The constant refrain of waste, fraud and abuse from Republicans and particularly from DOGE has been ongoing since at least 2009 with the emergence of the Tea Party. It is essentially nonsense. There have been in place inspector generals who have reviewed programs and used actual audit functions to determine whether or not waste, fraud and abuse actually exists. There is no doubt in my mind that there is a level of all three in the government. However, the approach being taken utilizing sledgehammer rather than a scalpel is not going to get us to where we need to be, and that is a more efficient well-run government. In that context, Mr. Musk has reduced his estimate of his potential savings through DOGE to 2 trillion, to 1 trillion, to half a trillion, and is now down to 150 billion. So, the ability to even estimate what they can recover or eliminate has been sadly mismanaged.
Popular Mechanics recently published an article that all life arises from a single ancestor known as “Luka” with an origin of hundreds of millions of years ago. The acronym “Luka” stands for the last universal common ancestor. It is an organism from which everything else flows. It is interesting to know we came from a speck somewhere.
I believe Mr. Schumer truly blew his opportunity with regard to the CR. In my view, as soon as the House passed the CR, he should have filed his own bill in the Senate which could have provided for no cuts to Medicare, Medicaid and Social Security, requiring the hiring of professional auditors to review all payments and contracts to determine whether or not these were subject to any form of waste, fraud or abuse, or, in fact, necessary programs. When this bill failed, which it likely would have, then he could have agreed to vote for the Republican bill. This would have at least shown some fight and maybe as important, what Democrats would do if they were in charge. He could have spelled out in detail how Democrats would have approached the need to streamline government in a constructive and logical way, instead, in my view, he panicked.
Liberation Day has come and gone but little has changed other than the erratic nature of the tariffs which Mr. Trump has imposed. The chaos that has been created in world trade as well as the global stock markets seems to have very little impact on the President, or his advisors, although they did pull back last week with Mr. Navaro making incredible claims about tariffs, the market, and the impact on the economy. One really has to wonder what the plan is and given what occurred over this past weekend with indication from various administration members that the tariff on electronics was going to be paused or eliminated followed by statements that it was staying in place followed by statements that these tariffs were going to be in effect modified and reintroduced all lead to the general confusion and a negative impact on world trade.
Will Canadians take another look at foreign trade zones as a way to at least delay the payment of tariffs since goods imported into a foreign trade zone are not subject to tariffs or other import fees until the goods leave the foreign trade zone and enter the U.S. There are rules regarding what must be done to the goods while in the foreign trade zone, but it certainly could be an attractive alternative for some Canadian businesses to continue their work in the U.S. and at least have some control over their cash flow.
Mr. Trump has indicated that he will “help” farmers to withstand the retaliatory tariffs from China and potentially other countries. I wonder if he is going to help the small businesses in Plattsburgh, like marinas, restaurants and others that are hammered by the decline in Canadian activity in Clinton County, or, for that matter, throughout the United States. It strikes me that people who voted for Mr. Trump probably shouldn’t get help.
The Wall Street Journal has an interesting take on the tariffs and treat it as a $6 trillion tax increase, and some conservative groups are marshalling together to attack the tariffs for that reason since the idea of increased taxes has generally been an anathema to Republicans, and certainly to the Libertine section of the party. We will see where all of this goes, and how long it takes for some cracks to appear in Republican solidarity as their constituents begin to experience real negative economic consequences.
The question of “what is the overall plan” I think troubles everyone. Unfortunately, the volume of activity and information that is coming at you. First, you have to determine whether or not it is accurate and second how do you, if you will, analyze this information and make a decision. Unfortunately, I think it is going to be very difficult for several more months to be able to make sense out of where we’re going and what the impact is. I am hopeful that as we move down this track, we are able to ascertain what is actually happening in terms of jobs, the market, etc. so that we can push our representatives to take action to deny Mr. Trump the ability to move his agenda forward. One of the more interesting aspects of this entire process, as people have watched the stock market and are worried about their 401k, is what is happening to the dollar and to bonds. Historically the dollar and U.S. government bonds have been a safe haven. What we are now seeing, which has not been particularly focused on by the media, is a softening of those positions. That is, the dollar is declining and rates on government bonds are increasing, even as the price of the bond goes down which is the normal trajectory for these investments. If that is in fact the case, and the rest of the world is abandoning us as a safe haven, that could have a much greater long term negative impact upon all of us than has really been discussed in the media.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford, Owens, Piller, Murnane, Kelleher and Trombley in Plattsburgh, NY and a Strategic Advisor at Dentons to Washington, DC.
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