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      US Congress averts shutdown but the deadlock remains over Ukraine aid

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      Republican and Democratic leaders in Congress managed to ward off a damaging federal government shutdown with a last-minute compromise reached this week – but remain deadlocked over approving further military assistance for Ukraine and Israel, and tightening immigration laws.Congress was up against a Friday midnight deadline to reauthorize government spending or see a chunk of the federal departments cease much of their operations.On Wednesday, top lawmakers including Chuck Schumer, the Democratic Senate majority leader, and Mike Johnson, the Republican House speaker, announced they “are in agreement that Congress must work in a bipartisan manner to fund our government”, and the following day lawmakers passed a short-term spending measure that Joe Biden signed on Friday.But similar agreement has proven elusive when it comes to funding both the continuation of Ukraine’s grinding defense against Russia’s invasion and Israel’s assault on Gaza.Last month, a bipartisan Senate agreement that would have paired the latest tranche of military aid with measures to limit the number of undocumented people and asylum seekers crossing into the country from Mexico was killed by Republicans – reportedly so Donald Trump, who is on the cusp of winning the Republican presidential nomination, could campaign on his own hardline approach to immigration reform.The Senate then approved a $95bn bill that would authorize aid to Ukraine, Israel and Taiwan without changing policy at the border, but Johnson has refused to put it to a vote in the House. Meanwhile, the government funding saga isn’t quite over. This week’s agreement pushed the funding deadlines for the two bills authorizing spending to 8 and 22 March. In their joint statement, the House and Senate leaders said lawmakers would vote on the 12 separate appropriations bills funding federal departments before these dates.As Russia’s invasion enters its third year, enthusiasm for Kyiv’s cause has cooled among the American right. While it still has high-profile champions among the GOP, including the party’s top senator, Mitch McConnell, it is Democrats who have been loudest in sounding the alarm over the holdup of aid as Russia advances in the country.“Every day that House Republicans refuse to hold a vote on the bipartisan National Security Supplemental, the consequences for Ukraine grow more severe,” Biden said on Thursday.And though Biden’s administration faces intense criticism from some of his allies for his support for Israel – on Tuesday, a write-in campaign to protest his Middle East policy picked up 100,000 votes in vital swing state Michigan’s Democratic primary – the president insisted the aid would help both Israel’s fight against Hamas and the needs of Gaza’s civilians.“This bill will help ensure that Israel can defend itself against Hamas and other threats. And it will provide critical humanitarian aid to the Palestinian people and those impacted by conflicts around the world. Because the truth is, the aid flowing into Gaza is nowhere near enough, and nowhere fast enough. Innocent lives are on the line,” he said.The biggest obstacle at this point appears to be Johnson, a rightwing lawmaker and Trump ally elevated to the speaker’s job in October after an unusual intraparty revolt cast Kevin McCarthy from the post. On Wednesday, a coalition of parliamentary leaders from European countries including France, Spain, Finland and Ukraine sent an open letter to Johnson asking him to allow a vote on Ukraine aid.“While Speaker Johnson believes we must confront Putin, and is exploring steps to effectively do so, as he said at the White House, his immediate priority is funding America’s government and avoiding a shutdown,” the speaker’s office replied.Centrist lawmakers in Congress’s lower chamber, which the GOP controls by a meager two seats, are reportedly planning to circulate a discharge petition, which, if signed by a majority of members, could force Johnson to put Ukraine aid up for a floor vote. Asked about that at a press conference, the Democratic House minority leader, Hakeem Jeffries, was not ready to endorse the idea.“The most effective way to secure aid for our democratic allies, including, but not limited to, Ukraine, is to take the bipartisan bill that is pending before the House right now and put it on the floor,” Jeffries said, adding: “All legislative options remain on the table.” More

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      ‘Huge tax breaks’: private equity prepares for a boon from Congress

