European concerns about a recession are growing as the euro loses power to the U.S. dollar. We’ll also look at high tensions over the side deal with Sen. Joe Manchin (D-W.Va.) and the risks facing the tentative deal to avert a railroad strike.
But first, an update on how Hurricane Fiona hit Puerto Rico.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Subscribe here.
Strong US dollar boomerangs on Europe
The Federal Reserve is expected to raise interest rates another three-quarters of a point this week in its effort to bring down inflation, further increasing the strength of a rapidly rising dollar in the process.
That’s increasingly being seen as a problem in Europe, where concerns about a recession are growing as currencies lose power to the U.S. dollar.
The background:
- Europe is also dealing with economic pressures from Russia’s war on Ukraine, with mounting fear that Russian President Vladimir Putin could use energy as a potent weapon this winter.
- Many European countries depend on supplies from Russia to heat homes over the winter.
- The worries are leading to new complaints from those who see the Fed’s actions as potentially causing more problems than they will fix if Europe takes a serious hit.
The Hill’s Tobias Burns has more here.
LEADING THE DAY
Tensions rise amid frustration over mystery Manchin deal
Lawmakers are frustrated about being kept in the dark as Democratic leaders strategize how to jimmy an energy deal struck with Sen. Joe Manchin (D-W.Va.) behind closed doors through Congress — while also averting a government shutdown.
Democratic leadership is aiming to use a must-pass government-funding bill to advance an energy permitting proposal by Manchin by the end of the month. But with roughly two weeks standing between Congress and the critical funding deadline, tensions are simmering over the closely-kept negotiations.
- “We don’t know what it is. They haven’t released the text, they don’t give us the detailed explanation,” Sen. Shelley Moore Capito (R-W.Va.) told The Hill this week. “So, I don’t know how you could ask people to vote for something they don’t know what it is.”
- “There’s a reason they’re keeping it secret: it’s either still being negotiated or it’s so weak it has no meaning or it’s too strong for other people,” she added.
Aris and The Hill’s Rachel Frazin dig in here.
EVENT INVITE
You’re Invited: A New Housing Market: Affordability, Access & Equity, Tuesday, Sept. 20 at 8 a.m. ET
The housing market, spurred by two years of red-hot demand and dwindling home supply, is finally cooling down. And while staggering mortgage rate hikes for homebuyers have dominated recent headlines, the rental market is seeing its own share of dramatic price increases and competition. What is the current landscape of American housing, and how are ballooning interest rates and rent costs impacting American families? Reps. Emanuel Cleaver (D-Mo.) and French Hill (R-Ark), National Low Income Housing Coalition’s Diane Yentel, Realtor.com chief economist Danielle Hale and Urban Institute’s Janneke Ratcliffe. RSVP today to attend in-person or get livestream link.
SKID WATCH
Deal averting railroad strike has potential to fall apart
The White House-brokered agreement to avert a railroad strike has the potential to fall apart, threatening widespread economic disruption right before the midterm elections.
Rail workers are set to vote on the tentative deal reached between unions and railroads Thursday morning. If any of the 12 rail unions fail to ratify a new contract, nearly 125,000 rail workers could be headed for a strike.
- The agreement would mandate two-person crews, cap health care costs and allow workers to take time off for medical appointments or other scheduled events without being penalized, all key concessions won by unions.
- But nearly 36 hours after the agreement was announced, rail workers said they still didn’t have concrete details on sick leave and voluntarily assigned days off. That’s raised some doubts about just how strong the new contract language is.
Karl and The Hill’s Alex Gangitano explain here.
SHUTDOWN SHOWDOWN
House, Senate conservatives: GOP shouldn’t give ‘lame duck’ Democrats power in funding bill
Conservative Republicans in both chambers of Congress are calling on GOP colleagues to reject any government funding deal that could give Democrats the opportunity to pass a new budget before the end of the year, with 42 House Republicans and 14 Senate Republicans signing “Dear Colleague” letters.
The Monday letters come as Congress has 10 days to take action before government funding runs out at the end of the fiscal year after Sept. 30.
- Congress is poised to extend government funding through a short-term continuing resolution (CR) to fund the government at current levels before then.
- But with the possibility of Republicans winning control of one or both chambers in the midterm elections, the conservatives say that the new deadline made by the continuing resolution should be after the start of the next Congress.
The Hill’s Emily Brooks explains here.
Good to Know
Here’s what else we have our eye on:
- State attorneys general are leading efforts to crack down on the power of big technology firms, as highlighted by California’s suit filed last week against Amazon and a Texas-led coalition’s measured win in its fight against Google.
- Student loan forgiveness: Don’t miss these four dates
- A group of House GOP lawmakers is pushing President Biden to address concerns that his student loan forgiveness plan could kneecap military recruiting.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.