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D.C. Memo: Concern about deficit not dead, just went away to Nana’s farm for a while

REUTERS/Eric Thayer
Republicans and Democrats in the Senate reached a deal on Wednesday to keep the government open for another six weeks and significantly increase federal spending.

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This week in Washington, Republicans stopped pretending to care about the federal budget deficit and joined with Democrats, who will figure out something on DACA later I guess, to push for a $500 billion increase in federal spending over two years. Hoping they put it on the CashRewards card!

This week in Washington

Good morning! The short-lived era of fiscal restraint in Washington appears to be over: early this morning, Congress passed, and President Donald Trump signed, a bill that would implement the largest increase in federal spending in nearly a decade. 

Majorities of Republicans, and enough Democrats, joined together to approve roughly $500 billion in new spending over the next two years. The largest chunk of that goes to the Pentagon, fulfilling Republicans’ dreams of boosting military funding, while an additional $130 billion over two years will go to non-defense social programs that Democrats have been itching to replenish. There’s also lots of money for disaster relief and for countering the opioid epidemic.

The bill also extends the government’s borrowing authority, a.k.a. the “debt ceiling,” and extends government funding through March 23. With top-line budget numbers set, appropriators can finally get to work on spending legislation for the next two fiscal years. 

Most Republicans were cool with approving a massive spending increase without really paying for it — a striking departure for a party that has, for years, run on a message of fiscal restraint and reining in the federal deficit. Chart-toting deficit hawk Speaker Paul Ryan was all aboard on the spending hike, which is really something. Yesterday’s Politico Playbook summed up the GOP’s “evolution” on spending well: “If Barack Obama proposed this, he would’ve been laughed out of the room.”

But there was plenty of dissent on the Republican side of the aisle. Kentucky Sen. Rand Paul, a libertarian fiscal purist, used procedural tactics to delay the Senate’s vote on the budget, which ensured that a partial government shutdown kicked in at 12:01 AM Friday morning as funding ran out. In the House, 73 Republicans, including Reps. Tom Emmer and Jason Lewis, voted no on the spending package.

Democrats were conflicted. In the Senate, most voted without hesitation to approve the big spending increase which promises to fund a lot of the party’s policy priorities, from infrastructure to health care. In the House, however, 119 Democrats — a majority of the caucus — voted no, because the legislation did not include any deal for the Dreamers, the undocumented young immigrants whose legal status is set to expire soon because Trump terminated the DACA program.

Democratic House Leader Nancy Pelosi took to the floor on Wednesday for a marathon eight-hour speech to advocate for a DACA deal. She and other key Democratic leaders voted no on the budget, but didn’t seem terribly intent on persuading their flock to follow suit.

Progressives are incensed that there was no DACA resolution: they believe Republicans don’t really want to do anything about it, and feel that Democrats continue to lose leverage and another critical chance to ensure Dreamers do not get deported in mass numbers starting in March. 

Fifth District Rep. Keith Ellison, said this to me about the Republicans on DACA: “They keep on trying to do everything but the right thing… Just give us a DACA vote.”

Ryan is promising that Democrats will get their chance, and a DACA vote will happen. But without being attached to must-pass spending legislation, it becomes less urgent, and many Dems feel the train has left the station. 

While Congress was figuring out a long-term vision for the budget and government funding, President Trump was working on a long-term goal of his own: having a parade. Since a visit last summer to Paris and the Bastille Day celebrations, POTUS has reportedly been obsessed with the idea of having a big ol’ military parade in which tanks and troops march down Pennsylvania Avenue in Washington. These parade talks have reportedly reached a “high level” at the Pentagon, multiple outlets reported this week.

THIS IS NOT NORMAL, liberals cried immediately, slamming the military parade as a textbook Soviet/Nazi move. (While the circumstances and scope of U.S. military parades has varied, they have taken place several times in the capital during the modern era.)

The D.C. city government does not love a parade: all those lumbering tanks on Pennsylvania Ave. — a nightmare of a street already, believe me — would necessitate expensive road repairs, which the District would have to pay for. Anyway, see you guys down here July 4 for the big event!

Speaking of useless displays of political theater, the much-touted “memo” written by Republicans to expose anti-Trump bias and abuse of power at the FBI was a dud, and did more to reveal congressional partisan bickering than any issue of public concern.

