THURSDAY, AUGUST 22 , 2019. THE WASHINGTON POST EZ RE A
that much in a recession.
“Both sides are out of bullets,”
said Chris Rupkey, chief financial
economist at MUFG Union Bank.
“I’ve never seen a situation where
there’s a recession cloud on the
horizon, but Washington is totally
unprepared to deal with a down-
turn in the economy.”
Others argue, however, that it
would be a mistake to confuse the
long-term deficit challenges with
the need to keep the economy
healthy in the long run. In the
years following the Great Reces-
sion, Republicans pushed for
sharp spending cuts to correct the
deficit, moves that many econo-
mists say slowed the recovery.
“That couldn’t be more wrong,”
Jared Bernstein, a former Obama
administration economist, said of
the idea that deficits should stop
lawmakers from acting in the
event of a downturn. “Of the many
things that keep me up in night,
that’s in the top 5.”
In its report, the CBO said the
United States has added about
$1.9 trillion in new spending over
the next decade, as a result of a
bipartisan budget deal as well as
emergency spending package
aimed at the crisis at the U.S.-Mex-
ico border. Those budget increases
will be partially offset by lower
spending than projected because
of reductions in interest rates paid
on the U.S. debt.
By the end of next decade, the
federal debt will approximately equal
the entire nation’s economy or GDP.
It may be difficult for Demo-
crats and Republicans to agree on
how to stimulate the economy so
soon after the GOP passed an
enormous tax cut.
At the outset of the last reces-
sion, House Speaker Nancy Pelosi
(D-Calif.) and former Senate ma-
jority leader Harry M. Reid (D-
Nev.) worked closely with the
George W. Bush administration to
push an aggressive tax cut aimed
Jay Powell and the Fed. He’s like a
golfer who can’t putt, has no
touch,” Trump tweeted Wednes-
day. “Big U.S. growth if he does the
right thing, BIG CUT — but don’t
count on him! So far he has called
it wrong, and only let us down.”
The Fed cut its benchmark in-
terest rate last month, out of con-
cern the economy is slowing, and
it is weighing further cuts this
year. But the Fed is targeting a
historically low 2 to 2.25 percent
interest rate, and the central bank
can’t cut rates as much as it has in
During the past seven reces-
sions, the Fed has cut interest
rates by at least 5 percentage
points, according to Jay Sham-
baugh, senior fellow in economic
studies at the Brookings Institu-
tion. Fed Chair Jerome H. Powell
may give a better sense of the
central bank’s plans during a
speech Friday in Jackson Hole,
The Federal Reserve honed
some other monetary policy tools
during its response to the Great
Recession — such as quantitative
easing, or buying bonds to pump
money into the financial system —
that could prove useful to deploy
in the next recession. Still, it’s not
clear how effective those would be
now — the Fed still holds trillions
of dollars of bonds it bought fol-
lowing the 2008 financial crisis
and Great Recession.
“We tested these out in a way we
hadn’t before,” said Ernie Tede-
schi, who served as an economist
in the Obama administration’s
Treasury Department. “The Fed
may have tools in its tool kit, but
those tools might be less effective.”
Some analysts note that be-
tween the deficit soaring and low
interest rates, neither Congress
nor the Fed would be able to do
remained manageable in part be-
cause the interest rates on U.S.
Treasury bonds have been low.
And the global economic slow-
down has pushed them lower, as
investors seek out government
debt as a place to park cash.
But the debt remains a long-
term threat, some analysts say,
one factor that some lawmakers
may weigh as they decide how far
to go to stimulate the economy in a
“We all know we are already on
a troubling fiscal path, but today’s
CBO report shows us that our lead-
ers are making things consider-
ably worse,” said Michael A. Peter-
son, chief executive of the Peter G.
Peterson Foundation, which advo-
cates for lower deficits.
On Wednesday, President
Trump backed away from one idea
to boost growth: a cut in payroll
taxes, which fund Social Security.
A payroll tax cut has been adopted
in past years to stimulate the econ-
omy, and the White House had
looked at whether to advance the
proposal in response to signs the
economy was worsening. The idea
can be attractive because it pro-
vides an immediate pay boost to
But after confirming he was
looking at the idea Tuesday,
Trump said Wednesday that he’s
not considering it any longer.
“We don’t need it. We have a
strong economy,” he said.
Even as he declared the econo-
my didn’t need support from Con-
gress, however, he insisted that it
needed help from the Fed. In a
tweet, Trump once again pressed
for the Fed to cut interest rates
sharply. The Fed usually cuts rates
in times of economic stress.
