With fewer than 50 legislative days before the August recess, also the new deadline to increase the debt limit, the House and Senate do not yet have agreement on a massive reconciliation bill to implement President Donald Trump’s agenda. President Trump is not sure what he wants in the bill: last week he suggested Congress increase the top marginal rate on wealthy taxpayers, then said they should not, but if they did it would be okay with him.
The most important House committee markups on the reconciliation bill come this week. Senate committees are waiting for the House to pass their version of the bill before detailing their companion proposal. Infighting between House Republican deficit hawks and spending moderates has been going on for over six months with no resolution by Speaker Mike Johnson. He has to satisfy both Republican factions in order to achieve the near unanimity needed to pass the bill – a task made more difficult by the President’s equivocation.
Speaker Johnson points to his prior successes to urge he not be underestimated, but most of those achievements postponed final decisions on taxes and spending. Moderate House Republicans are particularly fearful of voting for spending cuts that could endanger their reelection prospects only to have Senate Republicans cast them aside. Johnson will need to detail how he plans to thread the needle this week.
President Trump announced the outline of a trade agreement with the United Kingdom, the first since Liberation Day. It suggests almost all U.S. trading partners will have to agree to a 10 percent minimum tariff on U.S. imports – a level the U.S. Chamber of Commerce says will force the closure of many small businesses. Administration and Chinese trade officials met this weekend in Switzerland.
The Federal Reserve held interest rates steady last week.