No one really seemed to care, anyway: a Politico poll found that half of American voters don’t know or don’t care about the memo. That same poll found that about a third of voters have a favorable view of special counsel Robert Mueller, while a third have an unfavorable view, and another third has no view. Clarity!

The Dow Jones Industrial Average tanked on Monday, losing 1,175 points, the largest single-day point drop in Dow history. But all those points don’t account for a very large share of the overall market, and Monday’s dive doesn’t rank as a top-1o crash by that metric.

Stock experts (lol) simply claimed this was a return to “market volatility” after an impressive year-long run at the Dow. Some interesting political implications here: since taking office, POTUS has repeatedly taken credit for the bull market, brandishing it as a vindication of his economic policies. As the NYT explains, presidents typically steer clear of doing this: when you live by the bull market, it’s just a matter of time before you get gored by it.

A caucus note: you’ve probably already read your #MNGov takes. Read my colleague Briana Bierschbach, if you haven’t already, on caucus night. Not a whole lot of congressional hot caucus takes for you at this stage, but some rumblings out of the 8th Congressional District gatherings that the strong support for mining-critical candidate Rebecca Otto could mean trouble for Rep. Rick Nolan, who is facing a challenger for the DFL endorsement, Leah Phifer, centered on mining and environmental issues. [UPDATE! On Friday, Rep. Rick Nolan announced he would retire at the end of his term rather than seeking re-election.] A tweet out of Cook County’s caucus reported all the delegates present supported Phifer. Northland blogger and friend of the show Aaron Brown has a take here, expanding on that.

Sen. Tina Smith and some fellow Democrats got a visit from the Washington Post’s Fact Checker this week, over their claims about a GOP-backed bill that seeks to ban abortion after 20 weeks. The bill, Smith claimed in some social media posts, “would ban abortion after 20 weeks, with no exception to protect a woman’s health and no exceptions for survivors of rape and incest.”

As the Fact Check team points out, the bill does include some exceptions for survivors of rape and incest, along with other exceptions (albeit ones pro-choice advocates argue are inadequate.) Smith’s team conceded her initial comments were off and corrected at least one social media post. WaPo keeps their Pinocchios dry for Smith: “Because Smith conceded this error, we will not be factoring it into our Pinocchio judgment; otherwise, she would have qualified for a few Pinocchios,” they wrote.

Nevertheless, unable to pass up such an opportunity, Smith’s GOP rivals at the National Republican Senate Committee ran with the post, claiming Smith was awarded the dreaded Pinocchio when, in fact, the distinction was awarded to “statements” about the GOP bill.

Barack Obama and his former AG Eric Holder are working together on a Democratic project to fight gerrymandering in the next round of redistricting, and they’ve set their sights on Minnesota: their so-called National Democratic Redistricting Committee will target statehouse and gubernatorial races in Minnesota in 2018 with an aim of electing Dems who will “have a seat at the table when new maps are drawn in 2021.” Other targets include Wisconsin, Michigan, Florida, and Colorado.

A one-two punch of important D.C. consumer finance policy news this week: the Consumer Financial Protection Bureau continues its transformation from the aggressive, adversarial agency envisioned by the Obama White House, which created it, to an agency that appears pretty meh about looking into consumer finance abuses and scandal.

Reuters reported this week that the new leader of the consumer watchdog, White House budget chief Mick Mulvaney, has been moving to ice a comprehensive investigation the bureau was conducting into credit reporting bureau Equifax, and its loss of the personal data of 140 million Americans thanks to a hack in September.

Mulvaney has moved to curb the CFPB’s process to figure out how the hack happened, and he has not asked for testimony from Equifax executives — some stuff that could probably stop such a massive breach of sensitive data from happening again.

But the soaking of ne’er-do-well Wells Fargo continues: in her last big act as chair of the Federal Reserve Bank, Janet Yellen laid into Wells, slapping it with an expensive penalty, demanding the axing of several board members of the bank, and limiting its growth until it implements reforms. (The move is a mic drop for Yellen, a widely respected Fed chair who nonetheless got shown the door by Trump.)

Former Obamacare czar and current Obamacare booster Andy Slavitt, resident of Edina and Twitter, joined this week with some other big names in health care and politics (and also Bradley Whitford?) to launch something called the United States of Care, a nonprofit they’re billing as an effort to “galvanize public opinion in support of evidence-based and economically sound policy changes that move our country toward a positive vision: ensuring all Americans finally have the ability to care for themselves, and their families, without fear of devastating costs.”

