ReportWire

Tag: federal budget deficit

  • Congress has so much to do before Christmas | CNN Politics

    Congress has so much to do before Christmas | CNN Politics

    [ad_1]

    A version of this story appears in CNN’s What Matters newsletter. To get it in your inbox, sign up for free here.



    CNN
     — 

    It is the most productive time of year on Capitol Hill – after the election and before Republicans take over the House of Representatives – when the current Congress tries to cram some of its most vital work into a few short weeks.

    The US government is up against some hard deadlines, a narrow timeline and a whole lot of unfinished business.

    Lawmakers need to avert a government shutdown, authorize Pentagon policy, decide what to do with former President Donald Trump’s tax returns and wrap up the work of the House January 6, 2021, committee.

    If they can find the time, lawmakers could also raise the debt ceiling and safeguard future elections.

    Here’s what to watch for in the twilight of 2022:

    First, the government runs out of authority to spend money on Friday, December 16. The House and Senate will have to act before then to avert a government shutdown.

    Second, the newly elected Congress will be sworn in on January 3. Republicans will then be in charge of the House, and Democrats will have a narrow 51-49 majority in the Senate. Everything resets in the new Congress, and lawmakers will have to start from scratch on anything they don’t finish up this month.

    Rather than pass a dozen funding bills in turn, lawmakers are poised to roll all the spending bills for the massive federal government into one bill that could approach or exceed $1.5 trillion.

    The problem is that they’re still negotiating, and Republicans and Democrats in the Senate have not reached an agreement on how much the government can spend, much less the specifics. They’re still $26 billion apart, according to Republican Sen. Richard Shelby of Alabama. The most likely current scenario is the House and Senate each pass short-term, one-week funding bills to keep the lights on while they continue to hash out the larger funding bill.

    While officials have emphasized a government shutdown is unlikely, federal agencies have been warned to prepare for one per standard procedure.

    One major looming question is whether Senate Republicans and Democrats can agree on a bill to fund the government for a full year or whether they have to punt to the next Congress. Democrats will want to avoid that fate since the GOP-controlled House will likely insist on spending cuts as soon as it can. Read more in CNN’s full report that includes reporting from Capitol Hill and the White House.

    It’s not yet clear who will lead Republicans in the House next year, much less how they would react to an immediate funding fight if only a short-term spending bill can get through by January.

    The current GOP leader, Kevin McCarthy, does not yet have the votes of many of the most conservative Freedom Caucus Republicans, and he’s being encouraged to take more concrete stands against spending. Finding a funding agreement that can pass through the House and the Senate and get President Joe Biden’s signature gets much more difficult starting January 3.

    In addition to writing checks, Congress authorizes government activity through policy bills, including the must-pass National Defense Authorization Act, which authorizes $858 billion in annual defense spending.

    It’s a sprawling endeavor, and this year’s version passed by the House gives members of the military a 4.6% pay raise, gives new support to Ukraine and NATO, and retools US air power and land defense efforts. It also rescinds a Covid-19 vaccine requirement for service members, a move that Biden has opposed.

    Senators are expected to take up the bill this week. It should get bipartisan support, but will also eat up valuable time on the Senate floor, where Democrats also want to push through judicial nominees. Read more about the defense bill.

    One thing Democrats would like to do – but probably, at this point, cannot – is raise the debt ceiling.

    Republicans, particularly in the House, plan to use the nation’s borrowing limit as a bargaining chip to force spending cuts next year. The current debt ceiling of $31.4 trillion will likely be reached in the coming weeks, which means raising it will be a major fight early in 2023.

    How much more does the government spend than it takes in? This is from a CNN Business report Monday: “For fiscal year 2023, which started in October, the government is running a deficit of $336 billion, which is $20 billion narrower than the comparable year-ago period.”

    Republicans will shut down the House select committee investigating the January 6, 2021, insurrection when they take control in January. GOP lawmakers plan to flip the script and investigate the committee’s activity.

    But first, the committee, which features Democrats and two anti-Trump Republicans, will issue its much-anticipated report on December 21. Also look for the committee to recommend the Department of Justice prosecute Trump or members of his inner circle.

    Meanwhile, Jack Smith, the newly appointed special counsel, has been busy ramping up a pair of criminal probes involving the former president, all of which could explode into public view if charges are ultimately brought. Read the latest on Smith’s work.

    Now that the House Ways and Means Committee has six years of Trump’s tax returns, it must figure out what to do with them in just a few weeks.

    There’s probably no time for a thorough review, and Republicans will have little appetite for a Trump tax investigation when they take control of the House.

    Democrats could move to make some of Trump’s tax information public – on top of what was already published by The New York Times in 2020. But there could be a political cost to simply releasing the returns since Democrats obtained them in order to scrutinize IRS audit policy. Read more about Trump’s taxes.

    It’s a bipartisan idea to make some major clarifications to election law and cut down on the possibility of another January 6, 2021. Read here about what’s in the bill, which is specifically designed to guard against Insurrection 2.0.

    But there may be no time to pass the proposal – there are similar but competing versions in the House and Senate. The Senate version, in particular, has bipartisan support. Republicans in the House may not be interested in the legislation once they take control in January.

    If the Electoral Count Act can pass, it could be slipped into that massive spending bill. It hasn’t gotten the attention it deserves, but this could be a good example of lawmakers working together.

    But that’s a very open question, since that massive spending bill has not yet been put together.

    [ad_2]

    Source link

  • It’s time to review government shutdown plans, federal agencies are formally warned | CNN Politics

    It’s time to review government shutdown plans, federal agencies are formally warned | CNN Politics

    [ad_1]



    CNN
     — 

    While congressional leaders continue to negotiate a spending deal, the federal government has begun the process of preparing for a potential shutdown, participating in the mandatory but standard process of releasing shutdown guidance to agencies ahead of this Friday’s funding deadline.

    Lawmakers on both sides currently acknowledge they are going to need to pass a week-long stopgap measure to give themselves more time for talks, and officials have emphasized that there is no real likelihood of a government shutdown, but the standard procedure laying out the steps toward bringing non-essential government functions to a halt is underway.

    “One week prior to the expiration of appropriations bills, regardless of whether the enactment of appropriations appears imminent, OMB will communicate with agency senior officials to remind agencies of their responsibilities to review and update orderly shutdown plans, and will share a draft communication template to notify employees of the status of appropriations,” a budget circular document from the Office of Management and Budget states.

    That standard guidance was circulated last Friday, marking seven days before a shutdown could occur absent congressional action.

    Every department and agency has its own set of plans and procedures. Those plans include information on how many employees would get furloughed, which employees are essential and would work without pay (for example, air traffic controllers, Secret Service agents, US Centers for Disease Control and Prevention laboratory staff), how long it would take to wind down operations in the hours before a shutdown, and which activities would come to a halt.

    It’s not the first time the government has been on the brink of a shutdown, and it has happened on multiple occasions. Recently, the government shut down for 35 days, a record length, from December 2018 to January 2019 amid a congressional stalemate over funding for then-President Donald Trump’s border wall. The government also shut down for three days over deadlock during the Trump administration in January 2018. And in 2013, then-President Barack Obama presided over a 16-day partial government shutdown caused by a dispute over the Affordable Care Act and other budget disagreements.

    [ad_2]

    Source link

  • Congress faces looming government shutdown deadline at end of the week | CNN Politics

    Congress faces looming government shutdown deadline at end of the week | CNN Politics

    [ad_1]



    CNN
     — 

    Lawmakers face a Friday at midnight deadline when government funding is set to expire – and the House and Senate will likely have to pass a short-term extension to avert a shutdown at the end of the week, which would give negotiators more time to try to secure a broader full-year funding deal.

    The other major legislative item lawmakers are working to wrap up before the end of the year is the National Defense Authorization Act, the massive annual must-pass defense policy bill. The NDAA is expected to get a vote in the Senate this week and be approved with bipartisan support.

    The House has already approved the measure so once the Senate votes to pass it, the bill can go to President Joe Biden to be signed into law.

    The approaching deadline had members of Congress and their staffers from both parties, as well as Biden administration officials, continuing to slog through negotiations over the weekend to try to get to an agreement on a spending package.

    “This is the time of the year when there’s no weekends for folks who work on appropriations,” one administration official closely involved in the talks told CNN.

    Over the weekend, both Democrats and Republicans were sharing with one another their “bottom lines” on various fronts, and the White House remained publicly optimistic that an agreement could be reached on an omnibus: “There is absolutely still a path and time for a deal.”

    But if Biden administration officials are still keeping their eyes on the ball on Congress ultimately reaching a deal on a government spending deal, there is also real recognition that lawmakers will need an extra few days – perhaps even a week – of cushion to buy themselves more time. That would be achieved through passing a short-term stop-gap measure called a continuing resolution, or a CR.

    Particularly with that in mind, administration officials also continue to maintain that they do not see any real likelihood of a government shutdown.

    Congressional aides acknowledged to CNN that the weekend talks went better than days prior, which is why Democrats have announced they will not introduce their own Democratic-only omnibus plan on Monday. Republicans on Capitol Hill had been reading a threat for Democrats to introduce their own bills as a messaging exercise that would only further divide negotiators, and by avoiding that messaging exercise, Republicans see a sign that Democrats are serious about trying to get to yes.

    For now, a bipartisan deal on government funding remains elusive. Lawmakers have not yet been able to reach a negotiated agreement for a comprehensive, full-year funding package – known on Capitol Hill as an omnibus – amid a dispute between the two parties over how much money should be spent on non-defense, domestic priorities. Sen. Richard Shelby of Alabama, the ranking Republican member on the Senate Appropriations Committee, has told reporters the two sides are roughly $26 billion apart.

    Republicans are critical of recent domestic spending by Democrats and argue that measures Democrats have passed while they have been in control both chambers of Congress, like the $1.9 trillion pandemic relief bill and the sweeping health care and climate bill, are wasteful and will worsen inflation. Democrats counter by saying those measures were necessary to help the country recover from the devastating impact of the pandemic as well as to tackle other critical priorities. And Democrats said that money to respond to Covid, health care and climate should not mean there should be less money next year for government operations and non-defense, domestic spending.

    The impasse over a broader funding deal is likely to force both sides to agree to pass a short-term funding extension – known as a continuing resolution, or CR – before the fast-approaching Friday deadline on Friday.

    The key question will be how long such an extension would last. It could be as short as one week, a timeframe that would keep the pressure dialed up for lawmakers to reach a broader deal, while still allowing more time for negotiations. Or it could extend the shutdown deadline into the next Congress, which will convene on January 3, and when Republicans take control of the House.

    That change in majority in the House would dramatically alter the dynamic for negotiations and likely make it far harder to reach a broader funding deal. Lawmakers could pass a full-year CR if it looks like a bipartisan funding deal can’t be reached, but leaders in both parties hope to avoid that scenario since it would keep spending flat for the Pentagon as well as domestic priorities.

