For the first time in the past six decades, Washington D.C. is preparing for a deep round of federal workforce cuts, in what the Washington Post called a “historic contraction.”
This would be the first time the government has executed cuts of this magnitude — and all at once — since the drawdown following World War II, economists and budget analysts said.
President Trump aims to peel back regulation in great sheaths, executing Stephen Bannon’s plan to “deconstruct the administrative state” while building up the military and homeland security.
Erick wrote just before the inauguration, the most honest benchmark for measuring Trump’s success is property values inside the Washington beltway.
If that area’s real estate market collapses and the area heads into recession, we will know that Donald Trump is successful. As Washington’s power has grown, that region has grown with it. As Washington lets go of power and the states rebound in strength and clout, that area should correspondingly grow weaker.
We’re talking mass layoffs.
According to an economic analysis by Mark Zandi, chief economist for Moody’s Analytics, the reductions outlined so far by Trump’s advisers would reduce employment in the region by 1.8 percent and personal income by 3.5 percent, and lower home prices by 1.9 percent.
While defense spending and employment decreased through the Clinton years, it bounced back slightly during the Iraq and Afghanistan wars. Meanwhile, the rest of the federal workforce–especially regulators in Washington, D.C., continued to grow.
Time Magazine‘s March 20th issue cover screamed “Trump’s War on Washington,” focusing mostly on the “deep state,” tweets and conspiracies. But the real war, and the real political power, is in the purse and executive discretion.
He has embraced a budget that would slash nondefense government-agency spending by $54 billion. He has delayed, suspended or reversed 90 regulations imposing government controls on everything from Wall Street to telecoms to hunters, according to an analysis by the New York Times. He has frozen federal hiring, and his allies on Capitol Hill have proposed reducing federal employees’ pensions. He says many of the nearly 2,000 open executive federal positions might be “unnecessary.”
What the establishment initially saw as Trump’s slowness and incompetence at filling more than 4,000 federal political appointments, they are now beginning to see as the opening shots of a war of attrition against the administrative state.
With Republicans controlling both houses of Congress, and budget reconciliation immune from Senate Democratic filibuster, Trump may get everything he wants in giving Washington bureaucrats a haircut.
To whom would voters complain? Both of Virginia’s senators are Democrats, as are Maryland’s. Reps Bob Goolatte (R-Va. 6 CD) and Dave Brat (R-Va. 7 CD) might suffer the wrath of laid-off voters in northern Virginia, but their votes are not enough to stop the assault against the federal bureaucracy.
Democrats are desperate for any issue to resonate with the public, that they can stage a “shut down the government” standoff. Right now, that issue the the border wall. That probably won’t work. But it would be beyond ironic if the Democrats held the debt ceiling hostage–the agreement to suspend the debt ceiling expires on April 28.
The bad news is that the price of all this cutting is likely to be funding Planned Parenthood, the left’s sacred cow. From POLITICO:
The Democrats also drew a line at including anything in the funding bill that would “roll back protections for our veterans, environment, consumers, and workers and prohibit funds for critical healthcare services for women through Planned Parenthood. We strongly oppose the inclusion of such riders in any of the must-pass appropriations bills that fund the government.”
So far, so good however. What I’ve seen coming out of Congress is bill after bill shoved down the Democrats’ throats. Every amendment they’ve proposed has been defeated on party lines. Every call for reopening debate has been met with a steamroller of Republicans.
If that trend continues, small government Republicans might get the budget of our dreams–at least until we see the trillion dollar bill for infrastructure programs and the increases in mandatory benefits.
Honestly, I’ll take a one-time “stimulus” and infrastructure spending package to win a permanent cut of federal regulatory state discretionary spending. You can’t overestimate the drag the regulatory economy exerts on businesses and capital investment. Once the business environment and capital spigot opens, the benefits become clear and intoxicating. I find myself, for the first time in a long time, looking forward to a federal budget.
Unfortunately, Washington, D.C. bureaucrats are not so optimistic.