Budget problems haven’t changed for a year: the debt ceiling, Ukraine, and the Border. Israel is logically a distinct issue but is lumped with Ukraine. A partial government shutdown looms on January 19.
Shutdown Deadlines
- January 19: A partial shutdown turns off funding for the departments of Agriculture, Transportation, and Housing and Urban Development.
- February 3: Complete Shutdown.
- April 30: This date is in play if there is another clean continuing resolution that punts the decisions further. This is the lead chart, discussed below, in which spending caps will be enforced by sequestration, across-the-board reductions applied to budgetary resources as set by the Fiscal Responsibility Act of 2023.
Statutory Limits on Discretionary Funding
Please consider the CBO letter to the House Chair of the Budget Committee Re: Implementing the Statutory Limits on Discretionary Funding for Fiscal Year 2024
Dear Chairman Arrington and Ranking Member Boyle: At your request, the Congressional Budget Office is providing information concerning implementation of the caps on most discretionary funding for fiscal year 2024 as established by the Fiscal Responsibility Act of 2023 (FRA; Public Law 118-5). The FRA sets separate caps (in law they are called limits) on defense funding (in law, revised security, which is budget function 050) and on nondefense funding (revised nonsecurity, which covers all other budget functions).
Section 101 specifies caps for 2024 of $886 billion for defense and $704 billion for nondefense funding.
Section 102 Caps. CBO estimates that the annualized base budget authority provided by the current continuing resolution exceeds the section 102 defense cap by $10 billion and the nondefense cap by $41 billion. Thus, on April 30, 2024, OMB would be required to cancel 1 percent of sequestrable defense budgetary resources and 5 percent of sequestrable nondefense budgetary resources
Secure the Border Act H.R.2
The House Republican hardline Freedom Caucus wants the Secure the Border Act H.R.2 which passed the House but died in the Senate.
H.R.2 would provide funding for a 900 mile wall, while waving environmental and historical site reviews. It would mean taking property from private landowners, at a price specified by the government, shutting off water access to the Rio Grande for many.
H.R.2 would fast track deportations of minors unaccompanied by parents.
The Hill points out “the bill denies people the ability to claim asylum unless the Customs and Border Protection (CBP) officer who processes them believes their ultimate case would more likely than not be accepted, adds a $50 fee to make an asylum claim and bars migrants from making an asylum claim anywhere but at an official port of entry.”
One of the reasons there is surge of border crossings is the backup at the ports of entry.
The bill provides no path for citizenship for millions of productive immigrants who have been living and working here for years, and it does not mention legal immigration at all. I wonder how we are going to get crops harvested if we simply deport everyone.
Dead on Arrival
H.R.2 is flawed for many reasons. Regardless, like it or not, the bill is dead on arrival, as is.
It will not pass the Senate.
What’s the Real Deadline?
January 19 is less than two weeks away. The real deadline is allegedly February 3.
Since Treasury Secretary Janet Yellen is not incessantly yapping over this, I suspect the real deadline is further away.
Republicans can always punt with another “temporary” and “clean” continuing resolution. And that would not surprise me in the least. It would buy everyone time to avoid budget cuts that would kick in on April 30.
But eventually, it will come down to my long-stated beliefs, expressed below.
Expect More of This for More of That
The Republican hard-line House Freedom Caucus won’t accomplish anything because there is not enough of them and they are not even united on what they want.
Some want funding for Israel but that is conveniently lumped with funding for Ukraine which they generally don’t want.
H.R.2 is a nonstarter. As a result, there will be some Republican holdouts who will not vote for whatever Speaker Mike Johnson concocts with Senate Majority Leader Chuck Schumer.
If any bill passes in the House, it will be with Democrat support. The Freedom Caucus will howl.
The only question is how big this final boondoggle is. There will be more money for defense, more money for Ukraine, and more money for Israel in return for a pittance of money for the wall.
Fiscal Responsibility Act Hoot of the Day
The FRA would cut the defense budget by 1 percent and the nondefense discretionary by 5 percent.
