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  • Income Tax Deadline Fast Facts | CNN

    Income Tax Deadline Fast Facts | CNN

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    CNN
     — 

    Here’s a look at the annual income tax filing deadline in the United States. April 15, 2024, is the deadline to file 2023 income tax returns.

    In fiscal year 2022, the IRS amassed more than $4.9 trillion in gross tax collections.

    (Source: Center on Budget and Policy Priorities, FY 2023)
    Medicare, Medicaid, CHIP, marketplace subsidies 24%
    Social Security 21%
    National Defense 13%
    Economic security programs 8%
    Benefits for veterans & federal retirees 8%
    Interest on debt 10%
    Education 4%
    Transportation 2%
    Natural resources and agricultrue 1%
    Science and medical research 1%
    Law enforcement 1%
    International 1%
    All other 4%

    1862 – During the Civil War, the IRS is born when President Abraham Lincoln and Congress create the Commissioner of Internal Revenue and enact an income tax to pay war expenses. The first income tax levies 3% on incomes between $600 and $10,000 and 5% on anything over $10,000. This income tax lasts until 1872.

    1895 – The Supreme Court rules in Pollock v. Farmers’ Loan and Trust Co. that taxing incomes uniformly throughout the United States is unconstitutional.

    1913 – The 16th Amendment is ratified by the states, giving Congress the authority to enact an income tax. Congress also introduces the first 1040 form and levies a 1% tax on personal incomes over $3,000 with 6% surtax on incomes of more than $500,000.

    1954 – The tax filing deadline is moved from March 15 to April 15, to give taxpayers more time to prepare their returns.

    January 3, 1996 – Congress enacts the Taxpayer Bill of Rights to ensure relief from overzealous collection efforts on the part of IRS personnel.

    March 20, 2020 – Secretary of the Treasury Steven Mnuchin tweets that tax day is moving from April 15 to July 15 due to the coronavirus pandemic.

    March 17, 2021 – The IRS announces the filing deadline has been moved from April 15 to May 17, to allow filers more time to navigate tax situations complicated by the coronavirus pandemic.

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  • Russian banker dies suddenly from ‘heart attack’ in latest mystery death

    Russian banker dies suddenly from ‘heart attack’ in latest mystery death

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    A TOP Russian banker has died suddenly from a “heart attack” at the age of 42, the latest in a series of prominent early deaths.

    Nikolay Vasyov was senior vice president of Sberbank, the country’s largest financial institution.

    1

    Top Russian banker Nikolay Vasyov has died suddenly from a ‘heart attack’ at the age of 42

    Initial analysis by doctors said his “untimely death” was due to a “heart attack”, said the bank.

    However, further details were not released on the circumstances of his death.

    “It is with deep regret that we inform you that today Nikolay Vasyov, senior vice president, Head of the B2C Customer Experience Development block of Sberbank, suddenly passed away,” a statement read.

    “According to the preliminary conclusion of doctors, death was due to a heart attack.”

    His death follows a number of prominent business and banking figures dying young or in unusual circumstances since Vladimir Putin prepared for his invasion of Ukraine.

    It comes amid deep strains in Russia’s financial sector caused by Putin’s war and the impact of Western sanctions.

    Sberbanks profits plunged almost 80 per cent last year, alone.

    A statement from Sberbank said: “The bank’s management and colleagues mourn the untimely death and express deep condolences to the family and loved ones of Nikolay Vasyov.”

    Vasyov had been closely associated with mortgages and loans at Sberbank and appeared to be close to the pro-Putin head of the bank, German Gref, a former government minister.

    “Nikolay is a passionate professional, bold in his decisions, inquisitive and open to new knowledge,” said Gref of him in 2020.

    “I thank Nikolay for his strong results.”

    Vasyov’s passing follows the mysterious death of the third top executive at Russia’s second largest oil company within a year and a half.

    Vladimir Nekrasov, 66, chairman of the Lukoil board of directors, died “suddenly” last month.

    Russian state media said at the time that the “preliminary” conclusions of doctors was that Nekrasov suffered “acute heart failure”.

    His death follows that of tycoon Ravil Maganov, 67, who fell from a window of Moscow’s elite Central Clinical Hospital, also known as the Kremlin clinic, in September last year.

    There were suspicions of murder but Maganov had been in hospital for a longstanding heart problem prior to falling from a sixth floor window, dying on the spot.

    Billionaire Alexander Subbotin, 43, also linked to energy giant Lukoil where he was a top manager, was found dead in May 2022 after “taking advice from shamans”.

    One theory is that Subbotin – who also owned a shipping company – was poisoned by toad venom triggering a heart attack.

    Among other cases during the war was wealthy Vladislav Avayev, 51, a former Kremlin official, who appeared to have taken his own life after killing his wife Yelena, 47, and daughter, 13.

    He had high level links to leading Russian financial institution Gazprombank.

    Friends disputed reports that he was jealous after his wife admitted she was pregnant by their driver.

    There were claims he had access to the financial secrets of the Kremlin elite.

    Several days later multimillionaire Sergey Protosenya, 55, was found hanged in Spain, after evidently killing his wife Natalia, 53, and their teenage daughter, Maria, with an axe.

    He was a former deputy chairman of Novatek, a company also closely linked to the Kremlin.

    As with Avayev, it is suggested this may have been an assassination  made to appear a murder-and-suicide.

    Naked Yevgeny Palant, 47, a mobile phone multi-millionaire, and his wife Olga, 50, both Ukrainian-born, were found with multiple knife wounds by their daughter Polina, 20.

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  • 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

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    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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  • Lionel Messi Fast Facts | CNN

    Lionel Messi Fast Facts | CNN

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    CNN
     — 

    Here is a look at the life of soccer player Lionel “Leo” Messi, who plays for Argentina’s national team and Major League Soccer (MLS) club Inter Miami.

    Birth date: June 24, 1987

    Birth place: Rosario, Argentina

    Birth name: Lionel Andrés Messi

    Father: Jorge Messi, factory worker

    Mother: Celia Cuccittini de Messi

    Marriage: Antonela Roccuzzo (June 30, 2017-present)

    Children: Ciro, Mateo and Thiago

    As a young boy, Messi was diagnosed with a growth hormone deficiency. At age 13, he signed with Futbol Club Barcelona and moved to Spain. As part of the contract, FC Barcelona agreed to pay for Messi’s hormone treatments.

    All-time leading scorer of FC Barcelona and Spanish soccer league La Liga.

    Winner of the Ballon d’Or, or footballer of the year, a record eight times: a record four consecutive years (2009-2012) and again for 2015, 2019, 2021 and 2023.

    Won the European Golden Shoe award six times: 2009-10, 2011-12, 2012-13, 2016-17, 2017-18 and 2018-19.

    1995-2000 – Plays for the local club team, Newell’s Old Boys, in Rosario, Argentina.

    2000-2003 – Signs with FC Barcelona and works his way up through Barca’s youth squads.

    November 16, 2003 – Makes his team debut, as a replacement in a friendly match against FC Porto.

    October 16, 2004 – Makes his official debut for FC Barcelona against Espanyol. Barca wins 1-0.

    2007 – Establishes the Leo Messi Foundation, working to improve access to education and health care for children.

    August 2008 – Leads Argentina’s soccer team to a gold medal at the Summer Olympics in Beijing.

    March 11, 2010 – Messi is announced as a UNICEF Goodwill Ambassador.

    2011-2012 season – Sets the all-time record for most goals scored in a single season for a major European football league, with 73 goals.

    June 2013 – Prosecutors in Barcelona file tax fraud charges against Messi and his father for the period between 2007 and 2009. The complaint alleges that Messi and his father, aiming to lower their Spanish tax bill, sought to manage the player’s lucrative income from image rights through shell companies set up overseas. Messi denies all allegations of wrongdoing.

