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Tag: public finance

  • The cream-cheese-stuffed bagel is here | CNN Business

    The cream-cheese-stuffed bagel is here | CNN Business


    New York
    CNN
     — 

    In the 1990s, Pizza Hut unveiled an important cheese-in-bread innovation, the stuffed crust pizza. Now, Philadelphia cream cheese and H&H Bagels, a New York City-based bagel shop, are trying to please the carbohydrate- and dairy-loving communities with a new and dubious spin on the stuffed crust: The bagel stuffed with cream cheese.

    But unlike stuffed-crust pizzas, the bagel is filled with cheese after it is baked, making it more of a cream cheese bagel donut, if not in spirit then at least in form.

    The bagels are “baked fresh daily and then cooled to be individually stuffed with Philly’s signature cream cheese one at a time,” according to Jay Rushin, CEO of H&H. “H&H Bagels use a pastry tool to pipe in the Philly cream cheese by hand,” he added. “The process leaves very small holes where the insertions are made, similar to a jelly donut.”

    The obvious question, as is often the case with food mash-ups, is why. What’s so wrong with slicing a bagel and slathering on a healthy amount of cream cheese? Why must we pre-cheese the bagel? Because, Philly owner Kraft Heinz and H&H say, the simple acts of cutting and spreading are taxed, at least in New York.

    “New York City may be the bagel capital of the world, but its residents incur a ludicrous ‘bagel tax’ each time they opt to purchase a bagel that’s sliced and schmeared with cream cheese,” the companies said in a release.

    That’s true, sort of. New York doesn’t have a specific bagel tax, explained Ryan Cleveland, a representative of the New York State Department of Taxation and Finance. But certain food products, including baked goods, are tax exempt, while prepared foods are not.

    “It’s when a bagel becomes a sandwich or a prepared food that it then becomes taxable,” he said. In New York City, food sold at restaurants is taxed at 8.875%.

    Philadelphia and H&H plan to skirt this rule with the stuffed bagel, which is available at H&H’s Manhattan locations for $1.90 each, from Friday through Tax Day on Tuesday, April 18; and also online.

    “In today’s landscape, people are juggling enough hurdles, and having to pay an extra tax to enjoy their favorite bagel with Philly cream cheese should simply not be one of them,” said Keenan White, senior brand manager of Philadelphia cream cheese, in a statement.

    White and Kraft Heinz

    (KHC)     may well care about their customers’ tax payments. But for food companies, marketing stunts are about creating buzz and staying at the forefront of customers’ minds when they visit the supermarket — or bagel shop.

    Kraft in particular has in recent years been leaning into questionable combinations, like the Velveeta Martini and a hot dog flavored popsicle, to promote its brands and get attention.

    Philadelphia cream cheese, which struggled with shortages in the past, turned that issue into a marketing opportunity as well. There’s no problem with supply now, according to the brand.

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  • Still haven’t filed your taxes? Here’s what you need to know | CNN Business

    Still haven’t filed your taxes? Here’s what you need to know | CNN Business


    New York
    CNN
     — 

    So far this tax season, the IRS has received more than 90 million income tax returns for 2022.

    That means tens of millions of households have yet to file their returns. If yours is among them, here are some last-minute tax-filing tips to keep in mind as the Tuesday, April 18 deadline approaches.

    Not everyone has to file on April 18: If you live in a federally declared disaster area, have a business there — or have relevant tax documents stored by businesses in that area — it’s likely the IRS has already extended the filing and payment deadlines for you. Here is where you can find the specific extension dates for each disaster area.

    Thanks to many rounds of extreme weather in recent months, for instance, tax filers in most of California — which accounts for 10% to 15% of all federal filers — have already been granted an extension until Oct. 16 to file and to pay, according to an IRS spokesperson.

    If you’re in the armed forces and are currently or were recently stationed in a combat zone, the filing and payment deadlines for your 2022 taxes are most likely extended by 180 days. But your specific extended filing and payment deadlines will depend on the day you leave (or left) the combat zone. This IRS publication offers more detail.

    Lastly, if you made little to no money last year (typically less than $12,950 for single filers and $25,900 for married couples), you may not be required to file a return. But you may want to anyway if you think you are eligible for a refund thanks to, for instance, refundable tax credits such as the Earned Income Tax Credit. (Use this IRS tool to gauge whether you are required to file this year.) You also are likely eligible to use IRS Free File (intended for those with adjusted gross income of $73,000 or less) so it won’t cost you to submit a return.

    Your paycheck may not be your only source of income: If you had one full-time job you may think that is the only income you made and have to report. But that’s not necessarily so.

    Other potentially taxable and reportable income sources include:

    • Interest on your savings
    • Investment income (e.g., dividends and capital gains)
    • Pay for part-time or seasonal work, or a side hustle
    • Unemployment income
    • Social Security benefits or distribution from a retirement account
    • Tips
    • Gambling winnings
    • Income from a rental property you own

    Organize your tax documents: By now you should have received every tax document that third parties are required to send you (your employer, bank, brokerage, etc.).

    If you don’t recall receiving a hard copy of a tax form in the mail, check your email and your online accounts — a document may have been sent to you electronically.

    Here are some of the tax forms you may have received:

    • W-2 from your wage or salaried jobs
    • 1099-B for capital gains and losses on your investments
    • 1099-DIV from your brokerage or company where you own stock for dividends or other distributions from their investments
    • 1099-INT for interest over $10 on your savings at a financial institution
    • 1099-NEC from your clients, if you worked as a contractor
    • 1099-K for payments for goods and services through third-party platforms like Venmo, CashApp or Etsy. The 1099-K is required if you made more than $20,000 in over 200 transactions during the year. (Next year the reporting threshold drops to $600.) But even if you didn’t get a 1099-K you still must report all the income that you made over third-party platforms in 2022.
    • 1099-Rs for distributions over $10 that you received for a pension, annuity, retirement account, profit-sharing plan or insurance contract
    • SSA-1099 or SSA-1042S for Social Security benefits received.

    “Be aware that there’s no form for some taxable income, like proceeds from renting out your vacation property, meaning you’re responsible for reporting it on your own,” according to the Illinois CPA Society.

    One very last-minute way to reduce your 2022 tax bill: If you’re eligible to make a tax-deductible contribution to an IRA and haven’t done so for last year, you have until April 18 to contribute up to $6,000 ($7,000 if you’re 50 or older). That will reduce your tax bill and augment your retirement savings.

    Proofread your return before submitting it: Do this whether you’re using tax software or working with a professional tax preparer.

    Little mistakes and oversights delay the processing of your return (and the issuance of your refund if you’re owed one). You want to avoid things like having a typo in your name, birth date, Social Security number or direct deposit number; choosing the wrong filing status (e.g., married vs single); making a simple math error; or leaving a required field blank.

    What to do if you can’t file by April 18: If you’re not able to file by next Tuesday, fill out Form 4868 electronically or on paper and send it in by April 18. You will be granted an automatic six-month extension to file.

    Note, however, that an extension to file is not an extension to pay. You will be charged interest (currently running at 7%) and a penalty on any amount you still owe for 2022 but haven’t paid by April 18.

    So if you suspect you still owe tax — perhaps you had some income outside of your job for which tax wasn’t withheld or you had a big capital gain last year — approximate how much more you owe and send that money to the IRS by Tuesday.

    You can choose to do so by mail, attaching a check to your extension request form. Make sure your envelope is postmarked no later than April 18.

    Or the more efficient route is pay what you owe electronically at IRS.gov, said CPA Damien Martin, a tax partner at EY. If you do that, the IRS notes you will not have to file a Form 4868. “The IRS will automatically process an extension of time to file,” the agency notes in its instructions.

    If you opt to electronically pay directly from your bank account, which is free, select “extension” and then “tax year 2022” when given the option.

    You can also pay by credit or debit card, but you will be charged a processing fee. Doing so, though, may become much more costly than just a fee if you charge your tax payment but don’t pay your credit card bill off in full every month, since you likely pay a high interest rate on outstanding balances.

    If you still owe income taxes to your state, remember that you may need to go through a similar exercise of filing for an extension and making a payment to your state’s revenue department, Martin said.

    Use this interactive tax assistant for basic questions you may have: The IRS provides an “interactive tax assistant” that can help you answer more than 50 basic questions pertaining to your individual circumstance on income, deductions, credits and other technical questions.

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  • NPR stops using Twitter after receiving ‘government funded media’ label | CNN Business

    NPR stops using Twitter after receiving ‘government funded media’ label | CNN Business


    New York
    CNN
     — 

    NPR on Wednesday said that it is suspending its use of Twitter after clashing with the social media company and its owner Elon Musk over a controversial new “state-affiliated media” label applied to its accounts.

    “NPR’s organizational accounts will no longer be active on Twitter because the platform is taking actions that undermine our credibility by falsely implying that we are not editorially independent,” the broadcaster said in a statement. “We are not putting our journalism on platforms that have demonstrated an interest in undermining our credibility and the public’s understanding of our editorial independence.”

    Late last week, Twitter labeled the radio broadcaster as a “state-affiliated media” organization akin to foreign propaganda outlets such as Russia’s RT and Sputnik. The move was quickly rebuked by NPR, which is publicly funded by listeners. NPR CEO John Lansing called the label “unacceptable.” Twitter over the weekend updated the label to “government-funded media.”

    In a final series of tweets — its first in over a week — NPR noted other places its work can be found, including through its app and newsletters, as well as on other social media platforms.

    “Millions of Americans depend on NPR and their local public radio stations for the fact-based, independent, public service journalism they need to stay informed about the world and about their own communities,” Lansing said in an email to NPR staff Wednesday. “It would be a disservice to the serious work you all do here to continue to share it on a platform that is associating the federal charter for public media with an abandoning of editorial independence or standards.”

    The move threatens to undermine one of Twitter’s key selling points — its role as a central hub for news — especially if other outlets follow in NPR’s footsteps. Twitter has also faced backlash over applying a similar “government funded media” label to the BBC, which is also primarily funded by the public.

    In an interview with the BBC Tuesday, Musk acknowledged the pushback, saying, “I know the BBC … was not thrilled about being labeled ‘state affiliated media.’”

    “Our goal is simply to … be as truthful and accurate as possible,” Musk said, adding that he planned to update the BBC’s label to “publicly funded.”

    It’s just the latest example of Musk antagonizing media outlets. Twitter earlier this month also targeted the New York Times by removing the blue verification checkmark from its main account, after previously pledging to remove checks from all users verified under Twitter’s legacy system. And the platform riled some journalists when it briefly restricted users from sharing links to a popular newsletter platform, a move it quickly walked back.

    Meanwhile, Twitter also appears to have removed some restrictions on Russian government accounts that had been put in place following the outset of Russia’s war in Ukraine. “All news is to some degree propaganda. Let people decide for themselves,” Musk said in a tweet commenting on the decision Sunday.

    The chaos comes as Musk attempts to shore up Twitter’s business, which he has repeatedly said was on the brink of bankruptcy and had just “four months to live” following his takeover.

    Twitter has faced an exodus of advertisers, who have been concerned about increased hate speech on the platform and massive cuts to the company’s workforce. In the meantime, Musk has taken on the uphill battle of encouraging users to pay $8 per month for the platform’s subscription service.

    It’s “not fun at all” and can sometimes be “painful,” the billionaire CEO told the BBC Tuesday of running the company, although he suggested that some Twitter advertisers are returning to the platform.

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  • EPA proposes new tailpipe rules that could push EVs to make up two-thirds of new car sales in US by 2032 | CNN Politics

    EPA proposes new tailpipe rules that could push EVs to make up two-thirds of new car sales in US by 2032 | CNN Politics



    CNN
     — 

    The Environmental Protection Agency on Wednesday proposed ambitious new car pollution rules that could require electric vehicles to account for up to two-thirds of new cars sold in the US by 2032, in what would be one of the Biden administration’s most aggressive climate-change policies yet.

    The tailpipe standards would also have the effect of cutting planet-warming pollution from cars in half. Transportation accounts for nearly 30% of all greenhouse gas emissions in the US, according to the EPA.

    EPA Administrator Michael Regan called the regulations “the strongest-ever federal pollution standards for cars and trucks.”

    Regan touted the proposed rules on “CNN News Central” on Wednesday, claiming they would bring down costs for consumers and slash planet-warming pollution.

    “This is a future for everyone, and we’re starting to see all of the auto industry move in this direction,” Regan told CNN’s Sara Sidner, saying strong auto emissions rules have been part of President Joe Biden’s “vision from day one.”

    EPA officials said that they are considering several different emissions proposals, which could result in anywhere from a 64% to 69% electric vehicle adoption rate by early next decade. If approved, the emissions standards would start model year 2027 vehicles.

    The agency anticipates the new rules would mean EVs could also make up nearly half of all new medium-duty vehicles, like delivery trucks, by model year 2032. Officials are also proposing stronger standards for heavy-duty vehicles, including dump trucks, public utility trucks, and transit and school buses.

    One expert told CNN the Biden administration’s proposal is a pivotal moment for the US auto industry and consumers.

    “It’s a pretty big deal,” said Thomas Boylan, a former Environmental Protection Agency official and the regulatory director for the EV trade group Zero Emission Transportation Association. “This is really going to set the tone for the rest of the decade and into the 2030s in terms of what this administration is looking for the auto industry to do when it comes to decarbonizing and ultimately electrifying.”

    Regan and White House National Climate Adviser Ali Zaidi hailed the proposed regulations as a major climate win that would also save American consumers money in the coming years.

