Americans Deeply Divided Over DOGE

Trump and Johnson in January
Reuters
By Yuval Rosenberg and Michael Rainey

Happy Monday! It's bound to be another newsy week. President Donald Trump said today that his 25% tariffs on imports from Mexico and Canada will take effect tomorrow, with "no room left" for those countries to avoid the measures. Fears of a Trump trade war and heightened inflation rattled the stock market, which saw a sharp afternoon selloff that ended with the S&P 500 index down about 1.8% on the day, its worst loss since December.

Trump is set to deliver an address to Congress tomorrow night. That speech - not officially a "State of the Union" - comes as he and lawmakers also face a government shutdown deadline on March 14 and must deal with the ongoing fallout of his Oval Office clash with Ukrainian President Volodymyr Zelensky. And then Friday will bring the first monthly jobs report since the Trump administration launched its effort to slash the federal workforce.

Here's what else is happening.

Congress and Trump Have 11 Days to Avoid a Shutdown

With current federal funding due to expire in 11 days, House Speaker Mike Johnson now says he wants Congress to pass a "clean" continuing resolution that would "freeze funding at current levels" through the end of the fiscal year in September. That would avoid a shutdown of government agencies - at least those not being targeted right now by Elon Musk's DOGE effort.

The speaker had previously indicated he wanted to include the DOGE cuts in the current funding bill, but his new approach would have Republicans wait until the Fiscal Year 2026 budget to try to codify those cuts over the objections of Democrats.

"For FY26, for the next fiscal year, you're going to see a very different process and a lot more efficient and effective spending for the people," Johnson said during an interview Sunday with NBC's "Meet the Press."

Before Republicans can get to that, though, they need help from Democrats to pass a funding bill for the rest of this fiscal year. Johnson said Democrats need to back off efforts to restrict Trump and DOGE. "Democrats have to help negotiate this, and they've to this point shown no interest in finding a reasonable solution," he said, later adding: "They want to use government funding as some sort of weapon against President Trump and his administration, and that is not the way this is supposed to work."

Democrats are reportedly pressing for guarantees that the Trump administration will spend funds as appropriated by Congress. House Minority Leader Hakeem Jeffries said in a statement Sunday that Democrats are ready to work with Republicans but "there has been zero outreach from the Trump administration and House Republicans have walked away from the negotiating table."

What's next: Republican leaders are reportedly looking to release the text of a stopgap spending bill this weekend.

Trump Announces Cryptocurrency Strategic Reserve

President Trump declared on social media this past weekend that the U.S. will create a "crypto strategic reserve," echoing his pledge during the campaign to be the most pro-crypto president in history.

"A U.S. Crypto Reserve will elevate this critical industry after years of corrupt attacks by the Biden Administration, which is why my Executive Order on Digital Assets directed the Presidential Working Group to move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA," Trump said on his social media platform, referring to the cryptocurrencies XRP, Solana and Cardano. "I will make sure the U.S. is the Crypto Capital of the World. We are MAKING AMERICA GREAT AGAIN!"

The president added that Bitcoin and Ethereum will "be the heart of the Reserve."

Not surprisingly, the announcement was greeted with enthusiasm among many crypto investors, including David Sacks, the Silicon Valley billionaire who has been named the White House "AI and crypto czar." Sacks has been involved with some of the currencies intended to be in the reserve, though he says he sold his personal holdings before joining the administration.

Crypto prices surged in the hours following the announcement, with Cardano rising as much as 60%. Prices fell Monday, however, as the currencies gave up some their gains from the weekend.

Why crypto? Trump once derided cryptocurrency as a "scam" that is "based on thin air" and a threat to the dollar, but he embraced the industry last year as the industry spent more than $130 million in the election backing Republicans. Trump even jumped into the market himself, releasing meme coins - special cryptocurrencies that are often jokes and have little value or utility - of himself and his wife shortly before the inauguration.

The U.S. already owns about $20 billion of Bitcoin obtained through seizures, but some financial experts have wondered why the U.S. would want or need to maintain a reserve of cryptocurrencies. Many economists believe digital currencies have no inherent value, which is reflected in their wild swings in price. A resource like oil, on the other hand, has a clear use value and could be hard to access in times of economic or military crisis, so it makes more sense to keep a strategic reserve.

