What We’re Hearing on Capitol Hill
Author: Greg Valliere
April 9, 2019
AFTER TWO GREAT WEEKS OF SEEING CLIENTS AND COLLEAGUES IN CANADA, we spent yesterday on Capitol Hill, mostly listening. We got an earful:
MEMBERS OF BOTH PARTIES are aghast over Donald Trump’s purge of the Department of Homeland Security, apparently at the behest of his ruthless 33-year-old aide Stephen Miller. Republicans we talked with worry that the separation of children from parents will resume, and they worry that the border may be shut — a huge economic issue. “Trump is un-hinged over the surge of illegal immigrants, it’s his core issue, and he’ll do anything — and fire anyone — to avoid blame,” a Republican staffer told us.
HEARINGS AND SUBPOENAS: Democrats we talked with are eager to begin hearings on the Mueller report; William Barr will testify soon, followed — eventually — by Mueller himself. There’s a widespread opinion in both parties that Trump isn’t out of the woods yet, but impeachment is unlikely and conviction is extremely unlikely. There’s a widespread consensus that more damaging revelations are coming; both parties disagree on whether the public eventually will tire of this mess.
BENEATH THE RADAR — THE BUDGET: Democrats are divided on many issues; they’re bickering in public over details in the House budget for fiscal 2020. Moderates want to raise spending caps a little, while progressives want a huge increase, comparable to the expected enormous hike for Pentagon outlays. A predictable budget brawl over this and the debt ceiling looms this fall, with one clear outcome: spending and deficits are headed higher.
THE LEGISLATIVE OUTLOOK: There’s a surprising consensus that an infrastructure bill could move later this year, although there’s little agreement on the details. The deep antipathy toward drug companies could lead to legislation that would seek to curb prices. There’s also no love on Capitol Hill for the tech industry or financial services firms, although we see no imminent legislative risk.
TRUMP VS. THE FED: The economic IQ on Capitol Hill is abysmal, so issues like monetary policy usually break down to personalities. There’s widespread support for Jerome Powell, and a sense that Trump’s criticism of the Fed is reckless. Yet Republicans feel that interest rates should be lower, in light of tame inflation. Most Republicans are likely to support the nomination of Stephen Moore to the Fed board, but his prospects are shaky. We detected little support for Herman Cain, whose train-wreck nomination may be scuttled by summer.
TRADE WARS: There’s surprising support for a hard line with China, and within both parties there’s a concern that a final deal later this spring might be exceedingly modest. There’s no enthusiasm for ratifying the NAFTA replacement, which may languish for many months. And there’s concern that a new trade fight over tariffs looms with the European Union.
THE 2020 ELECTION: We talked with Democrats who grudgingly agree that Joe Biden is still the favorite for the nomination despite his indiscretions, but there’s little enthusiasm. Beto O’Rourke has charisma but needs gravitas, many Democrats agree. They all consider Kamala Harris a serious candidate and they shake their heads at Bernie Sanders’ popularity and fundraising. “It’s not a real strong field,” one Democrat told us.
TRUMP, A TWO-TERM PRESIDENT? Virtually no one — especially in private — has anything good to say about Trump, who squandered an opportunity to act magnanimously after Mueller ruled that there was no collusion. Instead, Trump looked for new targets like the Fed, relishing fights that keep the Trump name in the news. “If the economy stays strong, he’s the favorite in 2020,” a demoralized Democrat told us, and most Republicans agree despite their distaste for him.
THE WILD CARD: More than one person inquired yesterday about Ruth Bader Ginsburg, who is a neighbor. “What are you hearing about her health?” people inquire (she looks frail, but what a strong woman). The most overlooked story in Washington is the sharp move rightward in the courts, navigated brilliantly by Mitch McConnell. A fresh Supreme Court vacancy could complete the transformation of the judiciary for the next two decades.
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