Senators Still Slugging It Out Over Border Deal

Senators Still Slugging It Out Over Border Deal

The Senate’s drawn-out struggle to reach a deal on border policy changes and aid to Ukraine continues. But even before any agreement is reached, tensions have already risen with the Republican conference and tempers reportedly flared at a party lunch Tuesday.

Sen. James Lankford, the lead Republican negotiator, told his colleagues and reporters today that there won’t be any vote on a deal this week, though he still hopes to be able to produce legislative text.

The challenges to reaching a final deal are still considerable. For one thing, appropriators still have to figure out how much the deal would cost and how to budget for it. “It will definitely be more” than the $14 billion in border funding the White House originally sought, said Sen. Susan Collins of Maine, the top Republican appropriator, according to Punchbowl News. The border funding is a relatively small portion of a White House national security request that totaled more than $100 billion, including $61 billion in aid to Ukraine and $14 billion for Israel.

And Senate conservatives are reportedly bristling at the secretive nature of the talks and pushing back on the prospective deal. “Republicans including Sens. Mike Lee (Utah), Ron Johnson (Wis.) and Ted Cruz (Texas) complained about being left in the dark about key details and warned that the deal could hurt Republican chances of keeping control of the House in the 2024 election,” The Hill’s Alexander Bolton reports, citing senators present at the tense GOP lunch meeting.

Utah’s Lee reportedly said that senators need at least three weeks to review the package.

The pressure on negotiators has been mounting, and it could grow further if former president Donald Trump dials up his demands for a more partisan approach.

“There are many on the hard right who are trying desperately to kill these negotiations,” Senate Majority Leader Chuck Schumer said Tuesday, urging patience.

Some key Republicans, including Senate Minority Leader Mitch McConnell, support a deal and describe it as the party’s best opportunity to win Democratic concessions on immigration policy — an opportunity that won’t come again if Trump were to be reelected. “That is the signal we want to send to the House: that our Republican conference, the majority of us support it,” North Carolina Sen. Thom Tillis told reporters, according to The Messenger.

When Will the Fed Start Cutting Interest Rates?

The Federal Reserve’s policymakers are widely expected to keep rates steady when they meet again next week, with the CME FedWatch tool putting a 97.4% chance that the key target rate stays at its current 5.25% to 5.5% range.

But the expectations for a cut at the Fed officials’ next meeting, in March, have also fallen considerably in recent weeks, as Neil Irwin notes at Axios. A month ago, futures markets saw a better than 75% chance of a rate cut in March, according to the CME FedWatch Tool. Since then, the odds have fallen to 48%.

A Fed rate cut, Irwin writes, “will be a meaningful signal that a period of aggressive monetary tightening has ended and Fed officials are comfortable that inflation is at a low risk of flaring up again.” But economic data and Fed messaging have shifted perceptions that a rate-cutting campaign is imminent and focused attention on the next inflation reports due out, including this coming Friday and next month.

In a social media post Tuesday, former Fed economist Claudia Sahm, who has advocated for a more dovish approach to monetary policy, urged bank officials to get going. “What exactly is the Fed waiting on? Cut,” she wrote. “The consensus is that core inflation gets a 2-handle on Friday. Total [inflation] has had it for a while. [Fed Chair Jerome] Powell has repeatedly said that the Fed would not wait until 2% to cut. Hello???”

Map of the Day: Unemployment Rates Around the US

Unemployment rates crept higher in 15 states in December relative to the month before, the Bureau of Labor Statistics said Tuesday, even as the national rate held steady at a remarkably low 3.7%. Only Minnesota saw a decrease in its jobless rate, to 2.9%, while the unemployment numbers held steady in 34 states and the District of Columbia.

The states with the lowest unemployment rates in December were Maryland and North Dakota, which came in at 1.9%. Nevada had the highest unemployment rate, at 5.4%, followed by California at 5.1%.

“Nationally, the jobless rate remains near the lowest levels since the 1960s,” wrote Reuters’ Amina Niasse. “That, along with job participation and wage growth are set to be key talking points in President Joe Biden's bid for re-election in what polls suggest will be a rematch with former President Donald Trump.”

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Fiscal News Roundup

• Frustrations Explode at Senate GOP Lunch Over Border Deal – The Hill
• Lead GOP Negotiator: No Border Package Vote This Week, 'Very Hopeful' on Deal Text – Politico
• Senate Bipartisan Border Deal Is a ‘Miracle’ in the Making – The Messenger
• Schumer: Republicans Taking Cues From Trump in Opposing Border Deal – The Hill
• Yellen Reassures Ukraine's PM on Budget Support – Reuters
• The Pentagon Has No More Money for Ukraine – ABC News
• Low Energy in New Hampshire May Point to Depressed Turnout – The Hill
• IRS Will Start Simplifying Its Notices to Taxpayers as Agency Continues Modernization Push – Associated Press
• Biden Has Forgiven Billions in Student Loans. Who Has Gotten the Relief? – The Hill
• State Officials Warn 1.5 Million Families Could Lose Home Heating Benefits Without Additional Funding – The Hill
• Vermont Becomes Latest State to Propose Wealth Taxes – New York Times
• US Unions Flexed Their Muscles Last Year, but Membership Rates Fall to All-Time Low – Associated Press
• DeSantis Suggests He’d Veto Legislation Paying Trump Legal Bills in Florida – The Hill

Views and Analysis

• Why Is Congress Giving Business Retroactive Tax Breaks? – Howard Gleckman, Urban-Brookings Tax Policy Center
• The Rich Aren’t Rich Enough to Balance the Federal Budget – Brian Riedl, Wall Steet Journal
• Biden Keeps Saying Billionaires Pay 8 Percent in Taxes. Not Really – Glenn Kessler, Washington Post
• Why the 2024 Campaign Could Start Looking More Like 2012 – Catherine Rampell, Washington Post
• The GOP Wants Pure, Uncut Trumpism – Molly Ball, Wall Street Journal
• Is the Vibecession Finally Coming to an End? – Paul Krugman, New York Times
• The Odds of an Immediate Fed Rate Cut Are Falling – Neil Irwin, Axios
• Offer More Social Security Choice to Workers Phasing Into Retirement – Robert C. Pozen, The Hill
• US Hospitals Receive Billions in Funding — but Where Does It Actually Go? – Chris Pope, The Hill
• Donald Trump Has a Big Problem Ahead – Sam Stein and Natalie Allison, Politico