Trump Diverts $3.6 Billion from Military to Build Border Wall

Plus: a better payroll tax cut?

Trump Administration Diverts $3.6 Billion to Pay for Border Barriers

The Department of Defense has approved a plan to divert $3.6 billion to pay for the construction of parts of President Trump’s border wall, Defense Secretary Mark Esper said Tuesday. The money will be shifted from 127 construction projects focused on upgrading military bases in the U.S. and overseas, which will be suspended unless Congress provides additional funds.

In a letter addressed to Senator James Inhofe, chair of the Armed Services Committee, Esper said that in response to the national emergency declared by Trump earlier this year, he was approving work on 11 military construction projects “to support the use of armed forces” on the border with Mexico.

The $3.6 billion will fund about 175 miles of new and refurbished barriers (Esper’s letter does not use the term “wall”).

Esper described the projects, which include new and replacement barriers in San Diego, El Paso and Laredo, Texas, as “force multipliers” that, once completed, will allow the Pentagon to redeploy troops to high-traffic sections of the border that lack barriers. About 5,000 active duty and National Guard troops are currently deployed on the border.

Months in the making: By declaring a national emergency on the southern border earlier this year, Trump gave the Pentagon the legal authority to move billions of dollars around in its budget to address the purported crisis. Legal challenges to the emergency declaration are ongoing.

Conflict with lawmakers: Congress passed a resolution opposing the national emergency declaration in March, prompting Trump to issue the first veto of his presidency. Democrats on the House Appropriations Committee reiterated their opposition to Trump’s move Tuesday, saying in a letter, “As we have previously written, the decision to take funds from critical military construction projects is unjustified and will have lasting impacts on our military.”

Majority Leader Steny H. Hoyer was more forceful, saying in a statement, "It is abhorrent that the Trump Administration is choosing to defund 127 critical military construction projects all over the country … and on U.S. bases overseas to pay for an ineffective and expensive wall the Congress has refused to fund. This is a subversion of the will of the American people and their representatives. It is an attack on our military and its effectiveness to keep Americans safe. Moreover, it is a political ploy aimed at satisfying President Trump's base, to whom he falsely promised that Mexico would pay for the construction of an unnecessary wall, which taxpayers and our military are now being forced to fund at a cost of $3.6 billion.”

A group of 10 Democratic Senators said in a letter to Esper that they “are opposed to this decision and the damage it will cause to our military and the relationship between Congress and the Department of Defense.” They said they also “expect a full justification of how the decision to cancel was made for each project selected and why a border wall is more important to our national security and the well-being of our service members and their families than these projects.”

Politico’s John Bresnahan, Connor O'Brien and Marianne LeVine said the diversion will likely be unpopular with Republican lawmakers as well. Republican Senators Mike Lee and Mitt Romney expressed concerns Wednesday about funds being diverted from their home state of Utah. "Funding the border wall is an important priority, and the Executive Branch should use the appropriate channels in Congress, rather than divert already appropriated funding away from military construction projects and therefore undermining military readiness," Romney said.

The Pentagon released a list of construction projects that will be affected late on Wednesday (you can review a screenshot tweeted by NBC News’ Alex Moe here). The administration reportedly has characterized the suspended military construction projects as being delayed, but to be revived, those projects would require Congress approving new funding. House Democrats have vowed they won’t “backfill” the money.

An $8 billion effort: In addition to the military construction funds and the money provided by Congress, the Trump administration is using $2.5 billion in drug interdiction money and $600 million in Treasury forfeiture funds to support the construction of barriers on the southern border, for a total of approximately $8 billion. (More on that here.)

The politics of the wall: Trump has reportedly been intensely focused on making progress on the border wall, amid news that virtually no new wall has been built during the first two and a half years of his presidency. Speaking to reporters at the White House Wednesday, Trump said that construction on the wall is moving ahead “rapidly” and that hundreds of miles will be “almost complete if not complete by the end of next year … just after the election.”

Trump Administration Will Give States $1.8 Billion to Combat Opioid Crisis

The Department of Health and Human Services announced Wednesday that it will offer states more than $1.8 billion in new funding to fight the opioid crisis. The money will be used to expand access to treatments and collect data on the epidemic, the department said.



HHS also projects that by the end of the year it will have awarded more than $9 billion in opioid treatment and prevention grants to states and local communities since the start of the Trump administration.

Prescription opioids and drugs like heroin and fentanyl were responsible for 47,600 U.S. deaths in 2017, with that number declining slightly last year, according to the government figures cited by Reuters.

Tweets of the Day

From Kai Ryssdal of Marketplace and Eamon Javers of CNBC:

Javers added that he “asked the White House for an explanation of the president’s suggestion that the Chinese can’t sell US debt until the debts ‘come due’” but did not get an official response.

Are Republican Voters Done With Tax Cuts?

The White House is reportedly mulling another tax cut in the form of an inflation adjustment on capital gains and President Trump has promised a middle-class tax cut if Republicans sweep the 2020 election, but according to Jackson Gode and Vanessa Williamson of the Brookings Institution think tank, all that talk about tax cuts isn’t likely to win the GOP much support at the ballot box.

The Republican Party may still be beholden to the Reagan-era belief in the power of tax cuts, Gode and Williamson said Tuesday on a Brookings blog, but few Americans share that faith. According to polls, most Americans say they pay about the right amount in taxes, and taxes are low on the list of problems most people say are facing the country (see the chart below). President Trump’s big legislative success, the 2017 Tax Cuts and Jobs Act, was largely a political failure, with few people believing they had received a tax cut, even though 80% did benefit in the first year.

“At the end of the day, the administration’s talk about taxes are a sideshow,” Gode and Williamson write, marking “an enormous shift in the Republican Party.” Trump’s voter base is motivated by other things, they argue — namely, “racism and xenophobia” — which suggests that the promise of a new round of tax cuts, however unlikely, isn’t going to mobilize voters heading into what promises to be a hotly contested election in 2020.

A Permanent Payroll Tax Cut?

With the Trump administration reportedly considering a temporary payroll tax cut to boost the economy and ward off a potential recession, Marc Goldwein of the Committee for a Responsible Federal Budget is floating an alternative plan that he says would help the economy over the short- and long-term and also increase progressivity, strengthening Social Security and raise wages for many Americans.

In an op-ed at The Hill, Goldwein suggests permanently reducing the current payroll tax for workers and employers — each side pays 6.2% of wages up to roughly $133,000 a year — by 1 percentage point. But to avoid undermining Social Security’s finances, that cut would be gradually paired with a new 5.2% tax on all compensation, including benefits.

“Cutting workers’ tax rate will boost economic activity by increasing consumer spending, while cutting employers’ rate will support the economy by helping businesses to keep prices low and retain or hire workers. Making the rate cut permanent will assure these economic gains are sustained over time,” Goldwein says. He adds: “This reform would be far more progressive and more efficient than the current payroll tax. It would encourage employers to control health care costs and boost middle class wages rather than dedicating a growing share of compensation toward fringe benefits and pay for companies’ highest earners.”

Goldwein acknowledges that some questions would still need to be answered — perhaps most notably, whether our politicians have the creativity and will necessary to make such changes.

Read the full op-ed at The Hill.

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