I was very closely watching the saga of OMB’s disastrous effort to freeze funding for a vast number of federal programs, and wrote about why it was actually revoked at New York.
This week the Trump administration set off chaos nationwide when it temporarily “paused” all federal grants and loans pending a review of which programs comply with Donald Trump’s policy edicts. The order came down in an unexpected memo issued by the Office of Management and Budget on Monday.
Now OMB has rescinded the memo without comment just as suddenly, less than a day after its implementation was halted by a federal judge. Adding to the pervasive confusion, White House Press Secretary Karoline Leavitt immediately insisted on Wednesday that the funding freeze was still on because Trump’s executive orders on DEI and other prohibited policies remained in place. But there’s no way this actually gets implemented without someone, somewhere, identifying exactly what’s being frozen. So for the moment, it’s safe to say the funding freeze is off.
Why did Team Trump back off this particular initiative so quickly? It’s easy to say the administration was responding to D.C. district judge Loren AliKhan’s injunction halting the freeze. But then again, the administration (and particularly OMB director nominee Russell Vought) has been spoiling for a court fight over the constitutionality of the Impoundment Control Act that the proposed freeze so obviously violated. Surely something else was wrong with the freeze, aside from the incredible degree of chaos associated with its rollout, requiring multiple clarifications of which agencies and programs it affected (which may have been a feature rather than a bug to the initiative’s government-hating designers). According to the New York Times, the original OMB memo, despite its unprecedented nature and sweeping scope, wasn’t even vetted by senior White House officials like alleged policy overlord Stephen Miller.
Democrats have been quick to claim that they helped generate a public backlash to the funding freeze that forced the administration to reverse direction, as Punchbowl News explained even before the OMB memo was rescinded:
“A Monday night memo from the Office of Management and Budget ordering a freeze in federal grant and loan programs sent congressional Republicans scrambling and helped Democrats rally behind a clear anti-Trump message. Senate Minority Leader Chuck Schumer blasted Trump as ‘lawless, destructive, cruel.’
“D.C. senator Patty Murray, the top Democrat on the Appropriations Committee, warned that thousands of federal programs could be impacted, including veterans, law enforcement and firefighters, suicide hotlines, military aid to foreign allies, and more …
“During a Senate Democratic Caucus lunch on Tuesday, Schumer urged his colleagues to make the freeze “relatable” to their constituents back home, a clear play for the messaging upper hand. Schumer also plans on doing several local TV interviews today.”
In other words, the funding freeze looks like a clear misstep for an administration and a Republican Party that were walking very tall after the 47th president’s first week in office, giving Democrats a rare perceived “win.” More broadly, it suggests that once the real-life implications of Trump’s agenda (including his assaults on federal spending and the “deep state”) are understood, his public support is going to drop like Wile E. Coyote with an anvil in his paws. If that doesn’t bother Trump or his disruptive sidekick, Elon Musk, it could bother some of the GOP members of Congress expected to implement the legislative elements of the MAGA to-do list for 2025.
It’s far too early, however, to imagine that the chaos machine humming along at 1600 Pennsylvania Avenue will fall silent even for a moment. OMB could very well issue a new funding-freeze memo the minute the injunction stopping the original one expires next week. If that doesn’t happen, there could be new presidential executive orders (like the ones that suspended certain foreign-aid programs and energy subsidies) and, eventually, congressional legislation. Democrats and Trump-skeptical Republicans will need to stay on their toes to keep up with this administration’s schemes and its willingness to shatter norms.
It’s true, nonetheless, that the electorate that lifted Trump to the White House for the second time almost surely wasn’t voting to sharply cut, if not terminate, the host of popular federal programs that appeared to be under the gun when OMB issued its funding freeze memo. Sooner or later the malice and the fiscal math that led to this and other efforts to destroy big areas of domestic governance will become hard to deny and impossible to rescind.
I agree completely with Neuhauser and Hapin. I would add two points. 1)Since many social and environmental needs are being neglected and even under the so-called “full employment” of the Clinton years, there weren’t enough jobs available, we need greatly increased federal funding for public-service jobs. 2) We need to reverse Clinton’s negation of federal responsibility for basic economic welfare.
