The People v. the Permanent Government (1)

Part 1 of the story behind the Trump administration's battle with the U.S. administrative state.

The Systematic Unraveling of the Administrative State | Brownstone Institute | Jeffrey Tucker:

July 13, 2025 - "In 1883, when the Pendleton Act was passed, creating the US civil service, it must have seemed like no big deal. The forgotten Chester A. Arthur was the president. The fear of being assassinated like his predecessor James Garfield convinced him to back the legislation. The case for passage: government needs professionals with institutional knowledge. Technicians were changing the world, so why not government too?

"Science and engineering were the rage – electricity, steel bridges, telegraphic communications, internal combustion, photography  – so surely public affairs needed the same level of expertise. Who could deny that civil service could do a better job than the cousins and business partners of professional politicians?

"That’s how it started. What was once called government of, by, and for the people was derided as the hopelessly corrupt 'spoils system,' a phrase that reflected genius marketing. So it was overthrown in favor of 'merit-based' hiring in the executive, a staff not yet permanent or huge, but the proverbial camel now had its nose under the tent. 

"Through two world wars and the Great Depression, and then the Cold War, what landed on the other side was something the Constitution’s Framers never imagined. We had huge governing systems in giant bureaucracies staffed by employees who could not be fired. It was left to them to implement, but really create the operational framework for the whole of civil society. It was a state within a state, one with many layers, including that which was and is classified. 

"Industry and media long ago caught on that the civil service was a more reliable source of information and institutional continuity than the elected or appointed branches of government. Serving in government became a mark of credibility in industry, and so the revolving door was in constant operation. Media and the deep state, including its military and intelligence sectors, developed a mutually beneficial relationship that allowed for the manipulation of the public mind. 

"The best thing about the new system was that hardly anyone in public life really understood it. The schoolkids were still taught that there are three branches of government with checks and balances between them. Public life has been long dominated by elections with fierce ideological battles that eventually became more like window dressing, the results of which did not matter much for the practical affairs of state. It was the illusion of democracy. 

"Once the machinery was revealed, and some critical attention was applied to its legitimacy, the unraveling was inevitable. The reason is rather obvious. The entire thing is inconsistent with the idea of a people’s government. The Founders fought a war to overthrow bureaucracy, not establish one. The Declaration of Independence plainly said: it is the right of a people to overthrow any government and establish a new one. That idea is the most embedded postulate in the whole of American civic life. It has far more legitimacy in the public mind than the claims of the civil service or the demands that its plots and machinations must remain secret from the people. 

"Strangely, throughout the whole period of administrative state gains, the Supreme Court was never called upon to render a clear judgment on its legitimacy. There were small decisions along the way that shored up its functioning, but nothing that plainly said: this is or is not consistent with the law governing a free people. 

"This year, and mostly because the Trump administration decided to challenge the entire model, the machinery has begun to malfunction and melt away. There is a very long way to go, but we finally have the answer to the question of this fourth branch’s legitimacy. Plainly, it is not legitimate. It never has been. 

"The opening salvo was arguably Phillip Hamburger’s Is the Administrative State Unlawful? (2014), which gradually set off a huge literary debate for and against, plus a growing army of podcasters who figured it out in the course of the events that followed. It was a classic case of raised consciousness: once you see it, you cannot unsee it. 

"The active confrontation began in Trump’s first term. He arrived in Washington, D.C., expecting to be the boss of the executive branch, probably because that’s what the Constitution says in Article 2, Section 1. He quickly found out otherwise. Everything he wanted to change was declared to be off-limits. So far as he could tell, the whole of the city agreed that the job was entirely ceremonial. 

"That did not sit well with him. The tradition in the deep state of ignoring the president unless he annoyed them rubbed him wrong. He finally got fed up with the plots, schemes, and attempts to undermine presidential authority – which he saw as like unto a CEO, but no one else agreed – that he decided to run a test. He fired James Comey as head of the FBI. Washington freaked out. 

"The man to whom the job of firing fell was Justice Department attorney Rod Rosenstein, whose sister worked at the CDC. She was Nancy Messionier, who called the first press conference on the matter of a new virus from China that she said would necessitate dramatic changes in American life. Her role was first revealed by the New York Times reporter, who later said he was tricked. 

