Happy Tuesday! Here’s what’s happening.
Democrats Prepare ‘Secret Weapon’ for Debt Limit Crisis
House Democrats are maneuvering to prepare a fallback option that would force a floor vote on a bill to raise the debt limit — but the process would require the support of at least five Republican members, leaving the prospect of success highly questionable.
Minority Leader Hakeem Jeffries (D-NY) on Tuesday began to deploy what Carl Hulse of The New York Times called Democrats’ “secret weapon”: a bill meant to bypass House Speaker Kevin McCarthy (R-CA) and force a vote to increase the debt limit. Democrats had quietly prepared shell legislation that has been sitting around unnoticed and could be used to bring up what’s called a discharge petition addressing the debt limit.
“[T]he 45-page legislation, introduced without fanfare in January by a little-known Democrat, Representative Mark DeSaulnier of California, is part of a confidential, previously unreported, strategy Democrats have been plotting for months to quietly smooth the way for action by Congress to avert a devastating federal default if debt ceiling talks remain deadlocked,” Hulse writes.
Democrats would need a majority of members to sign on to their petition, meaning they would need at least a handful of Republicans to join in, and the complex process only allows them to start gathering signatures in a couple of weeks.
“House Democrats are working to make sure we have all options at our disposal to avoid a default,” Jeffries wrote in a letter to colleagues. “The filing of a debt ceiling measure to be brought up on the discharge calendar preserves an important option. It is now time for MAGA Republicans to act in a bipartisan manner to pay America’s bills without extreme conditions.”
The discharge petition would be a long shot, though.
“Several top Democratic lawmakers and aides have privately said that the discharge petition is not their preferred method of preventing a default, with many describing it as the absolute final option, to be used hours before a default would occur, if the White House and congressional leaders cannot strike a deal,” The Washington Post reports.
Senate Republicans have shown no interest in a clean debt ceiling increase or a short-term extension of the limit, either. “The only thing that can get 60 votes in the Senate is something between the president and the House Republican leadership,” Senate Minority Whip John Thune (R-SD) told reporters.
Majority Leader Chuck Schumer (D-NY) on Monday started the process to put two bills on the Senate calendar: the GOP plan passed by the House and a competing suspension of the debt limit through 2024. “Putting the bills on the calendar doesn’t guarantee a vote on either, but it does place Democrats’ ‘clean’ proposal without spending cuts head-to-head with the House Republican bill,” Politico reports. Neither bill would get 60 votes at this point.
“This process will ensure that once a clean debt ceiling is passed the House bill is available for a bipartisan agreement on spending and revenue as part of the regular budget process,” a Schumer spokesperson told reporters.
‘Big Four’ meeting set for next week: McCarthy and Senate Minority Leader Mitch McConnell (R-KY) have accepted President Joe Biden’s invitation to discuss the debt limit with him and Democratic congressional leaders at the White House on May 9.
One White House official told NBC News that the meeting is meant to emphasize “the urgency of preventing default” and spur talks about the 2024 budget, which Biden and Democrats say is the appropriate place for negotiations about the GOP demands for spending cuts.
The need for action is growing increasingly urgent after Treasury Secretary Janet Yellen told lawmakers yesterday that the deadline for raising the debt limit could be as early as June 1. Still, the path to avoiding a crisis remains entirely uncertain. The White House is holding fast to its insistence that the debt limit must be raised without conditions, and Republicans continue to insist that won’t happen. In the meantime, the two sides continue to lob their attacks.
Signs of Softening in the Labor Market
The number of job openings in the U.S. fell to 9.59 million at the end of March, declining from an upwardly revised total of 9.97 million in February, the Bureau of Labor Statistics announced Monday.
The latest “Job Openings and Labor Turnover Summary” report, knowns as JOLTS, provides more evidence that the labor market is softening. The number of job openings has declined for three months in a row and is now well below the 12 million mark recorded last spring. The ratio of open jobs to the number of unemployed people fell to 1.65, meaning there were 1.65 jobs available for every unemployed worker in March. That’s above the pre-pandemic average of about 1.2 jobs per unemployed worker, but below the peak level of 2 that was reached in March 2022.
