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Mike Johnson now knows what Kevin McCarthy was dealing with.

At the new speakers behest, House Republicans today relied on Democratic votes to avert a government shutdown by passing legislation that contains neither budget cuts nor conservative policy priorities. The bill was a near replica of the funding measure that McCarthy pushed through the House earlier this falla supposed surrender to Democrats that prompted hard-liners in his party to toss him from the speakership.

Johnson is unlikely to suffer the same fate, at least not yet. But todays vote laid bare a reality thats become ever more apparent over the past year: Republicans may hold more seats than Democrats, but they dont control the House.

Under McCarthy and now Johnson, Republicans have been unable to pass just about any important legislation without significant help from Democrats. The three most consequential votes this year have been the spring budget deal that prevented a catastrophic U.S. debt default, Septembers stopgap spending bill that averted a shutdown, and todays proposal that keeps the government funded through early 2024. More Democrats than Republicans have voted for all three measures.

Read: Kevin McCarthy finally defies the right

GOP leaders have struggled to pass their own proposals on spending bills, leaving the party empty-handed in negotiations with the Democratic-led Senate and the Biden administration. Like McCarthy before him, Johnson pledged that Republicans would advance individual appropriations bills to counter the Senates plans to combine them into legislative packages that are too big for lawmakers to adequately review. But in the past week, hes been forced to scrap votes on two of these proposals because of Republican opposition.

McCarthy surrendered to Democrats in late September after his members refused to pass a temporary spending bill containing deep cuts and provisions to lock down the southern border. When it was his turn, Johnson didnt even bother to try a conservative approach. On Saturday, he unveiled a bill that maintains current spending levelsenacted by Democratic majorities in 2022for another two months. He did not include additional funding for either Israel or Ukraine, nor did he include any policy provisions that might turn off Democrats. Johnsons only wrinkle was to create two different deadlines for the next funding extension; funding for some departments will run out on January 19, while money for the rest of the government, including the Defense Department, will continue for another two weeks after that.

The Louisiana Republican said that the dual deadlines would spare Congress from having to consider a trillion-dollar omnibus spending package right before Christmas, as it has done repeatedly over the past several years. That is no way to run a railroad, Johnson said this morning on CNBC. This innovation prevents that from happening, and I think well have bipartisan agreement that that is a better way to do it.

Johnsons decision to avoid a partisan shutdown fight seemed to catch Democrats off guard. The White House initially slammed his proposal, but once party leaders on Capitol Hill realized that the spending bill contained no poison pills, they warmed to it. Democratic support became necessary once it was clear that Republicans would not be able to pass the measure on their own. Conservatives couldnt even agree to allow a floor vote on the proposal, forcing Johnson to bring it up using a procedure that ultimately required the bill to receive a two-thirds majority to pass.

Republican hard-liners have been no more willing to compromise under Johnson than they were under McCarthy. The conservative House Freedom Caucus, which initially suggested the two-deadline approach, ultimately opposed the bill anyway. It contains no spending reductions, no border security, and not a single meaningful win for the American People, the group said in a statement. While we remain committed to working with Speaker Johnson, we need bold change.

Buried in that final expression of support for Johnson was the first hint of a warning. Conservatives have given the untested speaker some leeway in his opening weeks. Even McCarthy received something of a grace period; when the speaker negotiated a debt-ceiling deal with President Joe Biden, conservatives voted against the bill but didnt try to overthrow him. Hard-liners havent threatened to remove Johnson, but that could change if he keeps relying on Democratic votes. When McCarthy caved to Democrats on spending for the second time, he lost his job a few days later.

The former speaker and his allies warned his GOP critics that his replacement would find themselves in the same position: managing a majority that isnt large enough to exert its will. Im one of the archconservatives, Johnson told reporters before the vote, trying to defend himself. I want to cut spending right now, and I would have liked to put policy riders on this. But when you have a three-vote majority, as we do right now, we dont have the votes to be able to advance that.

Read: We put sharp knives in the hands of children

Johnson has now used up one of his free passes. The question is how many more hell get. In the coming weeks, the speaker will have to navigate a series of fiscal fights over funding for Israel, Ukraine, and the southern border. The bill that the House passed today buys Congress another two months to hash out its differences over spending, but it doesnt resolve them. Johnson vowed not to agree to any more short-term extensions of federal funding, increasing the risk of a shutdown early next year. The speaker will also have to decide whether to press forward with an impeachment of Biden that could please conservatives but turn off Republicans in swing districts.

