Trump and Biden Agree on Police Defunding

Monday, June 8, 2020

As "defund the police" has become a rallying cry for protestors, with activists and some politicians looking to build on a wave of support for the movement, President Trump has in recent days rejected the idea — and tried to turn it to his political advantage as he seeks to portray himself as the candidate of "LAW & ORDER" in his reelection campaign against former Vice President Joe Biden.
"There won't be defunding, there won't be dismantling of our police and there is not going to be any disbanding of our police. Our police have been letting us live in peace, and we want to make sure we don’t have any bad actors in there," Trump said Monday afternoon at a White House event with law enforcement officers.

White House Press Secretary Kayleigh McEnany told reporters earlier in the day that "the president is appalled by the defund the police movement," including vows from the mayors of New York and Los Angeles to cut police budgets and reallocate the money to social services. In Minneapolis, where the killing of George Floyd in police custody sparked massive nationwide protests, most of the city council has pledged to 'begin the process of ending' the police department.

On Sunday, Trump tweeted: "Sleepy Joe Biden and the Radical Left Democrats want to 'DEFUND THE POLICE'. I want great and well paid LAW ENFORCEMENT. I want LAW & ORDER!"

Biden’s campaign said Monday he also opposes calls to defund the police. "As his criminal justice proposal made clear months ago, Vice President Biden does not believe that police should be defunded," Biden spokesman Andrew Bates told reporters Monday. "Biden supports the urgent need for reform — including funding for public schools, summer programs, and mental health and substance abuse treatment separate from funding for policing — so that officers can focus on the job of policing."

The Trump campaign attacked Biden for not commenting on the matter himself. "As the protesters like to say, silence is agreement," Trump campaign communications director Tim Murtaugh said on a conference call with reporters. "By his silence Joe Biden is endorsing defunding the police."

The bottom line: Congressional Democrats unveiled broad legislation to reform police departments, but the party has stopped well short of embracing calls for defunding. House Speaker Nancy Pelosi said Monday that those decisions fall to local governments.

The National Bureau of Economic Research announced Monday that the U.S. economy entered a recession in March, ending the nation’s longest expansion on record. Here’s the summary from the report by the Business Cycle Dating Committee at NBER:

"The committee has determined that a peak in monthly economic activity occurred in the U.S. economy in February 2020. The peak marks the end of the expansion that began in June 2009 and the beginning of a recession. The expansion lasted 128 months, the longest in the history of U.S. business cycles dating back to 1854. The previous record was held by the business expansion that lasted for 120 months from March 1991 to March 2001."

The announcement of the recession came relatively soon after its onset. Usually, the committee of economists waits to see how economic conditions develop over a longer period of time before determining that a recession has begun, but the current slowdown is clearly exceptional. The committee said "it concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions."

The Congressional Budget Office said the federal budget deficit was $424 billion in May, well below the $738 billion recorded in April — but still the second highest monthly shortfall in history. The CBO also said the deficit for the first eight months of the fiscal year came to $1.9 trillion, roughly $1.2 trillion more than the deficit in the first eight months of fiscal year 2019.

Revenues in May were down about 25% compared to the year before, due in large part to a sharp decline in individual income and payroll taxes. Spending, on the other hand, was up 53% compared to last year, once calendar discrepancies were taken into account.

The most notable changes were clearly driven by the pandemic, with outlays for unemployment compensation rising from $2 billion in May 2019 to $93 billion in May 2020. And outlays by the Small Business Administration rose from $98 million to $35 billion, driven by the relief efforts for small business owners affected by the coronavirus shutdowns.

Current funding for the federal highway law is set to expire at the end of September. As that deadline appears on the horizon, reauthorizing key transportation spending programs will be a major item on lawmakers’ pre-election to-do list.

Rep. Peter DeFazio (D-OR), chair of the House Transportation and Infrastructure Committee, last week introduced a bill that would authorize $494 billion over five years for road, bridge, rail, mass transit and resiliency projects. In the GOP-controlled Senate, a five-year, $287 billion surface transportation bill advanced out of the Environment and Public Works Committee last summer.

As usual with infrastructure plans, how to pay for that proposed spending remains a question, but as Roll Call’s Jessica Wehrman reports, it appears increasingly likely that the costs will be added to the national debt:

"The federal gas tax-fueled Highway Trust Fund, which has not fully paid for highways, roads, bridges and transit since 2008, has borrowed $140 billion from the general revenue since then to meet its expenses. It would need that same amount over the next five years under a House highway bill introduced last week.

"Another option is that the federal government finds some sort of financing instrument, such as bonds, and takes advantage of historically low interest rates to borrow the money needed to fix the nation’s roads.

"Both President Donald Trump and House Transportation and Infrastructure Chairman Peter A. DeFazio have suggested the latter, with Trump suggesting up to $2 trillion for a massive highway bill and the Oregon Democrat suggesting paying back the bonds by indexing the gas tax to inflation."

Wehrman adds that the coronavirus recession appears to have wiped out any chance of a gas tax increase. "But the most popular alternative to the gas tax — a mechanism that would charge people based on vehicle miles traveled, or VMT — is nowhere near ready for national deployment," she writes.

So while the pandemic recession may fuel interest in infrastructure spending as a way to boost the economic recovery, paying for the new highway bill could be less of a priority. "The response to the crisis is most important right now, and that investment involves taking care of the economy at the expense of tidying up the budget," Douglas Holtz-Eakin, a former director of the Congressional Budget Office who is now president of the conservative American Action Forum, told Roll Call.

"There’s an inverse relationship between the level of the S&P 500 and willingness for policymakers to come together to arrive at some sort of solution. If the market stays up, chances of deals in Congress this year are likely to go down and are likely to approach zero."– Willie Delwiche, an investment strategist at Baird, telling Bloomberg Businessweek that the soaring stock market will reduce pressure on policymakers in Washington to provide more stimulus for the economy. A former trader Bloomberg spoke to, Tom Essaye, even has a back-of-the-envelope rule about the relationship between the stock market and the next potential round of stimulus: "Every 1% the S&P 500 rallies reduces the chances that a stimulus bill actually gets passed," he said.

Search form

Trump and Biden Agree on Police Defunding