Deciphering the Federal Budget

President Trump spoke about his budget plan in his wide ranging address to Congress last month. However, it is rare that Congress actually passes a budget (the last time was in 2015, and that was the first time in six years) and rarer still that the presidential framework made it through the process.

So, let’s take a look at what was proposed, where it falls apart, and then what the process actually involves. Go get a cup of coffee, you’re going to need it.

First, the good news. Appropriations come from Congress, not from the Executive branch.  Per the Origination clause in the Constitution, all appropriations bills must start in the House, although the Senate may concur and/or offer amendments. In real life, normally this leads to negotiations between the Chambers prior to anything being enacted. Thus, nothing is happening quickly. That means there is time to lobby your reps for things that matter to you.

Next, the massive increase in military spending. It’s pretty obvious from what Trump says about this being a “Nationalistic” budget and how we need to win wars, that he’s committed to getting a lot of Americans killed for no reason. To get the money through Congress would be a hard slog as we are a war-weary nation. Further, it would require 60 votes in the Senate (think: 8 Democrats) to remove the existing cap, and legislation to work around sequestration.  However, and this is the scary part, there is something called “overseas contingency operations” spending.  That’s how they fund war. And it is, de facto, a black hole of your tax dollars that don’t get accounted for in the budget. It’s a backdoor into funneling money to defense without having to deal with the caps.

But assuming that the increased defense funding would come via the budget process, there is still the need to make cuts to stay within the requirements of sequestration, and to go with the “spend a dollar, cut a dollar” logic that avoids ballooning the deficit.

So where does money go from the Federal budget? A great source for information is the National Priorities Project, which not only tracks this information, but provides a great deal of background to help people understand the process.

The budget  is divided into three parts: mandatory spending, discretionary spending, and interest on the debt. Approximately 65% is mandatory spending: While the Bannon Administration can make some cuts, today’s promise is that Social Security, Medicare and Medicaid will remain untouched, and assuming that Veteran’s Affairs will likewise be left alone means that only about 8% of the mandatory part of the budget can be touched, and that would encompass food, agriculture, transportation and “other.”  Likewise, it would be pure insanity to refuse to cover interest on the debt.

Source: National Priorities Project. Reprinted with permission.

So let’s take a look at discretionary spending, from whence the cuts would come. The chart on the left shows the 2015 numbers, the last year for which data is available.

The number for the military is about $54 billion.  The likeliest target is that orange “Government” pie piece in the lower part of the chart.  Cutting that pie piece will mean firing a lot of government workers. Will the administration really want to raise unemployment? Further, a lot of the money from Government, Education, Housing and Community, Energy and Environment, etc., goes to big companies with government contracts. Will they be willing to throw all those people out of work also?

You may be wondering how some things are both Mandatory and Discretionary spending. Take Social Security. The monies paid to recipients are mandatory, the employees that process those checks and do the rest of the work are considered discretionary. It will be difficult to keep the program operational if there is no one to run it.

President Trump spoke about cuts to the federal budget and criticized adding to the federal debt. Interesting factoid on that:

March 15 of 2017 will be a crucial data for all Americans on the planet. On this day, the debt ceiling “holiday” put together by Obama and Boehner expires. Moreover, the debt ceiling will freeze at US$20 trillion, which is the same number it is at today. From that point forward, no more debt can be created by the US economy. Considering the country burns through US$75bn worth of cash every month, the US may find itself out of tangible money by the Summer of 2017. Although it is unclear if this will happen, it is a rather troublesome idea. Source

Source: National Priorities Project. Reprinted with permission.

Another leg to this stool is where the money comes from that funds the Federal government. Yes, taxes is part of it, but what’s interesting is how much more money comes from individual taxpayers compared to corporations. People say that they pay too much in taxes, but most people pay a far lower rate for Federal taxes than they think they do. Honest. It’s the math. But you can see all income sources in the chart on the right.

Listen carefully when President Trump talks about the need to cut taxes: every plan I’ve seen from the GOP has included cuts for corporations (who are currently taxed at an effective rate about 10 – 15% of what they paid back in the 1950’s and 60’s when our economy was growing at a much faster rate than it is now) and the very wealthy, who also pay far less than they used to pay, viz effective rates.