    Senate GOP leader Mitch McConnell laid out the GOP position in remarks on the Senate floor Thursday. “Our commander-in-chief and his party have spent huge sums on domestic priorities outside the normal appropriations process without a penny for the Defense Department. Obviously, we won’t allow them to now hijack the government funding process, too, and take our troops hostage for even more liberal spending,” McConnell said.

    Senate Appropriations Committee Chairman Patrick Leahy, a Vermont Democrat, outlined the argument for his party in his own floor remarks on Thursday. Republicans, Leahy said, are “demanding steep cuts to programs the American people rely on.”

    Referring to Democratic-passed legislation that Republicans have criticized, Leahy said, “Those bills were meant to get us out of the pandemic, get the nation healthy, and get our economy back on track, and I believe they are accomplishing that goal. They were not meant to fund the basic functions of the American government in fiscal year 2023.”

    While lawmakers continue to negotiate, the federal government has begun the process of preparing for a potential shutdown, participating in the mandatory but standard process of releasing shutdown guidance to agencies ahead of Friday’s funding deadline.

    Officials have emphasized that there is no real likelihood of a government shutdown, but the standard procedure laying out the steps toward bringing non-essential government functions to a halt is underway.

    “One week prior to the expiration of appropriations bills, regardless of whether the enactment of appropriations appears imminent, OMB will communicate with agency senior officials to remind agencies of their responsibilities to review and update orderly shutdown plans, and will share a draft communication template to notify employees of the status of appropriations,” a document from the Office of Management and Budget stated.

    That standard guidance was circulated last Friday, marking seven days before a shutdown could occur absent Congressional action.

    Every department and agency has its own set of plans and procedures. Those plans include information on how many employees would get furloughed, what employees are essential and would work without pay (for example, air traffic controllers, Secret Service agents, US Centers for Disease Control and Prevention laboratory staff), how long it would take to wind down operations in the hours before a shutdown, and what activities would come to a halt.

    This story has been updated with additional developments.

    [ad_2]

    Source link

  • Congress faces time crunch on government funding and sweeping defense policy bill | CNN Politics

    Congress faces time crunch on government funding and sweeping defense policy bill | CNN Politics

    [ad_1]



    CNN
     — 

    Lawmakers on Capitol Hill are scrambling to try to fund the government and pass a sweeping defense policy bill before a new Congress is sworn in, but there are signs that both sides have struggled to reach agreement over these key outstanding issues.

    Government funding expires at the end of next week on December 16 – and it appears all but certain that lawmakers will have to pass a short-term extension as they try to reach a broader full-year funding agreement.

    Separately, the House has been expected to take up the National Defense Authorization bill for fiscal year 2023 this week, but it’s not yet clear when a vote will take place amid questions over whether certain controversial policy provisions will be included in the legislation – like eliminating a Covid-19 vaccine mandate for the military. Once the House has passed the bill, it would next have be taken up by the Senate.

    Senate GOP leader Mitch McConnell warned on Tuesday that rather than passing a full-year funding bill, lawmakers may have to pass a short-term stop-gap measure to kick the can into early next year. This would set up a huge funding fight and create fears of a government shutdown early in the new Congress, when Republicans will take control of the House and would have to cut a deal with Democrats who run the Senate.

    On government funding legislation, McConnell said: “We don’t have agreement to do virtually anything, which can only leave us with the option of a short-term CR into early next year,” referring to a short-term bill known as a continuing resolution.

    He added: “We don’t even have an overall agreement on how much we’re going to spend, and we’re running out of time.”

    Despite the threat of a stop-gap, Senate Majority Leader Chuck Schumer reiterated on Tuesday that senators are “working very hard” to reach a deal to fully fund the government before the upcoming deadline, but acknowledged that “there’s a lot of negotiating left to do.”

    Senate Republican Whip John Thune signaled Tuesday that he doesn’t have a “high level of confidence” both parties will be able to reach a deal on an omnibus government funding bill, as time is running short to pass that massive bill.

    “I don’t have a high level of confidence because I’m looking at the calendar,” the South Dakota Republican said. “It’ll be a very heavy lift, but who knows? I guess I would say is, you know, bring your Yuletide carols and all that stuff here because we may be singing to each other.”

    McConnell complained Tuesday that Democrats were preventing quick passage of the National Defense Authorization Act by trying to add unrelated items at the last minute that Republicans oppose.

    “Senate Democrats are still obstructing efforts to close out the NDAA by trying to jam in unrelated items with no relationship whatsoever to defense. We’re talking about a grab bag of miscellaneous pet priorities,” McConnell said in remarks on the Senate floor.

    “My colleagues across the aisle need to cut their unrelated hostage taking and put a bipartisan NDAA on the floor,” he added.

    Lawmakers released text of an agreement for the NDAA Tuesday night.

    The summary, released by the Senate Armed Services Committee, said it “requires the Secretary of Defense to rescind the mandate that members of the Armed Forces be vaccinated against COVID-19.”

    CNN reported earlier this week that the mandate was likely to be rescinded as part of the defense policy bill.

    In a tweeted statement Tuesday night, House GOP leader Kevin McCarthy said that “the end of President Biden’s military COVID vaccine mandate is a victory for our military and for common sense.”

    House Majority Leader Steny Hoyer, a Maryland Democrat, said earlier Tuesday that the House was considering eliminating the Covid-19 vaccine mandate for military members in order to gather enough Republican votes to pass the annual defense authorization. Republicans have said they will not support the NDAA with the vaccine mandate in place.

    Hoyer said at his weekly pen and pad with reporters that Democrats were not “willing” to give up the mandate, but that a compromise is required to get the NDAA across the finish line.

    “We’re not willing to give it up. This is not a question of will; it’s a question of how can we get something done? We have a very close vote in the Senate, very close vote in the House. And you just don’t get everything you want,” he said.

    Thune said of the defense policy bill, “I think the ransom the Democrats wanted for stripping the vaccine mandate is a whole bunch of things to include the permitting reform, but also some other things that are just going to be non-starters on our side, and I don’t think we’re going to get in the business of, you know, allowing them to hold us hostage.”

    This story has been updated with additional developments.

    [ad_2]

    Source link

  • US trade deficit edged up to $78.2 billion in October | CNN Business

    US trade deficit edged up to $78.2 billion in October | CNN Business

    [ad_1]


    New York
    CNN Business
     — 

    The US trade gap edged only slightly higher in October than the month before, to $78.2 billion.

    The latest reading was up just 5.4%, less than half the pace of increase from the revised September reading, when the trade deficit jumped by 12.7% to $74.1 billion.

    A strong dollar and weaker global demand weighed on exports both months. A strong dollar makes US goods more expensive to foreign buyers and it also makes imports more affordable for US buyers. But economic slowdowns in overseas markets also hit US exports in the most recent readings.

    The latest report shows exports fell 0.7% in October compared to the month before, and are down nearly 2% from the record exports set in August. Most of the drop was in the export of goods, rather than services, which fell 4.4% compared to August.

    Oil prices have come down since earlier this year, according to data released in the report. The average price of crude oil imports in the month was $82.05 a barrel, down 5.7% from September, and down 21.7% from the peak in June.

    But the United States now exports more petroleum products, by dollars, than it imports. So a lower price of crude no longer helps the trade deficit the way it might have done in the past, when crude and petroleum product imports vastly exceeded exports.

    The deficit in the movement of goods between the United States and China narrowed significantly in the latest report, falling 22.6% to $28.9 billion from $37.3 billion, one factor in the smaller trade gap increase.

    Although most of that narrowing was due to a 31.3% jump in the export of US goods to China, compared to September, a 9.5% decline in US imports of Chinese goods was also a factor in the smaller trade deficit between the two countries.

    [ad_2]

    Source link

  • These are the end-of-year political showdowns that will help decide America’s future | CNN Politics

    These are the end-of-year political showdowns that will help decide America’s future | CNN Politics

    [ad_1]



    CNN
     — 

    America is heading for a year-end political collision that will set the stage for showdowns between the new Republican-led House and the Democrats who still wield power in the Senate and White House.

    A fraught coda to the political battles of 2022 will decide who holds the government purse strings and how far the US will go in funding Ukraine’s war with Russia. It will showcase extremism in the incoming GOP-run House and the size of the Democratic Senate majority. And the 2024 presidential campaign is grinding into gear with ex-President Donald Trump stirring controversy on multiple fronts and President Joe Biden pondering a reelection bid.

    In Congress, a lame-duck session will see standoffs that could risk a government shutdown and over the must-lift US government borrowing limit, with grave implications for the economy.

    Meanwhile, House Republican leader Kevin McCarthy is scrambling to solidify support in his bid to become speaker in January, with a smaller-than-expected incoming majority giving his extreme pro-Trump colleagues extra power.

    And the House January 6 committee is poised to soon unveil its final report on Trump’s negligence and incitement leading up to the US Capitol insurrection. The findings, amid signs of acrimony inside the panel, could further color sentiment towards the ex-president as he seeks to build momentum after an underwhelming 2024 campaign launch – and as powerful donors, as well as prominent Republicans considering their own White House ambitions, are openly castigating Trump for hosting and then failing to disavow White nationalist and Holocaust denier Nick Fuentes. The special counsel probe into his hoarding of classified documents and 2020 election chicanery is also gathering pace.

    Trump is also one of the factors playing into the Georgia Senate runoff election on December 6 that could give Democrats slender breathing room in the chamber or extend the 50-50 split broken only by Vice President Kamala Harris’ tie-breaking vote that made Biden’s agenda so precarious for the last two years.

    These next few weeks will show the country has failed to fully process the trauma of the Trump presidency or to arrive at the sense of normality that Biden promised during the 2020 campaign – even as the two rivals maneuver ahead of a possible rematch in 2024. They will also stress the near impossibility of governing at a time when America is deeply split between two political poles since big questions are likely to get pushed down the road.

    Big issues not solved this December will be pitched into an even more volatile atmosphere by an aggressive GOP-controlled House primed to slam the White House with partisan investigations.

    There’s also the renewed threat of a freight rail strike that could again clog supply lines and fresh Democratic calls for more action on gun control after a tragic new spate of mass shootings. The Democrats have a massive agenda before relinquishing the House but have little political room or time to accomplish it.

    Still, Congress is expected to mark one milestone in the coming weeks. The Senate is expected to vote to codify rights to same-sex and interracial marriage after a procedural vote on the measure earlier in November demonstrated strong bipartisan support.

    Here is what to look out for in the coming weeks.

    Congress must pass a bill to fund the government by December 16 or risk a partial government shutdown. The administration has asked for $37.7 billion in aid for Ukraine, $10 billion for extended efforts to combat Covid-19 and an unspecified amount for disaster relief after hurricanes hit Florida and Puerto Rico.

