Most everything Congress does these days happens at the last minute. Or, sometimes, several hours after the last minute. On yet another dramatic, and very late, night for the members of Congress, midnight struck with no budget in place, thus shuttering the federal government. An hour later, the Senate passed the budget that was hammered out this week, by a vote of 71 to 28, and sent it to the House for their approval.
There was nothing that Senate Majority Leader Mitch McConnell could do in order to avoid the shutdown, thanks to the most troublesome member of his caucus, Sen. Rand Paul (R-KY). The libertarian Paul hates almost all government spending, and he is positively beside himself at the hundreds of billions of dollars in outlays that his colleagues are committing to. Consequently, he used parliamentary shenanigans to make certain that the vote took place past midnight, so as to draw attention to his objections.
As to the House, they continued debating the bill early into Friday morning, primarily Democrats taking the podium to demand action on the dreamers. As a result, the vote on the bill was pushed to roughly 5:00 a.m. EST. Sure enough, at 5:30 a.m. the House voted 240 to 186 to pass the budget. Donald Trump is expected to sign it quickly, even if that means cutting into his Executive Time.
The text of the bill is 600 pages. It funds the government for another 6 weeks, but contains a myriad of other provisions as well. It is very very unlikely that any member of Congress has read more than a fraction of it. In the coming hours and days we will find out what is in it. Sen. Ron Johnson (R-WI) summed up the whole situation around the budget by saying: "It's just further example of the dysfunction of this place." (Z & V)
Republicans have trumpeted the fact that corporations have announced employee bonuses that add up to $2.5 billion. Sounds pretty good, until you do the math and see that it amounts to a one-time payment of $31 for a family of four on the average. And even that is slightly misleading since some families will get more and many will get nothing. Now Democrats have a different number for people interested in macroeconomics: Corporations have spent $97 billion on share buybacks, an expenditure 39 times larger than the bonus program. The point of a corporation buying its own shares is to reduce the number of shares outstanding. Given the same demand for the shares, having fewer shares outstanding will drive up the price. This benefits shareholders and especially senior managers, who get paid largely in options to buy the stock at the price it was when the options were issued.
Sen. Ron Wyden (D-OR), ranking member of the Senate Finance Committee, summed up this corporate behavior by saying: "No amount of flashy headlines will cover up Republicans' choice to give the middle class less so corporations could get more." Put in other terms, when the tax bill was pending, Republicans said that companies would spend their new-found money building factories so they could hire more workers and produce more products to sell. In reality, buying back stock doesn't actually make the economy more productive or add more jobs, it just gives the money (indirectly) to the shareholders, most of whom are fairly well off to start with. (V)
Unfortunately for companies that just bought back some of their stock, the Dow Jones index dropped another 1,000 points yesterday, which for many companies offset any gains due to buybacks (although the buybacks may have kept the drop in the market from being worse). Executives who did buybacks last month in anticipation of higher stock prices this month are probably kicking themselves now, because if they had waited, they could have bought more stock for the same money today. As usual, though, the best tool for timing stock purchases is 20-20 hindsight.
Market analysts are blaming the proposed Senate budget deal for yesterday's drop. The fear is that it will balloon the federal deficit and force the government to borrow over $1 trillion this year to pay its bills. That could slurp up a tremendous amount of money, making it harder for businesses to borrow money to grow. It could also drive up inflation, something that scares the daylights out of investors. The bleeding looks likely to continue for at least one more day, as the Asian markets dropped heavily at the start of trading on Friday.
White House Deputy Press Secretary Raj Shah blamed the mini-crash on Barack Obama, saying: "I know some of the numbers have more to do with the previous administration's accounting than it has to do with this administration's policies, but I would say we are committed to fiscal discipline and the budget next week shows that in greater detail." It takes real moxie to claim that handing out hundreds of billions in tax cuts and then increasing the budget by hundreds of billions more represents "fiscal discipline." (V)
Most of the time, four-star Marine Corps generals have a lot of credibility, but White House Chief of Staff John Kelly is burning though his at a blistering rate. Consider what he has done since October:
Now Kelly has ratcheted this up another notch by strongly defending White House staffer Rob Porter after two of Porter's ex-wives and one of his ex-girlfriends came forward with stories how Porter emotionally abused them and physically beat them up. Peter Wehner, who has served in three previous Republican administrations, said: "To have a chief of staff defend the integrity of a person who's been credibly accused of being a wife beater is just stunning...and unconscionable." After more than 24 hours of withering criticism all over the media, Kelly recanted and said: "I was shocked by the new allegations released today against Rob Porter. There is no place for domestic violence in our society."
