On The Money — Congress losing time to avert shutdown
Lawmakers have about a week to strike a deal to fund the government, and they aren’t particularly close. We’ll also look at Sam Bankman-Fried agreeing to testify before a House panel, as well as a main driver of inflation.
But first, see what Sen. Kyrsten Sinema’s new announcement means for the Senate.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane and Aris Folley. Someone forward you this newsletter? Sign up here or in the box below.
Congress races to resolve spending tug-of-war
Lawmakers are digging in their heels in a high-stakes, end-of-the-year spending tug-of-war, with only a week now left before a government shutdown deadline.
While leading negotiators say they’ve been exchanging topline figures for a potential omnibus funding bill that many are still optimistic could pass this month, members say it’s becoming clearer that negotiations will likely need to extend beyond the current Dec. 16 deadline.
- Negotiators have speculated leaders will try to bring up a short-term bill, known as a continuing resolution (CR), potentially extending funding at fiscal 2022 funding levels through Dec. 23 to keep the government running amid ongoing talks.
- Some Republicans, meanwhile, are openly calling for a CR into next year, seeking to punt the action until their party controls the House. But some lawmakers are shooting for an earlier cutoff date to apply pressure as leaders race to put a bow on fiscal 2023 funding before Christmas.
- Democratic negotiators also say they’re set to release new funding plans as early as next week that they claim are designed to attract GOP support to get the ball rolling.
The context: A stopgap measure freezing funding levels past Jan. 3 would allow Republicans significantly more influence in shaping government funding, but Democrats say it would also raise the risk of shutdown in a further divided Congress.
At the same time, Democrats say they’re preparing for a full-year CR — an option neither side wants — as conservatives turn up the heat on GOP leadership to gun for a short-term one to next Congress.
Aris takes it from here.
LEADING THE DAY
FTX founder Bankman-Fried agrees to testify at House hearing on collapse
The founder and former CEO of bankrupt cryptocurrency platform FTX on Friday said he will testify before a House committee next week despite his initial reluctance.
In a tweet, Sam Bankman-Fried announced he would testify before the House Financial Services Committee at its Tuesday hearing on the collapse of FTX.
- Bankman-Fried’s decision to testify comes after intense pressure from House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) and ranking member Patrick McHenry (R-N.C.). The duo had been pushing Bankman-Fried over Twitter to appear before their panel and answer questions under oath from lawmakers after giving several high-profile interviews to journalists.
- The move to appear means he will face questions from lawmakers about the FTX collapse under oath. While Congress cannot bring criminal charges against an individual, it can share potentially incriminating material with regulators and law enforcement investigating FTX. He could also face charges if he lies to lawmakers, raising the stakes of his upcoming testimony.
- Bankman-Fried did not say whether he would also agree to appear before the Senate Banking Committee during its own hearing on FTX scheduled for Wednesday. Senate Banking Committee Chairman Sherrod Brown (D-Ohio) and ranking member Pat Toomey (R-Pa.) have threatened to subpoena Bankman-Fried to testify if he refuses to do so voluntarily.
Sylvan dives in here.
PET ADOPTION CRISIS?
Animal shelters face a potentially fatal pet adoption crisis
The “pandemic pet” boom that captured headlines and the public imagination may have been more anecdote than fact, at least for the animal rescue community: Dog and cat adoptions actually declined in 2020.
But the post-pandemic shelter crisis of 2022 looks very real.
- Shelters around the nation are packed to furry capacity. Animal rescues are understaffed, workers overwhelmed. Adoptions are lagging as a procession of families surrender dogs and cats they can no longer keep.
- Why? Animal advocates cite the decline of virtual work, a national housing shortage and the rising cost of kibble, among other factors.
The Hill’s Daniel De Visé has the details here.
Labor costs point to corporate profit as main inflation driver
The continued drop in labor costs has economists pointing to private sector profits as a main driver of inflation, undercutting arguments from the Federal Reserve regarding its plan to bring down consumer prices that remain around 40-year highs.
Unit labor costs, which are measured by the Labor Department to determine how much businesses are paying for workers to produce their goods and services, have been getting outpaced by profits over several quarters, leading economists to call out a trend.
- Paul Donovan, an economist with Swiss Bank UBS, wrote in a note to investors saying that Wednesday’s labor cost numbers showed again that corporate profits are rising faster than labor costs. But that’s a very different argument from the one put forward by many U.S. policymakers, both in the political and economic sectors.
- Speaking on CNBC Thursday morning, Rep. Kevin Brady (Texas), the top Republican on the Ways and Means committee, sounded a familiar refrain, arguing the labor situation in the U.S., which has been characterized by a tight job market and rising nominal wages, was behind lingering consumer inflation.
The Hill’s Tobias Burns digs into this here.
Good to Know
The Biden administration on Friday announced sanctions against a Chinese company listed on the NASDAQ stock exchange, saying Pingtan Marine Enterprises Ltd. engaged in “illegal, unreported and unregulated” fishing that contributed to grave human rights abuses.
Here’s what else we have our eye on:
- The New York City Department of Health and Mental Hygiene issued a health advisory recommending that residents wear masks at all times when they are at indoor public spaces regardless of their vaccination status, citing an increase in respiratory viral illnesses and the high levels of hospitalizations being reported.
- A coalition of advocacy groups is making a last-ditch plea to Senate Majority Leader Charles Schumer (D-N.Y.) to prioritize passing several antitrust bills targeting tech giants with just three weeks to go before the end of the year, and only two until Christmas.
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 next week.