But even that pittance will be too much for Republicans to swallow. They won’t allow any cuts in the defense budget.
Thus, the FRA was cleverly worded to ensure the final outcome would be “more of this in return for more of that”.
The only questions are on timing how fast the Republicans cave in and how many Democrats it takes to pass the final boondoggle.
Continuing Resolution Poll
Debt Ceiling Resolution Poll
Secure the Border Poll
Debt Jumps Past $34 Trillion, $1 Trillion Interest
Meanwhile please note Debt Jumps Past $34 Trillion, $1 Trillion Interest
The fallback position is not less of anything. Rather, it’s another clean continuing resolution.
A bipartisan majority wants more of this and more of that. So that is what you should expect.
Debt to GDP Alarm Bells Ring, Neither Party Will Solve This
In case you missed it, please see Debt to GDP Alarm Bells Ring, Neither Party Will Solve This
“Neither party will fix the deficits. Neither party will do anything about mounting debt. No one will do anything about anything because the political system is totally broken.” Mish
That’s the message of gold. Bitcoin advocates would say Bitcoin as well.
Well it appears as though MJ has them heading in the Correct Direction! I don’t know the gory details, but they will be plastered everywhere soon enough.
– The agreement includes an increase in Pentagon spending to $886.3 billion > So they got the money they wanted. I applaud Mike for looking at the long game on this one. it’s not as if all of this money is getting spent before the next election. Mike did get a nice claw back of 10 Billion from the IRS (Brown Shirt Additions) New Enforcement Agents. Mike also somehow managed to find 6 Billion of unspent COVID money, and clawed that back as well.
– The agreement holds non defense funding essentially flat at $772.7 billion > Mike held it flat, but Dear Ole Kevin comes back to haunt us, yet one more time (let’s hope it’s the last time). MJ had to also include a $69 billion added handshake money deal between McCarthy and the White House, prior to his arrival.
– It also however, did not include an additional $14 billion sought by the Republican and Democratic appropriators (Senate, so Dems) to beef up both domestic and military spending.
Excellent Job Mr. Johnson! No CR, you’re a Great Man for that alone. Gave the money you had to, if you wanted to get the deal done, hooray! Clawed Back some Covid Money, and some of the IRS Added Agent’s Money. You also nixed the 14 Billion (Dem Sen) Appropriations Boondoggle.
Most Importantly, You Showed SPINE! I Am So Very Proud of YOU MJ!!! Happy NEW Year!
“Brown Shirt Additions” (to the IRS).
That’s hilarious – especially referring to and thanking MJ as a “Great Man” who is a white Christian Nationalist anti-democracy religious-theocracy Federalist Society stooge. MJ supported, participated in, and defended a former President’s attempt to overthrow a legitimate election, and who defends a malignant narcissist pathological liar former President who calls his political opponents “vermin,” refers to American Nazi’s as “very fine people,” and states immigrants our “poisoning our blood” – straight out of Mein Kampf.
But it’s what I would expect out of the the ruling class elite – or their Faux News brainwashed culture-war lesser educated working class minions – who don’t want to be accountable for paying their fair share of taxes, and seem hell-bent on bringing back American Fascism ala the the German ruling elite of the 1930’s:
link to theholocaustexplained.org
Let’s Make America Great Again!
Raise the capital gains, dividends, and marginal income tax rates on millionaire’s, billionaire’s, and corporations back to what they were in the 50’s, 60’s, and early 70’s when we built the interstate highway system, went to the moon, a college degree didn’t cost the price of a home, and you could own a home and live a middle class life on a single income.
While we’re at it, raise the estate inheritance tax back to 55%, and lower the exemption back down to about $1 million from the current $5.4 million it was raised to in 2015.
These and other measures could raise trillions of dollars in revenue.
“Trickle down” “supply side” Republican economic scams are the real “nanny/welfare state” that benefit mostly the very the wealthy, and increase, not decrease, the deficit.
