Trump Eyes Billions in Cuts for Foreign Aid

Plus - Greenland's nice this time of year By Michael Rainey White House Wants to Cut $4.3 Billion in Foreign Aid The Trump administration is proposing to eliminate more than $4 billion in unspent foreign assistance funds, Politico [reported]( late Thursday. The White House budget office reportedly sent a proposal to the State Department to cut $2.3 billion in unspent funds at the United States Agency for International Development and another $2 billion in unspent funds at the State Department. The cuts would hit the budget of the United Nations particularly hard and include the cancellation of $522 million in basic funding for the international organization, $787 million for peacekeeping activities, and $364 million for humanitarian and human rights programs. The Trump administration is expected to formally submit the so-called rescission package next week. Congress will have 45 days to approve the rescissions, during which time the funds will be frozen; if lawmakers fail to approve the package, as expected, the money will be released. However, given that the fiscal year ends on September 30, the move could effectively cancel the funding, even if Congress does not approve the rescissions. Can the White House do that? The Trump administration could face legal challenges under a 1974 law governing unspent funds if it proceeds with the rescissions, Politico said, and lawmakers from both parties have asked the White House to reconsider. “Such action would be precedent-setting and a direct affront to the separation of powers principle upon which our nation was built,” the bipartisan leadership of the House Foreign Affairs and Senate Foreign Relations panels wrote in a letter to the White House. Rep. Nita Lowey (D-NY), chair of the House Appropriations Committee, said that the “funds were appropriated by overwhelming bipartisan majorities and the lengthy negotiations between the House, the Senate, the White House. And they were signed into law by the president.” Lowey also said that cuts to foreign aid have been rejected on bipartisan basis, and that “these funds are essential for U.S. global leadership and protecting the security of the American people.” The White House attempted a similar rescission effort for foreign aid last year but dropped the proposal due to resistance from both Republicans and Democrats. Number of the Day: $100 Million That’s how much President Harry Truman offered Denmark to purchase Greenland back in 1946, a deal the Danes turned down. According to a Wall Street Journal [report]( Thursday, President Trump has recently expressed interest in acquiring the autonomous Danish territory, which despite being the world’s largest island (Australia doesn’t qualify because it’s a continent) has a population of only about 56,000. “In meetings, at dinners and in passing conversations, Mr. Trump has asked advisers whether the U.S. can acquire Greenland, listened with interest when they discuss its abundant resources and geopolitical importance,” the Journal said. Although it’s not entirely clear that the president’s interest extends beyond dinner-table banter, White House aides are reportedly looking into the matter. The report of Trump’s interest was enough to prompt a response Friday from Greenland’s Ministry of Foreign Affairs, which threw cold water on the idea, [tweeting]( that the island is “open for business, not for sale.” Spending Up, Revenue Down Politicians argue about whether the U.S. has a revenue problem (taxes too low) or a spending problem (spending too high), but in historical context, it looks like the answer might be “both.” The fiscal hawks at the Committee for a Responsible Federal Budget [say]( that in 2020, “spending will be higher and revenue will be lower than their historical averages by about the same amount: 0.8 percent of GDP.” Absent significant change by Congress, that situation is likely to persist for years to come as spending on health care and retirement rises in the wake of the aging Baby Boomers and revenues remain relatively flat, especially in the most likely scenario, in which the individual tax cuts from the Tax Cuts and Jobs Act are maintained past 2025. Have a great day! Tell your friends they can [sign up here]( to get their own copy of this newsletter. Send your tips and feedback to yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. Happy Birthday to Social Security! President Franklin D. Roosevelt signed the Social Security Act into law 84 years ago this week, initiating a social welfare program that forever changed American society and its citizens’ relationship with government. For some interesting details about Social Security, see “[Top Ten Facts about Social Security]( from the Center on Budget and Policy Priorities. Chart of the Day: The Increasing Burden of Health Care As anyone who has employer-provided health insurance can tell you, Americans are spending more and more each year for health care. A [new analysis]( from the Peterson-Kaiser Health System Tracker explores the growth of spending on premiums, deductibles and copayments over the last 10 years for families with large employer coverage. “Looking specifically at the total cost for the family, both through higher average premium contributions and higher average cost-sharing, families contribute 67% more to their health benefits than they did a decade ago, while employers contribute 51% more in premium contributions,” the report says. “Meanwhile, wages have increased 26%.” Reviewing the analysis, Caitlin Owens of [Axios]( puts it simply: “The current trajectory isn't sustainable.” Here’s a look at the brutal details, courtesy of Axios: Your Prize for Making It Through the Week Greenland as the 51st state? Unlikely, perhaps, but we live in interesting times. Here’s a [stunning look]( at our potential new state-mate from Getty Images. News - [Judiciary Committee to Cut Recess Short to Take Up Gun Measures]( – Politico - [Trump Aides Look into U.S. Purchasing Greenland After Directives from President]( – Washington Post - [Can Trump Actually Buy Greenland? The Short Answer Is No]( – Bloomberg - [Economic Trouble Signs Hang Over Trump’s Trade War]( – New York Times - [Fed May Not Have Enough Firepower to Prevent a Recession]( – CNBC - [American Medical Association Drops Out of Industry Coalition Opposed to Medicare Expansion]( – Politico - [Election Officials Want Security Money, Flexible Standards]( – Roll Call - [Cory Booker Wants a ‘Baby Bond’ for Every U.S. Child. Would It Work?]( – Washington Post - [Amid Concerns of a Recession, Pension Plan Returns Fall Short]( – Governing - [Poll: 62 Percent of GOP Voters Identify as Fiscally, Socially Conservative]( – The Hill Views and Analysis - [The Treasury Bond Rush Won't End Well]( – Conor Sen, Bloomberg - [A Recession Will Come. How Bad Will It Be?]( – Andrew Van Dam, Washington Post - [Trump Has a Dream Team for Mismanaging a Recession]( – Catherine Rampell, Washington Post - [From Trump Boom to Trump Gloom]( – Paul Krugman, New York Times - [What FDR Understood About Socialism That Today’s Democrats Don’t]( – Peter Canellos, Politico - [How the Democrats’ Social Security Plan Could Finance a Tax Cut]( – Andrew G. Biggs, National Review - [Wealth Taxes Are a Dying Breed]( – Kevin Drum, Mother Jones - [Pentagon’s $10 Billion Brain Is Frozen by a Contracting Scandal]( – James Stavridis, Bloomberg - [Don't Let Other Countries Unfairly Tax America's Most Innovative Companies]( – Joe Kennedy, The Hill - [Americans Need to Know the Whole Truth About the Opioid Crisis]( – Washington Post Editorial Board - [William Perry Pendley Is Trump’s Card to Sell off Public Lands]( – Grace Kuhn, Salt Lake Tribune - [The Effects of Medicaid Expansion under the ACA: Updated Findings from a Literature Review]( – Kaiser Family Foundation [Like Us on Facebook]( [Like Us on Facebook]( [Read Us On the Web]( [Read Us On the Web]( Copyright © 2019 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. 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