One thing that Trump has mentioned is the “simplification” of the tax code, which would mean doing away with many tax breaks. One of the largest would be the home mortgage deduction. Think what that might do to the housing market. Hmm. The flat tax would, greatly extolled by failed presidential candidate Steve Forbes, mean that people would pay a flat percentage of their income. No deductions, no exemptions, but at a supposedly lower effective rate than people are paying now. Don’t believe it. The only way to keep this revenue neutral would be a VAT system, where taxes are paid at every step of a purchase from raw material to what is bought at the store.

As a final note, the speech to Congress is a Constitutional requirement. In most years, it’s called “The State of the Union” address, but when a president is in his first year, it’s called an address because normally the State of the Union looks back on the prior year, which is the previous administration. (Article II, Section 3, Clause 1.)

Messaging Economics: How to Win, How to Lose

Economy

Felicia Wong, Joseph Stiglitz, Rana Foroohar and Stan Greenberg

While at the Democratic National Convention (DNC), I attended an event hosted by the Roosevelt Institute. The institute explains its mission on its website:

Inspired by the legacy of Franklin and Eleanor, the Roosevelt Institute reimagines America as it should be: a place where hard work is rewarded, everyone participates, and everyone enjoys a fair share of our collective prosperity. We believe that when the rules work against this vision, it’s our responsibility to recreate them.

The event hosted by the Roosevelt Institute at the DNC was a panel discussion between Joseph Stigliz and Stan Greenberg, moderated by Rana Foroohar. The primary part of the discussion centered on looking at two economic messages put forth by Hillary Clinton and how these ideas polled relative to election outcomes. The two messages were not all that different; they just took two different approaches. Interestingly, one will win the election, and the other will lose. And, if one is implemented, it could potentially change the course of American economics. [Read more…]

Meet the Delegates: Joe Smallhoover – Democrats Abroad

Joe SmallhooverJoe Smallhoover is the Chair of Democrats Abroad France. We tried unsuccessfully to find some time together during the convention, but finally a mutually workable time a few days afterwards.

While he lives in Paris now, Joe was born in Pittsburgh and raised in Upper St. Clair, PA. He attended Washington and Jefferson College and Duke University. He holds an MA in Germanic languages from the University of Virginia and did advanced studies in Europe on a Fullbright, as an exchange teacher before returning to the US to obtain a law degree from the University of Pittsburgh. He has lived in Paris since 1985, and has practiced law in France, Belgium and Germany.

DocJess: Where did you get your interest in politics?

Joe Smallhoover: I have been involved since I was in diapers. My grandfather was the Chair of the Allegheny County Commissioners from 1934 until the late 1950’s and active in the Democratic Party all his life. I grew up in that household and was treated to seeing state and local dignitaries on a regular basis and learned the ins and outs of politics.

DJ: Democrats Abroad is a group of ex-pats…

JS: Let me stop you. Often people say “ex-patriots” instead of “expatriates” as if we are not patriotic Americans. We certainly are patriotic, and one of the ways we show that is by voting. We just happen to be living outside the country and prefer to be called Overseas Americans or Americans Abroad.

DJ: Sorry, I meant no disrespect.

JS: I know. It’s a common theme we deal with.

DJ: So. If I lived outside the country, how would I join Democrats Abroad? What exactly do you do?

JS: Democrats Abroad (DA) is recognized as a state party by the Democratic National Committee and we even have our own primary. The French and English groups are the oldest within the umbrella of DA, both chapters having been formed in 1964. We have committees in 41 countries, active but less organized committees in another 20 countries, and members from 160 countries.

If you are an American abroad, you can vote in the state primary of the state you lived in just prior to moving overseas, or you can participate in the Democratic primary as a part of DA.  Democrats Abroad, by the way, also participates directly in the DNC, with seats on various committees.

DJ: Is that true for the general election?

JS: Overall yes, in most cases. Federal law says that Americans living abroad can participate in Federal elections. There is a Federal ballot that can be used, or in some states, Americans abroad can file an absentee ballot for that state which would include all the offices on all the other ballots for that state.

However, some states will make you pay state income taxes if you vote on the state ballot because it establishes part of a residency requirement. Some states won’t charge taxes. It’s a fluid situation as states do change their rules over time. I lived in California just before I moved to France, and it used to be that you had to pay state taxes to vote absentee in state and local elections, but that was changed a few years ago.

