What Trump Knew and When He Knew It

What Trump Knew and When He Knew It

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Plus: White House says cutting debt will be second-term priority
Wednesday, September 9, 2020

Trump Knew, Downplayed Coronavirus Threat: Woodward Recordings

President Trump acknowledged in early February that the coronavirus pandemic was more deadly than the flu and said in March that he was intentionally playing down the severity of the virus outbreak, according to recordings of interviews with journalist Bob Woodward for a new book. The private comments contrast sharply with the president’s public claims that the virus would simply “disappear” and was “very much under control.”

In a February 7 phone interview, Trump made clear he knew the threat the novel virus posed:

  • “You just breathe the air and that’s how it’s passed. And so that’s a very tricky one. That’s a very delicate one. It’s also more deadly than even your strenuous flus. … This is deadly stuff.”

As The
Washington Post notes, Trump would go on to tell the public that the virus was no worse than the flu, saying it would soon disappear and that his administration had the outbreak under control. Trump claimed later in February that the number of U.S. cases "within a couple of days is going to be down close to zero," and he continued to hold campaign rallies that experts warned could put attendees at risk.

In a March 19 interview with Woodward, Trump admitted he was purposely minimizing the threat from the virus:

  • “To be honest with you, I wanted to always play it down. I still like playing it down because I don’t want to create a panic.”

In that March interview, Trump also told Woodward that “plenty of young people” were contracting the virus. The president would later claim publicly that children are “almost immune” to infection.

Joe Biden, the Democratic presidential nominee, blasted Trump for the recorded comments, saying the president’s decisions betrayed the American people and cost “tens of thousands of lives and millions more of American livelihoods.”

“He knew how deadly it was. He knowingly and willingly lied about the threat it posed for months,” Biden said at an event in Michigan. “He failed to do his job, on purpose,” he said.
White House Press Secretary Kayleigh McEnany insisted Wednesday that the president has never lied to the American public about Covid and was exhibiting strong leadership by trying to maintain confidence and calm. “The president never downplayed the virus,” she said.

Trump later reiterated to reporters that he wanted to show strength and avoid public panic. He said his administration has done an “amazing job” in combatting the virus and that the country otherwise would have seen millions of Covid-19 deaths.

Woodward conducted 18 interviews with Trump for his book, “Rage,” due to be released next week. CNN and The Washington Post obtained copies of the book and published details and audio recordings on Wednesday. The book reportedly also includes brutal criticisms of Trump from several of his former top national security officials.

Why it matters:
These are potential bombshells that could have Trump again on the defensive about his coronavirus response even as his campaign has tried to shift the focus in the presidential race. Yes, Trump has managed to survive and maintain the support of his base after past damaging comments, but this time the revelations are more directly tied to the voting public’s health and wellbeing — and the Covid death toll is nearing 190,000.

One thing is certain: You’ll be hearing a lot more about Woodward’s book over the next week.

Read more about Woodward’s revelations at The Washington Post and CNN.

Biden Pitches Corporate Tax Changes to Boost U.S. Jobs

Joe Biden rolled out corporate tax proposals Wednesday aimed at protecting U.S. workers by encouraging companies to invest in jobs domestically and punishing multinationals for moving jobs overseas.

Biden’s proposals include:

  • A 10% surtax on profits of U.S. companies on products made overseas and then sold in the United States. Combined with Biden’s proposed 28% corporate tax rate, the plan means companies would pay a 30.8% tax rate on any such profits, Biden’s campaign said.
  • A 10% “Made in America” tax credit meant to spur job creation. The credit would be available to companies that invest in reopening or retooling U.S. facilities or bring back manufacturing or service jobs from foreign countries.
  • Closing what the Biden campaign calls “three major offshoring loopholes” in the 2017 Republican tax law that allow companies to shield profits from U.S. taxes.

Biden also said he would sign a series of executive actions in his first week as president to strengthen the federal government’s “Buy American” rules and support American supply chains.

Why it matters:
The announcements mark Biden’s latest effort to challenge Trump on the issue of the economy and appeal to working-class voters in battleground Midwestern states including Michigan, where he held his event Wednesday. Carl Tannenbaum, chief economist at Northern Trust and a former official at the Chicago Federal Reserve, told Bloomberg News that, since the tax changes would require congressional action, they would depend on Democrats winning a filibuster-proof majority in the Senate in November’s elections.

Reducing National Debt Will Be ‘Big Second-Term Priority’ for Trump, White House Says

Donald Trump famously declared while running for president that he would eliminate the national debt during two terms in office.

"We're not a rich country. We're a debtor nation,” Trump told The Washington Post in April of 2016. “We've got to get rid of the $19 trillion in debt.” Asked how long that would take, Trump said, “I think I could do it fairly quickly ... I would say over a period of eight years.”

But the debt has done nothing but grow under Trump. Even before the federal response to the coronavirus crisis drove the annual deficit over the $3 trillion mark and the national debt as a percentage of the economy to its highest level since World War II, Trump’s fiscal policies of tax cuts and higher spending were driving the deficit and debt substantially higher. Three years into his presidency, the deficit had grown by more than 60% and trillions had been added to the national debt.

Nevertheless, on Wednesday White House Press Secretary Kayleigh McEnany renewed the president’s vow to start reducing the debt — just as soon as he wins reelection.

“The debt is a second-term priority of his,” McEnany told Fox News Wednesday, citing “unprecedented growth” as a means of accomplishing that goal.

Tax cuts won’t do it:
In her response to a question about the huge increase in the deficit this year, McEnany referred to increases in federal revenues in 2018 and 2019, which she attributed to the GOP tax cuts passed in 2017, while implying that such revenues could help reduce the debt. But as The Washington Post’s Dave Weigel pointed out last week in response to a claim by Treasury Secretary Steve Mnuchin that the Trump tax cuts “were creating growth that would pay down the debt over time,” the deficit was rising in the wake of the GOP tax cuts, and the debt was projected to keep growing, not shrink. The coronavirus crisis simply accelerated trends already in place. And Trump’s recent suggestion that he might eliminate payroll taxes certainly wouldn’t help.

So what’s the plan?
The Trump administration has released virtually no details on its agenda for a second term. But the president has indicated that, in addition to cutting taxes, he wants to cut spending, saying in May, "we're going to cut ... we're going to cut back very substantially." Asked if he had a plan for reducing the debt, Trump told a conservative radio host, “I do, I do. That bothers me too, but we’re going to get out of it.”

Trump’s track record, however, suggests that it is unlikely that there is such plan. And aside from slashing spending, which would require a Republican sweep of Congress in November in addition to a Trump victory, faster economic growth is the only tool the White House has cited for its budget reduction effort. The prospects for such extraordinary growth, however, remain quite poor, leaving a second Trump administration few options for achieving its goal of debt reduction.

Deficit Hits $3 Trillion in 2020: CBO

The federal budget deficit was $198 billion in August, the Congressional Budget Office projected on Wednesday, bringing the deficit for the first 11 months of the 2020 fiscal year to $3 trillion. The CBO reiterated its projection for a full year deficit of $3.3 trillion, or 16% of the size of the economy — the highest level since 1945.

The chart below shows the effect of coronavirus spending on the deficit this year compared to 2019.

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