    Zaidi said that in the Biden administration’s first few years, the number of EVs on US roads had already tripled, while the number of public charging stations had doubled. And Zaidi vowed more to come, with funding from Biden’s infrastructure law for a network of EV charging stations combined with consumer tax credits.

    “Whether you measure today’s announcements by the dollars saved, the gallons reduced, or the pollution that will no longer be pumped into the air, this is a win for the American people,” Zaidi said.

    Yet even as the administration is writing aggressive regulations to push the market toward EVs, a Gallup poll released Wednesday suggests that Americans are not yet sold on the idea. Gallup polled more than 1,000 adults in the US last month and found that 41% said they would not buy an electric vehicle.

    Not only are EVs still more expensive than gas-powered cars, but consumers also haven’t yet grasped the climate benefits of transitioning to zero-emissions vehicles, the poll found. Six in 10 respondents said they believe EVs help the environment “only a little” or “not at all,” Gallup reported.

    Transportation is the biggest source of planet-warming pollution in the US, and light duty vehicles – the average cars Americans drive – account for 58% of those emissions. The UN’s Intergovernmental Panel on Climate Change reported last year that aggressive, pollution-slashing changes in the global transportation sector – including the transition to EVs – could reduce the sector’s emissions by more than 80%.

    Speaking on CNN, Regan also emphasized that switching to an EV would save consumers money in the long run.

    “Folks who purchase electric vehicles will see a cost savings over the lifespan of the vehicle, because they’re not having to buy gas, having to pay for maintenance,” Regan said. “So this is a huge opportunity for everyone in this country.”

    Other countries, including the EU and China, are moving faster toward adopting EVs. In the US, California has already proposed that zero-emissions vehicles make up 70% of new car sales by 2030, and 17 other states plan to follow California’s lead.

    That means much of the US car industry will already be transitioning ahead of the proposed federal rules.

    “I believe it’s pretty doable,” Margo Oge, chair of the International Council on Clean Transportation and a former Obama EPA official, said of the aggressive transition to EVs. “The industry is there. Europe is ahead of the US, China is ahead of Europe – and these companies are global companies.”

    New federal tax credits are coming next week that aim to help American consumers save up to $7,500 on an EV. But they have incredibly complex requirements for the auto industry – including that the cars’ batteries and components come from the US or countries it has a free-trade agreement with.

    Still, Boylan said the regulations are designed to gradually work over the next decade, by which time consumers should have far more electric vehicle options to choose from.

    “You’ve got the tax credits as the carrot,” Boylan said. The proposed tailpipe regulation “provides the stick to backstop these incentives and push the industry forward.”

    Regan told CNN the rules would be phased in gradually, giving auto makers and consumers years before they fully go into effect. During that time, the administration is focused on installing more EV charging stations and expanding access to $7,500 federal EV tax credits.

    “What we’re looking at is a ramp-up period,” Regan said on CNN. “We’re going to see a massive buildup over the next couple years, and we’re starting to see those electric vehicle sales numbers grow already.”

    The EPA will take public comment on the proposal before finalizing the rules in the coming months.

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  • Wall Street says bad news is no longer good news. Here’s why | CNN Business

    Wall Street says bad news is no longer good news. Here’s why | CNN Business

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


    New York
    CNN
     — 

    There’s been a seismic shift in investor perspective: Bad news is no longer good news.

    For the past year, Wall Street has hoped for cool monthly economic data that would encourage the Federal Reserve to halt its aggressive pace of interest rate hikes to tame inflation.

    But at its March meeting — just days after a series of bank failures raised concerns about the economy’s stability — the central bank signaled that it plans to pause raising rates sometime this year. With an end to interest rate hikes in sight, investors have stopped attempting to guess the Fed’s next move and have turned instead to the health of the economy.

    This means that, whereas softening economic data used to signal good news — that the Fed could potentially stop raising rates — now, cooling economic prints simply suggest the economy is weakening. That makes investors worried that the slowing economy could fall into a recession.

    What happened last week? Markets teetered after a slew of economic reports signaled that the red-hot labor market is finally cooling (more on that later), flashing warning signals across Wall Street.

    Investors accordingly shed high-growth, large-cap stocks that have surged recently to rush into defensive stocks in industries like health care and consumer staples.

    While tech stocks recovered somewhat by the end of the short trading week — markets were closed in observance of Good Friday — the Nasdaq Composite still slid 1.1%. The broad-based S&P 500 fell 0.1% and the blue-chip Dow Jones Industrial Average gained 0.6%.

    What does this mean for markets? Now that Wall Street is in “bad news is bad news and good news is good news” mode, it will be looking for signs that the economy remains resilient.

    What hasn’t changed is that investors still want to see cooling inflation data. While the central bank has signaled that it will pause hiking rates this year, its actions so far have only somewhat stabilized prices. The Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, rose 5% for the 12 months ended in February — far above its 2% inflation target.

    Moreover, Wall Street might be overly optimistic about how the Fed will act going forward: Some investors expect the central bank to cut rates several times this year, even though the central bank indicated last month that it does not intend to lower rates in 2023.

    It’s unclear how markets will react if the Fed doesn’t cut rates this year. But there likely won’t be a notable rally unless the central bank pivots or at least indicates that it plans to soon, said George Cipolloni, portfolio manager at Penn Mutual Asset Management.

    Commentary that’s hawkish or reveals inflation worries could hurt markets, he adds. “It keeps that boiling point and that temperature a little high.”

    What comes next? The Fed holds its next meeting in early May. Before then, it will have to parse through several economic reports to get a sense of how the economy is doing, and what it will be able to handle. Markets currently expect the Fed to raise interest rates by a quarter point, according to the CME FedWatch tool.

    The labor market appears to be cooling somewhat, at least according to the slew of data released last week. But it’s still far too early to assume that the job market has lost its strength.

    President Joe Biden said in a statement Friday that the March data is “a good jobs report for hard-working Americans.”

    The March jobs report revealed that US employers added a lower-than-expected 236,000 jobs last month. Economists expected a net gain of 239,000 jobs for the month, according to Refinitiv.

    The unemployment rate dropped to 3.5%, according to the Bureau of Labor Statistics. That’s below expectations of holding steady at 3.6%.

    The jobs report was also the first one in 12 months that came in below expectations.

    But that doesn’t mean that the job market isn’t strong anymore.

    “The labor market is showing signs of cooling off, but it remains very tight,” Bank of America researchers wrote in a note Friday.

    Still, other data released last week help make the case that cracks are finally starting to form in the labor market. The Job Openings and Labor Turnover Survey for February revealed last week that the number of available jobs in the United States tumbled to its lowest level since May 2021. ADP’s private-sector payroll report fell far short of expectations.

    What this means for the Fed is that the cooldown in the latest jobs report likely won’t be enough for the central bank to pause rates at its next meeting.

    “The Fed will more than likely raise rates in May as the labor market continues to defy the cumulative effects of the rate hikes that began over a year ago,” said Quincy Krosby, chief global strategist at LPL Financial.

    Monday: Wholesale inventories.

    Tuesday: NFIB Small Business Optimism Index. Earnings from CarMax (KMX), Albertsons (ACI) and First Republic Bank (FRC).

    Wednesday: Consumer Price Index and FOMC meeting minutes.

    Thursday: OPEC monthly report and Producer Price Index. Earnings from Delta Air Lines (DAL).

    Friday: Retail sales and University of Michigan consumer sentiment survey. Earnings from JPMorgan Chase (JPM), Wells Fargo (WFC), BlackRock (BLK), Citigroup (C) and PNC Financial Services (PNC).

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  • America funded nationwide child care during WWII. Here’s how Biden is trying to revive that effort | CNN Politics

    America funded nationwide child care during WWII. Here’s how Biden is trying to revive that effort | CNN Politics


    Washington
    CNN
     — 

    During World War II, the federal government spent more than $1 billion in today’s dollars to help provide affordable child care for mothers who entered the workforce in droves to support the war effort.

    Child care centers in more than 635 communities across the country received funds. Many stayed open late and on weekends to match workers’ factory schedules.

    The World War II-era child care program was the first and only federally administered child care for all families, regardless of their income – a qualifying factor for many of today’s federal child care subsidies.

    But the federal funding abruptly expired when the war ended, and now, roughly 80 years later, many American families struggle to find affordable, high-quality child care that meets their needs. The private market simply does not provide adequate child care options.

    President Joe Biden, who could not get his universal pre-K proposal through Congress, is now taking a different, more limited approach. He’s requiring companies applying for certain federal grants meant to boost domestic manufacturing of semiconductor chips to also have a plan to provide access to affordable child care for their workers.

    The policy is designed to make sure workers as well as companies benefit from this federal investment, said Betsey Stevenson, a professor of public policy and economics at the University of Michigan who previously served as an adviser to former President Barack Obama.

    “Another way to think about it is that we really need government involved in child care,” she said.

    As men went overseas to fight in World War II and the federal government’s “Rosie the Riveter” campaign encouraged women to join the workforce, it became clear that child care was sorely needed.

    The money came from the National Defense Housing Act of 1940, more widely known as the Lanham Act, which was meant to fund infrastructure projects deemed critical to the war effort. The Federal Works Agency decided in 1942 that child care services fell in that category.

    The FWA allowed the funds to be used for the construction and maintenance of child care facilities, to train and pay teachers, and to provide meals for communities that were directly involved in the war effort. The child care money was disbursed to centers in nearly every state.

    Parents typically had to chip in, paying less than $1 a day for the child care services.

    “It’s quite remarkable. The country essentially stood up an entire child care program in a matter of months,” said Chris Herbst, an associate professor at Arizona State University who published a study in 2013 on the Lanham Act child care program.

    Herbst found that mothers’ paid work increased substantially following the child care subsidies. He also found that those mothers were more likely to be working 20 years later.

    The program had a long-term impact on the children, too, whom Herbst found to be more likely to achieve higher levels of education and to be employed in the future, and less likely to receive other kinds of government aid throughout their lives.

    Currently, the federal government subsidizes child care for low-income families through programs like the Child Care and Development Fund and Head Start programs.

    But many families still struggle to afford child care, and those that can afford it have trouble finding it. After the Covid-19 pandemic dealt a huge blow to the child care sector, the federal government provided funds to help keep child care centers operating. But long-lasting, sweeping reform has repeatedly failed to pass Congress.

    Last year, lawmakers passed the CHIPS and Science Act, which invests more than $200 billion over five years to help the US bring back semiconductor chip manufacturing from places like China. The law is not specifically about child care, but now the Commerce Department is requiring some companies to also provide access to child care in order to be eligible for the money.

    The CHIPS law creates incentives for companies to build, expand and modernize US facilities and equipment and is already spurring private investment. Wolfspeed, a North Carolina semiconductor manufacturer that Biden visited late last month, announced a $5 billion investment to build a facility, expecting to create 1,800 jobs there.

    In February, the Biden administration added the child care provision. Companies seeking certain grants over $150 million must also submit a plan to provide their facility and construction workers with access to affordable, high-quality child care, according to the government’s guidance.

    “The first thing I thought was that this was ‘Lanham Part Two,’” said Kathryn Edwards, an adjunct economist at the RAND Corporation.

    “We want to make sure we have workers for this critical industry, so we are going to have child care,” she said.

    Like the Lanham Act, the child care program is supported by a law primarily focused on industrial policy. But the CHIPS law is putting the onus on the employer to provide the service, rather than deliver funding directly to local child care centers.

    “Here’s the truth: CHIPS won’t be successful unless we expand the labor force. We can’t do that without affordable child care,” Commerce Secretary Gina Raimondo tweeted in February.

    Herbst believes it could be a few years before workers see how the child care requirement plays out and how each employer decides to structure the benefit. They may choose to provide child care on-site or offer employees child care vouchers.

    “The administration has, I think, a commitment to child care. I think the question is whether this is the best way to manifest that commitment,” Herbst said.

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  • Early struggles of new House Republican majority raise anxiety over high-stakes fights to come | CNN Politics

    Early struggles of new House Republican majority raise anxiety over high-stakes fights to come | CNN Politics



    CNN
     — 

    As House Republicans prepared to pass a parental rights bill – a signature plank of their governing agenda – GOP leaders ran into unexpected headwinds.

    House Majority Whip Tom Emmer, who is tasked with counting votes, began picking up on concerns from conservatives who thought the measure was federal overreach and moderates who worried about potential amendments related to transgender students.

    Even Rep. Ken Buck of Colorado, a member of Emmer’s whip team, informed leadership he would be voting against the bill – prompting grumbling from some senior Republicans who mused about kicking him off the whip team, according to sources familiar with the internal conversations.

    And when it came time for the floor vote, a last-minute hiccup – GOP Rep. Troy Nehls of Texas accidentally voting against the bill – prompted Emmer and other leaders to swarm Nehls on the floor and urge him to change his vote, a frantic scene as the clock ticked down and the measure’s fate hung in the balance.

    In the end, the bill wound up narrowly passing with five Republican defections – a margin that would have been enough to sink the legislation, had it not been for 10 Democratic absences.

    “Nobody ever said it was going to be easy,” Emmer told CNN in a phone interview. “You’re dealing with a whole bunch of people with a whole bunch of personalities, different points of view. (The amendment process) is an exciting process when members are able to come to the floor with an idea to impact a piece of legislation. … It’s always a challenge though.”

    Asked about Buck defying leadership on the education bill, Emmer said they are not booting him from the whip team, but he did joke about getting retribution.

