Democratic and Republican leaders on Capitol Hill are starting to temper expectations among their members about what a final debt ceiling deal could look like, becoming more explicit in acknowledging that neither side will get everything it wants.
When asked Monday whether any ultimate deal to cut spending as a condition of raising the debt ceiling will lose votes on both the left and right ideological edges of the parties, Speaker Kevin McCarthy (R-Calif.) indicated that it would.
“Did you ever think at the end of the day that when you get into a negotiation with both sides that only one side is gonna carry everything? No, no one thinks that,” McCarthy said.
That same day, House Minority Leader Hakeem Jeffries (D-N.Y.) said he was willing to consider a White House offer to freeze spending at current levels — a stance that is drawing ire from liberals.
Though Republicans flatly rejected that offer, it shows just how far the White House has moved in discussions with Republicans in a matter of weeks as pressure mounts to secure a deal.
“Any proposal that potentially offers to freeze spending is not a proposal that has been put into the public domain by the left flank,” Jeffries told reporters Monday. “That’s an inherently reasonable effort to find common ground in a divided government situation.”
Politics watchers had long expected the eventual deal to lift the debt ceiling to fall somewhere between what the two parties are demanding, but McCarthy’s and Jeffries’s statements are their clearest signals yet that their members should prepare for a compromise that jettisons some party priorities.
The tempering on both sides comes as negotiators say they are having productive meetings but remain apart on key issues ahead of a default that the Treasury Department says could come as soon as June 1.
Even with Democratic support, any deal that McCarthy makes will have to win support from a large majority of the House Republicans in order for him to keep the confidence of his conference — and his gavel.
“[McCarthy] knows that to get this passed out of the House, it’s gonna require a conservative work product that fundamentally changes how we spend money in this country,” Rep. Dusty Johnson (R-S.D.) said. “I believe that he’ll deliver that. I believe we’ll have the sort of overwhelming majority of the conference.”
Right-wingers lined up to support the Speaker to pass a bill that paired a $1.5 trillion debt ceiling increase with around $4.8 trillion in deficit reductions over a decade. The measure was designed to get President Biden to the negotiating table, but members of the hard-line House Freedom Caucus are pushing the Speaker to “use every leverage and tool at their disposal” to force the Senate to vote on the proposal or offer a countermeasure.
Some members have said they see the deal as a floor, rather than a ceiling, for what they expect in a final product.
“I’ll look at anything,” Rep. Ralph Norman (R-S.C.) said about a potential deal. But he said many Republicans feel that the House GOP debt bill was “meager at best,” and that he would want “four times the cuts.”
“I don’t know why we’re negotiating. The House has done its job. The Senate needs to pass the bill,” said Rep. Bob Good (R-Va.), adding that the only position being pushed by members in a Tuesday morning conference meeting was to pass the House GOP bill.
McCarthy spoke to that stance when asked Tuesday if he is preparing his conference to accept something less than the House GOP bill, responding that the real question is “what’s the Senate willing to accept, because they didn’t do anything.”
Yet he has laid out only a few red lines for a compromise: no tax increases, cut discretionary spending below current levels and no clean debt ceiling increase.
The red lines are around major issues, to be sure, but fall short of the full GOP wish list.
Johnson said it is too early to worry about how Republicans are going to whip the votes for a debt limit compromise. And others are downplaying the difficulty of doing so, with Rep. Tom Cole (R-Okla.), chair of the House Rules Committee, saying leadership will be able to secure that large majority with “a great whip team, which we have, and I think the sense that we’re being successful.”
At the same time, Democratic leaders are also feeling pressure from their left flank, as liberals roundly reject negotiations with Republicans over the debt limit.
Speaking about the White House proposal to freeze spending, Rep. Ilhan Omar (D-Minn.) said she could not in “good faith understand how that is a reasonable offer at the moment.”
“I think the offer should raise the debt ceiling. We have conversations about the budget later,” she said, adding, “If Democrats don’t get serious about the extremists that they’re dealing with, we are going to risk allowing these people to destroy our economy and the global economy.”
The warning from Omar adds to some of the growing uneasiness among progressives in recent weeks over the potential concessions the White House may end up making in order to find compromise with GOP leadership.
