Washington Update - May 15, 2023

Billy Moore    Dc2

Washington’s two greatest challenges of May, a possible default and chaos on the southern border, showed hopeful signs of resolution last week amid great uncertainty for the short- and long-term results.

President Joe Biden and congressional leaders met last week on the debt limit and dispatched staff for negotiations. The President’s team signaled his willingness to compromise on spending caps, rescinding unspent COVID funds, speeding up permits for energy projects and perhaps toughening work requirements for benefit programs. There are divisions within each area, such as whether to cap spending for two years or ten years, as the House-passed spending cut bill proposes. Neither side seems to be seeking to advance a long-term solution to the deficit – a Grand Bargain in Washington-speak – but rather to address the need to avoid a default in two weeks.

Any debt limit agreement will disappoint both Republicans and Democrats, making passage of short-term resolution difficult. Former President Donald Trump raised the hurdle last week by encouraging congressional Republicans to allow the U.S. to default on its debt.

The House passed anti-immigrant border security legislation as the Title 42 border enforcement rule expired Thursday. President Joe Biden warned of a chaotic period as tougher but more time-consuming Title 8 enforcement takes hold, yet many border communities report fewer than expected initial migrant arrivals.

The long-term solution to border problems, joining immigration reforms with enforcement actions, seems less likely today as political partisans seek to use the issues for electoral advantage.

Last week, the Senate confirmed nominations and passed a resolution disapproving of rules protecting the endangered northern long-eared bat. This week, Senators will continue confirmations as Representatives tackle a series of law enforcement measures.

Labor Department data on producer prices and unemployment claims last week signaled a cooling economy and future easing of consumer prices.