Guess we’ll find out more in the near future what exactly that looks like. Some liberal and left folks on quickly piled on the U.S. of C. to berate its initial statements and sleek branding; Splinter’s Timothy Faust really lays into the project in a post here. CNN has a worthwhile, even-handed look at the project here.

The week’s essential reads

We’ve been talking a lot about what Congress may do about the Dreamers. But one story is illustrating for many the broader crackdown on undocumented immigrants happening under the Trump administration — that of Jorge Garcia, a Michigan man who was recently deported to Mexico, having barely missed the cut-off for eligibility for the DACA program. The Detroit Free Press’ Niraj Warikoo from Mexico with Garcia’s story:

“I feel like I’m lost,” Garcia says, his eyes taking in the valley and hills of the city of Nicolás Romero on a Friday morning in January. “I don’t fit in here, at all.”

Two weeks earlier, Garcia was deported from Michigan to Mexico after living in the U.S. for 30 years, forced to leave behind his family, friends, and a solid job in landscaping.  Now, the married father of two finds himself alone in an unfamiliar country, with an uncertain future.

“Since I’ve got here, I haven’t had a good night’s sleep,” he explains, fingers fidgeting with each other as he speaks. …

After the Free Press reported on his deportation on Jan. 15, Garcia became a symbol for immigrant advocates who say his removal is an example of the government’s overzealous crackdown on illegal immigrants. He was only 10 years old when an aunt brought him to the U.S. without authorization. Now 39, he had lived his entire adult life in the U.S. before his removal.

The federal government has tried to put a positive shine on its response to Hurricane Maria, which devastated Puerto Rico back in September. But many on the island suffered — and still suffer — from lack of access to electricity, food, water, and key services. Stories like this one will not help restore trust: the NYT found that FEMA dished out a nine-figure contract to an unseasoned entrepreneur to provide 30 million emergency meals to Puerto Ricans — who ultimately got 50,000. The important and disturbing story:

The mission for the Federal Emergency Management Agency was clear: Hurricane Maria had torn through Puerto Rico, and hungry people needed food. Thirty million meals needed to be delivered as soon as possible.

For this huge task, FEMA tapped Tiffany Brown, an Atlanta entrepreneur with no experience in large-scale disaster relief and at least five canceled government contracts in her past. FEMA awarded her $156 million for the job, and Ms. Brown, who is the sole owner and employee of her company, Tribute Contracting LLC, set out to find some help. …

By the time 18.5 million meals were due, Tribute had delivered only 50,000. And FEMA inspectors discovered a problem: The food had been packaged separately from the pouches used to heat them. FEMA’s solicitation required “self-heating meals.”

“Do not ship another meal. Your contract is terminated,” Carolyn Ward, the FEMA contracting officer who handled Tribute’s agreement, wrote to Ms. Brown in an email dated Oct. 19 that Ms. Brown provided to The New York Times. “This is a logistical nightmare.”

Following up on that theme of government ineptitude with American lives and piles of taxpayer money at stake: Politico breaks that, according to an outside review, a key Department of Defense agency with 26,000 employees — the so-called “Walmart of the military” — lost track of how it spent $800 million. An important and timely read from Bryan Bender, given that many want to increase the Pentagon’s budget by some $80 billion:

Ernst & Young found that the Defense Logistics Agency failed to properly document more than $800 million in construction projects, just one of a series of examples where it lacks a paper trail for millions of dollars in property and equipment. Across the board, its financial management is so weak that its leaders and oversight bodies have no reliable way to track the huge sums it’s responsible for, the firm warned in its initial audit of the massive Pentagon purchasing agent. …

The agency often has little solid evidence for where much of that money is going. That bodes ill for ever getting a handle on spending at the Defense Department as a whole, which has a combined $2.2 trillion in assets.

In one part of the audit, completed in mid-December, Ernst & Young found that misstatements in the agency’s books totaled at least $465 million for construction projects it financed for the Army Corps of Engineers and other agencies. For construction projects designated as still “in progress,” meanwhile, it didn’t have sufficient documentation — or any documentation at all — for another $384 million worth of spending.