Many states have an overseas ballot that is a Federal ballot. These ballots are both for civilians overseas as well as uniformed (military) voters. The rule is you can file one ballot or the other, not both.

DJ: What do you do to encourage voting?

JS: In France, we have an event every week across the land. We have multiple talks on issues that affect people. We also have caucuses, such as the Minority, Women, LGBT, and Youth. We have programs to discuss topics like the environment, economy, etc. We hold dinner debates, as well as social events. We are active and embedded in the American community overseas.

I started an internet site close to 30 years ago, before it was popular, after someone complained he couldn’t find Democrats Abroad. It was a nascent, flat site, but it was a start and I saw the benefit of early adoption. Now, we’re active on our websites, and we leverage social media like Facebook, Twitter, and Instagram to do as much outreach as possible so people can find us easily.

DJ: Do the Republicans have something similar?

JS: They tried, but they were more about fundraising. They’ve dissipated. They’re smaller than DA by at least a factor of 10, and they are not active in as many places. We have precincts and wards and a “county/state” structure while the Republicans have some elections but they’re relatively small, and most of their folks are involved by appointment and not election.

DJ: Was this your first convention?

1928-democratic-national-convention-ticket-valueJS: No. A member of my family has been present at every convention since 1928. I have attended all the conventions since 1996.

DJ: What did you think of Philadelphia?

JS: Each convention is a little different because of the dynamics of delegates, candidates and the city itself. Philadelphia was very welcoming. It was a wonderful feeling, being a native Pennsylvanian. The convention was smoothly organized. There were very few glitches that make being and attending difficult. Except meals were difficult. The lines were long and once you were in the arena there weren’t any other nearby options. But that’s to be expected and taken in stride.

The convention itself was absolutely spectacular. The speakers were tremendous and there were a number of surprises like Khizr Khan. When he held up a copy of the Constitution, it was one of the most powerful things I’d ever seen at a convention.

I also appreciated Gabby Giffords. I’d met her in Paris before she’d regained the power of speech, and to see her take the podium, and speak, well, all I could think was if she could do this with her limitations, imagine how much brilliance must be locked inside of her.

DJ: And Larry Sanders?

JS: We had all seen him tear up in private, and were overwhelmed by the pride he had for his brother. It was very powerful, and then, we got to see his brother react. It was a moment that won’t soon be repeated.

DJ: One last thing. Some of my readers either live overseas or have kids who live overseas. How do they connect with you?

JS: Our site is www.democratsabroad.org and if they need to register, they can go directly to www.votefromabroad.org/vote. As long as someone makes the deadline, which differs in the various states, a ballot should be automatically sent, although one can download a Federal write-in absentee ballot as a substitute. All the instructions are available on the website.

See our full series of delegate interviews.

Wednesday Night: The Speeches

It was surprising how hard last night’s speakers went after Donald Trump. I had thought they would all stay positive, in diametric opposition to the RNC’s no-ideas-only-hatefest last week. But the main speeches were intertwined with condemnation of Trump, and positiveness of we Americans, democracy, the Democratic Party, and Hillary Clinton. It’s hard to pick a favorite between Mike Bloomberg and Joe Biden. It really is. For different reasons, both were masterful. Mike, for being a billionaire and an Independent talking honestly about what a con artist Trump is, and for showing all of us how the rich really act. Uncle Joe, for reminding us what it means to be proud, patriotic Americans with liberal values. [Read more…]

Day 3 and You Are There

Boat House Row.

Boat House Row lit up red, white and blue.

The thing I felt today, which was different from the last two days, was the party truly coming together. While Bernie shirts, hats and buttons were in full display, there was really an air that we will all work tirelessly to hold the White House, regain the Senate and then move on to recapture the house in two years. [Read more…]

Day 2 and You Are There

orange barrietI attended two terrific events yesterday. A Taste of Emerge was an introduction from the group Emerge, which trains women to run for office. The Future of Healthcare was a panel discussion. They are each detailed below. At the end of the second event came the high point of my experience of this convention. A compliment I will not soon forget. [Read more…]

Day 1 and You Are There

Day 1 started with the news that Rep. Debbie Wasserman Schultz was booed by her own delegation at the Florida breakfast. Not dissuaded, I tried to take SEPTA into Philadelphia, but because of the heat, there were long delays (beyond the already abbreviated schedule), and so I took my very first Uber ride. It was delightful.