    “I told him instead, we’re going to add a couple people to his whip card that will give him just a little bit more work,” Emmer said.

    The intense whipping effort and internal drama on a messaging bill that is dead-on-arrival in the Senate has become a recurring theme of the House GOP’s first 100 days in office. With little room for error in their razor-thin majority, Republicans have so far struggled to deliver on key priorities like the border and the budget amid their internal divisions – though they have notched some symbolic victories on energy and education, while actually succeeding in overturning a DC crime bill.

    Despite the handful of successes, the party’s more vulnerable members are frustrated with how the House Republican majority has so far spent its time in power, which has also included a heavy focus on investigations and running defense for former President Donald Trump.

    “I’m concerned about the kind of legislation that we’re working on, and what we’re talking about,” Rep. Nancy Mace of South Carolina, who represents a swing district, told CNN. “We just spent the last week talking about paying off porn stars, and that doesn’t get us anywhere closer to solving the inflation crisis, it doesn’t inch further to finding ways to protect women. … I’ve been very disappointed with what we’re doing right now.”

    Rep. Tony Gonzales of Texas, a moderate and outspoken critic of the GOP’s hardline border security bills, was even blunter: “I don’t have time to sit around all day long and drink scotch and bullsh*t about bills that have no chance of passing into law.”

    Senior Republicans chalked up the early struggles to natural growing pains that come with any new majority.

    “There’s always a bit of a learning curve. You have to understand, over half our members have never been in a majority,” said veteran Rep. Tom Cole of Oklahoma, a member of the GOP leadership team. “There’s a lot of learning that goes on – then add in a divided government and a narrow majority.”

    But the biggest hurdles are yet to come, with Congress gearing up to deal with must-pass items like lifting the nation’s debt ceiling and funding the government – two politically tricky issues with incredibly high stakes. And while GOP lawmakers say they are generally experiencing a honeymoon phase right now, the anxiety over the challenges ahead was palpable in interviews with over two dozen Republican members for this story.

    In a sign of how difficult things could get for GOP leaders, members of the hardline House Freedom Caucus are already talking about the cudgels they have at their disposal to use in those upcoming fights – namely, the power of any single member to force a floor vote on ousting the speaker. Restoring the procedural tool, known as the “motion to vacate,” was one of the key concessions Kevin McCarthy made in his bid to become speaker.

    “It hasn’t come up as far as in a serious conversation, as this needs to be enacted. But as we look at these issues … It does come up from time to time, as we game plan and we look at all of the alternatives and contingency plans that could play out over the next two years,” said freshman Rep. Eli Crane of Arizona, one of the McCarthy holdouts who ended up voting “present” on the last ballot.

    Lawmakers have largely attributed the House GOP’s slow start to the historic, drawn-out speaker’s battle that delayed their ability to organize committees.

    But there are other reasons: House Majority Leader Steve Scalise initially promised to put 11 bills on the floor within their first two weeks in office, but leadership was forced to pull five of them – including legislation on hot-button topics like border security, law enforcement and abortion – amid resistance within their ranks.

    House Republicans also promised to produce a 10-year budget, but have struggled behind the scenes to find consensus and are now discussing delaying – or even skipping – a budget in order to focus on a bill to combine hiking the debt ceiling with spending cuts.

    McCarthy can only afford to lose four Republican votes on any partisan bills. And he made a number of promises to secure his speakership that have complicated his ability to govern, such as vowing a more open amendment process that allows any member to alter legislation on the floor.

    While many lawmakers welcomed this addition to the legislative process, some have expressed concern that it could sink otherwise bipartisan pieces of legislation.

    “I’ve got mixed feelings,” GOP Rep. Don Bacon, who represents a Biden-won district in Nebraska, told CNN. “On the positive side, it gets more people involved. They feel like they have a voice. That’s good. I think, too, though, on the downside, it’s taking some of our bills that should be more bipartisan, but through the amendment process is made more partisan.”

    Rep. Kelly Armstrong of North Dakota acknowledged that the process is “not without its stumbles and it’s going to cause problems along the way,” but added: “I think we should celebrate it.”

    Abolishing the House’s remote voting system, though encouraging for many who wanted the chamber to return to its pre-Covid posture, has also made attendance an issue. Emmer told CNN that even a member who recently tore his Achilles’ heel is not planning on missing any time.

    Despite the challenging dynamics, Republicans have notched some real wins, including passing a resolution to block a DC crime bill that lessened penalties for certain offenses and a resolution to end the Covid-19 public health emergency.

    “We’re holding tight to our commitment to America. And I know it looks a little bit dicey and it doesn’t look real fluid. … That’s democracy. I think that’s a positive thing,” said Rep. Lisa McClain of Michigan, a new member of the GOP leadership team. “It’s not real pretty all the time, but I think it’s positive.”

    GOP Rep. Jennifer Kiggans, a freshman from Virgina who flipped her seat, said it is important to show what Congress looks like under Republican leadership even if the legislation is not going to pass the Senate.

    “We’ve been there three months. I don’t know anybody that assumes a new position and changes things overnight. So it’s a work in progress. I think we are demonstrating what Republican leadership looks like.”

    A number of House Republicans expressed concern that the toughest fights the party will face are still to come, from reaching a deal on the debt ceiling, to funding the government to continuing to deliver on key campaign promises.

    “We haven’t gotten to the heavy lifting yet,” GOP Rep. Mike Rogers of Alabama, a committee chairman, told CNN.

    Crane told CNN, “I’m definitely concerned about it” when asked about the pace of legislation coming to the floor.

    And GOP Rep. Steve Womack of Arkansas compared the first 100 days to a football scrimmage.

    “In football terms, we have been in a scrimmage. We’ve basically been trying to figure out how this small majority is going to work together with differing viewpoints,” he explained. “We’re going to join the varsity now. Competition is going to get a little tougher. The issues are going to get a little harder. And the challenge to leadership is going to get a little bit more compelling. But I think that they are equal to the task.”

    A number of members also voiced their concern that not enough progress has been made on crucial issues like the debt ceiling.

    “What worries me is the delay,” Cole told CNN about the state of debt ceiling talks.

    There’s also been some miscommunication issues. House Budget Chairman Jodey Arrington of Texas ruffled some feathers among Republicans when he told CNN that the GOP would produce a budget in May – a statement his office had to then walk back – and when he told a group of reporters that he is working on a “term sheet” of spending cuts, which McCarthy later shot down, saying: “I don’t know what he’s talking about.”

    Still, most House Republicans are pinning their frustrations on President Joe Biden, who they framed as unwilling to come to the negotiating table.

    “I wish we had made more progress on the debt ceiling at this point,” GOP Rep. Dusty Johnson, chair of the centrist-leaning Main Street Caucus, told CNN. “We are getting very close to go time. The fact that we’re where we’re at should concern a lot of us. That is because Joe Biden refuses to come to the table.”

    Kiggans told CNN, “there’s got to be less finger pointing” over the issue.

    “I really disagree with standing up on the floor and making really obnoxious speeches about the other side.”

    The White House has called for the debt ceiling to be raised without any conditions attached.

    Beyond the debt ceiling, the conference is still stalled on a number of key pieces of legislation including a narrow border security bill that has run into fierce opposition from moderates.

    The various ideological groups inside the House GOP met twice about a broader immigration and border package during the last week the House was recently in session, including one meeting involving McCarthy. The hope is to move a package through committee later this month.

    But the two most vocal voices on the issue, Gonzales and Texas GOP Rep. Chip Roy, do not appear to be budging.

    “I’m not going to give in, and you’re never going to out-border me,” said Gonzales, who opposes a hardline border security bill from Roy.

    Meanwhile, Roy told CNN: “I’m not really worried about what [Gonzales] has to say.”

    To help deal with the internal divisions, McCarthy tapped GOP Rep. Garret Graves of Louisiana to lead negotiations on the debt ceiling and to meet at least weekly with leaders of each faction of the House GOP conference, known as the “five families,” in an effort to privately air grievances and avoid tensions from spilling into public view.

    But the deputization of Graves – as opposed to someone on McCarthy’s elected leadership team, like Scalise, or Arrington, who is actually in charge of budget issues– has raised some eyebrows in GOP circles, who wonder if McCarthy is trying to create some distance from the talks or if he doesn’t feel like he can trust his other deputies.

    One GOP lawmaker said Arrington is not a close ally of the speaker, which has made things more challenging for the pair.

    “Jodey’s not a McCarthy guy,” the member said. “But Jodey is doing his best.”

    Another Republican acknowledged that there’s long been some distrust between McCarthy and Scalise, who were once seen as potential rivals.

    Arrington, in a statement, said he is focused on his mission “to stop the reckless spending that is bankrupting our country and restore fiscal sanity in Washington before it’s too late.”

    And Armstrong pointed out that having Graves in charge of overseeing some of these talks makes sense from a resource perspective.

    “Scalise and his team have to run the floor with a five-vote majority,” he said. “They are doing a great job, but it’s a lot.”

    Graves acknowledged to CNN the significance of being tapped by leadership to take on such a pivotal role.

    “Everything that I’m doing is sort of part of the speaker’s authority,” Graves told CNN. “I was not elected.”

    Graves likened the meetings, which McCarthy joins at least a third of the time, to “a therapy session.”

    “The best way I can describe it is a big family Thanksgiving dinner,” Armstrong, a regular meeting attendee, told CNN. “Everybody fights and is rowdy and will get into arguments but you know what? When you walk out of that Thanksgiving dinner, you better not make fun of my sister or brother at a bar or you’re going to have a problem.”

    “They’re contentious, but they’re respectful,” Armstrong added.

    These meetings are intended to open the lines of communication with members who normally wouldn’t engage with one another and be proactive about working out issues in order to avoid clashes on the House floor. From there, Emmer digs into the details with members who have specific sticking points. Beyond targeted meetings, Emmer said he and his team have had listening sessions with every member of the conference.

    The process of bringing various groups of House Republicans together has become a fixture in the conference’s first 100 days in the majority and a hallmark of McCarthy’s leadership style. Part of that is, by necessity, since McCarthy can only lose four Republicans on any given vote.

    But that process takes time, which is partly why the conference has not been able to put up some of its top priorities up for a floor vote yet.

    “It’s like getting a bunch of stray cats to all come together and go in the same direction. Pretty much the same thing with congressmen,” GOP Rep. Jeff Van Drew of New Jersey said.

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  • Taxes and adulting: What to know about filing taxes on your own for the first time | CNN Business

    Taxes and adulting: What to know about filing taxes on your own for the first time | CNN Business


    New York
    CNN
     — 

    For most people in their early- to mid-20s, filing taxes is right up there with having to pay rent and realizing you can’t take summers off anymore: an unwelcome fact of being an adult.

    If you’re a recent graduate working your first full-time job or supporting yourself for the first time, this tax-filing season may indeed be your first experience doing your own taxes without the help of a parent.

    So here are seven things to keep in mind.

    If you’re confounded by filing your taxes, you may think it’s because you’re young and inexperienced. Nonsense. Tax filers of all ages get confused by tax rules and the intricacies of all the tax documents required. And it doesn’t help that tax provisions are tweaked frequently.

    Your tax return is a financial snapshot of your life over a 12-month period, in this case 2022. And a lot can happen during that time that will have tax implications and need to be reported.

    “Think about what went on in your life in the past year,” said Tom O’Saben, the director of tax content at the National Association of Tax Preparers.

    For example, O’Saben asked, did you work more than one job? Did you move for a new job? Did you get laid off? Did you get married or have a child? Did you make student loan payments? Did you make money selling anything you own? Did you buy a home?

    Next, pull together all necessary documentation. In addition to receipts and other paperwork you may have kept, you should also have tax forms that were either mailed to you or sent electronically — from your employers, brokerage firms, college, loan servicers, the state unemployment office, etc.

    You’ll need the information on these forms to fill out your tax return accurately. Keep in mind, the IRS also has a copy of these “third-party” forms that were sent to you, so its systems will flag if there is any discrepancy between what is on the form sent to you and what you put on your return.

    Most people realize what they earn at a full-time job is subject to income tax and that those taxes are automatically withheld by your employer.

    But any side hustle income you generate, or money you make as a gig worker, is also taxable, even if you’re paid in cash or via a payment app. Ditto for tips. And often tax on that type of income is not withheld. You’re just paid a gross amount and will have to set aside money to cover the taxes owed on it.

    Severance payments and unemployment benefits may be taxable too.

    And so is investment income — meaning the profits (or “capital gain”) you make on the sale of an investment or property — which is basically the price for which you sell something minus the original price you paid for it. (Also worth noting: if you have investment income, also called “passive” income, it is taxed at a lower rate than your paycheck — i.e., “earned” income — assuming you held your investment longer than a year.)

    Most dividends and interest payments are also taxable.

    And remember all that lucrative fun you had betting on the SuperBowl or spending a weekend with friends in Vegas? Yup, your winnings from gambling and sports betting are considered taxable income. (The semi-good news is if you had any gambling losses last year, they can offset your wins, so it may be that you won’t owe tax on your winnings if your losses cancel them out.)

    For many of these types of income you should have received forms from your employer (a W2 if you’re a full-time employee); from your clients if you’re a contract or gig worker (eg. a 1099-K, a 1099-NEC) or, starting next year, from the payment apps on which you get paid for your goods and services (e.g., a 1099-MISC). Meanwhile, banks and brokerage firms will send you 1099-INTs (for interest), 1099-DIVs (for dividends) and 1099-Bs (for your capital gains and losses).

