Democrats Lay Out Demands in Shutdown Fight
Good evening! As the uproar swirls over ABC's decision yesterday to pull Jimmy Kimmel's show off the air, Federal Communications Commission Chair Brendan Carr said today that more changes may be coming to the media landscape. "I don't think this is the last shoe to drop," he told Fox News. And in an interview with CNBC, Carr said "we're not done yet" seeing the consequences of an ongoing shift in the media ecosystem fueled in part by "the permission structure that President Trump's election has provided." Trump on Thursday floated the possibility of stripping the broadcast licenses of networks that cover him critically.
Here's what else is happening.
Democrats Lay Out Their Demands in Shutdown Fight
Congressional Democrats on Wednesday evening introduced their own proposal to prevent a government shutdown at the end of the month. The Democratic bill would extend federal funding through the end of October, permanently extend enhanced Affordable Care Act tax credits and reverse recent Republican cuts to Medicaid and public broadcasting. It also seeks to push back on Trump administration efforts to rescind or exert more control over congressionally approved funding and calls for the creation of an inspector general for the White House Office of Management and Budget.
As lawmakers scramble to address heightened security fears in the wake of the assassination of conservative activist Charlie Kirk, the bill includes $326.5 million in security funding for members of Congress, judges and other government officials, far more than Republicans have proposed.
In all, the Democratic demands would add significant costs, including $350 billion over 10 years for extending the Obamacare subsidies set to expire at the end of the year and about $1 trillion over a decade for restoring the GOP's healthcare cuts.
The deadline dynamics: Democratic leaders say they won't accept a Republican plan to pass a "clean" stopgap spending bill that would extend federal funding largely at current levels to November 21. Senate Majority Leader Chuck Schumer and House Majority Leader Hakeem Jeffries have insisted that any short-term funding bill should also address what they call a looming healthcare affordability crisis. With 12 days to go before the shutdown deadline, Democrats say they are prepared to negotiate and argue that it is Republicans who now face a choice.
"For weeks, Democrats have been ready to sit down and hammer out an agreement, but Republicans are following Donald Trump's orders not to even deal with Democrats instead of doing their jobs," Schumer said in a statement. "Families are already stretched thin by rising costs- including healthcare costs-and hospitals are warning of crisis. Democrats are fighting to protect healthcare, lower costs, and keep the government open - because that's what hardworking people expect and deserve."
Some Republicans have expressed an interest in extending the higher Affordable Care Act subsidies and avoiding a sharp jump in the cost of coverage, but GOP leaders have dismissed Democratic demands to address the issue in a stopgap spending bill, arguing that policy issues should be dealt with separately once federal operations are funded. Senate Majority Leader John Thune said Democrats "are trying to take a hostage here to do a whole bunch of stuff that can't be done on a short-term funding resolution."
A new CBO analysis: The Congressional Budget Office said Thursday that permanently expanding the Affordable Care Act tax credits would add $350 billion to the deficit over the next 10 years - and would boost the number of people with health insurance by 3.8 million as of 2035. Rolling back other recent GOP moves to tighten the rules for the Obamacare marketplaces would add $312 billion to the deficit and raise the number of people with health coverage by 3.2 million.
Republicans plan a squeeze play: Democrats' proposal has little chance of going anywhere. With both sides dug in and insisting that the blame for a shutdown will lie with the party across the aisle, House Republican leaders are planning to pass their stopgap measure tomorrow, assuming they can avoid more than two defections, and force Senate Democrats to once again decide whether to back that "clean" bill or allow the government to shut down. Once the stopgap passes, House Republican leaders are reportedly considering allowing members to leave town until after the shutdown deadline, leaving the Senate with no alternative path to keep the government running.
Trump Asks Supreme Court to Allow Him to Fire Fed Governor Cook
The Trump administration on Thursday asked the Supreme Court to allow the president to fire Federal Reserve Governor Lisa Cook, even as litigation over the issue is still making its way through the courts.
In a court filing, Solicitor General John Sauer repeated allegations first aired by Federal Housing Finance Agency Director William Pulte that Cook committed mortgage fraud in loan applications for properties in Georgia and Michigan. Cook has denied the allegations, and documents have surfaced that challenge the validity of the accusation.
Trump relied on the allegations when he attempted to fire Cook on August 25, saying they gave him sufficient cause to remove her, but Cook sued to halt the effort and a federal judge ruled in her favor to allow time for the courts to sort things out. A federal appeals court backed the judge earlier this week, leaving an appeal to the Supreme Court as Trump's last remaining option to push ahead with the firing.
In his filing, Sauer noted that Trump has the power to remove a Fed governor "for cause" while arguing that the president has "unreviewable discretion" in determining what satisfies that condition.
"Put simply, the President may reasonably determine that interest rates paid by the American people should not be set by a Governor who appears to have lied about facts material to the interest rates she secured for herself - and refuses to explain the apparent misrepresentations," he wrote.
Despite Trump's bid to remove her, Cook participated in a meeting of the rate-setting Federal Open Market Committee this week, where she voted to cut the central bank's benchmark interest rate by a quarter point. Trump has aggressively pushed for larger rate cuts, waging a months-long campaign pressuring bank officials, who are shielded by law and tradition from political influence. If his appeal to the Supreme Court is successful, he would be able to name a replacement for Cook, fulfilling his wish for greater influence as soon as the next Fed meeting scheduled for October 28-29.
Jobless Claims Fall Sharply, Easing Some Fears About the Labor Market
New claims for unemployment benefits spiked last week, indicating to many economists that the labor market had taken a turn for the worse while bolstering the argument that the Federal Reserve needs to cut interest rates to support the economy - which the central bank did yesterday with its first rate cut of the year. But this week, the data show that initial claims dropped significantly, falling the most in nearly four years, suggesting that conditions in the labor market may not be as bad as they seemed.
There were 231,000 initial jobless claims for the week ending September 13, the Labor Department reported Thursday. That's about 33,000 less than reported the week before, and below expectations of 240,000.
The first week of September included a holiday, a possible source of distortion. State officials in Texas also claim they saw a big jump in jobless claims that week, which may have been connected to a fraudulent effort to secure unemployment benefits.
According to the four-week moving average, which reduces volatility from a single week's numbers, weekly initial jobless claims are little changed at 240,000, suggesting that the labor market is relatively stable, even if hiring has slowed sharply.
"Today's report casts doubt on any theories from last week that layoffs have suddenly taken off," said Carl B. Weinberg, chief economist at High Frequency Economics. "It also undermines calls for more and bigger rate cuts, both at the Fed and in the markets."
Fiscal News Roundup
- House Speaker Johnson Optimistic About Vote to Avert Shutdown, but Democrats Aren't – ABC News
- Democrats Are Barreling Toward a Shutdown With No Clear Plan to Get Out – Politico
- House Republicans at Impasse Over Member Security Funding – Politico
- Senate GOP Strategy Emerges in Shutdown Fight: 'Let Schumer Be Schumer' – The Hill
- ICE Seeks Hundreds of New Offices Across U.S. As Agency Expands – Washington Post
- Senate GOP Confirms 48 Trump Nominees Under 'Nuclear' Move – Politico
- Cassidy Asks Kennedy to Testify on Former CDC Director's Claims – Politico
- Inside the Room Where CEOs Say What They Really Think of Trump's Policies – Wall Street Journal
- American Farmers Are Feeling the Pain of Trump's Policies – Bloomberg Businessweek
- Trump Approval Drops to Record Low of Second Term: Poll – The Hill
- The Growing Chasm Between MAGA and Non-MAGA Republicans on Trump's Economy – Axios
- Trump Tariffs on EU Medical Devices Will Drive Up US Patient Bills, Industry Claims – Financial Times
- U.S. to Cut Out Nongovernmental Groups in Refocusing Health Aid – New York Times
- New York and Other States Form Health Bloc as Answer to Trump's Policies – New York Times
- This State Will Be the First to Offer Free Child Care, Regardless of Income – Washington Post
- Trump Administration Considers Raising Retirement Age to Save Social Security From Insolvency – Fox News
- Trump Readies Tax, Criminal Crackdowns on Liberal Groups After Kirk Killing – Bloomberg
Views and Analysis
- Surprisingly, Democrats-Not Republicans-Will Be Calling for a Shutdown This Year – Wendell Primus and Molly E. Reynolds, Brookings Institution
- Democrats Are United in Fear of Another Shutdown Surrender – Ed Kilgore, New York
- 'No One Should Be Very Confident': Four Economists Dissect Trump and the Economy – Rebecca Patterson, Oren Cass, Jason Furman and Lawrence H. Summers, New York Times
- The Fed Rolls Back Recession Risk – Greg Ip, Wall Street Journal
- The Three Takeaways From the Fed's Interest Rate Decision – Bill Dudley, Bloomberg
- Why It Might Be the Time to Repeal the Fed's Dual Mandate – Edward Yardeni, Financial Times
- Why Everybody's Talking About the Fed's "Third Mandate" – Neil Irwin, Axios
- Fed Meeting Hints at New Future of the Central Bank – Neil Irwin, Axios
- Welcome to the Era of Stagflation-Lite – Heather Long, Washington Post
- Why Voters Will Feel the Impact of GOP Health Cuts Before the Midterms – Joanne Kenen, Politico
- Rising Electricity Price? Thank Trump – Rahm Emanuel, Wall Street Journal
- The Plutonomy Is Still Going Strong – David Dayen, American Prospect
- Trump Is Politicizing Disaster Relief - and Communities Are Paying the Price – Gov. Wes Moore and Jay Inslee, The Hill
- Does Anybody Care This Is the Worst Bribery Scandal Since Teapot Dome? – Timothy Noah, New Republic
- Kimmel's Suspension Confirms What Many Suspected After Colbert's Cancellation – Lili Loofbourow, Washington Post