US President Donald Trump may have finally found a way to fund his US-Mexican wall initiative, and Congress is already considering legal action. Although Trump’s original $5.7 billion project was rejected outright, Congress did offer him $1.4 billion to build the Trump wall. The agreement came just in time to dissolve the threat of a second partial government shutdown, which would have left over 42,000 federal employees of numerous agencies on hold.
"I can't say I'm happy, I can't say I'm thrilled… I don't think you're going to see a shutdown."
President Donald Trump
Trump’s solution to the rejected proposal was a simple one. Declare the US-Mexico border a national emergency. No president in the history of the US has ever set such a risky precedent. This controversial strategy has allowed Trump to circumvent Congressional approval, as inciting the emergency powers act gives Trump fast-acting executive decision.
To put this into perspective, in 1979, beloved President Jimmy Carter announced a national emergency in response to the Iran hostage crisis. In 1996, President Bill Clinton declared a national emergency after civilian planes were shot down near Cuba. In 2001, President George W. Bush declared a national emergency in response to the terrorist attacks of 9/11. In 2014, former President Barack Obama declared a national emergency in response to the Russian invasion of Crimea. And now, 2019, President Donald Trump has declared an emergency that started as a prevention of the “immigrant invasion” and has now evolved into the threat of illegal drugs crossing the border. This change of angle has empowered Trump to increase USD expenditure to a staggering 8 billion from various government funds:
- $600 million - Drug Forfeiture Fund (Treasury Department)
- $2.5 billion - Drug Interdiction Program (Defense Department)
- $3.5 billion - Military Construction Budget (Defense Department)
- $1.375 billion - Appropriations Bill (Homeland Security)
Invoking a national emergency allows Trump to activate special powers to better handle a crisis with haste. Congress can nullify a declared state of emergency with a veto-proof majority vote, or a joint resolution and the President's signature, and early signs of intervention are already surfacing. Acting director of the Office of Management and Budget, Russell Vought, has been quoted to say that Trump would “absolutely veto” any legislative attempt to block his national emergency declaration. Democrats are taking Trump’s latest actions very seriously and will likely not back down.
“If the president can declare an emergency, on something that he has created as an emergency, an illusion that he wants to convey, just think of what a president with different values can present to the American people.”
Speaker of the United States House of Representatives
The Trump administration stands firm that such a costly appropriation of funds is urgent and necessary, but there are some disturbing details in the Trump wall initiative that don’t seem to support the end goal of border protection.
The truth about the Trump wall
Instead of pumping money into schools, healthcare, renewable energy, or housing, Trump wants to build something that will be a lasting legacy attached to his presidency. Like Trump’s failed Taj Mahal and the iconic Trump Tower, bricks and mortar have always been a point of interest for this real estate developer turned political leader. “Build the wall" was his main selling point throughout his first election campaign back in 2016, which effectively spoke to the masses living on (or close to) the poverty line. It worked, and he’s going to use it again in 2020 with his "Finish the wall” slogan. Will the Trump wall be an impenetrable blockade similar to a correctional facility or military base? Will the cost be justified? Unlikely on both counts! The reality of this project is baffling to many who are familiar with the current border conditions, but no surprise for those who are familiar with Trump’s track record.
The Mexican–US border extends for over 3,000 kilometers. While the most popular traffic points have manned checkpoints, the vast majority of the border is far from secure. Hundreds of kilometers are barely patrolled and “invaders” are usually faced with nothing more than a cattle farm fence to deter them. What does Trump think will change?
For many people, it seems clear that the Trump wall is not a solution. A five-meter high concrete wall with razor wire and motion sensors stretching all the way from East to West could have been an effective deterrent, but that’s not even close to what is planned.
Last year over 50,000 people were apprehended while trying to cross the border at the weakest points. The so far proposed 90 kilometers will likely not change that. Furthermore, compare that with the 320,000 immigrants who illegally extended their welcome in 2016. Is the Trump wall nothing more than a 2020 election tool? Moreover, if Trump’s past projects are anything to go by, it’s going to cost America a lot more in the coming years.
"We’ll be getting almost $23 BILLION for Border Security."
Crumbling wall or crumbling USD
Remember, market sentiment drives prices too, and if the world feels that America is taking a bad path, it will eventually be reflected in global trading volumes, and consequently the price of USD. The Trump wall alone might not be enough to make a deep and lasting effect on USD prices, but a nation’s leader spending billions on an initiative that gives very little in return could damage USD in the long run. For now, a trader's best strategy is to trade Trump’s fundamental footprint, or avoid USD entirely.
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