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Source: reuters

Key points:

Republicans in the U.S. Congress scrambled on Thursday to resolve nettlesome tax and health care provisions in their sweeping tax-cut and spending bill on Thursday as President Donald Trump pressed them to pass it by a July 4 deadline.

Trump plans to promote the package — which nonpartisan analysts say will add about $3 trillion to the federal government's $36.2 trillion in debt — at an afternoon White House event that will feature truck drivers, firefighters, ranchers and other workers who the administration says would benefit from the bill.

But Senate Republicans have yet to produce their version of their legislation ahead of a possible weekend vote, and the overall shape of the bill appeared more uncertain after a nonpartisan referee ruled that several healthcare provisions violated the complex process Republicans are invoking to bypass Democratic opposition.

Those elements collectively represented more than $250 billion in health care cuts, according to Democratic Senator Ron Wyden of Oregon. Democrats have lined up against the bill, portraying it as a wasteful giveaway to the wealthiest Americans.

Senate Republicans have spent the last several weeks revising a bill that passed the House of Representatives by one vote last month. The nonpartisan Congressional Budget Office said the House version would add $2.8 trillion to the debt over the next decade, when factoring in its economic effects, and noted the toll would rise to $3.4 trillion when accounting for interest expenses,

It was unclear on Thursday whether Republicans could opt to rework the bill to comply with the complex budget rules, as they have already done with some elements, or seek to override the decision by the Senate parliamentarian.

"It's pretty frustrating. But you know, what we've got to do is work through this process and come up with something that you know, fulfills the Trump agenda and also has fiscal sanity,” Senator Rick Scott, a Florida Republican, told reporters. "Look, I believe this bill is going to pass. I know there's a lot of work left to do."

A source familiar with the situation said Senate Republicans still had a path forward and described the July 4 deadline as achievable.

The bill encompasses much of Trump's domestic agenda. It would extend his 2017 tax cuts, boost immigration enforcement, zero out green-energy incentives and tighten food and health safety-net programs. Nonpartisan analysts say the bill would effectively shift wealth from younger Americans to the elderly.

DEBT DEADLINE AHEAD

Trump has called on Republicans to pass the bill by the July 4 Independence Day holiday, but lawmakers face a far more significant deadline later this summer, when they need to raise their self-imposed debt ceiling or risk triggering a catastrophic default.

Republicans who control both chambers of Congress broadly support the package, but they can afford to lose no more than three votes in either chamber. They remain at odds over several provisions — notably a proposed tax break for state and local tax payments and a tax on health care providers that some states use to boost the federal government's contribution to the Medicaid health plan.

The bill would limit those "provider taxes," which nonpartisan watchdogs portray as an accounting trick that drives up Medicaid costs. Rural hospitals and other health providers warn that those cuts could force them to scale back operations or go out of business, and some Senate Republicans have sought to soften that provision.

The provider tax is one of several health and education provisions that has been ruled out of bounds by the Senate parliamentarian, creating further uncertainty about its status.

"This would be a chance to get it right and to protect rural hospitals," said Republican Senator Josh Hawley of Missouri, a critic of the provider-tax restrictions.

The parliamentarian also flagged provisions that would deny student aid and Medicaid health coverage to some immigrants, as well as a provision that would prohibit Medicaid funding for transgender medical care.

Lawmakers a half-century ago decided that the Senate parliamentarian, currently Elizabeth MacDonough, would hold the power to determine what policies they can enact through "budget reconciliation," the process that Republicans are using now to bypass the chamber's "filibuster" rule that requires 60 of the 100 members to agree on most legislation.

Republican Senator Tommy Tuberville of Alabama wrote that she should be fired.

"Her job is not to push a woke agenda," Tuberville wrote on social media. Others, notably Senate Republican Leader John Thune, have said they will not to overturn her rulings.

Source: Reuters

European Union leaders are set to debate their strategy in response to President Donald Trump’s trade war, with the likely choices coming down to accepting an unbalanced deal or risking escalation by striking back.

European Commission President Ursula von der Leyen will brief EU leaders on the status of negotiations with the US over dinner Thursday as several capitals push the commission, which handles trade matters for the bloc, to go for a quick deal with the US even if it means that many of Trump’s tariffs stay in place, according to people familiar with the matter.

The EU needs to reach an agreement with Trump by July 9, when tariffs on nearly all of the bloc’s exports to the US increase to 50%. The US president says the EU takes advantage of US with its goods surplus and perceived barriers to American trade.

“We hope that the discussions with the US continue in an energetic mood in the coming days — the July deadline is coming soon,” Luxembourg Prime Minister Luc Frieden told reporters on his way into the summit. “I wish the commission good luck.”

Negotiations have intensified in recent weeks and detailed discussions are taking place on both tariffs and non-tariff barriers, as well as on key sectors, strategic purchases and regulatory matters the EU is hoping to address through its simplification agenda, said the people, who spoke on the condition of anonymity.

The US is asking the EU to make what the bloc’s officials see as unbalanced and unilateral concessions, Bloomberg reported earlier. Discussions on critical sectors — such as steel and aluminum, automobiles, pharmaceuticals, semiconductors and civilian aircraft — have been particularly difficult.

Officials believe the best-case scenario remains an agreement on principles that would allow the negotiations to continue beyond an early July deadline.

Alongside a 10% universal levy on most goods — which is currently facing a US court challenge — Trump has introduced 25% tariffs on cars and double that on steel and aluminum based on a different executive authority. He’s also working to expand tariffs on other sectors, including pharmaceuticals, semiconductors and commercial aircraft.

Many of those duties are expected to stay, regardless of an agreement with the Trump administration, according to the people. The EU, which has been seeking a mutually beneficial deal, will assess any end-result and at that stage decide what level of asymmetry — if any — it’s willing to accept.

The EU’s industry chief, Stephane Sejourne, told Bloomberg this week that the EU would need to respond to any tariffs — including a baseline 10% levy — with countermeasures. But some EU leaders, including Italy’s Giorgia Meloni have indicated that they could live with some levies if it allows for a rapid deal that avoids an escalation in the conflict.

“When we discussed 10% with companies, it isn’t particularly impactful for us,” Meloni told reporters in The Hague Wednesday after the NATO summit. “I think a decision at 10% would enable us, as far as we’re concerned, to keep working on things that we care about.”

In parallel to ongoing talks with the Trump administration, the EU continues to prepare counter-measures should negotiations fail to yield a satisfactory result, or if the bloc opts to move ahead with measures to correct any imbalances.

“My recommendation is that we continue doing everything we can to influence the Americans not to engage in a trade war,” Danish Prime Minister Mette Frederiksen said Thursday. “If the Americans maintain this stance, then of course we’ll have to respond in kind.”

The EU has approved tariffs on €21 billion ($24.6 billion) of US goods that can be quickly implemented in response to Trump’s metals levies. They target politically sensitive American states and include products such as soybeans from Louisiana, home to House Speaker Mike Johnson, as well as agricultural products, poultry, and motorcycles.

The bloc has also prepared an additional list of tariffs on €95 billion of American products in response to Trump’s so-called reciprocal levies and automotive duties. They would target industrial goods including Boeing Co. aircraft, US-made cars, and bourbon. The EU is also consulting member states to identify strategic areas where the US relies on the bloc, as well as potential measures that go beyond tariffs.

One concern among officials is that any lopsided arrangement could see European companies shift investments and production to the US, one the people said.

“Every effort has to be made to get a landing zone that we can live with,” Irish Prime Minister Micheal Martin said. “If a tariff dispute ensues, no body wins, there is no painless tariff war.”

Source: Bloomberg Europe

Source: finance.yahoo

Source: finance.yahoo