The Art of the Deal Revisited

If you haven’t read Donald Trump’s The Art of the Deal, you probably don’t understand what he’s doing. Get a copy. But whatever you do, don’t let your Democratic congressman read it. He might see through Trump—though it’s not likely. 

During the CNN town hall last Wednesday, Trump said

I say to the Republicans out there—congressmen, senators—if they don’t give you massive cuts, you’re going to have to do a default. And I don’t believe they’re going to do a default because I think the Democrats will absolutely cave, will absolutely cave because you don’t want to have that happen. But it’s better than what we’re doing right now because we’re spending money like drunken sailors.

Of course, no sailor (drunken or sober) ever spent money the way the U.S. Congress does. 

It is fair to say that the public, or at least the left-wing press (there’s hardly any other kind), had a hissy fit. The air was filled with cries of horror. The end of the world appeared to be nigh (though there was no discussion on whether that is a good thing or a bad thing).

Chase Bank’s Jamie Dimon (salary $34.5 million) took the bait (Trump probably had a bet on that that he would). 

“It’s one more thing [Trump] doesn’t know very much about,” Dimon said in an interview. “Anyone who’s anyone knows that is potentially catastrophic. I don’t think it’s going to happen—because it gets catastrophic, and the closer you get to it, you will have panic. It affects contracts, collateral, clearing houses, clients—it affects clients differently around the world. You have to then anticipate what people are going to do.”

It is just possible that Dimon is right about one point: that Trump doesn’t know “very much about” some of the technicalities involving the debt ceiling. But one thing Trump knows more about than just about anyone else is the art of the deal. 

Treasury Secretary Janet Yellen joined the fun, saying that failure to raise the debt ceiling would cause an “economic catastrophe.” 

“That is something that could produce financial chaos, it would drastically reduce the amount of spending and would mean that Social Security recipients and veterans and people counting on money from the government that they’re owed, contractors, we just would not have enough money to pay the bills,” Yellen told an interviewer on CNBC. 

Yes, and Santa Claus would have to take a hit too. 

Trump must be laughing his head off: the more the people he has to negotiate with take his comments about shutting down the government seriously (or take his opening offer as his final position), the better deal he is likely to get. He knows that; they appear not to.  

Trump’s done this before, with NATO. As a result of his pressure and public criticism while he was president, several NATO members increased their defense budgets. In 2019, NATO reported that our European allies and Canada had added $41 billion in defense spending since 2016, and by 2024, more than half of the member countries were projected to reach or exceed the 2 percent GDP target.

The caterwauling over the debt ceiling really appears to be overblown. We’ve been here before, without the world’s ending, and we’ll probably be here again. 

Since the enactment of the U.S. government’s current budget and appropriations process in 1976, there has been a total of 22 funding gaps in the federal budget, 10 of which have led to federal employees being furloughed.

There was a 21-day shutdown during the Clinton Administration and a 16-day shutdown during the Obama Administration caused by a dispute over implementation of the Affordable Care Act. 

And yet, our flag is still there. 

There were always threats from Democratic administrations in power when they wanted to spend more money: “We won’t be able to pay the interest on our debts!” 

But that’s nonsense. In fiscal year 2020, the federal government spent around $523 billion on net interest payments, which represented only about eight percent of total federal outlays. 

For fiscal year 2021, the U.S. federal government allocated approximately 15 to 16 percent of the total federal budget for defense-related expenditures. That included funding for the Department of Defense, military personnel costs, operations and maintenance, research and development, and other defense-related programs. All those people could continue to be paid during a shutdown. 

During previous government shutdowns, federal employees deemed “nonessential” (presumably that would not include, for example, air traffic controllers) have been furloughed, meaning they were placed on temporary unpaid leave. “Essential employees,” on the other hand, have been required to work without receiving their regular pay until the shutdown was resolved. Then, once the government shutdown ended and funding was restored, legislation was passed to provide retroactive pay for the period they were furloughed or worked without pay. 

That policy means that most federal employees have no stake in passing a reduced budget since they expect to be paid sooner or later, no matter what happens. Trump most likely would end that practice. He would also probably insist, and very publicly, that any federal furloughed employees not get paid their back wages in order to get them on his side during the negotiations. 

Given that summer is coming, it is predictable that the Biden Administration would shut the national parks in order to inflict maximum pain on the citizens—those wretched little people. Trump would keep them open and make the bureaucrats suffer.  

You may not want Trump to be president—you’re not alone—but it’s perfectly clear he’s a good negotiator, and possibly better than any other likely candidate. At the very least, he understands the art of the deal. 

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About Daniel Oliver

Daniel Oliver is chairman of the board of the Education and Research Institute and a director of the Pacific Research Institute for Public Policy in San Francisco. In addition to serving as chairman of the Federal Trade Commission under President Reagan, he was executive editor and subsequently chairman of the board of William F. Buckley Jr.’s National Review. Email him at Daniel.Oliver@TheCandidAmerican.com.

Photo: Jane Barlow/PA Images via Getty Images