    Democrats will remain in control of the House until the new Congress in 2023, but a major spending package will also still likely require agreement from 10 Republicans to beat a Senate filibuster. GOP senators are especially skeptical about the administration’s warnings that the US will suffer a relapse in its exit from the pandemic without billions more dollars in funding. And even getting a Democratic majority in the chamber to sign on could be a challenge since West Virginia Sen. Joe Manchin could make another stand against another spurt of government spending, especially since he would face a tough race if he decides to run for reelection in 2024.

    There is likely sufficient support for new aid to Ukraine in the Senate, but funding President Volodymyr Zelensky’s war for democracy against Russia is set to become far less routine next year as pro-Trump House members, like Georgia Rep. Marjorie Taylor Greene, are vowing to halt aid needed for vital weapons and ammunition. They want the cash sent to reinforce the southern US border instead.

    The most serious showdown of the new Congress could come over raising the government’s borrowing limit that is due to be reached sometime next year. Failure to do so could trash faith in America’s willingness to pay its bills and send shockwaves through the US and global economy.

    McCarthy has already warned he will require spending concessions on key programs in return for allowing the government to borrow more money – a scenario that triggered several damaging fiscal showdowns during the Obama administration.

    To avoid a repeat, Democrats could use the waning days of their control of both chambers to raise the debt ceiling themselves, using a budgetary process known as reconciliation that could bypass a Senate filibuster. But the process is hugely complex, in terms of congressional choreography and time.

    Democratic Senate Majority Leader Chuck Schumer said before Thanksgiving that the “best way to get it done, the way it’s been done the last two or three times is bipartisan.” But Senate Republican leader Mitch McConnell didn’t express much interest in Schumer’s invitation sit down to sort out the issue, saying “I don’t think the debt limit issue is until sometime next year.”

    The House Republican leader has a big problem – finding the votes in the new GOP majority to fulfill his dream of becoming speaker.

    McCarthy staked out a series of hardline positions heading into the holiday in an apparent effort to appease pro-Trump lawmakers after several declared they won’t vote for him. The California lawmaker can afford to lose only a few GOP votes if he wants to be speaker.

    During a trip to the border last week, he warned Homeland Security Secretary Alejandro Mayorkas to resign or face possible impeachment next year. And he said he’ll follow through on a threat to throw high-profile Democrats, such as Reps. Adam Schiff, Eric Swalwell and Ilhan Omar, off of top committees next year.

    Speaking on CNN’s “State of the Union” on Sunday, Schiff accused McCarthy of adopting extremist positions for his own naked political gain.

    “Kevin McCarthy has no ideology, has no core set of beliefs,” Schiff told CNN’s Dana Bash, saying the top House Republican will do “whatever he needs to do to get the votes of the QAnon caucus within his conference.”

    McCarthy’s struggle to confirm his speakership lies partly in the smaller-than-expected GOP majority following the lack of an expected “red wave” in this month’s election. And it could be a preview of a volatile majority and the extent to which his tenure, if he does win the speakership, will be hostage to the whims of the far-right Freedom Caucus and pro-Trump lawyers who want to use their majority as a weapon against Biden. But McCarthy also has to worry that two years of relentless, partisan investigations could turn off voters and lead them to snatch away the party’s fragile edge in the House in the 2024 election.

    But before the 2024 election gets into full swing, there’s unfinished business from 2022. Democratic Sen. Raphael Warnock and Republican challenger Herschel Walker go head-to-head in a runoff on December 6 after neither broke the 50 percent threshold the first time around.

    Former President Barack Obama, who was the most effective Democratic messenger in the midterms, is due to campaign for Warnock on Thursday. Walker’s chances could depend on whether he is able to win over a significant block of Republican voters who couldn’t bring themselves to vote for him despite backing Republican Gov. Brian Kemp. Walker’s problem is that he’s a protégé of Trump, from whom Kemp kept a good distance.

    After Trump announced his 2024 campaign days after the midterms, Warnock and his supporters started framing the runoff as the first chance for Democrats to stop Trump’s bid to return to the White House. Their argument recalled complaints by many Republicans that Trump’s intervention in two 2020 Senate runoffs in Georgia cost the GOP the chance to control the Senate.

    This might all be about one seat. But holding the Senate 51-49 rather than 50-50 would be huge for Democrats because it would insulate them from the incapacitation of one of their members and could diminish the power of Manchin, who has been a stubborn brake on Biden’s aspirations for two years.

    The former president finds himself under unusual political pressure inside the Republican Party he has dominated since 2015. His backing of several losing, election-denying and unpolished candidates in the midterms angered many key figures in the party. His hosting of Fuentes at the same time as rapper Kanye West at his Mar-a-Lago estate worried Republicans who fear that while he may be a formidable candidate for the GOP presidential nomination, Trump’s empathy for the far-right will again doom him before a national electorate.

    Another potential Republican presidential candidate, outgoing Arkansas Gov. Asa Hutchinson, condemned the incident as “very troubling” on CNN’s “State of the Union.”

    “I don’t think it’s a good idea for a leader that’s setting an example for the country or the party to meet with (an) avowed racist or anti-Semite,” Hutchinson said. “You want to diminish their strength, not empower them. Stay away from it.”

    Trump acknowledged the meeting in a Truth Social post, but claimed he knew nothing about Fuentes. He also did not disavow him or his views.

    This latest storm comes as the new special counsel Jack Smith, blasted by Trump as a “political hitman,” gets up to speed on the serious legal challenges facing the ex-president, who’s suffered several recent defeats in court in his bid to delay accountability. Trump’s early declaration of a campaign – apparently to quell the buzz around possible alternative Republican candidates like Florida Gov. Ron DeSantis – leaves the former president needing a way to create some traction in December and in the early months of the year when he might find it hardest to win political exposure.

    The opening stages of the campaign will begin to answer the central question of Trump’s 2024 run – whether his so far rock solid appeal to the GOP base will counter concerns in the wider party about his broader viability.

    Trump’s decision to jump in the race has also increased scrutiny of whether Biden, who turned 80 earlier this month, will decide to run for reelection. The president was asked by CNN’s Betsy Klein during his holiday vacation in Nantucket how his conversations about 2024 were going with his family.

    “We’re not having any. We’re celebrating,” Biden replied.

    [ad_2]

    Source link

  • What midterm elections could mean for the US economy | CNN Business

    What midterm elections could mean for the US economy | CNN Business

    [ad_1]

    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN Business
     — 

    Tuesday’s midterm elections come at a time of economic vulnerability for the United States. Recession predictions have largely turned to “when” not “if” and inflation remains stubbornly elevated. Americans are feeling the pain of rising interest rates and are facing a winter filled with geopolitical tension.

    The results of Tuesday’s election will determine the makeup of a Congressional body that holds the potential to enact policies that will fundamentally change the fiscal landscape.

    Here’s a look at what policy issues investors will pay particular attention to as they digest election results.

    Tax changes: Last week, President Joe Biden suggested he may impose a windfall tax on Big Oil companies after they recorded record profits on high gas prices. Republicans would be less likely to approve that windfall tax on oil company profits and also are generally not in favor of tax hikes on the wealthy, reports my colleague Paul R. La Monica.

    “What do midterms mean for the markets? If Republicans get the House, tax hikes are dead in the water,” said David Wagner, a portfolio manager with Aptus Capital Advisors.

    What about tax cuts? If Republicans do take control of Congress, it would be difficult to enact any major tax reductions without some backing from Democrats or President Biden, meaning there could be grandstanding without much action.

    Debt limit: The federal debt ceiling was last lifted in December 2021 and will likely be hit by the Treasury at some point next year. That means it will need to be raised again in order to ensure that America can borrow the money it needs to run its government and ensure the smooth operation of the market for US Treasuries, totaling roughly $24 trillion.

    A fight seems to be brewing between Democrats and Republicans. House Republicans indicate that they may ask for steep spending cuts in exchange for boosting the ceiling.

    If the government ends up divided and brinkmanship continues, there could be bad news for markets. The last time such gridlock occurred, under the Obama administration in 2011, the United States lost its perfect AAA credit rating from Standard & Poor and stocks dropped more than 5%.

    Spending: Democrats have indicated that they intend to focus on parts of the fiscal agenda proposed by President Biden in 2021 that have not yet become law, including expanding health coverage and child care tax credits. A Republican win or gridlock could table that. Goldman Sachs economists also note that a Democratic victory could likely increase the federal fiscal response in the event of recession, while Republicans would be more likely to avoid costly relief packages.

    Social Security: Popular programs like Social Security and Medicare face solvency issues long-term and the topic has become a hot-button issue on both sides of the aisle. The topic is so closely watched that even debating changes could impact consumer confidence, say analysts.

    Democratic Senator Joe Manchin said last week that spending changes must be made to shore up Social Security and other programs which he said were “going bankrupt.” He said at a Fortune CEO conference that he was in favor of bipartisan legislation within the next two years to confront entitlement programs that are facing “tremendous problems.” Republican Senator Rick Scott has proposed subjecting almost all federal spending programs to a renewal vote every five years. Analysts say that could make Social Security and Medicare more vulnerable to cuts.

    The Federal Reserve: Lawmakers have been increasingly speaking out against the pace of the Federal Reserve’s interest rate hikes meant to fight inflation. Democratic Senators Elizabeth Warren, alongside Banking Chair Sherrod Brown, John Hickenlooper and others have called on Fed Chair Jerome Powell to slow the pace of hikes.

    Now, Republicans are getting involved. Senator Pat Toomey, the top Republican on the Banking Committee, asked Powell last week to resist buying government debt if market conditions remain subdued. Expect more scrutiny from both parties after the elections.

    The stock market under President Biden started with a boom, but as we head into midterm elections, markets are going bust, reports my colleague Matt Egan.

    As of Monday, the S&P 500 has fallen by 1.2% since Biden took office in January 2021. That marks the second-worst performance during a president’s first 656 calendar days in office since former President Jimmy Carter, according to CFRA Research.

    Out of the 13 presidents since 1953, Biden ranks ninth in terms of stock market performance through this point in office, besting only former Presidents George W. Bush (-32.8%), Carter (-8.9%), Richard Nixon (-17.2%) and John F. Kennedy (-2.1%), according to CFRA.

    By contrast, Biden’s two immediate predecessors headed into their first midterm election with stock markets surging. The S&P 500 climbed 52.2% during the first 656 calendar days in office for former President Barack Obama and 23.9% under former President Donald Trump, according to CFRA.

    American consumers borrowed another $25 billion in September, according to newly released Federal Reserve data, as higher costs led to further dependence on credit cards and other loans, reports my colleague Alicia Wallace.

    In normal economic times, that would be a concerningly large jump, said Matthew Schulz, chief credit analyst for LendingTree, wrote in a tweet. “However, it is actually the second-smallest increase in the past year.” Economists were anticipating monthly growth of $30 billion, according to Refinitiv consensus estimates.

    The data is not adjusted for inflation, which is at decade highs and weighing heavily on Americans, outpacing wage gains and forcing consumers to rely more heavily on credit cards and their savings.

