Update: On Friday night, the Senate failed to garner enough votes to pass a continuing resolution prior to midnight, when government funding is set to expire.
Will the U.S. government keep the lights on? Will net neutrality make a comeback? We look at these and other policy issues that grabbed headlines this week.
Last week we wrote about the possibility of the GOP not being able to pass a budget, and it now appears they may have some trouble keeping the lights on. Axios reports the budget deadline at midnight on Friday could quite likely result in a government shutdown, unless the Republican leadership is able to satisfy both Democrats and ultraconservatives.
The House passed a continuing resolution budget Thursday night. The Senate did not; it adjourned with a plan by Majority Leader Mitch McConnell to vote on Friday. Senate Minority Leader Chuck Schumer has repeatedly signaled that Democrats will not vote for the continuing resolution until they are able to talk with Trump about DACA.
“Senate Minority Leader Chuck Schumer has repeatedly signaled that Democrats will not vote for the continuing resolution until they are able to talk with Trump about DACA.”
In the Senate, many Democrats won’t vote for a continuing resolution without addressing DACA, or Deferred Action for Childhood Arrivals. Republican Senators that have voiced opposition include Lindsey Graham (who wants immigration reform and increased military funding), Mike Rounds (who wants the government to stop issuing continuing resolutions), as well as Mike Lee and Rand Paul.
Prior to the passage of the continuing resolution on Thursday night, Freedom Caucus leader Mark Meadows had signaled a desire for decreased spending, immigration discussions and military pay raises. Democratic representatives from 16 states voiced opposition to the bill unless it includes Children’s Health Insurance Program, or CHIP, funding.
The Financial Times reports that President Trump may be complicating matters, with tweets addressing the need for any CHIP funding to be “part of a long-term solution,” not a continuing resolution. He has also raised the issue of “The Wall”: a contentious proposal that has come up in funding and appropriations talks. Although, the reference to a “deal” in Trump’s Tweet—“If there is no wall, there is no Deal!”—could refer to NAFTA or a variety of other things.
Axios also has a report on what a government shutdown might mean for you.
A group of U.S. state attorneys general filed a petition to challenge the Federal Communications Commission’s repeal of net neutrality, CNBC reports. Normally, such petitions wouldn’t materialize until after a ruling is passed into law—something that won’t happen until later this year. All Democrats in the Senate have signaled that they would vote to repeal the FCC ruling (thus reinstating net neutrality rules), as would Republican Sen. Susan Collins of Maine. Even if the Senate were able to find one more vote to reinstate net neutrality under the Congressional Review Act (allowing a simple majority to stop rulemaking), there is little chance of it being passed in the House—and an even smaller chance of the president signing it.
Instead, it appears the Democrats are trying to bring attention to the issue so they can campaign on it come November. Depending on who you ask, either a majority (52 percent, per this CNBC report), or a huge majority (83 percent, per this Hill report) are in favor of having net neutrality rules in place. That makes it a key target for Democratic campaigns that expect to use the issue to mobilize millennials.
Markets Bank on Tax Reform
Now that banks have reported their fourth-quarter earnings and expected 2018 outlook, the market has had a chance to try to quantify the tax bill, WSJ reports. On earnings calls over the past weeks, many banks reported huge losses as they paid the one-time tax on foreign earnings that the tax reform bill implemented, as well as reducing the value of deferred tax liabilities. Despite these massive hits to their balance sheets (Citigroup clocked the highest, at $22 billion), guarantees of lower tax bills led to positive sentiment among both executives and investors, as stocks roared upwards after earnings calls.
Meanwhile, BlackRock CEO Larry Fink cautioned against the push of activist investors and a desire to buy back shares with tax reform earnings in his 2018 Letter to CEOs this week, urging companies to use extra cash to increase the long-term value of their companies.
Ben Marsico is ACG Global’s manager of legislative and regulatory affairs.