    If you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, you don’t have to file a state tax return because those states don’t impose an income tax. If you live in New Hampshire and Tennessee, you won’t have to file a return for your salary and wages. But you may have to file a return if you got income from dividends and interest during the tax year.

    The standard deduction reduces your adjusted gross income. The amount for tax year 2022 is $12,950 for singles; $25,900 for married couples filing jointly; and $19,400 for heads of household (e.g., a single parent).

    “That’s the amount of money you don’t have to pay tax on,” O’Saben noted.

    The only filers who itemize their deductions are those whose deductions add up to more than the standard deduction. Itemized deductions include: charitable contributions, state and local income and property taxes, mortgage interest and casualty loss if you live in a federally declared disaster area.

    But even if you just take the standard deduction you may also take in addition what are called “above-the-line” deductions. These include up to $2,500 in student loan interest that you paid in 2022 (your student loan servicer should send you a Form 1098-E); any contributions you made to a deductible IRA or to a Health Savings Account; and, if you’re a teacher, up to $300 of what you spent on school supplies and personal protective equipment for your classroom.

    [For a fuller list of different types of taxable income (“additional income”) and above-the-line deductions (“adjustments to income”), see Schedule 1 to the federal 1040 form.]

    A tax credit is a dollar-for-dollar reduction of your tax bill and if it’s a “refundable” credit, which some are, it can actually increase your refund.

    Some credits to be aware of, especially if you’re not making a lot of income:

    The Earned Income Tax Credit: The EITC is intended to help low- and moderate-income workers (defined in 2022 as those with earned income under $59,187), and especially filers with children.

    The EITC is also available to earners without qualifying children and it’s worth $560 for 2022.

    Education credits: If you were in school last year, footed the costs and are not claimed as a dependent on anyone else’s tax return, you may be eligible for an American Opportunity Tax Credit or a Lifetime Learning Credit. To see if you qualify, here’s an IRS table comparing the eligibility requirements and the value of each of those credits. Also, check to see if your educational institution sent you a Form 1098-T, which you will need if you claim one of these credits.

    The Saver’s Credit: The Saver’s Credit is a federal match for lower-income earners’ retirement contributions for up to $2,000 a year.

    The Child Tax Credit: If you’re a parent you may claim a maximum child tax credit of $2,000 for each child through age 16 if your modified adjusted gross income is below $200,000 ($400,000 if filing jointly). Above those levels, the child tax credit starts to get reduced. And the portion of the credit treated as refundable — meaning it is paid to you even if you don’t owe any federal income tax — is capped at $1,500, and that is only available to those with earned income of at least $2,500.

    And if you paid for child care in 2022, you may be eligible to claim a dependent care credit.

    Your federal tax return is due on April 18. That is the day by which you must have filed your 2022 individual tax return and paid any remaining federal income taxes owed for last year. The only exceptions are for those who lived in federally declared disaster areas, in which case their deadlines are later.

    But anyone can apply for — and will automatically be granted — a six-month extension until October 16, 2023 to file their return if they submit Form 4868 by April 18.

    Note, though, that an extension to file is not an extension to pay if you still owe the IRS more in taxes for last year than you actually paid in 2022.

    So, unless you have good reason to believe you will receive a refund, get a ballpark estimate of what more you think you’ll owe the IRS and send in that check by April 18 if you file for an extension. Otherwise you could be hit with a late payment penalty. And that could be compounded by a failure-to-file penalty if you didn’t file on time or didn’t get an automatic filing extension.

    Sign up for CNN’s Adulthood, But Better newsletter series. Our seven-part guide has tips to help you make more informed decisions around personal finance, career, wellness and personal connections.

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  • ‘It’s not zero.’ Wall Street is pricing in a small but growing risk of a disastrous US default | CNN Business

    ‘It’s not zero.’ Wall Street is pricing in a small but growing risk of a disastrous US default | CNN Business


    New York
    CNN
     — 

    A US default would have such devastating economic and financial consequences that many observers dismiss the possibility out of hand. But investors are not ruling out such a nightmare scenario.

    Even though a default could wipe out millions of jobs and wreak havoc on Wall Street, the White House and Republican leaders in Washington are nowhere near a deal to avert disaster that could strike as soon as July.

    As politicians sleepwalk toward a potential debt ceiling crisis, financial markets have begun pricing in a small — but growing — chance of a disastrous default.

    The implied probability of a US government default has increased to approximately 2%, according to modeling by research provider MSCI shared exclusively with CNN. That calculation is based on the cost to insure US debt in the market for credit default swaps.

    Although the probability of default is tiny, it has increased roughly fivefold since January 2, MSCI said.

    Since then, chaos in Congress, underlined by the historic dysfunction leading up to the election of House Speaker Kevin McCarthy, have raised concerns about how lawmakers will reach a compromise on much thornier issues such as the debt ceiling.

    “The probability of default has gone up noticeably,” Andy Sparks, head of portfolio management research at MSCI, told CNN in an interview. “It is small, but it’s not zero. And it has gone up in a very significant way.”

    An actual default would be terrible — for both Wall Street and Main Street. Moody’s Analytics chief economist Mark Zandi has described a default as “financial Armageddon.”

    “I don’t think anyone should be complacent about this,” said Sparks. “Turmoil in the banking system shows how things can change very quickly.”

    The federal government hit the $31.4 trillion debt ceiling in January, forcing Treasury Secretary Janet Yellen to take accounting moves known as “extraordinary measures” to avoid default.

    Yellen has used unusually strong language for a former central banker to warn Congress against messing with the debt ceiling. On Thursday, Yellen said a breach of the debt ceiling could spark a “prolonged downturn and a global financial crisis.”

    “It could upend the lives of millions of Americans and those around the world,” Yellen said in a speech.

    Goldman Sachs chief economist Jan Hatzius told CNN in January that even a near-default could cause a recession as well as turmoil in financial markets. Moody’s estimates that even a brief breach of the debt limit would kill almost a million jobs.

    All of this explains why many believe Washington will get a deal done before disaster strikes, as it has in the past.

    Even though leaders in Washington are not seriously negotiating on a debt ceiling deal, there is still time.

    The Congressional Budget Office has estimated that even without addressing the debt ceiling, the government will have enough cash to avoid a default until sometime between July and September. The exact timing for the so-called X-date will depend in large part on 2022 tax collections in April.

    Tom Barkin, president of the Federal Reserve Bank of Richmond, told CNN last week that it’s “hard to imagine” the government would breach the debt ceiling.

    Still, Barkin conceded if it happened the Fed would be forced to react, much like it did after the Sept. 11 terror attacks.

    Others are more pessimistic about the debt ceiling.

    Greg Valliere, chief US policy strategist at AGF Investments, only sees a 60% chance that Congress reaches a deal to address the debt ceiling.

    “I think we’ll come right up to the precipice,” Valliere, who is based in Washington, told CNN. “Most people in this city feel it’s inconceivable we could default on our debt. I agree it’s unlikely but it’ll be much closer than people thought.”

    He pointed to the more radical makeup of the Republican caucus and the reluctance among some lawmakers to vote for a debt ceiling hike.

    Even McCarthy, the Republican House Speaker, told CNBC this week there has been “no progress” in negotiations. “Time is ticking. Now I’m very concerned about where we are,” McCarthy said.

    “I worry there are just enough House radicals who might not accept anything. And it doesn’t take many of them to make this a crisis,” Valliere said.

    Asked about MSCI’s estimate of a 2% implied probability of a default, Valliere said that number is low.

    “The markets are too sanguine,” he said. “The market has felt for months that this is like the little boy who cries wolf. But this is not a typical debt ceiling debate.”

    There are some early indicators of concern popping up in the bond market.

    Morgan Stanley wrote in a report on Thursday that “kinks” have emerged in the Treasury bill market around bonds that mature around the X-date.

    “Market attention could swing back to this issue soon” Morgan Stanley advised clients.

    Or maybe not.

    McCarthy and his top lieutenants say they are prepared to push ahead with a fallback plan: A party-line bill to raise the debt ceiling, CNN’s Manu Raju reports.

    But such a move could be risky. Republicans can only afford to lose four of their own members in any party-line vote.

    There is also a possibility that Congress punts, reaching a short-term agreement to delay the issue by a few months.

    Eurasia Group analyst Jon Lieber said in a report Thursday there is a growing chance that lawmakers put off a debt ceiling solution until the end of the year.

    “A short-term punt would merely delay and not eliminate the disruption risks of the debt limit,” Lieber said.

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  • McCarthy sends letter to Biden urging more robust negotiations on the debt ceiling | CNN Politics

    McCarthy sends letter to Biden urging more robust negotiations on the debt ceiling | CNN Politics



    CNN
     — 

    House Speaker Kevin McCarthy urged the White House in a letter sent Tuesday to start more robust negotiations over raising the nation’s borrowing limit, the first major action in weeks on either side of the debt ceiling issue.

    McCarthy writes “with each passing day, I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out of control government spending.”

    McCarthy also proposed a series of places to start saving money including reclaiming unspent Covid-19 relief funds and strengthening work requirements for social programs.

    However, there are limited relief funds left to draw upon. As of the end of January, some $90.5 billion in federal Covid-19 pandemic funding has not been obligated and has not expired, according to the US Government Accountability Office.

    That’s out of the roughly $4.6 trillion in pandemic relief and recovery funding that Congress approved in six packages since early 2020.

    The largest chunk of unexpired, unobligated money is in the Public Health and Social Services Emergency Fund, with smaller amounts left in the Pension Benefit Guaranty Corporation Fund, the Emergency Rental Assistance, Veterans Medical Care and Health Fund and other programs, according to the GAO.

    Republicans have also long been eager to add or enhance work requirements in public assistance programs, which will limit enrollment and reduce the amount of federal funding needed. Already, one GOP lawmaker has proposed broadening the work mandate in the food stamps program.

    McCarthy walked his members through his letter during their GOP conference meeting. He said that the White House is doing everything it can to not negotiate in an attempt to extract maximum leverage in these talks when the deadline approaches.

    McCarthy, shortly after the letter went out, criticized Biden for refusing to sit down with him.

    “I’m concerned more than I’ve ever been about getting this debt ceiling done,” the California Republican said on CNBC, due to the lack of conversations and negotiations.

    The White House, however, said it does not want to continue negotiations until Republicans are ready to offer a counter proposal to the White House’s budget request, which the Biden administration unveiled earlier this month.

    In a statement, the White House said, “It’s time for Republicans to stop playing games, agree to a pass a clean debt ceiling bill, and quit threatening to wreak havoc on our economy. And if they want to have a conversation about our nation’s economic and fiscal future, it’s time for them to put out a Budget – as the President has done with his detailed plan to grow the economy, lower costs, and reduce the deficit by nearly $3 trillion.”

    Republicans have yet to release their plan, as they continue struggle to find an agreement between the different factions in their narrowly divided majority.

    However, McCarthy told CNBC that House Republicans are prepared to lay out $4 trillion in cuts in his next meeting with Biden.

    “If the president would have a meeting I would have all the $4 trillion sitting there and provided to you … the difference, is he wants to play politics and I do not. I think we should be adults here,” he said.

    McCarthy and his team still believe that they have the upper hand on the debt ceiling in the sphere of public opinion if they continue to show a pattern of trying to get Biden to sit down and he refuses to do so. It’s why McCarthy publicly said last week he’d asked Biden when they’d talk at the Friends of Ireland lunch – they want to show they are making the effort.

    Republicans believe that if this does go to the brink, they need to show that they’ve tried repeatedly to talk.

    Rep. Richard Hudson, the head of the campaign committee for Republicans, told CNN that while the politics should be secondary on debt ceiling, he does think McCarthy repeatedly asking for negotiations only to be rebuffed helps Republicans.

    This story has been updated with additional developments.

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  • Biden to highlight US-Canadian unity in first presidential trip to Ottawa | CNN Politics

    Biden to highlight US-Canadian unity in first presidential trip to Ottawa | CNN Politics


    Ottawa, Canada
    CNN
     — 

    President Joe Biden will make a long-awaited trip to America’s northern neighbor Thursday evening, a 24-hour whirlwind visit where he will press to elevate a concerted effort to repair a bilateral relationship as the two nations confront growing geopolitical challenges.

    Despite the brief nature of the trip, White House officials say the crowded agenda underscores the relationship’s importance – and the substantial shift away from the fractures that developed during former President Donald Trump’s time in office. Still, they acknowledge there are a series of economic, trade and immigration challenges that must be navigated between the two governments.

    Biden’s visit includes a meeting with Canadian Prime Minister Justin Trudeau, an address to the nation’s parliament in Ottawa, and a cozy reception at an elaborate gala dinner. For Biden, who last traveled to Ottawa shortly after Trump was elected in 2016, the visit will also mark a moment to underscore close ties and the critical role Canada has played in the Western alliance that has supported Ukraine since Russia’s invasion more than a year ago.

    “This visit is about taking stock of what we’ve done, where we are, and what we need to prioritize for the future,” said White House National Security Council strategic communications coordinator John Kirby.

    The two leaders and political allies are expected to discuss North American supply chains and critical minerals, climate change, the opioid crisis and critical defense cooperation – including efforts to modernize the North American Aerospace Defense Command. And while no major breakthroughs are expected, thornier issues like the deteriorating situation in Haiti, immigration and trade are also expected to be on the agenda.

    “We’re going to talk about our two democracies stepping up to meet the challenges of our time. That includes taking concrete steps to increase defense spending, driving a global race to the top on clean energy, and building prosperous and inclusive economies,” Kirby told reporters on Wednesday.