“Look at what is being proposed in terms of cuts,” Rep. Rosa DeLauro (Conn.), top Democrat on the House Appropriations Committee, told reporters earlier this week. “Don’t talk about spending in the abstract. Headstart, 200,000 kids, no slots. 100,000 kids without child care.”
However, DeLauro didn’t rule out spending cuts entirely in comments to reporters, as many members on both sides have refrained from drawing red lines in debt limit negotiations.
Others in the party also aren’t thrilled by the direction talks have gone, but there is an understanding that the final compromise between the White House and a divided Congress won’t include everything both sides have pushed for. Arnold Schwarzenegger hired as chief action officer at Netflix 6 in 10 say spending cuts should accompany increase in debt ceiling: poll
“We have a divided government. Nothing can get done around here without votes on both sides in the Senate and the House,” Rep. Steven Horsford (D-Nev.), chair of the Congressional Black Caucus, said Tuesday. “That means neither side is getting 100 percent of what they want.”
“We recognize that we’re not going to get everything. Republicans shouldn’t get everything,” he said.
Mychael Schnell contributed to this report, which was updated on May 24 at 7:03 a.m.
Binance lawyers allege SEC Chair Gensler offered to serve as advisor to crypto company in 2019
SEC Chair Gary Gensler mocks putting a gun to his head in response to a “Blazing Saddles” reference by Rep. Emanuel Cleaver, D-Mo., during the House Financial Services Committee hearing titled “Oversight of the Securities and Exchange Commission,” in Rayburn Building on Tuesday, April 18, 2023.
Tom Williams | CQ-Roll Call, Inc. | Getty Images
SEC Chair Gary Gensler, who is in the midst of a hefty crackdown on crypto companies, offered to serve as an advisor to Binance’s parent company in 2019, according to the lawyers for Binance and founder Changpeng Zhao.
Documents filed by the SEC on Wednesday indicate that attorneys from Gibson Dunn and Latham & Watkins, two of Binance’s law firms, allege that Gensler offered to serve as an advisor to the crypto exchange in several March 2019 conversations with Binance executives and Zhao. He eventually met Zhao in Japan for lunch later that month, the filing claims.
At the time, Gensler was teaching at Massachusetts Institute of Technology’s Sloan School of Management. He was appointed head of the SEC in 2021 by President Biden, and over the past year has come down hard on the crypto industry, suing numerous companies for allegedly selling unregistered securities.
Earlier this week, the SEC filed 13 charges against Binance and Zhao, alleging the company failed to register as an exchange and broker-dealer, improperly commingled funds and lacked critical internal controls over its businesses.
Before Gensler started going after Binance, he was trying to cozy up to the company, the lawyers say. The Wall Street Journal previously reported on Gensler and Binance’s relationship, citing internal Binance messages and a person close to the SEC chair. Both suggested that Binance approached Gensler.
In the latest filing, the Gibson and Latham attorneys say that Zhao continued to stay in touch with Gensler after the March meeting. And at the future SEC chair’s request, Zhao sat down for an interview with Gensler as part of a cryptocurrency course he was teaching at MIT.
The SEC on Tuesday described Zhao, who reportedly resides in the UAE, as a “foreign national” with a tendency for “geographic elusiveness.” Zhao’s lawyers now say that the Zhao understood that Gensler was “comfortable serving as an informal advisor.”
Later in 2019, the letter said, Gensler was slated to testify before the House Financial Services Committee, and he sent Zhao a copy of his intended testimony ahead of the hearing.
In July of that year, Gensler testified before the House over Facebook’s proposed and later canceled cryptocurrency Libra and its planned Calibra wallet.
“I do not advise any financial, technology, blockchain or other companies, nor do I own any cryptocurrencies,” Gensler’s prepared testimony read.
Gensler’s advice to lawmakers at the time was largely the same as his public statements today. He said that, with Facebook envisioning a wallet to store customer assets, rules needed to be in place “to guard against Calibra’s use or potential abuse of such customer funds.”
He also testified more broadly in language that’s resembles his latest pronouncements.
“We must guard against illicit activities, such as tax evasion, money laundering, terrorist financing and avoiding sanctions,” he said at the time. “We must protect individuals’ privacy.”