Stop the invasion at the border or the country is done. Its that simple.
Really? I wonder what Native Americans think about invading immigrants?
I worked in the Yakima Valley of Washington State (heavily agricultural) and these people work 2+ times harder than any home-grown anglo-saxon spoiled brats full of entitlement. And they pay THEIR fair share of taxes, and help the economy and a myriad of other benefits.
At some point the monster’s diet must be reduced. This would be a good start.
A very cynical take that may turn out to be right.
However, Speaker Johnson holds the key. He can simply refuse to bring to the floor any bill funding Ukraine. That’s a lot of leverage. Just refuse and watch the desperation grow from the Biden administration.
similarly, he can refuse to pass any appropriations bills that don’t have spending levels below last year,and pass a year long CR. Voila, sequestration kicks in. There is nothing the Dems can do; of course, having power and being willing to use it are not the same thing.
The good news is we’re going to find out soon if your cynical take will play out. If it does, there is probably going to be a bond market reaction that you won’t like.
Republicans will get the blame for halting the government. Perhaps he does so for a few days of even a week. But it won’t last beyond the real shutdown date, whenever that is.
How is the GOP to blame for a government shutdown if they offer a clean CR for the rest of FY 24?
The Dems will howl about the sequester but unfortunately for them, if they shoot down a clean CR with mostly Dem votes, they own it.
Can the GOP snatch defeat from the jaws of Victory? Of course they can. But there is a path to spending cuts that requires absolutely nothing other than standing firm and staying away from Grand Bargains.
I should have known better than to think cynicism wouldn’t win. Mish you were right:
link to nationalreview.com
(Note that this does not include any funding for Ukraine or Israel, but expect a cave on that as well, eventually.)
If he’s not a RINO, he’ll hold steadfast and no true conservative would blame him. But he’s likely a RINO.
Imo its years of the whole my side vs your mentality is one of the reasons were in the mess were in now. The more they (politicians in general)have to vote across party lines to stay in office the more they represent the middle and that is where the solutions will be found.
You know the country is in trouble when a 1% cut in defense or a 5% cut in non-defense is considered to be a national emergency.
They are not Republicans. They are disguised, embedded Democrats.
And they aren’t caving. They’re intentionally tanking.
Check your premise.
They are not Republicans but they certainly are not Democrats
Of course they are dimocrats.
Not to be a homonymic orthophobe, but does nobody remember the difference between waving and waiving?
The nanny state at its finest.
I feel broke.
I heard recently on the December “BoPeep podcast” interview of Jim Willie that the reason we are sending crude in large tankers overseas to Asia is because suppliers of goods really no longer want US treasuries as trade. Also stated was the fact that we have to refinance $7 trillion in treasury bonds this year (2024) and Washington is having trouble auctioning off $150 Billion right now. Finally, the point was made that the ten, fifteen and thrty year treasuries are being shunned by most buyers in favor of the two and five year treasuries because of the risk outlook on U.S. finances and debt.
Has anyone else heard this?
“Jim Willie that the reason we are sending crude in large tankers overseas to Asia is because suppliers of goods really no longer want US treasuries as trade.”
When someone says something like that, it is a truly gross error.
it’s bullshit regarding treasuries.
And it’s bullshit regarding oil. The US no longer is dependent on Mideast oil. It’s a sign of strength not weakness.
He is totally clueless on trade.
These are all gross errors.
My advice is to stop reading him.
Couldn’t agree more Mish. I am always shocked at the amount of misinformation, outright lies, and cult conspiracies that people are being brainwashed with.
I thought it was common knowledge that you can’t have open borders and a welfare system. I guess I was wrong.
The Keyword CA, is knowledge, meaning the receiver of the information, must have Intelligence to comprehend this knowledge. We sorely and obviously lack such a gift from our current (non) leaders. This gift apparently, was never bestowed upon them…
If we enter a recession in 2024 voters will blame Biden, not Trump. A distressed customer owes u 10K. He might give u two options : either 1K today and write off the rest, or 7K when they make profit. That might happen in CA. Trump has more experience with distressed situations than anybody else.
