Buchanan: "Why Trump Dumped The Do-Nothing Congress"

Authored by Patrick Buchanan via Buchanan.org,

Donald Trump is president today because he was seen as a doer not a talker. Among the most common compliments paid him in 2016 was, “At least he gets things done!”

And it was exasperation with a dithering GOP Congress, which had failed to enact his or its own agenda, that caused Trump to pull the job of raising the debt ceiling away from Republican contractors Ryan & McConnell, and give it to Pelosi & Schumer.

Hard to fault Trump. Over seven months, Congress showed itself incapable of repealing Obamacare, though the GOP promised this as its first priority in three successive elections.

Returning to D.C. after five weeks vacation, with zero legislation enacted, Speaker Paul Ryan and Majority Leader Mitch McConnell were facing a deadline to raise the debt ceiling and fund the government.

Failure to do so would crash the markets, imperil the U.S. bond rating, and make America look like a deadbeat republic.

Families and businesses do this annually. Yet, every year, it seems, Congress goes up to the precipice of national default before authorizing the borrowing to pay the bills Congress itself has run up.

To be sure, Trump only kicked this year’s debt crisis to mid-December.

Before year’s end, he and Congress will also have to deal with an immigration crisis brought on by his cancellation of the Obama administration’s amnesty for the “Dreamers” now vulnerable to deportation.

He will have to get Congress to fund his Wall, enact tax reform and finance the repair and renewal of our infrastructure, or have his first year declared a failure.

We are likely looking at a Congressional pileup, pre-Christmas, from which Trump will have to call on Chuck Schumer and Nancy Pelosi, again, to extricate him and his party.

The question that now arises: Has the president concluded that working with the GOP majorities alone cannot get him where he needs to go to make his a successful presidency?

Having cut a deal with Democrats for help with the debt ceiling, will Trump seek a deal with Democrats on amnesty for the “Dreamers,” in return for funding for border security? Trump seemed to be signaling receptivity to the idea this week.

Will he give up on free-trade Republicans to work with Democrats to protect U.S. jobs and businesses from predator traders like China?

Will he cut a deal with Hill Democrats on which infrastructure projects should be funded first? Will he seek out compromise with Democrats on whose taxes should be cut and whose retained?

We could be looking at a seismic shift in national politics, with Trump looking to centrist and bipartisan coalitions to achieve as much of his agenda as he can. He could collaborate with Federalist Society Republicans on justices and with economic-nationalist Democrats on tariffs.

But the Congressional gridlock that exhausted the president’s patience may prove more serious than a passing phase. The Congress of the United States, whose powers were delineated in the late 18th century, may simply not be an institution suited to the 21st.

A century ago, Congress ceded to the Federal Reserve its right “to coin money (and) regulate the value thereof.” It has yielded to the third branch, the Supreme Court, the power to invent new rights, as in Roe v. Wade. Its power to “regulate commerce with foreign nations” has been assumed by an executive branch that negotiates the trade treaties, leaving Congress to say yea or nay.

Congress alone has the power to declare war. But recent wars have been launched by presidents over Congressional objection, some without consultation. We are close to a second major war in Korea, the first of which, begun in 1950, was never declared by the Congress, but declared by Harry Truman to be a “police action.”

In the age of the internet and cable TV, the White House is seen as a locus of decision and action, while Capitol Hill takes months to move. Watching Congress, the word torpor invariably comes to mind, which one Webster’s Dictionary defines as “a state of mental and motor inactivity with partial or total insensibility.”

Result: In a recent survey, 72 percent of Americans expressed high confidence in the military; 12 percent said the same of Congress.

The members of Congress the TV cameras reward with air time are most often mavericks like John McCain, Lindsay Graham and Jeff Flake, who will defy a president the media largely detest.

At the onset of the post-Cold War era, some contended that democracy was the inevitable future of mankind. But autocracy is holding its own. Russia, China, India, Turkey, Egypt come to mind.

If democracy, as Freedom House contends, is in global retreat, one reason may be that, in our new age, legislatures, split into hostile blocs checkmating one another, cannot act with the dispatch impatient peoples now demand of their rulers.

In the days of Henry Clay and Daniel Webster, Congress was a rival to even strong presidents. Those days are long gone.

It's Can-Kicking Time Again In The Imperial City

Authored by David Stockman via The Daily Reckoning,

You have to hand it to the Donald. He speaks his mind. This week he dropped an unwelcome stink bomb on Capitol Hill during his Phoenix rant Tuesday night. If Mexico won’t pay for my wall, he seemed to say, than Congress will—-even if I have to shutdown the Imperial City to extract the first $1.6 billion of seed money:

“We’re going to get our wall,” Mr. Trump said at a rally in Phoenix. “If we have to close down our government, we’re building that wall.”

