What Unifies Washington? Eight Quick Themes
Author: Greg Valliere
July 18, 2019
WE GOT PLENTY OF REACTION yesterday after our rant about the inability of Congress to get much done. One loyal reader asked a question that made us think: Despite the dysfunction, aren’t there issues where there’s widespread agreement in Washington? Yes, there are — and here are eight quick examples:
1. Everyone likes Jay Powell: We cannot uncover any serious opposition to the Fed Chairman on Capitol Hill. Even lawmakers who think the Fed is too powerful and too unaccountable have nice things to say about Powell. Everyone we speak with agrees that Donald Trump may need a scapegoat next year if the economy slips, but they think firing Powell — or, more likely, demoting him — is a terrible idea.
2. China needs to be confronted: We wonder if officials in Beijing appreciate how unified Washington is on the issue of getting tough on China in trade talks. There’s near-unanimity in this city that China cheats, steals U.S. intellectual property and regularly hacks U.S. companies. Support for still another trade war — against Western Europe — would be tepid, but even Democrats endorse Trump’s tough stance against the Chinese.
3. The debt ceiling is playing with fire: Everyone postures on raising the debt ceiling, and many members of Congress view this “must-pass” legislation as a vehicle for lots of other proposals. But is the U.S. going to default on interest payments on Treasury bills, notes, and bonds? That’s unthinkable, and most of Washington agrees.
4. Deficit reduction is politically radioactive: There’s no appetite in this city for going after the Third Rail of politics: the entitlement giants Medicare and Social Security, which are the fastest growing portion of the U.S. budget. Even modest entitlement reforms, including a new way of calculating cost of living increases, encounters fierce opposition — and the politicians clearly realize that any cuts would jeopardize their re-election.
5. The tech industry is deeply unpopular: Hearings this week highlighted the antipathy in this city toward Big Tech, despite the industry’s generous contributions to candidates. We don’t see an immediate threat, but both parties want to look more closely at privacy issues and anti-competitive behavior. At the least, the tech industry faces headline risk.
6. The isolationist trend: There’s virtual unanimity in Washington in opposition to new foreign entanglements. Over a decade of Mideast conflict has made the American public war-weary, and no one understands that more than Trump, who’s an isolationist with no stomach for nation-building. The consensus is that dramatically higher defense spending will be the deterrent — and both parties are comfortable with much higher Pentagon outlays.
7. What’s being ignored? Cyber terrorism: If you polled people in government and Congress, asking them about what’s being ignored, they would reply that it’s the threat of cyber terrorism from countries with far less military might than the U.S. Is this country prepared to confront a cyber terrorism threat? No.
8. Agreement on Donald Trump: Finally, there’s widespread agreement that Trump is a brilliant and ruthless tactician, willing to play the race card and demonize his Democratic opponents, who have been backed into a corner — supporting four radical House members who have come to symbolize the party, exactly what Trump wants. You want something that most of Washington agrees on? Trump is the early favorite to win re-election.
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