July 24, 2019

Budget Deal Reached

President Donald Trump and congressional leaders have announced a critical debt and budget agreement… The agreement is on a broad outline for $1.37 trillion in agency spending next year and slightly more in fiscal 2021. It would mean a win for lawmakers eager to return Washington to a more predictable path amid political turmoil and polarization, defense hawks determined to cement big military increases and Democrats seeking to protect domestic programs.” AP News

See past issues

From the Left

The left is generally supportive of the deal, though some are disappointed that the debt ceiling was not permanently abolished.

This is “a good deal for Democrats and a big retreat from the Trump administration, which called for $150 billion in spending cuts. The budget cuts in this deal would likely go into effect down the road, which means there’s a chance a future Congress will overturn them down the line. The deal still has to be passed by the House and Senate, and signed by Trump. But by striking such a deal, congressional leaders and the Trump administration are averting a disaster scenario.”
Tara Golshan and Ella Nilsen, Vox

“Discretionary spending has been declining steadily for four decades, interrupted only by the Iraq War and the Great Recession. The new budget deal will keep it at about 6 percent of GDP, the same as it was in 2000 and far less than it was in 1980. This is hardly a picture of a budget that’s skyrocketing out of control. If the hawks want to gripe about mandatory spending—primarily Medicare, Medicaid, Social Security, and other social welfare programs—that’s fine. Gripe away. But today’s budget deal has nothing to do with that.”
Kevin Drum, Mother Jones

Many argue, “It's official: Conservatives only care about deficits when a Democrat is president… Everyone in Washington seems to suddenly accept the economic and political benefits of government spending, as the GOP hopes to keep the stock market goosed past Trump's reelection. While it's great that Washington appears to have avoided another truly stupid, self-inflicted government shutdown, Congress is whistling past the graveyard. That's because deficits are growing while the economy is booming — up 23% in the first nine months of the fiscal year alone. That's not supposed to happen. And there will be hell to pay when the remorseless math of rapidly falling tax revenue kicks in during the next downturn.”
John Avlon, CNN

“It's often overlooked, but the biggest economic improvement since Trump took office is more government spending.”
Michael Madowitz, Twitter

“I don’t doubt that many House members elected in the Tea Party wave of 2010 truly thought they were helping the economy by trying to bring federal spending down… But Congressional Republicans’ overall loss of interest in deficit reduction after Trump’s inauguration does seem to indicate that partisan calculations were paramount… House Democrats, meanwhile, have far less ideological reason to oppose increases in government spending. But their unwillingness since taking charge in January to play hardball on legislation that might endanger the ongoing expansion also seems to bespeak a different attitude toward partisanship and macroeconomic policy. House Republicans were willing to hold the U.S. economy hostage for partisan advantage. House Democrats have not been.”
Justin Fox, Bloomberg

“Many progressives seem to want Democrats to learn from the scorched-earth tactics of Republicans. But Republicans would be wiser to learn from the bargaining strategy of Pelosi and Senate Minority Leader Chuck Schumer. Except for a brief shutdown in January 2018 over immigration that was quickly, and wisely, abandoned, congressional Democrats haven’t tried to take the government hostage during the Trump administration. (The only protracted shutdown of the Trump presidency was instigated by Trump, effectively taking his own government hostage in order to win border wall money. It didn’t work.) Instead, Democratic leaders have negotiated budget agreements with Republicans in good faith, and they have won policy victories in the process.”
Bill Scher, Politico

Regarding the debt ceiling, “rather than treating [it] as a matter of good housekeeping, politicians have fallen into the habit of flirting with default, engaging in bouts of brinkmanship that culminate in ad hoc deals on borrowing and spending. Congress seems unable to perform its duties unless it is acting under the threat of crisis… This is not a good way to run a government.”
Editorial Board, New York Times

“In 2011, debt-rating agency Standard & Poors decided the U.S. no longer deserved the firm’s highest credit score, mostly because of the federal government’s refusal to free the Treasury’s borrowing authority from political gamesmanship. The Government Accountability Office said in 2012 that the delays in raising the debt ceiling in 2011 cost the government $1.3 billion in higher interest payments that year… if political leaders want to prioritize fiscal responsibility, they shouldn’t need a legal mechanism to do so; they should simply act accordingly.”
Kevin Carmichael, NBC News

From the Right

The right is generally opposed to the deal due to its spending increases.

From the Right

The right is generally opposed to the deal due to its spending increases.

