Trump’s ‘Salute to America’ Sparks Fireworks on the 4th

Plus, Bernie Sanders' Wall Street tax By Yuval Rosenberg and Michael Rainey July 4th Fireworks: Trump Defends Costs of His ‘Salute to America’ President Trump famously admired the nationalistic display of military might he witnessed in Paris on Bastille Day two years ago. “It was one of the greatest parades I’ve ever seen,” Trump [said]( at a meeting with French President Emanuel Macron a few weeks after watching the jets soar over the Champs-Élysées. “We’re going to have to try to top it,” he added. Trump has been pushing the Pentagon to hold a big parade ever since. An event tentatively scheduled for Veterans’ Day last year was canceled as [cost estimates]( soared, with Trump accusing city officials in Washington of seeking to profit from the event. But on the Fourth of July this year the president will finally get the event he has been dreaming of for years. (In an [interview]( with The New York Times in July 2017, Trump said he had thought about a military parade on Pennsylvania Avenue long before witnessing the Bastille Day celebration in Paris: “I’ve always thought of that. I’ve thought of it long before.”) What is it? The White House says the event, which will occur before the annual Independence Day celebration, is meant to honor the U.S. military. “The Pentagon & our great Military Leaders are thrilled to be doing this & showing to the American people, among other things, the strongest and most advanced Military anywhere in the World,” Trump [tweeted]( Tuesday. “Incredible Flyovers & biggest ever Fireworks!” The president will deliver a televised speech at 6:30 p.m. and fireworks will commence at about 9. Heavy military equipment including tanks reportedly will be on “static display” on the National Mall, presumably remaining parked to avoid damaging the streets. Aircraft from the Army, Navy, Air Force and Marines will fly overhead, with the commanders of each branch standing next to Trump as their service hymns play. There will also be a parade along 10 blocks of Constitution Avenue, featuring marching bands, fife and drum corps, floats, military units, balloons and drill teams. Why is it controversial? The parade has quickly become something of a Rorschach test, with Trump and his supporters seeing a very different event than their critics. “Our July 4th Salute to America at the Lincoln Memorial is looking to be really big. It will be the show of a lifetime!” Trump [tweeted]( on Wednesday. But critics say the event is politicizing and militarizing a D.C. tradition that has usually avoided overt political themes, presidential speeches and displays of military firepower. And some accuse Trump of placing himself squarely at the center of the event, using troops as props for his [own self-aggrandizement](. Access has also become an issue, with the Republican Party reportedly distributing VIP passes to donors and political appointees for the event. “We’ve never seen anything like this,” Sen. Tom Udall (D-NM) [told]( The Washington Post. “No ticketed political event should be paid for with taxpayer dollars.” USA Today’s David Jackson [said]( that the Independence Day celebrations have generally avoided an overt connection to the sitting president. The last time that happened was 1970, when President Richard Nixon staged an "Honor America Day" featuring evangelist Billy Graham and comedian Bob Hope, at a time when the nation was bitterly divided over the war in Vietnam. How much will it cost? The White House has not provided a breakdown of the costs of the event, but the Veterans Day parade that was canceled in 2018 had a cost estimate of $92 million, though it’s not clear how similar that parade would have been to this year’s celebration. The typical annual fireworks show on the National Mall costs roughly $2 million. While Trump is adding more fireworks to the show, the two vendors involved are donating about $750,000 worth of fireworks, which should cover most of the additional cost for pyrotechnics. Even so, Trump is adding additional features to the celebration that have a significant military component and cost. The Washington Post [reported]( Tuesday that the National Park Service will use nearly $2.5 million in user fees intended for park maintenance to cover costs associated with Trump’s event. A White House aide said it will cost about $870,000 to transport tanks and fighting vehicles from Fort Stewart in Georgia. National Public Radio did a [rundown]( on the costs of operating aircraft that will be deployed, which are substantial. For example, the Boeing 747 often used as Air Force One costs more than $200,000 per hour, while an F-35 costs about $20,000 per hour. (No word, however, on the cost of the “[brand new” Sherman tanks]( Trump promised, which is a bit of a mystery, since the tanks haven’t been produced since 1945 and went out of service in 1957.) "There's going to be a big price tag for this and the taxpayers will have to pick up the tab," said Sen. Chris Van Hollen (D-MD), who sits on the Senate Appropriations Committee, which controls spending for such events. Some critics also pointed out the White House was being inconsistent in its approach on military costs, citing Trump’s cancellation of joint military maneuvers with South Korea because they were “tremendously expensive” at $[14 million](. Trump defended the cost of the celebration in a [tweet]( Wednesday: “The cost of our great Salute to America tomorrow will be very little compared to what it is worth. We own the planes, we have the pilots, the airport is right next