On The Money — Democrats set up chaotic end-of-year stretch

On The Money — Democrats set up chaotic end-of-year stretch
© Greg Nash

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: Democrats are facing a challenging remainder of the year as they seek to pass key economic priorities. We’ll also tell you about calls for overhauling the debt limit and this year’s winners of the Nobel prize in economics.

For The Hill, we’re Naomi Jagoda and Aris Folley. You can reach Naomi at njagoda@thehill.com or @NJagoda and Aris at afolley@thehill.com or @ArisFolley. You can also reach our Finance team colleague Sylvan Lane at slane@thehill.com or @SylvanLane

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Let’s get to it.

Lawmakers face busy three months

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Democrats are facing a daunting stretch as the party struggles to get beyond internal battles to win approval of President Biden’s agenda — and deal with other crises that have effectively been punted to the Christmas season.

Democrats are entering the home stretch of the year with four big priorities: funding the government, raising the debt ceiling and passing both the bipartisan infrastructure bill and a sweeping social spending measure.

It’s a stretch that could make or break Biden’s agenda and will surely set up battles for next year’s midterm elections.

  • Disagreements persist between progressive and centrist Democrats over the size and the policy deals of the social spending measure.

  • Government funding is set to last through Dec. 3, meaning Congress will need to pass legislation by that date to prevent a shutdown.

  • Congress may also need to raise the debt limit again in December. Senate Majority Leader Charles Schumer (D-N.Y.) is pledging to pass another debt limit increase without using budget reconciliation, but GOP senators are insisting that Democrats pass the next increase on their own using the budget rules.

The Hill’s Jordain Carney has more here.

LEADING THE DAY

Growing number of Democrats endorse abolishing debt limit altogether

The House is scheduled to pass a short-term debt limit increase on Tuesday, after the Senate passed the measure last week. Some Democrats are calling for taking the debt limit out of Congress’s hands going forward.

The calls are coming from prominent voices such as House Budget Committee Chairman John Yarmuth (D-Ky.) and Treasury Secretary Janet Yellen, who want to eliminate the debt limit in its current form.

They argue that members of Congress should not be able to use the threat of a debt default as political leverage ever again — an approach that would respond to GOP stonewalling by playing some hardball of their own. 

  • Yarmuth last week joined Rep. Brendan Boyle (D-Pa.) in introducing a bill that would transfer the authority to raise the debt limit from Congress to the Treasury secretary. 

  • Yellen came out in support of getting rid of the debt limit in testimony last week before the House Financial Services Committee, arguing that it’s impractical to limit the Treasury’s ability to pay for spending already enacted by Congress and the president. 

  • It’s not clear that Democrats would be entirely unified about overhauling the debt limit, given that some fiscally minded centrists are skittish about making major changes to precedent or appearing dismissive of the national debt.

    Read more here from The Hill’s Cristina Marcos.

 

EYES ON THE PRIZE

The 2021 Nobel Prize for economics was awarded on Monday to three U.S.-based economists, the Royal Swedish Academy of Sciences announced.

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Half of the prize was awarded to David Card, a Canadian-born professor at the University of California, Berkeley, for his contributions to labor economics. The other half of the prize was awarded to Joshua Angrist, an American-born professor at the Massachusetts Institute of Technology, and Guido Imbens, a Dutch-born professor at Stanford University.

Peter Fredriksson, chair of the Economic Sciences Prize Committee, said the three prize winners' research "has substantially improved our ability to answer key causal questions, which has been of great benefit to society.”

Read more here.

 

FORECASTS FOR U.S. GROWTH SLIP

Economists for Goldman Sachs have lowered their forecasts for U.S. growth this year and next, citing a delayed recovery in consumer spending. 

In a new report, economists forecasted gross domestic product (GDP) expansion of 5.6 percent this year, down from the 5.7 percent previously estimated. The report also projected GDP growth of 4 percent in 2022, compared to the previous 4.3 percent estimate.

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The new estimates come just days after the Labor Department released data showing U.S. employers added 194,000 jobs last month, falling significantly short of economists’ expectations.

Read more here.

 

Good to Know

World Bank Group President David Malpass said on Monday the Earth is seeing "tragic reversals in development" due to the ongoing COVID-19 pandemic.

Here’s what else have our eye on:

  • U.S. oil prices hit a seven-year high Monday, marking an increase of more than 120 percent from just under a year ago.

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  • Airbnb CEO Brian Chesky said "the world is rooting against" Big Tech in an interview for "Axios on HBO," amid rising skepticism from investors and the general public.

  • Experts weigh in on the Pandora Papers, a massive leak revealing the secret assets of some of the world's most powerful figures that is putting new pressure on global leaders to crack down on shadowy finances.

 

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 Tuesday.