    June 25, 2013 – Prosecutors in Barcelona tell CNN that Messi paid €10 million ($13 million) in taxes to cover the tax period 2010-2011, but efforts to prosecute him for alleged tax fraud from 2007 to 2009 are still ongoing.

    August 14, 2013 – Messi and his father, Jorge Messi, make a “reparatory” payment of €5 million ($6.6 million) to Spanish authorities for allegedly committing tax fraud between 2007 and 2009.

    September 27, 2013 – Messi and his father testify in a Barcelona court in a preliminary hearing over allegations they defrauded Spanish tax authorities of more than $5 million.

    March 16, 2014 – Scores a hat-trick (three goals during a game), to become FC Barcelona’s all-time leading scorer with 371 goals, eclipsing the record set by Paulino Alcantara, who scored 369 goals.

    May 2014 – Signs a new contract with FC Barcelona for a reported annual net of €20 million ($27 million).

    June 2014 – A Spanish state prosecutor asks the judge to drop the tax fraud charges against Messi, but not his father.

    July 13, 2014 – Messi wins the Golden Ball award for the best player of the World Cup tournament.

    July 28, 2014 – A judge rules that the tax fraud case against Messi and his father will proceed, despite the Spanish state prosecutor’s June request that the charges against Messi be dropped.

    November 22, 2014 – Messi scores a hat-trick to become the Spanish league’s all-time leading goalscorer with 253 goals, surpassing Telmo Zarra’s previous record of 251 goals.

    October 8, 2015 – A Spanish court rules that Messi and his father will stand trial for tax fraud charges.

    May 31, 2016 – The tax fraud trial begins for Messi and his father.

    June 27, 2016 – Says he probably will retire from international soccer after Argentina loses the Copa America final to Chile on penalties.

    July 6, 2016 – A Barcelona court fines Messi €2 million ($2.3 million), and sentences him to 21 months in prison for tax fraud. The Spanish courts reduces Messi’s prison sentence to an additional fine of €252,000 ($287,000) in July 2017.

    August 12, 2016 – Messi announces that he will play for Argentina once again, having stated in June that he would retire from international soccer.

    July 5, 2017 – Barcelona and Messi announce a contract extension that will keep Messi at Barca until June 30, 2021, and is reportedly worth €565,000 ($645,000) a week.

    January 13, 2019 – Scores his 400th Spanish league goal in his 435th appearance, extending his record as La Liga’s all-time top scorer. Messi is the first player to score 400 times in any of Europe’s “big five” leagues.

    August 2, 2019 – Messi is banned from all competition for three months and fined $50,000 by the CONMEBOL Disciplinary Court. The punishment comes after Messi accused South American football’s governing body of corruption, suggesting the 2019 Copa America was rigged in favor of hosts Brazil.

    August 5, 2021 – Messi is leaving FC Barcelona, according to a statement from the club.

    August 10, 2021 – French club Paris Saint-Germain announces signing Messi to a two-year contract with an option of extending for a third year.

    January 2, 2022 In a statement, Paris Saint-Germain announces Messi is one of four players of the French club to have tested positive for Covid-19. The other three players are Juan Bernat, Sergio Rico and Nathan Bitumazala.

    May 30, 2022 – Speaks about his struggle to recover from Covid-19 after testing positive in January. He missed three matches: two in Ligue 1 and one in the French Cup. “It left me with after effects. It left me with after effects in my lungs. I came back and it was like a month and a half without even being able to run because my lungs were affected.”

    December 18, 2022 – Argentina defeats France to win the World Cup. Messi, playing in his fifth and final World Cup, scores twice. Later, Messi wins his second Golden Ball award.

    June 7, 2023 – Messi says he’s going to join the MLS club Inter Miami. “I made the decision that I am going to Miami. I still haven’t closed it one hundred percent. I’m missing some things but we decided to continue my journey there,” he says in an interview posted by Spanish outlets SPORT and Mundo Deportivo. On July 21, he makes his debut with the club.

    August 19, 2023 – Messi scores to lead Inter Miami past Nashville FC in a penalty kick shootout to capture the Leagues Cup title and score the club’s first trophy.

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  • IRS has collected $160 million in back taxes by cracking down on millionaires | CNN Politics

    IRS has collected $160 million in back taxes by cracking down on millionaires | CNN Politics

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    Washington
    CNN
     — 

    The Internal Revenue Service has collected $160 million in back taxes this year by cracking down on millionaires who haven’t paid what they owe, the agency said Friday.

    The recent effort to target high-income individuals has been boosted by an increase in federal funding provided by Democrats last year through the Inflation Reduction Act. Republicans have criticized the amount of money the IRS is getting, and future funding is uncertain.

    In September, the IRS started seeking back taxes from about 1,600 taxpayers with income above $1 million and more than $250,000 in tax debt. So far, the IRS has closed 100 of those cases, collecting $122 million, it said Friday.

    Earlier this year, the IRS collected $38 million from more than 175 high-income earners. That brings the total to $160 million so far this year.

    “I think that the evidence that we’ve seen to date, in terms of the amount that we have recovered … points to this being a highly important effort for us,” IRS Commissioner Danny Werfel said on a call with reporters.

    In one successful case, an individual was ordered to pay more than $15 million in restitution last month for falsifying personal expenses as deductible business expenses, including the construction of a 51,000-square-foot mansion complete with an outdoor pool and pool house, as well as tennis, basketball and bocce courts, according to an IRS press release. The person also falsified expenses for luxury vehicles, artwork, country club memberships and homes for his children.

    Another individual pleaded guilty last week to filing false tax returns and skimming more than $670,000 from his business. The person spent $110,000 on personal expenses and $502,000 on gambling, the IRS said.

    The agency’s effort to ramp up enforcement aims to narrow what’s known as the “tax gap,” the difference between the amount owed and the amount actually collected on time by the IRS. The most recent estimate shows that $688 billion was not collected during tax year 2021.

    The IRS plans to bring a new focus to cracking down on large corporations that have not been paying the taxes they owe.

    The agency will target US subsidiaries of foreign companies that distribute goods in the US and do not pay what they owe in taxes on the profit they earn. It will start sending compliance notices next month to about 150 subsidiaries to “reiterate their US tax obligations and incentivize self-correction,” the announcement said.

    As new accountants come on board at the IRS in early 2024, they are expected to begin 60 audits of some of the largest corporate taxpayers. The targeted corporations will be selected by the IRS accountants using a combination of artificial intelligence and subject matter expertise that will better detect tax cheating. The use of technology is meant to help avoid burdening taxpayers with needless audits.

    The Inflation Reduction Act, which included a provision to deliver $80 billion to the IRS over 10 years, has allowed the agency to begin a complete overhaul of its operations. It’s working to hire new staff, update technology, improve taxpayer services and audit tax cheats.

    The new funds have already helped improve taxpayer services at the IRS. In the 2023 filing season, it answered 3 million more calls and cut phone wait times to three minutes from 28 minutes compared with the year before.

    The IRS is currently working on building its own free tax filing program, known as Direct File, that will launch as a limited pilot program next year.

    The IRS has also put a plan in motion to digitize all paper-filed tax returns by 2025. The move is expected to cut processing times in half and speed up refunds by four weeks.

    Republicans have raised questions about whether the $80 billion investment in the IRS would lead to increased audits for average Americans. Earlier this year, Republican lawmakers were able to reclaim $20 billion of the funding in a bipartisan deal to address the debt ceiling.

    The White House argued that the cut won’t fundamentally change what the IRS can do over the next few years. Biden administration officials have also repeatedly said that taxpayers earning less than $400,000 a year won’t face an increase in audits due to the new funding.

