Update: Senate Democratic Leader Chuck Schumer seems very positive on the bipartisan agreement too (but can’t resist a few jabs at President Trump)…
“This agreement is a good agreement for the American people, and takes the threat of a government shutdown off the table.
The Bill “ensures taxpayer dollars aren’t used to fund an ineffective border wall, excludes poison pill riders, and increases investments in programs that the middle-class relies on, like medical research, education, and infrastructure”
“Early on in this debate, Democrats clearly laid out our principles..” and the deal “reflects those principles.”
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As we detailed eariler, one of the biggest political overhangs facing the market may have just been removed, when moments ago AP and other newswires reported that House Democrats and Republicans are said to have reached a $1 trillion spending deal to keep the government – which is currently operating thanks to a last minute one-week stopgap measure enacted on Friday – open until October 1.
BREAKING: Congressional Republicans, Democrats reach agreement on $1T measure to fund government until Oct. 1.
— AP Politics (@AP_Politics) May 1, 2017
According to Washington Post, negotiators from both parties reached an agreement on a spending package to fund the government through the end of September, alleviating fears of a government shutdown later this week. Congress is expected to vote early this week on the package, with the bipartisan agreement expected to include increases for military spending and border security, a major priority for GOP leaders in Congress.
Several other important White House initiatives were rejected by the Republican and Democratic negotiators, including money for a wall on the U.S.-Mexico border that Trump has argued is needed to stop illegal immigrants and drugs. Instead, congressional negotiators settled on $1.5 billion more for border security, including more money for new technology and repairing existing infrastructure, the aide said.
The Trump administration had earlier backed away from a threat to end federal subsidies for low-income people to get health insurance through Obamacare, the program that Trump had pledged to repeal. Puerto Rico would get an emergency injection of $295 million in additional funding for its Medicaid health insurance program for the poor, according to the aide who asked not to be identified. The impoverished island, which is a U.S. territory, is facing a severe Medicaid funding shortfall. Democrats also fended off potential cuts to women’s healthcare provider Planned Parenthood, while House Democratic leader Nancy Pelosi applauded a nearly $2 billion hike in funds for the National Institutes of Health this year.
Coal miners and their families facing the loss of health insurance next month would get a permanent renewal under the spending bill.
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There is a non-trivial chance the Sunday night announcement is merely a trial balloon, because as the WaPo adds “the details of the agreement were not yet clear on Sunday night” which would suggest that there is a high likelihood that whatever tentative deal was reached, ultimately falls through.
For now, however, this is good news, and it has sent both the pound and yen sliding, and the dollar rising on hopes that politics will not be a major risk factor for at least 5 months.
House Republicans have struggled in recent weeks to keep their members focused on spending as White House officials and conservatives pressed leaders to revive plans for a vote on health-care legislation. The health-care fight became tangled last week with the spending talks as leaders worried that forcing a vote to repeal the Affordable Care Act risked angering Democrats whose votes are necessary to avoid a government shutdown.
Another possible threat is that the GOP pushes on with Obamacare repeal, a gambit which may prompt Democrats to withdraw any support they voiced for Sunday’s “deal.”
GOP leaders worked last week to determine if there are enough votes in the House to pass a revised health-care bill brokered by the White House, the head of the conservative House Freedom Caucus and a top member of the moderate Tuesday Group. House Speaker Paul D. Ryan (R-Wis.) and his top lieutenants announced Thursday that they did not have sufficient votes to be sure the health-care bill would pass but vowed to press on.
“We’re still educating members,” House Majority Leader Kevin McCarthy (R-Calif.) told reporters after a late-night health care meeting last week. “We’ve been making great progress. As soon as we have the votes, we’ll vote on it.”
And now, in the spirit of trial balloons everywhere, we await the denial from yet other “unnamed sources.”