Because of Gensler’s ties to Zhao, Binance’s lawyers said they’d asked for his recusal from any actions regarding the company. They say they got no acknowledgement from SEC staff.
An SEC spokesperson said in a statement to CNBC that, “the Chair is very familiar with and full compliance with his ethical obligations including any recusal obligations.”
The SEC’s probes into Binance.US and Binance began in 2020 and 2021, respectively, well after Gensler and Zhao’s last alleged contact.
NIO sets YTD order intake record after new ES6 launch in May
NIO’s new ES6 already looks to be a key factor as the EV maker looks to expand its brand and compete in the booming Chinese electric vehicle market. According to Morgan Stanley, NIO hit a new year-to-date order intake record aided by the launch of the second-generation ES6.
After launching what many consider its most important model to date two weeks ago with its second-gen ES6 electric SUV, NIO has seen increased interest in the brand.
Although NIO was the only major EV maker in China to see a monthly sales decline in May, delivering 6,155 models (down 8% from April), the company has a plan to turn things around… and it already looks to be paying off.
Although the ES6 has been the company’s top seller since launching in 2018 as a more affordable option to the ES8, NIO knew it was time for an upgrade.
The EV maker is focusing on its NT 2.0 EV platform vehicles, including the recently launched EC7, second-generation ES8, ET5, and ES7 models. All NT 2.0 models are built on the NIO Adam supercomputer using four Nvidia DRIVE Orin system-on-chips (SoCs).
New ES6 boosts NIO’s order intake to record YTD high
A research report released last week from the Chinese consumer behavior research agency CarFans highlighted consumer behavior in NIO stores within the first 72 hours of launching (May 24 to May 27) the new ES6.
The report found each NIO store received 90 pre-orders on average, with around 20 confirmations that included a down payment.
With roughly 330 stores, that’s around 29,700 pre-orders or 6,600 confirmations. For just three days, that’s pretty impressive for a premium SUV.
Although the cancellation rate is expected to be around 10%, the new ES6 is already leading to a new order intake record for the year, according to Morgan Stanley analyst Tim Hsiao (via CnEVPost).
In a research note on June 5, Hsiao said the firm had been tracking feedback from startups’ major sales channels in Tier 1 cities since last year to analyze the market. The team shared data that confirmed the new ES6 accounted for 35% to 40% of new orders in May, suggesting a meaningful impact on inflow as it launched in the final week of the month.
NIO’s overall traffic at flagship stores rose 30% to 40% month-over-month, with momentum continuing into early June. The new ES6 is NIO’s cheapest electric SUV, starting at RMB 368,000 ($51,614).
Meanwhile, the team said that despite customer traffic at the stores it tracks returning to levels seen this February, they are still “20% below last September’s level when the company rolled out ET5.”
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Vineyard Wind 1’s first turbine blades arrive in the US
The first turbine blades for Vineyard Wind 1, the US’s first commercial-scale offshore wind farm, have arrived at the New Bedford Marine Commerce Terminal in Massachusetts.
The $3.5 billion offshore wind farm will feature 62 GE Haliade-X 13-megawatt (MW) turbines spaced one nautical mile apart. The first turbine blades – each one 107 meters (351 feet) long – arrived at the Port of New Bedford (pictured above) from GE’s production site in Nazaire, France, on the heavy load vessel Rolldock Sky. (And no, it’s not lost on us, either, that wind turbine blades arrived on a fossil fuel vessel. May we collectively resolve that ironic problem ASAP.)
The turbine sections will be assembled at the terminal before they’re shipped out and installed this summer.
The 800 MW Vineyard Wind 1 is 15 miles south of Martha’s Vineyard and Nantucket and 35 miles from mainland Massachusetts. It’s a 50-50 joint venture between clean energy company Avangrid and Copenhagen Infrastructure Partners (CIP) funds CI II and CI III.
Vineyard Wind I will supply clean energy for over 400,000 homes and businesses in Massachusetts and reduce carbon emissions by over 1.6 million tons per year. It’s expected to come online at the end of 2023.
Read more: This US offshore wind farm is piloting a bubble curtain – what it is and why it’s cool
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