Critics have been quite clear in their dismissal of the basic idea. "Strategic Bitcoin Reserve makes as much sense as Strategic Baseball Card Reserve," Stanford economist Hanno Lustig said on social media.

Mark Zandi, chief economist at Moody's Analytics, noted that a crypto reserve would obviously benefit crypto investors, but with no clear benefit to the government, which must trade real assets for speculative ones. "There's just no discernible logic to do it," he said. "I get why the crypto investor would love it, but for taxpayers, it's risky."

Steve Rattner, who served as an adviser to the Treasury secretary during the Obama administration, said the idea is worse than risky. "Creating a bitcoin reserve is an outright waste of taxpayer dollars aimed at enriching the crypto industry," he wrote on social media. "If crypto prices steeply drop (which they have in the past), having created a crypto reserve could erase govt funds over night."

The critics even include some major crypto investors, who worry about government involvement in what is supposed to be an independent source and store of value. "I am PRO CRYPTO," said Joe Lonsdale, a wealthy Silicon Valley investor who supports Trump. "And I agree the SEC has been terrible, and that we should support the sector with clear laws and precedent. But to me, that doesn't include government money buying in! Not the proper, principled role of government."

Jason Calacanis, a Silicon Valley investor who runs a popular podcast with crypto czar Sacks, put it more simply: "what an insane grift the Crypto Strategic Fund is as far as I can see," he wrote on social media.

What's next: How the proposed reserve might operate is unknown, but we may learn more on Friday, when the White House holds its first crypto summit, to be led by the AI and crypto czar.

Poll: Americans Deeply Divided Over DOGE

Americans broadly understand that President Trump is making sweeping changes to how the government works, with 81% calling the shifts "major" in a new CBS News/YouGov poll. But the public is far more divided over whether Trump's changes represent improvements and whether Elon Musk's DOGE will be beneficial - and far from satisfied with Trump's priorities in office.

Overall, the poll finds that 51% of American adults approve of the job Trump is doing, while 49% disapprove. But of the poll respondents who said that Trump is making major changes to government, 40% said those changes are for the worse, compared to 35% who say they are for the better and 25% who think it's too soon to say.

The country appears sharply divided over DOGE and its efforts to slash the government workforce. About eight in 10 people say they have heard or read at least some about DOGE, and 52% say that Musk and DOGE have too much influence over firings and too much access to data records. More than half the country says the DOGE workforce cuts will reduce essential workers and decrease government services, but 65% say that the cuts will remove workers in unnecessary jobs and 53% think they will save taxpayer money.

Of course, views of Trump's changes and DOGE cuts are split along party lines: 87% of Republicans approve of efforts to slash federal staffing, while 86% of Democrats disapprove. Independents are split, 50-50, on the issue. And 86% of Republicans say DOGE cuts to the federal workforce will make federal agencies work better, compared to 83% of Democrats who say they will not.

The poll also finds that 82% of Americans want Trump to place a high priority on the economy and 80% say the same of inflation. Just 30% say tariffs should be a top priority. But just 36% say that Trump is placing "a lot" of emphasis on the economy, 29% say he is focusing a lot on inflation and 68% say he is prioritizing tariffs. More than half of respondents, 52%, said that they think Trump's policies are making the cost of food and groceries rise and 54% say they disapprove of how the president is handling inflation.

The pollsters interviewed 2,311 U.S. adults between February 26 and 28. The poll's margin of error is plus or minus 2.5 points. Read more at CBS News.

Chart of the Day

Federal spending has increased over the last 10 years, with a noticeable spike during the pandemic. This chart from The Wall Street Journal breaks the spending down into broad categories and shows how it has changed over time on a per capita basis.

"Tax revenue per person dipped following the 2017 tax cuts, which lowered rates on individuals and on corporations," say the Journal's Richard Rubin and Kara Dapena. "But tax collections jumped during the postpandemic recovery, especially as people sold stocks and cryptocurrency that soared in the asset boom of 2021."

"Meanwhile, federal spending has followed a more complex trajectory over the past decade. Congress pumped money into the economy during the pandemic to keep households, businesses and state governments afloat. Though those programs largely receded, long-run budget challenges remain because of growing interest costs and the aging population."

 

Federal Spending per Capita
The Wall Street Journal

Fiscal News Roundup

Views and Analysis