Still Another Budget Crisis Looms This Fall
Author: Greg Valliere
June 14, 2023
HOUSE CONSERVATIVES ARE FURIOUS over the budget deal cut by Speaker Kevin McCarthy, who needs to keep his restive troops in line; he’s hanging on to the speakership by a thread. So McCarthy, facing a rebellion, has indicated that he will consider a deal that would scrap the spending caps that were agreed to a month ago.
NOT SURPRISINGLY, Democrats are incredulous; there’s no chance that the Senate would agree to re-open the deal, even if the full House approves a new package that would spend less than the ceilings agreed to last month. Democrats are accusing McCarthy of “reneging” on the budget deal
THE FINANCIAL MARKETS WILL HAVE TO WATCH THIS ONE: A House-Senate stalemate could easily lead to a government shutdown as the new fiscal year begins on Oct. 1, and key spending provisions — defense and health care in particular — could stall in early October. (The debt ceiling is set for two years, but a shutdown is another story.)
McCARTHY HAS BEEN BOXED INTO A CORNER: If he doesn’t push for more spending cuts, he could be ousted as Speaker, so he may have to rescind his own deal, which is viewed as too expensive by conservative Republicans who want to oust him.
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DONALD TRUMP, YAWN: We watched his New Jersey speech last night and heard nothing new. All of his opponents are “lunatics” or “deranged,” eagerly participating in a monstrous witch hunt. At some point the thesaurus will be exhausted, at some point it will become clear that Trump’s handling of top secret documents was reckless.
IRONICALLY, ALL TRUMP HAD TO DO was return them, which probably would have avoided this latest crisis. For a good perspective on Trump’s behavior, we recommend this morning’s Wall Street Journal editorial, “The Self-Destructive Donald Trump.”
THERE’S MORE POLITICAL INSTABILITY to come, as Republicans prepare an all-out assault on Joe and Hunter Biden. The president has refused to hit back against Trump, to the dismay of liberals. Biden will hold his fire, happy to face Trump in the general election. Republicans, meanwhile, appear to be stuck with Trump — the favorite to win the GOP nomination, only to lose in the general election.
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