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Trump Is Defunding The Police Right Now

Eric J Scholl
Oct 7 · 6 min read

Back at the White House, Trump Tweets an order to his people to stop negotiating federal Coronavirus aid, and instead focus on getting his Supreme Court nominee through…

The reason? He doesn’t want money going to:

Take care of Democrat failed, high crime, Cities and States”.

Instead, the President says:

I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”

And if he’s making meting out any further stimulus money a condition of his re-election, we don’t think it’s a stretch to guess if he doesn’t win, he’ll continue to punish those states and cities financially.

Before we go on, let’s take a step back. Because we’re not sure we believe that series of Tweets. That the President won’t change his mind sometime in the blink of an eye. What with Trump handing out money right and left before he got sick, heading toward the election.

You want us to believe that now he’s going to stiff the entire American public, just to punish cities and states that happen to be run by Democrats? That probably didn’t vote for him and probably won’t again? Especially with 12,600,000 Americans now officially unemployed? Not to mention countless small businesses that are hanging on but teetering?

Trump suggests it’s OK because:

Our Economy is doing very well. The Stock Market is at record levels”.

But very few people have a substantial amount of their salary tied to the stock performance of the company they work for. Not unless they’re a CEO. Or are wealthy enough to begin with to earn a living as a professional investor.

Update: after we originally published this, the President then Tweeted he is “ready to sign right now” a “Stand Alone Bill” providing another $1,200 one-time stimulus check.

But let’s get back to what stimulus money granted to “poorly run, high crime, Democrat States” and cities pays for. Because he’s still not budging on that. Police, a lot of it. Other things too: education, public health, sanitation, etc. But in lots of cities, big and small, police budgets are at the top of the list. So when Trump turns his back on those cities and states, police tend to be a big segment of who he’s actually threatening, even if that’s not his direct intention.

Take Los Angeles, for example. According to Slate, spending on the LAPD tops the list of that city’s public services by a lot. Accounting for $1.73-billion of a $10-billion dollar total city budget. Here’s a graphic showing that more clearly:

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And that’s an extremely conservative view of things, because it only takes the police department’s actual annual operating budget into account. If you add in other city obligations to fund police pensions and the like, the amount nearly doubles: exceeding $3-billion.

So when Trump turns his back on his despised “Democrat failed, high crime, Cities and States”, he is putting pressure on cities and states to defund city and state police.

Now, in the past, Trump’s Treasury Secretary Steve Mnuchin has been very sensitive to not letting that happen. So back when the President signed an Executive Order to provide $400 a week in additional unemployment benefits, but originally required 25% of that to be paid by individual states, Mnuchin eliminated that last part, in large part because he didn’t want to see the President getting accused of being behind cutting essential locally-administered services, like police. Because mayors and governors in that case could’ve turned around and accused the President of forcing them to give a politically motivated handout at the expense of money for law enforcement. Because it has to come from somewhere…

Now that the President’s apparently decided for the time being not to help out anybody, everybody’s going to get hit. And so with law enforcement, instead of much-needed financial support, it becomes kind of a dare. Because if mayors and governors in those Democratically controlled states and cities Trump refers to — and they are among the most strapped — start cutting back on police budgets, then they open themselves up to further criticism from the President, even though he’s the one refusing to assist with their deepening financial crisis that may necessitate that. So they might try to cut deeper into education or public health budgets instead.

Let’s pause for a very basic question: Why does the federal government have money to spend on stimulus while states don’t? Aren’t the federal government’s coffers suffering too?

The answer is simple: states don’t have money mainly because they don’t have the power to print money. While Congress can authorize printing out an unlimited amount of more money. And according to Federal Reserve Chair Jerome Powell, who as we’ve said several times is kind of an unsung hero here, they should be doing exactly that right now. And aggressively.

The Fed can also help. And is. One way state and local governments can raise money is by issuing bonds to pay for various specific projects, or just general obligations. And the Fed, in an unprecedented move, has been supporting states and cities to some extent by buying some of those bonds. But those cities and states will be obligated to pay it back. Because the Fed can only lend money. Only Congress can just print it out, and then just give it out.

So without that, where are states and cities supposed to come up with all this extra money Trump is now insisting he won’t provide? Trump’s supported — or perhaps more accurately abetted — in this by his Chief of Staff Mark Meadows, who himself was famous while in Congress for threatening government shutdowns if he didn’t get his way.

Because states and cities can’t just print out new money. If they cannot get stimulus help from the federal government, they have to go out and get actual money that already exists, on their own.

But how? Raising taxes? On what? The most common sources of state and local revenues tend to be things like sales tax and gas tax. But those revenues are plunging as people spend and drive less. Can’t effectively raise state income taxes either, if tens of millions people aren’t working and thus have no income to pay that tax on.

Alcohol? Sure. Could see liquor taxes going up in some places. Marijuana? Legalization always pretty much has been a tax scheme to begin with, so you can bet before this is all over, even more states will legalize. But that can’t happen in a flash.

So the only real answer right now to how states might conserve the reduced amount of cash they are bringing in on their own is by cutting services. If they can’t access the wads of cash Trump dangled, but is now denying, they don’t really have a choice. They’ve already done education, health, garbage collection. And now they’re increasingly doing law enforcement. Even cities that had planned robust increases in police department budgets have already cut those back. No, the California Highway Patrol won’t disappear. But for a lot of towns across that state it acts not only as state police, but as local police too. So those are the kinds of services of which people will start to see less of, probably.

So in denying those funds, Trump is drawing a direct line between himself, and any cuts to law enforcement many state and local governments will almost definitely have to do because they just won’t have the money to expand the way they wanted, or even sustain current levels. And that will mean it’s Trump who is defunding the police.

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Eric J Scholl

Written by

Peabody award winning journalist. Streaming media pioneer. Played @ CBGB back in the day. Editor-In-Chief "The Chaos Report" www.thechaosreport.com

Data Driven Investor

from confusion to clarity not insanity

Eric J Scholl

Written by

Peabody award winning journalist. Streaming media pioneer. Played @ CBGB back in the day. Editor-In-Chief "The Chaos Report" www.thechaosreport.com

Data Driven Investor

from confusion to clarity not insanity

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