Good evening. We’re looking at the very real possibility of a government shutdown by next Saturday. Here’s an update, and we'll be back in your inbox on Monday with any developments.
New Speaker, Same Problems for House GOP on Spending Bills
House Republicans may have a new speaker, but they’re running into the same old problems when it comes to passing spending bills.
With the threat of a government shutdown looming just eight days away, House Republicans have essentially frittered away another week, struggling to pass more of their own appropriations bills even as they failed to make any real progress toward a short-term measure to keep agencies open past the November 17 deadline.
Speaker Mike Johnson and House GOP leaders had to abruptly pull a planned floor vote on their financial services spending bill, which funds the Treasury and IRS among other things, when it became clear that they didn’t have the votes to pass it. The bill faced opposition from both members of the House Freedom Caucus and moderates. The conservatives were reportedly upset that some amendments got voted down, including a measure to defund a new FBI headquarters building, while party moderates objected to a provision related to abortion access in Washington, D.C.
It was the second time this week that Republicans were forced to punt on a planned appropriations vote. They pulled their Transportation, Housing and Urban Development spending package on Tuesday after some Northeastern Republicans balked over cuts to Amtrak funding.
House Republicans have passed seven of the 12 annual appropriations bills but are struggling to come together over the final five.
At the same time, Johnson has yet to lay out his strategy for passing a stopgap funding bill needed to avoid a shutdown in just over a week. The speaker is considering a short-term funding extension that could potentially be paired with some Republican policy objectives, but he may also still opt for a “laddered” continuing resolution, an idea favored by the Freedom Caucus. A “laddered” CR would extend funding for federal agencies in two groups, setting two separate new deadlines. Democrats have rejected that approach — “That’s the craziest, stupidest thing I’ve ever heard of,” Senate Appropriations Chair Patty Murray said Thursday — and many Republicans have also derided it as overly complicated.
As he weighs his decision, Johnson is looking to balance the conflicting demands and desires of the various GOP factions. Conservative members of his conference have indicated they’ll allow him some leeway in this process — but it may not be much. “I think there’s a honeymoon period here. I’m not sure how long it lasts, maybe 30 days,” said Republican Rep. Thomas Massie of Kentucky, according to CNN. “With what’s going on the floor today, I think that indicates the honeymoon might be shorter than we thought. And every time the CR expires, the speaker is putting his head in the lion’s mouth.”
The bottom line: It’s more of the same for House Republicans. This has been another rough and unproductive week for them as they try to work out their intraparty differences. Republican leaders have little time left to release bill text for their stopgap spending bill if Congress is to act in time to avoid a shutdown.
Keep in mind, the House GOP spending bills will go nowhere in the Senate, and House Minority Leader Hakeem Jeffries insists that Democrats will only accept a clean continuing resolution. Any spending bills will have to have bipartisan support to pass both the House and Senate and get to President Joe Biden’s desk.
The House has adjourned until Monday. The government could shut down five days later.
Romney and Manchin Call for Commission to Stabilize US Debt
Sens. Mitt Romney of Utah and Joe Manchin of West Virginia introduced a bill Thursday that would create a commission tasked with stabilizing the national debt.
Warning that the nation’s finances are “not in order,” Manchin said the bill would address the “unsustainable path” of the country’s debt. “I am proud to introduce this commonsense legislation with my friend and colleague Senator Romney that would create a bipartisan, bicameral fiscal commission to identify comprehensive solutions to bring us back to a sustainable fiscal outlook.”
The details: The bill, called the Fiscal Stability Act, would establish a 16-member commission made up of 12 lawmakers and four outside experts. The commission would be required to produce a report by May 1, 2025, that proposes new legislation outlining specific steps for policymakers to take, with the goal of stabilizing the ratio of public debt to GDP within 15 years and improving the solvency of federal trust funds over a 75-year period. If the commission’s work is approved, the proposed legislation would receive “expedited consideration” in the House and the Senate.
The bill is backed by a group of senators including Republicans John Cornyn of Texas, Todd Young of Indiana, Cynthia Lummis of Wyoming and Thom Tillis of North Carolina; Democrats John Hickenlooper of Colorado, Mark Warner of Virginia and Jeanne Shaheen of New Hampshire; and independent Kyrsten Sinema of Arizona.
The legislation is matched in the House by the Fiscal Commission Act, which was introduced in September by Reps. Bill Huizinga, a Republican from Michigan, and Scott Peters, a Democrat from California.
Asked if the new plan is simply a replay of the Simpson-Bowles commission — the ill-fated effort to stabilize the debt in 2010 — Romney told CNBC that while the plan for the new debt commission is similar to Simpson-Bowles, conditions have changed in the meantime. “The debt is now twice the level that it was,” creating more urgency for lawmakers, he said, adding that the new commission also has a well-defined process for getting any proposed legislation to Congress for a vote, unlike the previous effort.
Romney also pushed back against the idea that a debt commission necessarily means cuts to popular programs like Social Security. “The reality is not everything is on the table because neither one of us and nobody else is talking about changing our entitlements for retirees or people nearing retirement,” Romney said. At the same time, reductions for younger people who are still years away from retirement would likely be fair game.
Battle lines are drawn: The advocacy group Social Security Works put out a statement signed by dozens of labor and progressive groups saying they are “in strong opposition to the formation of a debt commission which has been promoted during the ongoing debate around government funding.” The group added that the “White House has accurately described such a commission as a ‘death panel’ for Social Security.”
The group said that Congress can address debt directly, without the need for a special commission, and in any event, Social Security should be left out of the discussion since “the program is totally self-funded, cannot pay benefits or associated costs without the revenue to cover the costs, has no borrowing authority, and, therefore, does not add a penny to the deficit.”
At the other end of the political spectrum, fiscal conservatives were delighted with the proposal. “[A] commission is likely our best hope to tackle America’s immense challenges,” the Committee for a Responsible Federal Budget said in a statement. “A commission can help policymakers build upon recent fiscal successes to show we can govern and make hard choices.”
Quote of the Day: A Reminder From the Fed
“The Federal Open Market Committee (FOMC) is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance. We know that ongoing progress toward our 2 percent goal is not assured: Inflation has given us a few head fakes. If it becomes appropriate to tighten policy further, we will not hesitate to do so.”
— Federal Reserve Chair Jerome Powell, in prepared remarks delivered Thursday at the International Monetary Fund in Washington, D.C.
Numbers of the Day: 10,135,000 and 2,006,000
At least 10 million Medicaid beneficiaries, including more than 2 million children, have lost their health insurance under the program since April, according to updated data from KFF, a health policy research organization. The coverage losses come after the expiration of a pandemic-era policy that prevented states from disenrolling people from March 2020 through March 2023. “The figures, which are likely a significant undercount, represent one of the fastest and most dramatic ruptures in the American safety net since Medicaid went into law in 1965,” Noah Weiland writes at The New York Times, citing experts.
More than 70% of people who have lost coverage have done so for procedural reasons, not because they were ineligible, according to KFF’s analysis of available data. At least one million children who have lost coverage are likely to still be uninsured, Joan Alker, the executive director of the Georgetown Center for Children and Families, told the Times.
IRS Releases Tax Brackets for 2024
The IRS has released income limits for the various brackets taking effect in 2024. Some key numbers from the announcement:
* The marginal rates for 2024:
37% for incomes over $609,350 ($731,200 for married couples filing jointly)
35% for incomes over $243,725 ($487,450 for married couples filing jointly)
32% for incomes over $191,950 ($383,900 for married couples filing jointly)
24% for incomes over $100,525 ($201,050 for married couples filing jointly)
22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)
10% for incomes of $11,600 or less ($23,200 for married couples filing jointly).
* The standard deduction will be $14,600 for single taxpayers, up $750 from 2023, and $29,200 for married couples filing jointly, an increase of $1,500.
* The Alternative Minimum Tax exemption amount will be $85,700, with a phase-out starting at $609,350 ($133,300 for married couples filing jointly, with a phase-out starting at $1,218,700).
* The estate tax exclusion rises to $13,610,000 in 2024, up from $12,920,000 in 2023.
Fiscal News Roundup
- House GOP Pulls Second Funding Bill in a Week – The Hill
- Where Are the 12 US Government Funding Bills to Avert Shutdown? – Reuters
- House Speaker Johnson Is Running Out of Time to Avoid Shutdown – Bloomberg
- Social Security in Peril? Mitt Romney Vows ‘Promises Will Be Kept’ in Response to Debt-Commission Concerns. – MarketWatch
- ‘Rich People Should Not Be Collecting Social Security,’ Chris Christie Says at GOP Debate – MarketWatch
- At Least 2 Million Children Have Lost Medicaid Insurance This Year – New York Times
- Biden Touts Affordable Care Act Enrollment Spike – The Hill
- Joe Manchin Won't Seek Reelection in 2024, Dealing Blow to Dems' Senate Map – Politico
- Swing-State Voters Put Border Before Mideast, Ukraine Conflicts – Bloomberg
- Powell Says Fed to Be Careful, Won’t Hesitate to Hike If Needed – Bloomberg
- U.S., Already Hit by 25 Disasters of $1 Billion Each, Could See More Flooding This Year – NBC News
Views and Analysis
- Yield Uncertainty Will Persist Even If the Fed Is Done Raising Rates – Mohamed A. El-Erian, Bloomberg
- It Beggars Belief That Democrats Will Keep Sleepwalking Ahead With Biden – George Will, Washington Post
- 6 Takeaways From the Republican Debate – Shane Goldmacher, Jonathan Swan and Maggie Haberman, New York Times