Overnight Finance

On The Money — Presented by NRHC — Biden plays debt limit hardball with McConnell

President Biden delivers remarks regarding the debt ceiling and infrastructure package being debated on Capitol Hill on Monday, October 4, 2021.
UPI Photo

Happy Monday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup.

Today’s Big Deal: President Biden is setting Republicans up to take the blame if the U.S. defaults, and won’t guarantee it won’t happen. We’ll also look at the president’s road trip to sell his economic agenda and new scrutiny of the Federal Reserve.

But first, read more about the man who inadvertently “married” a bird.

For The Hill, We’re Sylvan Lane and Aris Folley Write me at slane@thehill.com or @SylvanLane. You can reach my colleagues on the Finance team Naomi Jagoda at njagoda@thehill.com or @NJagoda and Aris Folley at afolley@thehill.com or @ArisFolley.

Let’s get to it.

Biden blasts McConnell, GOP on ‘dangerous’ debt ceiling gambit 

Minority Leader Mitch McConnell (R-Ky.) heads to the Senate Chamber on Monday, October 4, 2021 to give opening remarks.

President Biden is laying the groundwork to blame Senate Minority Leader Mitch McConnell (R-Ky.) if the country defaults on its debt for the first time in U.S. history.

  • Biden singled out McConnell on Monday for the GOP leader’s insistence that Democrats raise the federal borrowing limit on their own. 
  • Continued efforts to block bipartisan legislation on the debt ceiling, the president argued, would make Republicans responsible for the financial consequences.

Making the stakes clear, Biden told reporters after his speech he cannot guarantee that the U.S. will be able to pay its bills past Oct. 18 if GOP senators are unwilling to clear a path to keep the country solvent.

“I cannot believe that will be the end result, because the consequences are so dire,” he said. “But can I guarantee it? If I could, I would. But I can’t.”

Welp. We’ve got more here.

The context: The U.S. is on track to default on the national debt by Oct. 18, the date at which Treasury Secretary Janet Yellen said the government will run out of the cash and accounting measures necessary to stay solvent. 

  • While Republicans voted to raise the debt ceiling three times under former President Trump, they’ve blocked several Democratic attempts to do so.
  • GOP senators have vowed to block any Democratic attempt to raise the debt ceiling unless it comes through the budget reconciliation process, the vehicle for Biden’s multi-trillion-dollar social services and climate bill. 
  • That process allows for the legislation to pass with a simple majority, meaning Democrats don’t need any GOP support.

In a Monday letter to Biden released shortly before the president’s remarks, McConnell reiterated the GOP’s months-long position.

“Republicans’ position is simple. We have no list of demands. For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”

Why some budget veterans are worried: Democrats and Republicans have faced off over the federal debt limit for decades and have never allowed the U.S. to default due to the dire implications. But the GOP’s unwillingness to even consider voting for a debt limit increase has alarmed budget experts and Capitol Hill veterans involved in past standoffs.

“I’ve dealt with the debt limit many times before when I was up there. For some reason, this one has me more scared than any other,” said Bill Hoagland, senior vice president at the Bipartisan Policy Center, who spent almost three decades as a high-ranking Senate GOP budget aide.

“McConnell has won,” he continued. “With all due respect to the minority leader, you’re not being internally consistent. All you said was, ‘All we want is 51 votes.’ Then don’t set up a hurdle of 60 votes.”

Read more on the fight over the debt limit: 

A MESSAGE FROM NRHC

We Believe in Rental Housing

Single-family rental home companies are helping residents experiencing economic hardship and ensuring a ready supply of quality, affordable, well-located rental housing.

LEADING THE DAY

Biden to hit the road in economic agenda push

President Biden is getting off the sidelines in selling his economic agenda this week after one of the most difficult periods of his presidency thus far.

  • Biden is down in the polls and facing a quagmire over the debt ceiling and how to get a bipartisan infrastructure bill and a reconciliation package through Congress. 
  • He spent last week largely out of the public eye as the White House navigated a battle between centrists and liberals in the Democratic Party.

But the president will now take a more active role in front of the cameras as he seeks to unify the party, pass his agenda and put Republicans on the defensive, including with a trip to the swing state of Michigan on Tuesday.

The Hill’s Brett Samuels and Morgan Chalfant tell us what to expect.

A MESSAGE FROM NRHC

We Believe in Rental Housing

Single-family rental home companies are helping residents experiencing economic hardship and ensuring a ready supply of quality, affordable, well-located rental housing.

HOUND DOG

Fed’s internal watchdog will review trades by top officials

The Federal Reserve’s internal watchdog will review financial trades conducted by high-ranking officials last year amid growing backlash to how top central bank policymakers managed their portfolios amid the pandemic.

The bank’s Office of Inspector General, the bank’s independent ethics investigator, is set to review whether investment moves made by Fed officials were in line with internal ethics rules and federal law.

The review comes as the Fed faces growing backlash over trades made by three top officials as the bank was plotting and conducting an unprecedented attempt to stabilize financial markets amid the onset of the pandemic.

Read more

CHECK IS IN THE MAIL

USPS testing paycheck cashing, other financial services

The U.S. Postal Service has begun offering some financial services at a few East Coast locations in a possible move toward reviving postal banking. 

The branches offering the service are currently limited to select locations in Washington, D.C.; Falls Church, Va.; Baltimore; and the Bronx, New York. Services include cashing checks, paying bills, providing money orders and wire transfers.

A spokesperson for the Postal Service told The Hill that the program began Sept. 13 as a collaboration between the Postal Service and the American Postal Workers Union. They added customers could use their payroll checks to buy a gift card of up to $500.

Read more

Good to Know

U.S. Trade Representative Katherine Tai on Monday said she plans to raise “serious concerns” about China’s trade practices in direct talks with her Chinese counterpart in the coming days that will also focus on enforcing Beijing’s commitments under a Trump-era trade pact.

Here’s what else have our eye on:

  • Leaked offshore financial records dubbed the “Pandora Papers” were published by major news outlets this past weekend, exposing the secret assets and agreements from some of the world’s most wealthy and powerful leaders.
  • As of this summer, a majority of large cities and states had yet to use any of the funding they received as part of the Biden administration’s American Rescue Plan.

McDonald’s is planning to cut its greenhouse gas emissions so that the company is net-zero emissions by the year 2050.

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 Donald Trump Janet Yellen Joe Biden Katherine Tai Mitch McConnell
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