    Biden will “reaffirm the United States’ commitment to the US-Canada partnership and promote our shared security, shared prosperity, and shared values,” press secretary Karine Jean-Pierre wrote in a statement announcing the trip earlier this month.

    The two men are also expected to discuss Russia’s ongoing invasion of Ukraine. Trudeau, the longest-serving leader in the G7, has been an ally to Biden in providing military and financial assistance to the country during the Kremlin’s invasion.

    “This is a meaningful visit. Canada is one of the United States’ closest allies and friends and has been now for more than 150 years,” Kirby added.

    Vincent Rigby, a former national security and intelligence adviser to Trudeau and current senior adviser at CSIS, told CNN that as Biden travels to Ottawa with “the world on his mind,” the current geopolitical environment in the Indo-Pacific and Eastern Europe means that Canadian security contributions will be a key topic in Friday’s bilateral meeting.

    “I think the big question is going to be, OK, Canada, where do you stand on all this? And I would suggest that Canada has been struggling to match some of its allies over the last number of years in responding to this unstable security environment. So it will probably be the elephant in the room to a certain extent,” he told CNN.

    Rigby noted that while efforts to increase Canadian defense spending, modernize NORAD or contain China are not new, it’s an issue that has garnered a greater public profile the last few months following the Chinese spy balloon’s incursion into North American airspace and recent allegations about Beijing attempting to interfere in Canadian elections.

    While Canada has announced $3.8 billion in spending to help upgrade NORAD and has recently purchased F-35s, Canada’s overall percentage of GDP spent on defense remains well below the 2% asked of NATO members.

    “I think that the prime minister needs to reassure the president that he’s going to do what’s necessary to have a military in Canada that’s ready to respond to these kinds of threats, particularly on the international stage,” Rigby added. “This isn’t just about blindly following the United States’ lead. It’s about doing what’s right for Canada and Canada’s national interest.”

    Preparations for the president’s visit were already well-underway on Wednesday with American and Canadian flags draped along Wellington Street across the way from the Parliament complex, and Canadian security services – buttressed by police units from neighboring cities like Toronto – conducting practice runs for expected motorcade routes.

    Biden’s travel agenda will kick into gear from the moment he lands at Ottawa International Airport on Thursday night, when he will hold a bilateral meeting with the governor general of Canada – the country’s apolitical and ceremonial head of state – followed by a meet and greet at Trudeau’s official residence.

    On Friday, Biden makes the short trip from his hotel to Parliament Hill where will have a bilateral with Trudeau, an expanded meeting with their respective staff, and then Biden’s address to Parliament. The two leaders will then hold a joint news conference in the afternoon before Friday evening’s dinner ahead of a late evening flight back to the US.

    First lady Dr. Jill Biden – who is accompanying her husband in Ottawa – will also take part in additional events with Sophie Grégoire Trudeau, the prime minister’s wife.

    Despite being fellow liberals and political allies who are closely aligned on many issues, Prime Minister Trudeau and President Biden have had their share of disagreements. Early on in Biden’s administration, Trudeau expressed disappointment over the president’s unwillingness to back off his decision to cancel the Keystone XL pipeline and the Canadians have previously raised concerns over the impact of “Buy American” measures on trade between the two countries.

    And while Friday’s meetings will heavily feature areas of cooperation between the two countries, there will also be discussions on more complicated issues like immigration, trade and Haiti.

    As both leaders face an influx of migrants and mounting political pressure, they will be pressed to finalize changes to the Safe Third Country Agreement. Trudeau has been facing blowback domestically over hundreds of migrants crossing Roxham Road, a remote street that connects Champlain, New York, with Hemmingford, Quebec.

    “The only way to effectively shut down, not just Roxham Road but the entire border, to these irregular crossings is to renegotiate the Safe Third Country Agreement,” Trudeau said at a news conference last month, pointing to the thousands of kilometers of shared unguarded border between the US and Canada and adding that people will cross elsewhere even if the Roxham Road access point is closed.

    Signed in 2002, the agreement applies to people transiting through a country where they could have claimed asylum because it’s deemed safe. It means that anyone entering a land port of entry could be ineligible to make a claim and therefore returned to the US. But Roxham Road is not an official crossing, meaning that people who transit there could still seek protections in Canada even though they passed through the US.

    Biden and Trudeau have previously touted their relationship on a slew of issues, including in accepting refugees, and CNN reported earlier this month that it’s unlikely the latest migration trend along the northern border will damage that bond.

    Kirby, a top White House official, said Wednesday the US is “well aware” of Canadian concerns regarding migration and that he has “no doubt” the two leaders will discuss it.

    “We’ll be talking about issues of migration, which affects us both. There are more people on the move in this hemisphere than there have been since World War Two and that affects both our countries,” he said.

    Fueling the increase in immigration this year and also expected to be brought up in Friday’s talks are discussions on the ongoing crisis in Haiti where the government is edging closer to becoming a failed state as criminal gangs in the capital become increasingly violent and the country faces interlocking health, energy and security crises.

    United Nations officials are warning that the situation “continues to spiral out of control,” and in the first two weeks of March, the gang violence has killed 208 people, injured 164 others and led to 101 kidnappings, according to the UN. Last year there were 2,183 homicides and 1,359 kidnappings in Haiti, which nearly doubles the statistics from the previous year, according to the UN.

    Late last year the United States drafted a UN Security Council resolution, following calls from the Haitian government for outside intervention, to support the deployment of a rapid action force to Haiti to help the government’s national police wrest back control of the crisis-ridden country.

    While the US has no plans to lead such a force, national security adviser Jake Sullivan said in January that Canada had “expressed interest in taking on a leadership role.” Although Kirby on Wednesday said that they’re not yet at a point where all the players involved can make any definitive decisions and that the two leaders will continue their discussions.

    “We have continued to stand with the people of Haiti, and we will continue to. Obviously, this current situation is heart wrenching and we need to continue to be there for the people of Haiti. But we need to make sure that the solutions are driven by the people of Haiti themselves,” Trudeau said in January, pointing to the military and financial support Canada and the US have already provided.

    Part of the calculus for Canada, according to Rigby, is that any sort of military intervention could potentially become a “quagmire” and would require distinct objectives and goals. But also, as Canada’s top general has publicly acknowledged, the Canadian armed forces may lack the capacity to lead such a mission.

    “It might be a bridge too far for them to go into Haiti. So that’s why I think you’re seeing a little bit of reluctance on the part of the Canadian government to engage on Haiti as much as I think they’d like to help,” Rigby told CNN.

    American presidents typically visit Canada as one of their first trips abroad, but the ongoing Covid-19 pandemic and war in Ukraine at the beginning of Biden’s administration complicated matters and delayed Biden’s first visit North. Instead, the newly minted US president in early 2021 opted for his first phone call and virtual bilateral meeting to be with Trudeau.

    “When we work together, as the closest of friends should, we only make each other stronger,” Biden said at the time.

    Since then, the Bidens have hosted the Trudeaus at the White House and the two men have met repeatedly in other international fora and on the sidelines of other multilateral settings, including most recently in January at a summit of North American leaders.

    Biden and Trudeau have known each other for years and describe their relationship as a close one that has only grown more critical in the year since Russia’s invasion.

    One of Biden’s final trips as vice president was to attend a state dinner held in his honor in Ottawa; during his toast, Biden recounted the call he received from Trudeau’s father Pierre – then serving as prime minister – when his first wife and daughter died in a car accident.

    It’s a personal element that helped animate a level of warmth Biden attempted to convey at the time despite the trepidation among US allies about what the next administration would mean for relations.

    “The friendship between us is absolutely critical to the United States, our well-being, our security, our sense of ourselves,” Biden said at the time.

    But he also implicitly framed what would become a turbulent four years ahead – and pointed directly to the younger Trudeau as someone who would become a critical player during that period.

    “The world’s going to spend a lot of time looking to you, Mr. Prime Minister, as we see more and more challenges to the liberal international order than any time since the end of World War II,” Biden told Trudeau at the time.

    Biden’s predecessor Donald Trump visited Canada only once for a Group of 7 summit in Quebec. The two leader’s bad blood was on full display afterward when Trump revoked his signature from a joint statement and called Trudeau “very dishonest and weak” on Twitter.

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  • Biden White House closely watching Federal Reserve following bank failures | CNN Politics

    Biden White House closely watching Federal Reserve following bank failures | CNN Politics



    CNN
     — 

    All eyes are trained on the Federal Reserve as it prepares to announce another potential interest rate hike Wednesday afternoon – exactly 10 days after the Biden administration stepped in with dramatic emergency actions to contain the fallout from two bank failures.

    Biden White House officials will be closely watching the highly anticipated rate decision – and monitoring every word of Fed Chairman Jerome Powell’s public comments – for any telling clues on how the central bank is processing what has emerged one of the most urgent economic crises of Joe Biden’s presidency.

    The moment creates a complex, if carefully observed, dynamic for the administration’s top economic officials who have spent much of the last two weeks engaged in regular discussions and consultations with Powell and Fed officials as they’ve navigated rapid and acute risks to the banking system.

    The Fed’s central role in not only supervising US banks and the stability of the financial system, but also in serving as a liquidity backstop in moments of systemic risk, has once again thrust the central bank back to center stage in the government’s effort to stabilize rattled markets.

    But Biden has made the central bank’s independence on monetary policy an unequivocal commitment – and has repeatedly underscored that he has confidence in the Fed’s central role in navigating inflation that has weighed on the US economy for more than a year and remained stubbornly persistent.

    Even as some congressional Democrats have directed fire at Powell for the rapid increase in interest rates and the risks the effort poses to a robust post-pandemic economic recovery, White House officials have taken pains not to shed light on their views publicly.

    Officials stress nothing in the last week has changed that mandate from Biden – and note that the widespread uncertainty about what action the Fed will take on rates only serves to underscore that reality.

    It’s a reality that comes at a uniquely inopportune time for a banking system that has shown clear signs of stabilizing in the last several days, but is still facing a level of anxiety among market participants and depositors about the durability of that shift.

    “I do believe we have a very strong and resilient banking system and all of us need to shore up the confidence of depositors that that’s the case,” Treasury Secretary Janet Yellen said during remarks Tuesday in Washington.

    Yellen said a new emergency lending facility launched by the Fed, along with its existing discount window, are “working as intended to provide liquidity to the banking system.”

    But prior to the closures of Silicon Valley Bank and Signature Bank, analysts had widely predicted that the Fed would unveil a half-point rate hike. But after the sudden collapse of the two banks that sent shockwaves across the global economy, there has been a growing belief among Wall Street analysts that the central bank will pull back, and only raise rates by a quarter-point – in part to try to alleviate concerns that the Fed’s historically aggressive rate hikes over the past year were precisely to blame for this month’s financial turmoil.

    But there are also concerns that a dramatic pullback, like choosing to forgo any rate increases altogether until a later meeting, would bring its own risks of signaling to the market that there are deeper systemic problems.

    It’s a conundrum top Fed officials started grappling with in the first of their two-day Federal Open Market Committee meeting on Tuesday. How they choose to navigate the path ahead will remain behind closed doors until their policy statement is released Wednesday afternoon.

    Powell is scheduled to speak to reporters shortly after.

    For officials inside the Biden White House, Wednesday is poised to offer critical insight into how the central bank is grappling with its urgent priority of bringing down inflation, while at the same time, minimizing the risk of additional dominoes falling in the US banking sector.

    Those two imperatives – bringing prices down and maintaining stability across the US financial sector – are urgent priorities for the Biden White House, particularly as the president moves closer to a widely expected reelection announcement and the health of the economy remains the top issue for voters.

    Yet the Fed’s decision will come at a moment of accelerating political pressure on the Fed itself – and Powell specifically.

    Massachusetts Democratic Sen. Elizabeth Warren, a member of the Senate Banking Committee, slammed Powell, saying he has failed at two of his main jobs, citing raising interest rates and his support of bank deregulation.

    “I opposed Chair Powell for his initial nomination, but his re-nomination. I opposed him because of his views on regulation and what he was doing to weaken regulation, but I think he’s failing in both jobs, both as oversight manager of these big banks which is his job and also what he’s doing with inflation,” Warren said on NBC’s “Meet the Press.”

    White House officials have made clear – with no hesitation – that Biden’s long-stated confidence in Powell is unchanged. Powell, who was confirmed for his second four-year term as Fed chair last year, announced last week that the Fed would launch a review into the failure of Silicon Valley Bank.

    Treasury and Fed officials, along with counterparts at other federal regulators and their international counterparts, have continued regular discussions this week as they’ve monitored the system in the wake of the weekend collapse, and eventual sale, of European banking giant Credit Suisse.

    US officials viewed the Credit Suisse collapse as unrelated to the crisis that took down the US banks a weekend prior, although they acknowledged it posed broader risks tied to confidence, or the potential lack thereof, in the system.

    In recent days, White House officials have begun to cautiously suggest that they see signs of the US economy stabilizing, following the turbulent aftermath of the closures of Silicon Valley Bank and Signature Bank. Biden, for his part, has credited the sweeping steps his administration announced – namely, the backstopping of all depositors’ funds held at the two institutions and the creation of an emergency lending program by the Federal Reserve – as having prevented a broader financial meltdown.

    He has also called on US regulators and lawmakers to strengthen financial regulations, though it is not yet clear what specific actions the president may ultimately throw his weight behind.