The Mexican Wall waste an estimated $20 billion needed to complete, and would place ICE agents at the border handing out guest worker papers to anyone who comes across looking for a job. That would mean more domestic production and tax revenue, and a tad less addition to the crushing national debt that Washington is handing generations to come.

It didn’t take long for Washington’s permanent political class to say “no dice” to the shutdown idea. It seems Speaker Paul Ryan has been domiciled in the Imperial City since he was 21 years old and makes no bones about his priorities.

“I don’t think anyone’s interested in having a shutdown,” House Speaker Paul Ryan said at a stop at an Intel Corp. facility in Oregon on Wednesday…….

Mr.. Ryan said he expected lawmakers would need to pass a short-term spending bill in September to give them more time to work out a broader budget agreement later this year.

What has the GOP Congress been doing the last nine months that it hasn’t enacted into law a single one of the 12 annual appropriations bills? The same bills that would provide upwards of $1.1 trillion to run the Pentagon and the domestic agencies.

The answer is simple. They’ve been deliberately burning up the clock in order to force spending measures through as emergency continuing resolutions (CRs) or 11th hour compromises to keep the government open. This has been going on for years.  It is the very reason Washington now stands on the edge of raising the national debt ceiling above $20 trillion.

So we’ve officially entered the kick-the-can season. You can count on Paul Ryan to spin and misdirect in order to obfuscate what’s actually going on. The House Speaker is about to capitulate again to the nation’s fiscal doomsday machine. Expect clever maneuvers designed to hide the truth through yet another election cycle.

That’s exactly what Ryan did back during the 2013 shutdown crisiswhen he negotiated a sell-out deal with ultra-liberal Dem Senator Murray to keep the government open through the 2014 election.

In that case, he agreed with Sen. Murray to bust the sequesters caps by $64 billion over FY2014-2015.

Per the typical routine, Ryan got $32 billionon top of the $1.01 trillion already slated to be wasted by the Pentagon during that two year period, while Murray got $32 billion more (a 3.5% increase ) to sprinkle across a myriad of domestic social programs. At the end, all parties were praised by the beltway lobbies.

Likewise, Ryan’s first act as Speaker after succeeding John Boehner following the shutdown crisis of 2015was to pass the Boehner-Obama deal that suspended the national debt limit and empowered the Obama Treasury to borrow at will.

That it did!

As of October 1, 2015, the net debt of the US was $17.66 trillion. After the Ryan-enacted debt limit suspension expired on March 15, 2017, the net debt soared to $19.82 trillion.

Paul Ryan and Continuing Resolutions in the Imperial City

This time, Speaker Ryan is going to need to deploy his best tricks to avoid a giant fiscal mishap. That’s because the White House is occupied by the Great Disrupter. By the looks of Trump’s Twitter account he’s still capable of unleashing the kind of impulsive curve ball that the Imperial City simply cannot anticipate.

Having already complicated the appropriations and CR, the Donald piled on more by suggesting GOP leadership had already screwed up raising the debt ceiling during the few days available when Congress returns from August recess.

Opined the Donald,

I requested that Mitch M & Paul R tie the Debt Ceiling legislation into the popular V.A. Bill (which just passed) for easy approval. They……didn’t do it so now we have a big deal with Dems holding them up (as usual) on Debt Ceiling approval. Could have been so easy—–now a mess!

Here’s the thing. Trump is 70 years old and has spent just eight months in the Imperial City, or about 1.0%of his life. Ryan and McConnell are collectively 122years old and have been playing their trades in the Great Swamp for 82collective years, or two-thirdsof their lives.

The rank and file Republicans on Capitol Hill desperately fear being blamed for a shutdown. They have bound themselves as hostage to both the Fiscal Doomsday machine and the main street media’s need to safeguard Uncle Sam’s credit at all costs.

CNN talking boxes would have a field day excoriating the GOP for shutting down the government. Now that the GOP allegedly controls the White House and both chambers of Congress the situation is even more muddled. Thus, as one member of the Freedom Caucus opined to the Wall Street Journal,

“A government shutdown hurts Republicans—it’s the last thing I want,” said Rep. Trent Franks (R., Ariz.), a member of the House Freedom Caucus who was at Mr. Trump’s rally Tuesday. “It is a political liability of profound significance to us.”

