Trump uses power of purse to control states

 

Gordon L. Weil

Donald Trump promised that, if elected president, he would make big changes.  He claims to keep his promises, and he surely is keeping that one – and fast.  He interprets his win as the nation’s endorsement of massive change.  The speed and scope of his moves have stunned the country.

Among his lightning moves is one meant to reshape the relationship between his federal government and the states.  This could be huge, though it was not a prominent part of his package of promises.  Beyond using almost unlimited presidential power to remake the federal government in his own image, he also wants to bring the states into line.

Trump can pressure states, whether Democratic or Republican, to accept his priorities by using the power of the purse. If a state, especially one that has not backed him, wants federal funds that are doled out by his executive branch agencies, it might have to meet his conditions. 

Federal funds, appropriated by Congress for many programs, flow to all states.  Decisions on specific outlays under a federal program are left to individual states.  Each state can deal with its own problems in its own way and can be held responsible by its own voters.

Congress gives the president and executive agencies wide discretion in distributing the funds.  The agencies and their inspectors general are expected to make sure states spend the money as intended by Congress.  But last week Trump, jumping legal procedures, fired 18 independent, departmental inspectors general.

Visiting North Carolina, Trump promised federal aid to deal with hurricane impacts and extensive federal involvement in the recovery.  Then, in fire-stricken California, he conditioned federal emergency funds on changes to the state’s voter identification system and water management policies.

North Carolina backed him for president, while California remained loyally Democratic.  It looks like he rewarded one and punished the other.  About 42 percent of  the American population lives in Democratic states. While those states might resist Trump’s domestic policies, his administration could force them to follow his policies or lose federal funding.

Consistent with that approach, he proposed eliminating the Federal Emergency Management Agency and replacing it with direct grants to the states.  That way, states would assume lead responsibility for disasters.  They already have that role and FEMA supplements them, but his moves could give him political power over the states that FEMA can’t exercise.

Favored states might gain considerable freedom in spending federal aid.  To receive urgently needed support, Democratic states could be forced to adopt Trump’s policies, even if far removed from the intent of the funding, or lose out.

Kristi Noem, then governor of South Dakota and now Trump’s Homeland Security Secretary, provided the model.  She used a small part of Covid relief funds for state government costs and applied the balance at her discretion rather than helping people and companies that had suffered losses from the pandemic. 

She also refused federal funds, when she disagreed with Biden’s policies.  While Democratic states might similarly refuse Trump, they can’t afford to decline the massive aid necessary to meet enormous disasters.  California faces the choice between either accepting the president’s conditions or paying overwhelming emergency costs.

The problem with refusing the money is that California’s federal government contribution could go to other states, while it gets little.   It may have to raise state taxes for emergencies, while Trump’s elimination of FEMA may provide him with money he needs to extend costly federal tax cuts.

That’s how Congress does business.  States vie for as much money as they can get at the expense of other states.  After Sen. Susan Collins became the chair of the Senate Appropriations Committee, attention in Maine focused more on the added dollars she can bring home than on her increased ability to influence national priorities.

Maine gains large federal subsidies, being a winner like almost all small states.  Most small states are Republican, so that could work for Trump.  Collins is the sole GOP member of Congress from New England, so Republicans might want to help her with the state’s voters by meeting Maine’s needs with other people’s money.

Making states more dependent on the president and less able to act independently steps away from the original constitutional formula.  The states intended to cede limited powers to the federal government, but they have become its dependents.  This change plus the fading role of Congress, has increased presidential power.  Checks and balances don’t matter.

As much as Trump may wish that he could serve a third term, his use of presidential power and his reshaping the ways the federal government adopts and executes policies could extend his reach well beyond his current term.  Change has come.  His successors in either party are likely to accept and continue many precedents he is creating in the name of MAGA.