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      Some of largest and most profitable companies in the US are primed to save billions of dollars from a congressional tax deal that critics say gives “billions in tax credits to the biggest corporations while giving pennies to middle-class children and families”. And private equity funds could be among the deal’s biggest beneficiaries, a Guardian analysis suggests.The tax cuts passed the House of Representatives at the end of January as part of an agreement that pairs handouts for businesses with a moderate expansion of the child tax credit. The Senate could vote on the bill over the coming weeks, and the White House has indicated that Joe Biden would sign it into law.The deal, led by Democratic senator Ron Wyden and Republican congressman Jason Smith – the chairs of Congress’s tax-writing committees – would roll back a series of tax measures that were designed to partially offset the cost of the 2017 Trump tax cuts.Weakening these provisions would allow companies to claim bigger tax deductions for certain expenses, including buying new equipment, spending money on research and development, and paying interest on their debt, as the Guardian previously reported.Last year the American Investment Council (AIC), private equity’s main trade group, spent more than $3m lobbying the federal government, according to OpenSecrets – more than any single year since 2009. Including their subsidiaries, five of the country’s largest private equity funds – Blackstone Group, KKR & Company, Carlyle Group, Cerberus Capital Management and Apollo Global Management – together spent an additional $21m lobbying over the same period.“Increasing the interest deductions, which private equity firms have been the worst abusers of, is just another example of how the Wyden-Smith tax deal hands out billions in tax credits to the biggest corporations while giving pennies to middle-class children and families,” the Democratic congresswoman Rosa DeLauro, one of two dozen House Democrats who voted against the bill, told the Guardian.“While private equity is cheering on the huge tax breaks they will get if this deal passes the Senate, American families are living paycheck to paycheck and struggling with rising costs.”‘Debt can supercharge the returns of private equity’Tax policy experts told the Guardian that raising the cap on interest deductibility could provide an especially generous subsidy for private equity funds, which rely heavily on debt.“The model of the private equity industry is often to … buy public corporations, take them private and load them up with debt,” said Steve Wamhoff of the non-profit Institute on Taxation and Economic Policy. These heavy debt burdens help explain why companies bought by private equity funds are about 10 times more likely than other firms to go bankrupt.“The deductions that are allowed for interest expenses really make that a more viable business model,” Wamhoff said.Debt is cheaper when companies get a tax break for deducting the interest they pay on that debt, and “cheaper money, which has to be repaid by their takeover targets, is what makes private equity go,” said Carter Dougherty of Americans for Financial Reform (AFR), an advocacy coalition.“The magic of the private equity business model, and the way that it’s able to generate outsized returns, is its reliance on debt for the acquisition,” said Brendan Ballou, author of Plunder: Private Equity’s Plan to Pillage America.If you invest $20m in a business and get 10% returns, you only get $2m back,” Ballou explained. “But if, of that $20m, you actually only put up $2m yourself, you actually make 100% return. So debt, or leverage, allows you to get bigger returns than you normally would if you actually had to put up your own cash.”That’s how “debt can supercharge the returns of private equity”, Ballou said.Asked for comment, the AIC referred the Guardian to two letters previously signed by the group, one of which states that “debt financing plays an important role in supporting job-creating investments”.skip past newsletter promotionafter newsletter promotion“There’s already a strong bias in the tax code for debt, and this bill doubles down on that bias to boost private equity’s predatory practices, which will only drive more American companies into bankruptcy and decrease market competition,” said the Texas congressman Lloyd Doggett, one of three Democrats who voted against the bill in the House ways and means committee, in a statement.“There’s nothing fair about private equity companies lining their pockets while shifting the tax burden to American families already dealing with high costs.”‘A complete wasteful giveaway’The Trump tax law established new limitations on how much interest companies could deduct from their tax bills in a single year. That annual cap on interest deductions was tightened further in 2022.Higher interest rates have made debt more expensive, so private equity funds have found themselves having to invest more of their own money, rather than relying as extensively on borrowed money.That shift, in turn, has lowered potential returns, adding to the industry’s sense of urgency to loosen the cap on interest deductions, AFR’s Carter Dougherty said.Not only would the Wyden-Smith deal undo the tighter limit created by the Trump law, but it would do so retroactively, meaning corporations could amend their 2022 and 2023 tax returns to take advantage of the newly generous subsidies.Making these tax cuts retroactive “would be just a complete wasteful giveaway”, Chye-Ching Huang, the executive director of the Tax Law Center at the New York University School of Law, told the Senate finance committee last November. “You can’t change past investments or wages by giving away tax cuts.”Loosening the interest deduction threshold would cost $64bn over the next 10 years if it were made permanent, according to an estimate provided to members of the House ways and means committee by the US Congress’s non-partisan joint committee on taxation.While the Wyden-Smith deal only rolls back the provision through 2025, tax policy experts told the Guardian that corporations and their trade groups would probably work to extend it further.In a statement to the Guardian, a Wyden spokesperson said: “The provision dealing with business interest was a Republican priority in negotiations, and it’s clear that it would become law in a Republican Congress without any matching benefit for working families. With the support of finance committee Democrats, Senator Wyden set a standard for this divided Congress that any tax cuts for corporations must be matched with an investment in children and families that the Joint Committee on Taxation scores as equal, and that’s why the bill includes a child tax credit expansion that helps 16 million children from low-income families get ahead.”Smith’s office did not respond to a request for comment. More

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      US House passes temporary funding bill to avert government shutdown

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      The House has passed a short-term funding bill, narrowly averting a partial government shutdown that would have taken place this weekend.The bill passed with a 320-99 vote on Thursday afternoon. Among Republicans, 113 voted yes and 97 voted no. Meanwhile, 207 Democrats voted yes and 2 voted against it.The two Democrats who voted against the bill were Mike Quigley of Illinois and Jake Auchincloss of Massachusetts.The bill’s passage comes after congressional leaders from both parties, including the House speaker, Mike Johnson; the House minority leader, Hakeem Jeffries; the Senate majority leader, Chuck Schumer; the Senate minority leader, Mitch McConnell; as well as leaders of the House and Senate appropriations committees, announced the agreement on Wednesday.“To give the House and Senate appropriations committees adequate time to execute on this deal in principle, including drafting, preparing report language, scoring and other technical matters and to allow members 72 hours to review, a short-term continuing resolution to fund agencies through March 8 and the 22 will be necessary, and voted on by the House and Senate this week,” the statement said.With the House passing the temporary funding bill on Thursday, a congressional vote is now expected next week for six full-year appropriations bills that will extend funding for agencies under the departments of agriculture-FDA, commerce-justice and science, energy and water development, interior, military construction-veterans affairs and transportation-housing and urban development.“These bills will adhere to the Fiscal Responsibility Act discretionary spending limits and January’s topline spending agreement,” congressional leaders said on Wednesday.The remaining six appropriations bills set to be finalized and voted on by 22 March revolve around the departments of defense, financial services and general government, homeland security, labor-health and human services, as well as legislative branch and state and foreign operations.Following Thursday’s vote, Virginia’s Democratic representative Abigail Spanberger said that despite voting alongside colleagues who “understand our fundamental responsibility to keep our government functioning … Speaker Johnson’s leadership has our country yet again one week away from a partial government shutdown and within a month of the whole of the federal government shutting its doors.”“As our country remains on a collision course with a completely preventable potential shutdown, I will continue to press Speaker Johnson to bring bipartisan bills forward that would pass in the US House, pass in the US Senate, and get to the president’s desk,” she added.Before Thursday’s vote, Joe Biden and Kamala Harris met with congressional leaders in attempts to help avert a partial government shutdown, which Biden said would “significantly” damage the economy.The bill will now head to the Senate, where the majority leader, Chuck Schumer, said the chamber could vote as early as Thursday evening.“Once the House acts, I hope the Senate can pass the short-term CR [continuing resolution] as soon as tonight, but that will require all of us working together. There’s certainly no reason this should take a very long time. So, let’s cooperate and get it done quickly,” Schumer said. More

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      House and Senate negotiators reach agreement to prevent shutdown – report

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      With government funding set to partially expire on Friday, House and Senate negotiators have reached an agreement to prevent a shutdown, Politico reported.Funding for some federal departments was previously set to expire after Friday, while the rest faced an 8 March deadline. Democratic and Republican leaders in Congress met with Joe Biden yesterday at the White House, where all sides expressed their desire to avoid a shutdown that the president warned would damage the economy.More details soon … More

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      Johnson Floats Short-Term Spending Bill to Avert Partial Shutdown

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      The Republican speaker, who has come under bipartisan pressure to strike a deal that his far-right members are resisting, is weighing a temporary funding patch that would allow more time for negotiations.Speaker Mike Johnson is floating another short-term stopgap spending bill to head off a partial government shutdown at the end of the week, offering a temporary path out of a stalemate that has repeatedly threatened federal funding over the past six months.His proposal would extend funding for some government agencies for a week, through March 8, and the rest for another two weeks, until March 22. It would be contingent on congressional leaders finalizing an emerging bipartisan agreement on six of the 12 annual spending bills.And it would leave time for top lawmakers to negotiate the other six measures, and then try to pass the spending bills individually before the next set of deadlines to fund the government. That would be a tall order in the House, which has struggled to pass spending legislation amid Republican divisions.Any stopgap bill “would be part of a larger agreement to finish a number of appropriations bills, ensuring adequate time for drafting text and for members to review prior to casting votes,” said Athina Lawson, a spokeswoman for Mr. Johnson.Congressional leaders hoped to finalize the plan as early as Wednesday, leaving time for quick votes in both chambers before the midnight deadline on Friday.The details were reported earlier by Punchbowl News.The proposal offers glimmers of hope for staving off a shutdown in the immediate term, but would only punt resolution of a spending stalemate that has gripped Congress for months, as Republicans bent on steep cuts and conservative policy mandates refuse to accept a deal with Democrats. It comes after a meeting at the White House on Tuesday in which President Biden and congressional leaders from both parties escalated pressure on Mr. Johnson to accept a spending deal. Top Democrats and Republicans emerged saying they were optimistic about keeping the government funded.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      California’s Orange county was once a conservative bastion. Can it swing the balance of the US House in 2024?

