Five things to know about where debt ceiling talks stand

Published

2 years ago

May 16, 2023

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Less than two weeks stand between Congress and a fast-approaching deadline from the Treasury Department forecasting the earliest the nation could risk a federal default.

Negotiations between the White House and Speaker Kevin McCarthy (R-Calif.) have picked up in recent days, but McCarthy told reporters this week that he thinks both parties are still “far apart” in reaching a compromise to keep the nation from defaulting on its debt.

“I think we’ve got to have a deal done by this weekend to be able to have a timeline to be able to pass it,” McCarthy said on Monday.

Treasury Secretary Janet Yellen has said the country could run out of money to pay its debt as early as June 1, an estimate she reaffirmed on Monday.

Here are five things to know about the ongoing battle. McCarthy, Biden set to meet again this week

President Biden last week sat down with McCarthy, along with other congressional leaders, in the pair’s first talks on the debt ceiling since February. The Speaker said afterward that the meeting produced little movement, but that discussions would continue between staff in the days ahead before principal leaders are set to meet again.

However, he also said of the White House on Monday that it “seems like they want a default more than a deal,” underscoring the challenges both sides face in this critical stretch.

Debt ceiling talks had long been at a standstill as Republicans drew red lines against raising the debt limit without significant fiscal reforms while the White House refused to come to the bargaining table, insisting instead on a “clean” bill to raise the debt limit while pushing for bipartisan spending talks to be carried out separately.

Biden is set to meet again with leaders on Tuesday. Areas for potential compromise emerge

As discussions continue at the staff level, details have emerged about where compromise could be found.

In a pen-and-pad discussion with reporters last week, prominent House Republicans said they see new limits on federal spending, reclaiming unobligated coronavirus funding, permitting reform and changes to work requirements for public assistance programs among the top areas ripe for bipartisan agreement.

The areas were included in a package House Republicans passed last month that paired an increase in the debt limit with a host of partisan proposals to cut spending. No Democrat voted for the bill.

Some moderate Democrats have also signaled openness to changes like clawing back some coronavirus funds or even potential changes to the student loan policies implemented under the Biden administration in recent weeks.

Biden said last week that rescinding some unspent COVID-19 funding is “on the table.”

And, asked over the weekend about work requirements, the president responded, “I voted for tougher aid programs that’s in the law now, but for Medicaid, it’s a different story. And so I’m waiting to hear what their exact proposal is.”

But there is still plenty of resistance to other proposals Republicans have offered to cut spending. Democrats talking backup plans

As both sides look to put pressure on the other over the threat of a default, Democrats have talked up the prospect of potential backup plans to bypass working with McCarthy on the debt limit.

There’s been a lot of chatter in recent days around using the 14th Amendment, which says the public debt “shall not be questioned,” to potentially allow the president to issue debt. However, the idea has sparked serious legal questions and concerns from lawmakers who think it too risky.

Treasury Secretary Janet Yellen has also said the move could lead to a “constitutional crisis,” while warning against Washington reaching “the point where we need to consider whether the president can go on issuing debt.”

Democrats have additionally looked at using a procedure known as a discharge petition in a bid to allow the party to force a vote on a bill to raise the debt limit in the lower chamber, despite opposition from the Speaker. But that plan would also require support from at least five rebel Republicans for success, and House GOP leaders are adamant the conference is largely unified in tying any increase to the debt ceiling with cuts to spending. Time is running short

Members on both sides are hopeful Congress can put a bow on the debt ceiling matter before June 1, the earliest the Treasury warns the nation risks defaulting on its debt, setting off a high-stakes race against the clock.

While there’s another meeting on the calendar between Biden and congressional leaders this week, the president is soon scheduled to head for Asia later this week for the Group of Seven (G7) summit. He also has trips to Papua New Guinea and Australia on the calendar before the end of the month.

Lawmakers are also short on legislative time, prompting questions around the fate of Memorial Day recess in the upper chamber as tensions escalate around the debt limit.