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  • The IMF sees greater chance of a ‘soft landing’ for the global economy | CNN Business

    The IMF sees greater chance of a ‘soft landing’ for the global economy | CNN Business

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    London
    CNN
     — 

    The International Monetary Fund (IMF) sees better odds that central banks will manage to tame inflation without tipping the global economy into recession, but it warned Tuesday that growth remained weak and patchy.

    The agency said it expected the world’s economy to expand by 3% this year, in line with its July forecast, as stronger-than-expected growth in the United States offset downgrades to the outlook for China and Europe. It shaved its forecast for growth in 2024 by 0.1 percentage point to 2.9%.

    Echoing comments made in July, the IMF highlighted the global economy’s resilience to the twin shocks of the pandemic and the Ukraine war while warning in its World Economic Outlook that risks remained “tilted to the downside.”

    “Despite war-disrupted energy and food markets and unprecedented monetary tightening to combat decades-high inflation, economic activity has slowed but not stalled,” IMF chief economist Pierre-Olivier Gourinchas wrote in a blog post. “The global economy is limping along,” he added.

    The IMF’s projections for growth and inflation are “increasingly consistent with a ‘soft landing’ scenario… especially in the United States,” Gourinchas continued.

    But he cautioned that growth “remains slow and uneven,” with weaker recoveries now expected in much of Europe and China compared with predictions just three months ago.

    The 20 countries using the euro are expected to grow collectively by 0.7% this year and 1.2% next year, a downgrade of 0.2 percentage points and 0.3 percentage points respectively from July.

    The IMF now expects China to grow 5% this year and 4.2% in 2024, down from 5.2% and 4.5% previously.

    “China’s property sector crisis could deepen, with global spillovers, particularly for commodity exporters,” it said in its report

    By contrast, the United States is expected to grow more strongly this year and next than expected in July. The IMF upgraded its growth forecasts for the US economy to 2.1% in 2023 and 1.5% in 2024 — an improvement of 0.3 percentage points and 0.5 percentage points respectively.

    “The strongest recovery among major economies has been in the United States,” the IMF said.

    The agency expects that inflation will continue to fall — bolstering the case for a “soft landing” in major economies — but it does not expect it to return to levels targeted by central banks until 2025 in most cases.

    The IMF revised its forecasts for global inflation to 6.9% this year and 5.8% next year — an increase of 0.1 percentage point and 0.6 percentage points respectively.

    Commodity prices pose a “serious risk” to the inflation outlook and could become more volatile amid climate and geopolitical shocks, Gourinchas wrote.

    “Food prices remain elevated and could be further disrupted by an escalation of the war in Ukraine, inflicting greater hardship on many low-income countries,” he added.

    Oil prices surged Monday on concerns that the latest conflict between Israel and Hamas could cause wider instability in the oil-producing Middle East. Brent crude prices were already elevated following supply cuts by major producers Saudi Arabia and Russia.

    High oil and natural gas prices, leading to skyrocketing energy costs, helped drive inflation to multi-decade highs in many economies in 2022. The latest jump in oil prices could cause a fresh bout of broader price rises.

    Bond investors are already on edge. They dumped government bonds last week in the expectation that the world’s major central banks would keep interest rates “higher for longer” to bring inflation down to their targets.

    The IMF also pointed to concerns that high inflation could become a self-fulfilling prophecy. If households and businesses expect prices to go on rising, that could cause them to set higher prices for their goods and services, or demand higher wages.

    “Expectations that future inflation will rise could feed into current inflation rates, keeping them high,” the IMF noted.

    It added that the “expectations channel is critical to whether central banks can achieve the elusive ‘soft landing’ of bringing the inflation rate down to target without a recession.”

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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

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    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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  • Britain’s PM seeks to rally his party ahead of an election they are tipped to lose | CNN

    Britain’s PM seeks to rally his party ahead of an election they are tipped to lose | CNN

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    London
    CNN
     — 

    Rishi Sunak will gather with members of his governing Conservative Party on Sunday for what is likely to be their final party conference before the UK’s next general election, which Sunak is currently projected to lose. 

    The Conservatives come together for their annual meeting with little good news to celebrate. The party is trailing the opposition Labour Party in the polls by a significant distance. 

    Sunak has been criticized by moderates in the party for tacking to the right on key issues like immigration and commitments to reducing carbon emissions. He is also being attacked from the party’s right for what they perceive to be an anti-conservative approach to taxation and public debt. 

    As if Sunak’s job uniting his party this week wasn’t hard enough, the Institute for Fiscal Studies, the leading economic research institute in the UK, published a report projecting that taxes will account for around 37% of national income by the next election – the highest level since World War II. 

    Party conference season is an important date fixture in the annual British political calendar. Taking place in the early fall, these jamborees are the principal forums for each party to outline its priorities for the next 12 months. 

    For the governing party, conference is typically a time when members rally around the leadership and unite against the opposition, insulated from whatever is happening in the wider world of politics. 

    This should be especially true as an election approaches. However, Sunak, who wasn’t even the Conservatives’ leader this time last year, has inherited a broken party that has been in power for so long it seems out of ideas and already preparing for the post-mortem and blame game that follows any election loss. 

    And factions on both the left and right of the party are already publicly criticising Sunak on a range of issues. 

    Examples coming into this year’s conference: 

    Former cabinet minister Priti Patel told British channel GB News on Friday that the tax burden was “unsustainable” before unfavourably comparing Sunak to tax-cutting former PM, Margaret Thatcher. 

    The Conservative-supporting Daily Mail newspaper ran a column titled: “Didn’t the Tories used to be party of tax CUTS?”

    Sunak can also expect vocal criticism from the environmental wing of his party after a significant U-turn last week on climate policy. Sunak delayed a planned moratorium on the sale new gasoline and diesel cars from 2030 to 2035 and pushed back on plans to phase out gas boilers in homes. 

    Some Conservatives who support action on the climate crisis, not least former PM Boris Johnson, criticised Sunak, saying the UK “cannot afford to falter now” or “lose our ambition.” 

    Such a direct criticism of a sitting PM by a former PM is highly unusual. What makes it particularly painful for Sunak is that Johnson is at the heart of perhaps the most crucial internal battle within the Conservative Party. 

    Greenpeace activists targeted British Prime Minister Rishi Sunak's private mansion this year.

    Johnson was forced to resign from office because of a range of scandals last summer. However, Johnson’s most loyal acolytes believe that Sunak’s decision to quit as Johnson’s finance minister was the straw that broke the camel’s back and made Johnson’s position untenable. They believe he was motivated by the opportunity to take a run at the top job himself, something Sunak denies. 

    This battle between Sunak and Johnson has created a very strange dynamic within the party. 

    Johnson, darling of the Conservative right since the Brexit referendum, is in many ways politically to the left of Sunak. However, his pragmatism over Brexit and cautious economics has led to his allies painting Sunak as a Conservative sellout.

    They also believe that Sunak’s betrayal of Johnson and apparent wish-washy centrism is what will ultimately cost the Conservative Party the next general election – ignoring the damage that Johnson did to the party and its standing in the polls through his scandal-ridden premiership. 

    Sunak has made attempts to counter these attacks by throwing red meat at Conservative MPs and voters. The U-turn on climate policies is just the most recent example. He’s made a crackdown on immigration – particularly the route across the English Channel from France in so-called small boats – a key plank of his agenda since taking office. 

    He’s been accused of sowing division over over the complex issue of trans rights in attempts to win over his own MPs and has leant into the Johnsonite position of attacking “lefty lawyers” over opposition to his plans, including those on immigration.

    Prime Minister Rishi Sunak speaking in June on his plan to

    His hard-line shift doesn’t necessarily resonate with the public, most polls show. Which is why experts believe that Sunak is doubling down on his Conservative base, which might be his only real path to retaining power at the next election. 

    “Sunak’s strategy of taking on issues like net zero and small boats is very much a ‘core vote’ strategy, aimed at securing the Conservative base,” says Will Jennings, professor of politics at the University of Southampton. 

