Happy Tuesday! On this date 45 years ago, the first “test tube baby,” conceived through in vitro fertilization, was born — a birth considered one of the most remarkable medical breakthroughs of the 20th century.
Here’s what’s happening today.
House Conservatives Look to Squeeze McCarthy on Spending, Again
Members of the House Freedom Caucus warned Tuesday that they are not yet prepared to back a pair of Republican spending bills set to come to the floor this week. As GOP leaders look to start passing the 12 annual spending bills, the far-right group has been pressing Speaker Kevin McCarthy and their fellow Republicans for additional spending cuts, even if a showdown over spending levels results in a government shutdown this fall.
“We should not fear a government shutdown. Most of what we do up here is bad anyway,“ Republican Rep. Bob Good of Virginia said at a press conference Tuesday, repeating a line he’s used before. Good argued that Republicans should hold the line on spending and try to force President Joe Biden and Democrats to accept steeper cuts — and he argued that most Americans won’t notice if the government is shut down temporarily.
“We’re sounding the warning call,” Republican Rep. Andy Biggs of Arizona, another Freedom Caucus member, said. “We’re reminding our leadership: You need the votes. And we’re begging our leadership: Listen to us. Do not take us on a further irresponsible spending path.”
What this fight is about: “Some conservatives worry that backing the two bills would signal support for the broader spending plans, which they complain rely on sleight-of-hand budgeting maneuvers to show budget reductions,” Siobhan Hughes of The Wall Street Journal explains. “The cuts won’t change the trajectory of future spending, they argue, because they don’t lower the levels from which all future increases will be determined, but instead would allow for a gross total of $1.59 trillion in spending in fiscal 2024, paired with $115 billion in cuts labeled ‘rescissions’ from other buckets including for the Internal Revenue Service.”
Senate Scrambles to Pass Defense Policy Bill This Week
Senate Majority Leader Chuck Schumer is looking to pass the 2024 National Defense Authorization Act by the end of this week, before lawmakers leave for their August recess. It may not be easy, given the slew of amendments the Senate will have to work through without adding anything controversial to the legislation that might threaten final passage.
Some Senators want to raise defense spending above the $886 billion cap set by the Fiscal Responsibility Act, the bipartisan budget and debt-limit deal enacted in early June. GOP defense hawks’ desire for supplemental funding for Ukraine and other military needs could also increase the likelihood of a clash between the Senate and the House over spending levels — and a fight between Republicans in the two chambers.
The Senate process began this afternoon. We’ll be monitoring the action, but in the meantime, you can see more about the NDA and potential Senate obstacles here or here.
Chart of the Day: Vibes Improving
Consumer confidence has risen to its highest level in two years, the Conference Board announced Tuesday.
“Despite rising interest rates, consumers are more upbeat, likely reflecting lower inflation and a tight labor market,” the group said in a press release, noting that their consumer confidence index hit its highest reading since July 2021.
Dana Peterson, the group’s chief economist, said that the availability of jobs appears to have played a key role in the results. “Assessments of the present situation rose in July on brighter views of employment conditions, where the spread between consumers saying jobs are 'plentiful' versus 'hard to get' widened further,” she said. “This likely reflects upbeat feelings about a labor market that continues to outperform.”
The confidence report suggests that consumers may finally be starting to align their outlooks with the economic data, which has been better than expected for months. “[M]aybe the real lesson is that it takes time for peoples' perception of the economy to catch up to what the numbers show,” wrote Neil Irwin of Axios.
Number of the Day: $4.7 Trillion
Countries around the world stand to lose upward of $4.7 trillion in revenues over the next 10 years due to the use and abuse of tax havens by corporations and wealthy individuals, according to a new study released Tuesday.
The Tax Justice Network, a U.K.-based group that advocates for tax fairness, based its analysis on data from 47 nations in the Organization for Economic Cooperation and Development, and limitations in the data mean that the revenue gap could be considerably larger. Even the basic estimate, though, points to an enormous loss of government revenues. “The future losses of public money would be equivalent to losing a year of worldwide spending on public health,” the group said.
Pegging the annual tax revenue loss in 2023 at an estimated $472 billion, the Tax Justice Network said that $301 billion of that total is related to multinational corporations moving profits into tax havens, while $171 billion is produced by wealthy individuals hiding their money offshore.
In response to the ongoing losses, the group calls for a “democratic revolution” in global tax rules to be organized by the United Nations.
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Fiscal News Roundup
- Conservatives’ New Warnings Put Squeeze on GOP Leaders – Wall Street Journal
- Senate NDAA Vote: GOP Amendments Schumer Wants to Kill to Get Military Spending Bill Over the Line – Washington Examiner
- The Biden Administration Proposes New Rules to Push Insurers to Boost Mental Health Coverage – Associated Press
- Cracks Inside the Fed Deepen at Crucial Moment in Inflation Fight – Bloomberg
- IMF Upgrades Forecasts for the Global Economy – Axios
- Officials Juggle Several US Goals as They Award CHIPS Money – Roll Call
- Number of Kids Who Received Free Summer Lunches Dropped by Nearly 45% in 2022 Compared to Previous Year – NBC News
- Countries Could Lose $4.7 Trillion Over the Next Decade to Tax Havens, Tax Group Estimates – CNN Business
- UPS Strike Averted, Sparing Biden Another Economic Disaster – Politico
- US Consumer Confidence Jumps to Highest Level Since July 2021 – CNN Business
- The World Tied $3.5 Trillion-Plus of Debt to Inflation. The Costs Are Now Adding Up – Wall Street Journal
- Biden Picks Next Pentagon Policy Chief, Testing Tuberville’s Blockade – Washington Post
- Biden Designates a National Monument Honoring Emmett Till and His Mother – NPR
Views and Analysis
- The GOP’s Zombie Idea for Fixing Social Security – Joseph Zeballos-Roig, Semafor
- Inflation Is Down. The Fed’s Rate Hikes Aren’t the Only Reason – Rachel Siegel, Washington Post
- Here’s Why Public Transit Keeps Running Out of Money – Juhohn Lee, CNBC
- Defense Authorization Bill Takes Important Steps to Fight China’s Growing Influence – Rep. Michelle Steel (R-CA), The Hill
- Joe Manchin Is Dreaming – Jamelle Bouie, New York Times
- The Plutocratic Policies of No Labels – Harold Meyerson, American Prospect
- Your Exorbitant Medical Bill, Brought to You by the Latest Hospital Merger – Elisabeth Rosenthal, New York Times
- DeSantis Lights Taxpayer Money on Fire, Then Complains About Arson – Catherine Rampell, Washington Post
- Democrats Champion Free Markets as Republicans Target Wall Street – Jasper Goodman, Politico
- A Surprising Beneficiary of New Alzheimer’s Drugs: GE HealthCare – David Wainer, Wall Street Journal
- The Best Answer to the Overdose Crisis Might Surprise You – Megan McArdle, Washington Post