 

 

Foreign policy by threats has high cost

 

Gordon L. Weil

Donald Trump conducts foreign policy by threats.   If you don’t do as I demand, he implies, I will simply take you over.  Forget about pursuing traditional diplomacy with friendly nations.

Bullying may work on real estate competitors in New York City, where Trump gained his education in his father’s business, and the volatile world of local commerce allowed him to crush competitors.  

Real estate moguls may come and go, but sovereign nations tend to hang on tenaciously.  Look at Ukraine.  Still, you may dream of your place in history by expanding American territory.  Meanwhile, your diplomats can demand concessions from others by warning them about the president’s unpredictability if they don’t yield.

Trump’s threats may be false, but he uses intimidation as the shortest path to getting what he wants.  Beat up Denmark about Greenland, Panama about its canal and Canada for its supposed dependence on the U.S.  Even if his real goals are unknown, as the powerful leader of a powerful nation, he tries to pressure friendly nations to bend to his will.

In one aspect of this approach, Trump seems to believe that when one country sells more goods to another country, their margin represents a subsidy – getting something for nothing.  In fact, each country gets paid for its products.  It looks like the U.S. should always have a favorable trade balance with others and not “subsidize” anybody.

That policy doesn’t account for trade in services and cross-border investments. It also ignores the mutual benefits that can flow from trade, but measures only money and even that only partially.  It is virtually impossible for a country to have a neutral or favorable trade balance all the time with everybody else.

Trump’s remedy is to boost the prices of imports by imposing tariffs.  If foreign suppliers want to avoid being priced out of the market, they must swallow the tariff.  Otherwise, when tariffs boost their prices in the export market, domestic producers can raise both their prices and their sales.  Either foreign producers’ incomes are cut or American customers pay more or both.

Trump bullies Canada, which he claims without evidence that the U.S. “subsidizes” by $100 billion a year.  He threatens to raise tariffs on imports from Canada to cut the subsidy, and force it to increase its military spending and border controls. 

Trump’s crude and insulting solution is that Canada should become the 51st state.  One Canadian counters that Canada should absorb some U.S. states, including Maine.

Does the U.S. pay more to Canada than it receives? 

In 2023, the U.S. bought about $64 billion more goods from Canada than it sold there.  Canada paid $23 billion more for American services than flowed the other way.  That left a U.S. trade deficit of $41 billion.  But Canadian investment into the U.S. was $77 billion more than U.S. investment into Canada.  (There’s no U.S. foreign aid to Canada.) 

The net result was a favorable U.S. balance of payments with Canada.  Trump chooses to ignore the full facts, the essential details showing there’s no $100 billion “subsidy.”

Canada’s vast territory provides a protective buffer for the U.S., like the Atlantic and Pacific Oceans.  But it needs to boost its military spending.  Trump is right in saying it leans too much on the U.S.  And he has already succeeded in inducing increased Canadian border protection.

To accomplish his objectives, Trump has alienated many Canadians by devaluing their loyalty to their own country. You don’t have to be American to think your country is great. By insulting a close ally and its leaders, Trump may prevail on some current issues, while sacrificing a highly valuable partnership for the long term.

If Trump raises tariffs on Canadian goods, Canada has plans to retaliate dollar-for-dollar.  A trade war only leaves victims and no real winners.  It would harm the relationship for many years, reducing Canadian trust in its “neighbour” (even their spelling is different).  Trump dismisses cooperation to confront China, their common adversary. 

Does Trump really believe that Canada’s ten provinces would readily join the U.S. as a single state, and that Canada would simply drop its own national identity, foreign policy, health care system, gun control, and abortion law, just to avoid high American tariffs or confrontation with him?

Trump’s policy of “America First” must inevitably turn into “America Alone.”  Canada would focus increasingly on trade with other countries.  The European Union, which includes Denmark, might either build its own defense arrangements or see the rise of anti-American nationalism in countries there, leaving the U.S. with fewer reliable allies in either case.

