Washington Correspondent Neil McCabe Answers the Question of the Day, What Is Infrastructure?

Washington Correspondent Neil McCabe Answers the Question of the Day, What Is Infrastructure?

 

Live from Music Row Wednesday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – guest host Ben Cunningham welcomed Tennessee Star National Correspondent Neil McCabe to the newsmakers line to weigh in on the infrastructure spending, budget reconciliation, and the filibuster.

Cunningham: Neil McCabe, who is the Washington correspondent for Star Media and probably the most connected person in Washington, D.C., is on the line with us. Neil, good morning.

McCabe: Hey. Fantastic to be with you. I hope you had a good, long weekend.

Cunningham: We did. We did. Al Gore was in town, so it was cold. (McCabe laughs) So, unfortunately, we had a cold weekend, but I actually got in the water. I stayed in about 30 seconds, and then I got out. All right, Neil, we’re going to ask you the question of the day here. What is infrastructure? (Laughter)

McCabe: What isn’t infrastructure. (Laughter)

Henry: That’s the answer.

Cunningham: What can you tell us about the huge package? I mean, he announced this week the package where he throws everything into this thing but the kitchen sink. How is this thing going to fare? Are Republicans going to stand up at all, or are they just going to pass this thing via reconciliation and it’s going to be over quickly?

McCabe: There are a number of different Republican senators that have made their way to the White House to try to cut deals, and all of them are sort of the usual suspects that you would expect, like Mitt Romney.

But also, you know, John Cornyn, I think the person to really watch is Shelley Moore Capito from West Virginia. She is a full-on Trump hater. This, of course, was after the election, and she sort of played nice with Trump during his presidency. But once the results were sort of put in stone, she has come out as a full-on Trump hater.

She’s also someone who uses Paul Ryan’s fundraiser. And I wrote about this for The Tennessee Star. She is completely linked in to this GOP resistance that’s being run by Paul Ryan. And this crowd is trying to push for an infrastructure bill. And who knows what’s even in it. Republicans are saying 900 billion. And that’s, like, their compromise.

Cunningham: Yeah, thanks a lot.

McCabe: But what’s even in it, right. The only thing we know that’s not in it is a wall on the Mexican border, which was, frankly, even throughout the campaign, that’s like, the biggest applause line Trump ever had.

And so what they’re going to do is the Biden White House needs to get this thing done. And they’ve told the Republicans that they have a week to sort of get their act together. And if they want to participate in this thing, the translation is the Biden and Democrats say we’re going to pass this.

And if you want your pork projects, if you want your swimming pools, your bridges, and all this stuff for your districts and your states. If you want all your goodies and Christmas presents put into this bill, you have to get on board now.

And they think they can pass it. They might be able to do a reconciliation, but they might not. The Senate is not lock solid. It’s a 50-50 Senate. And there are Democrats who are in trouble.

Cunningham: Has Manchin come out one way or the other on the whole budget?

McCabe: Manchin is a stoic vote for the Democrats. But what he won’t do is he will not go along with the filibuster and he may not go along with reconciliation. Now they may do reconciliation with the permission of the Parliamentarian. This reconciliation rule basically makes the budget exempt from a filibuster.

And the idea is you can’t to stop the government from being shut down by a filibuster. And so you’re only supposed to have one budget a year hence, you can use reconciliation one time. And you can only use reconciliation when it deals with taxes or something connected to the budget.

This is why sometimes a tax bill can go through with reconciliation. But we saw in 2017, you can’t do a lot. It has to be kind of revenue-neutral. And so Manchin may or may not go along with this. My feeling is that Manchin will vote with the Democrats on their bills like this one.

He will not try to disrupt the rules of the Senate. You’re looking at in Arizona, you have Sinema and Mark Kelly, who may be no votes. Obviously, Hassan in New Hampshire is looking at Chris Sununu.

And you have this specter of inflation, which was like something people were whispering about. They were whispering about it six months ago, three months ago, two months ago.

Cunningham: Now it’s real.

McCabe: Now people are saying, holy mackerel, we are going to blow up this economy with inflation. And the idea that Biden just announced another six trillion dollar bill. And people are like, whoa, guy, what are you doing?

Carmichael: Neil, let me ask you a quick question. Didn’t the COVID bill the Democrats passed, didn’t they pass that with reconciliation?

McCabe: I’m not sure if they use reconciliation.

