As jobs shrink, Trump uses Democrat shutdown gambit to slash public works
(Originally published Oct. 2 in “What in the World“) Democrats appear to have fallen hook, line, and sinker for Trump’s plan to eviscerate what’s left of the U.S. federal government.
After holding out for the renewal of healthcare subsidies, Democrats let the government shut down at midnight Oct. 1. The very next morning, the White House announced it was moving to block $26 billion in funding to federally approved projects, most in states controlled by Democrats. Is it revenge against Democrats for the shutdown? Or just part of Trump’s ongoing campaign to dismantle the government entirely? You be the judge.
Perhaps the White House’s biggest move was to withhold roughly $18 billion from New York City infrastructure projects because of the city’s “unconstitutional DEI principles.” The decision was announced Wednesday by White House budget director Russell Vought, who specifically cited the Gateway Program, which would build a new train tunnel under the Hudson River connecting New York and New Jersey and is one of the largest public works projects in the United States.
Trump is supposedly blocking the funding in retaliation against Democrats for the shutdown. But it’s also blaming the shutdown for the funding lapse. Trump had already placed the project under review by the Dept. of Transportation for alleged DEI policies and suspended funding in the meantime. The shutdown, according to the DOT, furloughed the federal employees processing that review.
Vought also announced that the White House was canceling $8 billion in funding from the Energy Department for climate projects. The week before, he had told federal agencies to start drafting layoff plans in the event of a shutdown. Trump had warned the day before the shutdown that it might be a good excuse to fire more federal workers, cancel more federal programs, and shutter more federal agencies.
Amid all the political skullduggery in Washington, it was almost easy to miss the news that payroll-processing giant ADP said Wednesday that the U.S. lost 32,000 private-sector jobs. But more investors will undoubtedly be poring over ADP’s report given that the U.S. Bureau of Labor Statistics’ scheduled Friday release of nonfarm payrolls data is also likely to fall victim to the shutdown. Moody’s economist Mark Zandi says the U.S. is already in a jobs recession.
Add to this slumping consumer confidence and you’d think it’s a no-brainer for rate-cuts. But somehow, U.S. consumers are feeling down, but ain’t out: consumer spending rose in August.