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Tag: public debt

  • Interest rates are high. These are the best places to park your cash | CNN Business

    Interest rates are high. These are the best places to park your cash | CNN Business

    Editor’s Note: This is an update of an article that originally ran on September 20, 2023.


    New York
    CNN
     — 

    The Federal Reserve on Wednesday chose not to raise its key interest rate, the same decision it took following its September meeting, leaving its benchmark lending rate at its highest level in 22 years.

    Given that the Fed influences — directly or indirectly — interest rates on financial accounts and products throughout the US economy, savers and people with surplus cash still have many opportunities to get a far better return on their money than they’ve had in years — and even more importantly, a return that outpaces the latest readings on inflation.

    Here are low-risk options to get the best yield on funds you plan to use within two years, and also on cash you expect to need within the next two to five years.

    The average annual percentage yield on bank savings accounts was just 0.59%, according to an October 31 survey from Bankrate. That average is kept low by a nearly zero APY at the biggest brick-and-mortar banks like JPMorgan Chase and Bank of America, which were each offering rates of just 0.01%.

    But many online, FDIC-insured banks are offering well north of 5% on their high-yield savings accounts.

    Those accounts are a great place to deposit money that you will likely deploy within the next two years — to cover anything from a planned vacation or big purchase to an emergency expense or an unexpected change of circumstance like a job loss.

    While bank deposit account yields can change overnight, they have remained high for months and are likely to continue to do so. “In the last few months, the Fed has signaled that it intends to keep rates higher for longer. … Some banks have responded to this new ‘higher for longer’ expectation by offering promotional rate guarantees on their savings or money market accounts. In the guarantee, a competitive rate is guaranteed to last for several months on the savings or money market account,” said Ken Tumin, founder of DepositAccounts.com.

    An online savings account is what certified financial planner Lazetta Rainey Braxton, co-CEO at 2050 Wealth Partners, calls your “cushion” account. She likes the word “cushion” because it describes the flexibility and options such an account gives you to handle both what you want to do in the near term and what you might need to do.

    Another way high-yield accounts can be useful, Braxton said, is to house money you’ll need to pay off a purchase for which you’ve secured a 0% financing deal for a limited period of time. In that case, you won’t owe interest on your purchase so long as you pay it off in full before the end of the promotion period, which can be anywhere from six to 24 months. In the meantime, the money can grow by 4% to 5% a year in your high-yield account.

    For your regular household bills, Braxton recommends keeping just enough cash to cover a month or two in a regular checking account for fastest access. “Not too much, because [those accounts] won’t yield much,” she said.

    You can always link your high-yield account to your checking account to transfer funds when needed — just know it may take up to 24 hours for the transferred money to show up in your checking account, Braxton noted.

    Money market accounts and funds

    If you don’t want to set up an online savings account at another bank, your own bank may offer you a money market deposit account that pays a higher yield than your regular checking or savings accounts.

    Money market accounts may have higher minimum deposit requirements than a regular savings account, but they are more liquid than a fixed-term certificate of deposit or Treasury bill, meaning they give you access to your money more quickly while still potentially giving you some of the highest yields available, said Doug Ornstein, senior manager for integrated solutions at TIAA Wealth Management.

    But don’t confuse money market accounts with money market mutual funds, which invest in short-term, low- risk debt instruments. As of Oct 31, they had an average 7-day yield of 5.19%, according to the Crane Money Fund Index, which tracks the top 100 taxable money market funds.

    Unlike money market deposit accounts, money market mutual funds are not insured by the FDIC. But if you invest in a money market fund through a brokerage, your overall account is likely to be insured through the Securities Investor Protection Corp (SIPC), which offers protection in the event your brokerage ever goes under.

    Another high-return, low-risk investment that is great for money you likely won’t need to tap for a few months or even a couple of years are certificates of deposit.

    You can get the best returns on CDs through a brokerage such as Schwab, E*Trade or Fidelity. That’s because you can comparison shop for CDs from any number of FDIC-insured banks and will not have to set up individual accounts with each institution.

    To get the greatest benefit from a CD, you have to leave the money invested for a fixed period. You can always access your principal sooner if you need to, but if you do you will forfeit at least some interest.

    As of November 1, CDs listed on Schwab.com with durations of three months, six months, nine months, one year and 18 months were all yielding at least 5.5% .

    Say you invest $10,000 in a six-month CD with a 5.5% APY. At the end of that period, you’ll get your principal back plus nearly $274 in interest when the CD matures, according to Bankrate’s CD calculator. If you put it in a one-year CD you’d earn $555 in interest, while an 18-month term will generate $844.

    If you don’t go through a brokerage you may get a reasonable deal from your primary bank. Tumin said. For example, he noted, Citi came out with an 11-month CD Special with a rate of up to 5.65% APY. But he cautions that with any big bank CD you should take your money out at the end of the term, otherwise your bank may automatically renew it and lock you in to a much lower-yielding CD.

    Another option for money you can leave untouched anywhere from several months to a few years are short-term Treasury bills, which are backed by the full faith and credit of the United States.

    Three- and six-month bills had yields of 5.46% and 5.54% respectively on November 1, while nine-month and one-year bills were offering 5.46% and 5.43%, according to rates posted on Schwab.com for a $25,000 investment.

    If you’re someone who manages your portfolio like a hawk, you may feel comfortable buying T-bills on your own from TreasuryDirect.gov. But if you don’t, it might be easier just to buy new issues through your brokerage account or invest in a short-term bond index fund or ETF, said Andy Smith, executive director of financial planning at Edelman Financial Engines.

    And if you’re looking at money that will be needed in three to five years, you might consider a diversified fund of highly rated government and corporate bonds, Ornstein said. Yields on four-year, AAA rated corporate bonds, for instance, were yielding 4.97% this week, and three-year AAA-rated municipal bonds (which are issued by local governments) had rates of 4.59%, according to Schwab.com.

    When deciding on the best accounts and investments for your specific goals and peace of mind, it may pay to consult a fee-only fiduciary adviser — meaning someone who doesn’t get paid a commission to sell you a particular investment.

    What you’ll always want to do is build in flexibility for yourself so you can easily access cash, regardless of your timeline for key goals. “What happens if something changes and you need that down payment a lot sooner — or your parents need medical care fast?” Smith said.

    That means balancing your desire for great yield with a need and desire for ease of access without penalty. Translation: Don’t chase yield for yield’s sake.

    Think of it this way, Ornstein said: Unless you have huge sums to invest or are an institutional investor, the difference between getting a 5.1% yield versus 5% is negligible, and in fact it could even cost you more if there are penalties for taking your money out early. “Most of the time convenience is really important. Give up the 0.1%,” he advised.

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  • Why you should care about the global rout in government bonds | CNN Business

    Why you should care about the global rout in government bonds | CNN Business


    London
    CNN
     — 

    A slump in government bonds around the world has pushed up the cost of some nations’ debt to levels not seen in more than a decade. That’s bad news for governments in the red but also for the wallets of millions of mortgage borrowers, stock investors and businesses.

    The sell-off has been fueled by expectations among investors that the world’s major central banks will keep interest rates “higher for longer” to bring inflation down to their targets.

    It works like this: Governments looking to raise cash for public services and investments issue bonds. A bond provides a way to borrow money from investors for a set length of time, with the obligation to make regular interest payments.

    When official interest rates rise, so do investors’ expectations for returns on bonds, known as yields. This creates an incentive for investors to sell the bonds they currently hold and buy newly issued ones that offer higher interest payments. Selling bonds reduces prices. So, in short, when yields rise, bond prices fall.

    And yields have most definitely been rising: The yield on 30-year US government bonds, also known as Treasuries, hit 5% on Tuesday for the first time since 2007. In the United Kingdom, the yield on 30-year bonds also reached 5% this week, the highest level in more than two decades.

    Yields on German long-dated bonds are back to levels last seen on the eve of the eurozone debt crisis in 2011. Yields on Italy’s 10-year bonds hit 5% on Wednesday, the highest level since 2012, when that crisis was in full swing.

    Here’s why you should care.

    The yields on local government bonds are usually used by banks to price mortgages.

    The disastrous “mini” budget unveiled by former UK Prime Minister Liz Truss in September last year provided a stark illustration of that relationship. Her plan to borrow tens of billions of pounds to fund tax cuts spooked bond investors who feared that the country’s finances were on an unsustainable path.

    The resulting sell-off in UK government bonds — called “gilts” — caused yields to shoot up, taking mortgage costs higher with them.

    The average interest on a two-year fixed-rate mortgage soared to 6.47% at the start of November 2022, according to data from product comparison website Moneyfacts, the highest level since the depths of the global financial crisis in August 2008.

    Early morning sun illuminates streets of residential terraced houses, on September 17, 2023 in Bath, England. Soaring interest rates and falling prices has meant the end of the UK's 13-year housing market boom potentially leading to a wider house price crash.

    That meant hundreds of pounds more a month in mortgage payments. Before higher mortgage rates kicked in, some panicked homeowners rushed to refinance their fixed-rate loans earlier than planned, accepting a financial penalty for doing so.

    Mortgage rates had been falling back since the drama last fall but are now back to 6.47%, this month’s data from Moneyfacts shows.

    In the United States, mortgage rates tend to track the yield on 10-year Treasuries, and that yield has risen 0.27 percentage points since late September.

    On Thursday, government-backed mortgage provider Freddie Mac announced that the average interest on a 30-year fixed-rate mortgage had hit 7.31% in the week ending September 28 — its highest level since 2000.

    “Higher mortgage rates create a standoff between potential buyers, who face some of the highest borrowing rates since 2000, and sellers, who may already enjoy a low fixed-rate mortgage and thus are less incentivized to sell,” Andrew Sheets, global head of corporate credit research at Morgan Stanley, told CNN.

    Surging government bond yields are probably coming for your stock portfolios too.

    Shares typically lose value when the yields on government debt rise, as investors can now get high returns — and a steady income — from less risky assets.

    Take the yield on 10-year Treasuries: at 4.78%, it is more than twice as high as the average yearly dividend paid out by the companies making up the S&P 500 index (SPX).

    “The higher the gilt yield goes, the less inclined, or obliged, investors will feel to take risk and pay up for other asset classes, such as shares,” Russ Mould, investment director at AJ Bell, told CNN.

    Stock indexes have tumbled on both sides of the Atlantic in recent weeks. The S&P 500 and the tech-heavy Nasdaq Composite (NDX) have shed 4% and 2.3% respectively since the Federal Reserve said late last month that it could hike rates once more this year and expected to make fewer rate cuts in 2024.

    The STOXX Europe 600 has sunk 4.5% and London’s FTSE 100 4.3% in that time.

    “Income is back,” analysts at BlackRock, the world’s biggest asset manager, wrote in a note Monday, recommending investments in short-dates US Treasuries.

    Stocks have also taken a hit in recent weeks as rising oil prices, an ailing Chinese economy and the prospect of another government shutdown in the United Stated have unnerved investors.

    High official interest rates in America and Europe have also raised the cost of borrowing for businesses.

    “Higher interest rates make borrowing less attractive, and we’ve already seen a sharp slowing of bank lending that we think is consistent with this idea,” said Sheets at Morgan Stanley.

    “It’s important to note that slower credit growth, which generally means a cooler economy, is precisely what the Federal Reserve is trying to achieve through its large recent rate hikes,” he added.

    Higher yields also mean that the government must pay more to service its debt — with less money available to spend elsewhere.

    The US government is currently sitting on a $33 trillion debt pile and is expected to incur more than $1 trillion in average annual interest costs over the next decade.

    In March, when gilt yields were much lower than now, the UK’s public spending watchdog said it expected the annual interest paid on the government’s pile of debt to peak at £115 billion ($140 billion) this year. That’s almost three times as much as the UK government plans to spend in 2023 on a key benefit for children and people with disabilities.

    Rising bond yields mean that “for any given level of borrowing, more must be spent on debt interest, leaving less scope to finance other priorities,” the Office for Budget Responsibility said in its March forecast.

    Higher gilt yields give politicians “less wiggle room to ease [the] cost-of-living pain through tax cuts or public sector pay offers,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, wrote in a note Wednesday.

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  • Government on brink of shutdown ahead of midnight deadline as McCarthy slates last-minute vote | CNN Politics

    Government on brink of shutdown ahead of midnight deadline as McCarthy slates last-minute vote | CNN Politics



    CNN
     — 

    Federal agencies are making final preparations with the government on the brink of a shutdown and congressional lawmakers racing against Saturday’s critical midnight deadline – as House Speaker Kevin McCarthy mounts a last-minute push to avert the lapse in funding.