The week in takes

Your weekend longread

Maybe I’m leaning a bit too much into the (unintentional) theme of government waste and and mismanagement in this week’s memo, but I have to flag for your weekend read this absolutely bonkers investigation from the Washington Post’s Craig Whitlock about how a Singaporean naval contractor used bribes, fancy meals, liquor, and prostitutes to worm his way into the flagship of the U.S. Navy’s Asia-Pacific fleet in order to gain access to critical and classified information about the fleet’s movements so he could steer lucrative contracts to his own firm.

“Fat Leonard” Francis has been hauled in by U.S. authorities and is awaiting his sentencing in a California prison. But Whitlock’s telling of how he manipulated some of the most powerful commanders in the Navy left me, occasionally, picking my jaw up from the floor.

Prosecutors say nine sailors from the 7th Fleet flagship leaked classified information about ship movements and other secrets to Francis, a Malaysian citizen, making the U.S.S. Blue Ridge perhaps the most widely compromised U.S. military headquarters of the modern era. …

Between 2006 and 2013, Francis doled out illicit gifts, hosted epicurean feasts and sponsored sex parties for Blue Ridge personnel on at least 45 occasions, according to federal court records and Navy documents obtained by The Washington Post under the Freedom of Information Act.

Officers from the Blue Ridge consumed or pocketed about $1 million in gourmet meals, liquor, cash, vacations, airline tickets, tailored suits, Cuban cigars, luxury watches, cases of beef, designer handbags, antique furniture and concert tickets — and reveled in the attention of an armada of prostitutes, records show.

A master recruiter, Francis methodically assembled a network of informants to feed him the secret itineraries, court documents show. Wielding remarkable influence for a foreigner, he then prodded his moles on the Blue Ridge to reroute aircraft carriers and other vessels to ports controlled by his firm so he could more easily overcharge the Navy for fuel, other supplies and services.

What to look for next week

Assuming a shutdown is averted, Congress is likely to move next week onto negotiations and debate over immigration policy, particularly over DACA. Vox has a good preview here.

As midterm election season rapidly approaches, there’s talk on the Hill that, with budget battles in the books, these immigration talks might represent the last opportunity Congress has to do real legislating in 2018 before campaign fever takes over.

A delegation from the White House, including VP Mike Pence and first daughter Ivanka Trump, has arrived in PyeongChang, South Korea, to represent the administration at the opening of the 2018 Winter Olympics, which began on Wednesday and are officially opened on Friday night.

The administration is using Pence’s visit as something of an opportunity to advance its hard-line policy on North Korea. Previously, the veep had left the door open to meeting with Kim Jong Un’s regime during his visit, but they’re reportedly not interested in meeting with him. Pence said on Wednesday the U.S. is preparing to levy its toughest sanctions yet on North Korea, and is attempting to get the more dovish South Korean government on board ahead of an Olympic games where North and South will compete on the same teams for some events, and enter the opening ceremony together.

That’s all for this week — thanks for sticking around. I’ll be enjoying a weekend filled with biathlon and mixed doubles curling, but send me your comments and hot takes anyway at sbrodey@minnpost.com.

Comments (2)

  1. Submitted by Paul Udstrand on 02/09/2018 - 01:06 pm.

    I wish the press would stop repeating this fallacy

    Republican’s decided deficits are irrelevant back in the 80’s. They whine about deficits when Democrats are in power but EVERY budget Republican produce, whenever they get a chance to produce one, creates and grows the debt and deficit. So let’s stop pretending that what Republicans always say is in some way related to their actual agenda.

    The tax cut already blew a hole in the budget, the fed already announced that it’s planning to borrow twice a much money this year as it did last year because of the tax cuts (that’s a trillion dollars by the way). And it looks like, as usual, Republican stewardship is driving the nation into another recession, which was also predictable and predicted.

    So let’s stop with this pretense of Republicans as some kind of deficit hawks shall we? The only reason Republicans talk about deficits is as an excuse to cut funding to stuff they don’t like or believe in, but anything they like always gets spending increases regardless of it’s budget effects.

  2. Submitted by Jeffrey McIntyre on 02/11/2018 - 11:18 am.

    Deficits

    These will come back to haunt us mere mortals in 2025…when the tax breaks and higher standard deduction expire…the spin will probably be “we can’t afford to extend them, it will blow a hole in the deficit”!

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