    “This is not without risk – firstly because it’s not clear how large that core vote is without Boris Johnson, Brexit and Jeremy Corbyn (the controversial, hard-left former Labour leader) and also because voters have other concerns right now – most notably the economy,” he adds. 

    If you talk to senior Conservatives right now, there is a quiet acceptance that a loss is the most likely result of the next election. Most agree that not only does this look like a government in its death throes, but also that everyone is already thinking about who will replace Sunak after his defeat. Factions on the right and left of the party are already forming and people on both sides are already talking about how to win the battle for the soul of their party. 

    While the next election may not be a foregone conclusion, the next few months will be critical if Sunak is to start turning the polls around and make the comeback of all comebacks. All of that starts this week in Manchester: a good conference could lift the mood and rally the troops; a bad conference could be the kiss of death to any hope his party had left. 

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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

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    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

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    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

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    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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  • That jet the Marines lost? Taxpayers will pay $1.7 trillion for the F-35 program | CNN Politics

    That jet the Marines lost? Taxpayers will pay $1.7 trillion for the F-35 program | CNN Politics

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



    CNN
     — 

    The military losing a fighter jet near Charleston, South Carolina, and asking the public to help find it is a plotline in which “Top Gun” (fighter jets) meets “The Hunt for Red October” (country can’t find its weapons system).

    But the larger story of the F-35 Lightning II stealth fighter is like tax dollars meet “The Blob” (unstoppable force consumes everything in its path).

    “How in the hell do you lose an F-35?” wondered Rep. Nancy Mace, the South Carolina Republican, in a post on social media that speaks for everyone who read the headline about the state-of-the-art military plane that went missing Sunday after its pilot ejected and parachuted to safety.

    “How is there not a tracking device and we’re asking the public to what, find a jet and turn it in?” she continued.

    A more general and important question could be asked of the F-35 program writ large: How in the heck can you spend so much money on a plane that doesn’t work the way it’s supposed to?

    The exact amount of money for a single aircraft like the one that went missing is somewhere around $100 million.

    The entire F-35 program is on track to cost $1.7 trillion over the lifetime of the plane. Trillion. With a “t.”

    CNN’s Oren Liebermann reported the facts of what we know about the missing aircraft on CNN on Monday:

    • The pilot ejected safely and was taken to a hospital.
    • Joint Base Charleston posted a social media plea for information from anyone who might have seen the jet or its remains.
    • The search is focused northwest of Charleston near Lakes Marion and Moultrie.

    But we’re left with so many questions, he told CNN’s Jim Sciutto.

    “Was the transponder working? If not, why wasn’t it working? Why, maybe, had it been switched off? What was the mission it was on? All of this is either under investigation or a question we haven’t gotten an answer to yet.”

    When I asked Liebermann by email how to generally explain the F-35 program, he noted it is the most expensive weapons program in US history.

    For a country that spends a good portion of its income on its military and is known to have the most advanced fighting force on Earth, that’s saying something.

    The F-35 is what’s known as a “stealth” fighter, which means it is supposed to be able to avoid detection by enemies. Maybe a little too stealth.

    But if you watch the glossy Lockheed Martin video at F35.com, the jet is also supposed to be able to communicate with rest of the military, “sharing its operational picture with the ground, sea and air assets.” The video shows the jet beaming information to the ground and satellites.

    The New York Times’ editorial board used the word “boondoggle” to describe the F-35 program in 2021. But it added that the US is essentially stuck with the program.

    Or as CNN’s Zachary Cohen wrote back in 2015, “Is the world’s most expensive weapons program worth it?” Eight years later, the question still applies.

    Many US allies – Canada, Germany, Japan and others – also buy F-35s from Lockheed.

    The F-35, as developed by Lockheed at the request of the US military, was supposed to be the jack-of-all-jets, with versions to do different jobs for the Air Force, the Navy and the Marines.

    The version that went missing over South Carolina – the F-35B – is used by the US Marine Corps and meant to be able to “land vertically like a helicopter and take-off in very short distances,” according to a fact sheet from Lockheed. Another F-35B crashed in 2018, also in South Carolina.

    The Project on Government Oversight, a nonpartisan watchdog group, has written extensively on the F-35 and its cost overruns. I asked Dan Grazier, an F-35 expert for POGO, what has gone wrong.

    It all boils down to “failure at the conceptual level,” he told me in an email.

    “The architects of the program attempted to build a single aircraft to meet multiple mission requirements for not just three separate services but also those of multiple countries,” Grazier said, noting the difference between a small and nimble fighter jet and a long-range jet.

    “When someone attempts to design a single aircraft to perform all of these roles, they have to make numerous design tradeoffs that generally results in an aircraft that can sort of do it all, but doesn’t do anything particularly well.”

    The jet has never reached its full operational capability and already needs updates and tweaks, including a new engine. “Every F-35 built until now is nothing more than a very expensive prototype,” Grazier told me.

    “All of them will have to go through an expensive retrograde process in the future when the design is complete to bring them up to something approaching full combat standards.”

    I asked a spokesperson for Lockheed Martin if the company is confident the jets perform as they should considering the taxpayer investment.

    They provided this statement:

    The global F-35 fleet has surpassed more than 721,000 cumulative flight hours and spans 17 nations and three U.S. military services. Since F-35s began flying 17 years ago, there has been one pilot fatality and less than 10 confirmed destroyed aircraft. More than 965 F-35s have been delivered and more than 430,000 sorties completed.

    Diana Maurer is director of defense capabilities and management at the Government Accountability Office, the government’s own watchdog that earlier this year described the F-35 program as “more than a decade behind schedule and $183 billion over original cost estimates.”

    She said pilots frequently report being impressed by the plane’s capabilities. But they also report not being able to fly it often enough.

    Problems getting spare parts, issues with repairs and a reliance on contractors all contribute to the F-35 having a substandard readiness and frequent groundings of the fleet.

    “There’s a variety of reasons why they can’t get these aircraft up in the air as often as they would like,” Maurer said. “And that’s really frustrating from a taxpayer perspective for something that already costs hundreds of millions of dollars a year; cost many, many multiple billions already; and will cost nearly $2 trillion over the life cycle of the program.”

    Grazier said officials at the Pentagon have acknowledged problems with the F-35 that can be applied to the design process in the future. But this is a program that evolved over successive presidencies and with a rotating cast of characters in charge both in Congress and at the Pentagon.

    The system is supposed to have safeguards against extreme cost overruns, but when those warnings were triggered in previous decades, the F-35 program was allowed to barrel forward. And here we are.

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  • Americans are feeling gloomier about the economy | CNN Business

    Americans are feeling gloomier about the economy | CNN Business

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    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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  • Federal Reserve Chair Jerome Powell hints at more bad news for borrowers | CNN Business

    Federal Reserve Chair Jerome Powell hints at more bad news for borrowers | CNN Business

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    Washington, DC
    CNN
     — 

    Additional interest rate hikes are still on the table and rates could remain elevated for longer than expected, Federal Reserve Chair Jerome Powell said Friday.

    Delivering a highly anticipated speech at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming, Powell again stressed that the Fed will pay close attention to economic growth and the state of the labor market when making policy decisions.

    “Although inflation has moved down from its peak — a welcome development — it remains too high,” Powell said. “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

    The Fed chief’s annual presentation at the symposium, which has become a major event in the world of central banking, typically hints at what to expect from monetary policy in the coming months.

    Powell’s speech wasn’t a full-throated call for more rate hikes, but rather a balanced assessment of inflation’s evolution over the past year and the possible risks to the progress the Fed wants to see. He made it clear the central bank is retaining the option of more hikes, if necessary, and that what Fed officials ultimately decide will depend on data.

