Overnight Finance

On The Money: Shutdown Day 32 | Senate to vote on dueling funding measures | GOP looks to change narrative | Dems press Trump on recalled workers | Kudlow predicts economy will 'snap back' after shutdown

Happy Tuesday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL--With shutdown deal elusive, Senate to vote on dueling government funding bills: Senate leadership on Tuesday struck an agreement to vote on dueling proposals to reopen the federal government as the partial government shutdown stretched into its 32nd day.

Senate Majority Leader Mitch McConnell (R-Ky.) set up two votes for Thursday afternoon, both of which will require 60 votes to advance.

The details:

  • The first vote will be on President Trump's proposal to reopen the government, provide $5.7 billion in funding for the border wall and extend legal protections to some immigrants for three years.
  • If that fails, the Senate would then vote on a three-week continuing resolution (CR).

 

Why does it matter? It's unlikely that either bill can get the votes to pass and break the stalemate that has closed roughly a quarter of the government. But the deal between McConnell and Senate Minority Leader Charles Schumer (D-N.Y.) is the first sign of progress after weeks of partisan bickering. The Hill's Jordain Carney explains why here.McConnell on Tuesday continued his opposition to the slew of House-passed government funding bills that would reopen parts of the government, blocked a measure to temporarily reopen the Department of Homeland Security (DHS).

It's the fourth time McConnell has blocked a House effort to fund DHS and third time he's killed legislation to reopen other departments and agencies.

McConnell has insisted for weeks that taking up House legislation would be nothing more than "show votes" since Trump has pledged to veto any funding bill without border wall money.

 

The politics: President Trump and congressional Republicans are trying to change the narrative on Democrats.

Republicans, who have seen poll after poll showing that a majority of respondents blame Trump for the shutdown, are eager to corner Democrats by forcing a vote on the White House proposal to reopen the government and provide Trump with $5.7 billion in wall funding.

Whether the gambit works is anyone's guess.

Senate Democrats are showing no signs of division so far, and the Senate is also poised to vote Thursday on another measure that would temporarily reopen the government but not provide funding for the wall.

Still, the votes on Thursday could allow Republicans to argue that they are putting up proposals to end the shutdown after weeks in which the only actions to do so have been taken by Democrats in the House.

The Hill's Jordain Carney has more on the calculations on both sides.

 

Trump administration recalls more employees from furlough: The Trump administration has called back thousands of furloughed federal employees previously deemed "non-essential" to work without pay amid mounting economic damage from the shutdown.

The Agriculture Department (USDA) on Tuesday announced it would call back to work more than 9,700 employees currently furloughed during the government shutdown to help provide financial assistance to farmers and ranchers.

Agriculture Secretary Sonny Perdue said in a statement that the USDA would reopen all Farm Service Agency (FSA) offices starting Thursday, allowing farmers and ranchers to apply for loans and financial assistance.

The announcement is welcome news for a slew of small U.S. farms that have suffered from blowback to President Trump's trade battles and sagging commodity prices. But it also forces almost 10,000 federal employees sidelined during the shutdown to return to work unpaid.

  • Democrats and left-leaning government watchdog groups have raised legal questions about the recalls and have blasted Trump for what they call an effort to prolong the shutdown.
  • Two federal employees unions have also sued the Trump administration for forcing furloughed workers back to the office without pay.

Meanwhile, Americans who rely on the USDA-run food stamp program, known as Supplemental Nutrition Assistance Program (SNAP), could face 10-day delays in receiving benefits if the shutdown continues.

 

LEADING THE DAY

Top Trump adviser predicts economy will 'snap back' after shutdown: President Trump's top economic adviser on Tuesday predicted that the ongoing partial government shutdown will not do lasting damage to the U.S. economy.

National Economic Council Director Larry Kudlow told reporters at the White House that while he would not predict when the government would reopen, he expects to see "an immediate snapback" for the economy when it does. The Hill's Jordan Fabian tells us why

The argument: Kudlow acknowledged that there are "hardships" for federal workers and others affected by the shutdown, which is now in its second month, but said that "resources will come back, I mean literally, the day of" the shutdown's end.

"When the government reopens - and I'm not here to negotiate; I'm not going to make a prediction, that's up to the president - you will see an immediate snapback," he said.

"We've seen this before. There will be snapback. Immediately. That's my sense."

The problem: While Trump has signed a bill to grant workers back pay the day the shutdown ends, that money can't replace a month of depressed consumer spending triggered by more than 800,000 workers going unpaid.

Plus, the back pay may not cover interest incurred on loans taken by unpaid employees to cover basic expenses, and the shutdown may also do long-term damage to consumer confidence.

 

Senate Dem introduces 'Stop Stupidity' act to end government shutdowns: Sen. Mark Warner (D-Va.) on Tuesday introduced legislation to prevent future government shutdowns in the event of funding lapses.

The Stop Stupidity (Shutdowns Transferring Unnecessary Pain and Inflicting Damage In The Coming Years) Act would automatically renew funding for all aspects of government, besides the legislative branch and president's office, at the same level as the previous year.

A press release about the legislation said that such a policy would keep the government running in the event that lawmakers are not able to pass a funding bill due to policy differences.

 

GOOD TO KNOW

  • President Trump's months-long feud with the Federal Reserve is cooling off as central bank officials indicate a pause in interest rate hikes amid the shutdown.
  • A Russian oligarch with ties to Russian President Vladimir Putin along with his allies will maintain a majority ownership in an energy company under a Treasury Department plan to lift sanctions against the business, according to The New York Times. 
  • A group of conservative organizations is pressing President Trump to take executive action to reduce capital gains taxes, since legislation to cut taxes is unlikely to pass in the new divided Congress.
  • Lobbyists for alcohol and tobacco companies who need to get labels for their products approved by the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau (TTB) are trying to make the best of a bad situation.
  • China's economy is slowing, and the slowdown is probably worse than Beijing says, according to the New York Times.
  • The International Monetary Fund cut its global growth forecasts on Monday and a survey showed plunging optimism among business chiefs.

 

ODDS AND ENDS

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