"No one at the CDC bothered to check with Trump. By the time he was asked to sign off on lockdowns, a month following the initial CDC announcement, the deed was pretty well done. He chose to get out ahead of the issue rather than be eaten alive by a media prepared to blame him for every death. He spent the next eight months issuing edicts via social media – initially bad but increasingly better – but he was almost entirely ignored by the administrative state he had unleashed. 

"Just before leaving office in 2020, Trump issued an executive order that would have reclassified a portion of the civil service as holding jobs subject to termination. Every venue that covered federal affairs had a meltdown of panic about what this would mean for the future of the 100-year racket they had been running. The order was quickly repealed by the new president upon taking the oath of office – an action that set up the great battle of the future: permanent Washington vs. the public."

[continued in part 2]

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The People v. the Permanent Government (2)

Part 2 of the story behind the Trump administration's battle with the U.S. administrative state

[continued from part 1].

The Systematic Unraveling of the Administrative State | Brownstone Institute | Jeffrey Tucker:

July 13, 2025 - "After four years in exile, Trump and his team plotted their revenge. It was clear to everyone that this issue was fundamental. He would have to risk it all by putting the question to the Supreme Court. He did this by issuing a record number of executive orders that pertained to the executive branch, all of which would presume that he could act like a president. 

"Trump’s team had predicted a flurry of lawsuits followed by injunctions, very much like what had happened in 2019-2020. This time, however, they would lawyer up and drive the question to the top. It was a huge gamble but it has turned out well. They knew that the structure of the status quo was completely indefensible from a Constitutional point of view. 

"The most recent blow to the administrative state gets to the heart of the issue. In Trump v. American Federation of Government Employees (July 8, 2025), the Supreme Court backed the right of the president to engage in mass firings of federal employees. There was only one dissenting vote from Justice Ketanji Brown Jackson, the judge who had reversed other Trump orders when she was a DC district judge. 

"Jackson’s dissent tries to make sense of the 4th branch of government. 'Under our Constitution, Congress has the power to establish administrative agencies and detail their functions,' she wrote. Thus, over the past century, Presidents who have attempted to reorganize the Federal Government have first obtained authorization from Congress to do so.' Lacking such authorization, she says, the Court should embrace the 'harm-reducing preservation of the status quo.'

"After all, she warns, 'This executive action promises mass employee terminations, widespread cancellation of federal programs and services, and the dismantling of much of the Federal Government as Congress has created it'.... There we go: the very core of the central-planning beast is at risk. At least she does understand the stakes. 

"This latest ruling – with many more likely to follow – comes on the heels of a flurry of similar decisions including: Loper Bright Enterprises v. Raimondo (June 28, 2024), which overturned Chevron deference (1986), reducing agency interpretive authority, shifting power from agencies to other branches (judiciary and executive, respectively); SEC v. Jarkesy (June 27, 2024), which limited agencies’ use of in-house adjudication, enhancing judicial oversight; Corner Post, Inc. v. Federal Reserve (July 1, 2024), which expanded opportunities to challenge old regulations; Ohio v. EPA (June 27, 2024), which enforced strict APA compliance, curbing regulatory overreach; Garland v. Cargill (June 14, 2024), involving restricted agency statutory interpretations; Trump v. CASA (June 27, 2025), which curbed nationwide injunctions, strengthening executive action; and City and County of San Francisco v. EPA (March 4, 2025), which narrowed the EPA’s regulatory scope.

"This has all happened with remarkable speed – in the course of one year. The regime of one hundred years has suddenly fundamentally changed to fit more precisely with what the Framers designed. It amounts to a counter-coup against the tyranny of experts and the convoluted systems of compulsion and control they had carefully constructed. Even if we do not yet feel the effects, the ground has shifted beneath our feet. 

"It’s a myth that courts are merely looking at the law and ruling cases on their merits. They are subject to the pressures of public opinion and have proven deferential to the ethos of the times. That ethos has changed, suddenly and dramatically, and why? 