You’re touting his multiple bankruptcies? Of CASINOS?
” I wonder how we are going to get crops harvested if we simply deport everyone.” Simple – wages go up and the price of produce goes up also. I would pick crops for $75 an hour, wouldn’t you?
Of course the Rs will cave. They have to, or they’ll get killed in November. Welcome to politics.
In the next few years CA might turn red. Her radical leaders will pay the price.
The high tech leaders might toss the unfunded entitlement promises off their backs.
Retired policemen, firemen, teachers, healthcare, colleges and gov workers might face reality. CA is hell bc of her crazy ideology and the illegals. WA, MA and NY state might not escape.
You are mistaken if you think this is just a “blue” problem. Many of the retired policeman, firefighters, emergency response are all Republicans. Let’s ask if they would be willing to give up their golden pensions. Illegals are nowhere near the size of the pension crisis.
They might takeover and give the rest a worthless IOU.
What would the Romans do?
Wewease Bwian!
If I get a vote? Not another cent for Israel or Ukraine. Spend as much as necessary to get control of the border. Institute reasonable rules to allow work permits to vetted individuals who are employer sponsored. Applications must be made from home country and decisions made within 30 days. Workers are allowed to travel home to visit family and back to the US as they see fit. After 3 years if workers don’t break any laws and have a letter of recommendation from their employer they can become eligible to apply for a green card. After five years eligible to apply for citizenship.
I’d vote for that. Never seems to come up as an option at votin’ time though.
SPX 1M. SPX has not been in recession since Feb 2009. SPX escaped recession
territory in 2020 and in Oct 2022. In Dec 2013 RSI entered a bullish territory (77.63).
In Jan 2018 RSI maxed (87.73). Aug 2021 was a lower high (78.19). SPX is likely to
enter a bearish territory in 2024/2025. The next low might not be the final low.
Mike Johnson might fight to bend Biden’s will. I hope I am wrong.
Illegal immigrants come here for the jobs and money.
The obvious solution is stop the jobs via big fines and prison time for the employers of illegal workers.
No jobs, no inflow.
Follow the money.
Under Gov. Abbott, at least 10% of all illegal workers in the US work in Texas. How dedicated is Abbott to the illegal entry issue when he never mentions that in his performative proclamations? His state’s economy is dependent on illegal workers. This is also true in many other red-state jurisdictions.
It is not a problem that Red state legislators want to solve-it will hurt powerful forces in their constituency and it will be lost as a wedge issue. What kind of BS is it when the Speaker of the House says “It’s too complicated to spend time solving it”
The people who stand in the way of a solution want employers to have access to a quiescent and undemanding work force that allows wages to lie below their actual market level.
Until the illegal access to jobs is under control, the illegal immigration will keep on happening. The immigrants are following the money, too. Regardless of how much of a joke you might think “Bidenomics” is, the immigrants know that they can make a far better life in the US than virtually anywhere else in the world. So why not use your feet and walk to a better life with easy access to jobs with employers that will readily hire
There are hundreds of photos and videos of 100’s of thousands of immigrants coming through the fence. The fence and pretty much any barrier can be easily defeated with a $40 cordless saw from Harbor Freight. The fence is wasted money. Catch and release puts them in the goal they wanted. Catch and return means another attempt.
Stop the jobs for illegals by enforcing a stringent and punitive employment law on the employers.
They’ll stop coming when they can’t get hired. They’ll stop being hired when employers are afraid of the consequences of hiring them.
Anything else is just theater.
American citizens don’t want many of the jobs that immigrants do. This is painful truth that many Caucasian, blacks and other citizens simply cannot stomach. There is no mass unemployment problem amongst citizens in the working age population.
Here is the first act of the theater, “but we really need them”
A decision as to how many and what the occupations are is the answer, not unlimited access to the whole jobs economy.
