In a rare display of financial sanity, Senate Republicans have voted to scrap a $1 billion earmark for a gilded ballroom at Trump Tower, dealing a blow to the President's penchant for marble and gold leaf. The move, which echoes the austere sensibilities of a British Treasury mandarin, suggests that even the most profligate of political dynasties can be reined in when the bottom line is at stake.
For years, the City of London has watched with a mixture of amusement and horror as American fiscal policy veered from the sublime to the ridiculous. But this decision, to cut what can only be described as a monument to vanity, is a welcome nod to fiscal responsibility. It is as if the ghost of Nigel Lawson himself whispered in the ears of the Grand Old Party, reminding them that every pound borrowed is a pound that must be repaid with interest.
The proposed ballroom, a venue for lavish fundraisers and state dinners, was a classic example of government waste: a marble-clad sinkhole for taxpayer money. Its cancellation is a rare victory for the hawks, those dour creatures who understand that economic growth is not fuelled by shiny baubles but by productive investment.
Market reaction has been muted but positive. Gilt yields did not spike, which is more a reflection of the scale of the cut (a paltry $1bn in a $6 trillion budget) than any lack of enthusiasm. Still, the signal is important. It says that the era of endless government spending, of treating the national purse as a personal slush fund, may be coming to an end.
The British fiscal prudence model, long the envy of the developed world, is built on the simple principle that governments should not spend what they do not have. It is a lesson that the Americans have been slow to learn. But with this decision, they have taken a step in the right direction.
Of course, there are those who will argue that $1bn is a rounding error in the grand scheme of things. But in the world of high finance, it is the marginal trade that moves markets. And this trade, a short on hubris and long on common sense, is one that should be celebrated.
Inflation remains the ghost at the feast, with CPI still running hot despite the Fed's tightening. But every cut helps. Every dollar saved is a dollar that can be used to pay down debt, or better yet, not borrowed at all.
So here is a toast to the Senate Republicans who stood up to the man with the golden escalator. It may not be the revolution, but it is a start. And in the world of fiscal responsibility, every small victory counts.
