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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.
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 ShelbySenate spending talks go off the rails Senate panel advances 5B defense spending bill This week: Congress returns for first time since mass shootings 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 trouble was immediately apparent on Tuesday as the Senate Appropriations Committee started work on its first bill.
- With just 20 days until the new fiscal year begins, the panel was meant to begin a belated markup process with the two largest spending bills covering the Pentagon, and the Departments of Labor, Health and Human Services, and Education (Labor-H).
- But the Labor-H markup was abruptly canceled, as lawmakers clashed over a proposed amendment from Sen. Patty MurrayPatricia (Patty) Lynn MurrayPush on ‘surprise’ medical bills hits new roadblocks Teachers union calls on Congress to pass gun legislation Overnight Health Care: Planned Parenthood to leave federal family planning program absent court action | Democrats demand Trump withdraw rule on transgender health | Cummings, Sanders investigate three drug companies for ‘obstructing’ probe MORE (D-Wash.) to block the Trump administration’s Title X rule, which would prohibit funds going to providers that offer information about abortion.
- Republicans argue the amendment would be a “poison pill” under a handshake deal struck by leadership and the White House this year. Democrats say senators should be on the record with their positions on the issue.
- There were also disagreements on funding levels linked to the wall, as Democrats argued that funding for the Labor-H bill could end up financing the border wall in some capacity.
Read more: Senate Democrats are planning to force a vote to try to nix President TrumpDonald John Trump5 things to watch in critical NC race Remembering 9/11: How the suicide attacks led to two vastly different wars Conservative strategist calls Steyer’s 2020 bid a ‘vanity run’ MORE‘s emergency declaration transferring military construction money to fund the U.S.-Mexico border wall.
ON TAP TOMORROW
- A House Financial Services subcommittee holds a hearing on private market exemptions and initial public offerings, 10 a.m.
- A House Financial Services subcommittee holds a hearing on the macroeconomic impacts of climate change, 2 p.m.
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 MnuchinThe Hill’s 12:30 Report: Bolton out as national security adviser Trump fires national security adviser Bolton Trump faces tough path to Fannie Mae, Freddie Mac overhaul MORE, Housing and Urban Development Secretary Ben CarsonBenjamin (Ben) Solomon CarsonTrump faces tough path to Fannie Mae, Freddie Mac overhaul On The Money: Congress faces sprint to avoid shutdown | McConnell sees need for short-term funding | Trump vows to release report on finances before election | White House to consider tax-cut package next year | CBO says deficit surpassed T Watchdog faults EPA response to lead paint hazards 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.
- 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.
- Sen. Sherrod BrownSherrod Campbell BrownHill editor-in-chief: Sanders has to ease fears among seniors on ‘Medicare for All’ Bank watchdogs approve rule to loosen ban on risky Wall Street trades Dayton mayor assigned extra security following verbal spat with Trump MORE (Ohio), the banking panel’s ranking Democrat, condemned the Trump plan as a “cream-skimming privatization scheme.”
- Sen. Mark WarnerMark Robert WarnerGOP senators object to White House delaying home-state projects for border wall Report highlights Instagram, deepfake videos as key disinformation threats in 2020 elections GOP Sen. Johnny Isakson to resign at end of year MORE (D-Va.), a moderate who has played a leading role in previous housing finance negotiations, also doubted the administration’s ability to support lending to troubled consumers if their plan to downsize Fannie and Freddie succeeded.
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
- Comedian Hasan Minhaj testified before a congressional committee Tuesday about student loans, telling lawmakers that crushing debt is “sidelining millions of Americans.”
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