Chris Whipple, author of a history of White House chiefs of staff said: "It's clear now that those expectations everybody had that Kelly would somehow be the grown-up in the room, a moderating force who would smooth the rough edges off of Trump, were just completely unrealistic." So far, though, Kelly seems to still be in favor with the one person who matters: his boss. (V)
Veteran political guru Charlie Cook notes two seemingly contradictory motions that are happening in House races. On the one hand, the Democrats' lead in the generic House polls has been cut in half, from about 12 points in December to around 6 points now. On the other hand, individual House races are moving toward the Democrats. It could be that as the midterms get closer, people are thinking less about Democrats vs. Republicans in general and "my Democrat" vs. "my Republican" more. After all, candidates do matter, at least somewhat. That said, Cook has changed his predictions for 21 House races, as shown below.
|IN-02||R+11||Jackie Walorski (R)||Solid R||Likely R|
|TX-21||R+10||OPEN (Smith, R )||Solid R||Likely R|
|CA-04||R+10||Tom McClintock (R)||Solid R||Likely R|
|MO-02||R+8||Ann Wagner (R)||Solid R||Likely R|
|FL-16||R+7||Vern Buchanan (R)||Solid R||Likely R|
|AR-02||R+7||French Hill (R)||Solid R||Likely R|
|VA-07||R+6||Dave Brat (R)||Likely R||Lean R|
|NY-22||R+6||Claudia Tenney (R)||Lean R||Toss Up|
|NC-13||R+6||Ted Budd (R)||Likely R||Lean R|
|IL-12||R+5||Mike Bost (R)||Lean R||Toss Up|
|FL-18||R+5||Brian Mast (R)||Likely R||Lean R|
|MI-06||R+4||Fred Upton (R)||Solid R||Likely R|
|VA-02||R+3||Scott Taylor (R)||Likely R||Lean R|
|NY-11||R+3||Dan Donovan (R)||Likely R||Lean R|
|NH-01||R+2||OPEN (Shea-Porter, D)||Toss Up||Lean D|
|PA-07||R+1||OPEN (Meehan, R)||Toss Up||Lean D|
|NJ-02||R+1||OPEN (LoBiondo, R)||Toss Up||Lean D|
|OR-05||EVEN||Kurt Schrader (D)||Likely D||Solid D|
|FL-07||EVEN||Stephanie Murphy (D)||Lean D||Likely D|
|CA-10||EVEN||Jeff Denham (R)||Lean R||Toss Up|
|MN-03||D+1||Erik Paulsen (R)||Lean R||Toss Up|
Cook believes that these changes may understate the Democrats' chances at capturing the House because there are a number of districts that should be competitive in which the Democrats don't have a candidate yet. Of the 95 districts that Trump won by fewer than 15 points or lost, in 34 of them no Democrat has raised $100,000. There is still a chance that a stronger candidate could show up in many of these. Two of these CA-21 (David Valadao) NY-24 (John Katko) were won by Hillary Clinton. No doubt the DCCC is beating the bushes to find candidates in these districts. (V)
Yesterday, former president George W. Bush said there is "pretty clear evidence that the Russians meddled" in the 2016 presidential election. He did not mention Donald Trump by name, but his statement is the exact opposite of Trump's position, which is that no meddling took place. Bush was also critical of Trump's friend, Russian President Vladimir Putin, saying: "He's got a chip on his shoulder. The reason he does is because ... the demise of the Soviet Union troubles him." Bush followed this up by supporting NATO, an institution Trump has attacked. (V)
Former Navy SEAL Robert O'Neill, who claims to be the one who killed Osama bin Laden, has issued a scathing dismissal of Donald Trump's plan for a big military parade, calling it "Third World bulls**t:"
A military parade is third world bullshit. We prepare. We deter. We fight. Stop this conversation.— Robert J. O'Neill (@mchooyah) February 8, 2018
O'Neill said that ostentatious displays of military might are typically seen in totalitarian countries, like Russia, China, and North Korea. And he is no antiwar liberal: He is a Fox News contributor in addition to being a war hero. O'Neill did say that he was lucky to have been the one who shot bin Laden. He was two feet in front of the terrorist, who was hiding behind his wife. He instantly recognized bin Laden, fired, then watched him take his last breath.
The reaction to the proposed parade from Congress has been generally unenthusiastic, even among Republicans. Sen. Lindsey Graham (R-SC) said: "I don't think it is a particularly good idea." Sen. John Kennedy (R-LA) said: "When you're the most powerful nation in all of human history, you don't have to show it off, like Russia does, and North Korea, and China." Sen. Dick Durbin (D-IL) said that a parade would be a "fantastic waste of money to amuse the president." (V)
Roy Moore is not going to be an Alabama senator anytime soon. As someone who is more than 70 years old, he cannot be elected to a judgeship in the Yellowhammer State any more. However, there will be a gubernatorial election this year, and there is much speculation that Moore will be back for another go-round.
If the accused child molester could not win a statewide election in 2017, it seems unlikely that will change in 2018, especially since he would be running against a reasonably popular incumbent in Gov. Kay Ivey (R). Undoubtedly, GOP leadership in Alabama and in Washington is hoping and praying that he stays retired, since they don't need him (and Joe Arpaio and the Nazi in Illinois) talking to anyone and everyone with a microphone and further damaging the GOP brand. We will know by the end of the day today; Moore has to file the necessary paperwork by the close of business if he wants to run. (Z)