    Press secretary Karine Jean-Pierre declined to comment Tuesday afternoon at the White House press briefing on how she and other officials were watching the Fed’s upcoming decision.

    “The Fed is indeed independent. We want to give them the space to make those monetary decisions and I don’t want to get ahead of that,” Jean-Pierre said. “I don’t even want to give any thoughts to what Jerome Powell might say tomorrow.”

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  • Asia Pacific stocks rise as investor worries about global banking turmoil ease | CNN Business

    Asia Pacific stocks rise as investor worries about global banking turmoil ease | CNN Business


    Hong Kong
    CNN
     — 

    Stocks in the Asia Pacific region rose Tuesday as concerns about the global banking sector eased in response to a whirlwind of intervention by policymakers and industry players.

    The S&P/ASX 200 in Australia jumped 1.3%, boosted by its AXFJ index, a measure of banking stocks, which surged 1.7%.

    In Hong Kong, the Hang Seng Index

    (HSI)     opened up 0.8%. China’s Shanghai Composite was 0.3% higher at the start of its trading session.

    South Korea’s Kospi ticked up 0.8%. Japanese markets were closed for a public holiday. Singapore’s Straits Times Index gained 1.1%.

    US stock futures were flat in Asian trade Tuesday, with Dow futures, S&P 500 futures and Nasdaq futures little changed.

    That followed a sunnier day on Wall Street, as investors became more confident in the outlook for the general banking sector, sending shares up.

    On Monday, central banks across Asia Pacific moved to quell concerns about the finance industry, with authorities in Australia, Hong Kong, Singapore and the Philippines assuring the public that their money was safe following the emergency bailout of Credit Suisse over the weekend.

    That did little to stop stocks from slumping initially, though analysts had predicted global markets could see calm later on Monday as investor nerves settled and relief set in. The landmark rescue of Credit Suisse

    (CS)     by bigger Swiss rival UBS

    (UBS)     on Sunday was followed by a coordinated move by major central banks to boost the flow of US dollars through financial markets.

    Shares of UBS rose about 3.3% in an intraday reversal on Monday, following a drop of as much as 15% earlier in the session.

    Still, recession fears continue to dog investors ahead of the US Federal Reserve’s meeting, which is set to conclude Wednesday. Traders see about a 73% probability of the central bank raising interest rates by 25 basis points.

    US regional banks also aren’t out of the woods yet. Shares of First Republic

    (FRC)    , the struggling California bank bailed out by a consortium of banks last week, fell to an intraday record low Monday before ending the session down about 47% in another day of steep losses for the company.

    The Dow

    (INDU)     closed 1.2% higher, while the S&P 500

    (SPX)     gained about 0.9%. The Nasdaq Composite

    (COMP)     climbed 0.4%.

    — CNN’s Krystal Hur contributed to this report.

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  • Trump shadow looms large over House GOP policy retreat | CNN Politics

    Trump shadow looms large over House GOP policy retreat | CNN Politics


    Orlando, Florida
    CNN
     — 

    House Republicans had hoped to use their annual retreat to get on the same page about upcoming policy battles and devise a strategy to preserve their fragile majority.

    Instead, they find themselves playing defense for former President Donald Trump.

    While most Republicans had hoped to steer clear of any presidential politics – despite being in Florida, home to two major potential GOP rivals in 2024 – Trump’s announcement over the weekend that he expects to be imminently arrested has put him back in the center of the conversation and forced Republicans to publicly rally to his side. Even some GOP lawmakers who have called for the party to move on from Trump have lined up to offer their full-throated defense of the ex-president, attacking the Manhattan District Attorney’s office that is investigating Trump as a political witch hunt.

    Speaker Kevin McCarthy, echoing calls from inside his conference, has instructed GOP-led committees to investigate whether the Manhattan DA used federal funds to probe a payment made by Trump’s then-personal attorney Michael Cohen to adult film star Stormy Daniels days before the 2016 presidential election.

    McCarthy said Sunday that he already talked to House Judiciary Committee Chairman Jim Jordan, a Republican from Ohio, about an investigation into the matter, and hinted that there could be more developments on that front soon.

    “Remember, we also have a select committee on the weaponization of government, this applies directly to that. I think you’ll see actions from them,” McCarthy told reporters at a news conference kicking off their three-day policy retreat.

    But Republicans weren’t in complete lockstep with Trump. McCarthy carefully broke with Trump’s calls to protest and “take our nation back” if he is arrested, which has sparked concerns of political violence reminiscent of the January 6 attack on the Capitol.

    “I don’t think people should protest this, no,” McCarthy said. But he added: “You may misinterpret when President Trump talks … he is not talking in a harmful way, and nobody should. Nobody should harm one another … We want calmness.”

    Firebrand Rep. Marjorie Taylor Greene of Georgia, however, offered a different take.

    “I don’t think there’s anything wrong with calling for protests,” she told reporters after the news conference on Sunday. “Americans have the right to assemble and the right to protest. And that’s an important constitutional right. And he doesn’t have to say ‘peaceful’ for it to mean peaceful. Of course he means peaceful.”

    The latest Trump drama is once again threatening to divide the GOP and overshadow their carefully-laid messaging plans – a familiar predicament for Republicans who served in Congress while Trump was in office and spent years being forced to answer for his regular controversies. Republican leaders who had hoped to focus on their legislative agenda during the first news conference of their policy retreat instead fielded numerous questions from reporters about Trump and the Manhattan DA’s investigation.

    Asked whether he thinks it would be appropriate for Trump to run for president if he is ultimately convicted, McCarthy said: “He has a constitutional right to run.”

    Multiple Republican lawmakers – including House GOP Conference Chair Elise Stefanik – have endorsed Trump, while at least two of his staunch supporters have thrown their weight behind other candidates in the race: South Carolina Rep. Ralph Norman is backing former South Carolina Gov. Nikki Haley, and Rep. Chip Roy of Texas is supporting Florida Gov. Ron DeSantis.

    Most GOP lawmakers, however, have been reluctant to pick sides just yet, waiting to see how the field develops. Even McCarthy, who credited his speakership to Trump, has yet to make his preference known.

    “I could endorse in the primary, but I haven’t endorsed,” he told reporters on Friday. When pressed on if he will do so, he again repeated: “I could endorse but I haven’t.”

    Aside from a potentially bruising GOP primary contest, House Republicans have other major internal battles on the horizon. They are about to dive into some of the most complicated and divisive policy fights of their razor-thin majority, including lifting the nation’s borrowing limit, funding the government, reauthorizing federal food stamp programs and deciding whether to continue aid for Ukraine.

    Part of their goal during their annual retreat is to just get the conference in sync ahead of these looming debates.

    “The value of something like this is, can we keep the era of good feelings going within the Republican conference?” said Rep. Dusty Johnson of South Dakota, who chairs the centrist-leaning Main Street Caucus. “This is gonna be a nice opportunity for us to just get in the same room, have a couple hundred of us breathe the same air, and remind ourselves that we have more in common than we have apart.”

    While the GOP has notched a handful of victories since taking over the House, including a resolution to overturn a DC crime bill, most of their bills have been messaging endeavors thus far. And even measures that were thought to be low-hanging fruit, like a border security plan, have proved more challenging than expected in their slim majority.

    House Republicans know their biggest challenges lie ahead.

    “The question is really going to be as we get into phase two,” GOP Rep. Brian Fitzpatrick of Pennsylvania, who co-leads a bipartisan caucus with Democrats, told CNN. “The real test is going to be the must-pass pieces of legislation.”

    The GOP’s investigations on a wide array of subjects, including Hunter Biden’s business deals and the treatment of January 6 defendants, have caused some consternation among the party’s moderates. And some were also skeptical about the need for a congressional response to a potential Trump indictment.

    “I’m going to wait until I hear more facts and read the indictment itself,” Rep. Don Bacon, a Nebraska Republican who represents a district President Joe Biden won, told CNN. “I have faith in our legal system. If these charges are political bogus stuff, and they may be, it will become clear enough soon.”

    GOP leaders are nonetheless expressing confidence in their ability to stay united.

    “House Republicans are working as a team,” House GOP Whip Tom Emmer of Minnesota said at the Orlando news conference. “Because that’s what the American people elected us to do.”

    Bacon framed the stakes of the legislative fights with Biden and Senate Majority Leader Chuck Schumer to come by saying, “We need to be the governing party that voters trust. This will determine 2024 results. This means we can’t cave to Biden’s and Schumer’s demands, but we can’t refuse to find consensus and make agreements on must pass legislation.”

    GOP Rep. Tim Burchett of Tennessee, who told CNN he is willing to shut down the government if conservatives do not get what they are calling for pertaining to the debt ceiling, reflected on how House Republicans could learn from their Democratic counterparts in presenting a unified front.

    “They’re better than us at the carrot and the stick. If they get in line, they get the carrot. If they don’t, they get the stick. They all tout the unity thing. Maybe that’s one of our weaknesses,” he told CNN.

    The must-pass pieces of legislation expose not only the fault lines of a slim majority, but also underscore the hurdles House Republicans face in cementing their transition from a nay-saying minority to a governing majority.

    “Campaigning is for dividing. Governing is for uniting,” GOP Rep. Tony Gonzales of Texas told CNN, adding that sentiment must extend beyond House Republicans to Biden and Senate Democrats.

    “I’d say in general, not everybody comes up here to be serious legislators. A lot of people come up here for fame and fortune. I spent 20 years in the military. I’m focused on being a serious legislator,” he added.

    Fitzpatrick told CNN, “It’s definitely an adjustment,” when describing the House Republicans’ transition from minority to majority, particularly for those members who have not served in the majority before. But Fitzpatrick pointed to the fact that the messaging bills that Republicans have brought to the floor so far have passed almost unanimously.

    Some of the House GOP’s biggest hurdles will come in trying to write a budget blueprint, which they hope will kick off negotiations over the raising debt ceiling, where Republicans are demanding steep spending cuts.

    Further complicating the GOP’s goal to balance the budget and claw back federal spending, Republican leaders – egged on by Trump – have vowed not to touch Social Security and Medicare.

    Norman acknowledged how difficult it is going to be to coalesce around a framework that the entire conference can agree on. Before leaving Washington, the far-right House Freedom Caucus laid out their own hardline spending demands in the debt ceiling fight.

    “I don’t expect to get 218 on the first blush. What we present, there’s gonna be some gnashing of teeth,” he told CNN. “Every dollar up here has an advocate.”

    Burchett told CNN he stands behind the proposals being pushed by the Freedom Caucus.

    “It seems like every time the conservatives are the only ones that compromise. And we are just going to have to say no compromise,” he told CNN, adding he is willing to shut down the government on this issue. “I did it under Trump, and I’ll sure as heck do it under Biden.”

    McCarthy said he thought it was “productive” for his members to outline “ideas” for the budget, and dismissed the idea that anyone was drawing red lines.

    Asked about Biden’s insistence that House Republicans show them their budget before negotiations can continue, McCarthy replied, “Why do we have to have a budget out to talk about the debt ceiling? We’re not passing the budget, we’re doing a debt ceiling.”

    He added that he has told the president, “We’re not going to raise taxes, and we’re not going to pass a clean debt ceiling, but everything else is up for negotiation.”

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  • UBS is buying Credit Suisse in bid to halt banking crisis | CNN Business

    UBS is buying Credit Suisse in bid to halt banking crisis | CNN Business


    London
    CNN
     — 

    Switzerland’s biggest bank, UBS, has agreed to buy its ailing rival Credit Suisse in an emergency rescue deal aimed at stemming financial market panic unleashed by the failure of two American banks earlier this month.

    “UBS today announced the takeover of Credit Suisse,” the Swiss National Bank said in a statement. It said the rescue would “secure financial stability and protect the Swiss economy.”

    UBS is paying 3 billion Swiss francs ($3.25 billion) for Credit Suisse, about 60% less than the bank was worth when markets closed on Friday. Credit Suisse shareholders will be largely wiped out, receiving the equivalent of just 0.76 Swiss francs in UBS shares for stock that was worth 1.86 Swiss francs on Friday.

    Extraordinarily, the deal will not need the approval of shareholders after the Swiss government agreed to change the law to remove any uncertainty about the deal.

    Credit Suisse

    (CS)     had been losing the trust of investors and customers for years. In 2022, it recorded its worst loss since the global financial crisis. But confidence collapsed last week after it acknowledged “material weakness” in its bookkeeping and as the demise of Silicon Valley Bank and Signature Bank spread fear about weaker institutions at a time when soaring interest rates have undermined the value of some financial assets.

    Shares in the 167-year-old bank fell 25% over the week, money poured from investment funds it manages and at one point account holders were withdrawing deposits of more than $10 billion per day, the Financial Times reported. An emergency loan of nearly $54 billion from the Swiss National Bank failed to stop the bleeding.

    But it did “build a bridge” to the weekend, to allow the rescue to be pieced together, Swiss officials said Sunday night.

    “This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue,” UBS chairman Colm Kelleher told reporters.

    “It is absolutely essential to the financial structure of Switzerland and … to global finance,” he told reporters.

    Desperate to prevent the meltdown spreading through the global financial system on Monday, Swiss authorities initiated the search for a private sector solution, with limited state support, while reportedly considering Plan B — a full or partial nationalization.

    “Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome,” Credit Suisse chairman Axel Lehmann said in a statement.

    “This has been an extremely challenging time for Credit Suisse and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome.”

