The Empire Strikes Back
We shouldn't underestimate the traps being laid for the incoming Administration.
Janet Yellen's Short-Term Thinking Could Cost the U.S. Big
The outgoing administration has laid a host of traps for the incoming one.
The biggest threat to DOGE is a shock to US Treasury markets. This will pre-occupy Congress and take away energy from the support for codifying DOGE reforms.
‘Janet Yellen gets low marks from most financial experts for her term as Treasury Secretary. The Treasury Secretary's primary role is managing U.S. debt issuance, determining the mix of loan terms and debt structures to minimize interest costs. During the pandemic, interest rates were very low—below 1 percent in most instances—and instead of locking in those low rates for 10 or 30 years, she chose to mostly issue debt in short maturities, usually two years and under.
When interest rates inevitably rose in 2022, the U.S. government was forced to refinance at significantly higher rates, which cost taxpayers hundreds of billions of dollars. It was an error of judgment that most of us cannot even comprehend—if interest rates are close to zero, you lock them in for as long as possible. It's no different than refinancing your mortgage at 2.5 percent, as millions of homeowners did during that time period. It's common sense.’
Biden Issues Sweeping Deportation Protections Before Trump Takes Office
Biden makes mass deportation of people from named countries nearly impossible for upwards of two years.
‘The Biden administration on Friday issued sweeping extensions of deportation protections for hundreds of thousands of people from Sudan, Ukraine and Venezuela in a move that makes it almost impossible for President-elect Donald J. Trump to swiftly strip the benefit when he takes office.
The extension of Temporary Protected Status, as the program is called, allows the immigrants to remain in the country with work permits and a shield from deportation for another 18 months from the expiration of their current protection in the spring. Late last year, Secretary of State Antony J. Blinken recommended the protections be extended in a series of letters.
Biden’s EPA Tries to Put One Over With EV Mandate
Congressional Review Act coming back into play with last minute regulations.
‘While Kamala Harris was campaigning on the claim that she would “never tell you what kind of car you have to drive,” the Environmental Protection Agency was working overtime to ban the internal-combustion engine. The EPA revealed its latest efforts in December by giving the green light to California’s ban on the sale of new gasoline-powered cars as well as mandates intended to kill diesel trucks. Although federal law prohibits states from making such rules, the EPA decided to approve them anyway via waivers.
‘President-elect Trump has promised to end electric-vehicle mandates on day one of his administration. But rolling back EPA waivers through the administrative process would be slow and laborious. Doing it through the conventional legislative route would require 60 Senate votes to overcome a filibuster. A better solution is to use the Congressional Review Act, which calls on federal agencies to send “rules” of “general applicability” to Congress. If lawmakers don’t like a particular rule, they have 60 days to introduce a resolution of disapproval, which needs only to clear the House and pass the Senate with a simple majority—no filibuster. If the president signs the resolution, the regulation is repealed.’
DOGE should focus on deregulation, not cost-cutting.
‘A more plausible way to direct the DOGE’s ambition is to aim at the inefficiency our government causes, at least as much as that which it embodies. And this would suggest focusing on federal regulation. The scope of such regulation has grown sharply over recent decades — in ways that neither discretionary spending nor federal employment have. The burdens those rules have imposed on the economy have also grown far heavier. Regulatory action is both a domain of slow and inefficient government action and a source of costly inefficiency in the private sector — as rulemaking stretches over years of procedural complexity and creates immense compliance costs and uncertainty for regulated businesses.’
Musk Says DOGE’s Goal to Cut $2 Trillion in Spending Is ‘Best-Case Outcome’
This is actually a good sign. They’re doing the work now and they have a better sense of what’s feasible. But he is still an ambitious Musk-like target.
‘“I think if we try for $2 trillion, we’ve got a good shot at getting one,” Musk said Wednesday in a conversation with Mark Penn, chairman and chief executive of ad company Stagwell, that was livestreamed on Musk’s social-media platform X.
‘Musk said the $2 trillion goal is “like the best-case outcome.” He also said that the group should set an ambitious target to help them get results.’
Musk Now Skeptical DOGE Effort Can Cut $2 Trillion From Budget
The headline is misleading.
What isn’t said is the estimate of how much economic value is unleashed as a result of the deregulatory efforts and what kind of fiscal windfall that creates in the form of higher taxes.
‘Similar efforts to slash federal expenditures in Congress, such as one by Republican Senator Rand Paul, which proposed cutting six pennies out of every dollar projected to be spent in the next five fiscal years, have failed to pass. While Republicans control both chambers of Congress, their slim majorities make it unlikely such sweeping legislative efforts will make it to Trump’s desk.’