Plenty of DC Drama, Just Not About a Shutdown

Plus, a GOP surrender on tax cuts By Yuval Rosenberg and Michael Rainey Plenty of DC Drama, Just Not About a Shutdown The intensifying D.C. [dramas]( this week over Brett Kavanaugh’s Supreme Court nomination and Deputy Attorney General Rod Rosenstein’s fate — both likely to crescendo on Thursday — are overshadowing a much less dramatic win for Congress and the GOP, [writes Politico’s Sarah Ferris]( By Wednesday night, both chambers of Congress are expected to have cleared 87 percent of federal funding without a single blow-up, and with days to spare before the Sept. 30 deadline for fiscal 2019. That includes the Pentagon’s first on-time annual funding bill in 22 years, a success that would normally be a selling point Republicans would be touting six weeks ahead of a midterm election. In recent years, the threat of a government shutdown likely would have dominated the news cycle, with cable TV countdown clocks ticking down the seconds to the September 30 deadline to pass spending legislation and keep federal offices open. And lawmakers now patting themselves on the back — justified as they may be — for steering back toward regular order on the budget and appropriations process might have been able to score more pre-election attention for an unusually bipartisan process or for funding their partisan priorities. After all, the [$854 billion]( spending package heading to President Trump’s desk includes wins that the GOP can easily tout, like some $20 billion more for defense and the biggest pay raise for the military in nearly a decade — and plenty for Democrats to trumpet, like additional money for education and health care, including a funding bump for the National Institutes of Health and more spending to combat the opioid epidemic. Under different circumstances, we might also have seen a more robust debate over the level of spending in the 2019 appropriations bills, given the [$153 billion increase]( Congress agreed to earlier this year, just months after passing a massive tax cut. But it's an unassailable reality of the Trump era: Scandal, turmoil and drama dominate, pushing the regular business of governing out of the headlines and off our screens. “We would love to be talking about it,” one senior GOP aide told Politico of the appropriations progress. “We’re competing against a news cycle right now that’s pretty unforgiving, and it’s hard to break through.” True to form, Trump had injected some mild drama into the September 30 deadline with repeated threats to shut down the government in an effort to secure more funding for a border wall with Mexico. “I want to know, where is the money for Border Security and the WALL in this ridiculous Spending Bill, and where will it come from after the Midterms?” he [tweeted]( last week. “Dems are obstructing Law Enforcement and Border Security. REPUBLICANS MUST FINALLY GET TOUGH!” But he signaled Wednesday that those threats were mostly political posturing and that, to the relief of many in the GOP, he’s willing to put off a fight over the border wall until after the midterm elections. "We'll keep the government open. We're going to keep the government open," he [told reporters]( during a meeting with Japanese Prime Minister Shinzo Abe during the United Nations General Assembly. Of course, Trump could still change his mind, especially if the Kavanaugh hearing doesn’t go well for him — or at least that’s [the fear]( among some in D.C. So we won’t say that the shutdown has been averted until the president puts pen to paper. A Health Care Hearing Postponed Thursday’s planned Senate [hearing]( on “Reducing Health Care Costs: Improving Affordability Through Innovation,” which had been scheduled for 10 a.m., was postponed “to accommodate senators’ schedules.” The Brett Kavanaugh hearing just so happens to be scheduled at that time. GOP Surrenders in the Tax Cut Messaging Battle Republicans aren’t saying much about the tax cuts in their midterm campaigns, The Washington Post [reports]( and when they do mention taxes it’s often to accuse Democrats of wanting to raise them. Republican lawmakers are still enthusiastic about the tax legislation passed late last year but blame botched political messaging for the lack of interest among the general public. House Ways and Means Committee Chairman Kevin Brady (R-TX) said Tuesday, “I think the misleading claims out there have taken hold. I do think just repeating the false narrative of ‘tax cuts for the wealthy’ is an easy narrative to sell, but it’s been fact-checked so often that it just simply isn’t true.” Some Republicans say that President Trump’s focus on issues that motivate his base, like crime and immigration, makes it harder to break through with a message focused on the tax cuts and the booming economy. “Their messaging has been extremely poor. We’ve got the best economy in 25 years and they aren’t really talking about it. They are letting Democrats control