Photo Jul 25, 10 53 12 AMThe logistics of the Philly convention are somewhat challenging. The morning starts for all of the delegates at 7 a.m. when they need to pick up their credentials for the day at their hotels, some of which are 30 miles from the city. For the rest of us needing daily credentials, the day starts at the Philadelphia Convention Center (PCC), where people are milling about and attending meetings, caucuses and training sessions.

Ralph Rodland, DNC delegate.

Ralph Rodland, DNC delegate.

The first person I met today was a Hillary delegate from North Carolina,  Ralph Rodland. We had a fantastic chat about House Bill 2, North Carolina’s infamous “bathroom bill,” requiring individuals to use public restrooms that correspond to the gender on their birth certificates. Rodland believes that North Carolina Gov. Pat McCrory’s days are numbered. Although he is thrilled to be here as a Hillary delegate, Rodland did ask whether it was always this hot in Philly, since it’s actually cooler and less humid back home in North Carolina right now.

Then it was time to get on the media bus and go down to scope out the arena. Although the city is much less closed off than it was when the pope visited last year, it was still a long walk from the drop-off point to the arena. For those not familiar with Philly, it’s less of an arena and more of a conglomeration of multiple sports facilities. If you know my knowledge of sports, you know I don’t know who plays what where, but I’m sure someone will tell me. Again.

One of the first things I scoped out was the part of the convention no one really shows you. Below are some pictures of where the work actually gets accomplished.

All food in the stadiums is owned and operated by Aramark. It’s a monopoly, which is how they charge $4.50 for a 16.9 ounce bottle of Aquafina tap water.

All food in the stadiums is owned and operated by Aramark. It’s a monopoly, which is how they charge $4.50 for a 16.9 ounce bottle of Aquafina tap water.

Okay, enough of that. Let’s go upstairs. Facebook has a nice lounge where it is possible to sit, tweet, and hey, post to Facebook. One of the nicest things is that the lounge is filled with charging stations, all of which have multiple options for various electronics. A few charging areas are also stationed around the arena, and all are brought to you courtesy of AT&T. Twitter has a table too. Both places have tons of swag.

I tweeted out pictures of the arena all decked out, and posted some to Facebook. The real excitement happened when the gavel came down. Baltimore Mayor Stephanie Rawlings-Blake replaced Rep. Wasserman Schultz in presiding over the opening ceremonies, and was cheered when she came out — possibly because some people were surprised. She was poised and did a good job speaking, and then realized, she didn’t have the gavel. She got it, banged it, and the place went wild. Then, the Rev. Dr. Cynthia Hale gave the invocation, and the train came off the rails. Everything was okay until she said “…and we are here to select Hillary Clinton as our nominee for president of the United States.” The booing was louder than the yays. That was a theme for a while. Everything was fine until Clinton, or Clinton and Kaine, were cited as the nominees prior to names being entered into nomination or the vote being taken.

When Rep. Marcia Fudge (D-OH) took over as head of the convention, she tolerated the booing for a while. And then, she let loose, chastising the audience. It was not our finest hour.

State Senator Andy Dinniman.

State Senator Andy Dinniman.

I decided to take a walk, and ran into my state senator, Andy Dinniman. There’s something really heartwarming about talking to your elected official who knows you — where you live, what you do — no need for an aide to hand him a file card. Andy is a great guy who fights tirelessly for “the right thing” for our community, and amongst the noise and the politics, it was fantastic to talk to someone who, day after day, does the work of government in a way that is decent and worthwhile.

Finally it was time to call it a day. The arena was getting overcrowded, on a day when the heat index hit 108. Walking across the security zone, I ran into John Fetterman, mayor of Braddock, Pennsylvania, and former candidate for U.S. Senate.  We talked about meeting at Netroots Nation back in 2009, his campaign this year, his former opponent Katie McGinty, and the work he is still doing every day in Braddock. Again, a public servant who, day in and day out, works tirelessly for his people.

John Fetterman, mayor of Braddock, PA. and former candidate for U.S. Senate.

John Fetterman, mayor of Braddock, PA. and former candidate for U.S. Senate.