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      In the battle between Democrats and Republicans for control of the US House of Representatives, one region could hold the key to victory – Orange county, California’s historically conservative heartland.For decades, the region – perhaps most famously described by Ronald Reagan as the place “where the good Republicans go before they die” – was a Republican stronghold and a hotbed for radical conservatives.But the county has undergone dramatic changes both politically and demographically. The region has shifted from the largely white center of conservative politics in California to a far more diverse place and one of the few true purple counties in the US, the effects of which have reverberated nationally.Today the county of 3.1 million people is home to some of the most competitive congressional elections in the US. Four of Orange county’s six congressional districts, including the seat vacated by congresswoman Katie Porter as she runs for the Senate, are ranked among the most competitive races, according to an analysis by the Cook Political Report.Recent polling from UC Irvine suggests that Asian Americans and Latino voters could play a key role in the upcoming races as potential swing voters. Orange county is far less white than it once was and its growing diversity has helped fuel its political transformation, said Jon Gould, who launched the poll.It’s a stark contrast to years past when Asian Americans were an afterthought in county political campaigns, said Andrew Ji, the managing director of the Orange county office for Asian Americans Advancing Justice. “In certain regions where there’s tight races, Asian Americans are gonna be the swing voting bloc,” Ji said.Orange county was conservative even for conservatives, a place that embraced the John Birch Society, a far-right political group that opposed the civil rights movement and spread conspiracy theories that Republican president Dwight Eisenhower was a communist.The region was overwhelmingly Republican into the 1990s, said Jim Newton, a UCLA lecturer and veteran journalist who covered the region. Demographic trends suggested it wouldn’t remain so forever, he said, but the political shift came far sooner than anticipated.In 1990, Orange county was 65% white while Latinos comprised 23% of the population and Asian Americans 10%, according to the US census. By 2020, Latinos accounted for 34% of county residents, the Asian American population climbed to 22% and white people made up 37% of the population.Greater ethnic and racial diversity fueled change, but other demographic changes played a role too, said Gould, the dean of the School of Social Ecology at the University of California, Irvine. There’s been a rise in college-educated county residents – and there is a link between higher education and less extreme Republicans, he said.“When I was younger this was the home of the John Birch Society, this was … the place Ronald Reagan was king,” said Gould. “The transformation has been remarkable.”The changes in the political landscape were evident in 2016, when Orange county favored a Democrat for president for the first time in nearly a century – giving more votes to Hillary Clinton than Donald Trump. In 2018, Democrats flipped four seats and the county sent an entirely blue delegation to Congress.The shifting political winds came as California as a whole was becoming more blue, and the far-right shift in the Republican party and Donald Trump alienated voters, particularly suburban women.View image in fullscreenThe GOP’s association with downplaying or outright denying the climate crisis also didn’t play well in a state where people take the environment seriously, Newton, the UCLA lecturer, argues.“The fact that we talk about Orange county as potentially a swing place is really bad news for Republicans,” Newton said.skip past newsletter promotionafter newsletter promotionDemocratic voters have a slight lead in the county today, but it remains firmly purple. Republicans won two House seats back from Democrats in 2020 with the election of Young Kim and Michelle Steel – two of the first Korean American women to serve in Congress.Purple counties – where congressional and presidential contests are truly competitive – are increasingly rare, said Gould, who recently conducted a poll of county voters.The poll published by UC Irvine suggests that the county will swing left in this year’s election due to independent and “modestly partisan Republicans”. The latter group has become a political anomaly in a sharply divided America, but could play a strong role in the races in the region. That demographic is less supportive of Trump, does not dislike Biden as much as other Republicans and is generally more diverse, Gould noted.“They tend to be more educated, wealthier and compared to the strongly attached Republicans, they are much less likely to be white,” he said. “That is where there is a Latino and Asian group of modestly attached Republicans who may very well have a strong influence on the presidential race and congressional races in 2024.”They may not necessarily vote for Democrats, he said, and the question is whether they will vote, and if so will they vote for Republicans in every race.The outcome of the congressional races could have major implications nationally and determine which party controls the House.“If Democrats can’t keep this seat, they have no hope of winning the House majority, because demographically this is exactly the type of district that is coming into the Democrats’ coalition,” David Wasserman, with the Cook Political Report, said of Porter’s seat in an interview with the Los Angeles Times.For Ji, the election is another sign of how much has changed in Orange county and there is an excitement to see it transform from a mono-political white place, into somewhere known for diversity – ethnically and politically.“I’m very excited for the future of Orange county,” Ji said. “We are pivotal. We can be seen as an inflection point and we are very important nationally in the way we vote.” More

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      Putin ‘gains every day’ Congress fails to send Ukraine aid, top Biden official says

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      Vladimir Putin “gains every day” the US House does not pass a new aid package for Ukraine, Joe Biden’s national security adviser warned, as its president, Volodymyr Zelenskiy, warned of dire outcomes unless Ukraine receives US military aid within one month.Ahead of a crunch week in Washington that could end in a government shutdown – in part made possible by hardline Republican opposition to new support for Kyiv – Jake Sullivan told CNN that “the reality is that Putin gains every day that Ukraine does not get the resources it needs and Ukraine suffers.”Sullivan pointed to “a strong bipartisan majority in the House standing ready to pass” an aid package for Ukraine “if it comes to the floor”.The Democratic-held Senate already passed a $95bn package of aid to Ukraine and other US allies, including Israel, earlier this month. But in the House, the Republican speaker, Mike Johnson, is under pressure from the pro-Trump far right of his party not to bring it to a vote.In striking contrast to the division within the US Congress, European leaders were set to meet in Paris on Monday to discuss Ukraine, seeking to show unity and support. “We are at a critical moment,” Emmanuel Macron, the president of France, said. “Russia cannot win in Ukraine.”Speaking on the second anniversary of Russia’s full-scale invasion, Zelenskiy on Sunday said “millions will be killed without US aid” and told a conference in Kyiv that a US failure to pass new aid would “leave me wondering what world we are living in”.The US has so far sent billions of dollars of aid and weapons, but with the pro-Russian Trump all but confirmed as the Republican nominee for president, large elements of the congressional GOP have fallen in behind him to block new Ukraine spending.Ukrainian forces report shortages of weapons and ammunition, as a grinding stalemate gives way to Russian gains. On Sunday, Zelenskiy put the overall death toll among Ukrainian troops at 31,000.US officials were previously reported to have put it at 70,000.Congress has been on holiday for two weeks and reconvenes on Wednesday. In order to approve Ukraine aid, rightwing House Republicans are also demanding spending on border and immigration reform – regardless of the fact that Senate Republicans this month sank a bipartisan border deal of their own which included it.“History is watching whether Speaker Johnson will put [the Senate foreign aid] bill on the floor,” Sullivan said. “If he does, it will pass, will get Ukraine what it needs for Ukraine to succeed. If he doesn’t, then we will not be able to give Ukraine the tools required for it to stand up to Russia and Putin will be the major beneficiary of that.”Many Republicans in the House do support Ukraine aid. A senior Republican member of the foreign relations committee called on Johnson to put the aid package on the floor for a vote or risk a party rebellion.“Ukrainians have already died because we didn’t provide this aid eight months ago as we should have,” Brad Sherman of California told CNN. “I think that it’s up to Speaker Johnson to put this bill on the floor. It’ll pass it’ll pass by a strong vote. And he needs to do that so the aid flows in March.“If he doesn’t, eventually Republicans will get tired of that obstructionism and will join Democrats in a discharge petition” – a congressional manoeuvre, rarely used, that can bypass blockages.“But that’s a very bulky way to try to pass a bill. It’s only happened once in my 28 years in Congress. I suspect that we’ll be getting the aid to Ukraine in April, unless Speaker Johnson is willing to relent.”Ukraine, Sherman said, was a “bulwark between Russia and Nato countries that we are obligated to defend, notwithstanding what Trump may have said”.Trump has repeatedly threatened to refuse to defend Nato countries he deems not to have paid enough to maintain the alliance, going so far as to say he would encourage Russia to attack such targets.The defence of Ukraine, Sherman said, “is just critical to us. They can’t do it. They haven’t been able to do it this last month, because we have not provided the artillery shells and other systems.” More

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      Spending Impasse Persists Amid G.O.P. Resistance as Partial Shutdown Looms

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      With Republicans insisting on adding right-wing policy measures to spending bills, lawmakers are running out of time to strike a deal to avert a partial government shutdown before a deadline of Friday at midnight.Congressional leaders have failed to reach a deal on legislation to keep federal funding going past Friday, with Republicans insisting on adding right-wing policy dictates to the spending bills, pushing the government to the brink of a partial shutdown within days.Senator Chuck Schumer, Democrat of New York and the majority leader, said on Sunday that despite “intense discussions” that were continuing among top lawmakers to break the impasse, Republican recalcitrance was raising the prospect of a “disruptive shutdown” at midnight on Friday.“While we had hoped to have legislation ready this weekend that would give ample time for members to review the text, it is clear now that House Republicans need more time to sort themselves out,” Mr. Schumer said in a letter to Democratic senators. “With the uncertainty of how the House will pass the appropriations bills and avoid a shutdown this week, I ask all senators to keep their schedules flexible, so we can work to ensure a pointless and harmful lapse in funding doesn’t occur.”With no sign of a breakthrough, President Biden summoned congressional leaders to the White House on Tuesday to discuss the spending legislation, as well as the $95 billion foreign aid package for Ukraine and Israel that the Senate passed earlier this month, which Speaker Mike Johnson has refused to take up.But the more immediate task was to keep government spending from lapsing this week.Three consecutive times over the last six months, Congress has relied on short-term, stopgap spending bills passed by a bipartisan coalition of lawmakers to keep government spending flowing, essentially punting on a longer-term agreement for several weeks at a time. Each time, the Republican speaker — first Kevin McCarthy, then Mr. Johnson — has promised hard-right lawmakers that they would try to win more spending cuts and conservative policy conditions on how federal money could be spent during the next round of negotiations.Now, with patience wearing thin among ultraconservatives, pressure is mounting on Mr. Johnson, whose members want him to secure major cuts and policy changes that have no chance of enactment with Democrats in control of the Senate and White House. Lawmakers in the House, which has been out of session for the past week, are set to return to Washington on Wednesday, just two days before a deadline on Friday to fund military construction, agriculture, transportation and housing programs.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More