"From 2020 to 2023, with continued fallout today, the administrative state that had long ruled out of the public eye reached deep into the private affairs of every American. It closed the schools, churches, and businesses. It issued stay-at-home orders. It kidnapped family members into medical institutions, allowing no contact with family. It then mandated the injection of multitudes with an experimental shot that achieved nothing but left many harmed and others dead. 

"It is a measure of the arrogance and perceived hegemony of this machine – which extends from agencies to corporations to academia and the nonprofit sector – that so many within its ranks believe they could get away with all these outrages without consequence. Public rage followed, expressing itself in every possible way and demanding change. That change has begun. The conditions are in place for a much more dramatic change, which could happen later or possibly sooner. 

"The intricate networks of influence, graft, and quid pro quo, and surreptitious pillaging of the people’s resources and power, believed itself to be invulnerable, somewhat like the rulers of the old Soviet empire in the months before it fell apart. Every old regime has believed itself to be secure up to the moments when its leaders seek sanctuary and its minions flee to the hills....

"We’ve wondered for many years what the revolution would look like when it came home. We got a glimpse of this last week, when iPhone cameras recorded thousands of State Department employees carrying their belongings out in bankers’ boxes out the front doors of the palace that had long been their home. Live by administrative edicts; die by them." 

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For reprints, please set the canonical link back to the original Brownstone Institute Article and Author:
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Carney gov't scrambles for savings for fall budget

Mark Carney's Finance Minister has directed cabinet members to find billions of dollars in savings before this fall's federal budget. 

Finance minister directs cabinet colleagues to find billions in spending cuts | National Post | Antoine Trépanier:

July 7, 2025 - "Canada’s Finance Minister François-Philippe Champagne has directed his cabinet colleagues to find ways to cut spending by billions of dollars as he prepares to present his first budget in October. In two letters sent Monday to all his cabinet colleagues — including secretaries of state who sit outside cabinet as junior ministers — Champagne stated his intention to reduce program spending by 7.5 per cent for the 2026–27 fiscal year, by 10 per cent in the second year, and 15 per cent in 2028–29. National Post did not see the confidential letters, but several high-ranking sources confirmed their contents, as initially reported by La Presse.

“'As part of this ambitious review, each minister must examine the programs and activities in their portfolio to determine which (of them): achieve their objectives, are essential to the federal mandate and complement rather than duplicate what is offered elsewhere by the federal government or by other levels of government,' the letter states, a senior government source said. Champagne also asked ministers for 'three priority proposals that can be funded by the reallocation of existing funds, following a spending review' by the end of the summer. Liberal government insiders indicated that a first wave of budget cuts could be felt in the next budget....

"This initiative is being led by the Department of Finance and the Treasury Board at the request of Carney, who often repeated 'invest more, spend less' throughout his recent federal election campaign. His goal is to reduce the operating budget, while setting increased spending apart in the capital budget.

"The Parliamentary Budget Officer projected early this year that the federal deficit would fall to $50.1 billion during this fiscal year.... However, Carney has made several big-ticket spending announcements since then, including an income tax cut, cutting GST on new homes and dramatically amping up defence spending. The C.D. Howe Institute projected last week that this year’s deficit could reach $92 billion."

Read more: https://nationalpost.com/news/federal-finance-minister-tells-cabinet-to-cut-billions-in-spending

How will Canada reach its new defence spending commitments? | Ottawa Citizen | David Pugliese  •  Ottawa Citizen

June 26, 2025 - "Canada has signed on to the NATO pledge to increase defence spending to 5 per cent of annual GDP by 2035. That means that Canadians at that point will be spending $150 billion annually on defence and security. The NATO plan involves investing 3.5 per cent of GDP into core military needs, which includes armaments and equipment. Another 1.5 per cent will be spent on related infrastructure, cyber defence and security....

"Prime Minister Mark Carney has said that Canada should have no problem reaching the 1.5 per cent infrastructure portion by concentrating on projects that are already under way or currently being planned. That would include the development of the mining and stockpiling of critical minerals, an initiative that could see Canada becoming a trusted supplier to western nations for such material....

"But Carney has also hinted at cuts coming in other areas to fund the military spending boost. 'If we are moving to the higher and higher levels of defence spending because that’s necessary then we will have to make considerations about what less the federal government can do, in certain cases, and how we’re going to pay for it,' Carney told journalists at the NATO conference.