    The emergency takeover was agreed to after a days of frantic negotiations involving financial regulators in Switzerland, the United States and United Kingdom. UBS

    (UBS)     and Credit Suisse rank among the 30 most important banks in the global financial system, and together they have almost $1.7 trillion in assets.

    Financial market regulators around the world cheered UBS’ action to take over Credit Suisse.

    US authorities said they supported the action and worked closely with the Swiss central bank to assist the takeover.

    “We welcome the announcements by the Swiss authorities today to support financial stability,” said US Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell, in a joint statement. “The capital and liquidity positions of the US. banking system are strong, and the US financial system is resilient.”

    Christine Lagarde, President of the European Central Bank, said the banking sector remains resilient but the ECB stands at the ready to help banks maintain enough cash on hand to fund their operations if the need arises.

    “I welcome the swift action and the decisions taken by the Swiss authorities,” Lagarde said. “They are instrumental for restoring orderly market conditions and ensuring financial stability.

    The Bank of England said it welcomed the measures taken by the Swiss authorities “to support financial stability.”

    “We have been engaging closely with international counterparts throughout the preparations for today’s announcements and will continue to support their implementation,” it said in a statement. “The UK banking system is well capitalized and funded, and remains safe and sound.”

    The global headquarters of UBS and Credit Suisse are just 300 yards apart in Zurich but the banks’ fortunes have been on very different paths recently. Shares of UBS have climbed 15% in the past two years, and it booked a profit of $7.6 billion in 2022. It had a stock market value of about $65 billion on Friday, according to Refinitiv.

    Credit Suisse shares have lost 84% of their value over the same period, and last year it posted a loss of $7.9 billion. It was worth just $8 billion at the end of last week.

    Dating back to 1856, Credit Suisse has its roots in the Schweizerische Kreditanstalt (SKA), which was set up to finance the expansion of the railroad network and industrialization of Switzerland.

    In addition to being Switzerland’s second biggest bank, it looks after the wealth of many of the world’s richest people and offers global investment banking services. It had more than 50,000 employees at the end of 2022, 17,000 of those in Switzerland.

    The Swiss National Bank said it would provide a loan of 100 billion Swiss francs ($108 billion) to UBS and Credit Suisse to boost liquidity.

    UBS Chief Executive Ralph Hamers will be CEO of the combined bank, and Kelleher will serve as chairman.

    The takeover will reinforce the position of UBS as the world’s leading wealth manager with $5 trillion of invested assets, and boost its ambition to grow in the Americas and Asia. UBS said it expects to generate cost savings of $8 billion per year by 2027. Credit Suisse’s investment bank is in the crosshairs.

    “Let me be clear. UBS intends to downsize Credit Suisse’s investment banking business and align it with our conservative risk culture,” Kelleher said.

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  • Rubio wants to block Ford from tax breaks for using Chinese battery technology | CNN Business

    Rubio wants to block Ford from tax breaks for using Chinese battery technology | CNN Business

    US Senator Marco Rubio on Thursday introduced legislation that takes aim at Ford’s deal to use technology from Chinese battery company CATL as part of the automaker’s plan to spend $3.5 billion to build a battery plant in Michigan.

    Rubio, the top Republican on the Intelligence Committee, introduced legislation that would block tax credits for electric vehicle batteries produced using Chinese technology, saying it would “significantly restrict the eligibility of IRA tax credits and prevent Chinese companies from benefiting.”

    Ford said in response to Rubio that “making those batteries here at home is much better than continuing to rely exclusively on foreign imports, like other auto companies do. A wholly owned Ford subsidiary alone will build, own and operate this plant. No other entity will get US tax dollars for this project.”

    Last month, Rubio asked the Biden administration to review Ford’s deal to use technology from CATL.

    Rubio called for an immediate Committee on Foreign Investment in the United States (CFIUS) review of the licensing agreement between Ford and CATL.

    Rubio said the deal “will only deepen US reliance on the Chinese Communist Party for battery tech, and is likely designed to make the factory eligible for Inflation Reduction Act (IRA) tax credits.”

    CFIUS is a US Treasury-led interagency panel that reviews proposed transactions to ensure they do not harm national security.

    Treasury declined to comment, but Energy Secretary Jennifer Granholm said last month the Ford deal will “bringing advanced manufacturing capabilities from overseas to the United States is key to our competitiveness, will stimulate our economy, and create good-paying American jobs.”

    Ford has said the plant would create 2,500 jobs and begin producing lower cost and faster recharging lithium-iron-phosphate batteries in 2026.

    The $430 billion IRA imposes restrictions on battery sourcing and is designed to wean the United States off the Chinese supply chain for electric vehicles (EVs). The IRA will eventually bar credits if any EV battery components were manufactured by a “foreign entity of concern,” in a provision aimed at China.

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  • Senate confirms Biden’s IRS nominee Daniel Werfel | CNN Politics

    Senate confirms Biden’s IRS nominee Daniel Werfel | CNN Politics



    CNN
     — 

    The Senate voted Thursday to confirm Daniel Werfel, the former acting commissioner of the Internal Revenue Service, to lead the IRS.

    He was approved on a bipartisan 54-42 vote.

    Werfel’s confirmation to the agency comes after he was grilled by the Senate Committee on Finance last month on how he plans to utilize the money in new funding coming to the IRS over the next decade to revitalize the tax agency as taxpayers could see increased audit rates. Democrats approved the $80 billion for the agency last year when they approved the Inflation Reduction Act in a party-line vote. Democrats backed the funding in its bid to crack down on tax dodgers and to provide better services for taxpayers, arguing that the IRS could boost federal revenue by more than $100 billion over the 10-year time period if they collect more in taxes.

    But Republicans have made the IRS and the new funding a political target, claiming that the money will create additional audits for taxpayers.

    After Republicans took control of the House earlier this year, two of the party’s first legislative votes were aimed at the IRS. One bill called for rescinding roughly all the new funding for the agency and others called for abolishing the IRS altogether. However, it is highly unlikely that either bill will become law because Democrats still control the Senate.

    Werfel said last month he would follow through on Treasury Secretary Janet Yellen’s previous directive that the IRS will not use the new funding to increase audit rates, relative to historic levels, for households making less than $400,000 a year.

    “If I am fortunate enough to be confirmed, the audit and compliance priorities will be focused on enhancing the IRS’ capabilities to ensure that America’s highest earners comply with applicable tax laws,” Werfel said at the February hearing.

    “If poor people are more likely to be audited than the wealthy, that is something I think potentially degrades public trust and needs to be addressed within the tax system,” he added.

    But ranking Republican committee member, Republican Sen. Mike Crapo of Idaho, said at the time he remains “very concerned” about how twhe funds will be used to increase tax enforcement, pointing out that Yellen’s directive “leaves a lot of wiggle room.”

    “I don’t expect to see wiggle room in this commitment,” Crapo told Werfel.

    The Inflation Reduction Act states that the new investment going to IRS is not “intended to increase taxes on any taxpayer or small business with a taxable income below $400,000.” However, there is some uncertainty about how the IRS will decide how it will ramp up audits.

    Moderate Democratic Sen. Joe Manchin of West Virginia voted against Werfel’s nomination. He has also opposed several of President Joe Biden’s other recent nominees.

    Manchin said his vote against Werfel had to do with the Biden administration ignoring the “congressional intent” in implementing the Inflation Reduction Act.

    “As far as the gentleman for the IRS, most qualified, he’ll do a good job. That was a message I’m sending because the president and his administration is not adhering to the piece of legislation called the Inflation Reduction Act,” Manchin said on “CNN This Morning” Thursday ahead of the vote, explaining his reasoning for voting against Werfel. “They have touted that as strictly an environmental bill.”

    Werfel was the acting IRS commissioner for seven months in 2013 during a difficult time for the agency. His predecessor had resigned following revelations that the agency targeted conservative groups seeking tax-exempt status for extra scrutiny.

    Before his stint at the IRS, Werfel worked for nearly 16 years at the White House’s Office of Management and Budget, where he served as deputy controller and later federal controller.

    After he left government, Werfel joined Boston Consulting Group, where he is currently a managing director and partner on the federal and public sector teams.

    This story has been updated with additional developments.

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  • What’s changed since Powell last headed to Capitol Hill | CNN Business

    What’s changed since Powell last headed to Capitol Hill | CNN Business


    Minneapolis
    CNN
     — 

    Federal Reserve Chair Jerome Powell is set to appear before the Senate Banking Committee Tuesday to deliver the first part of his two-day semiannual monetary policy testimony before Congress.

    It’s his first appearance before the committee since June last year, when inflation was on its way to 9%.

    Powell is expected to speak to the progress the US central bank has made in its yearlong campaign to rein in high inflation by ratcheting up its benchmark interest rate from near zero to between 4.5% to 4.75%.

    Inflation has slowed in recent months, measuring 6.4% in January after hitting a 40-year high of 9.1% in June. However, the battle is not yet won, and Powell and other Fed officials have cautioned that disinflation will be bumpy and there’s a long “ways to go.”

    Fed policymakers have warned in recent weeks that interest rates will likely have to remain higher for longer in order for inflation to settle down to the central bank’s 2% target.

    This time last year, Powell’s congressional address came on the heels of Russia’s invasion of Ukraine, surging gas prices and a significant escalation in US inflation. The economy continuing to rebound and repair itself from the lingering effects of the pandemic — including the disruptions of the Omicron variant.

    Faced with a strong labor market, uncertain geopolitical developments and surging inflation, Powell told members of Congress then that he’d likely propose a quarter-point rate hike at the central bank’s forthcoming meeting.

    It’s now March 2023, and the central bank is faced with an “extraordinarily strong” labor market, ongoing geopolitical uncertainty and stubborn inflation. However, there are signals that some inflationary pressures have eased: China’s economic growth was recently downgraded; and supply chain disruptions are easing, the Federal Reserve Bank of New York reported Monday.

    The markets are currently expecting the Fed to make another quarter-point rate hike during its next meeting two weeks from now: The CME FedWatch Tool is showing a 69.4% probability of such a hike. However, the perceived chances of a half-point increase (at 30.6%) have grown considerably during the past few weeks. One month ago, the probability for a half-point increase was 3.3%, according to the CME FedWatch Tool.

    Still, several major pieces of economic data — including the latest labor turnover report, monthly jobs report, Consumer Price Index, Producer Price Index, and retail sales — are all due ahead of the Fed’s next policymaking meeting on March 21-22.

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  • Turkey’s earthquake caused $34 billion in damage. It could cost Erdogan the election | CNN

    Turkey’s earthquake caused $34 billion in damage. It could cost Erdogan the election | CNN

    Editor’s Note: A version of this story first appeared in CNN’s Meanwhile in the Middle East newsletter, a three-times-a-week look inside the region’s biggest stories. Sign up here.


    Abu Dhabi, UAE
    CNN
     — 

    The devastating earthquake that hit Turkey on February 6 killed at least 45,000 people, rendered millions homeless across almost a dozen cities and caused immediate damage estimated at $34 billion – or roughly 4% of the country’s annual economic output, according to the World Bank.

    But the indirect cost of the quake could be much higher, and recovery will be neither easy nor quick.

    The Turkish Enterprise and Business Confederation estimates the total cost of the quake at $84.1 billion, the lion’s share of which would be for housing, at $70.8 billion, with lost national income pegged at $10.4 billion and lost working days at $2.91 billion.

    “I do not recall… any economic disaster at this level in the history of the Republic of Turkey,” said Arda Tunca, an Istanbul-based economist at PolitikYol.

    Turkey’s economy had been slowing even before the earthquake. Unorthodox monetary policies by the government caused soaring inflation, leading to further income inequality and a currency crisis that saw the lira lose 30% of its value against the dollar last year. Turkey’s economy grew 5.6% last year, Reuters reported, citing official data.

    Economists say those structural weaknesses in the economy will only get worse because of the quake and could determine the course of presidential and parliamentary elections expected in mid-May.

    Still, Tunca says that while the physical damage from the quake is colossal, the cost to the country’s GDP won’t be as pronounced when compared to the 1999 earthquake in Izmit, which hit the country’s industrial heartland and killed more than 17,000. According to the OECD, the areas impacted in that quake accounted for a third of the country’s GDP.

    The provinces most affected by the February 6 quake represent some 15% of Turkey’s population. According to the Turkish Enterprise and Business Confederation, they contribute 9% of the nation’s GDP, 11% of income tax and 14% of income from agriculture and fisheries.

    “Economic growth would slow down at first but I don’t expect a recessionary threat due to the earthquake,” said Selva Demiralp, a professor of economics at Koc University in Istanbul. “I don’t expect the impact on (economic) growth to be more than 1 to 2 (percentage) points.”

    There has been growing criticism of the country’s preparedness for the quake, whether through policies to mitigate the economic impact or prevent the scale of the damage seen in the disaster.

    How Turkey will rehabilitate its economy and provide for its newly homeless people is not yet known. But it could prove pivotal in determining President Recep Tayyip Erdogan’s political fate, analysts and economists say, as he seeks another term in office.

    The government’s 2023 budget, released before the earthquake, had planned for increased spending in an election year, foreseeing a deficit of 660 billion liras ($34.9 billion).

    The government has already announced some measures that analysts said were designed to shore up Erdogan’s popularity, including a near 55% increase in the minimum wage, early retirement and cheaper housing loans.

    Economists say that Turkey’s fiscal position is strong. Its budget deficit, when compared to its economic output, is smaller than that of other emerging markets like India, China and Brazil. That gives the government room to spend.