Carmichael: Well they had to because no Republicans voted for it.

McCabe: So if they did, that was their one-off. The Parliamentarian rules that you can use reconciliation twice, then basically it’s game over. Then the filibuster is over. But the specter of inflation is becoming very, very real. And for the first time, the Republicans are getting political traction against the spending, not because of the debt, but because of this inflation.

Carmichael: Neil, let me ask a question. I’m going to make a statement, and you can correct me. I was under the impression that reconciliation could be used for taxes and spending.

But if you are going to pass another bill, for example, the ProAct or the Senate version of the HR1 that requires 60 votes, but the taxes and spending did not require 60 votes that you can pass that with a majority. Am I wrong about taxes and spending?

McCabe: No, you’re absolutely right. The reason why you have this reconciliation allows for one privileged motion a year in the Senate that is not subject to filibuster. But that’s because of the need to get the budget done.

You can’t change the voting age. You can’t regulate guns or de-regulate. You can’t do gun legislation. You can’t make Puerto Rico estate using reconciliation. If it’s connected to the budget, you can use reconciliation.

But even then, there’s not a lot you can do because you have to be relatively budget neutral or revenue-neutral, which is why the 2017 tax bill was passed with reconciliation. But it couldn’t go to the far extremes, which is why they had the House bill repealing the estate tax, and Republicans put the state or death tax back in. Specifically, Mike Rounds from South Dakota, personally put the estate tax back in.

But the excuse was that we needed to push revenue back in so we can get this bill passed. Biden’s in trouble. Let me just say. And I’ve said it over and again. Biden is in trouble and he’s losing control of the Senate, but he’s also losing control of the House.

And whatever he doesn’t get done by July 4 will not get done. We’ve already crossed Memorial Day. They know that they have between now and July 4 to get something done.

Listen to the full third hour here:

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Tune in weekdays from 5:00 – 8:00 a.m. to the Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.

 

 

 

 

 

 

 

 

The Great Dilemma for America: Crom Carmichael on the Democratic Party of Grifters and Looming Inflation

The Great Dilemma for America: Crom Carmichael on the Democratic Party of Grifters and Looming Inflation

 

Live from Music Row Wednesday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. –  host Leahy welcomed all-star panelist Crom Carmichael in the studio to breakdown the potential of inflammatory effects on America’s economy from COVID and Democratic grifters.

(Chuck Schumer clip plays)

Leahy: That is perhaps one of the most dishonest grifters in American political history. Senator Chuck Schumer of New York trying to explain why they should pass a $1.9 trillion giveaway to big blue cities and big blue states and he’s using a false claim.

Carmichael: Yes. As Mitch McConnell pointed out one percent of the bill, which is, by the way, one percent of 1.9 trillion.

Leahy: It’s one percent?

Carmichael: One percent goes directly to COVID. Goes directly to COVID.

Leahy: And then eight percent indirectly?

Carmichael: Indirectly. But 91 percent doesn’t go to COVID or anything related to COVID.

Leahy: Either directly or indirectly.

Carmichael: But one percent of one point nine trillion is still $20 billion. So that is still $20 billion.

Leahy: One point nine trillion, one percent of one point nine trillion.

Carmichael: Did I get my math wrong?

Leahy: You are correct.

Carmichael: I am correct.

Leahy: You are correct sir because 10 percent of one point nine trillion would be 190 billion. One percent is 19 billion. You are correct in your math.

Carmichael: So it’s a very very large amount for COVID. And so what Schumer’s doing is what all grifters do. He’s just making stuff up. And if it were not for the willful complicity of the media you couldn’t get away with this. This is the great dilemma for our country. You have now Big Tech and big media that is in bed with the Democrat Party and in bed with all their policies.

And so you have about probably 20 to 25 percent of the population that benefits from all this grifting. And the balance of the population gets hurt. Now deficits do matter. And one of my great pet peeves is when politicians say these deficits are going to hurt our children and grandchildren. That’s false. They’re hurting us now. And what they do is they act kind of like a wet blanket.

And what they do is if productivity is growing at four percent then you ought to have real income rising at four percent. But if you have deficit spending that’s equal to more than four percent of the economy, then you may see a rise in your paycheck. But you’re going to see inflation in some of your basic goods. For example in housing prices. housing prices now across the country are going up because you see commodity prices like lumber, copper, and many of the materials that go into a home are rising at very very high rates.

