Last Gasp for Impeachment; Trump Second Term Spending Plans Worry Republicans
Author: Greg Valliere
July 22, 2019
HIGH DRAMA THIS WEEK: The vast majority of Democrats in Congress believe that Donald Trump obstructed justice in the Russia probe, yet the House is reluctant to pursue impeachment unless Robert Mueller encourages them to proceed. By late Wednesday, after Mueller completes his testimony before Congress, it finally may become clear to House diehards that there’s no chance of impeachment.
WE’VE PREDICTED FOR OVER A YEAR that there couldn’t possibly be 67 votes in the Senate to convict, as House Democrats concede. So their goal for Wednesday’s hearing is to damage Trump politically if Mueller reluctantly discusses several incidents of likely obstruction. Trump will tweet furiously, attacking Mueller personally, but his political damage is likely to be temporary.
OUR BOTTOM LINE IS THAT LITTLE WILL CHANGE: Trump might drop a point or two in the polls, but the Mueller testimony probably won’t have much of an impact; Trump will continue to claim, falsely, that he was totally exonerated. A sitting president apparently can’t be indicted, as Mueller will point out, and only about one-third of the House Democrats are determined to impeach.
AFTER THIS WEEK’S LAST GASP, perhaps the most crucial issue of all will be unresolved: are there any new measures in place to prevent Russia and other foreign powers from interfering in the next election, as they did in the last one? The answer appears to be no.
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TRUMP WILL SEEK DEEP SPENDING CUTS if he wins a second term, according to a very interesting piece this weekend in the Washington Post. The background: a massive budget deal — decidedly market-friendly — is coming into focus this morning that will be denounced by conservatives because it would raise the debt ceiling for two years while ignoring strict spending caps. Defense and domestic outlays would increase significantly.
THIS EMERGING BUDGET DEAL HAS GENERATED INTENSE OPPOSITION from Republican deficit hawks in the House, who have been suspicious of anything produced by Nancy Pelosi and Stephen Mnuchin, who want the debt ceiling raised before the August recess. Conservatives have implored Trump to kill this deal; they believe it would guarantee deficits well above $1 trillion annually for years to come.
SO TRUMP HAS SOUGHT TO ASSUAGE the fiscal hawks by promising — without offering details — massive spending reductions in his second term, and that worries Mitch McConnell, who has a Senate majority to maintain in the next year. He knows there are only two ways budget deficits can be slashed:
1. Deep cuts in spending, primarily on Social Security and Medicare. Even a hint of cuts to those programs would become a huge political albatross for the Republicans in the 2020 campaign; if Trump is willing to consider entitlement cuts, the Democrats would have a very potent issue. As for other spending cuts, only a sharp reduction in defense outlays would make a real dent in deficits — and the worst outlook for the Pentagon in a second Trump term would be a leveling off of its explosive spending growth.
2. The other source of deficit reduction could come from higher revenues, but we see virtually no chance of major tax hikes — nothing more than a few “cats and dogs” and loophole closers. If Trump wins a second term, the Senate probably would stay Republican, which means serious tax increases would be out of the question. Could there be higher revenues from stronger economic growth? The White House is already projecting GDP growth at or above 3% in the next three years; meeting that projection seems extremely unlikely.
THUS IT APPEARS THAT ANY SERIOUS DEFICIT REDUCTION in a Trump second term would have to focus primarily on entitlements; there aren’t enough potential savings from cuts in non-defense discretionary spending to make much of a difference. The devil is in the details, as Republicans like McConnell know — and they don’t want to talk about those details ahead of the next election.
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