    McCarthy announced that the House will vote on a 45-day short-term spending bill Saturday, and it will include the natural disaster aid that the White House requested.

    The bill does not include $6 billion in funding to aid Ukraine, a key concession that many House Republicans demanded and a blow to allies of Ukrainian President Volodymyr Zelensky, who lobbied Congress earlier this month for additional assistance.

    Asked if he is concerned that a member, including Republican Rep. Matt Gaetz of Florida, could move to oust him over this bill, McCarthy replied, “If I have to risk my job for standing up for the American public, I will do that.”

    Infighting among House Republicans has played a central role in bringing Congress to a standoff over spending – and it is not yet clear how the issue will be resolved, raising concerns on Capitol Hill that a shutdown, if triggered, may not be easy to end.

    Democrats in the House have been trying to slow down passage of the GOP-led continuing resolution throughout the day Saturday, objecting to being forced to vote on a bill just introduced and wanting to keep Ukraine aid. It’s unclear how long Democrats will stall the House from voting.

    House Republicans met throughout Saturday morning, seesawing between options for how to proceed. Republicans including veteran appropriators and those in swing districts pushed to bring a short-term resolution to keep the government funded for 45 days to the House floor for a vote Saturday.

    McCarthy has faced threats to keeping his job throughout the month if he works with Democrats as he endures a consistent resistance from the hardline conservatives in his own party.

    A shutdown is expected to have consequential impacts across the country, from air travel to clean drinking water, and many government operations would grind to a halt – though services deemed essential for public safety would continue.

    Both chambers are scheduled to be in session Saturday, just hours before the deadline. The Senate was expected to take procedural steps to advance their own plan to keep the government funded – GOP Sen. Rand Paul had vowed all week to slow that process beyond the midnight deadline over objections to the bill’s funding for the war in Ukraine. The Senate is now waiting to see how the House developments shake out before proceeding.

    But Paul told CNN on Saturday afternoon that he won’t slow down the Senate’s consideration of the House GOP’s 45-day spending bill, if it passes the House and the Senate takes it up, allowing the Senate the ability to move the bill quickly – though any one other senator could slow that down beyond the midnight deadline.

    House Republicans have so far thrown cold water on a bipartisan Senate proposal to keep the government funded through November 17, but they have failed to coalesce around a plan of their own to avert a shutdown amid resistance from a bloc of hardline conservatives to any kind of short-term funding extension.

    “After meeting with House Republicans this evening, it’s clear the misguided Senate bill has no path forward and is dead on arrival,” McCarthy wrote on X. “The House will continue to work around the clock to keep government open and prioritize the needs of the American people.”

    His late Friday night message came after a two-hour conference meeting in the Capitol, where McCarthy floated several different options – including putting the Senate bill on the floor or passing a short-term bill that excludes Ukraine money. But there is still no consensus on what – if anything – they will put on the House floor Saturday to avoid a government shutdown.

    McCarthy suffered another high-profile defeat on Friday when the House failed to advance a last-ditch stopgap bill.

    In the aftermath of Friday’s failed vote, McCarthy told reporters he had proposed putting up a “clean” stopgap bill, and said he was “working through maybe to be able to do that.”

    “We’re continuing to work through – trying to find the way out of this,” McCarthy said.

    The Senate’s bipartisan bill would provide additional funds for Ukraine aid, creating a point of contention with the House where many Republicans are opposed to further support to the war-torn country.

    McCarthy argued on Friday that aid to Ukraine should be dropped from the Senate bill. “I think if we had a clean one without Ukraine on it, we could probably be able to move that through. I think if the Senate puts Ukraine on there and focuses on Ukraine over America, I think that could cause real problems,” he told CNN’s Manu Raju.

    The Senate, meanwhile, is working to advance its own bipartisan stopgap bill. The chamber is on track to take a procedural vote Saturday afternoon to move forward with the bill, particularly if the last-minute House bill falters. But it’s not yet clear when senators could take a final vote to pass the bill and it may not happen until Monday, after the government has already shut down.

    Border security has also become a complicating factor for the Senate bill as many Republicans now want to see the bill amended to address the issue.

    Senate Republicans said Friday that they were still discussing what kind of border amendment they would want to add to the bill, and were unsure if the chamber could even advance the bill in Saturday’s procedural vote without the addition of a border amendment.

    “Nothing’s really coming together, too many moving parts at this stage,” said Sen. Mike Braun, an Indiana Republican. “I think what I understand is we’re going to have a vote tomorrow … and other than that, there’s nothing that’s really crystallized in anything that probably would be palatable with the House.”

    This story and headline have been updated with additional developments.

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  • White House strategy on government funding meets serious test this week | CNN Politics

    White House strategy on government funding meets serious test this week | CNN Politics



    CNN
     — 

    President Joe Biden and his top aides at the White House plan to hammer away at a blunt message as the US government inches closer to a shutdown this week: A handful of extremist Republicans are entirely to blame for the havoc that would be unleashed across the country.

    For Biden, there’s a lot riding on that message getting through to Americans.

    Biden’s advisers have been assessing for weeks how involved to get in lawmakers’ deliberations to fund the government ahead of the end-of-month deadline, and ultimately decided to take a hands-off approach. The expectation: Should the Republican-led House struggle to reach consensus, they would ultimately shoulder the blame for any disruption.

    “Watch the GOP struggle and force them to govern or be blamed for shutdown,” a Biden administration official said, summing up the strategy.

    The White House is planning to dispatch a number of Cabinet officials this week to help lay out the broad range of ramifications if the government were to shutdown – everything from flight delays to childcare centers shutting down.

    Agriculture Secretary Tom Vilsack will appear at Monday’s White House news briefing to discuss how a government shutdown could hit everything from food programs to loans for farmers, a White House official said.

    “This would stop us in our tracks,” Transportation Secretary Pete Buttigieg said on CNN on Sunday. “A shutdown that would mean service members wouldn’t get paid, coming back to transportation to air traffic controllers who would be working in the towers. They wouldn’t get paid.”

    Over the weekend, White House officials continued to monitor for any signs of movement on Capitol Hill to extend funding for the federal government ahead of the deadline. How to handle a possible shutdown was a key agenda item when White House chief of staff Jeff Zients huddled with senior advisers in the West Wing on Saturday, according to people familiar. But heading into a new work week, Republican members had not put anything realistic on the table, officials said, leaving the White House bracing for what is to come.

    In the days ahead, the president and his allies will repeatedly point to “who’s responsible” for the mess that could unfold, one senior administration official said simply.

    The White House took a similar approach this spring during the debt ceiling negotiations, but not without a seeming hit to Biden. In a CNN poll conducted mid-May, 59% of respondents said the president was not acting responsibly as talks stalled and the government careened toward default. The difference then: Republicans had coalesced around a specific position, passing a bill in the House that reflected their priorities and catching the White House off guard. Negotiations escalated in the weeks that followed, resulting in a deal that set broad guardrails around federal spending for the 2024 fiscal year.

    That deal was supposed to usher in months of in-depth appropriations work that would yield a full-year spending package and avert a government shutdown. Now, the White House says Republicans dropped the ball.

    Speaking over the weekend at the Congressional Black Caucus Foundation Phoenix Awards Dinner, Biden said it was “small group of extreme Republicans” that was refusing to “live up to the deal” that he had struck months ago with House Speaker Kevin McCarthy.

    “The president did his job,” White House press secretary Karine Jean-Pierre said when asked whether the White House would do anything to stave off a shutdown. “This is not something we can fix. The best plan is for House Republicans to stop their partisan political play and not do this to hurt Americans across the country. That’s the plan.”

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  • McCarthy privately outlines new GOP plan to avert shutdown, setting up clash with Senate | CNN Politics

    McCarthy privately outlines new GOP plan to avert shutdown, setting up clash with Senate | CNN Politics



    CNN
     — 

    House Speaker Kevin McCarthy privately outlined to members a new GOP plan to keep the government open on Wednesday after a marathon two-and-a-half-hour GOP conference meeting.

    The California Republican later told reporters that Republican negotiators made “tremendous progress as an entire conference,” following days of GOP infighting and less than two weeks before a government funding deadline.

    “We are very close,” McCarthy said Wednesday evening when asked specifically what progress had been made on the GOP short-term bill. “I feel like just got a little more movement to go there,” he added of the new GOP plan. When asked specifically about the topline numbers, he wouldn’t get into details but said: “We’re in a good place.”

    The plan, as outlined by the speaker, would keep the government open for 30 days at $1.471 trillion spending levels, a commission to address the debt and a border security package. Separately, they also agreed to move year-long funding bills at a $1.526 trillion level. That level is below the bipartisan agreement that the speaker reached with the White House to raise the national debt limit.

    The levels are also far lower than what senators from both parties and the White House are willing to accept, meaning it’s unclear how such a deal would avert a government shutdown. With just 10 days left to fund the government, the new plan sets up a standoff with the Senate over how to keep the government open.

    As part of the deal, Republicans now believe they have the votes to move forward on the yearlong spending bill that five conservative hardliners scuttled just Tuesday.

    GOP Rep. Mike Garcia of California said after Wednesday evening’s conference meeting there is now “a little more clarity” on the path forward.

    “We have a little more clarity as to a potential plan moving forward,” Garcia said, adding, “We are still negotiating that final number and trying to figure out exactly what we can do.”

    Some of the people that were previously opposed now signaled they are supportive. Reps. Ralph Norman of South Carolina and Ken Buck of Colorado indicated they will flip to a yes on the rule and will vote to advance the Department of Defense bill Thursday after the speaker came down to the spending levels that Norman had been demanding.

    “Sounds like we’ve got the votes for the rule,” Garcia said, pointing to Buck and Norman as having committed to changing to a “Yes.”

    With McCarthy’s extremely thin margin in the chamber – and Democrats so far united against the GOP proposal – Republican leadership has been negotiating for days to try to win over enough GOP support to pass their legislation.

    When asked about struggling to make progress earlier Wednesday, McCarthy repeated his favorite line, insisting he will never back down from a challenge no matter how messy.

    “I wouldn’t quit the first time I went for the vote for speaker,” McCarthy said, a reference to how he was voted speaker only after 15 rounds and days of voting in January. “The one thing if you haven’t learned anything about me yet, I will never quit.”

    However, an additional potential complicating factor emerged Wednesday night with former President Donald Trump, the front-runner for the 2024 Republican nomination, coming out in opposition to a short-term funding bill as he called on lawmakers to defund the DOJ and the investigations into him.

    McCarthy and his GOP leadership team have been trying to sell the House Republican Conference on unifying behind a plan to fund the government, brokered between the House Freedom Caucus and the more moderate Main Street Caucus over the weekend. But that proposed legislation encountered immediate opposition from more than a dozen far-right Republican lawmakers who wanted deeper spending cuts attached.

    Amid that impasse with conservatives, moderates in the bipartisan House Problem Solver’s Caucus are close to finalizing their own framework on a short-term spending bill that would fund the government for several months at current levels and include Ukraine aid and disaster assistance, according to two sources. Even with Democratic support, that plan would still likely face major challenges – not the least of which is how it would get to the floor before the government runs out of money.

    There are already signs that this alternative plan could face its own strong headwinds – not just with Republicans but with Democrats. Rep. Pramila Jayapal, a progressive Democrat from Washington state, told CNN on “Inside Politics” that she wants a “clean” continuing resolution of funds, a sign that progressives may not back some of the border security provisions that the Problem Solvers Caucus members are eyeing.

    House Democratic leader Hakeem Jeffries met with the House Problem Solvers Caucus earlier Wednesday, and said afterward that they need a bipartisan agreement in line with what was already negotiated in the debt ceiling package.

    “We need to find a bipartisan agreement consistent with what was previously reached,” he said.

    House GOP leadership announced Wednesday night that the House will be in and voting on Friday and Saturday, making official what was expected as the majority struggled to reach an agreement all week.

    The House is expected to pass a rule for the defense appropriations bill Thursday. Assuming the rule passes, the House will then start consideration of the defense bill with final passage expected Friday.

    The thinking would then be to pass the new GOP stopgap plan on Saturday, which is expected to be a full day.

    Members were advised on Tuesday to keep their schedules flexible as weekend votes were possible. Members filtering in and out of Whip Emmer’s office the past two days are insistent that they are making progress, but Rep. Kelly Armstrong of North Dakota told CNN earlier Wednesday that while they are getting closer, they are not close yet.

