On The Money: Senate spending talks go off the rails | Trump officials vow to reform Fannie, Freddie if Congress doesn't act | Majority in poll see recession on the way

On The Money: Senate spending talks go off the rails | Trump officials vow to reform Fannie, Freddie if Congress doesn't act | Majority in poll see recession on the way
© Aaron Schwartz

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-- Senate spending talks go off the rails: Senate negotiations to fund the government descended into chaos on Tuesday, underscoring the fight awaiting lawmakers as they try to prevent a shutdown.

The talks snagged almost immediately after they started amid deep disagreements over abortion and funding for the U.S.-Mexico border wall, among other issues.

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Both sides are swapping accusations, with Republicans saying Democrats are violating the spirit of the two-year budget deal and Trump effectively throwing a grenade into the talks with his plan to raid military construction funds to build the wall.

Senate Appropriations Committee Chairman Richard ShelbyRichard Craig ShelbyTop Republican says Trump greenlit budget fix for VA health care GOP senators not tested for coronavirus before lunch with Trump McConnell, GOP senators support exempting VA health funds from budget caps MORE (R-Ala.) warned that they'll need to resolve the partisan fighting in order to move funding bills "if we're going to move them very far."

"If we're going to have problems and disagreements, if we can have them early and resolve them, that's good. If you have them early and they continue and persist and never go away, that's not a good sign," he added.

Congress has less than 11 working days before the deadline to either pass the fiscal 2020 bills or a short-term continuing resolution (CR).

The Hill's Niv Elis and Jordain Carney with more on a chaotic day at the Capitol.

 

The problem: 

 

Read more: Senate Democrats are planning to force a vote to try to nix President TrumpDonald John TrumpBiden slams Trump in new ad: 'The death toll is still rising.' 'The president is playing golf' Brazil surpasses Russia with second-highest coronavirus case count in the world Trump slams Sessions: 'You had no courage & ruined many lives' MORE's emergency declaration transferring military construction money to fund the U.S.-Mexico border wall. 

 

ON TAP TOMORROW

 

LEADING THE DAY

Trump officials vow to reform Fannie, Freddie if Congress doesn't act: Top Trump administration officials warned senators Tuesday that they plan to begin moving forward with a sweeping plan to overhaul the federal housing finance system with or without support from Congress.

Treasury Secretary Steven MnuchinSteven Terner MnuchinSenate Republicans call on DOJ to investigate Planned Parenthood loans The Hill's Coronavirus Report: Surgeon General stresses need to invest much more in public health infrastructure, during and after COVID-19; Fauci hopeful vaccine could be deployed in December Republicans push for help for renewable energy, fossil fuel industries MORE, Housing and Urban Development Secretary Ben CarsonBenjamin (Ben) Solomon CarsonCOVID-19 makes Trump's work with black Americans that much harder Sunday shows preview: Congress spars over next round of coronavirus relief; GOP seeks offensive after news of Flynn 'unmasking' On The Money: Small business loan program out of money | Lawmakers at impasse over new funds | Senate adjourns for week with no deal | Trump to leave decision on reopening economies with governors MORE and Federal Housing Finance Agency Director Mark Calabria urged the Senate Banking, Housing and Urban Affairs Committee to help unwind the post-crisis regulatory system that lawmakers have struggled to reform for more than a decade.

Even so, Mnuchin, Carson and Calabria pledged to flex their executive authority to free the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, better known as Fannie Mae and Freddie Mac, from Washington's control.

"The Administration's preference is to work with Congress to enact comprehensive housing finance reform legislation," Mnuchin said. "At the same time, we believe that reform can and should proceed administratively," he added. I explain what that means here.

 

The dynamic: 

  • There are steps the Trump administration can take on its own, including forcing Fannie and Freddie to boost capital reserves before releasing them to the private sector.
  • But much of the plan released by Treasury last week cannot be enacted without legislation.

 

The hurdles ahead:

A major legislative push just 14 months before the 2020 elections would depend on ample bipartisan agreement and good will. While senators were unified by concern with rising housing prices nationwide, Senate Democrats made it clear that there was no appetite for the administration's proposal.

 

GOOD TO KNOW

  • A majority of respondents said in a new poll that a recession is likely within the next year amid the escalating trade war between the U.S. and China.
  • President Trump argued in a court document filed late Monday that a federal judge should deny a motion to dismiss his lawsuit challenging New York's law that allows Congress to request his tax returns.
  • Fifty-one chief executives at major U.S. corporations, including Amazon, AT&T and IBM, are urging Congress to pass federal consumer privacy legislation that would block states from implementing their own regulations on data privacy.

 

ODDS AND ENDS