The Republican Party stands with America’s veterans — until America’s veterans stand up to the party’s donor class.
The GOP relies on former servicemen and women as both a constituency (in 2016, Donald Trump won them by a two-to-one margin), and as reinforcements in its culture war. Veterans command broad, bipartisan respect — and thus, have the power to turn any cause they’re associated with into a sacred cow. Republicans have had little difficulty reframing calls for cutting America’s gargantuan military budget or ending misbegotten wars — or even reducing police violence against African-Americans — as affronts to those who fought and died for this country.
But veterans’ cultural cachet is a double-edged sword for the GOP. The conservative movement exists to undermine the notion that the federal government has an obligation to safeguard the well-being of working-class Americans. And veterans are both largely working-class and disproportionately likely to rely on public programs and public-interest regulations for their well-being. Vets get their health care from the single most socialized segment of America’s health-care sector — and most of their advocacy organizations want to keep it that way. Meanwhile, veterans’ acute vulnerability to predatory lenders has abetted the passage of bipartisan legislation strengthening federal regulations on the finance industry. Which is to say that on a number of economic issues, Democrats are the ones holding the “support our troops” card.
All this presented the Trump administration with a stark choice: It could either show deference to the interests of one of its core constituencies, or maximize its cronies’ ability to profit off of deregulation and privatization (at considerable political risk).
It’s now clear that president Trump has opted for door No. 2.
Many veterans hail from humble backgrounds and enter the military early in adulthood, before they’ve had the opportunity to build much credit. For decades, this made them a prime target for unscrupulous lenders; according to Defense Department research, vets are four times more likely than other Americans to be exploited by payday lenders. The Pentagon claimed such practices hurt the morale of America’s fighting forces, and thus, national security. In response, Congress passed the Military Lending Act (MLA), which bars lenders from charging military members an annual interest rate above 36 percent, forcing vets to settle legal disputes over loans through arbitration, or imposing penalties for early payment, among other restrictions.
After Elizabeth Warren pushed the Consumer Financial Protection Bureau (CFPB) into existence, the federal government stepped up enforcement of the MLA. In addition to investigating individual reports of abuse, the CFPB began conducting routine inspections of various lenders’ practices — essentially stopping and frisking shady financial institutions. Through this tactic and others, the CFPB has redistributed more than $130 million from abusive lenders to military members and their families since 2011.
But some of the Republican Party’s best friends are abusive lenders. And so, according to documents obtained by the New York Times and NPR, the Trump administration will soon suspend the CFPB’s efforts to enforce the MLA through proactive investigations; instead, the agency will merely react to individual reports of alleged malpractice.
This change will make it significantly easier for payday lenders to profit off of veterans’ financial desperation with impunity. This fact is so plain, the administration is not even arguing that the CFPB’s proactive investigations are unnecessary. Rather, it is arguing that the CFPB lacks the legal authority to conduct such supervision under the MLA. A spokesman for interm CFPB head Mick Mulvaney told the New York Times that his boss “is urging Congress to quickly pass a measure that would give him the power to resume supervisory examinations” (something that a Republican Congress is extremely unlikely to do).
But this rationale is bogus. The consumer bureau has launched dozens of supervisory investigations since its creation, and none have met significant legal opposition. At present, no lenders are challenging the CFPB’s interpretation of the MLA, according to administration officials who spoke with the Times.
In reality, the administration is pretending that it has a legal obligation to suspend routine enforcement because it knows it has no politically viable argument for doing so voluntarily. Helping payday lenders rip off garden-variety working-poor Americans is one thing; helping them fleece “our troops” is another. This the same tactic that the White House used when suspending DACA (i.e. “We’d love to protect law-abiding, American-raised immigrants from deportation, and veterans from predatory lenders, but we just don’t have the power!”). The president has repeatedly confirmed that this position is wholly cynical, by adopting extraordinarily expansive interpretations of executive authority when it suits him. According to the Trump administration, the White House lacks the power to proactively enforce financial regulations, but can unilaterally declare Canada’s steel industry a “national security threat,” and then impose tariffs on it without congressional consent.
Meanwhile, the Trump administration has handed its veterans’ health-care agenda over to three dues-paying members of the president’s Florida golf resort. As ProPublica revealed last week, the chairman of Marvel Entertainment Isaac Perlmutter, his personal doctor Bruce Moskowitz, and Moskowitz’s squash partner Marc Sherman have been informally advising Trump on Veterans Administration policy (while paying monthly fees to Mar-a-Lago). This “troika” played a leading role in ousting David Shulkin from the VA, and orchestrating the administration’s push for privatizing veterans’ health care. As ProPublica reports:
Over the course of 2017, there was growing tension within the Trump administration about how much the VA should rely on private medical care. During the campaign, Trump championed letting veterans see any doctor they choose, inside or outside the VA system. But Shulkin warned that such an approach was likely to result in poorer care at a higher cost. His preferred solution was integrating government-run VA care with a network of private providers.
In September 2017, the Mar-a-Lago Crowd weighed in on the side of expanding the use of the private sector. “We think that some of the VA hospitals are delivering some specialty healthcare when they shouldn’t and when referrals to private facilities or other VA centers would be a better option,” Perlmutter wrote in an email to Shulkin and other officials. “Our solution is to make use of academic medical centers and medical trade groups, both of whom have offered to send review teams to the VA hospitals to help this effort.”
In other words, they proposed inviting private health care executives to tell the VA which services they should outsource to private providers like themselves.
Shulkin’s approach to privatization was endorsed by most of America’s veterans’ lobbies. But the White House decided that the “Mar-a-Lago crowd” had a better understanding of veterans’ health-care needs than the vets themselves.
In sum: The Trump administration believes that kneeling during the national anthem is a grievous insult to the men and women who risked their lives fighting for America, but using political power to help payday lenders bury service members beneath unpayable debts — while allowing one’s billionaire friends to override veterans’ preferences for health-care policy — is not.
This fall, Democratic ad makers should ask voters whether they agree.