“President Trump once vowed to drain the swamp, but by joining with House Speaker Nancy Pelosi on the latest budget deal, he has merely drained it of the Tea Party. There are many ways in which the Trump presidency has been disruptive to the status quo. But when it comes to spending and deficits, he has restored Washington to a much more conventional place in which both parties agree to ignore warnings of fiscal disaster, and resolve their differences by simply agreeing to spend more money…

Trump’s Republican Party may want to dismiss the importance of the debt, but the numbers don’t lie. The nation’s federal debt will surpass unprecedented levels in the coming decades, and neither party even wants to pretend to care about it.”
Philip Klein, Washington Examiner

“The tea party burst into Washington pledging spending restraint, balanced budgets, and accountable government. Even the possibility of defaulting on the national debt was an acceptable price of reform. Roughly a decade later, budget deficits are again reaching $1 trillion, spending is soaring, Obamacare remains on the books, and Republicans are raising the debt limit and eviscerating their lead accomplishment, the Budget Control Act. With Republicans like these, who needs Democrats?
Brian Riedl, National Review

This “is exactly how Washington has worked for decades. This is a place where politicians splurge today, and promise to repent tomorrow. And where ‘compromising’ means adding your differences together, rather than splitting them… To understand what this means for the deficit, consider that if Congress had simply held spending growth to the rate of inflation after 2014, the deficit this year would be $400 billion, instead of more than $1 trillion…

“It’s important to note that this problem is not being driven by Trump’s tax cuts. Even with those cuts in place, federal revenues are near the postwar average, and they are slated to continue to claim a larger share of GDP each year for the next several decades. The problem is entirely on the spending side. The CBO’s forecast has spending closing in on 30% of GDP by 2049 — and that’s assuming there aren’t any major new entitlement programs.”
Editorial Board, Issues & Insights

“The good news—the only good news—is that the deal continues the Trump Administration’s modest defense buildup… Several years in a row of predictable, higher funding will allow the Pentagon to improve the readiness of fighter squadrons, build a few more ships, improve missile defenses and invest in technology—all necessary for maintaining the military’s competitive edge. The price Democrats extorted for essential national security is another two-year blowout in domestic accounts

“Democratic leaders Nancy Pelosi and Chuck Schumer are crowing that they ‘secured an increase of more than $100 billion in funding for domestic priorities since President Trump took office.’ This is all the more remarkable because Democrats have only had a majority in the House, and only for seven months… Everybody’s happy except the future taxpayers who will pay for it.”
Editorial Board, Wall Street Journal

Nevertheless, “in these highly polarized times, just reaching this kind of agreement is an achievement in itself, no matter how unimaginative or bad it might be… Give Trump credit, seriously, for nailing down an agreement with the caucus that’s currently battling over whether to impeach him. That credit gets split with Pelosi, who is trying mightily to quell impeachment talk so that Democrats can present some set of positive accomplishments on which to propose keeping their House majority in 2020.”
Ed Morrissey, Hot Air

Some contend that “we have big government because the voters want it that way… it is time for conservatives to understand there is no political will to significantly cut spending in the absence of an overall bipartisan deal… Rank-and-file Republicans may want lower spending, but they clearly prioritize other issues such as immigration, trade, tax cuts and religious liberty. It is also clear that moderates, both the Obama-Trump blue-collar types and the suburban Romney-Clinton voters, prefer much more spending than does the GOP’s right…

“The Republican Party needs to show it understands what voters want by proposing a serious deficit-reduction package that includes tax increases on those who can afford it, in addition to a package of spending cuts… a new bipartisan compromise could achieve what a decade of futile gesturing has not: reduced deficits and moderate growth in government spending.”
Henry Olsen, Washington Post

“NBC and MSNBC embraced Sen. Elizabeth Warren of Massachusetts in the first debate of Democratic presidential candidates Wednesday night, treating her like the star of the show. The debate led off with Warren, who had a huge popularity advantage from the start… NBC anchor Savannah Guthrie started it off sounding more like Warren’s press secretary. ‘You have many plans – free college, free child care, government health care, cancelation of student debt, new taxes, new regulations, the breakup of major corporations,’ Guthrie said, before teeing up an economy question. Guthrie even used Warren’s plan to break up tech companies as the foundation for a question for Sen. Cory Booker of New Jersey… the round-robin final comments also ended with Warren, as Maddow asked her for the ‘final, final statement.’ That let NBC bookend the entire debate with Warren and Warren.”
Dan Gainor, Fox News

President Trump should be happy. As much as Warren is articulate, obviously intelligent, and energetically supported by Democrats, she would also be far easier to defeat than Joe Biden… Considering Trump's economy, the president is well placed to defeat Warren.”
Tom Rogan, Washington Examiner

A libertarian's take

Outside Hong Kong, the silence Is deafening… Some protesters in Hong Kong today are adopting the British Union Jack flag, the American flag and the ‘Star-Spangled Banner’ as symbols, yet that doesn’t seem to have stirred our collective imaginations… Americans are preoccupied with fighting each other over political correctness, gun violence, Trump and the Democratic candidates for president. To be sure, those issues deserve plenty of attention. But they are soaking up far too much emotional energy, distracting attention from the all-important struggles for liberty around the world…

“It’s 2019, and the land of the American Revolution, a country whose presidents gave stirring speeches about liberty and freedom in Berlin during the Cold War, remains in a complacent slumber. It really is time to Make America Great Again — if only we could remember what that means.”
Tyler Cowen, Bloomberg

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