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| By Michael Stratford |
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The looming fiscal policy fights of Trump 2.0 came early for Christmas. Several dozen hardline conservatives in the House on Thursday night rebelled against President-elect Donald Trump’s 11th-hour proposal to suspend the debt limit for the first two years of his presidency as part of a stopgap spending bill. As Katherine Tully-McManus and Jennifer Scholtes report, those 38 GOP lawmakers joined with nearly all Democrats to reject the proposal, ratcheting up the chance that Congress won’t pass legislation funding the government before it’s set to shut down at midnight tonight. Beyond the usual fallout from a lapse in appropriations, a shutdown could also upend the presidential transition at federal agencies and throw into chaos preparations for Trump’s second inauguration, as our Alice Miranda Ollstein and Gavin Bade report. Trump’s debt limit demand — which scrambled negotiations over averting a government shutdown — offers a preview of the fiscal fights ahead next year as he seeks to advance campaign promises on taxes, trade and immigration that many outside experts say will increase the budget deficit by trillions of dollars. GOP lawmakers are already debating the extent to which they’ll offset tax cuts next year. “It really makes it harder for Republicans to ever make a case against Democratic deficits or Democratic debt limits ever again,” said Brian Riedl, a senior fellow at the conservative Manhattan Institute. “Trump absurdly claimed that he could cut taxes by $9 trillion over 10 years while still reducing the budget deficit, and now that he's getting closer to moving into the Oval Office, he’s essentially admitting that his agenda is going to blow up deficits, perhaps even bigger than his predecessor.” Those fights will largely be internal Republican squabbles as Trump’s political sway with the fiscal hawks in his party are put to the test. Rep. Chip Roy (R-Texas) said on the House floor he was voting against raising the debt ceiling as Trump wanted because it wasn’t paired with spending cuts. “I’m absolutely sickened by a party that campaigns on fiscal responsibility and has the temerity to go forward to the American people and say you think this is fiscally responsible,” Roy said.
Trump said Thursday that clearing the debt ceiling issue away was “VITAL to the America First Agenda” for his first few years in office. “Anybody that supports a bill that doesn’t take care of the Democrat quicksand known as the debt ceiling should be primaried and disposed of as quickly as possible,” he told Fox News. Happy Friday — Sam is off, and your next MM host will be Declan Harty. Send tips: dharty@politico.com.
| | A message from Capital One:
Capital One recently announced our historic, five-year, $265 billion community benefits plan in connection with our proposed acquisition of Discover to advance economic opportunity and financial well-being. This plan is twice as large as any other community commitment developed in connection with a bank acquisition and demonstrates that the combined Capital One and Discover will create an opportunity to provide more lending, investment, and services for underserved communities than either institution would undertake individually. Important information: CapitalOneDiscover.com | | | | | Hill wants GOP to weigh reauthorization alongside reconciliation — Incoming House Financial Services Chair French Hill is urging colleagues to view reauthorization of key programs like HUD's as a tool in the reconciliation process, Eleanor reports.
"We have unauthorized programs, besides budget reconciliation and mandatory spending, and we want to see if we can reduce spending or improve the direction of an agency through selectively reauthorizing that, for those programs where Republicans have consensus," Hill said in an interview this week in his office. "That's not reconciliation, per se, but it is part of it: You can do some things by reconciliation, but if there are other things that are more substantial, even if they result in spending cuts — [they] can't be done through reconciliation, they have to be done through the authorizing process."
Hill said he made that point in the presentation that helped win him the gavel last week. He added that he met with House Majority Leader Steve Scalise and other committee chairs this week to chart a path forward. "That coordinated work has begun, both at the staff level and member discussion," Hill said.
Hill said he plans to treat cryptocurrency legislation passed this Congress as a starting point for negotiations next year; that it could make sense for the House to move those bills first; that he's already talked to Trump's artificial intelligence and crypto czar about coordinating legislation with regulation; and that the committee's first hearing next year will likely be testimony from Federal Reserve Chair Jerome Powell in February. For additional reading, check out POLITICO Pro's interview with Hill.
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First in MM: Democrats probe Robinhood over election betting — Rep. Sean Casten (D-Ill.) and Sen. Jeff Merkley (D-Ore.) on Thursday were among a handful of House and Senate Democrats raising concerns with Robinhood's election betting, Eleanor reports. “It appears that Robinhood has capitalized on election betting to expand its profits, which could come at the expense of protecting investors" and "normalizes risky and speculative betting on critical events," they wrote in a letter to CEO Vlad Tenev and Vice President JB Mackenzie. They requested information on how Robinhood approves users and prevents market manipulation, among other things. "The election event contracts offered by Robinhood Derivatives are regulated by the CFTC and offered through CFTC-registered entities," Lucas Moskowitz, Robinhood's general counsel, said in a statement. "We believe the market for event contracts will become increasingly relevant for retail and institutional investors alike, and we're proud to be one of the first platforms to offer these products to retail customers in a safe and regulated manner."
| | US economic growth beats expectations: Victoria Guida reports that GDP rose at a 3.1 percent annualized pace in the third quarter of the year, according to Commerce Department data released Thursday, after growing at a 3 percent pace in the second quarter. That growth, fed by steady consumer spending, comes alongside a still-low unemployment rate of 4.2 percent and much-improved inflation, which has fallen below 3 percent. It’s the final big-picture snapshot of the economy that President Joe Biden is leaving to his successor.
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| A message from Capital One:   | | | | | Troubling FDIC survey: The FDIC’s Inspector General said in a report Thursday that its survey of the agency’s workforce yielded “areas of significant concern” with the agency’s workplace culture. More than one-third of respondents (37 percent) said they had experienced harassment or (34 percent) personally witnessed harassment that happened to someone else at work. And 72 percent of employees who reported harassment said they were dissatisfied with how the agency handled their complaints.
The watchdog report also faulted the FDIC for failing to consistently maintain adequate records on cases of harassment and misconduct. And, the watchdog said, the FDIC didn’t do a good job of informing senior leaders about misconduct allegations, potentially leaving some executives unaware of the extent of the problems. CapOne-Discover deal inches forward: Delaware’s banking regulator signed off on Capital One’s proposed $35 billion deal to purchase Discover, clearing one of the first regulatory obstacles to the businesses merging into the nation’s largest credit card company and one of the biggest banks. Capital One called the approval from the Delaware State Bank Commissioner “an important step toward the completion of the merger.” The company said it expects the transaction will close in “early 2025.”
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Trade war watch: The Washington Post’s Abha Bhattarai and Jaclyn Peiser report: “Americans are scrambling to stock up on cars, appliances and other big-ticket imports in anticipation of new Trump administration tariffs — a spending spree that could reignite the very inflation buyers are hoping to avoid.” Safety net expansion: “Nearly 3 million people could receive a boost in Social Security payments under legislation set for a final Senate vote in the coming days,” The Associated Press’s Bill Barrow reports.
| | A message from Capital One:
Capital One’s community benefits plan, as part of our proposed acquisition of Discover, announces a commitment of over $35 billion supporting affordable housing for low- and moderate-income communities and individuals, representing a nearly 30% increase over our planned activities, as well as over $5 billion supporting solutions to challenges LMI communities face, including employment, food accessibility, healthcare, education, and public infrastructure.
Important information: CapitalOneDiscover.com | | | | |
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