Senate Republicans Block Bipartisan Border Deal

Plus: Deficits to top $2 trillion a year, CBO Says ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Good evening. The collapse of the Senate’s border deal is complete. And the Congressional Budget Office says U.S. debt is on pace to rise by nearly $20 trillion over the next decade. Here’s what’s happening, or not happening, as the case may be. Senate Republicans tanked the border deal they demanded. (Reuters) Senate Republicans Block Bipartisan Border Deal They Demanded Senate Republicans on Wednesday blocked a $118 billion package of border reforms and foreign aid —a deal they had insisted was needed to unlock more funding for Ukraine in its war against Russia. In a 49-50 vote, most Senate Republicans and a handful of Democrats rejected the bipartisan compromise that negotiators had crafted over months of talks, despite the inclusion of many of Republican demands on border policy and the endorsement of some solidly conservative groups, including the union of Border Patrol officers. The collapse of the deal leaves the fate of near-term funding for Ukraine and Israel in doubt, though Senate Majority Leader Chuck Schumer moved quickly to bring up a foreign aid package that strips out the border measures, a Plan B that had at one point been Plan A. “Republicans have said they can’t pass Ukraine without border. Now they say they can’t pass Ukraine with border. Today, I’m giving them a choice,” Schumer said on the Senate floor. “I urge Republicans to take yes for an answer.” It’s not clear when or whether Republicans would get to yes on the foreign aid, even as many GOP senators support that funding. An afternoon procedural vote was held open for hours as Republicans sought to regroup and get on the same page. Even if the Senate can pass an aid bill, it would face challenges in the House, where many Republicans oppose more funding for Ukraine. “We’ll see what the Senate does,” House Speaker Mike Johnson told reporters earlier in the day. “We’re allowing the process to play out and we’ll handle it as it’s sent over.” Dialing up the Republican dysfunction: The Senate’s border deal was doomed even before it was released. Yes, many Republicans had insisted on tougher laws to address the surge of migrants coming through the southern border as a prerequisite for foreign aid funding. But any momentum for a deal in the Republican conference faded fast after former president Donald Trump, intent on using the border as a potent political weapon in his campaign to win back the White House, blasted the bill and warned senators against backing it. Many Republicans rejected the deal even before it was final, while others did so within hours of its release. “The damage Republicans have done this week to their credibility cannot be understated,” Schumer said. Reaganite Republicans like to cite the former president’s willingness to accept half a loaf and go back for more, but many in today’s Republican Party prefer to starve so they can tell their base they’re on a hunger strike, standing up for conservative principles and refusing to work with Democrats. Sen. James Lankford, the Oklahoma Republican who was a lead negotiator on the deal, said Wednesday that an unnamed “popular commentator” had threatened him, saying, “If you try to move a bill that solves the border crisis during this presidential year, I will do whatever I can to destroy you.” Lankford and Sens. Susan Collins of Maine, Lis Murkowski of Alaska and Mitt Romney of Utah were the only Republicans voting for the bill. Democratic Sens. Ed Markey and Elizabeth Warren of Massachusetts, Bob Menendez of New Jersey, and Alex Padilla of California voted against it, as did Sen. Bernie Sanders, the Vermont independent. “Politics used to be the art of the possible,” Romney told reporters. “Now it’s the art of the impossible. Meaning, let’s put forward proposals that can’t possibly pass so that we can say to our respective bases, ‘Look how I’m fighting for you.’” Sen. Kyrsten Sinema, the Arizona independent who spent months negotiating the Senate border deal, slammed Republicans in the Senate for also kowtowing to Trump and choosing to campaign on the border crisis rather than address it. “Less than 24 hours after we released the bill, my Republican colleagues changed their minds,” she said on the Senate floor. “Turns out they want all talk and no action. It turns out border security is not actually a risk to our national security, it’s just a talking point for the election. After all of their cable news appearances, after all those campaign photo ops in the desert, after all those trips to the border, this crisis isn’t actually much of a crisis after all. Sunday morning, there was a real crisis at the border. Monday morning, that crisis magically disappeared.” Bicameral chaos: The dysfunction hasn’t been limited to the Senate. It has been even more pronounced in the House. “Democracy is messy,” Johnson told reporters Wednesday morning in trying to explain away the embarrassing double debacle of Tuesday night’s pair of failed House votes, one to impeach Homeland Security Secretary Alejandro Mayorkas and the other on a standalone aid package for Israel. “You’re seeing the messy sausage-making, the process of democracy play out,” Johnson said. “It’s not always clean. It’s not always pretty. But the job will be done at the end of the day.” But messy doesn’t fully describe the magnitude of current Republican dysfunction. [Axios]( termed Tuesday’s failed votes, which happened in quick succession, “10 minutes of humiliation that will live in House lore,” adding: “Even in an era of ousted speakers and wild, daily internal disarray, Tuesday night's back-to-back defeats for House Republicans were epic.” The humiliation reportedly has intensified the questions swirling about