Business & Economy

On The Money — GOP opposes upping debt limit without fiscal reforms

Sen. Mike Lee (R-Utah) questions nominee for ATF Director Steven Dettelbach during his Senate Judiciary Committee nomination hearing on Wednesday, May 25, 2022.
Greg Nash
Sen. Mike Lee (R-Utah) questions nominee for ATF Director Steven Dettelbach during his Senate Judiciary Committee nomination hearing on Wednesday, May 25, 2022.

Twenty-four Senate Republicans signed onto a letter warning President Biden that they’ll oppose legislation raising the nation’s debt limit without spending reform.

We’ll also look at the electric vehicle price war underway as Ford slashes the cost of its top electric vehicle, details surrounding TikTok CEO Shou Zi Chew’s coming appearance before Congress, and more. 

But first, find out why former President Trump is suing an iconic reporter. 

Welcome to On The Money, your guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom.

24 GOP senators oppose debt limit increase 

Nearly half of the Senate Republican Conference has signed on to a letter to President Biden warning they will not vote for any bill to raise the nation’s debt limit unless it’s connected to spending cuts to address the nation’s $31 trillion debt.   

The letter, led by conservative Sens. Mike Lee (R-Utah) and Ted Budd (R-N.C.), says it is the policy of the Republican conference that any increase in the debt ceiling must be accompanied by cuts in federal spending or “meaningful structural reform in spending.”   

  • They cited the Prevent Government Shutdowns Act, which would automatically provide continuing appropriations to fund government if Congress fails to pass spending legislation by the end-of-year deadline, and the Full Faith and Credit Act, which would prioritize federal payments in case Congress doesn’t raise the debt limit, as “meaningful structural reform.” 
  • The letter, which was not signed by Senate Republican Leader Mitch McConnell (Ky.), gives public support to Speaker Kevin McCarthy’s (R-Calif.) effort to negotiate fiscal reforms with the White House in exchange for raising the debt ceiling. 
  • Senate Republican Conference Chairman John Barrasso (Wyo.) signed the letter but Senate Republican Whip John Thune (S.D.) and Sen. John Cornyn (R-Texas), two other influential members of McConnell’s leadership team, did not. 

The background: The letter comes as McConnell has called on the House GOP to take the lead in debt limit talks with Biden, as McCarthy strategizes a path forward on a plan that can garner adequate backing from the party’s narrow majority in the lower chamber.  

The Hill’s Alex Bolton has more here


EV price war underway as Ford slashes electric Mustang prices  

Ford Motor Co. will slash the price of its top electric vehicle, the Mustang Mach-E, after Tesla announced a series of major price cuts earlier this month.  

Ford on Monday announced price cuts ranging from $600 to $5,900 on certain Mach-E models. The American automaker added that it will “significantly” increase production of the electric SUV to reduce customer wait times and boost its market share. 

“We are not going to cede ground to anyone,” said Marin Gjaja, Ford’s chief customer officer for EVs.  

  • Ford’s price drop comes just a few weeks after Tesla, the EV market leader, slashed the price of some of its vehicles by up to 20 percent. 
  • The Mustang Mach-E was the third best-selling EV in the U.S. last year, but Tesla continues to dominate the market.  
  • EV prices dropped 5.5 percent last month after several years of persistent price hikes.  

Karl has more here


TikTok chief to appear before congressional panel  

TikTok CEO Shou Zi Chew will appear in March before the House Energy and Commerce Committee as lawmakers push to examine the video-sharing app’s ties to China and its consumer data privacy and security practices.   

Committee Chair Cathy McMorris Rodgers (R-Wash.) said calling the TikTok chief to testify is part of the panel’s goal of “asking Big Tech CEOs — from Facebook to Twitter to Google — to answer for their companies’ actions.”  

The social media app TikTok, which is owned by China-based parent company ByteDance, “has knowingly allowed the ability for the Chinese Communist Party to access American user data,” Rodgers said.  

A TikTok spokesperson told The Hill that the company sees Chew’s congressional committee appearance as an “opportunity to set the record straight” and talk about its security plans, adding that “there is no truth” to Rodgers’ claim that TikTok user data could be available to the Chinese Communist Party. 

The Hill’s Julia Mueller has the preview here


Southwest hires former congressman as lobbyist amid scrutiny  

Southwest Airlines hired a lawmaker-turned-lobbyist amid investigations into the carrier’s catastrophic system meltdown over the holidays.   

Southwest contracted with former Rep. Jerry Costello (D-Ill.), a for-hire lobbyist who chaired the House Transportation and Infrastructure Aviation Subcommittee during his time in Congress, according to a congressional filing. 

  • The airline is dispatching Costello to lobby on the FAA reauthorization package, which lawmakers plan to pass this year.   

  • Lawmakers have indicated that they will investigate Southwest’s meltdown, and examine whether tougher airline rules are needed, as part of the FAA process. 

Karl has more here


On the Record Newsmaker event,Wednesday, Feb. 1 at 2 p.m. ET/11 a.m. PT

Rep. Virginia Foxx (R-N.C.), chairwoman of the House Education and the Workforce Committee, sits down with The Hill’s Bob Cusack for a live newsmaker event to discuss her priorities for the 118th Congress. RSVP and join us live.

Good to Know

President Biden is expected to lean into an economic message as he and his campaign team conduct a soft launch of his reelection campaign in the coming weeks, sources familiar with his plans say.   

A strong report on the economy last week that showed the nation is adding jobs even as inflation cools is stoking confidence among Democrats that the economy can bolster Biden in 2024, after many feared it was a hindrance in the 2022 midterm message for the party. 

Other items we’re keeping an eye on: 

  • Perhaps a 2023 recession can be avoided after all: Consistently falling prices alongside a stronger-than-expected fourth-quarter gross domestic product (GDP) and next week’s anticipated less aggressive interest rate hike from the Federal Reserve are changing economists’ tune and renewing hopes about the overall health of the economy. 
  • The Adani Group, controlled by Asia’s richest person, Gautam Adani, lost more than $51 billion in value last week after a short seller accused the company of engaging in a “brazen stock manipulation and accounting fraud scheme.” 

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. 

Tags Biden Biden Debt limit Donald Trump Electric vehicles Ford Shou Zi Chew Southwest Airlines TikTok

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