    In the second quarter of this year, credit card balances saw their largest year-over-year increases in more than two decades, according to separate data from the New York Federal Reserve. The third-quarter household debt and credit report is set to be released Nov. 15.

    Correction: A previous version of this article incorrectly stated the number of calendar days in the analysis as well as the stock market performance under various US presidents during that period.

    [ad_2]

    Source link

  • Rep. Nancy Mace says she supports Kevin McCarthy’s debt ceiling strategy to force spending cuts | CNN Politics

    Rep. Nancy Mace says she supports Kevin McCarthy’s debt ceiling strategy to force spending cuts | CNN Politics

    [ad_1]



    CNN
     — 

    Rep. Nancy Mace on Sunday said she supports Republican Leader Kevin McCarthy’s strategy of refusing to lift the debt limit, if Republicans win back the House, unless Democrats in the White House agree to spending cuts.

    “And I can tell you, I sit on the Oversight Committee, where we look at waste, fraud, and abuse in the federal agency level, and there is waste in every single agency,” Mace said to CNN’s Jake Tapper on “State of the Union.”

    The Republican from South Carolina said that when Covid-19 began, businesses had to make tough decisions about how they would keep their doors open, and the federal government continued to get record revenue without making those tough decisions.

    “We can find ways to be more responsible with our spending, just like we forced companies and businesses to during Covid. So, that’s one of the ways that I would approach it,” she said.

    President Joe Biden said on Friday that he will not relent to Republican lawmakers threatening to send the nation into default if he doesn’t meet their demands but he doesn’t support Democrats’ efforts to abolish the debt limit entirely.

    When asked by Tapper about legislating and meeting with leaders of the Senate and people in the White House to come up with a way to reduce spending, Mace noted Republicans had been “shut out of many of those conversations.”

    “We have seen Republicans for a year-and-a-half now talk about more responsible spending, looking at the deficit spending in these bills that have been passed talking about how we can move this country forward. And we have been shut out.”

    In a separate appearance on “State of the Union” on Sunday, Vermont Sen. Bernie Sanders said he sided with increasing the debt ceiling.

    “But what Republicans are basically doing – and I hope everybody understands this – they are saying look, we are prepared to let the United States default on its debt, not raise the debt ceiling, unless – you talk about making cuts.”

    Sanders added “You know what they’re talking about? Cuts in Social Security, Medicare, and Medicaid. Is that irresponsible? It is absolutely irresponsible. You don’t use the debt ceiling to do that.”

    Mace also indicated to Tapper that she would not automatically be on board with impeaching Biden if Republicans take the House in November. However, she didn’t dismiss it completely either, noting allegations of high crimes and misdemeanors “would have to be investigated.”

    “I am not interested in playing tit-for-tat. I am not interested in retaliation. Impeachment has been weaponized over the years, and we’ve seen that. I really want us to be focused on the economy, on tackling inflation with responsible policy,” she said.

    Mace, who has travelled to Ukraine since the war began, dodged when asked if she supported McCarthy’s comment to Punchbowl that House Republicans would not write a “blank check” to Ukraine if they are in the majority.

    “It is something that we’re going to have to find balance on next year,” she said, due to the threat of a recession and Republican promises to cut government spending.

    [ad_2]

    Source link

  • Democrats predict an ‘extremely busy’ lame duck. Here’s what’s on the agenda | CNN Politics

    Democrats predict an ‘extremely busy’ lame duck. Here’s what’s on the agenda | CNN Politics

    [ad_1]



    CNN
     — 

    A packed legislative to-do list awaits Congress when it returns to session after the midterms – and Democrats, who currently control both chambers, will face a ticking clock to enact key priorities if Republicans win back the House or manage to flip the Senate in the upcoming elections.

    Senate Majority Leader Chuck Schumer has predicted an “extremely busy” lame duck session – the period of time after the midterms and before a new Congress begins in January.

    “We still have much to do and many important bills to consider,” Schumer said in remarks on the Senate floor at the end of September. “Members should be prepared for an extremely, underline extremely, busy agenda in the last two months of this Congress.”

    The jam-packed agenda for the lame-duck session includes: Funding the government to avert a shutdown before the end of the calendar year, passage of the National Defense Authorization Act, or NDAA, the annual must-pass legislation that sets the policy agenda and authorizes funding for the Department of Defense, as well as a vote in the Senate to protect same-sex marriage and the potential consideration of other key pieces of legislation.

    Democrats are still limited in what they can achieve, however, given their narrow majorities in both chambers. With a 50-50 partisan split in the Senate, Democrats lack the votes to overcome the filibuster’s 60-vote threshold – and do not have the votes to abolish the filibuster. As a result, major priorities for liberal voters – like the passage of legislation protecting access to abortion after the Supreme Court overturned Roe v. Wade – will still remain out of reach for the party for the foreseeable future.

    Government funding is the most pressing priority that lawmakers will confront during the lame duck. The current deadline for the expiration of funding is December 16 after the House and Senate passed an extension to avert a shutdown at the end of September.

    Since the funding bill is viewed as must-pass legislation it will likely become a magnet for other priorities that lawmakers may try to tack on to ride along with it. It’s possible that further aid for Ukraine could come up as Ukraine continues to counter Russia’s invasion of the country. While that funding has bipartisan support, some conservatives are balking at the pricey contributions to Ukraine and may scrutinize more closely additional requests from the administration, a dynamic that is dividing Republicans on this key issue.

    Democrats also want more funding for pandemic response, but Republicans have pushed back on that request.

    One issue that may come up during the government funding effort is money for the Department of Justice investigation into the January 6, 2021, attack on the Capitol.

    A House Democratic aide told CNN that final fiscal year 2023 funding levels have yet to be determined. Justice Department needs and resources are part of this ongoing conversation, but under the leadership of Rep. Matt Cartwright, chairman of the House Appropriations subcommittee on commerce, justice, science, and related agencies, the House bill included $34 million that would allow DOJ to fund these prosecutions without reducing their efforts in other areas.

    House Appropriations Committee Chairwoman Rosa DeLauro told CNN in a statement, “I look forward to working with my colleagues on the House and Senate appropriations committees and passing a final 2023 spending package by the December 16th deadline.”

    Meanwhile, the Senate has begun work on the NDAA, and is expected to pass the massive piece of legislation during the lame duck. Consideration of the wide-ranging bill could spark debate and a push for amendments over a variety of topics.

    Republican Sen. Chuck Grassley of Iowa has called for punishing OPEC for its production cut by passing legislation that would hold foreign oil producers accountable for colluding to fix prices – and the senator has said he believes the measure can pass as an amendment to the NDAA. The legislation would clear the way for the Justice Department to sue Saudi Arabia and other OPEC nations for antitrust violations.

    Senate Democrats will also continue confirming judges to the federal bench nominated by President Joe Biden, a key priority for the party.

    A Senate vote to protect same-sex marriage is also on tap for the lame-duck session. In mid-September, the chamber punted on a vote until after the November midterm elections as negotiators asked for more time to lock down support – a move that could make it more likely the bill will ultimately pass the chamber.

    The bipartisan group of senators working on the bill said in a statement at the time, “We’ve asked Leader Schumer for additional time and we appreciate he has agreed. We are confident that when our legislation comes to the Senate floor for a vote, we will have the bipartisan support to pass the bill.” The bill would need at least 10 Republican votes to overcome a filibuster.

    Schumer has vowed to hold a vote on the bill, but the exact timing has not yet been locked in. Democrats have pushed for the vote after the Supreme Court overturned Roe v. Wade, sparking fears that the court could take aim at same-sex marriage in the future.

    The Senate could take up legislation during the lame duck in response to the January 6, 2021, attack by a mob of pro-Trump supporters attempting to overturn the results of the 2020 presidential election.

    Over the summer, a bipartisan group of senators reached a deal to make it harder to overturn a certified presidential election. The proposal would still need, however, to be approved by both chambers. Notably, the Senate proposal has the backing of Senate Minority Leader Mitch McConnell, a Kentucky Republican.

    “I strongly support the modest changes that our colleagues in the working group have fleshed out after literally months of detailed discussions,” McConnell said at the end of September. “I’ll proudly support the legislation, provided that nothing more than technical changes are made to its current form.”

    If the bill passes the Senate, it would also need to clear the House, which in September, passed its own version of legislation to make it harder to overturn a certified presidential election in the future by proposing changes to the Electoral Count Act.

    Passing a bill to to restrict lawmakers from trading stocks is a priority for a number of moderate House Democrats – who may continue to push for the issue to be taken up during the lame duck, though whether there will be a vote is still to be determined and other pressing must-pass items like government funding could crowd out the issue. The House did not vote on a proposal prior to the midterm elections.

    “It’s a complicated issue, as you can imagine, as a new rule for members they have to follow, and their families as I understand, so I think it deserves careful study to make sure if we do something, we do it right,” House Majority Leader Steny Hoyer told CNN last month.

    Meanwhile, it’s not yet clear when exactly the nation will run up against the debt limit and it appears unlikely for now that Congress will act to resolve the issue during the lame-duck session, especially as other must-pass bills compete for floor time. But political battle lines are already being drawn and maneuvering is underway in Washington over the contentious and high-stakes issue.

    A group of House Democrats recently sent a letter to House Speaker Nancy Pelosi and Schumer calling for legislation to “permanently undo the threat posed by the debt limit” during the post-election lame-duck session. The letter, led by Pennsylvania Rep. Brendan Boyle, was signed by several prominent House Democrats, including Caucus Chair Hakeem Jeffries of New York.

    Biden on Friday gave a window into how he’s preparing for a looming political showdown over the debt ceiling, stating unequivocally that he will not relent to Republican lawmakers threatening to send the nation into default if he doesn’t meet their demands, but adding that he doesn’t support efforts from within his own party to abolish the debt limit entirely.

    [ad_2]

    Source link

  • McCarthy and hardliners reach tentative agreement to resume House floor business | CNN Politics

    McCarthy and hardliners reach tentative agreement to resume House floor business | CNN Politics

    [ad_1]



    CNN
     — 

    Hardline conservatives have agreed to end their blockade of the House floor while they continue discussions with House Speaker Kevin McCarthy about future spending decisions and a new “power-sharing agreement,” according to multiple members leaving the speaker’s office.

    Conservatives who had voted against a procedural vote in retaliation for how GOP leadership handled the debt ceiling deal now say they are willing to support the procedural vote, after they received new commitments from McCarthy about how the California Republican plans to operate going forward, though they said the exact details are still being worked out and did not say whether they would ever be made public or put into a written statement.

    “I think you’re gonna see an agreement to move forward in the next day or two on moving the legislation we wanted to move last week,” said Rep. Bob Good, a Virginia Republican who has repeatedly criticized McCarthy.

    Rep. Ralph Norman, a South Carolina Republican, said of the nearly hourlong meeting in McCarthy’s office: “We aired our issues. We want to see this move forward as a body.”

