An Urban's Rural View

Why John Kelly Could Be Good News for Agriculture

Urban C Lehner
By  Urban C Lehner , Editor Emeritus
Connect with Urban:

Oh, to be a fly on the wall of the West Wing just now.

The government was headed for one of its periodic debt-ceiling crises, and this time, the Director of the Office of Management and Budget wasn't backing the Secretary of the Treasury's call for a "clean" increase in the debt ceiling. Then, suddenly, the OMB director reversed himself.

Oh, to be a fly on the wall and know how and why that happened. Could it have been the handiwork of the new White House Chief of Staff John Kelly? And, if so, could this incident be a precursor of good news for farmers?

In an orderly political system, we wouldn't have debt-ceiling crises. If Congress didn't want the national debt to rise, it would simply stop voting to spend more than tax revenues cover. Instead, Congress votes for deficit spending and then, to demonstrate its commitment to fiscal responsibility, balks at approving the increases in the debt ceiling the deficits require.

Were Congress to actually fail to raise the debt ceiling, the government would default on its debts. The mere prospect of default spooks financial markets; bond investors are the folks to whom the debt is owed. In the run up to a Congressional debt-ceiling debate, markets become increasingly volatile.

To avoid default and stave off financial panic, treasury secretaries, Republican and Democrat alike, invariably ask Congress for "clean" -- no conditions attached -- increases in the ceiling. President Trump's treasury secretary, Steven Mnuchin, is no exception. He favors a clean increase.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

In recent years, though, clean increases have been no cinch to come by. Congressmen belonging to the Republican Party's House Freedom Caucus have tried to use the debt-ceiling debate as a back door to push through tough spending limits that could not make it through Congress's front door.

The problem is with these spending conditions attached, debt-ceiling increases could not get enough votes; default would loom. This doesn't faze the Freedom Caucus legislators. They argue the government could simply become a slow payer, prioritizing debt service to avoid default while putting off other obligations.

Whether this would reassure markets is doubtful. It would certainly not be popular among those whose payments were put off -- providers of goods and services, recipients of government payments, you know, maybe even farm payments. Under this scheme, Uncle Sam would become Uncle Deadbeat.

Until this year, though, the idea of attaching spending limits and risking default never got that far. What changed is that a former Freedom Caucus Congressman, Nick Mulvaney, became Trump's OMB director. For the last few months, the administration has been sending Congress conflicting signals, with Mnuchin pushing for a clean increase and Mulvaney backing spending limits.

On August 3, Mulvaney changed his tune. Mnuchin speaks for the administration on the debt ceiling, Mulvaney told reporters (http://tiny.cc/…). "We've heard that out of the president's mouth, and I respect that, in fact that's the right way to do it," he said. "I've got budget, Mnuchin's got debt ceiling, and [Gary] Cohn's got tax [reform] so there is no infighting within the administration about the debt ceiling."

The fly on the wall wonders: What alien has occupied Donald Trump's body? Love him or hate him, our president is famous for setting advisers against each other and enjoying the resulting chaos. Yet here he is imposing what amounts to a disciplined chain of command, telling advisers to stay out of each other's patches.

Could this careful division of labor be the result of naming a new chief of staff with a background as a Marine general?

A more disciplined White House seems to be Kelly's objective. He took the job on the condition that he controls access to the president; even the president's daughter and son-in-law report to him. He listens in on some of the president's phone calls. Kelly is even said to have booted two warring aides from a meeting with the president, telling them not to come back until they'd resolved their differences (http://tiny.cc/…).

How long the president will sit still for all this discipline is anyone's guess. It's a hopeful sign that Kelly seems to understand his limits. "He has privately acknowledged that he cannot control the president and that his authority would be undermined if he tried and failed," the New York Times reports. "Instead, he is intent on cosseting Mr. Trump with bureaucratic competence and forcing staff members to keep to their lanes ..." (http://tiny.cc/…).

If my fly-on-the-wall theory is correct, this is good news for agriculture. In Congress, agriculture is the last bastion of orderliness and discipline. The committees hold listening sessions with farmers across the country before writing a farm bill. So-called "regular order" prevails -- legislation only goes to the floor after the ag committees have held hearings and debates. Bipartisan compromises are common.

Restoring order and discipline to the executive branch, then -- requiring the president's aides and cabinet members to "stick to their lanes" -- would be very much to ag's benefit. Avoiding a financial-market crash would be good, too. Congress will still have a fight about attaching spending cuts to an increase in the debt ceiling, so default is still a real possibility. Without the new order and discipline in the West Wing, it would have been a near certainty.

Urban Lehner can be reached at urbanity@hotmail.com

(CZ)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .