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Senate Committee Approves Massive Highway Authorization Bill
The Senate Environment and Public Works (EPW) Committee approved America's Transportation Infrastructure Act (ATIA) of 2019 last Tuesday. The bill, which is being touted as the largest highway legislation in history, authorizes $287 billion over five years, including $259 billion for formula programs aimed at maintaining and repairing America's roads and bridges. According to the Committee, the bill represents an overall increase of over 27 percent from the Fixing America's Surface Transportation (FAST, Pub. L. No. 114-94) Act authorizing levels. The bill also includes a new subtitle on climate change that is dedicated to reducing carbon emissions by the transportation sector. The new subtitle creates a handful of new formula and competitive grant programs aimed at reducing emissions, while also enhancing the resiliency of the nation's infrastructure system. It remains unknown when the bill might be considered on the Senate floor.
A detailed overview of the ATIA can be viewed here.
For more information,
please contact
Matthew McKenna, Director of the Great Lakes Washington Program at the Northeast-Midwest Institute
.
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The Fed Cuts Interest Rates Due to Trade Tensions, Hostilities Continue to Escalate with More U.S. Tariffs and Chinese Currency Devaluation
Wednesday, the Federal Reserve announced that it would cut interest rates for the first time in over a decade, reducing the benchmark that guides national interest rates by .25%. As
reported by
The Economist, Chairman Jerome Powell attributed the shift from the trend of raising interest rates to "weak global growth, trade policy uncertainty and muted inflation."
Markets have generally been optimistic about the future global financial outlook, with many institutional experts predicting the trade hostilities between the U.S. and China would subside in the comings weeks or months. Every time the Trump Administration has claimed it was in the brink of a deal with China to resolve the dispute, it has quickly walked back the claim or it simply never came to fruition.
Thursday afternoon, that trend continued as the President went to Twitter to voice his frustrations with the Chinese negotiations. He claimed China was trying to renegotiate the deal the two governments allegedly struck in recent months, though there is little to no indication that a tangible deal ever existed. President Trump also stated that he was imposing a 10% tariff on an additional $300 billion of Chinese goods imported into the U.S., adding to the 25% tariff already in place on $250 billion of different Chinese goods imported by the U.S.
These new tariffs will cover commonly used products that had thus-far avoided being drawn into the trade war, like iPhones. After the announcement of the new tariffs, stocks dropped despite the decease in interests rates that was announced less than 36 hours ago.
The additional tariffs will go into effect on September 1st. Meanwhile, China retaliated to the latest U.S. tariffs by significantly devaluing its currency, a move that will make Chinese exports to the U.S. more attractive and U.S. exports to China less attractive. Ironically, President Trump has continually criticized China for currency devaluation, despite the U.S. Department of Treasury declining to label China as a currency manipulator in its last five reviews. Now, China is actually manipulating its currency, but only after the U.S. forced China's hand.
At the time of writing, all the major stock indexes were down at least 2.5 percent.
For more information,
please contact
Eric Heath
, Senior Policy Counsel for the Mississippi River Basin Program at the Northeast-Midwest Institute
.
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Budget Deal Signed as Congress Departs for August Recess, Averting Government Shutdown and Debt Ceiling Crisis
The Senate voted 67-28 on Thursday to pass a two year budget and debt ceiling agreement. With the House already on August recess and the Senate about to follow suit, time was running out for passage of the agreement. Despite President Trump's previous opposition to raising the debt ceiling or increasing domestic spending, he signed the bill into law on Friday.
In July, Secretary of Treasury Steve Mnuchin warned Congressional leaders that the U.S. could run out of money by the beginning of September, putting pressure on them to pass a deal before departing for the Summer. Neither chamber will return until the second week of September.
The $2.7 trillion budget deal raises spending caps for both defense and non-defense spending over the next two years by $320 billion each. It also suspends the debt ceiling for two years until July of 2021.
This agreement averts both a government shutdown and a credit rating nightmare for the country.
For more information, please contact Eric Heath, Senior Policy Counsel for the Mississippi River Basin Program at the Northeast-Midwest Institute.
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This Week in Washington
In the Senate:
The Senate is currently on August recess.
In the House:
The House is currently on August recess.
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NEMWI: Strengthening the Region that Sustains the Nation
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