    Norman said one of the things McCarthy agreed to was to involve conservatives more directly in future decision making.

    A group of hardline conservatives have held up legislative action in the GOP-led House for nearly a week in protest of the deal McCarthy struck with President Joe Biden to raise the nation’s borrowing limit last month. Conservatives wanted the debt ceiling deal to cut more federal spending than it did, and several far-right members of McCarthy’s conference accused him of reneging on commitments he made to them in private in order to win the speakership in January.

    McCarthy told the hardliners Monday that he wouldn’t have cut the debt ceiling deal had he known it would “divide us,” according to a GOP source familiar with the meeting.

    But McCarthy knew at the time that not all his members were going to be on board with the deal, with many of them publicly expressing their concerns with the direction of the talks.

    One of the concessions McCarthy agreed to as part of Monday’s developments was an ironclad commitment to bring a pistol brace bill from GOP Rep. Andrew Clyde of Georgia to the floor. Leadership has agreed to incorporate the bill, which would block a new Bureau of Alcohol, Tobacco, Firearms and Explosives rule on pistol braces, into an upcoming procedural vote.

    That vote, which is slated for Tuesday, will now combine a rule for the pistol brace bill with a rule for a gas stoves bill as well as a bill to rein in the administration’s regulatory powers.

    GOP Rep. Matt Gaetz of Florida said, “The power-sharing agreement that we entered into in January with McCarthy … it has to be renegotiated, so what happened on this debt ceiling bill never happens again.”

    Specifically, Gaetz said the hardliners want more tools to put more “downward pressure on spending,” and want a return to fiscal 2022 spending levels.

    House Appropriations Chairwoman Kay Granger announced Monday night that her panel will take up spending bills that would roll back funding to the levels demanded by the hardliners, a move that could ease tensions between the group and McCarthy while generating backlash from the White House and Senate Democrats.

    Gaetz said that while they’re willing to end their stand against the procedural vote this week, he warned that they’re willing to oppose future procedural votes if they don’t get their way.

    “If there’s not a renegotiated power sharing agreement then perhaps we’ll be here next week,” he said.

    House Freedom Caucus Chairman Scott Perry of Pennsylvania confirmed they’ve reached a “framework for moving forward” but did not provide details.

    Rep. Dusty Johnson of South Dakota, leaving McCarthy’s office, said they have a path forward now but said there will be no votes in the House tonight, as they had previously planned.

    This story has been updated with additional information.

    [ad_2]

    Source link

  • No. 3 House Republican defends party’s debt ceiling bill | CNN Politics

    No. 3 House Republican defends party’s debt ceiling bill | CNN Politics

    [ad_1]



    CNN
     — 

    House Majority Whip Tom Emmer said Sunday that President Joe Biden “doesn’t have to negotiate” over the debt ceiling, saying that “Republicans in the House, led by Kevin McCarthy, have passed the solution.”

    House Republicans last week narrowly passed their bill to raise the nation’s $31.4 trillion debt limit by an additional $1.5 trillion. But the measure faces nearly impossible odds of passing in the Democratic-led Senate. Emmer disagreed with that contention in an interview with CNN’s Dana Bash on “State of the Union.”

    “To say that it’s dead on arrival in the Senate, when you’ve got even Joe Manchin suggesting support for this type of approach, I think that’s not exactly accurate,” the Minnesota Republican said. “If you don’t like something in it, if you have ideas of your own, our speaker is more than willing, I’m sure, to listen to those.”

    The House GOP measure was aimed at boosting Republicans’ efforts to negotiate with Democrats as the country approaches its default deadline as soon as this summer. But the White House has said it will not negotiate a debt ceiling increase and will accept only a clean proposal to raise the nation’s borrowing limit.

    Following passage of the GOP bill, Biden told reporters Wednesday that he would be “happy to meet with McCarthy, but not on whether or not the debt limit gets extended. That’s not negotiable.”

    Separately on Sunday, House Majority Leader Steve Scalise said Biden needs to come to the table to negotiate with Republicans on spending and the debt limit.

    “The White House needs to ultimately get into this negotiation. The president has been in hiding for two months,” the Louisiana Republican said on ABC’s “This Week.”

    “That’s not acceptable to Americans. They expect the president to sit in a room with Speaker McCarthy and start negotiating,” he added.

    The US hit its debt ceiling in January and can’t continue to borrow to meet its obligations unless Congress raises or suspends it. The Treasury Department is avoiding default – which would happen this summer or early fall – by using cash on hand and “extraordinary measures,” which should last at least until early June, Treasury Secretary Janet Yellen said in January.

    A breach of the US debt ceiling could spark a 2008-style economic catastrophe, wiping out millions of jobs and setting America back for generations, Moody’s Analytics has warned.

    Emmer, when asked by Bash if he could guarantee that the US government will not default on its debts, said, “I can, assuming that our president and the (Chuck) Schumer Senate recognize the gravity of the problem. This is no longer about politics.”

    “House Republicans will not allow America to default on its debt,” he added. “We showed that last week.”

    Emmer also disputed the characterization of some of the GOP bill’s provisions to reduce spending as “cuts.”

    “These are spending reforms. And all we’re doing is going back to the Biden-Pelosi budget of last year,” he said, referring to former House Speaker Nancy Pelosi.

    The debt ceiling legislation, dubbed the “Limit, Save, Grow Act,” proposes sizable cuts to domestic programs but would spare the Pentagon’s budget. It would return funding for federal agencies to 2022 levels while aiming to limit the growth in spending to 1% per year. The nonpartisan Congressional Budget Office said the bill would trim government deficits by $4.8 trillion over 10 years.

    As part of the 320-page bill, the GOP is also proposing to block Biden’s plan to grant student loan forgiveness, repeal green energy tax credits and kill new Internal Revenue Service funding enacted as part of the Inflation Reduction Act last year. The plan would also expedite new oil drilling projects while rescinding funding enacted to respond to the Covid-19 pandemic.

    [ad_2]

    Source link

  • McCarthy tells Republicans he’s ‘nowhere near’ a debt limit deal with Biden as deadline nears | CNN Politics

    McCarthy tells Republicans he’s ‘nowhere near’ a debt limit deal with Biden as deadline nears | CNN Politics

    [ad_1]



    CNN
     — 

    House Speaker Kevin McCarthy told Republicans during a closed-door meeting on Tuesday that he’s not close to a bipartisan deal with President Joe Biden to avoid a first-ever default on the nation’s debt.

    “We are nowhere near a deal,” McCarthy told Republicans. “I need you all to hang with me.”

    As each day passes without a deal, the clock is ticking closer to a looming deadline for default – which could be catastrophic for the global economy and have financial effects on countless Americans.

    Treasury Secretary Janet Yellen reaffirming in a letter to McCarthy on Monday that it is “highly likely” that the US Treasury will not be able to pay all of its bills in full and on time as soon as June 1. But several Republicans, including House Majority Leader Steve Scalise, have suggested that they do not believe Yellen’s estimate of June 1 as the so-called X-date for potential default and called on her to testify before Congress.

    While McCarthy has maintained that both parties could still obtain a deal by the June 1 deadline, he is also now accusing the president of trying to “disrupt” negotiations by bringing proposals involving Medicare and Social Security back “into the fold.”

    Republican Study Committee Chairman Kevin Hern said McCarthy told members during Tuesday morning’s meeting they should go home and work their districts if a deal isn’t reached by the White House and Republican negotiators by Memorial Day weekend. Members can always be called back, but Hern told reporters that this is a deal that has to be reached between a few key people.

    “The negotiations are with the speaker and his team and the White House and their team. And so the rest of us being here, just waiting around, doesn’t do any good for anyone,” Hern said.

    McCarthy’s continued optimism about securing a deal before next month follows a meeting at the White House with Biden on Monday evening, where he had underscored that both parties are united in their goal of reaching an agreement to raise the nation’s debt limit before the country defaults.

    “I felt we had a productive discussion. We don’t have an agreement yet, but I did feel the discussion was productive in areas that we have differences of opinion,” McCarthy said outside the West Wing, adding that the “tone” of Monday’s meeting was also “better than any other time we’ve had discussions.”

    Monday evening’s meeting at the White House came after negotiations hit a snag and were put on pause Friday, and representatives of each side spent most of the next two days criticizing the other while defending their own positions. But the parties appeared to smooth things over to resume negotiations when Biden and McCarthy spoke over the phone as the president was aboard Air Force One returning to Washington after a trip to Japan.

    Biden, in a statement, called Monday’s discussion in the Oval Office productive while acknowledging that areas of disagreement persist.

    “We reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement,” Biden wrote. “While there are areas of disagreement, the Speaker and I, and his lead negotiators … and our staffs will continue to discuss the path forward.”

    On Monday evening, McCarthy maintained that both he and the president “agree we want to be able to come to an agreement.”

    McCarthy’s team and White House negotiators have been meeting daily in an effort to come to a consensus on the budget and the debt ceiling. Negotiators also met through the night on Monday and reconvened Tuesday morning.

    The speaker on Monday also acknowledged that he does not plan to waive the House’s three-day rule – which requires that legislation be posted for at least three days to allow House members to study it before it can be voted on.

    McCarthy has repeatedly warned that the White House and House GOP must reach a deal this week to avoid default. And if negotiations drag on, waiving the three-day rule could allow the legislation to pass more quickly. However, there are concerns that expediting the legislative process by waiving the rule may lead to members voting to support something they aren’t fully informed on.

    The speaker said he “would give everybody 72 hours, so everybody knows what they’re voting for.”

    Despite continued talks, House members on both sides of the aisle appear remain divided over the approach to debt ceiling discussions.

    House Democratic Leader Hakeem Jeffries said Monday evening asserted that talks are moving in the “wrong direction.”

    At a hastily called news conference on the steps of the Capitol, Jeffries attacked the GOP for rejecting a White House compromise – to freeze domestic spending at the current levels. Republicans instead want to roll back spending to previous years’ levels and write into law that spending would be capped for several years.

    “They’ve rejected the fact that President Biden is willing to consider freezing spending. It will reduce the deficit by a trillion dollars. This is what the extreme MAGA Republicans say that they want. They rejected. They rejected an unwillingness to not put the country through this again,” the New York Democrat said. He also repeatedly refused to say if House Democrats would accept a spending cut, as McCarthy has demanded.

    Jeffries’ position is critical because McCarthy will almost certainly need House Democratic support to pass any deal cut with the White House.

    During Tuesday’s closed-door meeting with Republicans, at least one hardline member – Rep. Chip Roy of Texas – complained about Republicans seeking a compromise that water downs what they passed in the House, according to a source in the room. Roy said it’s about saving the country, not seeking a deal.

    Still, a number of Republicans – even some who haven’t always backed McCarthy – said they are standing by the speaker and are happy with how he’s negotiated up until this point.