    Rep. Garrett Graves from Louisiana, who has been in the room for negotiations, had echoed that schedule change and projected Friday and Saturday work.

    “I think we’re going to be here this weekend,” he said.

    When pressed on what exactly they’d be up to and if they’d be able to vote by Saturday, Graves said, “Well, we won’t be having Mardi Gras parties,” indicating they’d be voting.

    Rep. Steve Womack, a Republican from Arkansas who sits on the House Appropriations Committee, lambasted the hardliners, calling it a “breach of duty.”

    “We’ve got a handful of people that are holding the rest of the conference, the majority of our conference kind of held hostage right now and in turn, holding up America,” he told CNN.

    Womack also said this will likely extend into the weekend and that “either it’s gonna be good or it’s gonna be bad.”

    This story and headline have been updated with additional developments.

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  • Americans are feeling gloomier about the economy | CNN Business

    Americans are feeling gloomier about the economy | CNN Business


    Washington, DC
    CNN
     — 

    Americans aren’t feeling gloomy about higher gas prices just yet, but they’re still on edge about inflation and the economy’s direction — and concerns are starting to surface about the possibility of a government shutdown.

    Consumer sentiment tracked by the University of Michigan edged down in September from the prior month by 1.8 points, according to a preliminary reading released Friday.

    “Both short-run and long-run expectations for economic conditions improved modestly this month, though on net consumers remain relatively tentative about the trajectory of the economy,” said the University of Michigan’s Surveys of Consumers Director Joanne Hsu in a release. “So far, few consumers mentioned the potential federal government shutdown, but if the shutdown comes to bear, consumer views on the economy will likely slide, as was the case just a few months ago when the debt ceiling neared a breach.”

    Sentiment could start to sour soon, since gas prices are highly visible indicators of inflation. Sentiment fell to its lowest level on record last summer when gas prices topped $5 a gallon and inflation reached a four-decade high. The national average for regular gasoline stood at $3.87 a gallon on Friday, according to AAA, seven cents higher than a week ago and 17 cents higher than the same day last year.

    Consumers’ expectation of inflation rates in the year ahead fell to a 3.1% rate in September, down from 3.5% in the prior month.

    This story is developing and will be updated.

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  • Why China has few good options to boost its faltering economy | CNN Business

    Why China has few good options to boost its faltering economy | CNN Business


    Hong Kong
    CNN
     — 

    Every few days for the past several weeks, a parade of Chinese leaders and policymakers have publicly vowed to do more to boost the sputtering economy, usually by promising to support the beleaguered private sector.

    Sometimes investors appear to have gained confidence from these pledges, sending shares higher.

    More often though, they’ve ignored the flurry of official messaging, hoping for more tangible stimulus measures that economists and analysts tell CNN are now unlikely to come because China has become too indebted to just pump up the economy like it did 15 years ago, during the global financial crisis.

    “We have had plenty of vague promises already, which don’t amount to a great deal so far,” said Robert Carnell, regional head of research for Asia-Pacific at ING Group.

    Except for some incremental steps to help the property market, currently mired in its worst slump in history, and tweaks to interest rates, there have been few signs of the government providing real money to struggling consumers or businesses.

    “Chinese policymakers appear unlikely to enact any major monetary or fiscal stimulus, likely fearing doing so could exacerbate China’s growing debt risks,” said Craig Singleton, senior China fellow at the Foundation for Defense of Democracies, a Washington-based non-partisan think tank.

    “At most, we can expect meager, mostly-supply side measures ostensibly aimed at, among other things, attracting more private capital and boosting electric vehicle ownership,” he added.

    After a strong start to the year after Covid restrictions were lifted, the world’s second largest economy has lost momentum.

    Since April, a slew of disappointing economic data and population statistics has sparked concern that China may be facing a period of much slower growth and possibly even heading for a future comparable to Japan’s.

    China’s economy barely grew in the April to June months compared with the previous quarter, as an initial burst in economic activity following the end of pandemic restrictions faded. Signs of deflation are becoming more prevalent, sparking concerns that China could enter a prolonged period of stagnation.

    Based on Japan’s experience in the 1990s, there is the risk that China is entering “a liquidity trap,” a scenario in which monetary policy becomes largely ineffective and consumers hold on to their cash rather than spend it, said Alicia Garcia-Herrero, chief economist for Asia Pacific for Natixis, a French investment bank.

    “In other words, there is a risk that Chinese corporates and households, pushed by their very negative sentiment about the economic outlook, prefer to disinvest and de-leverage in the light of falling revenue generation.”

    To get the economy back on track, Beijing needs to match its words with action, according to analysts.

    China “conspicuously” refrained from the giant Covid-era support seen in developed economies, according to analysts at the UBS Global Wealth Management. Fiscal stimulus, for instance, amounted to just a third of the aid offered in the United States, with no nationwide cash handouts.

    While this helped China avoid the rampant inflation shock seen elsewhere, disposable household income fell as wages and property asset values simultaneously stalled, they said in a recent research note.

    Interest rate cuts are not enough, unless they are accompanied by fiscal measures to boost demand.

    “A comprehensive policy mix — covering monetary and fiscal stimulus, including infrastructure, property, and consumption, alongside structural reforms,” would be helpful to rebuild confidence, they said.

    China’s economic trajectory is of great concern for global investors and policymakers who are counting on it to drive global expansion. But, Beijing appears to have run out of ammunition.

    Back in 2008, Chinese leaders rolled out a four trillion yuan ($586 billion) fiscal package to minimize the impact of the global financial crisis. It was seen as a success and helped boost Beijing’s domestic and international political standing as well as China’s economic growth, which soared to more than 9% in the second half of 2009.

    But the measures, which were focused on government-led infrastructure projects, also led to an unprecedented credit expansion and massive increase in local government debt, from which the economy is still struggling to recover. In 2012, Beijing said it wouldn’t be doing it again. The costs were just too high.

    China’s debt woes have only deepened during the Covid-19 pandemic, when three years of draconian restrictions and a real estate downturn drained the coffers of local government.

    Analysts estimate China’s outstanding government debts surpassed 123 trillion yuan ($18 trillion) last year. Nearly $10 trillion of that figure is so-called “hidden debt” owed by risky local government financing platforms.

    In June, Zhu Min, a former senior official at the International Monetary Fund who previously served at China’s central bank, was quoted by Bloomberg as telling the Summer Davos forum in Tianjin that he didn’t believe China would unveil massive stimulus, as the nation was already struggling with high debt levels.

    “No [fiscal stimulus] has been announced, which seems to indicate that Chinese policymakers are still wary about a too rapid increase in public debt,” said Garcia-Herrero.

    And even if Beijing were to take action, it would be less effective than in 2008, Garcia-Herrero said.

    “An infrastructure-led fiscal stimulus would need to be much bigger to have the same economic impact,” she said.

    It also implies that, if action is taken, public debt in China would jump well above the current 100% of GDP, which would place the economy “among the most indebted in the world,” she added.

    What’s worse, under President Xi Jinping, Beijing appears to have doubled down on its strategy to strengthen the party’s control over the economy, analysts said.

    A “correct response” to the economic slump would be for Beijing to return to a pro-market reform path and let the private sector play a bigger role, according to Derek Scissors, senior fellow at the American Enterprise Institute.

    But signs are “limited” that the government is considering that direction, he said.

    According to Singleton, “China’s new economic leadership team has few tools to meaningfully revive growth.”

    “Beijing’s steadfast, albeit unsurprising, refusal to acknowledge the role Xi’s economic mismanagement has played” in exacerbating China’s problems will gravely compound its broader systemic risks, he said.

    The property sector will likely be a drag on growth for years to come, Singleton said, adding that the country’s alarming debt levels and timid consumers domestically and abroad won’t help either.

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  • Going to food banks. Canceling after-school activities. How federal workers will manage a government shutdown | CNN Politics

    Going to food banks. Canceling after-school activities. How federal workers will manage a government shutdown | CNN Politics



    CNN
     — 

    The last time the federal government shut down five years ago, Jesse Santiago found himself standing in line at his local food bank, rationing medication and falling behind on his mortgage payments, which ultimately cost him his home.

    Santiago, who has worked as a Transportation Security Administration officer at Houston’s airport since 2002, likes his job and takes pride in keeping Americans safe when they fly. But he’s outraged that Congress once again is on the brink of letting the federal government shut down, throwing him and his fellow federal workers into financial and emotional chaos.

    “Imagine serving the American people only to have to beg for food,” said Santiago, who lives with his husband in Cleveland, Texas, and has started stocking up on canned beans and other nonperishable food in case this impasse drags out. “I refuse to stand in food lines again while working for the federal government.”

    Santiago is among several million federal employees who will stop being paid if lawmakers cannot agree on funding the federal agencies by the start of the coming fiscal year on October 1. Some, like Santiago, are considered essential workers and have to go to work regardless. Others will be furloughed until Congress passes a spending package, which took more than a month during the 2018-19 shutdown.

    Hundreds of people wrote to CNN to express their views about the looming shutdown. Several said they were concerned about taking trips to national parks, including a bride-to-be who is holding her wedding at one in mid-October, while many senior citizens said they were terrified they wouldn’t get their monthly Social Security checks. (In fact, Social Security payments continue during shutdowns.)

    Some charitable organizations are already offering to help federal workers get through their payless period. Earlier this week, chef Jose Andres said his World Central Kitchen restaurants in Washington, DC, would provide food to federal employees during a shutdown, as they did during the previous impasse.

    Among the hardest hit by government shutdowns are federal employees, who won’t get paid until Congress funds their agencies, and federal contractors, who don’t receive back pay. Many wrote of the toll the last shutdown – the longest on record – took on them and their concerns that they and their families will likely have to go through this again.

    For Carrie Martin, who works in the finance department of the National Institutes of Health, potentially losing her paycheck comes at a tough time. Not only is she shelling out more for groceries, rent and other essentials because of inflation, but she’ll have to start making student loan payments of a little more than $700 a month in October.

    “Not knowing when I will get my next paycheck is very stressful considering I am living paycheck to paycheck,” said Martin, who earned a master’s in health administration degree from George Washington University this spring. “Adding student loans back into my bills is making it 10 times worse.”

    Plus, she said it’s difficult to work under such uncertain conditions. She and her colleagues have been putting in extra hours preparing for the end of the current fiscal year and the start of the next one.

    “Preparing for something that may not happen takes a lot of energy out of you,” said Martin, who is also still adjusting to living on one income after her wife passed away last year.

    Other federal workers are already planning to cut back their spending.

    Nicole, a federal law enforcement officer in southern Missouri, said she won’t be able to throw a party for her 6-year-old son whose birthday is in early October. She had hoped to invite a dozen or so children since he just entered kindergarten and is starting to make friends. Instead, her son will just have cake and presents at home with his parents, grandparents and younger brother.

    “I’ll probably feel more sad than he will,” said Nicole, who did not want her last name used because of the nature of her job. “I don’t want to tap into my savings and not pay my bills.”

    Even though her husband will continue to be paid since he works in the restaurant industry, Nicole said the family will have to make sacrifices, including not signing up her older son for after-school activities, such as basketball and painting. And they’ll skip going to fall festivals in their area.

    During the last shutdown, they bought fewer groceries, reduced their cable plan and paid a decent amount of late fees on bills. Plus, they had to take out a loan from their local credit union, though at least they didn’t have to pay interest on it.

    “That was probably one of the worst things we’ve been through,” said Nicole, who still has to report to work during a shutdown.

    The stress from the 2013 impasse prompted Rob, who was a federal police officer in Washington, DC, at the time, to leave federal service. He had to work long shifts without knowing when he’d see his next paycheck.

    A decade later, Rob decided to return to the federal workforce so he could get a better-paying job than the one he has working security at a local retailer. He is currently behind on his rent and car payments and depends on food stamps to feed his family, including his 4-year-old daughter.

    Just last week, he accepted a position as a police officer at a Veterans Health Administration hospital with a tentative start date of November 5. But if the government shuts down, he fears his paperwork and medical reviews will be delayed so he’ll have to wait longer to begin the job he desperately needs.

    “This was a light at the end of the tunnel for us,” said Rob, who now lives outside of Boston and did not want his last name used for fear of losing his job offer. “I just want to work. I just want to serve my country, do my job.”

    Many federal contractors, meanwhile, are gearing up to give up their paychecks completely until Congress resolves the impasse.