And so the inflation is almost hidden. But it’s there. Let’s just say that inflation affects you at $1,000 and infects everybody at $1,000. Well, somebody’s making $50,000 dollars a $1,000 is two percent of their income. If you’re making a million dollars then $1,000 is imperceptible. If you’re a multi-billionaire, you’re making far more money on the increase in the value of your stock than you are worried about the effects of inflation.

Leahy: So I’ve got some data here. This is from a website called The Balance. It looks at the deficit as a percentage of the gross domestic product. And it’s been quite high. When Ronald Reagan took office ’19 in 1980 It was two point six percent that fiscal year. Of course, he took office and it would have been fiscal in 81 when it was two point five percent. When George H.W. Bush took office it was three point seven percent in 1990. Then we fast-forward.

It was actually a surplus during the last years of the Clinton administration. And that was due to the sort of the internet bubble. George H.W. Bush and the crash of 2008. In fiscal 2009, 9.8 percent of GDP. the deficit. it’s been really really high pretty much ever since it went down to three-point four percent in 2017. It shot back up in 2020 at 17.9 percent because of the COVID impact. And it’s going to be about 10 percent in fiscal 2021 except probably more than that now.

Carmichael: It will be more than that if this bill passes. And then they’re talking about another great big bill in behind it. And so the aging of the baby boomers is going to affect Medicare in the coming years. So under Trump the deficit as a percentage, I think you said it got down to like three-point six percent.

Leahy: Yes. Under Trump in 2017, it was three point four percent.

Carmichael: What was it in ’18?

Leahy: In ’18, it would be three-point eight percent.

Carmichael: Okay, what was it in fiscal ’19?

Leahy: Up to four-point six percent.

Carmichael: Okay. All right. And so then it was in fiscal 2010 that it exploded. So part of ’19 perhaps had something to do with COVID. I don’t know.

Leahy: No it would have been ’20.

Carmichael: All fiscal year ’20?

Leahy: Because fiscal year ’20 goes from September to October 1, 2019, to September 30, 2020.

Carmichael: But here’s what’s interesting. With all of those numbers in there, I think that the federal government is doing a very poor job of collecting the right data to understand productivity gains. I think there are a lot more productivity gains due to technology than that is being captured. I think the productivity gains that they’re capturing are in an old-school way. And productivity gains are much different now.

Leahy: That’s a very good point. Despite COVID productivity gains probably have limited the depth for people that that are involved in certain jobs it’s had less of an impact.

Carmichael: If we come out from the other side of COVID a lot of the changes that were made because of COVID will enhance productivity. If I can do a Zoom meeting and make a sale and I don’t have to go do a business trip to make that same sale then I can make perhaps three or four sales calls a day and not spend any money in doing so.

Leahy: And not travel.

Carmichael: And not travel and do all that. And so that would actually be a gain in productivity.

Leahy: In certain segments. But for instance restaurants. Making stuff in a manufacturing facility that kind of thing got hurt badly. At least on the restaurant side.

Carmichael: That’s not a manufacturer, that’s a restaurant. So what you’re seeing is that if there are a lot fewer business lunches and dinners then that hurts the restaurant business. But in terms of the macro, if people are doing things more efficiently and accomplishing the same goal then there’s a particular…

Leahy: Because one thing that you and I are not Crom, we are not Luddites. (Laughter) Luddites were the people that wanted to go in and break all the new machinery that made it easier to manufacture clothing and other things back in 19th century Great Britain.

Carmichael: So what I’m saying is that if you have a productivity gain of four percent and you have deficit spending four percent more or less than increase the money supply, then theoretically you’d have an inflation rate of close to zero. But if you have productivity gains and four percent and you have an increase in the money supply of 10 to 15 percent and that’s done consistently at some point that catches up with you and it doesn’t affect the wealthy nearly as much as it affects middle and lower class demographics.

Leahy: You’re exactly right and the people that are being hurt by all of this deficit spending really middle-class Americans.

Carmichael: And lower-income people.

Leahy: You are exactly right.

Carmichael: And all these policies the Democrats’ the school policies, in particular, they hurt lower-income children far more than they hurt anybody.

Leahy: They absolutely do. We’ll close that talk off.

Listen to the full third hour here:


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Tune in weekdays from 5:00 – 8:00 a.m. to the Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio