Big news today: 82-year-old Mitch McConnell announced that he will step down as Senate minority leader in November, ending a hugely impactful run of nearly 18 years as head of the upper chamber’s Republican conference, the longest tenure as a Senate party leader in U.S. history.
McConnell, a frequent subject of Democratic ire for his partisan maneuvering, has in recent years also drawn criticism from Trumpian members of the GOP. But he indicated Wednesday that remains committed to a more Reaganesque view of his party and the world and is proud of his place in history.
“I love the Senate. It has been my life. There may be more distinguished members of this body throughout our history, but I doubt there are any with more admiration for it,” an emotional McConnell said on the Senate floor, his voice shaking. Before concluding, he added that he intends to serve out his term as a senator: “I still have enough gas in the tank to thoroughly disappoint my critics and I intend to do so with all the enthusiasm which they have become accustomed.”
Here’s what else is happening.
Lawmakers Strike Funding Deal to Avert Government Shutdown on Friday Night
Congressional leaders struck a deal Wednesday on half of the 12 required annual spending bills along with a stopgap measure to avoid a partial government shutdown that was set to begin Friday night.
“We are in agreement that Congress must work in a bipartisan manner to fund our government,” the four top congressional leaders and four top appropriators said in a joint statement announcing the deal, which was initially floated by House Speaker Mike Johnson.
The agreement will extend the current funding deadlines of March 1 and March 8 by one week and two weeks, respectively, buying time for appropriators to finish work next week on a package of six spending bills: Agriculture-FDA, Commerce-Justice and Science, Energy and Water Development, Interior, Military Construction-VA, and Transportation-HUD.
“After preparing final text, this package of six full year Appropriations bills will be voted on and enacted prior to March 8,” the lawmakers said in their statement. “These bills will adhere to the Fiscal Responsibility Act discretionary spending limits and January’s topline spending agreement.”
Leaders reportedly hope to have legislative text for the first batch of spending bills ready for lawmakers to review by this weekend. Once that package is done, the remaining six appropriations bills will be finalized and enacted by March 22. Those bills cover Defense, Financial Services and General Government, Homeland Security, Labor-HHS, Legislative Branch, and State and Foreign Operations.
The House will reportedly vote on the stopgap funding bill on Thursday, with the Senate to follow before Friday’s midnight deadline. “Johnson will almost certainly need help from Democrats to pass the measure in the House,” Politico points out, “and all 100 senators will have to agree to speed up debate to move the stopgap through the upper chamber before the March 1 deadline.”
Why it matters: None of the congressional leaders wanted to shoulder the blame for a government shutdown months before the 2024 elections, and this deal will allow them to avoid that possibility, for now. It will also remove any uncertainty about whether President Joe Biden will be able to deliver his State of the Union address as scheduled on March 7.
But, as Catie Edmondson of The New York Times writes, passing another stopgap spending bill will “only prolong what has been an agonizing monthslong negotiation on federal spending that has gripped Congress for months, as Republicans bent on steep cuts and conservative policy mandates refused to accept a deal with Democrats.
Lawmakers will still have to work out potentially significant differences over the next six, more contentious spending bills within a few weeks — or face another shutdown threat. “That would be a tall order in the House, which has struggled to pass any spending legislation amid Republican divisions,” Edmondson notes.
If or when lawmakers can finalize all the required 2024 annual spending bills, they’ll quickly have to move on to the 2025 budget battles. The president is due to release his fiscal 2025 budget request on March 11.
Quote of the Day
“Look, there’s no reason this shit couldn’t have been done by the end of September.”
‒ Democratic Sen. Jon Tester of Montana, who oversees the defense spending bill, as quoted by Politico talking about the budget and appropriations process for the current fiscal year, which started some five months ago.
European Leaders Urge Johnson to Pass Ukraine Aid
Parliamentary leaders from across Europe sent an open letter to Speaker Mike Johnson this week pleading with the Louisiana Republican to pass the legislation that would provide $60 billion in aid to Ukraine, which faces shortages of materiel in its ongoing war against Russian invaders.
“We believe that thanks to your personal leadership, the Congress will demonstrate historic bipartisan unity in support of the collective effort to assist Ukraine," they wrote in the letter, dated Tuesday. “Therefore, we ask you to take the next step toward adopting a historic decision on HR 815 that will secure US assistance to foreign countries and provide Ukraine with the necessary funds to continue its fight.”