door (Andrews), all we need is the fuel. We own the tanks and all. Fireworks are donated by two of the greats. Nice!” The Next Big Border Fight? In the last seven months, we’ve seen a 35-day government shutdown driven by disagreements over border wall funding and a congressional clash over a $4.5 billion emergency border funding bill. Now, Politico’s Playbook team [explains]( why the anger over President Trump’s immigration policies and the [squalid conditions]( for migrants being detained at the border could once again turn into a battle over a government spending bill: “In the next few months, Congress has to put together a spending bill by the end of September, and it needs to raise the debt limit. In the House, you have an emboldened crop of young Democrats who believe that the president’s immigration policy is not only wrongheaded, but also inhumane. How can the House flex its muscles? Through a spending bill, where Dems could try to tie the administration’s hands and redirect immigration policy.” The question, Politico says, is “Will the Democratic opposition to Trump’s immigration policy organize in time? If so, buckle up for a showdown.” Why Bernie Sanders’ Wall Street Tax Isn’t Likely to Raise the Trillions He’s Counting On Presidential candidate Sen. Bernie Sanders has proposed a financial transactions tax to cover the cost of making some types of higher education free while canceling $1.6 trillion in student debt. Here are the [details]( of the plan from Sanders’ campaign: “We can guarantee higher education as a right for all and cancel all student debt for an estimated $2.2 trillion. To pay for this, we will impose a tax of a fraction of a percent on Wall Street speculators who nearly destroyed the economy a decade ago. This Wall Street speculation tax will raise $2.4 trillion over the next ten years. It works by placing a 0.5 percent tax on stock trades – 50 cents on every $100 of stock – a 0.1 percent fee on bond trades, and a 0.005 percent fee on derivative trades.” But would the proposed tax really raise more than $200 billion a year? Howard Gleckman of the Tax Policy Center [says]( that Sanders’ plan suffers from a contradiction that would make fulfilling that goal quite difficult. On the one hand, Sanders wants to raise a lot of money to pay for new social goods. On the other hand, Sanders wants to discourage speculation by taxing what many critics see as excessive trading on Wall Street. The problem, Gleckman says, is that if the tax is effective, it will reduce trading and thereby raise less money than projected. “Because high-frequency traders live by arbitraging tiny spreads in stock prices, the Sanders [financial transactions tax] would put them out of business,” Gleckman writes. “But shutting down the flash boys would slash the revenue Sanders needs to pay for free college.” Ultimately, the financial transaction tax may have some value, Gleckman says. But its predictable effects mean that it would likely fall short of paying for Sanders’ educational agenda, producing only 10% to 20% of its stated goal. How Doctors Could Lose Under Medicare for All A transition to Medicare for All would mean significant pay cuts for most doctors and health care providers — and could have some unintended consequences, according to a [recent analysis]( in the Journal of the American Medical Association by Harvard's Dr. Zirui Song. Using data from Song’s analysis, [Axios]( illustrated just how steep the cuts might be, even if reimbursement rates are set well above current Medicare rates. Note that the figures below show the change in doctor pay compared to patients now covered by private insurance, not all patients. Private insurance typically reimburses providers at significantly higher rates than Medicare or Medicaid. The pay cuts for doctors and hospitals are a key element of Medicare for All, and one of the main ways proponents of a switch aim to bring down health care costs overall. But Song warns that the cuts could have some dramatic implications. “Reducing commercial prices to the level of Medicare prices would, at first glance and without any adjustment, substantially reduce the total cost of health care in the United States through lower total revenues for physicians and hospitals,” he writes in the JAMA analysis. “However, the assumption that physicians and hospitals would not react as their commercial prices are reduced substantially to Medicare levels is likely unrealistic.” Song says that doctors may respond in a number of ways, such as by increasing the number of procedures they perform; changing the mix of services they deliver or the patient populations they see; changing their billing and coding to try to get paid more; and consolidating further into hospitals (because services delivered in a hospital setting get reimbursed more). These potential behavioral changes, Song says, should be a caution sign to those advocating a switch to Medicare for All “because eventual savings in the health care system could be smaller than anticipated and changes to care patterns could be larger than anticipated.” Song argues that it’s worth considering setting “less draconian” prices under Medicare for All to ease any transition and get doctors and hospitals to buy into the change. Have a Happy 4th! In observance of the holiday, The Fiscal Times newsletter will not publish on Thursday or Friday. We'll be back in your inbox on Monday. Send your tips and feedback to yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( for their own copy of this email! 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