    US stocks opened higher before Powell’s speech, tumbled in late morning trading and then rose again.

    The Fed raised its benchmark lending rate by a quarter point in July to a range of 5.25-5.5%, the highest level in 22 years, following a pause in June. Minutes from the Fed’s July meeting showed that officials were concerned about the economy’s surprising strength keeping upward pressure on prices, suggesting more rate hikes if necessary. Some officials have said in recent speeches that the Fed can afford to keep rates steady, underscoring the intense debate among officials on what the Fed should do next.

    Financial markets still see an overwhelming chance the the Fed will decide to hold rates steady at its September meeting, according to the CME FedWatch tool, given that inflationary pressures have continued to wane.

    Here are some key takeaways from Powell’s speech.

    Chair Powell said there is still a risk that inflation won’t come down to the Fed’s 2% target as the central bank faces the proverbial last mile in its battle with higher prices.

    “Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Powell said.

    Concerns over the economy running too hot for the Fed’s comfort only recently emerged.

    Economic growth in the second quarter picked up from the prior three-month period and the Atlanta Fed is currently estimating growth will accelerate even more in the third quarter.

    That could be a problem for the Fed, since the central bank’s primary mechanism for fighting inflation is by cooling the economy through tweaking the benchmark lending rate.

    Generally, if demand is red hot, employers will want to hire to meet that demand. But many firms continue to have difficulty hiring, according to business surveys from groups such as the National Federation of Independent Business. In theory, that could prompt wage increases in order to secure talent — and those higher costs could then be passed on to consumers.

    “if you’re a policymaker, you’re looking at the level of output relative to your estimate of what’s sustainable for maximum employment and 2% inflation,” William English, finance professor at Yale University who worked at the Fed’s Board of Governors from 2010 to 2015, told CNN. “So what does that mean for monetary policy? That may mean that they need rates to be higher for longer than they thought to get the economy on to that desirable trajectory, but there are a lot of questions around that force, and a lot of uncertainty.”

    Cleveland Fed President Loretta Mester is one of the Fed officials backing a more aggressive stance on fighting inflation.

    “We’ve come come a long way, but we don’t want to be satisfied, because inflation remains too high — and we need to see more evidence to be assured that it’s coming down in a sustainable way and in a timely way,” Mester said in an interview with CNBC after Powell’s remarks.

    Meanwhile, some other officials think there will eventually be enough restraint on the economy and that more hikes could cause unnecessary economic damage. The lagged effects of rate hikes on the broader economy are a key uncertainty for officials, since it’s not clear when exactly those effects will fully take hold. Research suggests it takes at least a year.

    “We are in a restrictive stance in my view, and we’re putting pressure on the economy to slow inflation,” Philadelphia Fed President Patrick Harker told Bloomberg in an interview Friday after Powell’s speech. “What I’m hearing — and I’ve been around my district all summer talking to people — is ‘you’ve done a lot very quickly.’”

    Powell pointed to the steady progress on inflation in the past year: The Fed’s preferred inflation gauge — the Personal Consumption Expenditures price index — rose 3% in June from a year earlier, down from the 3.8% rise in May. The Commerce Department officially releases July PCE figures next week, though Powell already previewed that report in his speech. He said the Fed’s favorite inflation measure rose 3.3% in the 12 months ended in July.

    The Consumer Price Index, another closely watched inflation measure, rose 3.2% in July, a faster pace than the 3% in June, though underlying price pressures continued to decelerate that month.

    In his speech Friday, Powell stood firmly by the Fed’s current 2% inflation target, which was formalized in 2012 — at least for now. The Fed is set to review its policy framework around 2025, which could be an opportunity to establish a new inflation target.

    Harvard economist Jason Furman said in an op-ed published in The Wall Street Journal this week that the central bank should aim for a different inflation goal, which could be something slightly higher than 2% or even a range of between 2% and 3%.

    For now, Powell has made it clear he is sticking with the stated inflation target.

    Still, inflation’s progress has hyped up not only American consumers and businesses, but also some Fed officials.

    Chicago Fed President Austan Goolsbee reiterated to CNBC Friday that he still sees “a path to a soft landing,” a scenario in which inflation falls down to target without a spike in unemployment or a recession.

    Powell also weighed in on an ongoing debate among economists about whether the “neutral rate of interest,” also known as r*, is higher since the economy is still on strong footing despite the Fed’s aggressive pace of rate hikes.

    In theory, the neutral rate is when real interest rates neither restrict nor stimulate growth. The Fed chair said higher interest rates are likely pulling on the economy’s reins, implying that r* might not be structurally higher, though he said it’s an unobservable concept.

    “We see the current stance of policy as restrictive, putting downward pressure on economic activity, hiring, and inflation. But we cannot identify with certainty the neutral rate of interest, and thus there is always uncertainty about the precise level of monetary policy restraint,” Powell said.

    Either way, while the Fed chief hinted that more rate hikes might be coming down the pike, there’s no guarantee either way.

    The Fed paused its historic inflation fight for the first time in June, mostly based on uncertainty over how the spring’s bank stresses would affect lending. The central bank could decide to pause again in September over uncertainty as it waits for more data.

    “We think that the Fed is more likely to take a wait-and-see approach with the data and try to understand a little bit more about why the labor market is remaining so strong, even despite the inflationary experience that we’ve had and the higher interest rates in the economy,” Sinead Colton Grant, head of investor solutions at BNY Mellon Wealth Management, told CNN in an interview.

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  • Fact check: The first Republican presidential debate of the 2024 election | CNN Politics

    Fact check: The first Republican presidential debate of the 2024 election | CNN Politics

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    CNN
     — 

    Republican presidential candidates delivered a smattering of false and misleading claims at the first debate of the 2024 election – though none of the eight candidates on stage in Milwaukee delivered anything close to the bombardment of false statements that typically characterized the debate performances of former President Donald Trump, the Republican front-runner who skipped the Wednesday event.

    Sen. Tim Scott of South Carolina inaccurately described the state of the economy in early 2021 and repeated a long-ago-debunked false claim about the Biden-era Justice Department. Former New Jersey Gov. Chris Christie misstated the sentence attached to a gun law relevant to the investigation into the president’s son Hunter Biden. Florida Gov. Ron DeSantis misled about his handling of the Covid-19 pandemic, omitting mention of his early pandemic restrictions.

    Below is a fact check of those claims and various others from the debate, some of which left out key context. In addition, below is a brief fact check of some of Trump’s claims from a pre-taped interview he did with Tucker Carlson, which was posted online shortly before the debate aired. Trump made a variety of statements that were not true.

    DeSantis and the pandemic

    DeSantis criticized the federal government for its handling of the Covid-19 pandemic, claiming it had locked down the economy, and then said: “In Florida, we led the country out of lockdown, and we kept our state free and open.”

    Facts First: DeSantis’s claim is misleading at best. Before he became a vocal opponent of pandemic restrictions, DeSantis imposed significant restrictions on individuals, businesses and other entities in Florida in March 2020 and April 2020; some of them extended months later into 2020. He did then open up the state, with a gradual phased approach, but he did not keep it open from the start.