    “I am very confident in Kevin McCarthy as our speaker,” Rep. Nancy Mace, a Republican from South Carolina told CNN. “I don’t want Speaker McCarthy’s job. That’s a very tough job … he’s got the five families to deal with and a caucus of one right here. He’s doing a great job of pulling people together.”

    “I do not envy his position. I would not want it. He’s had a lot of success in bringing a lot of different factions together within the party and that is no small feat, and it’s not easy,” Mace said.

    Rep. Tim Burchett, who voted against the House’s GOP debt ceiling plan said that “McCarthy is very good at deal cutting. I trust him.”

    “If he says it’s going to start snowing in Knoxville tomorrow, I am running down … and buying a new sled,” Burchett added.

    [ad_2]

    Source link

  • 5 ways a debt default could affect you | CNN Politics

    5 ways a debt default could affect you | CNN Politics

    [ad_1]



    CNN
     — 

    President Joe Biden and House Republicans may have as little as a month to prevent the US from defaulting on its debt, which would impact millions of Americans and unleash economic and fiscal chaos here and around the world.

    Treasury Secretary Janet Yellen warned Monday that the government may not be able to pay all of its bills in full and on time as soon as June 1. However, the forecast was uncertain, and the default date might come several weeks later, she said. The US hit its $31.4 trillion debt ceiling in January, and Treasury has been using cash and “extraordinary measures” to satisfy obligations since then.

    Just what would happen if the nation defaults on its debt is unknown since it’s never actually happened before. A close call in 2011 roiled the financial markets and prompted Standard & Poor’s to downgrade the US’ credit rating to AA+ from AAA.

    Yellen gave a sense of the turmoil it would cause in her letter to House Speaker Kevin McCarthy on Monday.

    “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” she wrote.

    To be clear, a debt default doesn’t mean all payments would stop and people would permanently lose out on money they are owed. Treasury would have the funds to satisfy some obligations, but it’s not certain how the agency would handle the disbursements. Much would also depend on how long it takes Congress to address the borrowing cap.

    “Tens of millions of people across the country who expect payments from the federal government may not get them on time,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

    Here are five ways that Americans could be affected by debt default:

    About 66 million retirees, disabled workers and others receive monthly Social Security benefits. The average payment for retired workers is $1,827 a month in 2023.

    Almost two-thirds of beneficiaries rely on Social Security for half of their income, and for 40% of recipients, the payments constitute at least 90% of their income, according to the National Committee to Preserve Social Security and Medicare.

    These payments could be delayed in a debt default scenario, though it’s possible Treasury could continue making on-time payments because of the entitlement program’s trust fund, Akabas said.

    The benefits are disbursed four times a month, on the third day of the month and on three Wednesdays. Roughly $25 billion a week is sent out, according to the Congressional Budget Office.

    “Even a short delay in the payment of Social Security benefits would be a burden for the millions of Americans who rely on their earned benefits to pay for out-of-pocket health care expenses, food, rent and utilities,” Max Richtman, the committee’s CEO, said in a statement.

    Many other government payments could also be affected, including funding for food stamps; federal grants to states and municipalities for Medicaid, highways, education and other programs; and Medicare payments to hospitals, doctors and health insurance plans.

    More than 2 million federal civilian workers and around 1.4 million active-duty military members could see their paychecks delayed. Federal government contractors could also see a lag in payments, which could affect their ability to compensate their workers.

    Also, certain veterans benefits, including disability payments and pensions for some low-income veterans and their surviving families, could be affected.

    “Such calamity would place further stress on our servicemembers, retirees, and veterans, as well as their families, caregivers, and survivors,” Rene Campos, senior director of government relations for the Military Officers Association of America, said in a blog post. “Though life in uniform is not always predictable, those who serve or have served their country expect their country to honor their commitment to service.”

    About $25 billion in pay or benefits for active-duty members of the military, civil service and military retirees, veterans and recipients of Supplemental Security Income is sent out on the first day of the month, according to the CBO.

    Americans’ investments would take a direct hit. Case in point: Markets had what was then their worst week since the financial crisis during the 2011 debt ceiling standoff after the Standard & Poor’s downgrade.

    Even if the debt ceiling impasse is resolved soon after a default, stocks could shed as much as a third of their value. That would wipe out around $12 trillion in household wealth, according to Moody’s Analytics.

    If a default occurs, yields on US Treasuries will inevitably rise to compensate for the increased risk that bondholders won’t receive the money they’re owed from the government.

    Since interest rates on loans, credit cards and mortgages are often based on Treasury yields, the cost of borrowing money and paying off debt would rise. That’s on top of the increased costs Americans are already facing from the Federal Reserve rate hikes.

    Families and businesses would also have a tougher time getting approved for lines of credit since banks would have to be more selective about to whom they loan money. That’s because their costs of borrowing money will also rise, which limits the amount of money they can lend out.

    A debt default could trigger an economic downturn, which would prompt a spike in unemployment. It would come at a particularly fragile time – when the nation is already dealing with rising interest rates and stubbornly high inflation.

    How much damage would be done would depend on how long the crisis continues. If the default lasts for about a week, then close to 1 million jobs would be lost, including in the financial sector, which would be hard hit by the stock market declines. Also, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent, according to Moody’s.

    But if the impasse dragged on for six weeks, then more than 7 million jobs would be lost, the unemployment rate would soar above 8% and the economy would decline by more than 4%, according to Moody’s. The effects would still be felt a decade from now.

    “It would be a body blow to the economy, and it would be a manufactured crisis,” said Bernard Yaros, an economist at Moody’s.

    [ad_2]

    Source link

  • Inside the Treasury Department team monitoring early economic warning signs as default threat looms | CNN Politics

    Inside the Treasury Department team monitoring early economic warning signs as default threat looms | CNN Politics

    [ad_1]



    CNN
     — 

    Nearly five months before the US was projected to hit the debt ceiling, a small team inside the Treasury Department began alerting top officials to early effects already being felt in the US financial system.

    The cost of insuring US debt, as measured by the price of credit-default swaps, was rising – a sign that investors were beginning to view US bonds and other securities as increasingly risky.

    That early warning – and subsequent ones over the last month as the swaps pricing has surged – came out of the Treasury Department’s Markets Room and its eponymous team of nine financial analysts who are responsible for monitoring and analyzing global financial markets to inform the policy work of top Treasury Department and White House officials.

    As the US rapidly approaches a potential default date in early June, top US officials are increasingly relying on the Markets Room to monitor for signs of disruption in the financial markets.

    “In the same way that a doctor wants to understand the vital signs of a patient as they’re thinking about how to treat them, at Treasury keeping abreast of understanding the various ways in which the economy is healthy or unhealthy. And part of that is understanding the market,” Deputy Treasury Secretary Wally Adeyemo told CNN in an interview.

    “So, we’re spending a lot of time with them better understanding what the costs are today, in order to make sure that we’re in a position to share that information with Congress, in order to prevent us from getting into a position where for the first time in our history, we’re unable to pay all of our obligations on time.”

    That work begins each day before dawn, when staffers take turns waking up around 3:30 a.m. ET to compile data about overnight market developments and begin making calls to contacts working in European and Asian markets.

    At around 7 a.m. ET, those data and insights land in the inboxes of top policymakers at the White House and Treasury Department.

    At 9 a.m. ET, before the US markets open, Treasury Secretary Janet Yellen and her senior leadership team huddle virtually with the Markets Room and other key Treasury Department aides for a briefing on the state of the financial markets and issues to watch for that day.

    “Almost every American is influenced by what’s happening around the globe and global markets either through your 401(k), or your attempt to borrow money for your small business or for your home. So, this team of individuals, every morning, provides us a briefing and an update on what’s happening around the world,” Adeyemo said.

    In recent weeks, that daily briefing has heavily focused on reverberations of the debt limit standoff, from updates on auctions of Treasury bills to market reactions and commentary from market analysts and economists.

    Much of the rest of the day is spent monitoring developments in the financial markets and fielding inquiries from top policymakers at Treasury and the White House for analysis on those developments.

    And at the end of the day, the Markets Room also helps policymakers digest the biggest developments in the financial markets with another widely read one-page memo delivered after the US markets close and before the Asian markets open.

    Beyond the Treasury Department, a White House spokesperson said the unit’s twice-daily memos are “a valuable asset” for officials at the National Economic Council and Council of Economic Advisers.

    “Those offices also rely on the Markets Room’s real-time updates – either in memos or meetings – when more regular monitoring is warranted,” the spokesperson said.

    Officials say the Markets Room is focused on monitoring the global economy’s recovery from the pandemic-induced recession, lingering inflation and the trajectory of the global economy.

    Albert Lee, the Markets Room director, described the unit as an early warning system on the global financial system for top US policymakers.

    In the early days of the coronavirus pandemic, the team was among the first to sound alarm bells inside the federal government about early shocks in pockets of the financial system and predicting rate cuts from the Federal Reserve.

    The team also played a critical role during the banking crisis earlier this year, tracking the sharp selloff of stock and outflows of deposit at Silicon Valley Bank that ultimately triggered the bank’s collapse.

    As the Treasury Department acted to address the second-largest bank failure in US history and prevent any spillover effects in the banking sector, top Treasury Department officials leaned on the Markets Room team to track the feedback of their policy actions.

    “It was critically important for us to understand how markets were interpreting the actions that we took that made clear to the American people that your deposits were safe,” Adeyemo said. “We were monitoring signs of distress in the banking sector.”

    With one week until the government can potentially no longer pay its bills, the US stock market is only just beginning to show signs of concern about a potential default and Treasury officials say the team is focused on tracking further reactions from the stock market as well as the Treasury securities market.

    The stock market’s reaction has, up until now, been relatively muted – especially as compared to the 17% drop the S&P 500 suffered amid the 2011 debt ceiling crisis. But Treasury officials say volatility in the securities market is already affecting the federal government, raising the cost to borrow.

    Yields on short-term Treasury securities have surged and recent auctions for securities are leaving a heftier price tag for the federal government, which Adeyemo said recently incurred $80 million in additional costs for a recent auction of Treasury bills.

    “So, the cost of borrowing has already gotten more expensive when it comes to us borrowing in the short term for the US government,” Adeyemo said. “So as the debt limit manufactured crisis goes on, and costs go up for the government, it also means that costs will go up for the American people as well.”

    Adeyemo declined to disclose what contingencies are being prepared should the US default. But when the US faced a similar standoff on the debt in 2011, Federal Reserve officials and Treasury Department officials quietly prepared a plan to prioritize payments on US debt and delay paying other government bills and obligations, like Social Security and payments to veterans, according to transcripts of a central bank meeting released in 2017.

    “The most important thing for the American people, for our country, for our credibility, not only with our creditors, but with the American people is to pay all of our bills on time. That’s what our system is built to do,” Adeyemo said. “I’ve spent a good part of a decade working here at the Treasury Department. What I can tell you is that there’s no plan that would allow us to meet all of our commitments other than Congress, raising the debt limit.”