Many GOP lawmakers worry a shutdown or a failure to raise the government’s borrowing limit—another deadline they are facing this fall—could harm their chances of retaining the House majority in next year’s midterm elections. Treasury officials have said Congress must raise the government’s borrowing limit at some point near the end of September.

The real aim is herding legislators into the Christmas holiday. In that circumstance, as has been proven over and over in the past, not even the most resolute hawks have been able to stand by their convictions. The mantra always becomes “on to next year for real reform!”

Goldman Sachs, Debt Ceilings and Can Kicking

But perhaps this time it will be even worse. The Goldman Sachs Regency in the White House would readily sign up for the skinny bill and three-month punt. They are flat-out desperate to keep the casino at bay and the stock average from plunging.

Assuming that the Donald doesn’t blow-up the proceedings on a skinny bill, the maneuvering for a December deadline would be where the rubber could finally meet the road. That’s because there would need to be at least a $1.5 trillion debtceiling increase just to make it to December 2018 under current tax and spending policy.

The Treasury will need to borrow $500 billionor more to replenish its depleted cash balances and to pay back the funds which allowed it to pay the bills since March 15. The Treasury will be running upwards of an $800 billionannualized cash deficit between now and December 2018.

Even with a $1.5 trillion interim debt ceiling increase, there still wouldn’t be room for a single dime of tax cuts on top of the red ink that is already baked in. When it comes to Wall Street’s hope that Congress will pass a tax bill before the end of the year, or the next election – fuggedaboutit!

There’s no way to get a big enough debt ceiling increase to accommodate the current structural deficits and the Trump Stimulus, without major help from the Democrats.

The can kicking season is once again here, and this one will be like no other.

This Is What Trump's Revised Agenda Timeline Looks Like, In One Chart

Now that repealing Obamacare is out of the picture indefinitely, here is what the timeline looks like for the balance of Trump"s policy agenda, which includes reform of Trade, Budget and Tax policy, courtesy of Barclays, which takes a pessimistic outlook for what is in store and writes "Trump’s short-term agenda (reforms of healthcare, taxes, and trade policy) seems overly optimistic and has met resistance; healthcare’s lack of progress begs the question – is this GOP Congress an opposition party or a governing party?" We should know the answer once Trump/Ryan try to pass the next key item on the Trump agenda: the much anticipated tax reform.

Some additional thoughts from Barclays:

Healthcare may negatively affect tax reform negotiation, as the GOP needs to transition from a party of opposition to a party that governs.

• Healthcare: House delays American Health Care Act (AHCA) – The GOP’s goal is to minimize intra-party struggles, re-focus on comprehensive tax reform, and leave the option to revisit healthcare
  
  • GOP calls to repeal and replace ACA over the past seven years were more political rhetoric than an actual plan. GOP has not resolved an internal dispute with healthcare’s three-legged stool – the individual mandate, providing subsidies, and enforcing the guarantee for pre-existing conditions – as removing any one of them requires trade-offs between cost and coverage
  
  
  • We expect an intense intra-GOP fight, especially between the president and Speaker Ryan. There are concerns that the GOP domestic policy agenda could dissolve, but we think this delay will increase efforts to pass tax reform (or targeted tax cuts) before the Nov 2018 mid-term elections
  
  


• Tax Reform or Tax Cuts: GOP to re-focus immediately on taxes and pursue comprehensive reform, with a goal of passing legislation by August, well before the 2018 mid-terms
  
  • Outlook: Comprehensive tax reform will very likely meet significant obstacles, as there are limited revenue raisers to offset the proposed substantial tax cuts. We think tax reform could evolve to tax cuts (corporate rates possibly from 35% to 20-30%) and a repatriation of foreign earnings (potentially taxed at 8-15%). The House-proposed border adjustment tax (BAT) faces hurdles, given concerns of price increases, WTO compliance, and possible domestic job losses. Current costs of individual tax cuts will likely alarm fiscal hawks; we expect a more muted plan than the current one
  
  


• Trade: Administration aims to implement protectionist measures (eg, tariffs), as they view this form of economic nationalism as spurring long-term growth
  
  • NAFTA process has started; expect formal notice to trading partners shortly
  
  

And as an added bonus chart, here is Barclays on its take of Trump"s proposed Tax reform, which the GOP Aims for August, but expect late 2017 or early 2018: "While GOP-led Congress aims to use budget reconciliation (FY2018) to pass tax reform, politics of ACA reform will complicate tax negotiations"