The federal government has shut down because Republicans can’t agree on funding for President Donald Trump’s main campaign promise to build a wall on the southern border with Mexico, and Democrats are insisting they will not vote for wall funding. This typical Washington gridlock is surmountable because Trump can build the wall on his own.
A week ago, the White House put out a call to federal agencies to look for “pots of money” in their existing budgets that could be cobbled together to pay for border wall construction. Immediately, Sen. John Thune, the Republican whip in the upper chamber, shot down the idea of shifting funds from executive departments to the border, saying, “I’m not a big fan of moving money.” Like it or not, there are sources of revenue in the executive branch that the president has authority to use without congressional approval.
The Department of Agriculture has about $200 billion in outstanding loans for rural development projects such as community buildings, bridges, roads, fire stations, police stations, water projects and barriers such as fencing and walls. These federal loans to local communities have low default rates that are attractive to private-sector investors because they represent large, reliable cash flows — the kind of investments that big money funds desperately desire.
About $50-100 billion worth currently held by USDA are very marketable and attractive commercial paper investments. The rights to collect the remainder of the debt on these loans could be sold to private parties who would pay a premium for such a steady stream of cash payments. The sales would give a profit cushion to the government and alleviate taxpayers from any future risk of nonpayment while retaining certain borrower guarantees.
For example, Trump could authorize the sale of $10 billion of USDA rural water loans on the secondary market, which could bring in a lump sum payment of $12 billion or more. Revenue from these proceeds could be directed to build the border wall.
Legal authority comes from many angles. Obama stimulus loans (approximately $2-$5 billion) could be separated out and used because they involved “no year” money, meaning the funds don’t expire if not spent in a certain time frame. The president could tap into USDA’s Community Facilities Programs money if recouped funds from the sale were used for new loans to cooperating communities on the border, such as in Texas.
Trump can get wall money without Congress
Another option would be to utilize funds in the same way USDA undertakes in-kind swaps with private parties to the tune of hundreds of millions of dollars worth of commodities and services. This would entail swapping the proceeds of the commercial paper sales for the wall, with construction companies being the counterparties.
These are only a few creative funding avenues that could be explored, some less complicated than others. Such an aggressive approach is a sure way for Trump to regain the initiative and get the attention of lawmakers who have an interest in killing any threat to their control over spending, thus giving the president leverage in negotiations as pressure mounts to end the shutdown.
While the Constitution gives Congress power over the government’s purse strings, presidents of both parties have pushed the limits of their flexibility to use executive-branch funds free of congressional micromanagement. President George W. Bush was criticized for keeping billions in war spending off the books so it could be diverted to secret operations free from congressional oversight. Conservatives complained that President Barack Obama spent billions on health care without congressional authorization.
Voters want a wall and Trump should deliver it
Opposition to the wall within Trump’s own administration has prevented progress on this issue, which is wildly popular with the GOP’s conservative base and is the consequence of the president surrounding himself with establishment advisers who have worked to thwart his populist agenda from within. For example, after being briefed on the concept of selling USDA commercial paper to pay for border security, Agriculture Secretary Sonny Perdue’s then-Chief of Staff Heidi Green shot down the idea by curtly stating, “The secretary does not want the wall.”
Trump’s policy options will only get narrower after Democrats take control of the House of Representatives in January and the White House becomes consumed by fighting off impeachment. There is no chance that the wall funding will pass through Congress in the next two years with divided government and increasing political divisiveness in the nation's capital.
Minus an 11th-hour deal in the Senate, the only way a border wall will get built is if the president uses executive power to do it. He has the funds available and the authority to build the wall on his own. The only question is whether President Trump will finally start taking advice from those who actually support his goals rather than continuing to trust the internal obstructionists.
Brett M. Decker, an assistant professor of business at Defiance College, is the best-selling co-author of "The Conservative Case for Trump" and a former editor of The Wall Street Journal. Follow him on Twitter @BrettMDecker. James Renne, a national-security attorney, was a Trump Transition official who led the USDA Infrastructure Team and served in the George H.W. Bush and George W. Bush administrations.
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This article originally appeared on USA TODAY: Donald Trump can fund the border wall without congressional approval