    DeSantis received criticism in March 2020 for what some critics perceived as a lax approach to the pandemic, which intensified as Florida beaches were packed during Spring Break. But that month and the month following, DeSantis issued a series of major restrictions. For example, DeSantis:

    • Closed Florida’s schools, first with a short-term closure in March 2020 and then, in April 2020, with a shutdown through the end of the school year. (In June 2020, he announced a plan for schools to reopen for the next school year that began in August. By October 2020, he was publicly denouncing school closures, calling them a major mistake and saying all the information hadn’t been available that March.)
    • On March 14, 2020, announced a ban on most visits to nursing homes. (He lifted the ban in September 2020.)
    • On March 17, 2020, ordered bars and nightclubs to close for 30 days and restaurants to operate at half-capacity. (He later approved a phased reopening plan that took effect in May 2020, then issued an order in September 2020 allowing these establishments to operate at full capacity.)
    • On March 17, 2020, ordered gatherings on public beaches to be limited to a maximum of 10 people staying at least six feet apart, then, three days later, ordered a shutdown of public beaches in two populous counties, Broward and Palm Beach. (He permitted those counties’ beaches to reopen by the last half of May.)
    • On March 20, 2020, prohibited “any medically unnecessary, non-urgent or non-emergency” medical procedures. (The prohibition was lifted in early May 2020.)
    • On March 23, 2020, ordered that anyone flying to Florida from an area with “substantial community spread” of the virus, “to include the New York Tri-State Area (Connecticut, New Jersey and New York),” isolate or quarantine for 14 days or the duration of their stay in Florida, whichever was shorter, or face possible jail time or a fine. Later that week, he added Louisiana to the list. (He lifted the Louisiana restriction in June 2020 and the rest in August 2020.)
    • On April 3, 2020, imposed a statewide stay-home order that temporarily required people in Florida to “limit their movements and personal interactions outside of their home to only those necessary to obtain or provide essential services or conduct essential activities.” (Beginning in May 2020, the state switched to a phased reopening plan that, for months, included major restrictions on the operations of businesses and other entities; DeSantis described it at the time as a “very slow and methodical approach” to reopening.)

    -From CNN’s Daniel Dale

    Nikki Haley, the former South Carolina governor and US ambassador to the United Nations, said: “Donald Trump added $8 trillion to our debt, and our kids are never going to forgive us for this.”

    Facts First: Haley’s figure is accurate. The total public debt stood at about $19.9 trillion on the day Trump took office in 2017 and then increased by about $7.8 trillion over Trump’s four years, to about $27.8 trillion on the day he left office in 2021.

    It’s worth noting, however, that the increase in the debt during any president’s tenure is not the fault of that president alone. A significant amount of spending under any president is the result of decisions made by their predecessors – such as the creation of Social Security, Medicare and Medicaid decades ago – and by circumstances out of a president’s control, notably including the global Covid-19 pandemic under Trump; the debt spiked in 2020 after Trump approved trillions in emergency pandemic relief spending that Congress had passed with overwhelming bipartisan support.

    Still, Trump did choose to approve that spending. And his 2017 tax cuts, unanimously opposed by congressional Democrats, were another major contributor to the debt spike.

    -From CNN’s Daniel Dale and Katie Lobosco

    North Dakota Gov. Doug Burgum claimed that Biden’s signature climate bill costs $1.2 trillion dollars and is “just subsidizing China.”

    Facts First: This claim needs context. The clean energy pieces of the Inflation Reduction Act – Democrats’ climate bill – passed with an initial price tag of nearly $370 billion. However, since that bill is made up of tax incentives, that price tag could go up depending on how many consumers take advantage of tax credits to buy electric vehicles and put solar panels on their homes, and how many businesses use the subsidies to install new utility scale wind and solar in the United States.

    Burgum’s figure comes from a Goldman Sachs report, which estimated the IRA could provide $1.2 trillion in clean energy tax incentives by 2032 – about a decade from now.

    On Burgum’s claim that Biden’s clean energy agenda will be a boon to China, the IRA was specifically written to move the manufacturing supply chain for clean energy technology like solar panels and EV batteries away from China and to the United States.

    In the year since it was passed, the IRA has spurred 83 new or expanded manufacturing facilities in the US, and close to 30,000 new clean energy manufacturing jobs, according to a tally from trade group American Clean Power.

    -From CNN’s Ella Nilsen

    With the economy as one of the main topics on the forefront of voters’ minds, Scott aimed to make a case for Republican policies, misleadingly suggesting they left the US economy in record shape before Biden took office.

    “There is no doubt that during the Trump administration, when we were dealing with the COVID virus, we spent more money,” Scott said. “But here’s what happened at the end of our time in the majority: we had low unemployment, record low unemployment, 3.5% for the majority of the population, and a 70-year low for women. African Americans, Hispanics, and Asians had an all-time low.”

    Facts First: This is false. Scott’s claims don’t accurately reflect the state of the US economy at the end of the Republican majority in the Senate. And in some cases, his exaggerations echo what Trump himself frequently touted about the economy under his leadership.

    By the time Trump left office and the Republicans lost the Senate majority in January 2021, US unemployment was not at a record low. The US unemployment rate dropped to a seasonally adjusted rate of 3.5% in September 2019, the country’s lowest in 50 years. While it hovered around that level for five months, Scott’s assertion ignores the coronavirus pandemic-induced economic destruction that followed. In April 2020, the unemployment rate spiked to 14.7% — the highest level since monthly records began in 1948. As of December 2020, the unemployment rate was at 6.7%.

    Nor was the unemployment rate for women at a 70-year low by the end of Trump’s time in office. It reached a 66-year low during certain months of 2019, at 3.4% in April and 3.6% in August, but by December 2020, unemployment for women was at 6.7%.

    The unemployment rates for African Americans, Hispanics, and Asians were also not at all-time lows at the end of 2020, but they did reach record lows during Trump’s tenure as president.

    -From CNN’s Tara Subramaniam

    Scott said that the Justice Department under President Joe Biden is targeting “parents that show up at school board meetings. They are called, under this DOJ, they’re called domestic terrorists.”

    Facts First: It is false that the Justice Department referred to parents as domestic terrorists. The claim has been debunked several times – during the uproar at school boards over Covid-19 restrictions and anti-racism curriculums; after Kevin McCarthy claimed Republicans would investigate Merrick Garland with a majority in the House; and even by a federal judge. The Justice Department never called parents terrorists for attending or wanting to attend school board meetings.

    The claim stems from a 2021 letter from The National School Boards Associations asking the Justice Department to “deal with” the uptick in threats against education officials and saying that “acts of malice, violence, and threats against public school officials” could be classified as “the equivalent to a form of domestic terrorism and hate crimes.” In response, Garland released a memo encouraging federal and local authorities to work together against the harassment campaigns levied at schools, but never endorsed the “domestic terrorism” notion.

    A federal judge even threw out a lawsuit over the accusation, ruling that Garland’s memo did little more than announce a “series of measures” that directed federal authorities to address increasing threats targeting school board members, teachers and other school employees.

    -From CNN’s Hannah Rabinowitz

    Haley, the former ambassador to the United Nations and governor of South Carolina, said the US is spending “less than three and a half percent of our defense budget” on Ukraine aid, and that in terms of financial aid relative to GDP, “11 of the European countries have given more than the US.”

    Facts First: This is partly true. Haley’s claim regarding the US aid to Ukraine compared to the total defense budget is slightly under the actual percentage, but it is accurate that 11 European countries have given more aid to Ukraine as a percentage of their total GDP than the US.

    As of August 14, the US has committed more than $43 billion in military aid to Ukraine since the beginning of the war in Ukraine, according to the Defense Department. In comparison, the Fiscal Year 2023 defense budget was $858 billion – making aid to Ukraine just over 5% of the total US defense budget.

    As of May 2023, according to a Council of Foreign Relations tracker, 11 countries were providing a higher share in aid to Ukraine relative to their GDP than the US – led by Estonia, Latvia, Lithuania, and Poland.

    -From CNN’s Haley Britzky

    Former Vice President Mike Pence said Wednesday that the Trump administration “spent funding to backfill on the military cuts of the Obama administration.”

    Facts First: This is misleading. While military spending decreased under the Obama administration, it was largely due to the 2011 Budget Control Act, which received Republican support and resulted in automatic spending cuts to the defense budget.

    Mike Pence, a senator at the time, voted in favor of the Budget Control Act.