    Theresa Springer of Pittsburgh is a senior consultant for a small management consulting firm that works with various federal agencies. During the last shutdown, she and her coworkers were able to take paid time off, so her income didn’t suffer even though it cost her employer hundreds of thousands of dollars. The company is making the same offer again this year, giving her around two weeks of breathing room before she stops being paid.

    Though Springer said she has the savings to get her through, she will have to watch her spending and may have to delay some purchases if there is a shutdown. Regardless, she’s irritated at lawmakers’ inability to govern and thinks they should forgo their paychecks.

    “My emergency fund is for emergencies, not for the federal government not being able to get their act together,” she said.

    The situation is also tough for small businesses that depend on federal employees, like Sue Doyle’s Home Sweet Home Cleaning Services in Columbia, Maryland. Between 10% and 20% of her clients work for the government, and many cancel their appointments during shutdowns.

    During shutdowns, Sue Doyle temporarily loses many of her clients who work for the federal government.

    Not only does that hurt her income, it cuts into the earnings of her seven employees. Doyle tries not to lay anyone off, opting instead to reduce all of their schedules. While most understand, they are frustrated because they also have bills to pay, she said.

    “A shutdown has a trickle-down consequence,” said Doyle, who is already talking to a bank about a business loan so she can cover her expenses during the impasse. “Hopefully, my employees won’t have more than one day off a week.”

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  • Fact check: Biden makes false claims about the debt and deficit in jobs speech | CNN Politics

    Fact check: Biden makes false claims about the debt and deficit in jobs speech | CNN Politics


    Washington
    CNN
     — 

    During a Friday speech about the September jobs report, President Joe Biden delivered a rapid-fire series of three false or misleading claims – falsely saying that he has cut the debt, falsely crediting a tax policy that didn’t take effect until 2023 for improving the budget situation in 2021 and 2022, and misleadingly saying that he has presided over an “actual surplus.”

    At a separate moment of the speech, Biden used outdated figures to boast of setting record lows in the unemployment rates for African Americans, Hispanics and people with disabilities. While the rates for these three groups hit record lows earlier in his presidency, he didn’t acknowledge that they have all since increased to non-record levels – and, in fact, are now higher than they were during parts of Donald Trump’s presidency.

    Here’s a fact check.

    Biden said in the Friday speech that Republicans want to “cut taxes for the very wealthy and big corporations,” which would add to the deficit. That’s fair game.

    But then he added: “I was able to cut the federal debt by $1.7 trillion over the first two-and-a – two years. Well remember what we talked about. Those 50 corporations that made $40 billion, weren’t paying a penny in taxes? Well guess what – we made them pay 30%. Uh, 15% in taxes – 15%. Nowhere near what they should pay. And guess what? We were able to pay for everything, and we end up with an actual surplus.”

    Facts First: Biden’s claims were thoroughly inaccurate. First, he has not cut the federal debt, which has increased by more than $5.7 trillion during his presidency so far after rising about $7.8 trillion during Trump’s full four-year tenure; it is the budget deficit (the one-year difference between spending and revenues), not the national debt (the accumulation of federal borrowing plus interest owed), that fell by $1.7 trillion over his first two fiscal years in office. Second, Biden’s 15% corporate minimum tax on certain large profitable corporations did not take effect until the first day of 2023, so it could not possibly have been responsible for the deficit reduction in fiscal 2021 and 2022. Third, there is no “actual surplus”; the federal government continues to run a budget deficit well over $1 trillion.

    CNN has previously debunked Biden’s false claims about supposedly having cut the “debt” and about the new corporate minimum tax supposedly being responsible for deficit reduction in 2021 and 2022. The White House, which declined to comment on the record for this article, has corrected previous official transcripts when Biden has claimed that the debt fell by $1.7 trillion, acknowledging that he should have said deficit.

    As for Biden’s vague additional claim that “we end up with an actual surplus,” a White House official said Friday that the president was referring to how the particular law in which the new minimum tax was contained, the Inflation Reduction Act of 2022, is projected to reduce the deficit. But Biden did not explain this unusual-at-best use of “surplus” – and since he had just been talking about the overall budget picture, he certainly made it sound like he was claiming to have presided over a surplus in the overall budget. He has not done so.

    Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, a liberal think tank, said in response to the White House explanation: “Well he didn’t say ‘budget surplus’ I suppose. But in federal budget conversations, the word surplus has a very specific meaning. It doesn’t mean ‘additional,’ it means revenues exceed spending.” He noted earlier Friday that there hasn’t been a federal budget surplus since 2001.

    It’s worth noting, as we have before, that Biden’s Friday comments would be missing key context even if he had not inaccurately replaced the word “deficit” with “debt.” It’s highly questionable how much credit Biden himself deserves for the decline in the deficit in 2021 and 2022. Independent analysts say it occurred largely because emergency Covid-19 relief spending from fiscal 2020 expired as scheduled – and that Biden’s own new laws and executive actions have significantly added to current and projected future deficits. In addition, the 2023 deficit is widely expected to be higher than the 2022 deficit.

    More on the corporate minimum tax

    When Biden spoke Friday about “those 50 corporations that made $40 billion, weren’t paying a penny in taxes,” he was referring, as he has in the past, to an Institute on Taxation and Economic Policy analysis published in 2021 that listed 55 companies the think tank found had paid no federal corporate income taxes in their most recent fiscal year.

    But it was imprecise, at best, for Biden to say Friday that we made “them” pay 15% in taxes. That’s because the new 15% minimum tax applies only to companies that have an average annual financial statement income of $1 billion or more – there are lots of nuances involved; you can read more details here – and only 14 of the 55 companies on the think tank’s list reported having US pre-tax income of at least $1 billion. In other words, some large and profitable companies will not be hit with the tax.

    The federal government’s nonpartisan Joint Committee on Taxation projected last year that the tax would shrink deficits by about $222 billion through 2031, with positive impacts beginning in 2023. Gardner said Friday that he fully expects the tax to play a role in reducing deficits going forward, but he said its deficit-reducing impact “might be lower than expected” in 2023 because the Treasury Department – which has been the subject of intense lobbying from corporations that could be affected – has taken so long to implement the details of the law that the Internal Revenue Service ended up waiving penalties on companies that don’t make estimated tax payments on it this year.

    Regardless, Gardner said, “The minimum tax did not reduce the deficit at all in fiscal years 2021 or 2022 because it didn’t exist during those years.”

    Early in the Friday speech, Biden boasted of statistics from the September jobs report that was released earlier in the day. But then he said, “We’ve achieved a 70-year low in unemployment rate for women, record lows in unemployment for African Americans and Hispanic workers, and people with disabilities – folks who’ve been left behind in previous recoveries and left behind for too long.”

    Facts First: Three of these four Biden unemployment boasts are misleading because they are out of date. Only his claim about a 70-year low for women’s unemployment remains current. While the unemployment rates for African Americans, Hispanics and people with disabilities did fall to record lows earlier in Biden’s presidency, they have since increased – to rates higher than the rates during various periods of the Trump administration.

    Women: The seasonally adjusted women’s unemployment rate was 3.4% in September. That’s a tick upward from the 3.3% rate during two previous months of 2023, but it’s still tied – with two months of the Trump administration – for the lowest for this group since 1953, 70 years ago.

    African Americans: The seasonally adjusted Black or African American unemployment rate was 5.7% in September, up from the record low of 4.7% in April. The current 5.7% rate is higher than this group’s rates during four months of 2019, under Trump.

    Hispanics: The seasonally adjusted Hispanic unemployment rate was 4.6% in September, up from the record low of 3.9% from September 2022. The current 4.6% rate is higher than this group’s rates for every month from April 2019 through February 2020 under Trump, plus a smattering of prior Trump-era months.

    People with disabilities: The unemployment rate for people with disabilities, ages 16 and up, was 7.3% in September, up from a record low of 5.0% in December 2022. (The figures only go back to 2008, so the record was for a period of less than two decades.) The current 7.3% rate is higher than this group’s rates during eight months of the Trump presidency, seven of them in 2019.

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  • House speaker crisis is a symptom of historic Republican divisions | CNN Politics

    House speaker crisis is a symptom of historic Republican divisions | CNN Politics



    CNN
     — 

    You might have thought it was a Democrat who recently said that House Republicans were in the “same stupid clown car with a different driver.” And while I’m sure many Democrats feel that way, it was Republican Rep. Dusty Johnson who uttered that memorable phrase.

    The South Dakota congressman was referring to the current House mess after eight Republicans voted (with Democrats) to oust Kevin McCarthy as speaker.

    But whether or not the House Republican majority elects a new speaker anytime soon is irrelevant. What we’re seeing now is something we haven’t seen in modern times.

    This episode is symptomatic of a historic Republican divide in the House: It’s not just over ideology but also over trust in their leaders to compromise in a way that makes the party happy.

    Much of the recent discussion over House Republican divisions tries to frame it along the right-left ideological spectrum. Those who voted against McCarthy are more conservative, on average, than the GOP at large – and this is a very conservative House majority. But there are plenty of Republicans who are quite conservative and didn’t vote McCarthy out (think Texas Rep. Chip Roy, for example).

    What’s also going on is a split over whether Republicans should try to govern by way of compromise. Are people willing to line up behind the compromises House GOP leaders have made with Democrats to keep the government going?

    Analyzing roll call votes in Congress can offer some answers. Not surprisingly, the Republican representative who has been the least friendly to party leadership this Congress is Florida’s Matt Gaetz, according to a metric produced by the academics at Voteview.

    More importantly, the difference on this score between those House Republicans most open to compromise and friendly to party leadership and those most opposed (i.e., the top fifth and bottom fifth percentiles) is wider than it has been in the past 80 years. These lawmakers on the edges of the conference are so important because of how narrow the current GOP majority is – all it takes is a few members to topple the speaker, as we saw earlier this month.

    Representatives like Gaetz didn’t pop out of nowhere. They are in the Congress because people elected them.

    Specifically, many of the same people who really like former President Donald Trump.

    Take a look at a question asked in our latest CNN/SSRS survey published on Thursday. We asked whether Republicans in Congress should “stand firm on beliefs without compromise, even if not much gets done in Washington, or work across the aisle to get things done in Washington, even if it means losing out on some high-priority policies?”

    A majority of voters who are behind Trump in the 2024 GOP primary contest (52%) wanted Republicans in Congress to stand firm. Among Republicans not behind Trump, just 23% preferred lawmakers who didn’t compromise. Most (77%) yearned for congressional Republicans who worked across the aisle.

    Of course, most Republicans (58%) are backing Trump in the primary, the CNN poll found. Part of Trump’s appeal is that he isn’t a conventional Republican who does business as usual.

    Therefore, it shouldn’t be surprising that a majority of Trump supporters (56%) approve of McCarthy being removed as speaker after he made a deal with Democrats to avoid a government shutdown.

    Among all other Republicans, only 37% approved of McCarthy’s ousting.

    I should note that among Republican voters, the idea of compromising to avert a government shutdown isn’t terribly different than it was a decade ago. What does seem to have changed, to some degree, is the people in Congress.

    GOP lawmakers who were seen as anti-establishment a decade ago – like Kentucky’s Thomas Massie, who voted to retain McCarthy as speaker – are apparently not anti-establishment enough these days.

    Folks like Massie have been pushed aside for folks like Gaetz. For at least some Republicans in Congress, this now is the party of Trump.

    Another key difference is that the current size of the House GOP majority is more reminiscent of the late 1990s and early 2000s than the tea party era of a decade ago.

    Some 25 years ago, NBC polling found that Republicans were far more open to compromise than they were to standing on principle. When it came to negotiations with Democratic President Bill Clinton, 63% of Republicans wanted compromise and only 28% wanted to stand on principles when forced to pick between the two choices.

    Today, Republicans again have a slim majority in the House – but with a party electorate willing to tolerate a lot in the name of principle. It’s no surprise then that we’re dealing with a House GOP leadership fight that seems more fitting of an Aaron Sorkin script than the real world.

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  • House Republicans are making a gamble with a possible Jim Jordan speakership | CNN Politics

    House Republicans are making a gamble with a possible Jim Jordan speakership | CNN Politics



    CNN
     — 

    If House Republicans elect hard-charging Jim Jordan as speaker on Tuesday, they will be picking an election denier who is known for working to shut down the government rather than running it.

    The party would be ending its two-week speakership debacle, but it’d be elevating a ringleader in former President Donald Trump’s attempt to overthrow the 2020 election into a position that is second in the line of succession behind President Joe Biden.