    “Turkey starts from a position of relative fiscal strength,” said Selva Bahar Baziki of Bloomberg Economics. “The necessary quake spending will likely result in the government breaching their budget targets. Given the high humanitarian toll, this would be the year to do it.”

    Quake-related public spending is estimated at 2.6% of GDP in the short run, she told CNN, but could eventually reach as high as 5.5%.

    Governments usually plug budget shortfalls by taking on more debt or raising taxes. Economists say both are likely options. But post-quake taxation is already a touchy topic in the country, and could prove risky in an election year.

    After the 1999 quake, Turkey introduced an “earthquake tax” that was initially introduced as a temporary measure to help cushion economic damage, but subsequently became a permanent tax.

    There has been concern in the country that the state may have squandered those tax revenues, with opposition leaders calling on the government to be more transparent about what happened to the money raised. When asked in 2020, Erdogan said the money “was not spent out of its purpose.” Since then, the government has said little more about how the money was spent.

    “The funds created for earthquake preparedness have been used for projects such as road constructions, infrastructure build-ups, etc. other than earthquake preparedness,” said Tunca. “In other words, no buffers or cushions have been set in place to limit the economic impacts of such disasters.”

    The Turkish presidency didn’t respond to CNN’s request for comment.

    Analysts say it’s too early to tell precisely what impact the economic fallout will have on Erdogan’s prospects for re-election.

    The president’s approval rating was low even before the quake. In a December poll by Turkish research firm MetroPOLL, 52.1% of respondents didn’t approve of his handling of his job as president. A survey a month earlier found that a slim majority of voters would not vote for Erdogan if an election were held on that day.

    Two polls last week, however, showed the Turkish opposition had not picked up fresh support, Reuters reported, citing partly its failure to name a candidate and partly its lack of a tangible plan to rebuild areas devastated by the quake.

    The majority of the provinces worst affected by the quake voted for Erdogan and his ruling AK Party in the 2018 elections, but in some of those provinces, Erdogan and the AK Party won with a plurality of votes or a slim majority.

    Those provinces are some of the poorest in the country, the World Bank says.

    Research conducted by Demiralp as well as academics Evren Balta from Ozyegin University and Seda Demiralp from Isik University, found that while the ruling AK Party’s voters’ high partisanship is a strong hindrance to voter defection, economic and democratic failures could tip the balance.

    “Our data shows that respondents who report being able to make ends meet are more likely to vote for the incumbent AKP again,” the research concludes. “However, once worsening economic fundamentals push more people below the poverty line, the possibility of defection increases.”

    This could allow opposition parties to take votes from the incumbent rulers “despite identity-based cleavages if they target economically and democratically dissatisfied voters via clear messages.”

    For Tunca, the economic fallout from the quake poses a real risk for Erdogan’s prospects.

    “The magnitude of Turkey’s social earthquake is much greater than that of the tectonic one,” he said. “There is a tug of war between the government and the opposition, and it seems that the winner is going to be unknown until the very end of the elections.”

    Nadeen Ebrahim and Isil Sariyuce contributed to this report.

    This article has been corrected to say that the research, not the survey, was conducted by the academics.

    Sub-Saharan African countries repatriate citizens from Tunisia after ‘shocking’ statements from country’s president

    Sub-Saharan African countries including Ivory Coast, Mali, Guinea and Gabon, are helping their citizens return from Tunisia following a controversial statement from Tunisian President Kais Saied, who has led a crackdown on illegal immigration into the North African country since last month.

    • Background: In a meeting with Tunisia’s National Security Council on February 21, Saied described illegal border crossing from sub-Saharan Africa into Tunisia as a “criminal enterprise hatched at the beginning of this century to change the demographic composition of Tunisia.” He said the immigration aims to turn Tunisia into “only an African country with no belonging to the Arab and Muslim worlds.” In a later speech on February 23, Saied maintained there is no racial discrimination in Tunisia and said that Africans residing in Tunisia legally are welcome. Authorities arrested 58 African migrants on Friday after they reportedly crossed the border illegally, state news agency TAP reported on Saturday.
    • Why it matters: Saied, whose seizure of power in 2021 was described as a coup by his foes, is facing challenges to his rule at home. Reuters on Sunday reported that opposition figures and rights groups have said that the president’s crackdown on migrants was meant to distract from Tunisia’s economic crisis.

    Iranian Supreme Leader says schoolgirls’ poisoning is an ‘unforgivable crime’

    Iranian Supreme Leader Ayatollah Ali Khamenei on Monday said that the poisoning of schoolgirls in recent months across Iran is an “unforgivable crime,” state-run news agency IRNA reported. Khamenei urged authorities to pursue the issue, saying that “if it is proven that the students were poisoned, the perpetrators of this crime should be severely punished.”

    • Background: Concern is growing in Iran after reports emerged that hundreds of schoolgirls had been poisoned across the country over the last few months. On Wednesday, Iran’s semi-official Mehr News reported that Shahriar Heydari, a member of parliament, said that “nearly 900 students” from across the country had been poisoned so far, citing an unnamed, “reliable source.”
    • Why it matters: The reports have led to a local and international outcry. While it is unclear whether the incidents were linked and if the students were targeted, some believe them to be deliberate attempts at shutting down girls’ schools, and even potentially linked to recent protests that spread under the slogan, “Women, Life, Freedom.”

    Iran to allow further IAEA access following discussions – IAEA chief

    Iran will allow more access and monitoring capabilities to the International Atomic Energy Agency (IAEA), agency Director General Rafael Grossi said at a press conference in Vienna on Saturday, following a trip to the Islamic Republic. The additional monitoring is set to start “very, very soon,” said Grossi, with an IAEA team arriving within a few days to begin reinstalling the equipment at several sites.

    • Background: Prior to the news conference, the IAEA released a joint statement with Iran’s atomic energy agency in which the two bodies agreed that interactions between them will be “carried out in the spirit of collaboration.” Iranian President Ebrahim Raisi said he hopes the IAEA will remain neutral and fair to Iran’s nuclear energy program and refrain from being affected “by certain powers which are pursuing their own specific goals,” reported Iranian state television Press TV on Saturday.
    • Why it matters: Last week, a restricted IAEA report seen by CNN said that uranium particles enriched to near bomb-grade levels have been found at an Iranian nuclear facility, as the US warned that Tehran’s ability to build a nuclear bomb was accelerating. The president of the Atomic Energy Organization of Iran (AEOI), Mohammad Eslami, rejected the recent IAEA report, which detected particles of uranium enriched to 83.7% at the Fordow nuclear facility in Iran, saying there has been ‘“no deviation” in Iran’s peaceful nuclear activities.

    A new sphinx statue has been discovered in Egypt – but this one is thought to be Roman.

    The smiling sculpture and the remains of a shrine were found during an excavation mission in Qena, a southern Egyptian city on the eastern banks of the River Nile.

    The shrine had been carved in limestone and consisted of a two-level platform, Mamdouh Eldamaty, a former minister of antiquities and professor of Egyptology at Ain Shams University said in a statement Monday from Egypt’s ministry of tourism and antiquities. A ladder and mudbrick basin for water storage were found inside.

    The basin, believed to date back to the Byzantine era, housed the smiling sphinx statue, carved from limestone.

    Eldamaty described the statue as bearing “royal facial features.” It had a “soft smile” with two dimples. It also wore a nemes on its head, the striped cloth headdress traditionally worn by pharaohs of ancient Egypt, with a cobra-shaped end or “uraeus.”

    A Roman stela with hieroglyphic and demotic writings from the Roman era was found below the sphinx.

    The professor said that the statue may represent the Roman Emperor Claudius, the fourth Roman emperor who ruled from the year 41 to 54, but noted that more studies are needed to verify the structure’s owner and history.

    The discovery was made in the eastern side of Dendera Temple in Qena, where excavations are still ongoing.

    Sphinxes are recurring creatures in the mythologies of ancient Egyptian, Persian and Greek cultures. Their likenesses are often found near tombs or religious buildings.

    It is not uncommon for new sphinx statues to be found in Egypt. But the country’s most famous sphinx, the Great Sphinx of Giza, dates back to around 2,500 BC and represents the ancient Egyptian Pharoah Khafre.

    By Nadeen Ebrahim

    Ziya Sutdelisi, 53, a former local administrator, receives a free haircut from a volunteer from Gaziantep, in the village of Buyuknacar, near Pazarcik, Kahramanmaras province on Sunday, one month after a massive earthquake struck southeast Turkey.

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  • China to increase defense spending 7.2%, sets economic growth target of ‘around 5%’ for 2023 | CNN Business

    China to increase defense spending 7.2%, sets economic growth target of ‘around 5%’ for 2023 | CNN Business


    Hong Kong
    CNN
     — 

    China has set an official economic growth target of “around 5%” for 2023, as it seeks to revive the world’s second-largest economy after a year of tepid growth because of pandemic measures.

    It will also expand its defense budget 7.2%, marking a slight increase over growth the previous year.

    Both figures for the coming year were released at the opening of the annual gathering of the National People’s Congress (NPC), the country’s rubber-stamp legislature, which draws nearly 3,000 delegates to Beijing for the next eight days.

    “China’s economy is staging a steady recovery and demonstrating vast potential and momentum for further growth,” outgoing Premier Li Keqiang told delegates while delivering a government work report at the opening of the congress on Sunday.

    The economy added more than 12 million urban jobs last year, with the urban unemployment rate falling to 5.5%, according to the work report, which emphasized China’s focus on ensuring stable growth, employment and prices amid global inflation and set the GDP target.

    China also unveiled its annual military budget for 2023, which will increase 7.2% to roughly 1.55 trillion yuan ($224 billion) in a draft budget report released Sunday morning.

    The spending increase marks the second year in a row that the annual hike in military spending has exceeded 7% and tops last year’s 7.1% growth, amid rising geopolitical tensions and a regional arms race. As with other recent years, the figure stays well below the symbolically significant double-digit expansion.

    “The armed forces should intensify military training and preparedness across the board, develop new military strategic guidance, devote greater energy to training under combat conditions and make well-coordinated efforts to strengthen military work in all directions and domains,” Li’s work report said.

    The GDP target and military spending are among the most closely watched in the opening day proceedings, with the GDP target figure in particular being monitored this year as China emerges from its economically draining zero-Covid policy. The new figure appears modest against what some analysts had predicted could be a more robust aim for the year ahead.

    The NPC meeting is a key yearly political event that occurs alongside a gathering of China’s top political advisory body, with the events together known as the Two Sessions.

    This is the first Two Sessions since Chinese leader Xi Jinping secured a norm-breaking third term atop the Chinese Communist Party hierarchy in October. Xi is set to enter his third term as President, a largely ceremonial title, during the congress.

    China’s GDP expanded by just 3% in 2022, widely missing the official target of “around 5.5%” mainly due to prolonged Covid restrictions. It was the second lowest annual growth rate since 1976, behind only 2020 – when the initial Covid outbreaks nearly paralyzed the economy.

    In December, after the Communist Party abruptly ended its zero-Covid policy, a massive wave of infections swept across the country, throwing supply chains and factories into chaos. But the disruptions started to fade away in January, and the economic recovery picked up pace last month.

    Official data released Wednesday showed China’s factories had their best month in nearly 11 years in February, underscoring how quickly economic activity has bounced back following the end of the Covid exit wave. The services and construction industries also had their best performance in two years.

    Moody’s Investors Service has since raised its China growth forecast to 5% for both 2023 and 2024, up from 4% previously, citing a stronger than expected rebound in the short term.

    Analysts had predicted a difficult track to recovery for China amid global headwinds, which may have also been reflected in the conservative 2023 target of “around 5%” announced Sunday.

    The global economy will weaken further this year as rising interest rates and Russia’s war in Ukraine continue to weigh on activity, the International Monetary Fund estimated in January. Global growth will likely slow from 3.4% in 2022 to 2.9% in 2023.

    China is set to release its import and export data for the first two months of this year on Tuesday, which will provide a glimpse into demand for global trade.

    During the congress, the ruling Communist Party’s new economic team, including various ministers and financial chiefs, will be unveiled with other key appointments – already selected by the Communist Party leadership – also approved. Premier Li’s replacement will be formally appointed during the meeting, which runs until March 13.

    The new economic team will face the tough task of reviving the Chinese economy as it navigates a growing array of challenges, including sluggish consumption, rising unemployment, a historic downturn in real estate, and increasing tension with the United States over technology sanctions.

    The 7.2% increase in planned defense spending marks the first time in the past decade that the budget growth rate has increased for three consecutive years, as Beijing continues to modernize and build-up its military, while asserting pressure on Taiwan – the self-governing island democracy the Chinese Communist Party claims as its own despite never having ruled.

    China now controls the world’s largest navy by size and continues to advance its fleet of nuclear submarines and stealth fighter jets.

    The military budget expanded 7.1% to 1.45 trillion yuan in 2022, compared with 6.8% the previous year. The last year China’s annual defense spending grew by double digits was 2015. The size of this year’s budget is more than double that of ten years ago.

    Chinese officials have repeatedly sought to portray their military spending as reasonable relative to other countries like the United States – part of China’s bid to present itself as a peaceful power, despite its aggression in the region including its militarization of the South China Sea and heavy patrolling around Taiwan.

    During a press conference Saturday ahead of the opening day, NPC spokesperson Wang Chao said China’s defense budget maintained a “relatively moderate and reasonable growth rate.”

    “China’s defense expenditure as a percentage of GDP has remained stable over the years. It remains basically stable, lower than the world average,” Wang said.

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