McCarthy, meanwhile, told reporters he believed leaders need to agree on a framework by this weekend to avert default.

All the while, both sides have been steadfast in rejecting a short-term extension to the debt limit to buy Congress more time. Some on both sides toughen their stances

Members on both sides aren’t expecting the final deal to look much like the proposals some have dug in their heels on in recent weeks. The Memo: Nonexistent ‘border surge’ scrambles immigration politics Michigan boy fends off alleged kidnapper by shooting him with a slingshot

Reports have surfaced that negotiators are considering a two-year deal that would involve proposals aimed at limiting spending while also raising the debt limit. But Republicans are pushing for a shorter extension, as the party presses for another debt fight ahead of next year’s presidential election.

Congressional Democrats have also come out strongly against spending caps as talks heat up, posing a potential hurdle to both sides as negotiators pursue a bipartisan deal. Many also still insist that budget conversations be handled in a two-track process, separating possible cuts from the debt ceiling.

“I’m not open to any policy concessions in the context of the debt limit. We just have to do the responsible thing and prevent everyone’s mortgages from going up,” Sen. Brian Schatz (D-Hawaii), who serves on the Senate Appropriations Committee, said last week.

Entertainment

Liam Payne’s One Direction bandmates Harry Styles and Louis Tomlinson among mourners as funeral takes place

Published

1 hour ago

November 20, 2024

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Liam Payne's One Direction bandmates Harry Styles and Louis Tomlinson among mourners as funeral takes place

Friends and family of Liam Payne, including his One Direction bandmates, have gathered to say goodbye at his funeral.

Harry Styles, Louis Tomlinson, Niall Horan and Zayn Malik were among the family and friends attending the private ceremony.

Simon Cowell, who put the band together on The X Factor, Payne‘s girlfriend Kate Cassidy, and former partner Cheryl were also there.

The 31-year-old died after he fell from a third-floor balcony at the Casa Sur Hotel in Buenos Aires, Argentina, on 16 October.

Fans from around the world have held their own vigils over the past few weeks, and tributes have been left today in his hometown, Wolverhampton.

Payne’s dark blue coffin, topped with white roses, arrived for the service on a horse-drawn carriage, bearing flowers reading “son” and “daddy” – for his son, Bear, with Cheryl.

Her Girls Aloud bandmates Nicola Roberts and Kimberley Walsh were also among those at the service, along with TV and radio presenters including James Corden, Marvin and Rochelle Humes, Scott Mills, and Adrian Chiles, and former professional footballer Robbie Keane.

US influencer Cassidy, who returned home from Argentina two days before his death, arrived with Damian Hurley, son of Elizabeth Hurley.

As Payne’s mother and father, Geoff and Karen, arrived at the church in the Home Counties, standing next to the carriage, silence fell among mourners outside.

A few locals and fans also gathered nearby, but in the main largely stayed away from the private ceremony.

Payne rose to worldwide fame alongside Styles, Tomlinson, Malik and Horan on The X Factor in 2010, when they were put together to form One Direction. They went on to become one of the most successful UK pop groups of all time.

After the band announced their hiatus, the singer launched his solo career, releasing his debut album LP1 in December 2019.

His solo hits included Strip That Down, Bedroom Floor and For You, a collaboration with singer Rita Ora – who paid tribute to Payne as she hosted the MTV Europe Music Awards in Manchester.

Prosecutors in Argentina have launched an investigation into Payne’s death and announced earlier this month that three people had been charged in connection with the incident.

One Direction tributes

Payne’s One Direction bandmates all publicly paid tribute following his death.

“His greatest joy was making other people happy and it was an honour to be alongside him as he did it,” said Styles in his statement. “Liam lived wide open, with his heart on his sleeve, he had an energy for life that was infectious.

“He was warm, supportive and incredibly loving. The years we spent together will forever remain among the most cherished years of my life. I will miss him always, my lovely friend.”

Tomlinson said he had “lost a brother” and offered to be an uncle to Payne’s son, Bear, if he “ever needs me”.