Johnson’s leadership, well beyond his ability or inability to count votes. “Inside Johnson’s leadership circle, there are plenty who doubt his decision-making capability while being forced to begrudgingly execute his questionable strategies,” Punchbowl News [reported](. “And among rank-and-file House GOP lawmakers, there are a lot of people scratching their heads about where he’s leading them.” Johnson tried to downplay the significance of Tuesday’s failures. “We’re governing here,” he said, urging everyone to take a deep breath. It’s painfully obvious, though, that House Republicans are not governing and instead are trying to somehow use their unworkably thin majority to extract unadulterated conservative victories or lay the groundwork for a win by Donald Trump in November. Deficits to Soar Over $2 Trillion a Year, CBO Says The federal government’s $1.6 trillion annual budget deficit will grow significantly larger over the next 10 years, according to the [latest outlook]( from the Congressional Budget Office, released Wednesday. The CBO estimates that deficits will top $2 trillion a year in 2031, rising to $2.6 trillion by 2034 and totaling $19 trillion over the coming decade. Relative to the size of the economy, the federal budget deficit will equal 5.6% of gross national product in 2024, rising to 6.1% the following year. That represents a level of deficit spending about 50% higher than the post-war norm, and one rarely seen over the last 75 years. “Since the Great Depression, deficits have exceeded that level only during and shortly after World War II, the 2007–2009 financial crisis, and the coronavirus pandemic,” CBO said. The larger deficits will drive the national debt higher, with debt owned by the public rising from 99% of GDP to 116% of GDP by 3024 — which would be the highest level on record. Total debt owned by the public is projected to top $48 trillion in 2024, up from the current $27 trillion. Interest costs rising: Interest payments on the national debt are a major part of the deficit, and the growth of those payments accounts for about 75% of the increase in the deficit between 2024 and 2034. At the start of the 10-year window, interest costs roughly equal discretionary spending on both defense and non-defense activities. But by 2034, interest costs of about $1.6 trillion per year are projected to be about one and a half times bigger than each. The dynamics of an aging population are also putting upward pressure on deficits, as mandatory spending on retirement and medical benefits in Social Security and Medicare rises. Some improvement: Thanks to legislation passed by Congress and a surge of immigration, federal budget deficits will be smaller over the next 10 years than previously estimated. Between 2024 and 2033, deficits will be about 7% smaller than projected last year, CBO said, with the economy being about $7 trillion larger and federal revenues $1 trillion higher. The restraints on the growth of the deficit come from the Fiscal Responsibility Act, which capped spending as part of a deal to raise the debt limit. The FRA reduces spending by about $1.4 trillion over a decade. “The Fiscal Responsibility Act is the largest deficit-reduction bill in over a decade, and hopefully can be a starting point for further conversation in looking at other parts of the budget and tax code to really change our debt trajectory,” Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, a nonpartisan think tank that advocates for smaller deficits, [told The Washington Post](. Still, although the latest projections show a reduction in estimated accumulated debt compared to last year, the numbers remain dauntingly large. And it’s worth remembering that CBO projections are based on the assumption that Congress will not cut taxes or adjust spending higher over the next 10 years relative to the current baseline — an assumption that has usually proven to be incorrect. --------------------------------------------------------------- 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 - [Senate GOP Blocks Border Deal; Future of Ukraine, Israel Aid Unclear]( – Washington Post - [Senate Republicans Block Bipartisan Border Deal and Foreign Aid Package Following Months of Negotiations]( – CNN - [Senate Republicans Block Bipartisan Border Package, Scuttling Deal They Had Demanded From Democrats]( – Associated Press - [Schumer to Push Aid to Ukraine and Israel Without a Border Deal]( – Bloomberg - [The Border Bill’s Collapse Leaves Some Republicans Dazed and Confused]( – Semafor - [U.S. Debt on Pace to Top $54 Trillion Over Next 10 Years]( – New York Times - [Federal Budget Deficit Expected to Soar to $2.6 Trillion in 2034, CBO Says]( – CNN - [Biden-McCarthy Deal Will Limit Debt Growth by $1.4 Trillion, CBO Says]( – Washington Post - [US Treasury’s Biggest-Ever 10-Year Auction Garners Solid Demand]( – Bloomberg Views and Analysis - [The United States Has Been a Bulwark for Ukraine. What Happens if Support Collapses?]( – David E. Sanger, New York Times - [Trump’s Border Intervention Gives Biden a Chance to Shift from Defense to Offense]( – Peter Baker, New York Times - [Republican Turmoil Over Border, Ukraine Aid Consumes Congress]( – Steven T. Dennis, Bloomberg - [Broken Congress: It Can’t Fix the Border, Fund Allies or Impeach Mayorkas as GOP Revolts]( – Lisa Mascaro, Associated Press - [Some Backbone! GOP Congressman Torches Trump on Border]( – Tori Otten, New Republic - [The Deficit Could Shrink This Year. America Still Has a Serious Budget Problem]( – Andrew Duehren, Wall Street Journal - [Why Were Inflation Hawks Wrong?]( – Ryan Cooper, American Prospect - [A Soft Landing for the US Economy Could Slip Away]( – Conor Sen, Bloomberg Copyright © 2024 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. 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