If it paid 50 bucks an hour, you’d have white boys out there cutting broccoli. Nobody involved in the production or consumption of broccoli wants that.
I’m a broccoli consumer and I want that. Everything must be repriced once artificial imbalances eliminated. It will be painful but necessary.
The jobs illegal aliens do? Selling drugs, molesting children, stripping copper from anyplace they can find it, prostitution rings?
Unfortunately this is a myth. The overwhelming majority of illegals seek to stay here by asking for asylum. Those applying for asylum will get work authorization after a few months, while not getting a hearing on their asylum application for a decade or more. In other words, they have the legal right to work here. They aren’t the ones that pick fruits and vegetables. Going after employers for hiring illegals will only affect the illegals who came here a long time ago and didn’t ask for asylum. It won’t stop the illegals from coming and making false claims for asylum. The asylum loophole has to be closed.
As for doing farm work, a good worker can make a pretty good hourly rate. As much as $30 an hour. However, people here legally don’t want that kind of job because its seasonal and you have to move around the country. That means you aren’t working 40 hour weeks 52 weeks a year. Also, pretty hard to move around the country with a wife and kids in tow, especially if the kids are school age and have to attend school.
Most foods are harvested mechanically. If we didn’t have illegals picking the products, it would force innovation to find a way to harvest mechanically. those foods that still need to be picked by hand.
Revoke all asylum claims immediately. Economic migrants do not qualify for asylum.
Yes illegal aliens are stifling agricultural innovation. Why put out the capital when you have dirt cheap labor?
More sadly there is little conversation happening on either side of the aisle as to how we actually deal with the problem (maybe some in the Senate). So you really have to believe our legislative leaders are more interested in the theater than actually solving a problem. Although the trip to the border was 1) expensive and I am guessing we taxpayers footed the bill, 2) made all the news shows and 3) did nothing to solve the border problem. And I am guessing most went home for the weekend instead of sitting in a conference room and actually working on legislation.
FAA grounded some new Boeing 737 Max 9 jets. Great work by Boeing.
Farming will need to be outsourced to Mexico, central america, etc. The same way manufacturing was outsourced. Sad.
Alternatively, people could get off their ass and actually do something!
American citizens simply think they are above these hard labor jobs. There is no employment problem in America. You want retired people to start picking crops ?
Won’t happen. The compromise is to create a visa for illegal immigrants and make them work and pay taxes like everyone else.
We’ve had 50 years of immigration policy to do that. Not going to happen.
It’s kind of like believing there exists a deal that could bring peace to middle east. No way.
I don’t quite understand why the US has to follow budget rules when China or any other country doesn’t. Thr whole world is pretending.
Republicans don’t believe in government but want the border shutdown. These things do not intersect in the venn diagram.
Mish, why do use say “cave?” The Democrats hold a majority in the Senate and hold the WH. The Republicans have a razor-thin majority in the House and they have shown that they are a dysfunctional majority at best. Why should any rational Republican believe that they can or even should be able to dictate legislation and policy? They can push back on certain legislation to a point and that is how a divided government is supposed to work in our system, but that is it. The voters put the Democrats in charge of setting legislative priorities and agendas and until that changes, the Republicans cannot drive the train, they can only attempt to influence the actions of the Conductor on the margin.
I say cave because they will.
Please recall Kevin McCarthy lost his job because he caved in.
“Why should any rational Republican believe that they can or even should be able to dictate legislation and policy?”
Exactly what I have been saying for months. But I keep hearing nonsense from the Freedom Caucus.
Yeah! The Freedom Caucus, they’re the enemy of America right now. They’re the “bad guys” for wanting spending cuts, a border wall and the exact opposite of FJB’s border policies.
Yeah, Mish, you’re absolutely right. These people are nuts!
Congress may finally have to stop offering pensions to new government employees, just like industry did 20 years ago.
I’m guessing they will take whatever path that allows them to cut the least and spend the most.
…which means doing nothing.
No, it means more money for everything
Exactly!