Horan, who had been touring in South America and saw Payne at his show in the weeks before his death, said: “I feel so fortunate that I got to see him recently. I sadly didn’t know that after saying goodbye and hugging him that evening, I would be saying goodbye forever. It’s heartbreaking.”

Malik said Payne had supported him “through some of the most difficult times” of his life, and said he always had a “positive outlook and reassuring smile”.

Cowell also paid tribute, saying he was “devastated” and “heartbroken”.

He continued: “I wanted to let you know what I would always say to the thousands of people who would always ask me. What is Liam like? And I would tell them you were kind, funny, sweet, thoughtful, talented, humble, focused. And how much you loved music. And how much love you genuinely had for the fans.”

Politics

Inflation hits higher than expected 2.3% in October as energy bills rise

Published

1 hour ago

November 20, 2024

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Inflation hits higher than expected 2.3% in October as energy bills rise

Inflation has risen by more than expected due to an increase in energy bills, according to official figures.

It’s the first rise in the rate of price increases, as measured by the consumer prices index (CPI), for three months.

The figure stood at 2.3% in October, according to the Office for National Statistics (ONS), above the 2.2% forecast by economists.

This is also a sizeable increase on the 1.7% recorded a month earlier.

Household gas and electricity bills rose last month as the energy price cap brought the cost of a typical annual bill up by an extra £12 a month.

Inflation wasn’t higher because there were falls in live music and theatre ticket prices and continued drops in the cost of raw materials due to cheaper oil.

Money blog: Follow live reaction to inflation news

Latest inflation data will be cause for concern for rate-setters

Gurpreet Narwan

Business and economics correspondent

@gurpreetnarwan

How worried should we be about this inflation news?

These figures are a world away from the double-digit levels of inflation we experienced in 2022, when the index peaked at 11.1%. Inflation has broadly been coming down as the Bank of England has ratcheted up interest rates.

However, Labour’s budget has created inflation jitters. The government is injecting a big fiscal stimulus into the economy in the form of higher government spending.

The rise in employers’ national insurance contributions could also lead to higher prices.

This has raised the inflation forecasts and likely slowed the pace of interest rate cuts.

Read Gurpreet Narwan’s full analysis of the inflation news.

What about interest rates?

Today’s data may affect the likelihood of the Bank of England cutting interest rates next month.

Before the inflation figure was announced, there was a 78.3% chance of no change – and a 21.7% chance that the cost of borrowing would fall by 0.25 percentage points, according to market expectations.

After the announcement that changed to 84% chance of no cut.

Also on the up was another important measure of inflation watched by the Bank – core inflation, which measures price rises but excludes food and energy costs as they’re liable to sharply fall or rise.

Core inflation rose to 3.3%, more than the 3.1% expected by economists polled by Reuters.

Services inflation also came in above forecast and higher than a month ago at 5%.

Political reaction

Darren Jones, the chief secretary to the Treasury, said the government understands people are struggling after the inflation announcement.

He said: “We know that families across Britain are still struggling with the cost of living. That is why the budget last month focused on fixing the foundation of our economy so we can deliver change.

“But we know there is more to do. That is why the government is focused on economic growth and investment so we can make every part of the country better off.”

But shadow chancellor Mel Stride said: “It’s higher inflation and lower growth under Labour.

“What is worrying about today’s announcement is that inflation is running ahead of expectations and official forecasts state these figures are not expected to improve.

“Labour’s budget will push up inflation and mortgage rates.”

Politics

Donald Trump plans UK visit

Published

1 hour ago

November 20, 2024

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Jack checks in from Washington, which is still buzzing from Trump’s cabinet picks and 2024 ambitions, which could include a Scottish visit next year.

Prime Minister Keir Starmer is now returning from his trip to Brazil but will miss PMQs, leaving Angela Rayner to face the new Conservative frontbench. What do we know about Alex Burghart, who is being put up by the Tories to face her?

Plus, Jack and Sam get into the social media regulation discussion and Elon Musk’s invitation to appear before a select committee.

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