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Blog No. 17: Connecting the Dots

WASHINGTON --- Raising the debt ceiling and approving yet another Continuing Budget Resolution seems inevitable according to multiple sources in the press and on Capitol Hill. The dull reality of legislative bickering continues to cause expensive programs throughout the Federal Government to go unfunded --- and this malaise is costing us billions of dollars.

Despite promises to“drain the swamp” and overwhelming Republican majorities in both houses of Congress, it seems Speaker Ryan and Majority Leader McConnell can’t get their act together to put a budget together.

And the White House, which is badly understaffed, isn’t helping much.

Much to many observers’ surprise, the apparent effort to Repeal and Replace Obamacare has moved to the front of the legislative agenda, ahead of the proposed tax cuts, Federal Budget talks and non-DoD agency staffing reductions. The budget gridlock seems to be genuine, with no relief in sight. Another CR appears inevitable.

It’s not shocking. Everyone knows that the dysfunction in Washington is reaching near paralytic levels. What is shocking is what the long-term affect these budget freezes have had on the Pentagon and our Foreign Service budgets.

According to Defense News Magazine last week, because of budget cuts and reductions in a variety of essential long-term programs, over 53 percent of the Navy’s Attack Fighter jets are grounded. And, 35 percent of all the Air Force and Navy’s planes are non-operational.

The vast majority of the aircraft groundings are due to delayed maintenance issues tied directly to lack of spare parts and lack of maintenance crew training, a Defense Department spokesman said. Parts, training and recruitment of technical ground personnel were among key programs that were slowed, frozen, reduced and gutted to allow the DoD to hit its budget requirements.

To go backwards a bit, Former Speaker John Boehner and his Republican-led colleagues in the House in 2009 demanded that spending limits be placed on the US Federal budget. “Sequestration” was Boehner’s solution at freezing spending and “getting the tax-and-spend Democrats under control.”

Now Mr. Trump has announced he wants to increase Pentagon spending by 10 percent, and cut other Civilian agency budgets radically. In Trump’s Joint Session speech to Congress last week, he called for an end to Military Sequestration, and is looking ahead at new weapons systems, a new Navy aircraft carrier, and a force increase in personnel. All this as regional tensions in Asia, Europe and the Middle East are beginning to get ugly.

Fears at State Dept., are that the president will ask Sec. Rex Tillerson to cut State’s budget by half. Unlikely, but cuts are clearly being considered according to sources. While cuts may be forthcoming, so far, details are not.

What is certain is that Tillerson’s trip next week to Asia will be important. We should start getting a better picture of what a future State Dept., will look like in the next few weeks, as Tillerson fills out his greatly depleted staff.

Deepening concerns about China, and its growing aggressiveness in financial trade issues, will no doubt be a hot topic. Bloomberg ran a piece over the weekend detailing concerns, including commenting that empty promises by Chinese leaders to enact financial reforms are making the US more concerned than ever. Here’s a lift from that story:

Tensions between the U.S. and China over how to handle North Korea have escalated since President Trump accused Beijing of not doing enough to curb Kim Jong Un’s nuclear ambitions. Beijing’s leaders have called for a new round of talks on North Korea as they seek to rein in Kim and halt U.S. plans to deploy a missile-defense system known as Thaad in South Korea, in part on concerns that it will undermine China’s own security.

China’s top-ranking diplomat, Yang Jiechi, met Trump last week in what was the highest-level contact between the world’s two biggest economies since Trump’s election, as North Korea’s nuclear program overshadows tensions over trade.

So, Tillerson will be busy. It’s unlikely any key decisions of Foreign aid budget cuts will be made anytime soon.

Meanwhile, with the Russian scandal growing at ever-greater heights, Washington is more distracted by the Russians than the Chinese --- which is fine with Beijing. A front page NYT story Sunday depicting Cyber war issues with North Korea will get a lot of attention with the media this week, again tied to Tillerson’s Asian swing.

As we noted in Blog No. 16, Save the Blunnies, the distractions of the Middle East continue to draw Pentagon leaders away from the growing problems in the Pacific. Over the weekend, some 40 bombing sorties were flown in Yemen. SecDef James Mattis is now fully engaged in the activities of fighting Islamic Terrorists. And Mr. Trump wants him to “keep pounding them.”

A planted story over the weekend said China is actually not going forward with an aggressive arms buildup of its Navy. Not many here are taking that story very seriously. The greater concern is that China is doing just the opposite, much to the dismay of Japan and South Korea.

We’ll save the High Seas protection duties of the US Navy for another day. Suffice to say for now, Tillerson will get an earful this week, and hopefully so will our president upon the Secretary’s return from this key strategic trip.

A central part of future Defense budgeting is the Trump administration’s demand that our allies pay their fair share of defense spending. In fact, during NATO talks last month with three key senior cabinet officials, Reuters reported that Germany was surprised at the US arm-twisting efforts to get Germany to pay more for NATO costs. Specifically increases in German equipment and military personnel.

The confusion coming from Merkel’s government is that if Germany increases its military budget much more, it would be the SINGLE LARGEST MILITARY FORCE in Europe. Increasing the German army so it’s the biggest on the continent? Really? I think we’ve seen this movie before….

I was reminded of a luncheon I was having with a fellow Jewish guy in New York in 1988. Mike Rappaport told me: “Can you believe this, they’re actually talking about reuniting East and West Germany?”

“No way,” I said. “That’ll never happen in our lifetime.” Yeah, right.

Now the new Trump Foreign Policy team wants the Germans to increase the size of their army so it’s the biggest in Europe?

On a side note, we all know how efficient German engineers can be, and I’m not just talking about BMWs here.

About 15 years ago, Germany undertook a major domestic initiative to cut its dependency on foreign oil. Germany produces virtually no gasoline or petroleum products on its own, and is highly dependent on the UK, US and the Arabs for its oil and gas supplies. At the time, as oil was inching toward $100 per barrel levels, the Germans decided, admirably, to create huge tax incentives if its citizens would deploy solar power.

German business, industry and citizens alike quickly lined up behind this solar initiative. Today, Germany has radically reduced its dependency on foreign oil. It’s homes, factories and offices run with ruthless efficiency on Solar Power. In fact, Germany may be the most solar-efficient nation on earth. They make so much Solar Power, that they can’t use it all. Greenies worldwide marvel at the way Germany has adapted to clean tech.

Germany’s government is trying to negotiate EU accords to sell power back to the European Grid, but is struggling in Brussels to get this done. Eventually, the Germans will take a page out of Elon Musk’s book, and tie electric solar power to automobile technology. Apparently Germany’s work in this area, as evidenced by several Mercedes and BMW models now appearing in the US, is forthcoming --- again, with ruthless efficiency.

A stronger Germany, just as Europe seems to be moving toward a more conservative, political reality, is stunning. France, Italy, Austria, England and perhaps Spain all now have thriving right-wing political parties that are gaining steam.

China, as it grows ever more powerful economically and militarily, is also becoming increasingly more belligerent.

Cyber warfare, Russian worries, Yemen airstrikes, Chinese currency manipulation, growing fascism in Europe. Sounds like a tough next couple of years for Trump, Mattis, Tillerson and the new team.

Stay tuned. It’s going to get bumpy.

After over 35 years of working in and around Washington, I’ve learned that connecting the dots really is important. All of the elements addressed in Blogs 16 and 17 really are interconnected. And it ties together with a viable Federal-spending Budget.

It’s time for focus. No more continuing budget resolutions. The Congress needs to pass a budget before, God forbid, something blows up.

Picking up those pieces would really be expensive.

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