Overnight Finance

On The Money — Government shutdown risk lowers

Sen. Joe Manchin (D-W.Va.) is making the path to a government funding deal slightly clearer. We’ll also look at the first legal challenge to President Biden’s student loan forgiveness plan and rising consumer confidence in the face of a potential recession. 

But first, find out what makes Hurricane Ian so dangerous for the Tampa area. 

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan LaneAris Folley and Karl Evers-HillstromSubscribe here.

Manchin permitting reform cut from spending bill 

A stopgap government funding bill will not include permitting reform that Sen. Joe Manchin (D-W.Va.) had pushed for, Senate Majority Leader Charles Schumer (D-N.Y.) announced Tuesday. 

Manchin moments earlier had released a statement asking that language to change the approval process for energy infrastructure be removed from the funding bill as its passage appeared doomed amid bipartisan opposition. 

“Because American families should not be subjected to a Republican-manufactured government shutdown, Senator Manchin has requested, and I have agreed, to move forward and pass the recently-filed Continuing Resolution legislation without the Energy Independence and Security Act of 2022,” Schumer said. 

Manchin in his own statement did not explicitly blame either party, saying “It is unfortunate that members of the United States Senate are allowing politics to put the energy security of our nation at risk.” 

The background: 

  • Manchin previously struck a deal with top Democrats and President Biden to pass a proposal aimed at speeding up the country’s energy infrastructure projects, in exchange for his support for a sweeping tax, climate and health care plan that narrowly passed Congress in a party-line vote earlier this year. 
  • Since its release last week, Manchin’s proposal has drawn mixed reviews in the Senate, where some Democrats have criticized the plan for going too far, as advocates argue it will undercut environmental reviews. Republicans were also largely opposed to the plan. 

The Hill’s Rachel Frazin explains here. 

What it means: With the Manchin deal officially dead, there is one less obstacle for Congress to deal with as it races to pass a government funding bill before a shutdown strikes on Oct. 1. But lawmakers are still struggling with a White House for billions in funding in support for Ukraine, the country’s COVID-19 and monkeypox response efforts, and disaster relief. 

LEADING THE DAY

Group sues to block Biden’s student loan forgiveness plan 

The Pacific Legal Foundation (PLF) filed a lawsuit on Tuesday against the Department of Education over its new student loan cancellation policy, becoming the first organization to challenge the Biden administration’s move to forgive up to $20,000 in student debt per borrower. 

The federal lawsuit, filed in the U.S. District Court for the Southern District of Indiana, contends that Biden’s decision to cancel student loan debt for some borrowers is illegal because Congress did not approve it. 

“It’s flagrantly illegal for the executive branch to create a $500 billion program by press release,” said PLF attorney Caleb Kruckenberg in a statement. “And without statutory authority or even the basic notice and comment procedure for new regulations.” 

In a statement to The Hill, a spokesperson for the Education Department called the lawsuit “baseless” and said “opponents of the debt relief plan are trying anything they can to stop this program that will provide needed relief to working families.” 

The Hill’s Brad Dress has more here

STILL CONFIDENT?

Consumer confidence rises this month, despite recession fears 

U.S. consumer confidence saw an uptick for a second consecutive month despite ongoing concerns about the stability of the economy and the possibility of a recession.   

The Conference Board’s Consumer Confidence Index rose from 103.6 in August to 108 this month, according to a Tuesday release.

  • Jumps in August and September follow a three-month string of declines, with a low point in July, amid rising food and fuel prices and inflation fears.
  • Still, the Conference Board noted that “recession risks nonetheless persist” in the face of the new increase in consumer confidence.   

The Hill’s Julia Mueller has more here

INFLATING PRICES, DEFLATING NEWS

7 in 10 workers surveyed say inflation is outpacing their pay 

A growing number of Americans say the cost of living is climbing faster than their salary and wage growth amid rising inflation and recession fears, according to a new survey.   

A Bank of America-sponsored survey conducted in July and released Tuesday found that 71 percent of American employees say the cost of living is outpacing growth in their pay, up from 58 percent in February.  

Eighty percent of workers polled say they’re concerned about inflation, and 62 percent are stressed out about their own financial situation, even with full-time jobs. 

Here’s more from The Hill’s Julia Mueller. 

Good to Know

Sen. Tammy Baldwin (D-Wis.) on Tuesday introduced a bill aimed at reducing rail disruptions that have damaged the U.S. economy.  

The Reliable Rail Service Act would clarify common carrier rules — which require railroads to provide service upon reasonable request — that shippers say are poorly defined and rarely enforced.   

Here’s what else we have our eye on: 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

VIEW THE FULL EDITION HERE

Tags Biden Charles Schumer government shutdown Joe Manchin Schumer-Manchin deal stopgap bill
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