Though the bill has passed the Senate, Johnson has refused to bring it up for a vote in the House amid opposition from isolationist hardliners and former president Donald Trump.
The letter’s signatories include parliamentary leaders in Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Estonia, France, Germany, Iceland, Italy, Latvia, Lithuania, Moldova, the Netherlands, North Macedonia, Poland, Portugal and Spain.
Top Finance Republican Blasts $78 Billion Tax Bill
Sen. Mike Crapo, the top Republican on the Finance Committee, made it clear again Wednesday that he does not support the $78 billion tax bill that would expand the Child Tax Credit and restore a set of business tax breaks, with the cost covered by the elimination of the pandemic-era employee retention tax credit.
The bill, negotiated by Democratic Senate Finance Committee Chairman Ron Wyden and Republican House Ways and Means Chairman Jason Smith, passed the House easily in January in a bipartisan 357-to-70 vote. Supporters had hoped to move the legislation through the Senate quickly, possibly by attaching it to a government funding bill, but that became unlikely given the opposition from Crapo and several other senators.
Crapo was critical of the proposed changes in the Child Tax Credit, which would include a refundable portion in 2024 and 2025 that could be claimed even by households with no income. Crapo said Wednesday he was concerned about reducing the need to work. “I remain concerned the CTC provisions undermine the work requirement and represent a significant shift – described by some Democrats as a down payment – to transform CTC from primarily working family tax relief into a government subsidy,” he said.
Crapo chided the bill’s backers for trying to push the bill through without alternation or amendments. “Efforts to pressure Senate Republicans to rubber stamp the Wyden/Smith tax deal have been counterproductive,” he said, adding that the bill has “no near-term path forward in the Senate.”
Number of the Day: 3.2%
Economic growth in the fourth quarter of 2023 was slightly weaker than first estimated, according to government data released Wednesday. The Commerce Department lowered its estimate of GDP growth to 3.2%, one-tenth of a point lower than the initial estimate released in January. The reduction was driven by a downgrade to inventory investment in the final three months of the year.
At the same time, other components of the report improved in the revision. The measures of consumer spending, residential and business outlays, and state and local government investment were all raised, indicating that the economy was actually stronger overall than first estimated.
The estimate of inflation was also revised slightly higher, reflecting the higher demand. The personal consumption expenditures (PCE) price index rose by a revised 1.8% in the fourth quarter, up from the previous estimate of 1.7%, and the core PCE measure, which ignores volatile food a fuel prices, was revised to 2.1%, up from 2.0%.
Why it matters: The latest data does little to undermine the view that the U.S. is still on a glide path to a “soft landing” in which the economy continues to grow even as inflation falls back toward the Federal Reserve’s 2% target. Speaking to reporters Wednesday, Federal Reserve Bank of New York President John Williams said current economic conditions suggest that the central bank will likely wait until “later this year” to start cutting interest rates. “The economy is still strong, we expect to see positive growth and inflation to keep coming down,” he said, per Bloomberg.
Fiscal News Roundup
- Congressional Leaders Strike a Short-Term Deal to Avert Partial Shutdown – New York Times
- Days From a Government Shutdown Congress Is Racing to Strike a Deal. But Aid for Ukraine Is Stalled – Associated Press
- Jeffries Suggests Democrats Would Save Johnson From Removal Over Ukraine Aid – New York Times
- Mitch McConnell to Step Down as Republican Senate Leader in November – Washington Post
- Fed Officials Emphasize Data to Guide Pace of Interest-Rate Cuts – Bloomberg
Views and Analysis
- McConnell’s Exit Sets Up Trump-Fueled Fight for Republican Party – Steven T. Dennis and Erik Wasson, Bloomberg
- How Mitch McConnell Made Donald Trump – Alec MacGillis, ProPublica
- Mitch McConnell Is a Man Without a Party – Nia-Malika Henderson, Bloomberg
- What Trump Would Do to Our Economy – Steven Rattner, New York Times
- Think Donald Trump Has Promised Not to Change Social Security? Think Again – Brett Arrends, MarketWatch
- Why Americans Are Still Angry About Inflation, Even as It Cools – Heather Long, Washington Post