On The Money — GOP feuding over plan to fund government

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

The two top congressional Republicans are squaring off over government funding, and it may not bode well for their future.

We’ll also look at states stepping up for the Consumer Financial Protection Bureau and where Americans are pulling back their spending.

📝 But first, read up on the new batch of just-released JFK assassination records

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane and Aris Folley. Someone forward you this newsletter? Sign up here or in the box below.

Thank you for signing up!

Subscribe to more newsletters here

The latest in politics and policy. Direct to your inbox. Sign up for the On The Money newsletter

McConnell’s spending strategy fuels GOP ire

House Minority Leader Kevin McCarthy (R-Calif.) is taking public shots at Senate Republican Leader Mitch McConnell’s (Ky.) plan to pass an omnibus spending package before Christmas, fueling tensions between Senate and House GOP leaders.

McCarthy told Fox News host Sean Hannity on Tuesday evening that he hopes Senate Republicans won’t vote for the omnibus spending bill, arguing that they could save almost $100 billion in taxpayer money by voting instead for a stopgap measure that would freeze federal funding levels until next year when Republicans will take control of the House.

  • McConnell’s Senate allies say that McCarthy’s criticisms are “not helpful” to their efforts to pass a year-end spending package and avoid a government shutdown.   

  • And they worry this could be a preview of a potentially “challenging” working relationship between McConnell and McCarthy in the next Congress.

“They’re trying to jam us right before Christmas. Why would you ever move forward when there’s a change in power in 21 days where Republicans would have a stronger hand?” McCarthy said. “We wouldn’t be talking about adding more money. We’d talk about decreasing.”

The Hill’s Alexander Bolton breaks it down here.


Majority of states call on Supreme Court to review constitutionality of CFPB funding

More than three dozen attorneys general from red and blue states on Wednesday asked the Supreme Court to agree to decide the constitutionality of the Consumer Financial Protection Board’s (CFPB) funding structure.

The separate coalitions of Republican and Democratic state AGs urged the court to take up the case for sharply contrasting reasons.

  • Led by West Virginia, a group of 16 red states want the justices to affirm a lower-court decision that said the CFPB’s funding structure usurps Congress’s power over appropriations. 

  • A blue-state brief signed by Washington, D.C., New York and 20 other states backs the Biden administration’s request that the Supreme Court reverse the lower court ruling. 

  • The CFPB, which enforces consumer financial laws, was formed by the Dodd–Frank Wall Street reform law after the 2008 financial crisis and receives its funding, which totaled around $596 million last year, from the Federal Reserve.

In October, a decision by the U.S. Court of Appeals for the 5th Circuit said the CFPB’s funding scheme violates the Constitution’s Appropriations Clause, which establishes Congress’s power of the purse.

​​The Biden administration’s petition for Supreme Court review said Congress’s decision to fund the CFPB through annual transfers by the Federal Reserve was a valid use of its appropriations power.

The Hill’s John Kruzel dives into this here.


Fed’s 2 percent inflation target comes under fire from lawmakers, Wall Street

The Federal Reserve’s 2 percent target rate for consumer inflation is coming under scrutiny from economists, lawmakers and investors, who are all expressing doubts not only about whether 2 percent inflation is desirable in the post-pandemic economy but if it’s even possible.

“I doubt that the [Federal Reserve] alone can get us below about 4 percent,” Senate Banking Committee member Thom Tillis (R-N.C.) said Wednesday. “And so then the question is, what can we do or what can the administration do from a regulatory standpoint that will take the edge off?”

  • The reason some economists believe the Fed won’t be able to lower prices simply with interest rate hikes is that the current inflation has more to do with the profit levels of large businesses than wage costs. 

  • Interest rate hikes make it more expensive to buy things, which slows down economic activity and encourages companies to fire workers. This lowers their overhead so they can still turn a profit while charging less for their products.

The Hill’s Tobias Burns has more on this here.


Here’s where consumers spent less money in November as retail sales sank

Retail sales fell sharply in November despite reports of record-breaking Black Friday sales, according to data released Thursday by the Census Bureau.

Retailers and restaurants saw sales fall 0.6 percent between October and November, according to the new data, marring what is normally a strong month for the sector and a crucial source of strength for the U.S. economy. Steep drops in sales across several major categories could be a sign that U.S. consumers are finally reaching their breaking points with inflation.

“US households are feeling increasingly uneasy about having to drain their savings and using their credit cards to make up for the lost spending power and cover their purchases,” wrote Gregory Daco and Lydia Boussour, economists at consulting firm EY-Parthenon, in a Thursday analysis.

Here are the areas where consumers pulled back their spending the most.

  • Department stores: Sales at department stores fell 2.9 percent from October, the most of any retail subsector tracked by the Census Bureau. Consumer demand for large appliances, electronics, furniture, and other department store staples has fallen off after a rush of interest earlier in the pandemic, when homebound shoppers used their spare money on upgrading their living spaces. 

  • Furniture and home furnishings: The supply chain snarls and shipping backlogs that kept untold couches and dining room tables from reaching their new homes during the pandemic are finally easing. But higher prices driven by those delays and diminishing consumer interest in new furniture is taking a toll on the stores that sell it. 

  • Building materials and garden equipment: The steep slowdown in the housing market driven by higher interest rates has taken the steam out of housing construction and renovation, leading to a 2.6 percent drop last month and 3.2 percent drop in sales for building and garden supply stores.

Sylvan has the rest here.

Good to Know

President Biden on Thursday mocked former President Trump for teasing a “major announcement” that turned out to be a new line of digital Trump trading cards.

“I had some MAJOR ANNOUNCEMENTS the last couple of weeks, too…” Biden tweeted from his personal account.

The president listed a consumer price report that showed inflation easing in recent weeks, the signing of legislation to protect same-sex marriage, a prisoner swap that brought home WNBA star Brittney Griner after months of being imprisoned in Russia and falling gas prices as notable achievements for the White House in recent days.

Other items we’re keeping an eye on:

  • The Biden administration is restarting its program to send free COVID-19 testing kits through the U.S. Mail to any households that request them. 

  • Three Democrats on Thursday asked Amazon to detail how it plans to keep workers safe as one of its warehouses in Illinois that was struck by a tornado and collapsed last year is being rebuilt. 

  • Elon Musk is threatening to pursue legal action against an individual who set up a bot account on Twitter to track the movements of the billionaire’s private jet.

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.

For the latest news, weather, sports, and streaming video, head to The Hill.