“The only problem we have is
DEFICIT FROM A
gun purchases from 18 to 21.
Abha Bhattarai contributed to this
stopped selling handguns in 1993.
Last year, after 17 students and
teachers were killed in a school
shooting in Parkland, Fla., Wal-
mart raised the minimum age for
tally shot at a store in Southaven,
Miss. A former employee was
charged in that shooting.
Walmart sells guns in about
half of its 4,750 U.S. stores. It
martMustAct. They included Sen.
Sherrod Brown (D-Ohio) who
tweeted that he was “calling on
Walmart to stop selling firearms
in their stores.”
On Wednesday, Marshall told
The Post that he hoped to spur a
conversation about the role that
retailers — not just legislators —
play in gun issues. He noted that
Walmart has changed its policies
before, such as when it phased
out military-style rifles in 2015.
“That’s why a lot of us were
surprised, and in fact disappoint-
ed, that there was not a response
of that kind after these most
recent tragedies,” Marshall said.
Marshall, 23, said he felt sup-
ported by employees and others,
particularly younger people
who’ve grown up under the rising
threat of mass shootings. He also
helped organize a walkout two
weeks ago of roughly 40 white-
collar Walmart employees in San
Bruno, Calif. Workers at Wal-
mart’s e-commerce offices in
Portland, Ore., and Brooklyn also
pressed the company to stop sell-
ing firearms and end donations to
politicians who receive funding
from the National Rifle Associa-
Earlier this month, a gunman
killed 22 people and wounded
dozens of others at a Walmart
store in El Paso. Just days before,
two Walmart employees were fa-
company is listening to a wide
variety of perspectives and con-
sidering how it might respond.
The retailer also is “encouraging
others” to consider what actions
they could take on gun issues,
though Hargrove wouldn’t speci-
fy whom he meant.
Hargrove emphasized that
safety was Walmart’s priority and
that it would take time to “think
through this issue.” Since the
shootings earlier this month,
Walmart has not changed its fire-
arms or security policies.
“In the national conversation
around gun safety, we’re encour-
aged that broad support is emerg-
ing to strengthen background
checks and to remove weapons
from those who have been deter-
mined to pose an imminent dan-
ger,” McMillon said after Walmart
released its earnings this month.
“We must also do more to under-
stand the root causes that lead to
this type of violent behavior.”
Despite its growing number of
signatures, the petition also drew
consternation. Comments posted
to the Change.org Web page in-
cluded calls to fire any employee
who participated in a walkout,
and arguments that Walmart’s
policies alone are not enough to
end the shootings.
Calls on Walmart to end gun
sales spread to Twitter, with crit-
ics circulating the hashtag #Wal-
BY RACHEL SIEGEL
Weeks after two Walmart
stores became the scenes of dead-
ly shootings, employees and cus-
tomers continued to urge the
retailer to revise its gun policies.
On Tuesday, Walmart em-
ployee Thomas Marshall sent a
petition to chief executive Doug
McMillon calling on the retailer
to stop all sales of firearms and
ammunition, ban the public from
carrying firearms into stores and
end all donations to politicians
backed by the National Rifle As-
sociation. The petition had grown
by Wednesday morning to more
than 129,160 signatures, signal-
ing sustained pressure on one of
the nation’s largest retailers of
firearms and ammunition.
“Customers no longer feel as
safe as they once did in our
stores,” Marshall wrote in a note
to McMillon. “We must do more.
We have the power to do more.”
McMillon responded to Mar-
shall’s note Wednesday morning,
Walmart spokesman Randy Har-
grove said, to reiterate that the
Nearly 130,000 sign petition urging Walmart CEO to end gun, ammo sales
Employee’s message says
customers don’t feel safe
after two store shootings
Debt larger than
had been expected
at stimulating the economy.
But it is much harder to imag-
ine current Democratic leader-
ship forging a successful compro-
mise with the Trump administra-
tion, said former congressman
Barney Frank (D-Mass.), who
worked with Pelosi at the time.
“The classic ways to respond —
reducing interest rates and pump-
ing spending — are constraints.
An even bigger constraint is the
weirdness of Donald Trump,”
Frank said. “There won’t be any-
thing for [Democrats] to work
CAROLYN KASTER/ASSOCIATED PRESS
The country is not in a recession, but recent economic data has made clear the economy is growing more slowly. It may be difficult for
Democrats and Republicans to agree on how to stimulate the economy so soon after the GOP passed an enormous tax cut in late 2017.
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