    A Jordan speakership would represent a huge victory for Trump, given the Judiciary chairman’s record of using his power to target Democratic presidential candidates, including Biden and 2016 nominee Hillary Clinton. Before the midterm elections last year, for instance, Jordan said at the Conservative Political Action Conference that he’d use probes into the Biden administration to “frame up the 2024 race” for Trump.

    He has been as good as his word, working to highlight the ex-president’s claims that the federal government has been “weaponized” against him in an effort to distract from the four criminal trials the GOP front-runner is now facing. And Jordan has been a prominent player in the impeachment investigation opened against Biden, despite the failure of the GOP to provide evidence that the president personally profited from the business ventures of his son in places like China and Ukraine.

    Jordan’s hopes of becoming speaker increased dramatically over the weekend as he began to turn holdouts amid an intense lobbying campaign. Some key moderates who had previously said they wouldn’t back the Ohio Republican had changed course by Monday. But given the tiny House GOP majority, Jordan can only lose a small number of Republicans and still win the job in a vote in the full House, which is expected at noon on Tuesday. Florida Rep. Gus Bilirakis will be away from the Capitol on Tuesday, further complicating the vote math for Jordan, making it so that he can only lose three Republicans.

    But this is a temporary drop until the Florida congressman returns to Washington on Tuesday evening.

    Several high-profile dissidents still insist they will only vote for former Speaker Kevin McCarthy or are firmly against Jordan, who co-founded the conservative Freedom Caucus that was instrumental in the demise of the last three Republican speakers. Jordan’s opponents have cited his role in the run-up to the January 6, 2021, insurrection – when he discussed plans to object to the results – and have concerns that his hardline positions could alienate crucial swing voters next year.

    If Jordan wins the speakership, his reputation for resistance to compromise is likely to immediately fuel fresh fears of a government shutdown caused by Republican demands for massive spending cuts. Facing a right-wing revolt, McCarthy was forced to use Democratic votes to pass a stopgap funding measure. And he paid for his effort to stave off a national crisis, which could have hurt millions of Americans, with his job. Jordan has been among the right-wing Republicans who want to use their power to bulldoze through their agenda despite the fact that Democrats control the Senate and the White House.

    As speaker, Jordan would be in control of half of one of the three branches of the US government – a role that confers duties to the Constitution and the national interest far greater than those that weigh on individual members. By definition, he’d be an insider after years as an insurgent, a switch that could be a challenge. Fellow Ohioan and former Republican House Speaker John Boehner told CBS News in a 2021 interview referring to Jordan: “I just never saw a guy who spent more time tearing things apart – never building anything, never putting anything together.”

    A Jordan victory would mark one of the most significant milestones in Washington Republicans’ embrace of an extreme right-wing populist, nationalist ideology that is more dedicated to tearing political institutions down than using them to forge change. And it would reward the eight Republicans who voted with Democrats to topple McCarthy. More broadly, it would remove power from the party’s traditional Washington, DC, political establishment, which many of the party’s grassroots voters despise, and place the Freedom Caucus at the pinnacle of power in the House.

    The shift toward Jordan over the weekend, however, may also reflect a realization by lawmakers that the optics of continued chaos in the House are disastrous for the party and sends a message of American weakness amid a raging crisis in the Middle East.

    New York Rep. Marc Molinaro, who represents a district Biden would have won in 2020 under redrawn lines, announced Monday evening that he’s backing Jordan. “What I care deeply about is getting back to governing. And having been home over the weekend, I can tell you that most people I talk to just want us to fight inflation, just want us to secure the border, just want us to govern on their behalf. And truly they just want this House to function,” he told CNN.

    And if there is anyone who could keep far-right flamethrowers in line, it is Jordan. After all, he’s one of them. If wins the speakership, he’d potentially face a choice whether to at least seek a modicum of governance to show voters that the GOP can get results ahead of the 2024 election. Just as President Richard Nixon had the political cover as a hardline anti-Communist to forge an opening to Maoist China, Jordan might have more leeway than other potential Republican leaders to make painful concessions and keep his hardliners in line.

    But choosing Jordan to end the impasse would also represent a huge risk for the GOP. His close alliance with Trump, who has endorsed the Ohio Republican for the top job, could alienate moderate voters in districts that paved the way to the party’s narrow majority in last year’s midterms. His record of full bore confrontation could exacerbate a showdown with the Democratic Senate and the White House over spending that could shut down the government by the middle of November and cause a backlash against Republicans.

    And the qualities that his supporters see in Jordan – the fearsome use of power to drum up investigations against political opponents and a pugilistic refusal to find middle ground – are not those traditionally associated with successful speakers. Jordan has no history of bringing disparate factions of his party together – quite the opposite. His brand of politics is built around his history as a champion wrestler in college. “I look at it like a wrestling match,” Jordan told the New York Times earlier this year, referring to his staccato interrogations of witnesses in hearings that made him a hero on conservative media and a Trump favorite.

    Another knock on Jordan is that he’s not known as a prolific fundraiser – one of the most important jobs of a party leader in the House. McCarthy was known for his lucrative hauls that he used to boost candidates and foster loyalty from his supporters. In fact, Jordan has actively worked against some fellow members in the past, with the political arm of the Freedom Caucus backing primary challengers to 10 GOP incumbents over the last few cycles.

    The job of the House has traditionally been to pass laws. And by that measure, Jordan is one of the least effective legislators of his generation, according to the Center For Effective Lawmaking, a joint project of the University of Virginia and Vanderbilt University.

    Still, Jordan’s supporters worked to mitigate his liabilities heading into a floor vote that would force opponents to publicly renounce him at the risk of drawing primary challenges. House Armed Services Chairman Mike Rogers of Alabama, who had been vehemently anti-Jordan, flipped after what he described as “two cordial, thoughtful and productive” conversations with the prospective speaker and securing his support for a strong defense bill. Sources familiar with Jordan’s pitch to the GOP conference told CNN’s Annie Grayer and Melanie Zanona Monday that the Ohio congressman had promised to fundraise hard for Republicans across the country and that he would also do what he could to protect moderates – potentially by ensuring that they don’t face primary challenges next year from hardline pro-Trump candidates.

    However, Zanona and Grayer also reported that some big GOP donors had vowed not to invest in the House majority under Jordan and would instead concentrate their resources on flipping the Senate next year. That GOP coolness highlights how a 2024 Republican slate featuring Trump, the front-runner for the presidential nomination, and Jordan as the most powerful Republican in Washington could delight Democrats campaigning in the battleground districts that could decide the election.

    Rep. Don Bacon, who represents a swing district in Nebraska, emerged from a meeting of Republican lawmakers on Monday evening resolved not to support Jordan, after expressing concerns that handing him the speaker’s gavel would represent a victory for the hardliners who ended McCarthy’s tenure. Bacon said he was inclined to vote for McCarthy even though the former speaker is not standing, at least in a first ballot. “I’m going to vote tomorrow and we’ll take it after that one at a time,” Bacon said.

    Another anti-McCarthy holdout is Rep. Ken Buck of Colorado, who has said “part of” the reason he is opposed to Jordan is his behavior after the 2020 election. According to the House select committee that investigated the January 6, 2021, attack on the US Capitol, Jordan was a “significant player” in Trump’s efforts to overturn the election and to block the certification of Biden’s victory in Congress, including in multiple conversations with Trump and senior White House officials.

    But some key lawmakers appear to have made their peace with Jordan’s potential speakership, partly because of the damage being done to the GOP and their potential reelection prospects by self-indulgent internal battles. New York Rep. Mike Lawler, a freshman who is one of the most endangered Republicans next year and has been a strong supporter of McCarthy, called on the House to get back to work. “At the end of the day, we need to get back to the work of the American people,” Lawler told CNN’s Jake Tapper on Monday. He said he told Jordan on Friday that he was not a “hell no” and that he’d only back him if he had the votes to become speaker.

    He shrugged off attacks that are already coming from Democrats over his possible vote for Jordan.

    “They are going to attack me no matter what I do. That’s their job, that’s their objective. They want to get back into the majority,” Lawler told Tapper.

    “My constituents know who I am, they know where I stand on these issues,” Lawler said, noting how he had fought to raise the government’s borrowing limit earlier this year, averting a debt default, and to keep the government open.

    Lawler might be right. But the potential chaos and discord Jordan could sow may give voters fresh reasons to vote against Lawler by November of next year.

    This story has been updated with additional reporting.

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  • Congress poised for messy September as McCarthy races to avoid government shutdown | CNN Politics

    Congress poised for messy September as McCarthy races to avoid government shutdown | CNN Politics



    CNN
     — 

    GOP hardliners in the House are eager to play a game of chicken over the end-of-the-month deadline to fund federal agencies, seeking to force the White House and Senate to make a choice: Accept a slew of conservative priorities or risk a debilitating government shutdown.

    And caught in the middle, once again, is Speaker Kevin McCarthy.

    In a private conference call last week, McCarthy urged his colleagues to back a short-term spending deal to avoid an October 1 shutdown and instead focus their energy on the larger funding fight later in the fall, sources on the call told CNN. His argument: The year-long spending bills to fund federal agencies would be better suited to enact cuts and policy changes they have demanded, including on hot-button issues like border security and immigration policy.

    And, he argued, if they spend too much time squabbling among themselves, they’ll end up getting jammed by senators in both parties and forced to accept higher spending levels than they’d like.

    “It’s a great place to have a very strong fight and to hold our ground,” McCarthy told his colleagues, according to a person on the call, referring to having an immigration fight on the bill to fund the Department of Homeland Security – not on short-term funding legislation that the far-right House Freedom Caucus is pushing to use as a bargaining chip.

    As the Senate returns this week after its August recess, and the House reconvenes next week, the two chambers have little time to resolve major differences over funding the government. The two sides are hundreds of billions of dollars apart after McCarthy backed away from a previous deal he cut with the White House and later agreed to pursue deeper cuts demanded by his right-flank.

    Now, the two sides will have to work together to punt the fight until potentially early December and pass a short-term funding bill – all as Congress faces other key end-of-the-month deadlines, such as an extension of federal aviation programs, and as a potential impeachment inquiry against President Joe Biden looms in the House.

    None of it will be that easy.

    The White House and senators from both parties want to tie the short-term funding bill to $24 billion in aid to Ukraine and with another $16 billion in much-needed funds for communities ravaged by a spate of natural disasters. But a contingent of vocal House conservatives are furiously opposed to quickly passing more aid to Ukraine – while GOP sources said McCarthy privately voiced displeasure at the White House for formally unveiling its funding request during the congressional recess and not briefing lawmakers.

    Moreover, to pass legislation in the House by a majority vote, the chamber must first approve a rule – a procedural vote that is typically only supported by the majority party and opposed by the minority party. Yet several hard-right conservatives told CNN they are prepared to take down the rule over the spending bill if their demands aren’t met.

    That would leave McCarthy with a choice: Either side with conservative hardliners and set up a major clash with the White House or cut a deal with Democrats and pass the spending bill by a two-thirds majority, a threshold that would allow them to approve the bill without having to adopt a rule first but could force McCarthy to give more concessions to Democrats.

    But if he works with Democrats to circumvent his far-right, McCarthy risks enraging the very members who have threatened to push for a vote to oust him from the speakership.

    GOP Rep. Mike Simpson of Idaho, who leads one of the appropriations subcommittees, acknowledged that they’ll need Democratic support for both a short-term spending patch and for any longer-term bills to fund the government – which he said could put McCarthy in a predicament.

    “The challenge for McCarthy, and I’ll be real honest with you, is that if he works with the Democrats, obviously, the Democrats are not going to do it for free. They want something. So, it’s going to be a compromise – one of those really bad words in Washington for some reason,” Simpson told CNN. “Then you’re going to find a resolution introduced on the floor to vacate the chair.”

    One GOP lawmaker acknowledged there have been conversations among conservative hardliners about using a “motion to vacate” – a procedural tool that forces a floor vote to oust the speaker – to gain leverage in the funding fight, if they feel like McCarthy isn’t sticking to his spending promises or gives too much away to Democrats.

    A few on the right, who were furious with McCarthy over his bipartisan debt ceiling deal, briefly floated the idea of triggering a motion to vacate this summer, but then dialed back their threat when it became clear there wasn’t much support for the move.

    McCarthy allies say the hard-liners are playing with fire.

    GOP Rep. Don Bacon, who represents a Nebraska swing district won by Biden, said of the right’s hardline approach to spending: “It’s not realistic.”

    “This theory that you gotta have 100% (of what you want), and if you don’t get 100, you’ll take zero – it’s not that the way it works,” he added. “And it’s not good for the country.”

