
Government Shutdown Looms; Bank Deal In Trouble?
Author: Greg Valliere
February 22, 2024
HERE WE GO AGAIN: Congress is still enjoying its winter vacation, seemingly without a sense of urgency that a government shutdown could begin at the end of next week.
THERE’S BEEN LITTLE PROGRESS on a short-term stopgap measure, lining up the first package of four bills currently expiring March 1; the remaining eight bills lapse March 8.
THE FIRST BILL must be passed by a week from Friday or portions of the government will shut down. The four other measures would fund military construction, agriculture, energy-water and transportation-HUD. The House may need a short-term extension to get those done.
THE SENATE IS THE LAGGARD, NOT THE HOUSE AS USUAL, as the upper chamber returns to Washington next week to debate impeachment charges against Homeland Security Secretary Alejandro Mayorkas. There’s no chance Mayorkas will be convicted, but a trial could gobble up time.
ONCE THE FIRST FOUR SPENDING BILLS PASS, Congress will consider the crucial issue of supplemental funding for Ukraine, Israel and Taiwan. The Senate has passed a $95 billion package, which has enough votes to pass in the House, except Speaker Mike Johnson won’t bring up the bill for a vote.
BOTTOM LINE: If this bogs down after the first four bills pass, Democrats may try to pry the bill loose via a rarely-used procedural tactic called a “discharge petition,” which would have enough votes to pass, with solid support from both parties.
BUT THAT would be messy and complicated — and a brief shutdown now is a genuine threat by mid-March. U.S. allies and the credit rating agencies will be watching.
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BANK MERGER ON THIN ICE: It didn’t take long for populists on the right and the left to call for government rejection of the proposed acquisition by Capital One of Discover Financial Services.
THE FIRST SHOT came from Sen. Josh Hawley (R-Mo.), who never misses an opportunity to seek out a TV camera. “This is destructive corporate consolidation at its starkest,” Hawley said. “If consummated, this merger will create a new juggernaut in the credit card market, with unprecedented powers to extort American consumers. That cannot be allowed to happen,” Hawley stated.
NOT SURPRISINGLY, SEN. ELIZABETH WARREN attacked the deal from the left, stating that it “is dangerous and will harm working people. Regulators must block it immediately.”
THIS MERGER IS FAR FROM A DONE DEAL, antitrust experts believe. It will get a thorough review by the Biden Administration, with a good chance that some divestiture will required to get the deal done. Capital One is the ninth-largest bank in the U.S. by assets.
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