Trump, Pelosi Exchange Fire Over the Wall

Plus, Trump's deficits could make history

Trump, Pelosi Exchange Fire Over the Wall

President Trump warned again Thursday that the bipartisan congressional committee working on a compromise over border security funding will be a “waste of time” if it doesn’t provide money for the wall he wants — and again suggested he’s prepared to push ahead without Congress, and set off a surefire legal battle, if lawmakers don’t deliver the funds he wants.

“I don’t think they’re going to make a deal,” Trump told reporters in the Oval Office. “If they don’t have a wall, I don’t even want to waste my time reading what they have.”

The president has threatened another partial government shutdown if the proposed spending bill doesn’t fund the physical barriers he wants, and he has also said he could declare a national emergency at the southern border, bypassing Congress to secure money for building the wall. Some Republicans have cautioned against the idea of an emergency declaration, and such a move by Trump would certainly be met with immediate court challenges that would likely leave the wall in legal limbo for months or years.

The fight could come down to semantics: Trump’s Oval Office comments came after House Speaker Nancy Pelosi told reporters that Democrats are open to negotiating some additional border “infrastructure” and more money for technology, though they remain staunchly opposed to providing any money for construction of a wall on the southern border.

“There's not going to be any wall money in the legislation,” Pelosi said during her weekly press briefing, according to The Hill.

But Pelosi and other Democrats have left some wiggle room for Trump, if he opts to take it. “Is there a place where enhanced fencing, Normandy fencing would work? Let them [the negotiators] have that discussion,” she told reporters. “If the president wants to call that a wall, he can call it a wall.”

Pelosi’s comments suggest a potential endgame, Bloomberg’s Sahil Kapur tweeted: “Basically, Democrats will support money for various border security items (but not a concrete or steel barrier); Trump can call it a ‘wall’ and declare victory while Dems say it's not a wall. Question is whether he can accept that or whether he needs them to call it a WALL.”

The president has tried out various terminology for his wall. He’s talked about a “barrier” or a “steel slat fence,” and he joked on January 11 that lawmakers could even name the wall “peaches.” But on Thursday he went back to calling for a regular old wall. Or make that a WALL. "Lets just call them WALLS from now on and stop playing political games!," he tweeted. "A WALL is a WALL!" 

What’s in the Democrats’ opening offer on border security: House Democrats on Wednesday offered as a starting point a border security plan that would provide no funds for border barriers, but billions for technology, equipment and border personnel.

Bloomberg News outlines the proposal: “The Democrats’ offer includes $98 million for 1,000 new customs officers, $675 million for more imaging technology at land ports of entry, $400 million for other border technology procurement and $502 million for humanitarian aid for migrants.”

But Democrats involved in the talks also left room for compromise in the negotiations. “Lawmakers on both sides flashed signs of flexibility, eager to demonstrate willingness to compromise in hopes of resolving the standoff with Trump that sparked the just-ended 35-day partial government shutdown,” the Associated Press said.

Trump’s GOP allies reportedly say that a deal will have to include some money to satisfy Trump, but they “predict privately that the White House is eager to grab an agreement and declare victory — even if winning only a fraction of Trump’s request,” the Associated Press reported.

The clock Is ticking: With 15 days until portions of the government again run out of funding, the conference committee looking to strike a border security deal have precious little time to sort through some highly contentious issues.

“In order to have a bill signed by the president, we have to have a signed conference report by next Friday,” House Speaker Nancy Pelosi told reporters Thursday. “So we only have this week plus one day, with the State of the Union in between, to get this done.”

The bottom line: Trump’s blizzard of sometimes conflicting tweets and comments “left lawmakers from both parties confused as to what Trump would find acceptable as they work to avert another shutdown,” The Washington Post’s John Wagner reported. One House Democratic aide told Axios that Trump's tweet about the talks "undermines negotiations." But negotiators are still voicing optimism that they can hammer out a deal. The big question is whether Trump will accept one or plunge the government back into crisis.

Trump's History-Making Deficits

A dozen Bloomberg opinion writers on Thursday offered their evaluations of President Trump’s performance over his first two years in office, with former Bloomberg editor-in-chief Matthew Winkler tackling the change in the budget deficit.

Trump, Winkler writes, “has the dubious distinction of being the first leader among the Group of Seven (Canada, France, Germany, Italy, Japan, U.K., U.S.) to see the deficit widen on his watch as a percentage of gross domestic product during a synchronized global expansion.”

Thanks in large part to Trump’s tax cuts, the steady improvements in government revenues relative to outlays since the end of the recession have now reversed themselves, with revenues falling 2.7 percent, or $83 billion, in 2018 relative to the year before. By comparison, tax revenues surged 7 percent in 2015, the last time GDP growth approached 3 percent.

If economic growth continues on its current path toward less robust levels, Winkler says, “Trump will be the first president to preside over perennial deficits exceeding $1 trillion.”

Read the full review of Trump’s performance here.

Bernie Sanders Proposes 77% Estate Tax on Billionaires

Sen. Bernie Sanders (I-VT) added to the rapidly growing pile of liberal proposals to increases taxes on the wealthy Thursday, introducing a bill that would significantly expand the reach of the estate tax.

The legislation, called the “For the 99.8% Act,” would tax estates worth as little as $3.5 million, well below the $11 million threshold enacted by the Republican tax bill in 2017. The bill would also take steps to limit the ability of wealthy families to pass money to the next generation without paying taxes.

Here’s a breakdown of the proposed estate tax brackets, according to Sanders’ summary of the bill:

  • 45 percent on the value of an estate between $3.5 million and $10 million.
  • 50 percent for the value of an estate between $10 million and $50 million.
  • 55 percent for the value of an estate in excess of $50 million.
  • 77 percent for the value of an estate in excess of $1 billion.

The summary notes that the “top estate tax rate was 77 percent from 1941 to 1976, according to the Joint Committee on Taxation.”

The proposal comes just a few days after Republican senators released their own bill that would eliminate the estate tax entirely.

Sanders’s press release says his proposed estate tax would apply only to the wealthiest 0.2 percent of Americans, and provides some calculations to show it would affect the country’s billionaires. Amazon founder Jeff Bezos, for example, is worth an estimated $131 billion. Under current law, his estate would face a tax liability of $52 billion. Under the Republican proposal to eliminate the estate tax, his estate would face a tax liability of $0. Under Sanders’ proposal, it would face a tax liability of $101 billion.

Applied to all 588 billionaires in the U.S., who have estates currently valued at roughly $3 trillion, the estate tax would create potential liabilities of about $2 trillion.

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Some F-35s Are Wearing Out Much Faster Than Expected

The F-35B stealth jet used by the Marine Corps is wearing out an alarming rate, according to a report from the Pentagon’s test office obtained by Bloomberg News. The short-takeoff-vertical landing version of the troubled aircraft was expected to have a service life of 8,000 fleet hours, but recent testing data suggest that the service life could be as little as 2,100 hours. Some jets could reach the end of their service life as soon as 2026, Bloomberg's Tony Capaccio said.

The report also said that maintenance and reliability goals were not being met for the F-35B, and that previously-identified cybersecurity vulnerabilities have not been fixed.

Acting Defense Secretary Patrick Shanahan cautiously acknowledged the ongoing problems in the $1.5 trillion F-35 program, telling reporters Tuesday, "I am biased toward giving the taxpayer their money's worth. And the F-35, unequivocally, I can say, has a lot of opportunity for more performance."

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