"Parliamentary Budget Officer Yves Giroux has said he doesn’t have enough information to determine how the Carney government will meet its spending commitments. But shortly before the NATO meeting, Giroux told Bloomberg News that for Canada to finance the 5 per cent GDP defence hike it 'would require a major shift of government priorities — away from social spending, for example — to free up some of the resources currently allocated to these types of expenses towards defence.' The spending hike could also be financed by 'some tax increases, for sure, or much higher deficits,' Giroux added."

Read more: https://ottawacitizen.com/public-service/defence-watch/canada-defence-spending-nato

Canada's deficit could top $90 Billion this year

Canada's C.D. Howe Institute expects federal deficits to average $78 Billion over the next four years, more than double what the parliamentary budget officer forecast before the spring election. 

 Federal deficit could average $78B over 4 years, think tank warns | CityNews Toronto |  Craig Lord, The Canadian Press, and Cormac MacSweeney:

July 3, 2025 - "The C.D. Howe Institute predicts Ottawa’s recently announced spending plans — which include a much bigger defence budget — will drive its deficits markedly higher in the coming years. In a new analysis released today, the think tank says it expects Canada’s deficit to top $92 billion this fiscal year, given Prime Minister Mark Carney’s plan to meet NATO’s defence spending target of two per cent of GDP.

"C.D. Howe says it expects deficit growth to slow after that but predicts deficits will still average around $78 billion annually over four years, more than double the level forecast by the parliamentary budget officer before the spring federal election. The Liberal government did not publish a spring budget this year and has said it will instead push the planned fiscal update to the fall.

"In addition to ramping up defence spending, Prime Minister Carney’s Liberals recently pushed forward legislation to accelerate major project development and delivered a one-percentage-point cut to the lowest income tax rate.

"The C.D. Howe Institute accuses Ottawa of making costly commitments without showing the numbers to Canadians."

Read more: https://toronto.citynews.ca/2025/07/03/canada-federal-deficit-budget-spending-cuts/

BIG BUCKS LOST: Federal deficit numbers keep soaring with no end in relief | Toronto Sun | July 4, 2025:

Federal deficit projected to soar to $92B this year: 'Unfair to pass these burdens on,' C.D. Howe Institute says | National Post | Simon Tuck: 

July 4, 2025 - ""If this fiscal year’s deficit turns out to be as hefty as projected, it would be the second-largest deficit in Canadian history, topped only by the $327.7 billion shortfall from the pandemic year of 2020-21....

"Based on the most current and largely optimistic variables, the report says, federal deficits will remain above $71 billion during each of the following three years and in the fiscal year 2028-29 will be greater than three times what the government itself forecast in its most recent federal budget. But more likely, the report says, it will likely be a bit worse than that because the report’s authors say that they’re skeptical that all of the government’s plans to increase revenue through promised higher fines, penalties and savings will actually occur.... 

"But the most recent federal budget was now well over a year ago. The government took the highly unusual step this year of waiting until the fall to release its annual budget, more than half-way through the fiscal year.... The C.D. Howe report criticizes the government’s decision to wait until the fiscal year is more than half over before releasing its budget 'Delaying a budget until the fiscal year is more than half over is never good, but Canada’s current high-spending trajectory makes this delay especially bad.'

"Ottawa is making costly commitments, the report explains, without showing key numbers to the public such as how much more tax it expects to gather, the extent of its new spending and what the increased debt will mean for interest payments.... C.D. Howe suggests that the Liberal government eliminate or forgo some of its costly platform promises, make deeper cuts in its operating spending, substitute some revenue from less harmful taxation such as the GST, and cut federal transfers to provinces and territories."

Read more: https://nationalpost.com/news/canada/with-deficit-projected-to-soar-to-92-billion-it-is-unfair-to-pass-these-burdens-on-c-d-howe-institute-says

Military-industrial complex gets a big beautiful bill

Donald Trump's Big Beautiful Bill will add at least $150 Billion to U.S. military spending.

A Big Beautiful Bill for the Military-Industrial Complex | Ron Paul Institute | Ron Paul:

June 30, 2025 - "The US Senate worked through the weekend on the 'Big Beautiful Bill' {BBB]. The goal was to pass it quickly to ensure the House will then pass it and send it to President Trump’s desk before the July 4th holiday....  

