Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, February 21, 2018

Congressional dysfunction isn't battering the Washington area economy, it's the anti-government perspective of the Republicans

Washingtonian Magazine has an article, "Congress’s Dysfunction May Already Be Battering the DC Area’s Economy," about how the metropolitan economy is being diminished because of "Congressional dysfunction."

While the magazine is right that the Washington economy is collateral damage, they are wrong to attribute this to Congress.

Government shrinkage is a deliberate strategy emanating from anti-government policies of the Trump Administration.

Sure, the Tea Party types in Congress keep attacking government, but they can't knee-cap the agencies the way the Executive Branch can. Although maybe the headline is right in some respects because with a Republican controlled (albeit dysfunctional) legislative branch there are no checks on the Executive Branch.

It happens today I am doing some "processing" of stuff I clipped back in 2011, like the Republican House's attempt to cut the budget of the Corporation for Public Broadcasting or to eliminate the National Endowment of the Arts and the National Endowment of the Humanities. The headlines of the articles are comparable to the headlines today.

The difference then was you had a Democratic majority in the Senate and a Democratic President.

Today, an anti-government party in control of the Executive and Legislative branches has few checks. As the Wall Street Journal wrote recently about the director of the Office of Management and Budget, "Mulvaney's Real Target: Government, Not Deficits." From the article:
In fact, Mr. Mulvaney is not really a deficit hawk. He is a spending hawk, motivated less by an abhorrence of debt than of big government. Small government is a longstanding and principled goal of Republicans. But big government is not why deficits are about to explode. Republicans have already shrunk government quite a lot. And much of the remainder is now off limits: defense, homeland security, veterans, the elderly.

... In 2011, he helped take the federal government to the brink of default on its obligations by opposing a higher debt limit. To resolve that crisis, Republicans forced Mr. Obama to accept tight caps over discretionary spending (the sort Congress must approve each year, unlike open-ended entitlements such as Social Security and Medicare). And in 2013 those caps were tightened even further with across-the-board spending cuts called a sequester.

Congress first loosened those caps later in 2013, and again last week, drawing plenty of finger-wagging from deficit scolds across the political spectrum. Mr. Mulvaney says he probably would have voted against it. Mr. Trump blamed it on Democrats insisting on more domestic spending in return for a bigger military budget.

There is something surreal about the angst. Even with the higher cap, domestic discretionary spending in fiscal 2019 will be less than in 2012, without adjusting for inflation. At less than 3% of GDP, it would be near the lowest in at least 50 years. This category encompasses almost everything other than defense and entitlements, from environmental protection to education and research grants. In that narrow sense, the federal government is getting smaller. Its civilian workforce today is the smallest as a share of total employment since World War II.

So where is the federal government getting bigger? The safety net did grow under Mr. Obama, but mostly because of the Affordable Care Act. Food stamps, welfare and other programs targeted at the poor, sick and unemployed consume the same share of GDP today that they did under Bill Clinton and George W. Bush.

The real growth has been in the big entitlements: Social Security, Medicare and Medicaid, and the ACA, and much of this is the unavoidable consequence of an aging population. Mr. Trump, like Mr. Obama before him, has ruled out cutting Social Security and Medicare benefits. ... 
with taxes and most federal spending off the table, the room for Mr. Mulvaney to meaningfully cut the deficit is small. But talking about the deficit helps keep the pressure on those parts of the government that aren't off limits.
Even if it becomes impossible to cut social programs, it's always possible to cut government agencies, especially if Congress is inclined to go along. 

And that has major impact on the Washington area economy.

The Republicans have been fighting investing in government agencies for a long time, see this 2014 blog entry about the slowdown in federal agency property development, "New Year's Post #3: an illustration of the decline of the federal role in DC's real estate market (at least right now)."

But today with a Republican President who is anti-government, somewhat of a figurehead, but who has empowered anti-government zealots like Mick Mulvaney and Scott Pruitt, and put into power people who are willing to carry out directives for cutting agencies such as Betty DeVos, Rick Perry, and Rex Tillerson, agencies are getting "thinned out."

The Department of Energy is cutting units and employees ("Trump aims deep cuts at energy agency that helped make solar power affordable," Washington Post).

So is the Department of Education ("Inside Betsy DeVos's efforts to shrink the Education Department," Post).

The State Department ("State Department to Offer Buyouts in Effort to Cut Staff," New York Times).

The Department of Labor, the Environmental Protection Agency ("Success: EPA set to reduce staff 50% in Trump's first term," Washington Examiner), the Department of Agriculture ("Dismantling the USDA from within," Federal News Radio), the Department of Interior ("Interior chief wants to shed 4,000 employees in department shake-up," Post).


The various downsizing efforts across government agencies emanates from the Administration, not Congress, although the Republican controlled House and Senate are happy to smite what they think of as the Leviathan.

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At 11:17 AM, Anonymous charlie said...

Well if I understand the Fuller report it was "uncertainty" that pushed the local economy down.

That is BS. A shutdown threat isn't that level of uncertainty and won't change the trajectory of the region. Economists being economists and looking at livers.

Your points on the administration are correct.

At 1:30 PM, Blogger Richard Layman said...

I wonder how much the DoD increase will "help" the area economically. If it goes into buying hardware (especially ships, which seem to be a need), I can't see it being a huge factor.

Not like with the IT/cyber build up after 9/11.

Back in the day (2012), you commented on this post:

When I was working in Balt. County during FY2010, they were big in the belief that relocating various units to the Aberdeen Proving Grounds would be drawing a lot of ancillary contractor activity and space demand in the vicinity.

I seem to recall some Balt. Sun or Balt. Biz Journal coverage on that area in the last 6-8 months where they discussed the expected office development rush never occurred.

... although even back then there were notes that the hype was greater than the reality.

At 3:27 PM, Blogger Richard Layman said...

"On some policy matters, Trump edges toward conventional conservatism."

The real issue is the rest of govt. One person even the President doesn't make a government.

So when the people picked for jobs, to run agencies, etc. are hard core conservatives, why should it be a surprise that the Trump Administration is a typical, hard core, anti-government Republican governance system.

At 7:51 AM, Blogger Richard Layman said...

nice discussion in a Brookings piece, touched off by the mention of a new book on the Senate, _Broken_ about why the Senate is more partisan and less likely to focus on quality output.


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