    -From CNN’s Haley Britzky

    Christie said President Biden’s son Hunter Biden was “facing a 10-year mandatory minimum” for lying on a federal form when he purchased a gun in 2018.

    Facts First: Christie, a former federal prosecutor, clearly misstated the law. This crime can lead to a maximum prison sentence of 10 years, but it doesn’t have a 10-year mandatory minimum.

    These comments are related to the highly scrutinized Justice Department investigation into Hunter Biden, which is currently ongoing after a plea deal fell apart earlier this summer.

    As part of the now-defunct deal, Hunter Biden agreed to plead guilty to two tax misdemeanors and enter into a “diversion agreement” with prosecutors, who would drop the gun possession charge in two years if he consistently stayed out of legal trouble and passed drug tests.

    The law in question makes it a crime to purchase a firearm while using or addicted to illegal drugs. Hunter Biden has acknowledged struggling with crack cocaine addiction at the time, and admitted at a court hearing and in court papers that he violated this law by signing the form.

    The US Sentencing Commission says, “The statutory maximum penalty for the offense is ten years of imprisonment.” There isn’t a mandatory 10-year punishment, as Christie claimed.

    During his answer, Christie also criticized the Justice Department for agreeing to a deal in June where Hunter Biden could avoid prosecution on the felony gun offense. That deal was negotiated by special counsel David Weiss, who was first appointed to the Justice Department by former President Donald Trump.

    -From CNN’s Marshall Cohen

    Burgum and Scott got into a back and forth over IRS staffing with Burgum saying that the “Biden administration wanted to put 87,000 people in the IRS,” and Scott suggesting they “fire the 87,000 IRS agents.”

    Facts First: This figure needs context.

    The Inflation Reduction Act, which passed last year without any Republican votes, authorized $80 billion in new funding for the IRS to be delivered over the course of a decade.

    The 87,000 figure comes from a 2021 Treasury report that estimated the IRS could hire 86,852 full-time employees with a nearly $80 billion investment over 10 years.

    While the funding may well allow for the hiring of tens of thousands of IRS employees over time, far from all of these employees will be IRS agents conducting audits and investigations.

    Many other employees will be hired for the non-agent roles, from customer service to information technology, that make up most of the IRS workforce. And a significant number of the hires are expected to fill the vacant posts left by retirements and other attrition, not take newly created positions.

    The IRS has not said precisely how many new “agents” will be hired with the funding. But it is already clear that the total won’t approach 87,000. And it’s worth noting that the IRS may not receive all of the $80 billion after Republicans were able to claw back $20 billion of the new funding as part of a deal to address the debt ceiling made earlier this year.

    -From CNN’s Katie Lobosco

    Trump repeated a frequent claim during his interview with Carlson that streamed during the GOP debate that his retention of classified documents at Mar-a-Lago after leaving the White House was “covered” under the Presidential Records Act and that he is “allowed to do exactly that.”

    Facts First: This is false. The Presidential Records Act says the exact opposite – that the moment presidents leave office, all presidential records are to be turned over to the federal government. Keeping documents at Mar-a-Lago after his presidency concluded was in clear contravention of that law.

    According to the Presidential Records Act, “upon the conclusion of a President’s term of office, or if a President serves consecutive terms upon the conclusion of the last term, the Archivist of the United States shall assume responsibility for the custody, control, and preservation of, and access to, the Presidential records of that President.”

    The sentence makes clear that a president has no authority to keep documents after leaving the White House.

    The National Archives even released a statement refuting the notion that Trump’s retention of documents was covered by the Presidential Records Act, writing in a June news release that “the PRA requires that all records created by Presidents (and Vice-Presidents) be turned over to the National Archives and Records Administration (NARA) at the end of their administrations.”

    -From CNN’s Hannah Rabinowitz

    While discussing electric vehicles, Trump claimed that California “is in a big brownout because their grid is a disaster,” adding that the state’s ambitious electric vehicle goals won’t work with the grid in such shape.

    Facts First: Trump’s claim that California’s grid is currently in a “big brownout” and is a “disaster” isn’t true. California’s grid suffered rolling blackouts in 2020, but it has performed quite well in the face of extreme heat this summer, owing in large part to a massive influx of renewable energy including battery storage. These big batteries keep energy from wind and solar running when the wind isn’t blowing and sun isn’t shining. (Batteries are also being deployed at a rapid rate in Texas, a red state.)

    Another reason California’s grid has stayed stable this year even during extreme temperature spikes is the fact that a deluge of snow and rain this winter and spring has refilled reservoirs that generate electricity using hydropower.

    As Trump insinuated, there are real questions about how well the state’s grid will hold up as California’s drivers shift to electric vehicles by the millions by 2035 – the same year it will phase out selling new gas-powered cars. California state officials say they are preparing by adding new capacity to the grid and urging more people to charge their vehicles overnight and during times of the day when fewer people are using energy. But independent experts say the state needs to exponentially increase its clean energy while also building out huge amounts of new EV chargers to achieve its goals.

    -From CNN’s Ella Nilsen

    Trump and the border wall

    Trump claimed to Carlson, “I had the strongest border in the history of our country, and I built almost 500 miles of wall. You know, they’d like to say, ‘Oh, was it less?’ No, I built 500 miles. In fact, if you check with the authorities on the border, we built almost 500 miles of wall.”

    Facts First: This needs context. Trump and his critics are talking about different things when they use different figures for how much border wall was built during his presidency. Trump is referring to all of the wall built on the southern border during his administration, even in areas that already had some sort of barrier before. His critics are only counting the Trump-era wall that was built in parts of the border that did not have any previous barrier.

    A total of 458 miles of southern border wall was built under Trump, according to a federal report written two days after Trump left office and obtained by CNN’s Priscilla Alvarez. That is 52 miles of “primary” wall built where no barriers previously existed, plus 33 miles of “secondary” wall that was built in spots where no barriers previously existed, plus another 373 miles of primary and secondary wall that was built to replace previous barriers the federal government says had become “dilapidated and/or outdated.”

    Some of Trump’s rival candidates, such DeSantis and Christie, have used figures around 50 miles while criticizing Trump for failing to finish the wall – counting only the primary wall built where no barriers previously existed.

    While some Trump critics have scoffed at the replacement wall, the Trump-era construction was generally much more formidable than the older barriers it replaced, which were often designed to deter vehicles rather than people on foot. Washington Post reporter Nick Miroff tweeted in 2020: “As someone who has spent a lot of time lately in the shadow of the border wall, I need to puncture this notion that ‘replacement’ sections are ‘not new.’ There is really no comparison between vehicle barriers made from old rail ties and 30-foot bollards.”

    Ideally, both Trump and his opponents would be clearer about what they are talking about: Trump that he is including replacement barriers, his opponents that they are excluding those barriers.

    -From CNN’s Daniel Dale

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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

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    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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  • ‘I don’t know how they will get to 218’: House GOP struggles to find consensus on averting shutdown | CNN Politics

    ‘I don’t know how they will get to 218’: House GOP struggles to find consensus on averting shutdown | CNN Politics

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    CNN
     — 

    House Republicans are still struggling to reach consensus on a plan to fund the government, with lawmakers going back-and-forth over the issue and leadership forced to delay a planned procedural vote as they work to find agreement within their ranks.

    GOP leaders are planning to plow ahead with a vote on their proposal this week, even as some conservative hardliners are still digging in and threatening to oppose a procedural vote, which would prevent the bill from coming to the floor. GOP lawmakers stood up during a closed-door conference meeting Tuesday morning to make their case for – or against – the plan, which would temporarily fund the government and beef up border security but is dead-on-arrival in the Democratic-controlled Senate.

    House GOP leaders canceled a procedural rule vote on the proposal originally slated for Tuesday morning amid that opposition from hardliners. It’s unclear when or if that vote will get rescheduled.