    [ad_2]

    Source link

  • Debt default could occur in early June, forecasters say, backing Yellen | CNN Politics

    Debt default could occur in early June, forecasters say, backing Yellen | CNN Politics

    [ad_1]



    CNN
     — 

    Two new analyses are backing Treasury Secretary Janet Yellen’s forecast that the nation could default on its debt – and unleash economic chaos – as soon as early June if Congress doesn’t act.

    The projections, which are roughly in line with those issued last week by Yellen and the Congressional Budget Office, add to the pressure on House Republicans and President Joe Biden, who may have only a few weeks to hammer out their vast differences over addressing the debt ceiling. Biden is meeting with congressional leaders Tuesday to work on a deal, the first movement in months.

    A weaker-than-expected tax season, spurred in part by disaster-related filing extensions for much of California and parts of Alabama and Georgia, has increased the odds that Treasury won’t have enough funds to pay the federal government’s bills in early June, according to an updated estimate released Tuesday by the Bipartisan Policy Center.

    “The coming weeks are critical for assessing the strength of government cash flows,” said Shai Akabas, the center’s director of economic policy. “If a solution is not reached before June, policymakers may be playing daily Russian roulette with the full faith and credit of the United States, risking financial disaster for their constituents and the country.”

    The so-called X-date, when the US could default, could arrive between early June and early August, according to the center. In February, it projected the default could take place during the summer or early fall.

    Meanwhile, Moody’s Analytics last week pegged the default date at June 8, significantly earlier than its prior projection of August 18. But the X-date could hit as soon as June 1 or as late as early August, according to that analysis.

    Cumulative income tax receipts are tracking more than 30% below collections a year ago, in part because of weaker capital gains revenue as a result of last year’s stock market declines, Moody’s said.

    Tax receipts are running $150 billion below government projections for fiscal year 2023, which began in October, according to a report issued Monday by the Penn Wharton Budget Model, an independent research organization. This is due mainly to a drop in capital gains income and weakening corporate profit margins.

    In Yellen’s letter to House Speaker Kevin McCarthy last week, she said the exact date of default is impossible to pinpoint since the amount of revenue the federal government collects and the amount it spends is variable. She noted it could come as early as June 1 but could be a number of weeks later.

    Even if the Treasury Department doesn’t completely run out of funds, it could be difficult for the agency to manage its payments and stay below the debt ceiling when it only has a tiny cash balance, Akabas said. How much revenue the agency collects in the next three weeks is critical to whether the nation will default next month.

    “Treasury is skating on very thin ice in the month of June. If it’s $10, $20, $30, $40 billion below what we anticipate, that means that they’re really going to be in a crunch situation,” he said of revenue.

    Unable to keep borrowing to pay the nation’s obligations, the Treasury Department has been using cash and “extraordinary measures” to avoid default since the US hit its $31.4 trillion debt ceiling in January.

    If government collections wind up being enough to keep Treasury’s coffers flush through early June, then it’s likely the government won’t default until later in the summer. The agency will get another injection of funds from second quarter estimated tax payments, which are due June 15, and from an extraordinary measure that becomes available at the end of that month.

    Investors are growing skittish about the debt ceiling impasse and a potential default.

    Last week, the Treasury Department sold $50 billion of four-week securities scheduled to mature on June 6 at a record 5.84%, the highest yield for any Treasury Department bill auction since 2000, Akabas noted.

    “Even now, the looming deadline is raising costs to the government and therefore, to all taxpayers,” he said.

    If the government was to default for the first time, it would trigger an economic meltdown in the US and send shock waves through the global financial system.

    If the default lasts for about a week, then close to 1 million jobs would be lost, including in the financial sector, which would be hard hit by the stock market declines, according to Moody’s. Also, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent.

    But if the impasse dragged on for six weeks, then more than 7 million jobs would be lost, the unemployment rate would soar above 8% and the economy would decline by more than 4%, according to Moody’s. The effects would still be felt a decade from now.

    [ad_2]

    Source link

  • Biden’s second debt limit meeting with congressional leaders postponed | CNN Politics

    Biden’s second debt limit meeting with congressional leaders postponed | CNN Politics

    [ad_1]



    CNN
     — 

    President Joe Biden’s anticipated meeting originally scheduled for Friday with congressional leaders aimed at discussing a deal to avert a default on the national debt has been postponed, a White House spokesperson said.

    Friday’s meeting would have been the second time in less than a week that congressional leaders met with Biden at the White House in an effort to reach a solution to avoid default. Instead, the spokesperson told CNN on Thursday, staff will continue to meet and the leaders will come together again next week.

    “I don’t think there’s enough progress for the leaders to get back together,” McCarthy said on Thursday, adding that he expects a meeting on debt limit next week with the four congressional leaders and the White House.

    “The White House didn’t cancel the meeting – all of the leaders decided it’s probably in the best of our interest to let the staff meet again before we get back together,” McCarthy said.

    A source familiar with the meetings insisted the delay was a “positive development” and that “meetings are progressing.”

    White House officials and aides to McCarthy and House Minority Leader Hakeem Jeffries all thought postponing the meeting was a good idea, according to another source familiar with the negotiations. The general consensus, they said, is that allowing more time for staff-level talks will ensure the leaders’ meeting would be “more productive.”

    In a sign of contention, however, McCarthy slammed the “seriousness” of the White House in debt negotiations on Thursday, saying, “it seems like they want a default.”

    The ongoing conversations between the two federal branches come at a critical moment.

    Treasury Secretary Janet Yellen recently warned that the United States could default on its obligations as soon as June 1 if Congress doesn’t find a solution addressing the debt limit. And McCarthy has said Congress will need to reach a deal in principle by next week in order to move the deal through the gears of Congress ahead of that potential default deadline.

    After an initial meeting on Tuesday in the Oval Office, those involved acknowledged that a concrete path forward to avoid default had not been secured.

    Staff for each of the offices involved have met daily since Tuesday’s meeting, relaying areas they see as red lines for each of their parties.

    House Republicans have wanted to attach spending reductions to a debt ceiling increase and have passed a debt limit plan that does just that. But Biden and congressional Democrats have insisted on passing a clean increase on the debt limit before addressing a framework for spending.

    But even as the president continues to insist he will not negotiate over raising the debt ceiling, he has said he is willing to negotiate spending levels and his staff is now racing to reach a spending agreement with Republicans before the US faces default as early as June 1.

    The White House has conveyed to congressional negotiators that Biden’s most recent legislative accomplishment, the Inflation Reduction Act, is off the table as the two sides begin to eye potential spending cuts, two sources familiar with the matter told CNN. The law, which makes historic investments in combating climate change, was targeted as part of House Republicans’ bill to cut spending alongside a debt ceiling increase.

    Among the White House’s other non-starter items: rolling back student debt forgiveness – a key campaign promise that remains tied up in litigation that was also targeted in House Republicans’ bill last month – and Medicaid and SNAP benefits.

    Inside the West Wing, there is a growing acknowledgment that the White House will have to accept spending cuts, even as the president argues the spending negotiations are not linked to raising the debt ceiling.

    And negotiators are also beginning to discuss permitting reform, which could be a part of an eventual deal, two sources said.

    Sources familiar with the matter said the White House is willing to entertain a cap on future spending, but for a far shorter period of time than the 10-year spending cuts agreed to as part of the 2011 debt ceiling standoff.

    And in early conversations, White House officials have also indicated a debt ceiling increase will need to last more than the one year, to avoid this scenario playing out again next year.

    Louisiana Rep. Garret Graves, who is helping lead GOP negotiations on the debt ceiling, on Thursday outlined four areas where he thinks there could be agreement: permitting reform, clawing back unspent Covid relief funds, work requirements and spending caps.

    Graves acknowledged that the White House indicated they “don’t like” repealing any portions of the IRA. On the length of the debt ceiling hike, Graves signaled that Republicans would be open to a two-year hike but said that would require the White House to put “more savings on the table.”

    While Biden had suggested earlier this week that he’d be open to a short-term extension, Graves ruled out the idea, saying, “As far as we’re concerned right now, it’s absolutely off the table.”

    [ad_2]

    Source link

  • Top House progressive says Democratic leaders should be concerned about debt deal support | CNN Politics

    Top House progressive says Democratic leaders should be concerned about debt deal support | CNN Politics

    [ad_1]


    Washington
    CNN
     — 

    Washington Rep. Pramila Jayapal, the chair of the Congressional Progressive Caucus, said Sunday that White House negotiators and Democratic leaders should be concerned about progressive support for the tentative deal to raise the debt ceiling for two years

    “Yes, they have to worry,” Jayapal told CNN’s Jake Tapper on “State of the Union,” referring to some of the concessions made by the White House to reach the agreement with Republicans.

    Following the announcement of the deal Saturday night, the White House and Republican leaders in Congress have been mounting an intensive push to consolidate support. But the marathon is far from over, and there remains little certainty the nation will avoid a default.

    Whether House progressives will ultimately support the deal depends on the specifics of the agreement, Jayapal said, including how many people would be affected by expanded work requirements for certain adults receiving food stamps. The deal would also expand exemptions for certain recipients.

    “It is really unfortunate that the president opened the door to this, and while at the end of the day, you know, perhaps this will – because of the exemptions – perhaps it will be OK, I can’t commit to that. I really don’t know,” Jayapal said.

    The Washington Democrat said that she was briefed by top White House official Lael Brainard after the current framework came together but that she will not make her position clear until she can see legislative text.

    “That’s always, you know, a problem, if you can’t see the exact legislative text. And we’re all trying to wade through spin right now,” Jayapal said.

    The deal – which would also freeze spending on domestic programs and increase spending on defense and veterans issues, among other things – was meant to include provisions that could sway members of both parties to vote for it.

    Senior White House officials have been calling House Democrats since Saturday night to shore up support as some in the party say the Biden administration conceded too much.

    Connecticut Rep. Jim Himes, the former chair of the pro-business New Democrat Coalition, told “Fox News Sunday” he was leaning toward a “no” vote on the tentative deal.

    Himes said he did not want to validate the negotiating process used by Republicans, “which at the end of the day is a hostage-taking process,” adding that, “as the speaker said, there is absolutely nothing for the Democrats in these things.”

    But in a positive sign for the White House’s efforts to wrangle in Democratic votes, New Hampshire Rep. Ann McLane Kuster, the current head of the New Democrats bloc, signaled that her 99-member group may support the plan.

    “Our Members are encouraged that the two sides have reached an agreement, and are confident that President Biden and White House negotiators have delivered a viable, bipartisan solution to end this crisis,” Kuster said in a statement. “We are doing our due diligence as lawmakers to ensure that this agreement can receive support from both parties in both chambers of Congress.”

    Republican Rep. Dusty Johnson of South Dakota, one of the GOP negotiators on the deal, maintained that there were “no wins for Democrats” in the agreement.

