Happy Thursday and welcome back to On The Money, where we’re getting ready for summer recess. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL–House passes sweeping budget, debt limit deal: The House passed a two-year budget deal Thursday that lifts the debt ceiling and boosts government spending by $320 billion.
The legislation would suspend the debt limit through July 2021 and increase spending caps for the next two years, putting the U.S. on track to add an estimated $1.7 trillion to the deficit over the next decade when compared with the billions in automatic spending cuts that would otherwise kick in.{mosads}
Lawmakers passed the package in a 284-149 vote. The measure now heads to the Senate, which is expected to take up the measure next week before senators leave town for the August recess. The Hill’s Juliegrace Brufke and Niv Elis tell us about the deal and how we got here.
The nitty gritty:
- The legislation would ramp up defense spending to $738 billion and $740 billion over the next two fiscal years, respectively, compared with the current level of $716 billion.
- Non-defense spending would rise to $632 billion and $634.5 billion during the same period, an increase from this year’s $605 billion.
GOP angst: The spending increases drew criticism from conservatives who blasted what they called a lack of fiscal restraint. GOP leaders, including President Trump, sought to galvanize Republican support around the long-sought increases to defense spending and brushed aside concerns about the country’s fiscal health.
- “House Republicans should support the TWO YEAR BUDGET AGREEMENT which greatly helps our Military and our Vets. I am totally with you!” Trump tweeted Thursday.
- House Minority Whip Steve Scalise (R-La.) noted before the vote that while there is more that he would have liked to have seen in the bill, Republicans are faced with the reality of a divided Congress that limits their ability to obtain everything they want in major legislation.
But the legislation’s addition of $320 billion to the deficit over the next two years was too high for some Republicans, including the House Freedom Caucus and some members of GOP leadership, like Rep Mark Walker (R-S.C.).
Debt ceiling lifted: The budget deal passed Thursday suspends the debt ceiling until July 2021. That means it will be at least two years until the U.S. again threatens to trigger a global fiscal crisis of its own making by reducing the full faith and credit of the country to a napkin IOU.
LEADING THE DAY
Democrats file brief saying courts can’t stop panel from getting Trump’s NY tax returns: The Democratic-led House Ways and Means Committee argued in a court filing Thursday that courts lack jurisdiction to enjoin the panel from using a New York law to request President Trump’s state tax returns.
The filing comes in response to a lawsuit Trump filed in his personal capacity earlier this week challenging the New York law. Trump also filed a motion Wednesday requesting that Ways and Means Committee Chairman Richard Neal (D-Mass.) be barred from seeking Trump’s New York tax filings before the president’s case is heard in court.
The Hill’s Naomi Jagoda tells us more about the showdown here.
- Trump’s lawsuit, which was filed against New York officials in addition to the Ways and Means Committee, argues that the panel lacks a legitimate legislative purpose to use the New York law. He also claims that the law violates the First Amendment of the U.S. Constitution.
- The Ways and Means Committee counters that Trump’s lawsuit and emergency application “brazenly request that this Court violate the separation of powers and enjoin the Ways and Means Committee from even embarking on legislative activity squarely within its Article I powers.”
Debt collectors will pay $60M to settle consumer bureau charges: A New York debt collection network will pay more than $60 million in fines and exit the industry under settlements announced Thursday by the state’s attorney general and the Consumer Financial Protection Bureau (CFPB).
Debt collectors Douglas MacKinnon and Mark Gray — along with their companies, Northern Resolution Group, Enhanced Acquisitions and Delray Capital — agreed to settle 2016 charges of violating federal and New York state consumer protection laws.
The CFPB and New York attorney general charged MacKinnon, Gray and their companies in 2016 with using deceptive and abusive practices to collect millions of dollars in debt purchased by their network of collection firms. I’ve got more on the allegations here.
- The network of 60 debt collection companies allegedly violated federal and state regulations for debt collection by using “illegal tactics to extract as much money as possible from consumers for their debts,” according to the CFPB.
- Since 2009, the group allegedly inflated the amount of debt owed by consumers, sought payment for debt it was not entitled to collect, threatened legal action and impersonated law enforcement officials while seeking payment.
GOOD TO KNOW
- An association of CEOs from major U.S. corporations is making a personal pitch to lawmakers on Capitol Hill to approve President Trump’s revised North American trade deal.
- A group of eight state attorneys general met with Attorney General William Barr on Thursday to discuss antitrust concerns about tech giants.
- Eurozone economies reliant on exports are caught in the crosshairs of the U.S.-China trade war, according to the Wall Street Journal.
- Reuters: “New orders for key U.S.-made capital goods surged in June, but will probably not change expectations that business investment contracted further in the second quarter and contributed to holding back the economy.”
- China has lost almost 2 million industrial jobs because of the trade war with the U.S., according to the South China Morning Post.
- American Banker: “The Consumer Financial Protection Bureau is planning to end its special treatment for certain mortgages backed by Fannie Mae and Freddie Mac in the agency’s underwriting rules, Director Kathy Kraninger said Thursday.”
- The New York Times: “Moody’s Corporation has purchased a controlling stake in a firm that measures the physical risks of climate change, the latest indication that global warming can threaten the creditworthiness of governments and companies around the world.”
ODDS AND ENDS
- Kentucky’s two Republican senators offered a bill this week to permanently extend a provision in President Trump’s tax-cut law that benefits bourbon distillers.
- Automakers have struck a deal with California that would circumvent the Trump administration’s pending freeze of fuel efficiency standards.