There’s a lot of fun in politics, a lot of intrigue, a lot that’s sexy. But people like John and Andy understand that politics is poetry and governance is prose. It’s not just getting elected; it’s working for the good of one’s constituency.

Tomorrow, I’ll be downtown all day attending various seminars, lectures and meet-and-greets. I’ll be tweeting and Facebooking all day, and will have a wrap-up in the evening.

Lessons for Democrats from the RNC

RNC 2016The most important takeaway is that the GOP is now Donald Trump’s party. This may seem minor, but it’s critical to understanding what will be necessary for the upcoming general election cycle: the rules are different.

You may have noticed that the mainstream media referred to the Republican National Convention as “Donald Trump’s Convention” instead of “The Republican Convention” or “The RNC Convention.” Next week is not “Hillary Clinton’s Convention” — it is “The Democratic National Convention.” No convention has ever before been personalized this way. The importance relates to how the cycle will be covered, and intimates that Donald will continue to be covered differently from anyone ever.

Note that the first night of the convention, while the mother of a soldier lost in Benghazi was speaking, Donald called into Fox, and they preempted her speech to speak with him.

Zachary Taylor, People's Candidate for President and Millard Fillmore, Whig Candidate for Vice-President (N. Currier, June 1848)

Zachary Taylor and Millard Fillmore, Whig Candidates for for President and Vice President, respectively. (N. Currier, June 1848)

A cautionary tale for the party comes from more than 150 years ago. Read about Zachary Taylor. Seriously, read the link. Read it now. It’s really important.

Welcome back. Now you know the future.

Plagiarism is not a big deal to the Trump campaign.

I don’t blame Melania. She read off a teleprompter. She’s likely done very little, if any, public speaking and thus the speechwriters had nothing to work from relative to inclusions or tone.

But they could have Googled the speech, line by line, to check it. Plagiarism will get you tossed out of school: it’s a big deal. Intellectual property still matters.

The campaign is too green, too unprofessional to know any better. Then they spent 38 hours being unable to answer properly to the problem. Finally, they blamed an employee of the Trump organization.

If she was the one who wrote the speech, and she did it on company time, that’s an FEC violation. Campaigns cannot commingle monies or paid personnel between a company and the campaign, nor political offices and the campaign.

Speaking of breaking laws…

New Hampshire State Representative Al Baldasaro said in an interview that Hillary Clinton “should be put on the firing line and shot for treason.” The Secret Service is investigating. Baldasaro is a veterans’ adviser to Donald, who in no way distanced himself from the quote.

There was a lot of Hillary bashing at the RNC, and very little “Donald-is-good-because-XYZ” (except from his kids!!!) or “I support Donald because he stands for ABC.” The crowd in the arena, who are his voters, loved it.  Going forward, this means they’re for him, not his positions, nor his actions. It doesn’t matter to them, which makes our job that much harder.

Ted Cruz isn’t coming around.

Ted Cruz spoke, didn’t endorse, and was booed. More importantly, Ken Cuccinelli had to walk Heidi Cruz off the floor because she was in danger of being physically assaulted. Shows you what kind of people are Trump supporters.

Only 23 people were arrested.

There are 5,500 law enforcement types around the convention, but only 23 people were arrested. This compares to the 2000 Republican National Convention in Philadelphia where over 300 people were arrested. This is probably due to the huge security area around the arena keeping people far away from cameras.

What does this all mean?

First, the Democrats are not running against the Republicans; they are running against Zachary Taylor, and that didn’t work well for the good guys. (Except Millard Fillmore, who was a terrible president, but great in many other regards.)

It means every Jill Stein defection is a vote for Donald Trump.

It means they need to campaign differently up and down the ballot.

It means “I’m too busy” is not a valid excuse this September, October and November.

It means someone with no interest in running the country will end up running the country after having campaigned on no platform other than banning Muslims and building a wall.

The Politics of Transportation for the #DNC

PhiladelphiaWelcome to Philadelphia. We actually threw snowballs at Santa Claus. We’re the fifth rudest city in America. Our foods are cheesesteaks and soft pretzels. It’s Philly. But we worked hard to get the DNC here, and we should be trying to put our best foot forward. But, as I said, it’s Philly. [Read more…]