US Hits $34 Trillion in Debt

Plus: The new year starts with shutdown drama ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Tuesday and happy new year! We’re back, but Congress doesn’t return until next week and President Joe Biden is just heading home to the White House from his “working vacation” in St. Croix tonight, so let’s ease into the new year by looking ahead to what awaits lawmakers in the first weeks of 2024: a hugely consequential fight over government funding. Congress kicked much of its year-end agenda into 2024. (Yuval Rosenberg) New Year, Same Shutdown Drama When the House and Senate return next week, they will have just days to try to avert a partial government shutdown. As a result of the tiered stopgap funding bill that Congress passed in November, lawmakers will start the year facing a January 19 deadline to again fund some federal agencies and programs, with another deadline for other portions of the government looming February 2. The chances of avoiding that shutdown do not look particularly good, especially since the House and Senate have yet to set a topline spending level for fiscal year 2024 and Speaker Mike Johnson has said he’s done with short-term spending extensions. Johnson, who will visit the southern border with House Republicans this week, has also drawn a hard line on the ongoing talks over border policy changes being negotiated in order to unlock an emergency supplemental spending package providing aid to Ukraine, Israel and Taiwan. Because Congress has failed to pass full-year appropriations for fiscal 2024 and the federal government started the new year operating under a continuing resolution, or CR, the spending limits set by last year’s Fiscal Responsibility Act have officially taken effect. That law, which codified that deal to raise the debt limit agreed to by then-Speaker Kevin McCarthy and the White House, sets the defense budget at an interim level of $850 billion (down from $886 billion) and limits the non-defense budget to $736 billion, up from $704 billion, according to a [memo]( from the White House Office of Management and Budget. But those limits won’t be enforced until April 30, and the $1.59 trillion total for discretionary spending has been the subject of much wrangling. Further complicating matters, Punchbowl News [reported]( Monday that House Republican leaders are making new demands in the negotiations over the topline number, seeking to speed up IRS funding cuts that were part of the debt-limit deal and to rescind Covid response funds. The outlook: Congress could, in theory, still pass its annual funding bills, but it may not have enough time to do so, making another stopgap the leading option to prevent a partial shutdown, according to Wolfe Research policy analyst Tobin Marcus, who told clients in a research note cited by [MarketWatch]( that he expects “the initial action in January will focus on whether Johnson is willing to pass a stopgap or if he will choose instead to plow into a shutdown.” MarketWatch’s Victor Reklaitis also notes that Brian Gardner, the chief Washington policy strategist at investment bank Stifel, said that a partial shutdown is the most likely scenario. And as the Republican presidential primary advances toward the Iowa caucuses on January 15 and the New Hampshire primary eight days later, Gardner reportedly noted that the congressional negotiations also face the potential risk of being torpedoed by comments from former president Donald Trump. A border deal negotiated by the Senate could also still face trouble passing the House. Politico [reports]( that Democrats are a bit less concerned that those talks would cede too much to Republicans, noting that “the tone on the left — which has been a useful proxy for the likelihood of a deal — has shifted from grave alarm to cautious optimism that a bill that would satisfy House Republicans is now out of reach.” One appropriator, Republican Sen. John Kennedy of Louisiana, told [The Hill]( that he sees lawmakers pursuing one of two options: either a year-long CR or an omnibus spending package of the sort House Republicans have staunchly opposed. “If I were betting between the omnibus and the CR,” he said, “I would bet on the CR right now.” Number of the Day: $34,001,493,655,565.48 The gross U.S. national debt surpassed $34 trillion last Friday, according to the Treasury Department’s [daily debt tracker](. The debt grew quickly in 2023, topping $32 trillion in June and $33 trillion in September, and it continues to increase at a rapid clip. It is expected to reach the $35 trillion mark as soon as March of this year. It’s the Economy, Stupid? Top U.S. Priorities in 2024 Americans are becoming more concerned about immigration and U.S. involvement overseas, but the economy remains the No. 1 issue overall for voters as we head into the 2024 election year, according to a [new poll]( from the Associated Press-NORC Center for Public Affairs Research. Asked what problems they think the government should be focused on this year, more respondents (76%) cited economic issues than topics in any other category. Inflation was the most frequently cited economic concern, with 30% of respondents mentioning it. Unemployment (11%), poverty (16%) and government spending and debt (13%) also earned mentions. As with many topics, respondents showed significant partisan differences on economic issues. About 85% of Republicans cited an economic issue as a top concern, compared to 65% of Democrats. Republicans were more focused on inflation, with 41% of Republicans saying it was a top concern compared to 24% of Democrats. And Republicans were more concerned with debt, the deficit and government spending, with 22% citing those issues, compared to just 7% of Democrats. Overall, 13% of respondents cited fiscal issues as a top concern for 2024 — a big jump from the 5% who did so last year. The increase is likely related to the growing attention to the rising debt, repeated showdowns over the debt limit last year and the ongoing challenge of funding the government in the current fiscal year. The nationwide poll of 1,074 adults was conducted between November 30 and December 4, 2023. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [Government Shutdown Looks Likely This Month, Analyst Warns]( – MarketWatch - [Congress Faces Crisis at Home and Abroad as 2024 Deepens Partisan Division]( – CNN - [House GOP Majority to Shrink to 2 With Ohio Lawmaker’s Early Resignation]( – The Hill - [In Reversal, U.S. to Heighten Efforts to Collect Billions in Unpaid Covid Loans]( – Washington Post - [Millions of Americans Could Lose Internet Aid Months Before the 2024 Election]( – Politico - [IMF Chief Says Fed Is ‘Definitely’ Securing Soft Landing, Warns of Fragmentation]( – Bloomberg - [Prices of Hundreds of Drugs Expected to Rise This Month: New Analysis]( – Axios - [More Americans Can Now Get Insulin for $35]( – CNN - [Electric Car Models Eligible for $7,500 Tax Credit Cut to 13]( – Bloomberg - [These Voters Will Decide the 2024 Election. They Don’t Like What They See]( – Wall Street Journal Views and Analysis - [4 Ways the Government Funding Fight Could Play Out in January]( – Aris Folley, The Hill - [The Debt Matters Again]( – German Lopez, New York Times - [There’s a Reason the U.S. Economy Soared and Others Were Mediocre]( – Heather Long, Washington Post - [Will the Economy Help or Hurt Biden ’24?]( – Paul Krugman and Peter Coy, New York Times - [The People’s Inflation Is Still a Big Problem]( – Kathryn Anne Edwards, Bloomberg - [2024 Will Mark the End of the Post-Pandemic Economy]( – Allison Schrager, Bloomberg - [Is America on the Mend?]( – Paul Krugman, New York Times - [I Surrender. A Major Economic and Social Crisis Seems Inevitable]( – Mitch Daniels, Washington Post - [RIP ‘Worker-Centered Trade’: Biden’s Global Economic Agenda Stalls]( – Gavin Bade, Politico - [Congress’ 2024 Health Policy Agenda]( – Chelsea Cirruzzo and Ben Leonard, Politico - [The Root Causes of Congressional Dysfunction]( – Steven Pearlstein, Politico - [Caregivers Helped Us Be a Family. Everyone Should Have That Option]( – Rachael Scarborough King, New York Times Copyright © 2023 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](