by pcake1
Republicans
Work requirements for entitlements – food stamps, Medicaid, etc.
Reduce spending and slow government spending to 1% growth (this is a no-go for the White House)
Recoup money aimed at pending recovery (White House agrees)
Reform and streamline infrastructure spending (possible agreement with White House) – basically making it easier but possibly more risky to build infrastructure
Cuts to Biden’s Clean Energy Pledge (no-go for White House) Democrats
Democrats are aiming at raising the debt ceiling without giving in to too many Republican changes to the nation’s budget and spending
These only a handful of negotiation points. There is also a much larger topic that is remaining under the radar – student loan payments to resume collection. This, imo, is probably the largest risk to markets and the economy aside from failing to reach a deal on easing the debt limit.
There is currently $1.635 trillion is outstanding federal student loan debt and repayment of student loans has been repeatedly paused and delayed. What happens when suddenly everyone has to begin paying off their student loans again? That’s a lot of money being redirected to paying off student loans rather consumer goods. This will cause a huge slowdown in consumer spending – hence the repeated pauses and reluctance to begin forcing everyone to pay off their loans.
Also, republicans are pushing for rate cuts wherever they can get them – meaning less money for government spending. Less money for programs such as the CHIPS act giving semiconductor manufacturers $50bn of taxpayer money to “compete” with other superpowers.
Markets have rallied, at least according to financial propaganda, because both republicans and democrats are negotiating for a deal and it appears likely the debt ceiling will be raised by the deadline. This is absolute garbage – raising the debt ceiling is NOT itself bullish. We don’t even know the details of changes to come when a deal is reached and the debt ceiling is inevitably raised.
This is a classic buy the rumor sell the news.
www.cbsnews.com/amp/news/debt-ceiling-demands-republicans-democrats/