“Credit rating group Moody’s has warned on the US fiscal outlook, saying President Donald Trump’s trade tariffs can hamper the country’s ability to cope with a growing debt pile and higher interest rates,” the Financial Times reports.
Trump Wants Reconciliation Bill to Raise Debt Limit
“Senate Majority Whip John Barrasso told reporters Tuesday that Donald Trump wants the debt ceiling dealt with as part of a party-line package to enact the president’s sweeping domestic agenda,” Politico reports.
“Yet even as Trump has signaled privately that he wants a hike of the debt limit inserted into a reconciliation package — which would let him avoid having to make a deal with Democrats to avoid a catastrophic default in the coming months — congressional Republicans remain unsure if they’ll have the votes to include the policy in the bill.”
Thune Sets Ambitious Timeline for Budget Blueprint
“Senate Republicans want to adopt a budget blueprint by April 11 to move forward on President Donald Trump’s legislative agenda,” Politico reports.
Said Thune: “I want to get it done this work period.”
Trump Cuts $3 Billion from Congressional Deal He Hated
“President Donald Trump is cutting nearly $3 billion in spending, much of it reserved for foreign aid, by unwinding part of a 2023 fiscal deal loathed by conservatives,” Semafor reports.
“Trump is slashing from a pot of money deemed emergency spending by the 2023 Fiscal Responsibility Act, which capped federal spending but also included a side deal criticized by Trump and his allies. One element of the 2023 law’s side deal allowed for more than $12 billion in emergency spending for this year, but Trump is effectively deeming about a quarter of that as outside the scope of any emergency.”
A Big Week for Trump’s Agenda
Speaker Mike Johnson and Senate Majority Leader John Thune will meet on Tuesday along with House and Senate committee leaders to begin working out the differences between their budget resolutions paving the way for passing President Trump’s agenda through reconciliation, Punchbowl News reports.
U.S. Could Breach Debt Limit in July
The Treasury Department will likely exhaust its borrowing authority — leading the federal government to default on some of its obligations — as soon as mid-July, according to a Bipartisan Policy Center projection.
The date is dependent on how much the IRS collects in tax revenue by mid-April.
Tax Revenue Could Drop by 10% Amid IRS Turmoil
“Senior tax officials are bracing for a sharp drop in revenue collected this spring, as an increasing number of individuals and businesses spurn filing their taxes or attempt to skip paying balances owed to the Internal Revenue Service,” the Washington Post reports.
“Treasury Department and IRS officials are predicting a decrease of more than 10 percent in tax receipts by the April 15 deadline compared with 2024.”
Social Security to Require In-Person Identity Checks
“In an effort to limit fraudulent claims, the Social Security Administration will impose tighter identity-proofing measures — which will require millions of recipients and applicants to visit agency field offices rather than interact with the agency over the phone,” the AP reports.
CBS News: Social Security’s new in-person identification requirement angers retirees and advocates.
Trump Pushes House on Washington Budget Fix
“President Donald Trump is ready to press House Republicans to vote for fixing the District of Columbia’s budget, after GOP leaders unexpectedly slashed the capital city’s spending powers,” Politico reports.
“If needed, he’s prepared to work the phones — or fire off a social media post — to get Speaker Mike Johnson to put the bill on the floor.”
Trump’s Tax Cuts Mainly Benefit Wealthy
According to the Yale Budget Lab, Republicans’ proposed cuts to social safety net programs combined with the Trump tax cuts they are intended to pay for “would actively transfer money from low-income people to high-income earners,” the Washington Post reports.
Musk’s Team Evicts Officials at the U.S. Institute of Peace
“A simmering dispute between the Department of Government Efficiency and an independent agency dedicated to promoting peace broke into an open standoff involving the police on Monday, as Elon Musk’s government cutters marched into the agency’s headquarters and evicted its officials,” the New York Times reports.
“The dramatic scene played out in Washington on Monday afternoon as Mr. Musk’s team was rebuffed from the U.S. Institute of Peace, an agency that President Trump has ordered dismantled, then entered it with law enforcement officers. Agency officials say that because the institute is a congressionally chartered nonprofit that is not part of the executive branch, Mr. Trump and Mr. Musk do not have the authority to gut its operations.”
Trump to Slash Staff at IRS Taxpayer Help Office
“The Trump administration is set to cut more than 20 percent of the staff at the taxpayer help branch of the IRS, eliminating jobs designed to help people struggling with their finances, identity theft or other tax issues,” the Washington Post reports.
IRS in Turmoil at Height of Tax Season
CNN: “As DOGE has set up shop inside the IRS over the past month, the agency has fired thousands of workers and auditors and set out to shutter more than 110 taxpayer assistance offices across the country. Widespread layoffs are in the works, with plans to cut nearly 20% of all IRS employees by May 15.”
“The barnstorming, which has played out at multiple agencies, has thrown the IRS into turmoil at the height of tax season. While the business of processing returns and issuing refunds has been ongoing, sources say these DOGE actions could undermine the long-term operations of the IRS, which handles nearly all accounts receivable for the federal government.”
Hakeem Jeffries Opens Rift with Chuck Schumer
House Minority Leader Hakeem Jeffries (D-NY) opened a massive rift with Senate Minority Leader Chuck Schumer (D-NY), Punchbowl News reports.
Jeffries returned to the Capitol after his party’s retreat to lobby against the House GOP continuing resolution, which Schumer said last night he would vote for.
He added that House Democrats are “not afraid of a government funding showdown and we will win that showdown.”
Democrats Are Furious
“Senate Majority Leader Chuck Schumer’s decision to back the House-passed government funding measure effectively puts an end to a shutdown fight that exposed bitter partisan disputes over federal spending,” Punchbowl News reports.
“But the intra-party disputes among Hill Democrats are just getting started. The Democratic base — where most of the money and campaign support comes from — is furious, berating Schumer for helping President Donald Trump and Republicans pass a funding package that most Democrats loathe…”
Playbook: “One of the most surprising developments of the last 12 hours is that late last night, House Democratic leadership — repeat: not backbenchers — felt compelled to release a fiery statement that does not give Senate Dems who support the CR much of any room for cover.”
Trump Backs Senate Tax Plan Accounting
“President Donald Trump indicated to GOP senators during a White House meeting Thursday that he supports using an accounting method that would treat trillions of dollars in tax cuts in a massive GOP package as costing nothing,” Politico reports.
“House and Senate Republicans are split on the controversial accounting tactic, though Speaker Mike Johnson is increasingly open to using it. The move would make it easier for GOP lawmakers to make the math work on their costly plan.”
Schumer Will Back Republican Funding Plan
Senate Minority Leader Chuck Schumer said Thursday that he would support the CR to keep the government funded through Sept. 30, Punchbowl News reports.
Said Schumer: “While the CR bill is very bad, the potential for a shutdown has consequences for America that are much, much worse. I will vote to keep the government open, and not shut it down.”
Schumer’s statement indicates Democrats will vote to end the filibuster and allow the House-passed CR to get through the Senate.
Wall Street Journal: Democrats clear way for GOP bill, ending threat of shutdown.
Republicans No Closer on Debt Ceiling Deal
“President Donald Trump and key Senate Republicans are still grasping for a solution to the US closing in on the debt ceiling following a White House meeting Thursday,” Bloomberg reports.
“The senators, including Majority Leader John Thune and Finance Chairman Mike Crapo, discussed whether to increase the debt ceiling in the tax-and-spending package that Republicans intend to pass this year. Most analysts believe the US will default on a payment obligation sometime this summer without a debt ceiling increase.”
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