"The House version of the BBB added 150 billion dollars to the Pentagon’s already bloated budget. The Senate bill gave the military-industrial complex 156 billion dollars. Increasing military spending contradicts President Trump’s promise to stop wasting money on endless wars that have nothing to do with ensuring the security of the American people.

"Some of the BBB’s military spending will be used to put troops on the border. I support strengthening border security. However, I do not support using the military for domestic law enforcement, which includes enforcing immigration laws. Soldiers are trained to view people as potential enemies, not as innocent civilians to be protected. Introducing this mindset into domestic law enforcement will lead to abuses of liberty.

"Increasing spending on militarism while cutting spending on programs that help low-income Americans is bad politics and bad policy. Polls show that the majority of Americans, including many Republicans, do not support overseas intervention.

"The growing opposition to our hyper-interventionist foreign policy is easy to understand. The US has engaged in numerous military actions in many countries including Iraq, Afghanistan, and Syria since the beginning of the 21st century. The American people pay for this militarism in several ways. One is the “inflation tax” imposed by the Federal Reserve in order to monetize the debt incurred by the US government for endless wars. President Trump has turned his back on his antiwar supporters by bombing Iran and by increasing military spending to over a trillion dollars.

"The Republican insistence on increasing military spending is the main reason Congress cannot cut taxes without increasing the debt, making cuts in domestic welfare programs, or both. If the Republicans want to be the Make America Great Again party, they need to embrace a true America First foreign policy. This means no more regime change wars or US taxpayer supported 'color revolutions.' Instead, America should return to the Founders’ vision of a country that, in the words of John Quincy Adams, does not go 'abroad in search of monsters to destroy' and instead is 'the well-wisher to the freedom and independence of all' while 'the champion and vindicator only of her own.'

"A return to a noninterventionist foreign policy is the only way we will be able to begin to pay down the national debt and restore a government that adheres to the constitutional limits on its powers and respects all the people’s rights all the time."

Copyright © 2025 The Ron Paul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.

Read more: https://ronpaulinstitute.org/a-big-beautiful-bill-for-the-military-industrial-complex/

Canadian gov't rescinds Digital Services Tax

Happy Canada Day! The Canadian government has rescinded its Digital Services Tax, one day before it was to go into effect.

Canada Rescinds Digital Services Tax After Trump Halts Trade Talks | Epoch Times | Omid Ghoreishi:

June 30, 2025 - "The Canadian government is rescinding its digital services tax to avoid stalling trade talks with the United States, two days after U.S. President Donald Trump announced he would end negotiations over the levy. Ottawa says that removing the tax will put Canada back on track to reach a trade deal with the United States by July 21.

"Trump said on June 27 that he is ending all trade negotiations with Canada over Canada’s digital services tax (DST), which would impact U.S.-based tech companies such as Amazon, Google, and Netflix.... The DST imposed a 3 percent tax on revenue that tech companies earn from digital services provided to Canadian users. It was scheduled to go into effect on June 30, and was retroactive to 2022, leaving U.S. tech companies with a $2 billion bill to pay by the end of June. The Canadian tax had been an irritant to both the Biden and Trump administrations....

"The Trump administration has already imposed 25 percent tariffs on Canadian products, though goods falling under the U.S.–Mexico–Canada Agreement have been exempted. Washington has also imposed blanket tariffs on all steel and aluminum imports.... Ottawa has been seeking new trade negotiations with the United States to minimize U.S. tariffs. In announcing the removal of the DST, Canadian Minister of Finance François-Philippe Champagne said the move would allow trade negotiations with the United States to go forward....

"Champagne had insisted up until recently that Ottawa wouldn’t be putting the tax on hold, after pressure from Canadian and U.S. business groups as well as U.S. politicians to remove the tax. Canada’s Liberal government had said that the tax is in line with similar measures from a number of other countries, and that corporations should pay their 'fair share' of taxes in Canada.

The Office of the Parliamentary Budget Officer estimated that the tax would bring in $7.2 billion over five years in revenue for Ottawa."