    “There is nothing after the passage of this bill that will be more liberal or more progressive than it is today. It is a remarkable conservative accomplishment,” the chair of the center-right Republican Main Street Caucus said in a separate interview on “State of the Union.”

    [ad_2]

    Source link

  • Here’s how the 14th Amendment factors into the debt ceiling debate | CNN Politics

    Here’s how the 14th Amendment factors into the debt ceiling debate | CNN Politics

    [ad_1]



    CNN
     — 

    As the stalemate over addressing the debt ceiling continues and the threat of default looms larger, President Joe Biden has resurfaced the controversial idea of using the 14th Amendment as a way to lift the borrowing cap without Congress.

    How could a 145-year-old change to the US Constitution that gave citizenship to former slaves serve as a path out of the debt ceiling drama? Government officials and legal authorities are divided over whether it does.

    Some experts, including Laurence H. Tribe of Harvard Law School, point to Section 4 of the amendment as the basis of their argument that the president has the authority to order the nation’s debts be paid regardless of the debt limit Congress put in place more than 100 years ago.

    “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned,” reads the section, which refers to the debt incurred by the Union to fight the Civil War.

    Lawmakers who crafted the amendment are very strongly saying that once the US borrows money, it has to pay it back, said Garrett Epps, a constitutional law professor at the University of Oregon. The section was designed to remove debt payments from potential post-war partisan bickering between the North and South, but it also applies to the wide divide between Democrats and Republicans today.

    “The federal government is required to pay the debt on time in full,” said Epps, who has long supported using this option in the event Congress refuses to raise the debt ceiling.

    Were Biden to invoke the 14th Amendment to allow Treasury to borrow above the debt ceiling to pay the nation’s obligations, it would almost certainly prompt a constitutional crisis and swift legal action. The president acknowledged as much, saying that he doesn’t think it would solve the current problem.

    “I’ll be very blunt with you, when we get by this, I’m thinking about taking a look at, months down the road, as to see whether what the court would say about whether or not it does work,” Biden said Tuesday after meeting with congressional leaders about the impasse.

    Treasury Secretary Janet Yellen, who has warned lawmakers that the government may default on its obligations as soon as June 1, also poured cold water on the idea.

    “There would clearly be litigation around that. It’s not a short-run solution,” Yellen said at a news conference Thursday when asked about the 14th Amendment. “It’s legally questionable whether or not that’s a viable strategy.”

    She declined to rank where invoking the 14th Amendment would fall in the list of options if Congress failed to act.

    “There are choices to be made, if we got into that situation,” she said. “But as you think about each possible thing that we could do, the answer is there is no good alternative that will save us from catastrophe. The only reasonable thing is to raise the debt ceiling and to avoid the dreadful consequences that will come if we have to make those choices.”

    Prior administrations also considered invoking the 14th Amendment but deemed it unworkable. They never had to pursue it since Congress always acted in time.

    Doing so, however, would not avoid calling into question the safety of US Treasury securities and would put the nation at risk, former Treasury Secretary Jack Lew, who served in the Obama administration, said at a Council on Foreign Relations event last month.

    “It was not meant to be a broad grant of power,” he said. “Whether you could come up with a theory that you could convince a court was legitimate, I think it’s just a risky thing to do.”

    Invoking the 14th Amendment would also open the door to potential abuse of presidential power by allowing the executive branch to circumvent Congress, said Philip Wallach, senior fellow at the right-leaning American Enterprise Institute. And it could forever end the ability of lawmakers to negotiate with the president over the debt ceiling.

    “Every time you take these actions that empower the president at the expense of Congress and at the expense of the political process, you need to ask yourself, am I going to be happy about the consequences of this the next time, when the other side’s party is sitting in the White House?” Wallach said.

    [ad_2]

    Source link

  • ‘Significant risk’ for debt default in early June, CBO reinforces | CNN Politics

    ‘Significant risk’ for debt default in early June, CBO reinforces | CNN Politics

    [ad_1]



    CNN
     — 

    There is a “significant risk” that the federal government will no longer be able to pay all its obligations in the first two weeks of June if the debt limit remains unchanged, the Congressional Budget Office said Friday.

    The forecast reinforces both Treasury Secretary Janet Yellen’s estimate and the agency’s earlier warning that House Republicans and President Joe Biden may only have a few weeks to address the debt ceiling or unleash global economic and financial upheaval. Talks are underway between White House and congressional staffers.

    Predicting just when the nation hits the so-called X-date, when a default would occur, is uncertain because of the timing and amount of revenue Treasury collects and the bills it has to pay.

    If government collections wind up being enough to keep Treasury’s coffers flush through early June, then it’s likely the government won’t default at least until the end of July, the CBO said. The agency will get another injection of funds from second quarter estimated tax payments, which are due June 15, and from an “extraordinary measure” that becomes available at the end of that month.

    About $25 billion in pay or benefits for active-duty members of the military, civil service and military retirees, veterans and recipients of Supplemental Security Income is sent out on the first day of the month, according to the CBO.

    Interest payments are made around the 15th day and on the last day of the month. May’s mid-month payment is expected to be roughly $50 billion, per the CBO. End-of-month payments range from $10 billion to $16 billion over the past half year.

    If the nation runs out of cash and extraordinary measures to satisfy all its obligations, which has never happened, it’s unknown how Treasury would react. Some payments could be delayed. These include paychecks for federal employees and contractors, as well as the military. Also, many other government payments could be affected, including funding for food stamps and federal grants to states and municipalities for Medicaid, highways, education and other programs.

    However, payments to Social Security recipients and benefits covered under Medicare Part A, largely hospital care, are financed by trust funds. The Treasury obtains cash to make those payments by borrowing, but the disbursements lower the funds’ balances, which are held in the form of Treasury securities, the CBO said.

    Because of that reduction, the payments have little net effect on the total amount of debt subject to the borrowing cap, the agency said.

    The entitlements’ trust funds may allow Treasury to continue making these payments on time, said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

    [ad_2]

    Source link

  • Biden expected to meet with Hill leaders Tuesday following ‘productive’ debt limit meetings among staff | CNN Politics

    Biden expected to meet with Hill leaders Tuesday following ‘productive’ debt limit meetings among staff | CNN Politics

    [ad_1]



    CNN
     — 

    President Joe Biden is expected to meet Tuesday with congressional leaders on the debt ceiling limit following “productive” staff-level negotiations over the weekend, two sources familiar with the talks told CNN on Sunday, as the US barrels toward a deadline that could come as soon as June 1.

    Negotiators have been able to pinpoint some areas on which congressional staff and the White House can find common ground, including revising the permitting process, rescinding unspent Covid-19 relief funds and potentially cutting spending, the sources said.

    Biden and the top four congressional leaders – House Speaker Kevin McCarthy, House Minority Leader Hakeem Jeffries, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell – held talks on the debt limit last week in the Oval Office. Tuesday’s meeting, which has not yet been officially confirmed, according to the sources, comes after a planned Friday meeting was postponed as the staff-level talks continued.

    Deputy Treasury Secretary Wally Adeyemo told CNN’s Dana Bash on “State of the Union” on Sunday that talks between the two sides have been “constructive.”

    Biden, Adeyamo said, “looks forward to getting together with the leaders to talk about how we continue to make progress.”

    Biden himself indicated on Sunday that he expected principal-level debt ceiling discussions to take place Tuesday.

    “We’re working on it right now,” he said in brief remarks to reporters as he completed a bike ride in Rehoboth Beach, Delaware.

    There is still not a clear path forward to avoid a default with just four more days before June 1 when both the House and Senate are scheduled to be in session. Biden also confirmed Sunday that he expects to depart Wednesday for Hiroshima, Japan, for the G7 summit.

    “That’s my plan as it stands now,” he told reporters in Rehoboth Beach.

    It’s become increasingly clear that some spending cuts must be included for a deal to materialize, one of the sources said, and that point of discussion has been the main sticking point in negotiations so far.

    Biden said Sunday that he was waiting to hear Republicans’ exact proposals on work requirements for certain government aid programs. He said he has voted in the past for “tougher aid programs” that are now law but “for Medicaid, it’s a different story.”

    White House spokesperson Michael Kikukawa later elaborated on the president’s answer, saying in a statement that Biden would evaluate the GOP proposals guided by the principle that they would “not take away people’s health coverage” or “push Americans into poverty.”

    Negotiators recognize they will likely need to have an outline of a deal by the end of the week to ensure a bill can pass through Congress by June 1, the sources said, but they also think there are potential congressional tools that can be used to speed up the process if needed. The sources did not specify what those tools are.

    Adeyemo reiterated Sunday that the US “can’t” default on its debt but declined to provide details on areas of agreement. He echoed Treasury Secretary Janet Yellen’s assessment that default could happen “as early as June 1” but said it “can be sometime in early June,” calling on Congress to act as he warned that default would be “catastrophic.”

    Top Treasury official says debt ceiling negotiations have been ‘constructive’

    Pressed by Bash on the timing of a deal following McCarthy’s call for an agreement in principle by early this week and business leaders like JPMorgan Chase’s Jamie Dimon warning of market panic in the absence of a deal, Adeyemo said Biden “believes we should raise the debt limit as soon as possible.”

    “Because it’s not only financial markets, but the (University of Michigan) survey of consumer sentiment last week showed that consumers are now worried about the debt limit – it’s affecting the way they’re spending,” Adeyemo said.

    Meanwhile, top Biden economic adviser Lael Brainard on Sunday echoed previous White House comments on preferring a whole deal rather than a short-term fix.

    “Short-term is not a fix. It is not really addressing that core uncertainty that CEOs are talking about. It’s just really important to take default and address it, and Congress has the tools to do that,” the director of the National Economic Council said on “Face the Nation” on CBS.

    Biden expressed optimism Sunday for an eventual agreement.

    “I remain optimistic because I’m a congenital optimist. But I really think there’s a desire on their part, as well as ours, to reach an agreement. I think we’ll be able to do it,” he said in Rehoboth Beach.

    The president had indicated last week that he was prepared for talks to go down to the wire.

    “I’ve been involved in negotiations my whole career,” he told CNN during a trip to New York. “Some negotiations happen at the last second, some negotiations happen way ahead of time. So, we’ll see.”

    Biden resurfaced last week the controversial idea of lifting the borrowing cap without Congress by invoking the 14th Amendment, which some legal experts argue gives the president the authority to order the nation’s debts to be paid regardless of the debt limit Congress sets.

    But using the 14th Amendment to let the Treasury Department borrow above the debt ceiling to pay the nation’s obligations would almost certainly prompt a constitutional crisis and swift legal action.

    Asked Sunday whether the administration would consider invoking the 14th Amendment in the absence of a deal with Congress, Adeyemo said, “What the president said was that he did not think the 14th Amendment would solve our problems now. The only thing that can solve our problems now is for Congress to lift the debt limit.”

    This story and headline have been updated.

    [ad_2]

    Source link