    “There are a lot of ‘No’ votes in that room. I don’t know how they will get to 218,” said Rep. Nancy Mace, a South Carolina Republican, exiting a conference meeting on Tuesday morning. “Without a deal with Democrats, I don’t see it passing. … It is going to be a long two weeks.”

    Government funding is slated to run out on September 30.

    In another closed-door meeting Tuesday afternoon – this time in the office of House Majority Whip Tom Emmer – members of the GOP conference from all corners of the party engaged in talks to try and salvage a GOP spending bill that would fund the government for a month, with little progress to flag after more than four hours.

    Republican steering committee chairman Kevin Hern, exiting the meeting, said he plans to introduce an amendment on the short-term funding bill to cut spending that would move three members from “No” to “Yes” on the embattled measure. The amendment is a new statutory spending cap, Hern said.

    Amid the impasse in the House GOP conference, there are discussions underway among some Republicans and Democrats about teaming up on a so-called discharge petition to fund the government if the House Republican-brokered plan fails on the floor this week.

    House Democratic Leader Hakeem Jeffries will huddle with the bipartisan Problem Solvers Caucus on Wednesday, two sources told CNN, amid ongoing discussions between moderate Republicans and Democrats over a plan to avoid a shutdown. Politico first reported the meeting.

    In another sign of the divisions within House Republicans, the House has failed to pass a procedural vote that would bring a bill to fund the Department of Defense for the next fiscal year to the floor for final passage. Five Republicans – most of them from the right flank House Freedom Caucus – voted against the rule, denying House GOP leadership of the 218 votes it needed for passage.

    House Speaker Kevin McCarthy encouraged members who are opposed to the GOP government funding proposal brokered over the weekend to work out their difference in Emmer’s office, according to sources in the room.

    And Rep. Scott Perry, a conservative Republican from Pennsylvania and the chairman of the House Freedom Caucus who helped negotiate the deal, told members during the meeting that if they are opposed to the current plan but think there’s something else that might support, “please tell someone what that is,” sources said.

    Some conservative hardliners are now floating the idea of amending the proposal to include lower spending cuts. Republican Rep. Bob Good of Virginia said leadership is “entertaining everything” at this point, and said that even though the deal was negotiated by some members of the Freedom Caucus, he made clear they were not representing the entire group.

    But he also predicted it would be hard to avoid a government shutdown at this point, though he added, it should not be something that they “fear.”

    Rep. Ralph Norman, a South Carolina Republican, said he thinks they should work through the weekend until they are able to find agreement among House Republicans on how to keep the government open. He said he accidentally voted to support a rule for the short-term funding bill, saying he was “asleep at the wheel” during the meeting on Monday night, but plans to vote against the rule when it comes to the floor.

    Rep. Chip Roy, a Texas Republican and one of the negotiators of the package, suggested that one of the potential ways to move forward would be for the speaker to lay out a topline spending number and spending numbers for each of the appropriations bills to help members who are still on the fence see the full picture.

    “I think the biggest thing that I have heard – and this is where my colleagues I think have a really important point – what do we do next? The speaker needs to set a topline, needs to set a structure, a target,” Roy said. “I have been saying that for months. We are here in my opinion because we haven’t had a clear target.”

    But Roy did blast some of the opposition.

    “I find it extremely difficult to explain or defend opposition to an 8% cut over 30 days in exchange for the most conservative and strong border security measures we’ve ever passed out of this body,” he said. “I think that is inexplicable. I think it is malpractice, and I think there are some outside groups … who are trying to advance themselves that are a part of this that are pushing this narrative that it is somehow malpractice to do that when what would be true malpractice is to head into a shutdown without a coordinated and concerted message.”

    Florida GOP Rep. Byron Donalds said that members who negotiated the bill are willing to talk.

    “I want to get real conservative wins, not talking points, not tweets, not any of that stuff,” Donalds said.

    Perry said he continues to try and sell the bill to his colleagues and his message is simple, they can keep making changes but at some point, they have to decide: Do they want to pass something or get jammed by the Senate?

    “This is a proposal. I speak for myself. It doesn’t mean that I love it, but I am working with my colleague to secure one of two paths. The one path is where we offer something and the American people can see what we stand for, the other path is quite honestly accepting whatever the Senate sends us,” Perry said. “You are not going to get every single thing that you want, but if you don’t do something, you aren’t going to get anything.”

    GOP Rep. Matt Gaetz of Florida is seen on his way to a House Republican Conference meeting at the Capitol on September 19, 2023 in Washington, DC.

    There are at least 15 members currently opposed, and more that are undecided, according to an CNN whip count. Among those who are opposed: Reps. Good, Norman, Andy Ogles of Tennessee, Matt Gaetz of Florida, Dan Bishop of North Carolina, Andy Biggs of Arizona, Tim Burchett of Tennessee, Anna Paulina Luna of Florida, Marjorie Taylor Greene of Georgia, Matt Rosendale of Montana, Victoria Spartz of Indiana, Eli Crane of Arizona, Cory Mills of Florida, Wesley Hunt of Texas and Paul Gosar of Arizona.

    Those 15 “No” votes would easily sink the bill without any Democratic support, as Republicans control 221 seats to Democrats’ 212. It’s unclear, which votes Hern said would flip to “Yes” votes amid additional provisions being added to the proposal.

    Burchett told reporters he is aware of at least 16 to 17 holdouts.

    “Every day is progress, but I don’t see us doing a whole lot,” he said. “I think part of the problem is some of the folks that need to be in the room or not in the room.”

    Among the five Republicans who opposed the procedural vote Tuesday that would have brought the Defense funding bill to the floor for debate and final passage were four known “No” votes – Bishop, Biggs, Rosendale and Norman – as well as Rep. Ken Buck of Colorado.

    House Rules Committee Chair Tom Cole of Oklahoma had told reporters he planned to go to the floor Tuesday with the rule on the continuing resolution, but House leaders pulled a procedural rule vote on their short-term spending bill later Tuesday morning, in another sign that House Republicans are deeply divided on the path forward.

    Even if his own party sinks the bill, Cole said he is not worried about the overall strategy.

    “Welcome to politics,” Cole told reporters.

    Cole, who said some of the “No” votes are “movable,” warned his colleagues who are withholding their votes for the wrong reasons.

    “That’s not good legislation and that’s blackmail,” he said.

    This story and headline have been updated with additional developments.

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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

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    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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  • Former IRS contractor accused of stealing Trump’s tax returns pleads guilty | CNN Politics

    Former IRS contractor accused of stealing Trump’s tax returns pleads guilty | CNN Politics

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    CNN
     — 

    The former IRS contractor accused of leaking former President Donald Trump’s tax returns and stealing tax information on thousands of the wealthiest people in the US pleaded guilty in federal court on Thursday.

    Prosecutors say Charles Littlejohn of Washington, DC, sent Trump’s tax returns and other data to two media outlets that “published numerous articles describing the tax information they obtained from the Defendant.”

    Littlejohn pleaded guilty to the one count of disclosing tax information, which he was charged with in late September.

    The contractor’s crime affected so many individuals that prosecutors plan to create a public website to notify the victims of any developments in the case.

    During the plea hearing, an attorney for Trump gave a victim impact statement, calling the crime “an egregious breach.”

    Trump’s attorney, Alina Habba, said that Trump’s returns were “kept in a vault at the IRS” and suggested that the leak may have cost Trump votes in the 2020 election.

    Habba said Trump was opposed to the plea deal and called for the maximum sentence of five years in prison for Littlejohn.

    Judge Ana Reyes, the federal judge overseeing the case, said she agreed “completely that anyone taking the law into their own hands is unacceptable.”

    “I cannot overstate how troubled I am by what occurred,” Reyes said. “Make no mistake, this was not acceptable.”

    A sentencing hearing has been scheduled for January 29.

    This story has been updated with additional developments.

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