the-economy

Trade Votes of Past Point to Obama's Troubles Ahead

Democratic senators such as Sherrod Brown, left, and Jeff Merkley joined with all but one Democrat to block fast-track trade legislation from moving forward. (Bill Clark/CQ Roll Call)

It’s too soon to label the first test vote in the great trade debate of 2015 as a harbinger of total collapse ahead. But the prognosticators, the party whips and the president already have some tally sheets providing strong evidence of a cliffhanger in the making.  

Congress last approved similar legislation 13 years ago, which of course is a lifetime in rhythms of the place. Still, two messages may fairly be inferred from the positions taken back then by the lawmakers who remain in office today. Tuesday’s momentum-sapping roll call notwithstanding, at least three-fifths of senators are eager to vote to give President Barack Obama enhanced leverage to complete the expansive trade accord with 11 other nations on the Pacific Rim. Neither the hollowing out of the political center in the past decade, nor the fact that most senators were Democrats in the 107th Congress but most are Republicans now, has fundamentally changed the Senate’s personality as an ally of globalization.  

Deep-Sixing 529s Could Add Up to Zero for Tax Overhaul

(Bill Clark/CQ Roll Call)

In divided government, it's nothing special for a presidential budget to be immediately dismissed as dead on arrival in Congress. It’s much rarer for the president himself to whack an important piece of his budget a full week before delivery.  

President Barack Obama’s swift killing of a proposal to effectively eliminate the college savings accounts known as 529s is instructive about this year’s legislative dynamic because it connects two emerging story lines: The efforts by both parties to be perceived as doing the most for the middle class and the drive toward the biggest overhaul of the tax code in a generation.  

McCarthy Rewards Insurgents in First Big About-Face

McCarthy changed his mind on Ex-Im Bank reauthorization. (Tom Williams/CQ Roll Call)

It took less than 72 hours after his election for Kevin McCarthy to reveal an unambiguous and extremely consequential way he’ll be different from his predecessor.  

In what’s looking like the year’s hottest dispute between small-government crowd and the business community, the incoming House majority leader took a surprising side on Sunday. The Californian is joining the hard core fiscal conservatives who want to close the Export-Import Bank, which for eight decades has been one of the main tools at the government’s disposal for helping American businesses.  

Minimum Wage Vote Loss Gives Democrats Their Wedge Issue

Senate Democrats are lambasting congressional Republicans on the minimum wage, just in time for the midterm elections. (Bill Clark/CQ Roll Call)

Long before Wednesday’s totally predictable Senate vote blocking a bill to increase the minimum wage , President Barack Obama and his fellow Democrats in Congress had embraced their guaranteed consolation prize.  

It’s a construct as venerable as the Capitol itself: They will not have the bill, but they are plenty satisfied to have the issue.  

Yellen Takes a Grilling, but Will Soon Head the Fed

Janet L. Yellen faced intense and skeptical questions from several Republicans on the Senate Banking Committee, but nothing appeared to threaten her prospects for becoming the next chairman of the Federal Reserve.

While almost all the public and congressional attention is focused on the intensifying travails of the health care law, Wall Street is paying more attention to the Yellen confirmation hearing. If confirmed, she will be a dominant player in federal monetary and fiscal policy for at least the next four years — longer, probably, than the anxiety over Obamacare’s implementation.

Budgetary Tunnel Vision: No Early Light at This End

Updated 4:32 p.m. | One month before their no-penalty-attached deadline, budget negotiators will convene Wednesday morning for only their second public meeting. There's still no sign anything was accomplished behind the scenes since the opening session two weeks ago — except maybe a downgrading of the already de minimis expectations.

As a practical matter, a grand bargain fell off the table almost as soon as the government reopened in October, and ever since then, the scope of the talks has been narrowed to one modest topic: how much discretionary spending to permit in the final two-thirds of this fiscal year.

Senate Democrats Eye a Third Fall Showdown

Top Senate Democrats signaled today that they may amend the continuing resolution to last only seven weeks, to Nov. 15 instead of Dec. 15. That would move the fall’s second shutdown showdown to just after the looming dogfight over the debt limit.

The Democratic plan, which has not been finalized, would complicate this week’s stopgap spending imbroglio with a secondary issue that is important for many lawmakers but has nothing to do with the matter consuming the public’s attention. Conservative Republicans continue to demand that Obamacare be denied any funding in the new fiscal year as a condition for keeping the government open.