Read more: https://www.theepochtimes.com/world/canada-rescinds-digital-services-tax-after-trump-ends-trade-talks-over-the-levy-on-american-tech-companies-5880090

NO NETFLIX TAX - But Carbon Tariff is NEXT! | Canadian Taxpayers Federation | June 30, 2025:

Digital Services Tax derails trade talks with USA

The U.S. government abruptly broke off trade negotiations with Canada after the Carney government announced it was going forward with its Digital Services Tax, aimed at U.S. companies who operate online in Canada.

What is Canada's digital services tax and why is it infuriating Trump? | Financial Post | Yvonne Lau:

June 27, 2025 - "U.S. President Donald Trump abruptly cut off all trade negotiations with Canada on Friday, citing Ottawa’s Digital Services Tax (DST) for the decision. The tax, enacted last June, targets U.S. technology companies that operate in Canada but pay little tax here. Under the new tax regime, the first payments are set to be collected on Monday, June 30.... 

"Former Prime Minister Justin Trudeau’s government enacted Canada’s Digital Services Tax Act in June 2024.... The federal tax is applicable to large businesses — both foreign and domestic — that meet two specific criteria: a total global revenue of €750 million and up, and over $20 million of profits earned in Canada annually. The legislation levies a three per cent tax on digital services revenue over $20 million, and is retroactive to Jan. 1, 2022.... Taxable revenue includes those of online marketplaces, digital advertising, social media, and user data — which will primarily affect American Big Tech giants such as Amazon.com, Inc., Apple Inc., and Meta Platforms, Inc.

"Under the DST, companies were required to register with the Canada Revenue Agency (CRA) by Jan. 31, 2025 and are obligated to file their first DST returns on June 30, 2025. The CRA has said that more than 500 companies have already applied to register for DST purposes, and expects more than 100 companies to pay the tax. If applicable companies fail to register with the agency, they could be fined $20,000 per year. If they fail to file a DST return, Canada could dole out a penalty equal to five per cent of the unpaid tax for the year, plus one per cent of the unpaid tax for the year for each month, not exceeding 12 months, in which the return hasn’t been filed....

"The legislation however, has come under fire from business groups on both sides of the border, with critics warning that the rules could further inflame Canada-U.S. ties. The Canadian Chamber of Commerce has argued that the tax could increase costs for consumers and risks 'damaging our beneficial and lucrative trade relationship with the U.S.' The U.S. meanwhile, has long denounced Canada’s proposed rules, claiming that they unfairly discriminate against American firms. Last August, under the former Biden administration, the Office of the U.S. Trade Representative (USTR) launched dispute settlement consultations with Ottawa under the Canada-United States-Mexico Agreement over the DST.... 

"Tech giant Google LLC responded to Canada’s digital services tax rules by introducing an additional 2.5 per cent fee for ads shown in Canada starting in October 2024. Called the 'Canada DST Fee,' Google said the surcharges will “cover part of the costs of complying with DST legislation in Canada'....

"Around half of all European OECD countries have announced, proposed, or implemented a DST, according to the Tax Foundation Europe. The U.S. has met those proposals with threats of retaliatory tariffs. Some countries’ DST regimes could be on the chopping block. France’s Council of State, which advises the government on the preparation of bills and other matters, recently referred the country’s DST to the Constitutional Council for review, marking the first constitutional challenge to the DST since the legislation passed in 2019.

"For months, executives of U.S. tech giants have pressured American policymakers over Canada’s DST. Ontario Premier Doug Ford and Canadian business groups have also pressed the Carney government to abandon the DST. And while businesses and industry groups were holding out for a last-minute suspension of the DST, finance minister François-Philippe Champagne reconfirmed last Thursday that Canada is 'going ahead' with the tax. 'The (DST) is in force and it’s going to be applied,” he said.... 'Obviously, all of that is something that we’re considering as part of broader discussions that you may have,' Champagne said last week, suggesting that the DST could be renegotiated given the ongoing trade talks between Canada and the U.S."

Read more: https://financialpost.com/technology/canada-digital-services-tax-infuriating-donald-trump

What is Canada’s digital services tax, and who pays it? | CBC News: The National | June 27, 2025: