McCarthy Jabs at Biden Over Debt Limit Talks

McCarthy at Thursday's news conference
Gripas Yuri/ABACA
By Yuval Rosenberg

Happy Thursday! It’s been quite a day here in New York, as former President Donald Trump has reportedly just been indicted by a Manhattan grand jury in connection with a hush money payment to adult film star Stormy Daniels. It’s the first time a former president has been criminally charged.

On the lighter side, up in the Bronx, the Yankees won their Opening Day game as Aaron Judge hit the first home run of the season.

Here’s what else we’re watching as Congress heads out for a two-week recess.

McCarthy Jabs at Biden, Offers ‘Soft Food’ for Debt Limit Talks

House Speaker Kevin McCarthy again called on President Joe Biden to meet with him on the debt limit — only this time he worked in a nasty dig about the 80-year-old president’s age.

At a press conference to celebrate the House passage of H.R. 1, Republicans’ energy bill, McCarthy suggested that Republicans might pass legislation to raise the debt limit based on the letter he sent Biden this week, which included a number of broad proposals to cut spending.

House Republicans continue to insist that any increase in the debt ceiling must be paired with spending cuts, an approach they did not take when the debt limit was raised three times under former President Donald Trump.

Asked what the effects of such a House bill might be given that it could not get through the Senate and would not be signed by Biden, McCarthy insisted that Republicans have been reasonable and responsible in their approach to the debt limit.

“He is making the decision that he wants to put the economy in jeopardy,” McCarthy said of the president. “I don’t know what more I can do and how easy — I would bring the lunch to the White House. I would make it soft food if that’s what he wants.”

The speaker’s jab elicited laughs and applause from the Republicans lined up behind him at the news conference, but it did not improve McCarthy’s chances of arranging another meeting.

White House Press Secretary Karine Jean-Pierre told reporters that, unlike the White House, Republicans have yet to produce a budget plan. “What we really need from Speaker McCarthy and House Republicans is to see their budget,” she said. “We want to see what they value. We want to see exactly what it is that they want to cut. So let’s have that budget discussion. What does the speaker want to discuss? What are the specific cuts? What taxes does he want to raise? It’s been three weeks. We’ve had our budget out.”

Credit Suisse Helped Wealthy Americans Hide Money and Dodge Taxes: Report

Troubled Swiss bank Credit Suisse violated a 2014 plea agreement with the Justice Department by continuing to help wealthy Americans hide millions of dollars and evade taxes, according to a report by Senate Finance Committee Democrats released Wednesday.

The 2014 plea agreement involved the bank’s participation in an alleged conspiracy to help thousands of wealthy U.S. taxpayers evade taxes by hiding money from the Internal Revenue Service. The bank agreed to pay a lower fine of $1.3 billion in exchange for a number of measures.

The new report says that, among the plea violations, the bank was again involved in an ongoing and “potentially criminal” conspiracy involving the failure to disclose almost $100 million in accounts belonging to one family with dual citizenship. The report also details how Credit Suisse employees helped hide more than $220 million in offshore accounts for businessman Dan Horsky, who pleaded guilty to tax evasion in 2016. “In both instances, Credit Suisse failed to disclose the accounts to DOJ after entering into its plea agreement, and only did so after whistleblowers notified U.S. authorities of the existence of the accounts,” the report says. It was the result of a two-year investigation.

The committee says it also found 23 other potentially undeclared accounts belonging to ultra-high net worth Americans, each containing at least $20 million. The committee said that the total amount concealed by Credit Suisse in violation of its 2014 plea agreement is more than $700 million.

“Credit Suisse got a discount on the penalty it faced in 2014 for enabling tax evasion because bank executives swore up and down they’d get out of the business of defrauding the United States. This investigation shows Credit Suisse did not make good on that promise, and the bank’s pending acquisition does not wipe the slate clean,” Finance Committee Chairman Ron Wyden (D-OR) said in a statement. He called for the individual bankers involved in these cases to face criminal investigation.

He added that “the cases detailed in this investigation are textbook examples of why Democrats gave the IRS new funding for enforcement. Republican budget cuts have decimated the IRS’s ability to root out this kind of offshore tax evasion scheme, but Democrats are committed to stepping up enforcement against wealthy tax cheats.”

In a statement cited by The Washington Post, Credit Suisse said that the problems highlighted in the report were “legacy issues,” and that it has since taken steps to root out individuals trying to hide assets and is cooperating with U.S. officials. “Credit Suisse does not tolerate tax evasion,” the statement said.

Crackdown on Food Stamps Would Cut Aid for More Than 10 Million: Report

As some Republicans vow to impose more stringent work requirements on those who receive benefits from federal social programs, analysts at the Center on Budget and Policy Priorities took a look at how potential rules changes would affect those currently receiving food stamps through the Supplemental Nutrition Assistance Program, or SNAP.

Rep. Dusty Johnson (R-SD) has sponsored a bill called the America Works Act that would require a significantly larger number of people receiving food assistance to routinely report their work and educational efforts to continue to receive aid. States would face more stringent rules on providing waivers to work requirements, and able-bodied individuals between the ages of 49 and 65 would be subject to the same rules as those who are younger. In addition, some parents with young children would no longer receive automatic waivers from work requirements. (“By seven years old a child is in school nearly 35 hours a week,” Johnson says. “If a child can go to school nearly full-time, a parent with no other children under the age of seven can work 20 hours per week.”)

Analysts at CBPP say the restrictions could reduce or eliminate food benefits for about 10 million people. “Altogether more than 10 million people, about 1 in 4 SNAP participants, live in households that would be at risk of losing food assistance benefits under this bill,” CBPP’s Katie Bergh and Dottie Rosenbaum write. “That includes about 6 million people who would potentially be newly subject to the time limit and at risk of losing eligibility for SNAP, and about 4 million children who live in families that could have their SNAP benefits reduced, harming the entire household.”

Digging in at the state level, CBPP’s Ed Bolen, Dottie Rosenbaum and Catlin Nchako found that about 26% of all SNAP beneficiaries live in households at risk of losing their aid under the new rules. The larger states would see significant numbers of people losing their benefits, with more than a million people at risk in California, about 855,000 in Texas, 725,000 in Florida and 610,000 in New York.

The bottom line: Republicans are looking for ways to reduce spending, and social welfare programs like SNAP, which cost about $119 billion in 2022, are likely targets. And even without budgetary motives, the food stamp program could come under pressure. Johnson, whose family received federal food aid when he was a child, said his primary goal is to help people, not to save money. “My real motivation for work requirements is the fact that they are proven to help lift people out of poverty,” he said earlier this month. “To the extent that we save some money, I think is nice as well, but it's not the primary motivator.”

Number of the Day: 2.6%

The economy grew at a rate of 2.6% at the end of 2022, according to the third and final reading from the Bureau of Economic Analysis. The initial estimate for GDP growth in the fourth quarter was 2.9%, which was revised to 2.7% last month. The final number suggests that the economy started slowing more than expected at the end of the year, as consumers spent less than initially estimated. High interest rates are expected to provide additional drag on economic growth in 2023. Oxford Economics projects at 2.5% growth rate for the first quarter of the year.

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