I’m not a regular viewer of Squawk Box on CNBC, which is a function of a number of things – I wouldn’t call my investment portfolio particularly sophisticated at this point, cable news makes me sad, and the NBC brand of legacy corporate media, in my opinion, ranks even to the south of Disney’s offerings.
That said, yesterday, House Speaker Mike Johnson was on the show for a 19-minute segment which made a bit of news – most notably because Johnson endorsed Donald Trump on air, something he would tell you isn’t news, as he’s been a friend and confidant of Trump’s from virtually the beginning of the latter’s presidency.
He also talked a bit about the “laddered” continuing resolution which passed the House with more Democrat votes than Republican votes yesterday. Johnson isn’t calling that program a strategic retreat, which is what the House Freedom Caucus and other conservatives among the 90 Republicans voting against the CR yesterday are calling it, and perhaps he shouldn’t.
But it’s a strategic retreat. The resolution passing through the House yesterday funds the government at current levels through late January (for some parts of it) or early February (for others). There are no asks for conservatives in the CR, and for a very simple reason – cut one dime of Bidenomics federal spending, and every Democrat vote for the CR goes away, and you’re going to gain nowhere near enough of the 90 Republican “no” votes you’ll need to offset them.
As Johnson notes in his Squawk Box segment, the reason they’re acceding to a “clean” CR which has no policy changes is that they’re out of time – something he’s not at fault for; he’s been under the budget gun ever since he became Speaker three weeks ago. In that time the House has passed a host of appropriations bills, which is a big positive step toward re-creating “regular order” and a real budget process, so we’re closer to having a series of debates on federal spending inside the different agencies the money flows through.
Those debates are where the cutting of waste, fraud and abuse can be done. It can’t be done when the budget process is reduced to an up-or-down vote on a bloated, rancid omnibus bill made under the threat of a government shutdown.
Johnson, as Speaker, is responsible for the budget process not resulting in shutdown politics. His predecessor Kevin McCarthy wasn’t up to the job of avoiding such a train wreck, and that’s what ultimately ended his speakership.
The Squawk Box hosts all treated House conservatives as a disorganized rabble incapable of voting for budget bills, which is a typical ruling-class mentality. Johnson is taking a beating from some of those House members now over the CR, but what he’s getting across in the interview is that the budget fights are coming next year – on ground much more favorable to the Republicans.
Spending 2024 in a series of fights over each appropriations bill – how much to spend on health care, how much to spend on defense, how much on environmental protection, the FBI and so forth – is a far more productive platform for policymaking than we’ve seen. Because if the House cuts the EPA’s budget, let’s say, and the Senate then refuses to pass the appropriations bill funding the EPA, then who’s responsible for the government shutdown at the EPA?
And by the way, America will survive if EPA is shut down due to the Senate refusing to pass its appropriation. It’s when the whole government is shut down that there’s a political risk to the Republicans.
We’re not 100 percent sure that risk isn’t overrated, but if you’re Mike Johnson it’s your job not to find out.
Johnson gets grilled about Trump, and the questions are stupid – how can Trump be for the rule of law when he’s been indicted four times? (he actually gets asked that) – but his response is calm and composed. That’s how Johnson operates, and frankly, it inspires confidence to see him so unfazed by clownish, partisan legacy media questions.
We wish there were more like him. Based on his performance so far, we think it’s quite possible there will be. Mike Johnson is a heck of a good politician to emulate, it turns out.