The number of quits fell, too, dropping by 129,000 to 3.85 million. Economists consider the number of quits to be a good measure of worker confidence, and the measure has now fallen to its lowest reading since May 2021, suggesting that employees aren’t finding as many attractive alternative job options as they were last year.
The number of layoffs and discharges, on the other hand, rose in March, climbing to 1.8 million. That’s significantly above the cyclical low of 1.3 million recorded in 2021, and close to the pre-pandemic average of about 1.9 million.
“Demand for labor is cooling, and the dynamics of the labor market are normalizing,” Julia Pollak, chief economist at ZipRecruiter, told CNN. “After two years of incredibly rapid churn and highly elevated demand, things are now all going back to normal levels and rates.”
Number of the Day: $3.77 Billion
Sixteen states collected more than $3.77 billion in taxes on marijuana sales last year, according to a report published this week by the Marijuana Policy Project, an advocacy group that supports state control of cannabis laws.
While the total was a bit below the roughly $3.8 billion states collected in 2021, the overall trend shows a huge increase in sales and tax revenues since 2014, when the legal sale of recreational marijuana began in Colorado and Washington. In that first year, the two pioneering states reported $68 million in tax revenues.
California collected the most in taxes on marijuana sales in 2022, bringing in a bit more than $1 billion. The smallest take was in the smallest state, Rhode Island, which reported a $579,000 haul. Colorado and Washington reported $305 million and $529 million in tax revenues, respectively. Other heavy hitters include Arizona ($223 million), Illinois ($562 million) and Michigan ($326 million).
“These new streams of revenue are helping to fund crucial social services and programs across the country, such as education, alcohol and drug treatment, veterans’ services, job training, and reinvestment in communities that have been disproportionately affected by the war on cannabis,” said Toi Hutchinson, who leads the MPP. “The states that lag behind will not only be doing a disservice to their constituents—they will also be leaving money on the table.”
- House Democrats Move to Force a Debt-Limit Increase as Default Date Looms – New York Times
- House Democrats Prepare Long Shot Plan to Try to Force Debt Ceiling Increase – ABC News
- Biden Won’t Move on Debt Ceiling Terms Even as He Seeks to Restart Talks – Politico
- X-Date Projection Starts to Squeeze Capitol Hill – Politico
- House Republicans’ Budget Bill Doesn’t Spare Veterans. Democrats Are Making Them Regret It. – HuffPost
- Senate Republicans Dismiss the Possibility of a Short-Term Debt Limit Increase – NBC News
- A Short-Term Fix Looks More Likely as US Debt-Limit Deadline Looms – Bloomberg
- Is the Debt Limit Constitutional? Biden Aides Are Debating It. – New York Times
- Everything You Need to Know About the Debt Ceiling – New York Times
- Senators Can’t Find Right Prescription on Drug Price Bills, Punt Package – Politico
- Job Openings Fell More Than Expected in March to Lowest Level in Nearly Two Years – CNBC
- Jamie Dimon Says JPMorgan Rescued First Republic Because the Government Asked His Bank 'to Step Up, and We Did' – Insider
- Loneliness Poses Health Risks as Deadly as Smoking, Surgeon General Says – NBC News
Views and Analysis
- Why Joe Biden Won’t Negotiate on the Debt Ceiling – Dylan Matthews, Vox
- Millions of Americans Could Suffer if Debt Showdown Isn’t Solved in Next 30 Days – Stephen Collinson, CNN
- It’s Time to Worry About a US Default. For Real This Time – Zachary B. Wolf, CNN
- Why Is Inflation So Sticky? It Could Be Corporate Profits – Paul Hannon, Wall Street Journal
- Taxes Save Babies’ Lives – Amy Hanauer, Institute on Taxation and Economic Policy
- ‘Progressives’ Want to Go Back to the 1950s – Walter Russell Mead, Wall Street Journal
- Republican States Are Racing Toward Authoritarianism – Francis Wilkinson, Bloomberg