the messaging,” said the Heritage Foundation’s Stephen Moore, a former Trump economic adviser. Republican pollster David Winston said that the GOP has failed to educate the public about the tax legislation, including the doubling of the standard deduction, the increase in the child tax credit and the reduction in rates for most taxpayers. Members of focus groups he has dealt with were sometimes surprised to learn about what was in the bill — and “that is completely on Republicans that that is the state of people’s knowledge,” Winston said. The bottom line: Republicans may have lost the messaging battle, but messaging is not their only problem. As the Post also noted, numerous analyses have shown that the tax cuts are indeed tilted [toward the wealthy]( and the tax cuts have delivered only modest boosts in take-home pay for most voters, with few companies sharing their windfalls in the form of higher wages. Corporations, on the other hand, have done very well, with share buybacks headed to [record levels]( this year, according to Goldman Sachs. Tweet of the Day ABC news [reported]( earlier this week that farmers in the U.S. will start receiving checks from the federal government as part of the $12 billion bailout designed to aid an agricultural sector hit hard by President Trump’s trade dispute with China, inspiring Sen. Brian Schatz (D-HI) to [tweet]( Wednesday: Looking forward to a busy Thursday! Tell your friends they can [sign up here]( to get their own copy of this newsletter. And as always, keep sending your tips and feedback to yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. Charts of the Day The New York Times [takes note]( of a point that the Congressional Budget Office and debt watchers have made for some time: “The federal government could soon pay more in interest on its debt than it spends on the military, Medicaid or children’s programs.” Here are two Times charts looking at the projected growth of interest on the national debt. US F-35s Could See Combat Soon The U.S. may send its most expensive weapon system into combat in the coming weeks, according to Pentagon officials who spoke to [CNN](. The Marine Corps version of the stealth Lightning II — the F-35B, which has short takeoff/vertical landing capabilities — is aboard the amphibious assault ship USS Essex and will soon be in position to conduct missions in Afghanistan, including airstrikes. The Essex has been in the Middle East for several weeks, CNN said, and the Marines have used the jet in intelligence and reconnaissance operations over Somalia but not in combat. If the F-35s do see action over Afghanistan, it will be a first for the U.S. but not for the program overall. Israel claims the honor of flying the jet in combat first, using its version of the F-35A to conduct airstrikes back in May. News - [Shelby: Deal Close on Third Minibus Spending Package]( – The Hill - [Fed Raises Rates, Sees at Least Three More Years of Economic Growth]( – Reuters - [As Debt Rises, the Government Will Soon Spend More on Interest Than on the Military]( – New York Times - [Congress Reaches Agreement on Prescription for Fighting the Nation's Opioid Epidemic]( – USA Today - [Federal Employee Health-Care Premiums to Rise 1.5 Percent on Average for 2019]( – Washington Post - [How Universal Free Preschool in DC Helped Bring Moms Back to Work]( – Vox - [How the Trump Tax Law Passed: Obstacles Quickly Emerge]( – The Hill - [Executives Are Selling off Their Company's Stock at a Record Pace]( – MoneyWatch - [France to Bolster Defense Spending by $2 Billion]( – Defense News - [FEMA Chief’s Unauthorized Travel Cost Government $151,000, IG Report Shows]( – Wall Street Journal - [Trump's New Limo Cost $1.5M and Comes with a Fridge Full of His Blood Type]( – NBC News Views and Analysis - [Four States That Will Founder When the Next Recession Hits]( – Orphe Divounguy, TFT - [Locking in Further Regressive Tax Cuts Would Just Make the TCJA Worse]( – Hunter Blair, Economic Policy Institute - [Saving the Republican Congress]( – Stephen Moore, News OK - [Trump's Green Card Plan Tackles a Problem That Doesn't Exist]( – Aimee Picchi, MoneyWatch - [A $662 Billion Challenge: Transforming U.S. Grant Reporting]( – Rep. Virginia Foxx (R-NC), The Hill - [Republicans Are About to Lose More Than 450 Years of Experience in Congress]( – Robert Gebelhoff, Washington Post - [Underemployment Is the New Unemployment]( – Leonid Bershidsky, Bloomberg - [Medicare Prescription Drug Coverage: You May Need a New Plan]( – Steve Vernon, MoneyWatch Copyright © 2018 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. Our mailing address is: The Fiscal Times 712 Fifth AvenueNew York, NY 10019 [Add us to your address book](//thefiscaltimes.us1.list-manage.com/vcard?u=40d2c5373681f5cd830b6d823&id=714147a9cf) If someone has forwarded this email to you, consider signing up for The Fiscal Times emails on our [website](. Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](