Mulvaney: We Spend Too Much, but It’s Not Trump’s Fault

Plus, another F-35 fail

Mulvaney: We Spend Too Much, but It’s Not Trump’s Fault

Mick Mulvaney, the acting White House chief of staff, has a reputation as a fierce conservative hawk on federal spending — or at least he did before he joined the Trump administration.

The Atlantic’s Elaina Plott and Peter Nicholas report that Mulvaney is well aware “that Donald Trump’s administration doesn’t always make good on conservative ideals”:

“He knows that they’re ‘spending a bunch of money on stuff we’re not supposed to,’ and that all the excess doesn’t comport well with his own reputation as a fiscal hawk and Tea Party darling during his congressional days …”

“But the spending hasn’t escaped his notice—nor that of his old conservative colleagues in the House. One of them had actually ‘accused me of “losing,”’ Mulvaney recalled, after the White House signed a massive spending package. The colleague, Mark Meadows, ‘said, ‘It sounds like my friend Mick Mulvaney is not winning on some of the fiscal issues down at the White House.’’ But Mulvaney had a retort that underscores how he’s come to define success. ‘I told him, ‘Yeah, but at least I’m losing at the very highest levels.’’”

Mulvaney “was quick to wave off any of the administration’s perceived shortcomings,” Plott and Nicholas write, casting the blame for higher spending and debt on Congress:

“Mulvaney insisted that’s the Republican Party’s fault, not the president’s—lawmakers, he said, are voting for bills that they themselves admit spend way too much money. ‘Tell me how the president is supposed to be fiscally conservative against that backdrop,’ Mulvaney said. ‘So yeah, we spend too much money. But the president by himself can’t change that.’”

Mulvaney also said that “the ball really is in Democrat’s court” on whether they can, or are willing to, reach deals with Trump on his renegotiated trade deal with Mexico and Canada or infrastructure. If they fail to make progress on those priorities, Mulvaney said, “it could be a slow couple of years.”

Read the full piece at The Atlantic.

US Economy Grew at a 3.2% Rate to Start 2019, but Concerns Lurk

The U.S. economy grew at an unexpectedly strong 3.2% annual pace in the first three months of 2019, according to an initial estimate released by the Commerce Department Friday. Economists surveyed by The Wall Street Journal had projected 2.5% growth for the quarter, while a Bloomberg survey had put that number at 2.3%.

Kevin Hassett, chair of the Council of Economic Advisers, said that the results show that President Trump’s economic policies were paying off. “It confirms our view that the momentum from last year was not a sugar high but a serious response to long-run policies that have made the U.S. a more attractive place for business,” Hassett told The Wall Street Journal.

Paul Ashworth, chief U.S. economist at Capital Economics, said that the growth figure “would seem to make a mockery of claims that the US economy is slowing as the fiscal stimulus fades.” However, dig into the details of the report and “there are plenty of causes for concern,” Ashworth wrote in a note to clients.

A buildup of inventories contributed about 0.7 percentage points to the 3.2% growth figure, which is unlikely to repeat and will likely reverse itself in the current quarter. Net exports added another point, but that isn’t likely to last either. “The upshot,” Ashworth said, “is that, stripping out trade and inventories, final sales to domestic purchasers increased by only 1.4%, which is the smallest gain in more than three years.”

MarketWatch’s Rex Nutting said the details of the report were consistent with a slowing economy, despite the strong top line. “The tax cut was supposed to supercharge the private-sector,” Nutting wrote, “and it did — for a few quarters.”

Dean Baker of the Center for Economic and Policy Research noted that capital investment was weak in the quarter, growing at a modest 2.7% annual rate. “The performance on investment has been notably weak over the last year, growing at a modest single-digit rate,” Baker wrote on CEPR’s blog. “The administration’s projections of the impact of its tax cut imply growth in the neighborhood of 30 percent. We clearly are not seeing anything like this.”

Quote of the Day

“Now we’re going for the rest.”

– President Trump, in a speech at the National Rifle Association convention on Friday, vowing once again to repeal the Affordable Care Act after touting the GOP’s success in essentially eliminating the law’s individual mandate, which he called “the absolute worst part of Obamacare.”

Chart of the Day: The Cost of Medicare for All

Writing at The Nation, Mike Konczal of the liberal Roosevelt Institute says that supporters of Medicare for All need to answer a $5 trillion question: How will they wring out savings from doctors, hospitals and drug companies?



Reducing payments to health care service providers would provide about 70 percent of the savings provided by a switch to Medicare for All. Without those savings, the proposed universal system would end up costing more than the current system, though it would cover all of the population.

Why So Many F-35s Are Sitting on the Ground

The long-term cost of the Lockheed Martin F-35 stealth fighter continues to rise, according to a recent Pentagon assessment, with the lifetime cost of the program now projected to be $1.196 trillion. But higher spending levels don’t appear to be producing better performance for the still-troubled weapon system.

According to a report from the Government Accountability Office this week, the aircraft is “falling short of warfighter requirements” due to serious problems with maintenance and availability.

During an eight-month period in 2018, only about half of F-35s in the U.S. fleet were “mission capable” — defined as able to conduct at least one mission. Less than a third were “full mission capable,” or able to conduct all missions.

A big part of the reason, GAO said, was the lack of spare parts and the difficulty of managing a supply chain that reaches across the globe. Spare part shortages alone were responsible for nearly 30% of the downtime.

Tracking parts is a serious issue, GAO said. The Pentagon “has spent billions of dollars on F-35 spare parts but does not have records for all the parts it has purchased, where they are, or how much they cost.”

Mismatched parts are also a problem, with services struggling to keep up with modifications on the jets that render some spare parts obsolete. The three variations of the jet — different versions for the Air Force, the Navy and the Marines — contribute to the issue as well. As an example, the GAO said that “44 percent of purchased parts were incompatible with aircraft the Marine Corps took on a recent deployment.”

The GAO provided eight recommendations to the Department of Defense for fixing the problem, while warning that failure to successfully address the issue “risks that its F-35 fleet may fall short of the capability needed to support its critical national defense missions in the future.”

Your Prize for Making It Through the Week

The wizards at Google have created a fun Easter egg tied to the release of "Avengers: Endgame." Read about it here, or try it yourself by clicking on the Infinity Gauntlet (that's the glove image on the right) here.

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