Is Trump’s Raid on Pentagon Funds Jeopardizing National Security?

Is Trump’s Raid on Military Funds for His Border Wall Jeopardizing National Security?

The military construction projects that are being defunded to provide $3.6 billion for President Trump’s border wall are of vital importance to the Pentagon, according to documents submitted by the Defense Department to Congress in the last few years.

Released earlier this month, the list of 127 projects that are losing funding (which you can see here) provides no explanation of why those projects were chosen, or what might happen if they are not completed, according to Aaron Gregg and Erica Werner of The Washington Post. Reviewing recent budget requests from the Department of Defense, Gregg and Werner found that the Pentagon portrayed many of the construction projects as essential, and in some cases potentially a matter of life and death.

“In numerous instances, Defense Department officials wrote that the infrastructure problems were hurting the military’s readiness, and impeding the department’s national security mission,” Gregg and Warner wrote Wednesday.

Here‘s a sample of the construction projects reviewed by the Post that are losing funding:

• A parking ramp used by armed aircraft in the Air National Guard in New Orleans sits next to a public road, exposing passersby to an “unacceptable risk” from accidental explosions, the Air Force said in 2018. The air base was scheduled to receive $15 million for renovations.
• Military personnel have been violating safety standards at an ammunition plant in Indiana due to inadequate storage facilities. The Army had planned a $16 million project to improve the facilities.
• To make way for the new Air Force One, the Pentagon needs to relocate a facility that handles hazardous cargo at Joint Base Andrews in Maryland. The $37 million project has been placed on hold.

For its part, the Pentagon says that the construction projects are merely being delayed and will resume once Congress provides new funding. But Democrats appear to be unwilling to go along with this plan, saying it raises serious constitutional issues and would absolve the Trump administration of responsibility for redirecting the money in the first place.

Read the full analysis at the Washington Post.

Congress Considers Another Option for Border Funding Fight: Skip It

The fight over funding President Trump’s border barriers led to a 35-day shutdown, the longest ever, last December and January. With appropriators now working on spending decisions for fiscal 2020, and the issue of wall funding again emerging as a landmine on the path to any progress, lawmakers are exploring an option to defuse at least part of the threat, The Wall Street Journal’s Andrew Duehren reports:

“Officials on Capitol Hill crafting spending legislation are considering extending current funding for the Department of Homeland Security—which oversees construction of the wall—for another year, according to several people familiar with the deliberations. By simply continuing to fund the department at current levels, lawmakers could skip the contentious process of negotiating new funding for the wall, one of President Trump’s central legislative priorities.”

An extension of current DHS funding might help ease the passage of other funding bills, but it wouldn’t necessarily head off all clashes over barrier funding.

Democrats have a couple of big problems with providing money for the wall. First, they argue the wall is ineffective and an inefficient use of money. Second, they object to the Trump administration’s diverting funds provided by Congress for other uses toward barrier construction — and to GOP lawmakers’ efforts to backfill those diverted funds.

Simply extending DHS funding for another year wouldn’t address that second concern, and as the Journal notes, Democratic efforts to block the administration from shifting money toward Trump’s wall have already caused some turmoil in other parts of the Senate appropriations process.

The Journal’s Duehren notes that discussions of a DHS funding extension are “relatively preliminary” and that the White House and some key lawmakers may not be ready to go that route.

The Fed Cuts Interest Rates: ‘Monetary Policy Is Officially Easy Again’

The Federal Reserve cut interest rates again on Wednesday, lowering its benchmark overnight lending rate to a range of 1.75% to 2.00%, as was widely expected. With the cut, monetary policy is once again easy, says Torsten Slok, chief economist at Deutsche Bank Securities — meaning that the Fed funds rate is below the central bank’s estimate of the neutral rate:

“It is quite striking how short the period was with tight monetary policy relative to the long period of easy monetary policy. One explanation is that it simply took a long time for the economy to recover after the financial crisis and just when we arrived at neutral, the economy got hit by a trade war. Another explanation is that our estimate of the neutral rate is completely wrong, maybe interest rates should be lower because of unfavorable demographics, higher overall debt levels, and global central bank QE. The only development which can stop these forces from dragging down rates is inflation, and there are simply no signs that this will be a problem anytime soon.”

Wednesday is National Cheeseburger Day. Yes, we know, every day is National Cheeseburger Day. But just so you're properly prepared, tomorrow is National Butterscotch Pudding Day.

Send your tips and feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: @yuvalrosenberg, @mdrainey and @TheFiscalTimes. And please tell your friends they can sign up here to get their own copy of this newsletter.

News

• Fed Approves Quarter-Point Rate Cut but Is Divided on Further Action This Year – CNBC
• Health Care Riders, Farm Payouts Slow Stopgap Deal – Roll Call
• Tennessee Block Grant Plan Faces Uphill Battle – Axios
• House Rejects GOP Motion on Replacing Pentagon Funding Used on Border Wall – The Hill
• Interactive Graphic: Military Construction Projects Impacted by President Trump’s Diversion of Funds to the Border Wall – American Enterprise Institute
• Smithsonian Has Almost $1 Billion in Outstanding Maintenance, Committee Told – Roll Call
• Health Care Group Backs Democrats with Seven-Figure Ad Campaign – Roll Call
• This Report Tallied the Human and Economic Toll of Gun Violence in All 50 States. The Cost Is Staggering – NBC News
• US Air Force to Shift Billions of Dollars to Network Its Weapons – Defense One
• Feds Spend $60 Million for Automated Vehicle Tests on Public Roads – Axios
• Purdue Pharma Responds to Wave of Opioids Litigation by Filing for Bankruptcy. What Happens Now? – Time
• Military Has Spent Nearly $200,000 at Trump’s Scottish Resort Since 2017 – Politico
• To Bring ‘Prestige’ Back to Education, Make Teachers Tax-Exempt, Says Blackstone CEO Steve Schwarzman – Recode
• New Mexico Announces Plan for Free College for State Residents – New York Times
• Author J.K. Rowling Donates $18.8 Million to Research Into the Treatment of Multiple Sclerosis – Time

Views and Analysis

• Fixing America's Health-Care System Is Going to Require Radical Reform: Price Caps – Arielle Kane, The Hill
• Tennessee Wants to Block Grant Medicaid. Is That Legal? – Nicholas Bagley, The Incidental Economist
• Workers Aren't So Sure ‘Medicare for All’ Would Raise Their Wages – Drew Altman, Axios
• How the GM Workers Strike Makes Bernie Sanders’s Case for Medicare-for-All – Tara Golshan, Vox
• The GM Strike and America’s Health-Care Burden – Helaine Olen, Washington Post
• Trump Wall Raids 127 Military Construction Projects, Mocks the Constitution – USA Today Editorial Board
• Democrats Forced President Trump into Finding Alternatives to Build the Border Wall – Rep. Jody Hice (R-GA), USA Today
• Barack Obama’s Biggest Mistake – Farhad Manjoo, New York Times
• On Soaking the Rich – Paul Krugman, New York Times
• Why Rigged Capitalism Is Damaging Liberal Democracy – Martin Wolf, Financial Times
• The Fed Needs to Give the Economy a Booster Shot – Karl Smith, Bloomberg
• Bill Gates Is Right to Support a Wealth Tax – Leonid Bershidsky, Bloomberg