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Business & Economy
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Business & Economy
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The debt limit drama is over — for now
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The Senate’s Thursday night passage of a bill to raise the debt ceiling and impose budget caps effectively ended the latest standoff over the federal budget.
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President Biden is on track to sign the bipartisan measure as soon as this weekend, before the expected default date of June 5.
The president is also scheduled to give an address from the Oval Office — a rare occurrence — on Friday evening in the wake of both the debt deal and a strong May jobs report.
The deal raises the debt limit through 2025, meaning the U.S. and its elected officials are spared until then from another battle over whether the country will decide to pay what it already agreed to spend.
But the U.S. is far from moving beyond the dangerous battles triggered by the debt ceiling.
The federal government is still on track to add trillions of dollars to the national debt and is nowhere close to long-term reforms to Social Security and Medicare.
Lawmakers have also shown little willingness to find a way to prevent debt-ceiling standoffs and figure out a more responsible, less chaotic way of protecting the full faith and credit of the U.S.
Fitch Ratings, a prominent credit ratings agency, said Friday that it will keep the nation’s top credit rating on its “negative watch” list because of “repeated political standoffs” over the national debt.
“Repeated brinkmanship over the debt limit and failure to tackle fiscal challenges from growing mandatory spending has led to rising fiscal deficits and debt burden,” Fitch warned.
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Welcome to The Hill’s Business & Economy newsletter, we’re Aris Folley and Sylvan Lane — covering the intersection of Wall Street and Pennsylvania Avenue.
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Key business and economic news with implications this week and beyond:
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The economy added 339,000 jobs in May, once again blowing past analysts’ expectations and showing the strength of the U.S. labor market — even as the unemployment rate made one of its sharpest jumps in months, from 3.4 percent in April to to 3.7 percent last month.
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Political winners and losers from the debt ceiling drama
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Congress has sent legislation to raise the debt ceiling to President Biden, ending a months-long saga that brought the U.S. days away from a possible default.
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It’s now a known fact that the once-scorching hot US jobs market has been showing the signs of a cooldown, just as summer hits.
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Upcoming news themes and events we’re watching:
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- The House Financial Services Committee holds a hearing on Treasury debt markets on Tuesday.
- The House Small Business Committee holds a hearing on the impact of inflation on Wednesday.
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Branch out with more stories from the day:
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KYIV, Ukraine (AP) — U.S. Secretary of State Antony Blinken said Friday that the United States and its allies should not support a cease-fire or peace talks to end the war in Ukraine until Kyiv gains strength and can negotiate on its own terms.
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Business and economic news we’ve flagged from other outlets:
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- Tech stocks close out first six-week rally since January 2020 (CNBC)
- FTC: 30,000 Amazon Workers Could Access Alexa Data (Bloomberg)
- Are you middle class? Use this calculator to find out. (WaPo)
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Top stories on The Hill right now:
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House Republicans are asking the Justice Department (DOJ) to turn over information about special counsel Jack Smith’s investigation into Donald Trump, including details on whether any FBI employees on the case have investigated the former president. Read more
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A day before the Pentagon celebrated the June 1 start of Pride Month, top defense leaders were quietly enforcing a militarywide ban on drag performances. Read more
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Opinions related to business and economic issues submitted to The Hill:
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You’re all caught up. See you next week!
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