Outside the Box: Trump sells regulatory favors to his donors

President Donald Trump recently directed Secretary of Energy Rick Perry to prepare steps to subsidize coal and nuclear power plants, which are struggling to compete against cheaper, cleaner alternatives. This directive would bail out some of his largest donors while increasing energy costs for millions of Americans, showing once again the grift and graft ethos at the center of his economic policy.

Coal barons Bob Murray and Joseph Craft, who have strongly pushed the bailout, have given Trump and Trump-aligned groups millions of dollars. FirstEnergy Solutions FE, +1.75%  , another company that would benefit, paid Perry’s former campaign manager Jeff Miller more than $300,000 to lobby Perry for the bailout. Miller is also a major fundraiser for a Trump Super PAC, which got him access to Trump at an exclusive donor dinner; and the day after the dinner, Trump signaled his support for the coal baron bailout.

Sadly, backroom deals with political donors have become the norm for the Trump administration. Rather than a focus on improving economic growth or creating good-paying jobs, Trump and his allies focus on helping friends, punishing enemies, and leaving everyone else with the bill. Trump’s culture of corruption leads to a system that rewards payoffs and cronyism, not innovation and excellence. That’s a recipe for disaster that has failed in every country that has tried it.

Nowhere is this corrupt mentality more evident than in the long-standing pillars of the conservative economic agenda: tax cuts and deregulation.

Trump and his allies promised a tax plan focused on closing loopholes and helping the middle-class. Instead, the donor-driven tax cut shifted massive amounts of money to the wealthiest Americans and large corporations, while creating scores of new special-interest loopholes. As Republican Congressman Chris Collins famously said, “My donors are basically saying, ‘Get it done or don’t ever call me again.’” Members of Congress and even the president himself received sizeable tax cuts too.

The authors of the tax bill also sought to punish their political opponents, hurting the American people in the process. Stephen Moore, one of Trump’s top economic advisers on the campaign, said the bill would hurt Democratic states and Democratic policy priorities, like providing people with affordable health care. And now that they’ve provided these huge giveaways, Republicans are looking to pay for it with cuts to programs like Social Security, Medicare, and Medicaid.

Less attention has been paid to the ways in which regulatory changes have been used to carve out special favors for politically connected corporations and donors, while hurting American families. But it’s proven a breeding ground for graft and corruption.

This is not Murray’s first attempt at a bailout. Last year, he asked for one and then gave $1 million to a Trump Super PAC four days later. Trump moved forward with the proposal, which would have increased energy costs for consumers up to $11.8 billion a year. Fortunately, this effort was eventually stymied by a broad coalition of energy producers who fought the blatant giveaway.

Craft, meanwhile, not only gave more than $2 million to Trump, but has also been a major backer of Scott Pruitt, who Trump tapped to run the Environmental Protection Agency and is now the subject of a dozen federal investigations. In his new position, Pruitt has taken a number of steps to change regulations to benefit coal companies like Craft’s.

These are not isolated incidents. Under the Obama administration, the Department of the Interior closed a loophole that had decreased royalty payments to the federal government for coal extracted from publicly owned lands — the loophole cost American taxpayers up to $85 million a year.

But the Trump administration quickly reopened it, responding to an effort driven in large part by Cloud Peak Energy CLD, -1.47%  , one of the largest donors to Secretary of the Interior Ryan Zinke when he ran for Congress in 2016.

Corruption in our politics has been a serious issue for some time, but Trump has made the problem that much worse with his singular focus on abusing government’s power to help his friends and hurt his enemies, all without caring about the effects of his actions on the broader public.

When corruption replaces competition at the center of our economy, we all lose.

Counterpoint: Trump administration taking prudent steps to keep the lights on

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