The Third-Way’s new report is a far slicker coverage of their thesis than reviewed last summer. But it basically contains the fatal flaws pointed out by John Halpin in Truth-Telling, Populism and Inspirational Politics.
I think Third Way overstates and mischaracterizes what they call the neo-populist position when they make the case for its desrire to “recapture a bygone era” with outmoded solutions. However, that is to be expected since in order to the a “third” way, there must be two other, opposing camps to place yourself in opposition to. (Sort of a tiresome, academic literalness to it all, but not as badly done as the DLC which often resorts to distorted right-wing attacks on the left in order to create a “center” for itself.)
But the fundamental hook they hang their hat on for “de-bunking” the concerns of the “neopopulists” is the graph of the distribution of income by age class. While it does illuminate the age-diversity of income distribution hidden behind a single number of “All Households”, they assert that this very existence proves their point.
But that same distribution would have been true in the past as well.
The question is not just: Is there a spread in 2005? but it is rather: Is that curve significantly different than it was in the past? The curve has always been there, and prime-age earners have presumably always been better off than the average. Duh.
So, does this really tell us anything about their claim that “the middle class is just doing just fine, thanks!”? No.
The other argument they make is that, “Neopopulism feeds off of broad economic dissatisfaction and pessimism, but public opinion polls consistently show Americans to be optimistic about their personal finances.” Then they just ignore the “broad economic dissatisfaction and pessimism” because of the “personal optimism”. Futhermore, they ignore studies showing a much greater concern for whether people think their kids will be better off or not — and from personal anecdotes I can tell that concern has reached surprisingly high levels of the middle class.
I think they miss an important issue here — this is the same phenomenon with Congress (they’re terrible, but mine is ok) and schools (the system is bad, but mine is ok). According to Third Way’s methodology, Congress is doing great! Schools are doing great! The middle class is doing great! I’ve got a life jacket, so I don’t know what the dissatisfaction is with the Titanic — cruises are fun!
I don’t buy it and I think they do a disservice to ignore the broad dissatisfaction. There are important things underlying it.
What this Third Way sanguinity leads to is a set of policies that feel extremely incremental as it doesn’t recognize that we are in the midst of a great upheaval as important as the turn of the last century. There are three great global issues impacting everyone in America:
– globalized terrrorism
– global warming
– globalization’s commoditization of work
To be concerned about these issues as a concern for the future well-being of their children and grandchildren is not necessarily to be a Chicken Little. Nor does it require you to assume that the entire system must be chucked for some wild-eyed notion. Nor does it mean that “neopopulists” have no hope or optimism about the future — just that they think there is more to work on and bolder plans to lay.
When I looked at Third Ways solutions, they are basically:
More education
Retrain obsoleted workers
Tweak savings incentives
Give newborns a savings account
Tweak savings incentives some more
Be nicer to families with kids
Be nicer to families caring for their parents
Do more R&D
Have a more efficient healthcare industry
(One of the troubling aspect of the “nicer to family” solutions is that they are purely about more availability of services and tax (money), one the big issues are around time — it can take so much time to care for an older parent that you can’t work as much and so are earning less when your costs go up.)
All of these assume that people can afford to buy all the insurance and education and retraining and other things Third Way thinks they should and furthermore that they already pay enough in taxes to get back some meaningful amount in tax breaks to pay for them.
Which goes back to the core assumption of the Third Way: people make enough money, we just need to incentivize them to spend it more wisely.
But the reason 40M Americans don’t have healthcare isn’t because they they feel they aren’t getting a big enough tax break to justify buying healthcare insurance! The reason is they don’t have a spare $15,000/year to buy it on the open market themselves, no matter what tax incentives you give.
(I would note that this approach is the same thinking behind Bush’s health insurance “reform” pitched at the 2007 State of the Union.)
The reason this “agenda” sounds so paltry is that … it is!. And the reason for it goes back to the beginning — they think the status quo is basically fine, so clearly what is needed is an era of tweaking a few things to make them a little better.
Happy Days are already here!