    Part of the McCarthy strategy to get conservative hardliners on board is to channel their energy on other matters that won’t lead to an end-of-the-month shutdown.

    In recent weeks, McCarthy has tried to use the right’s desire to investigate and impeach Biden as part of his argument against a shutdown, warning that their probes into the administration would have to come to a halt if the government were to shut down.

    Meanwhile, the House will consider its homeland spending bill on the floor the week they return from recess, giving the right a fresh opportunity to offer amendments and shape their party’s border policy — and train their focus away from the must-pass short-term extension.

    Democrats are already trying to pin the blame on any shutdown on the House GOP.

    “When the Senate returns next week, our focus will be on funding the government and preventing House Republican extremists from forcing a government shutdown,” Senate Majority Leader Chuck Schumer said in a letter to his colleagues on Friday.

    How McCarthy deals with the immediate spending demands remains to be seen, including whether he’ll agree to pair the short-term spending bill with any aid to Ukraine.

    While Senate GOP Leader Mitch McConnell is a staunch advocate for Ukraine aid, McCarthy has been more circumspect amid loud calls from his right-flank against pouring more money into the war-torn country.

    And as he toured Maui on Saturday, McCarthy acknowledged the need for more disaster relief aid, though it’s unclear if he will separate that package from Ukraine funding — even as the White House and senators in both parties want them to move together.

    Rep. Kevin Hern of Oklahoma, leader of the conservative Republican Study Committee, told CNN that disaster relief and Ukraine “need to be separated.”

    “The president needs to come forward, or the speaker, leadership of the Republican Party, the Democrat Party need to come together to share with the American people what we’re doing, what’s the outcome of this?” Hern said.

    Simpson said of tying Ukraine aid to the short-term spending bill: “That’s a tougher sell. Particularly in our conference.”

    But advocates of more Ukraine aid say that the longer that Congress waits, the more difficult it will be to approve money needed to deter Russian aggression and the brutality of Vladimir Putin’s war.

    “I think we need to get that done because we’re not going to get it done next year, right?” said Sen. Tammy Duckworth, an Illinois Democrat. “Once you get truly into the presidential cycle, everything gets that much more difficult.”

    Hard-line conservatives are already threatening to make McCarthy’s calculus more complicated if he cuts a short-term spending deal with Democrats. Several of them are already threatening to oppose any rule if the bill falls short of their demands – a tactic that they have employed this Congress to bring the House to a halt. It would take just five Republicans to take down a rule, assuming all Democrats vote against it as they typically do.

    Rep. Ralph Norman – who serves on the House Rules Committee, where such a procedural step would originate – told CNN he hasn’t made up his mind yet on the rule.

    But the South Carolina Republican said he has concerns about the supplemental request for Ukraine aid, which he said needs to be offset, as well as top-line funding levels for their remaining spending bills.

    “There is no appetite for getting our financial house in order by anyone of either party,” he said.

    Rep. Matt Gaetz of Florida, another hardliner, also hinted that he may vote against both the short-term spending bill and the rule, but when asked for clarification by CNN, he said: “I’m on a very different decision calculus than this.”

    Gaetz didn’t respond to a follow-up question about what he meant, but later posted on social media a long list of grievances he has with GOP leadership – including on spending issues – and ended his post with: “We are going to have to seize the initiative and make some changes.”

    Some have made their demands directly known to GOP leaders, including Virginia Rep. Bob Good, who said on last week’s conference call that lawmakers shouldn’t fear a potential shutdown, according to a source on the call.

    Other Republicans made clear they want no part of a shutdown – something California Rep. Darrell Issa said is “not constructive.”

    “We will get there,” Issa said of funding the government. “Now if we get there earlier without a shutdown, the American people are better served.”

    When asked how the next few months will shake out, Simpson had some words of warning: “I tell people: buckle up. It’s going to be crazy for September, October, November, December,” Simpson said. “The next four months are going to be wild.”

    This story has been updated with additional information.

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  • Federal deficit effectively doubled in fiscal year 2023 | CNN Politics

    Federal deficit effectively doubled in fiscal year 2023 | CNN Politics



    CNN
     — 

    The US budget deficit soared in fiscal year 2023, which will likely complicate Congress’ efforts to come to a federal spending deal before government funding runs out next month.

    The deficit was $1.7 trillion for the most recent fiscal year, which ended September 30, according to Treasury Department data released Friday. That marks a $320 billion, or 23%, increase from the prior fiscal year.

    However, the deficit essentially doubled to about $2 trillion if the impact of President Joe Biden’s federal student debt cancellation plan – which the Supreme Court struck down before it took effect – is not included.

    The US Treasury Department listed the fiscal year 2022 deficit as $1.4 trillion because it took into account the cost of the president’s proposal. Without it, the deficit would have been closer to $1 trillion.

    The agency then logged the overturning of the cancellation plan as a savings for fiscal year 2023, which reduced the size of the deficit to $1.7 trillion.

    “We are a nation addicted to debt,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget. “With the economy growing and unemployment near record lows, this was the time to instill fiscal responsibility and reduce our deficits.”

    The nation’s hefty debt load will become even costlier in coming years as interest payments rise.

    “We are seeing in real time the painful combination of rising debt, inflation and interest costs, all leading to even more debt,” said Michael Peterson, CEO of the Peter G. Peterson Foundation, a nonpartisan organization that seeks to raise awareness of the US’ long-term fiscal challenges. “Interest costs rose almost 40% last year, and soon we’ll spend more on interest than we do on national defense.”

    Also contributing to the growth in the deficit was a sizable drop in tax revenue.

    More than 40% of the jump was attributable to lower tax revenues, according to Bernard Yaros, lead US economist for Oxford Economics. Individual income tax receipts plummeted because a weak stock market in 2022 resulted in lower capital gains and because the Internal Revenue Service extended the tax deadlines for much of California and parts of Alabama and Georgia due to natural disasters.

    In addition, increased spending on entitlement programs, including Social Security and Medicare, as well as on Medicaid accounted for just over a quarter of the widening in the budget shortfall, Yaros said. The growing number of Social Security beneficiaries and the inflation-fueled 8.7% cost-of-living adjustment for 2023 contributed to the rise in expenditures.

    The annual deficit data will likely factor into Congress’ already-fraught negotiations over funding federal agencies for fiscal year 2024. Lawmakers passed a stopgap spending measure on September 30, just before the federal government was set to shut down. It extended federal funding until November 17.

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  • Kevin McCarthy opens impeachment inquiry without passing budget despite once criticizing Democrats for the same | CNN Politics

    Kevin McCarthy opens impeachment inquiry without passing budget despite once criticizing Democrats for the same | CNN Politics



    CNN
     — 

    In 2019, then-Republican House Minority Leader Kevin McCarthy vehemently criticized Democrats for initiating an impeachment inquiry against President Donald Trump without first passing a budget and securing government funding to prevent a shutdown.

    Fast forward four years later and McCarthy, now the House Speaker, is pushing ahead with a formal impeachment inquiry into President Joe Biden while in the midst of another budget crisis and an unresolved looming government shutdown.

    McCarthy called for the inquiry, even as House Republicans have yet to prove allegations that Biden profited off of his son’s foreign business dealings, to appease far-right members of the Republican caucus who have threatened his speakership.

    In 2019, McCarthy said Democrats were prioritizing a politically-driven impeachment of Trump over the government’s basic responsibilities.

    “This is the day that Alexander Hamilton feared and warned would come,” he said at a news conference on December 5, 2019. “This is the day the nation is weaker because they surely cannot put their animosity or their fear of losing an election in the future in front of all the other things that the American people want.”

    “They don’t even have a budget,” he added. Congress passed a spending package two a few weeks later, averting a government shutdown.

    McCarthy did not respond to CNN’s request for comment.

    Now Congress faces a looming deadline at the end of the month to fund the government and some conservative members of the Republican caucus say they will not support a bill that doesn’t contain spending cuts.

    In comments made on radio shows and in press conferences in 2019 reviewed by CNN’s KFile, McCarthy repeatedly said Democrats’ actions demeaned the impeachment process to a point that every subsequent president could be impeached – something he said he hoped wouldn’t happen.

    “This is exactly what Alexander Hamilton warned us about, that with impeachment, that you would have a party actually grab it and, and not worry about the rule of law, but just the animosity that you have. And I’ve never seen the animosity in our lifetime,” said McCarthy to California local radio station KERN in late December 2019. “I’m sure there’s been animosity like this before, but not to this level. And maybe social media and other things drive it.

    “And if you, and if you lower it to this level, when they ended up with just those two articles, every president would’ve been impeached. And what does it mean for the future? Have we, have we now demeaned impeachment so low that everybody’s gonna have this?” he added.

    “Sometimes something happens so bad we need to learn from and come back from at this moment in time,” McCarthy continued. “I hope that’s the moment of where we are.”

    Trump was impeached for the first time by the House of Representatives in 2019 on charges of abuse of power and obstruction of Congress. The impeachment proceedings were initiated after allegations that he solicited foreign interference from Ukraine to benefit his 2020 reelection campaign and obstructed the subsequent congressional investigation.

    Trump was acquitted by the Senate in early 2020.

    McCarthy made similar comments at a press conference in November 2019.

    “I think what Republicans are doing is standing up for the constitution,” said McCarthy. “I think it’s the same thing that Alexander Hamilton warned us about, that you would use it for political gain from the same basis of going forward.

    “I think what Republicans are standing up for is the idea of what they ran on. First thing, I think a majority should do is pass a budget, which the Democrats have not done. They should actually make sure that they fund the government, which we have not done. We’re working to now have another continuing resolution, so our troops are not being provided the resources they need or the pay raise that they have earned.”

    McCarthy also lamented that impeachment has “overtaken every single committee” and emphasized “what is not being done in Congress.”

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  • How the ‘uniparty’ myth shut the House down | CNN Politics

    How the ‘uniparty’ myth shut the House down | CNN Politics

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



    CNN
     — 

    Republicans’ House speaker morass continued Tuesday with a little help from former President Donald Trump.

    Yet another lawmaker with support from most House Republicans – Rep. Tom Emmer of Minnesota, who was picked as their party’s nominee – failed to get the support of nearly all Republicans. He dropped out of the running Tuesday afternoon, leaving Republicans again back at square one.

    Emmer, who supports military aid to Ukraine and who voted to certify the 2020 election, saw his chances fade in the most bizarre possible way hours after being picked.

    Trump lobbied against Emmer with a social media post that hit while Emmer was trying to convince a few dozen skeptics on Capitol Hill and Trump was inside a New York courtroom facing civil fraud charges. Trump later told reporters outside the courtroom, “It looks like he’s finished.”

    After one fired speaker and three failed candidates who got majority but not universal support, no one seems currently capable of uniting their tiny House majority – and the idea of getting help from Democrats remains, for now, unthinkable to both Republicans and Democrats.

    It’s a situation that highlights not only Republican divisions, but also the bright line between Republicans and Democrats on Capitol Hill.

    But it’s important to note that it was born of a fringe protest meant to demonstrate there’s no difference at all between the two parties.

    The term “uniparty” has been a favorite of people like Steve Bannon, the former Trump White House official turned podcaster. He’s been using it for years in conjunction with the similarly cynical idea of Washington as a swamp that needs to be drained or the belief in a deep state that needs to be rooted out.

    Bannon’s goal is to mobilize support for dismantling the current version of the US government.

    The term also features prominently in the more-conservative-than-Fox-News media environment – networks like One America News, known as OAN, and Salem Radio.

    “Right now, we are governed by a uniparty,” Rep. Matt Gaetz, the Florida Republican, told the former Trump administration official Sebastian Gorka in a September interview on the right-wing Salem News Channel in which he argued then-Speaker Kevin McCarthy was in cahoots with President Joe Biden and the Democratic leader, Rep. Hakeem Jeffries of New York. Gaetz posted the interview on his official House website.

    “You’ve got a small band of House conservatives who are fighting, really, in a lot of ways, a political guerrilla war against that uniparty,” Gaetz said. In early October, it was Gaetz who moved to successfully oust McCarthy from the speakership.

    It’s indisputable that government spending has ballooned in recent years and reasonably arguable that it is out of control. But blaming a perceived “uniparty” is oversimplified nonsense.

    Republicans under Trump passed a tax cut bill all by themselves. Democrats under Biden passed a spending bill without help from Republicans.

    Reforming costly programs seems impossible because the two parties rarely work together, not because they secretly collude.