Whatever may be gained by bullying rather than negotiating could come at the loss of long-term trust among allies.  That would be a high price to pay by the U.S., long after Trump’s “America First” has faded.

 

 

Trump ran parallel presidency as Biden faded

 

Gordon L. Weil

A change in the political system is happening, but we are paying little attention to it.

Donald Trump, an agent of political change, has challenged the belief that the U.S. can only have one president at a time. Since the election, he has operated a parallel presidency.

A formal transition process exists in law, allowing for the incoming president and his appointees to be subject to specific ethics rules, to use federal office space and to receive financial support.  They can become current on department policies and actions. But the president-elect does not have to accept this process.

While the incoming president is not bound by previous policies, awareness of the current administration’s latest moves could enhance the chances for a smooth transition. But Trump wants to symbolize change, and cooperation may not suit his image.  He spurns transition and acts as if he is already in the White House.

Three reasons stand out.  First, Trump has already served as president so he can hit the ground running, without needing a basic White House education.  Second, Trump will head probably the most personal presidency, relying less than usual on precedent and advice than on his own instincts.  Third, President Biden is fading, creating an opening for his successor.

Biden has readily let him dominate the scene.  His departing administration is cloaked in the aura of its defeat rather than pride in its principles.  His cabinet has melted away, failing to react to Trump’s assertions. Biden failed to make his presidency the promised bridge – a real transition.

Though Biden still uses his inherent powers to deal with disasters, pardon people and issue executive orders setting his parting benchmarks, Trump has taken over large pieces of foreign and domestic policy.  Biden’s cabinet and actions are overshadowed, if not downright ignored.

Few resist the need to deal with Trump’s upcoming presidency as if he were already in office.  From Republican House members to foreign leaders, they have sought to curry his favor and divert any possible concerns he has about them well before his ability to take office, beginning next week.

Trump has moved decisively to transform the period between Election Day and Inauguration Day.  The so-called lame duck government of that transition period has become almost a rare bird.  By his actions, rather than through a formal constitutional amendment, Trump is redefining the transition for the second time in American history.

Originally, the presidency and the new Congress began on March 4, following the previous year’s November elections.  Given slow communications and travel, the delay was necessary to allow for vote counting and the arrival of newly elected officials in the capital city.

The result was that a president who might be slated to leave office and the sitting Congress could remain in power for months even if they had suffered election defeats.  That lame duck period could allow a departing administration and Congress to push through policies that might already have been rejected by a majority of voters. 

Newly elected presidents and members of Congress waited their turn and prepared to take office. That had to change.

Following the 1932 elections, voters clearly demanded action by the federal government in dealing with the Great Depression.  They had become impatient with the transition.  President Franklin D. Roosevelt used the time to ready measures he could put in place rapidly once he took office – the famous first 100 days. 

The delay also brought the end of the long-legged lame duck.  Under a new law, Congress would begin on January 3 and the presidential term would start on January 20, dates now set in the Constitution.

Twenty years later, President Truman offered to provide intelligence briefings to President-elect Dwight Eisenhower.  Truman’s first move led to a formal transition process, which has been expanded under the law.  

Because it is voluntary, Trump refused its ethics requirement or to be fully informed on current administration actions.  He chose to make the break between administrations both disruptive and preemptive.  In effect, he has improperly moved the government from Washington to Mar-a-Lago.  He has led the alternate government, not the government in waiting.

The refusal of the incoming president to participate in a transition comes at a price, especially when it relates to foreign policy.  The failure of an incoming administration to exchange information on its foreign contacts or its attempts to blindside the incumbent can be harmful to the conduct of delicate and complex relations.

Trump has drastically shortened the transition, which may have been inevitable.  But he has also made a mockery of its useful aspects.  Transition should not be left to the president-elect’s choice. The country would be better served, without limiting the incoming president’s discretion, by making their full participation mandatory.

The U.S. really should have only one president at a time.