In the meantime, frustrated lawmakers from both parties are racing to leave Congress. Since McCarthys ouster, nine members, five of them Republicans, have announced their plans to resign or forgo reelection. Many more are likely to do so before the end of the year. After fewer than two terms in the House, GOP Representative Pat Fallon of Texas even considered returning to his old seat in the state legislature, which Republicans have long dominated, before changing his mind today. The frustration extended to other corners of the House GOP. We got nothing, another Texas Republican, Representative Chip Roy, lamented to reporters yesterday. He shouldnt have been surprised. At the moment, Republicans in the House have a majority in name only.

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South Korean court clears Wemade ex-CEO in Wemix manipulation case

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South Korean court clears Wemade ex-CEO in Wemix manipulation case

South Korean court clears Wemade ex-CEO in Wemix manipulation case

After nearly a year of legal proceedings, a South Korean court acquitted former Wemade CEO Jang Hyun-guk of market manipulation charges.

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Is there £15bn of wiggle room in Rachel Reeves’s fiscal rules?

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Is there £15bn of wiggle room in Rachel Reeves's fiscal rules?

Are Rachel Reeves’s fiscal rules quite as iron clad as she insists?

How tough is her armour really? And is there actually scope for some change, some loosening to avoid big tax hikes in the autumn?

We’ve had a bit of clarity early this morning – and that’s a question we discuss on the Politics at Sam and Anne’s podcast today.

Politics Live: Reeves to reform financial regulations

And tens of billions of pounds of borrowing depends on the answer – which still feels intriguingly opaque.

You might think you know what the fiscal rules are. And you might think you know they’re not negotiable.

For instance, the main fiscal rule says that from 2029-30, the government’s day-to-day spending needs to be in surplus – i.e. rely on taxation alone, not borrowing.

And Rachel Reeves has been clear – that’s not going to change, and there’s no disputing this.

But when the government announced its fiscal rules in October, it actually published a 19-page document – a “charter” – alongside this.

And this contains all sorts of notes and caveats. And it’s slightly unclear which are subject to the “iron clad” promise – and which aren’t.

There’s one part of that document coming into focus – with sources telling me that it could get changed.

And it’s this – a little-known buffer built into the rules.

It’s outlined in paragraph 3.6 on page four of the Charter for Budget Responsibility.

This says that from spring 2027, if the OBR forecasts that she still actually has a deficit of up to 0.5% of GDP in three years, she will still be judged to be within the rules.

In other words, if in spring 2027 she’s judged to have missed her fiscal rules by perhaps as much as £15bn, that’s fine.

Rachel Reeves during a visit to Cosy Ltd.
Pic: PA
Image:
A change could save the chancellor some headaches. Pic: PA

Now there’s a caveat – this exemption only applies, providing at the following budget the chancellor reduces that deficit back to zero.

But still, it’s potentially helpful wiggle room.

This help – this buffer – for Reeves doesn’t apply today, or for the next couple of years – it only kicks in from the spring of 2027.

But I’m being told by a source that some of this might change and the ability to use this wiggle room could be brought forward to this year. Could she give herself a get out of jail card?

The chancellor could gamble that few people would notice this technical change, and it might avoid politically catastrophic tax hikes – but only if the markets accept it will mean higher borrowing than planned.

But the question is – has Rachel Reeves ruled this out by saying her fiscal rules are iron clad or not?

Or to put it another way… is the whole of the 19-page Charter for Budget Responsibility “iron clad” and untouchable, or just the rules themselves?

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Is Labour plotting a ‘wealth tax’?

And what counts as “rules” and are therefore untouchable, and what could fall outside and could still be changed?

I’ve been pressing the Treasury for a statement.

And this morning, they issued one.

A spokesman said: “The fiscal rules as set out in the Charter for Budget Responsibility are iron clad, and non-negotiable, as are the definition of the rules set out in the document itself.”

So that sounds clear – but what is a definition of the rule? Does it include this 0.5% of GDP buffer zone?

Read more:
Reeves hints at tax rises in autumn
Tough decisions ahead for chancellor

The Treasury does concede that not everything in the charter is untouchable – including the role and remit of the OBR, and the requirements for it to publish a specific list of fiscal metrics.

But does that include that key bit? Which bits can Reeves still tinker with?

I’m still unsure that change has been ruled out.

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LA sheriff deputies admit to helping crypto ‘Godfather’ extort victims

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LA sheriff deputies admit to helping crypto ‘Godfather’ extort victims

LA sheriff deputies admit to helping crypto ‘Godfather’ extort victims

The Justice Department says two LA Sheriff deputies admitted to helping extort victims, including for a local crypto mogul, while working their private security side hustles.

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