    Multiple Republicans who supported McCarthy have argued Democrats are to blame for the current lack of a speaker because they did not break party ranks and support McCarthy.

    There has been no substantive movement toward a unity speaker of some sort, although it is becoming hard to imagine any Republican getting enough support to become speaker without help from some Democrats.

    The current math is that any Republican can lose the support of only four party comrades and become speaker without Democratic help.

    Another lawmaker who voted to oust McCarthy is Rep. Andy Biggs of Arizona, who argued back in September that allowing the government to run out of money would not be that bad.

    “Don’t let the DC uniparty scare you into thinking that a government shutdown is the end of the world,” Biggs said on social media in September, before McCarthy used Democratic votes to pass a funding bill.

    This is a line of thinking that will get more attention, perhaps, when the government again faces a funding lapse November 17.

    RELATED: The last time the government faced a funding lapse, just last month, CNN documented how a government shutdown could impact Americans.

    Any potential speaker must find a way to both get the support of people like Gaetz and figure out how to fund the government in a little more than three weeks.

    Emmer’s downfall is yet another cautionary tale. The majority of House Republicans backed Emmer, their fourth choice this year to be speaker, in both secret ballot voting and a behind-closed-doors roll call vote.

    He had been working to convince holdouts when the post opposing him hit Trump’s social media account. For the fringe of the party, counts against Emmer include that he is a supporter of additional funding for Ukraine to repel Russia’s invasion. Foreign aid is a chief target of those who believe there is a uniparty.

    Politico noted back in 2017 that the term has roots on the American left, in the rhetoric of Ralph Nader, the consumer advocate turned Green Party presidential candidate.

    While there is not much polling on the idea of a uniparty, there is a lot of polling about the two main political parties.

    In a Pew Research Center survey published in September, just 10% of Americans said they saw “hardly any” difference between the parties. A larger portion of the country – 25% – does not feel either party represents the interests of people like them, but that sentiment is held by roughly equal shares of Republicans and Democrats.

    Similarly, about a quarter of both Republican and Republican-leaning voters and Democratic and Democratic-leaning voters do not feel well-represented by their parties.

    Interestingly, despite gripes about a uniparty by the Republican fringe, Republicans are less likely than Democrats to express an interest in more party choices, according to Pew’s survey.

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  • McCarthy says defense spending bill will get a vote this week ‘win or lose’ | CNN Politics

    McCarthy says defense spending bill will get a vote this week ‘win or lose’ | CNN Politics



    CNN
     — 

    House Speaker Kevin McCarthy said Sunday that the Defense Department appropriations bill that was paused last week before it even made it to the floor for debate will come up for a vote this week “win or lose.”

    “We will do that this week,” McCarthy said on Fox News, adding “unfortunately I had a handful of members last week that literally stopped the Department of Defense appropriations coming forward,” referring to members of his right flank who have stymied two appropriations bills thus far.

    “I gave them an opportunity this weekend to try to work through this, and we’ll bring it to the floor win or lose,” McCarthy told Maria Bartiromo.

    House Republican leadership was hoping to put a series of standalone spending bills on the floor to try to build consensus and unite the conference, but it’s been a gamble. Leadership was left scrambling over the defense spending bill after one member of the House Freedom Caucus, Rep. Ralph Norman of South Carolina, voted against the bill in the Rules Committee and another, Rep. Dan Bishop of North Carolina, told CNN he would vote against the rule on the floor.

    Both the debate and the scheduled votes were pulled minutes before the chamber was due to gavel in Wednesday.

    McCarthy on Sunday pointed a finger at the Senate, saying not only does the House have to work with the upper chamber, but that the Senate “blew up last week too. They couldn’t pass anything.”

    “And unfortunately on the Senate side, the Republicans and Democrats over there are writing bills to spend more money. Ours are the most conservative, but if we don’t ask them, we’re weaker in the negotiations. So anytime a Republican wants to hold back and stop the floor from working when Republicans have the majority, that puts us in a weaker position to win in the end of the day,” he said.

    But McCarthy said a government shutdown “would only give strength to the Democrats. It would give the power to Biden.”

    With no serious progress on Capitol Hill as Congress stares down a spending deadline at the end of the month, lawmakers are acknowledging that at this point a government shutdown is not only possible, but may soon be inevitable.

    That’s particularly true if the political dynamics at play among McCarthy, the hardliners in his conference and the US Senate don’t change fast.

    “I want to make sure we don’t shut down. I don’t think that is a win for the American public and I definitely believe that will make (Republicans’) hand weaker,” McCarthy said.

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  • House Democrats weigh risky strategy: Whether to save McCarthy | CNN Politics

    House Democrats weigh risky strategy: Whether to save McCarthy | CNN Politics



    CNN
     — 

    House Democrats have begun internal discussions about how to deal with the prospects of a chaotic situation: The possibility that Speaker Kevin McCarthy could lose his job in an unprecedented vote on the floor.

    While no decisions have been made, some of the party’s moderates are privately signaling they’d be willing to cut a deal to help McCarthy stave off a right-wing revolt – as long as the speaker meets their own demands.

    Publicly, Democratic leader Hakeem Jeffries has not weighed in on how he’d want his members to manage a challenge to McCarthy’s speakership, saying it’s hypothetical at this point. But privately, Jeffries has counseled his members to keep their powder dry, according to multiple sources, a recognition it’s better for Democrats to keep their options open as the government funding fight plays outs.

    “If somehow Democrats are asked to be helpful, it’s not just going to have to be out of the kindness of our hearts,” Democratic Rep. Dan Kildee of Michigan, told CNN. “If Kevin can’t govern with just his part – which clearly he can’t – and he wants to have a conversation with us about how to do that, we are going to have a policy conversation.”

    Asked recently by CNN if he would need to rely on Democrats to help save him, McCarthy would not say.

    “I am not worried about that,” he said.

    The private discussions have picked up steam in recent days, as a handful of hardline GOP members dig in against a series of spending bills – an effort that could catapult the government into a shutdown – and as any move the speaker takes to advance a short-term spending bill with Democrats could trigger the end of his speakership.

    If McCarthy’s position was threatened with a so-called motion to vacate, and there were five Republicans backing it, Democrats would have a major role in deciding McCarthy’s fate.

    But members who spoke to CNN made clear that any Democratic help would come at a cost. And their asking price for saving his speakership, Democratic members say, is a bipartisan deal to avoid a shutdown – a route McCarthy is not yet prepared to take, as Republicans are still trying to find consensus on a GOP plan to fund the government.

    “I think it is fair to say Democrats have a responsibility to be preparing for the possibility that there will be some sort of upheaval,” one Democratic member told CNN.

    One of the strategies being discussed by Democrats is to vote “present” or vote to kill it all together if a motion to oust McCarthy is brought to the floor. Voting present would change the threshold and make it harder for McCarthy’s critics to oust him, which would require a majority of those voting in order to succeed.

    It’s a complicated dance for Democrats, who don’t want to be seen as saving McCarthy – especially after he just launched an impeachment inquiry into President Joe Biden – and could open them up to backlash on the left. But some Democrats also fear the potential alternative: a government shutdown and the prospect of an even more right-wing lawmaker ascending to the speakership if McCarthy is ousted – or the House being paralyzed with no candidate able to win 218 votes to be elected speaker.

    “If he just jams us with something awful, and they still try to kill him, and that’s gonna be his approach to work with the Freedom Caucus, there’s less incentive (to help him),” said one Democrat. “Still, even then, you’re gonna have a lot of people who say: ‘Well I think what’s behind door No. 3 might be a lot worse.’”

    “I think if he’s willing to work together on things,” the member said, adding, “There will be enough of us to protect him.”

    It’s still not clear when or if McCarthy’s detractors would try and push the issue. Republican Rep. Matt Gaetz of Florida – one of McCarthy’s most vocal critics – would not specify Wednesday when he would move to force a vote on removing McCarthy as speaker. But he warned McCarthy against working with Democrats, and said House Republicans who work with Democrats to avoid a shutdown would be signing their own “political death warrant.”

    “If Speaker McCarthy relies on Democrats to pass a continuing resolution, I would call the Capitol moving truck to his office pretty soon because my expectation would be he’d be out of the speaker’s office quite promptly,” said Gaetz, who privately told his colleagues Wednesday there are seven Republicans who would vote against any stop-gap measure, enough to kill it if all Democrats oppose a conservative plan.

    With less than two weeks before a government shutdown, Democrats are watching the speaker’s actions carefully on spending and taking whether McCarthy is willing to cut his right flank lose in pursuit of a bipartisan deal on spending – short-handed on Capitol Hill as a continuing resolution or a CR – into consideration for how they’d act on the floor if a motion to vacate were brought forward.

    “If we were actually part of the deal, like actually part of a commonsense agreement on CR and budget, I think you would find a significant group of people willing to vote present,” one Democrat said.

    Meanwhile, as frustration in the GOP has reached a fever pitch, private talks between moderate Democrats and Republicans about a bipartisan funding deal have grown more serious: the bipartisan Problem Solvers Caucus has developed a framework for a plan, and Jeffries stopped by their meeting on Wednesday.

    Leaving the meeting, Jeffries called for a bipartisan agreement in line with what was already negotiated in the debt ceiling package – a deal cut by McCarthy but later abandoned amid pressure from his right flank to seek deeper cuts.

    “We need to find a bipartisan agreement consistent with what was previously reached,” he said.

    But the mechanism for putting such a bill on the floor is complicated. One possible option is for GOP members of the group to sign onto a so-called discharge petition, a complicated and time-consuming procedural mechanism. If five Republicans did so, it would trigger a process that could force the bill onto the floor for a vote without McCarthy having to do it. But that process would likely take too long at this point to avert a shutdown.

    Members are also discussing other procedural options with the House parliamentarian, lawmakers told CNN.

    “Failure is not an option. We’re gonna do everything we can to prevent a shutdown,” said Republican Rep. Don Bacon, who represents a swing district in Nebraska.

    Bacon warned that he would cut a deal with Democrats if they reach an impasse with conservative hardliners.

    “Well, in the end, if not, we will have to work across the aisle and get it done. I think people got that message,” he said.

    But the growing consensus is that with time running out, the most viable path to avoid a government shutdown is for the speaker to cut his right flank loose and make a deal with the middle – and then Democrats could bail McCarthy out from the inevitable vote to oust him that would be triggered by that scenario.

    Democrats considering bailing out McCarthy say it wouldn’t necessarily stop there.

    “We are having pretty broad conversations about like, use your imagination in terms of how you re-envision … this place is not working,” the member said. “I don’t think it would ever be as transactional as ‘OK, I get a vote on my bill and I am done …’ because you can’t trust him. I think then it becomes everything from what is committee presentation to how bills get pulled to the floor and how are those decisions made?”

    An opportunity to extract concessions from McCarthy, however, likely would never be enough for some Democrats. For Democrats, extending a lifeline to McCarthy could mean facing a primary challenge back home, not to mention the fact that any goodwill McCarthy might have still had with some Democrats evaporated with his announcement he was launching an impeachment inquiry into Biden.

    “There is not a chance in hell I would vote for the speaker. I barely have words. What reasonable thing has he done? What demonstrable outreach has he made to try to bring the House together, to work together in a deliberative and cooperative way,” Democratic Rep. Debbie Wasserman Schultz of Florida told CNN. “The real answer is I don’t see a scenario right now in which he would warrant my support, but I also would never say never.”

    Democratic Rep. Dean Phillips of Minnesota recently said “right now, no,” he and other Democrats would not come to McCarthy’s rescue if he faced a motion to vacate from his own party.

    “If you’d asked about two months ago I would have said absolutely. But I think sadly his behavior is unprincipled, it’s unhelpful to the country,” he said.

    He continued later: “I understand the position he’s in but these are times when people have to make a choice. Do you pander to the few or do you take care of the many?”

    Several Democrats argued that past Republican speakers – like Paul Ryan or John Boehner – may have been worth saving. But McCarthy, they argue is different.

    If McCarthy were challenged, it may only take a handful of Democrats to save him. Aside from voting “present,” they could also just vote to table the resolution – a procedural workaround that would essentially kill the effort. But, letting members walk the plank alone could be politically dangerous for moderates. Voting in total Democratic unison could shield members from the base.

    “I think we need to have a party position on it. I don’t think that has been resolved yet. It is still evolving,” Democratic Rep. Richard Neal of Massachusetts told CNN.

    Many Democrats are still weighing their options.

    “You know there are so many variables right now, I really don’t have an answer,” Rep. Mary Gay Scanlon of Pennsylvania told CNN.

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  • What could happen if the government shuts down | CNN Politics

    What could happen if the government shuts down | CNN Politics



    CNN
     — 

    The prospect of a US government shutdown grows more likely with each passing day as lawmakers have yet to reach a deal to extend funding past a critical deadline at the end of the month.

    Congressional leaders on both sides of the aisle are hoping to pass a short-term funding extension to keep the lights on and avert a shutdown. But it’s not at all clear that plan will succeed amid deep divisions over spending between the two parties and policy disagreements over issues such as aid to Ukraine.

    Here’s what to know if the government shuts down and what’s driving the current state of play:

    Government funding expires at the end of the day on Saturday, September 30 when the clock strikes midnight and it becomes October 1, which marks the start of the new fiscal year. (As shorthand, the deadline is commonly described as September 30 at midnight.)

    If Congress fails to pass legislation to renew funding by that deadline, then the federal government will shut down at midnight. Since that would take place over the weekend, the full effects of a shutdown wouldn’t be seen until the start of the work week on Monday.

    In the event of a shutdown, many government operations would come to a halt, but some services deemed “essential” would continue.

    Federal agencies have contingency plans that serve as a roadmap for what will continue and what will stop. For now, agencies still have time to review and update plans and it’s not possible to predict exactly how government operations would be impacted if a shutdown were to take place at the end of the month.

    Government operations and services that continue during a shutdown are activities deemed necessary to protect public safety and national security or considered critical for other reasons. Examples of services that have continued during past shutdowns include border protection, federal law enforcement and air traffic control.

    Federal employees whose work is deemed “non-essential” would be put on furlough, which means that they would not work and would not receive pay during the shutdown. Employees whose jobs are deemed “essential” would continue to work, but they too would not be paid during the shutdown.

    Once a shutdown is over, federal employees who were required to work and those who were furloughed will receive backpay.

    In the past, backpay for furloughed employees was not guaranteed, though Congress could and did act to ensure those workers were compensated for lost wages once a shutdown ended. Now, however, backpay for furloughed workers is automatically guaranteed as a result of legislation led by Sen. Ben Cardin, a Maryland Democrat, that was enacted in 2019. Employees deemed “essential” and required to work were already guaranteed backpay after a shutdown prior to the passage of that legislation.

    And federal employees aren’t the only ones who can feel the effects of a shutdown.

    During past shutdowns, national parks have become a major focal point of attention. Although National Park Service sites across the country have been closed during previous government shutdowns, many remained open but severely understaffed under the Trump administration during a shutdown in 2019. Some park sites operated for weeks without park service-provided visitor services such as restrooms, trash collection, facilities or road maintenance.

    “If you’re a government worker, it’s highly disruptive – whether you’re not going to work or whether you are,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan, nonprofit organization. “If you’re somebody who wants to use one of the services that you can’t get access to … it’s highly disruptive. But for many people … all the things that they are expecting and used to seeing of government are still happening and the inconveniences and the kind of wasted time and wasted resources aren’t things that they see and feel directly.”

    There is a deep divide between the House and Senate right now over the effort to reach consensus on and pass full-year spending legislation as House conservative hardliners push for deep spending cuts and controversial policy add-ons that Democrats as well as some Republicans have rejected as too extreme.

    With the funding deadline looming, top lawmakers from both parties hope to pass a short-term funding extension known on Capitol Hill as a continuing resolution or CR for short. These short-term measures are frequently used as a stopgap solution to avert a shutdown and buy more time to try to reach a broader full-year funding deal.

    It’s not clear, however, whether there will be enough consensus to pass even a short-term funding bill out of both chambers before the end of the month as House conservatives rail against the possibility of a stopgap bill and have threatened to vote against one while demanding major policy concessions that have no chance of passing the Senate.

    A fight over aid to Ukraine could also take center stage and further complicate efforts to pass a short-term bill.

    Senate Democrats and Republicans strongly support additional aid to Ukraine, which could be included as part of a stopgap bill, but many House Republicans are reluctant to continue sending aid and do not want to see that attached to a short-term funding bill.

    The White House issued a stark warning this week that a shutdown could threaten crucial federal programs.

    In its warning, the White House estimated 10,000 children would lose access to Head Start programs across the country as the Department of Health and Human Services is prevented from awarding grants during a shutdown, while air traffic controllers and TSA officers would have to work without pay, threatening travel delays across the country. A shutdown would also delay food safety inspections under the Food and Drug Administration.

    “These consequences are real and avoidable – but only if House Republicans stop playing political games with peoples’ lives and catering to the ideological demands of their most extreme, far-right members,” the White House said.

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  • Bipartisan House caucus leaders say ‘all options are on the table’ as shutdown looms | CNN Politics

    Bipartisan House caucus leaders say ‘all options are on the table’ as shutdown looms | CNN Politics



    CNN
     — 

    With government funding slated to run out September 30, the leaders of the bipartisan House Problem Solvers Caucus told CNN on Sunday that “all options are on the table” to force a vote on their alternative stopgap plan to avert a shutdown.

    There is no consensus plan to keep the government funded, and persistent opposition by a bloc of conservatives to House GOP leadership’s agenda has made any effort to pass a stopgap bill in the House a major challenge.

    While the caucus leaders, Reps. Brian Fitzpatrick and Josh Gottheimer, said they hope House Speaker Kevin McCarthy puts the measure on the floor, they said they have spoken with the parliamentarian about other avenues and raised the possibility of using a discharge petition – an arcane procedural step – to force a vote.

    The procedural tool can be used to force a floor vote, but only if a majority of House members sign on in support. Discharge petitions rarely succeed because of how high the threshold is to clear.

    “We’re going to do whatever it takes to get that bill on the floor. … A discharge petition is one of several options, and a group of us met with the parliamentarian this past week to discuss all the options we have to force a vote on our bill,” Fitzpatrick, a Pennsylvania Republican, told CNN’s Dana Bash on “State of the Union.”

    Gottheimer, a New Jersey Democrat, added: “I think our plan is reasonable. And it deals with the extremes and … instead of burning the place down as, Speaker McCarthy said of the far right, it actually provides a reasonable, commonsense solution working with people like Brian Fitzpatrick who want to get things done.”

    The caucus last week endorsed a potential backup plan if House Republicans are unable to pass their stopgap bill alone. The bill would fund the government through January 11 and include Ukraine aid, disaster response and border security provisions.

    “This is a decision the speaker is gonna have to make. He can bring that reasonable bill to the floor that we’ve proposed, and I guarantee you’re gonna get Democrats (and) Republicans coming together to support it and we can keep the lights on,” Gottheimer said.

    McCarthy, who is under pressure and has faced threats of an ouster, said Saturday he still lacks support from a handful of GOP hardliners to put a stopgap measure on the floor, making a shutdown likely.

    Rep. Tim Burchett, one of the holdouts, told CNN on Sunday he is still a “no” on passing a stopgap funding bill.

    “No, ma’am,” the Tennessee Republican told Bash. “I think it’s completely blowing away our duties. We have a duty to pass a budget.”

    He also said he would strongly consider support for ousting McCarthy if the California Republican cuts a deal with Democrats to keep the government open.

    “That would be something I’d look strongly at, ma’am, if we do away with our duty that we said we’re going to do,” Burchett said.

    McCarthy has been hoping the momentum of a handful of appropriations bills, which will head to the House floor this week, would bring some of those holdouts into the fold. But Burchett’s comments Sunday are the latest indication that hope may be in vain.

    “We’re sticking to our guns and all of a sudden we’re the bad guys because we want to balance our budget,” Burchett said.

    Another holdout, Rep. Matt Gaetz of Florida, said Sunday that McCarthy is in “breach” of promises he made regarding government spending when elected speaker.

    “We should have separate single-subject spending bills. Kevin McCarthy promised that in January, he is in breach of that promise, so I’m not here to hold the government hostage, I’m here to hold Kevin McCarthy to his word,” Gaetz said on Fox News’ “Sunday Morning Futures.”

    Gaetz added it would be fine if some departments shut down for a few days if it meant measures such as the Homeland Security appropriations bill passed first.

    “If, you know, the (departments) of Labor and Education have to shut down for a few days as we get their appropriations in line, that’s certainly not something that is optimal, but I think it’s better than continuing on the current path we are to America’s financial ruin,” Gaetz said.

    The holdouts’ comments come as the White House urges Republicans to find a solution, warning that a government shutdown could threaten crucial federal programs.

    “Funding the government is one of the most basic responsibilities of Congress, and it’s time for Republicans to start doing the job America elected them to do,” President Joe Biden said Sunday at an event held by the Congressional Black Caucus Foundation.

    Speaking on Sunday to CNN’s Bash, Transportation Secretary Pete Buttigieg called on House Republicans to “come to their senses and keep the government running.”

    “This is something that can and should be prevented,” Buttigieg said on “State of the Union.” He echoed Biden administration talking points, saying Republicans should hold up their end of the agreement made this year during debt ceiling negotiations.

    The White House has warned of massive disruptions to air travel if the government shuts down, as tens of thousands of air traffic controllers and Transportation Security Administration personnel will have to work without pay.

    “They’re under enough stress as it is doing that job without having to come into work with the added stress of not receiving a paycheck,” Buttigieg said of air traffic controllers.

    He added, “The American people don’t want to shutdown. From what I can tell, the Senate is ready to go. The administration is ready to go. House Republicans need to come to their senses and keep the government running.”

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  • White House readies itself for operating in a government shutdown | CNN Politics

    White House readies itself for operating in a government shutdown | CNN Politics



    CNN
     — 

    The White House is now “girding for a shutdown” and senior West Wing officials are drawing up plans for which personnel would be deemed “essential” starting on October 1 as the deadline to fund the government is only a handful of days away.

    Most of President Joe Biden’s senior-most aides are expected to be designated “essential,” meaning they would not be furloughed, one administration official said. The contingency planning currently underway kicked off in earnest on Friday when the Office of Management and Budget began its formal process of communicating with agencies about the possibility of bringing to halt all work deemed “non-essential.”

    Within the ranks of the White House, prior shutdowns have seen employees whose roles carrying the title “Special Assistant to the President” – a rank that also carries access to the Navy Mess – automatically deemed to be serving in essential roles. A 2023 directory of White House staff and salaries submitted to Congress each year showed 97 employees with that title.

    Even Biden is planning to remain in Washington this weekend, a relatively rare occurrence, as the likelihood of a shutdown loomed. He typically decamps for one of his Delaware homes or Camp David on Friday afternoons, but White House press secretary Karine Jean-Pierre told reporters Tuesday that he would remain in the capital.

    The active preparations related to White House staffing is yet another sign of the widespread anticipation in Washington that lawmakers on Capitol Hill may fail to find a way to fund the government by the end-of-month deadline.

    With four days until funding expires, Senate leadership on Tuesday reached a deal that would keep the government open through November 17, with $6.2 billion in funding for Ukraine and $6 billion for domestic disasters, CNN reported. A White House official had said earlier this week that Biden would be “broadly supportive” of a Senate-brokered deal, even if it included a fraction of the $24 billion the administration was seeking to continue assisting Ukraine.

    But even after a deal was reached in the Senate, White House officials maintained that the ultimate outcome remained unpredictable, in large part because it was impossible to guess what House Speaker Kevin McCarthy’s next moves might be. McCarthy, who may see a harder-line package with steeper spending cuts as the antidote to his intra-party politics, has not committed to putting a bipartisan Senate bill on floor for a vote.

    “Ultimately it’s going to come down to Kevin McCarthy and his conference,” said National Security Council coordinator for strategic communications John Kirby on CNN’s “The Lead with Jake Tapper.”

    Behind the scenes, the White House is not confident the two chambers can reach a mutually agreed deal in the next few days.

    “Nothing is inevitable, but every day that passes, it’s more likely,” a White House official said of a shutdown. “It’s hard to say we are confident about anything.”

    The White House has been closely monitoring the ongoing deliberations on Capitol Hill, including McCarthy’s efforts to placate some of the hardline members of his own caucus, as well as the deliberations in the Senate.

    Yet without a direct role in the negotiations, the White House strategy has been as much about messaging as it is about finding a funding solution. Biden’s aides are broadly confident that Republicans will catch the blame if the government shutters, and the president recorded a video this week pointing the figure at a “small group of extreme House Republicans” he said are “determined to shut down the government.”

    House Republicans, he added, “refuse to stand up to the extremists in their party – so now everyone in America could be forced to pay the price.”

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