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      Federal Reserve increases interest rates by a quarter point to 16-year high – as it happened

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      From 6h agoThe Federal Reserve is set to raise interest rates this afternoon, with an announcement coming at 2pm ET from the central bank after its most recent board meeting. Analysts expect the Fed will raise rates by a quarter point, which will bring rates up to 5% to 5.25%. This would be the central bank’s 10th interest rate increase since March 2022, when rates were at zero.The interest rate increase will come at what in hindsight may seem like an inflection point for the economy. Inflation is down, consumer spending has flattened and growth in the job market is starting to slow down, but Fed officials, especially Fed chair Jerome Powell, have been stringent on getting inflation down to their target of 2%. Inflation in March was 5%, the lowest it’s been since 2021, but still quite far from 2%.Analysts and economists will be closely watching Powell’s press conference at 2.30pm, where he will discuss the direction Fed staff see the economy going, giving hints as to whether even more interest rate hikes are to come or whether the Fed will end its rate-hike campaign.Here’s a quick summary of everything that’s happened today:
      The Federal Reserve increased interest rates by a quarter point, bringing rates up to 5% to 5.25%. Fed chair Jerome Powell said that Fed officials no longer anticipate more hikes, but will monitor economic data to see if they are necessary in coming months. The stock market dipped slightly after the Fed’s announcement.
      The debate over the debt ceiling continued today, with news that Senate majority leader Mitch McConnell will keep himself out of the specific of negotiating talks and hints that senators Joe Manchin and Kyrsten Sinema are breaking from Dems and looking to take Senate negotiations seriously.
      2024 is already gearing up: Joe Biden released his second TV ad since launching his campaign last week, while US rep. Colin Allred of Texas announced his bid to unseat Texas senator Ted Cruz. In Nevada, Jim Marchant, an election denier and staunch supporter of Donald Trump, also announced a Senate big.
      We’ll be closing this blog for today. Thanks for reading.Democratic senator Raphael Warnock from Georgia said that his two young kids were on lockdown at school because of the shooting in midtown Atlanta.“They’re there. I’m here, hoping and praying they’re safe,” he said on the Senate floor. “Thoughts and prayers are not enough.”One person has been confirmed dead and at least four injured after a gunman opened fire in a building in midtown around 12.30pm ET. Police said they are still searching for a suspect.The Washington Post just published a cheery report that the White House and lawmakers on Capitol Hill technically have just six working days together before the US government potentially defaults on its debt on 1 June.With the House and Senate in session on different days, and Biden making international trips for the G7 summit in Japan and another “Quad” meeting with Australia, Japan and India in Australia, the legislative and executive branches are scheduled to have just six more days together to figure out the debt ceiling.Of course, negotiations can take place even when a chamber is not in session, but the precariousness of negotiations and the closeness of default makes the timing a tad inconvenient.Talking about the fallout of the collapse of Silicon Valley Bank in March, Federal Reserve chair Jerome Powell said that it seems the worst of the crisis is over.“The severe period of stress, those have now all been resolved and all the depositors have been protected,” he said, adding that JPMorgan’s acquisition of First Republic bank marked the end of the worst of it all.Asked about lessons that he learned from the crisis, he noted that there needs to be stronger regulation and supervision, but declined to offer any specifics as he has tasked Fed vice chair Michael Barr with drafting specific policy proposals.“I am not aware of anybody thinking [the collapse] could happen so quickly,” Powell said. “Now that we know that was possible… it will be up to vice chair Barr to design ways to address that.”Today’s Federal Reserve interest rate hike is its second quarter-point hike in a row, after a series of half- and three-quarter point hikes over the last year. Fed chair Jerome Powell said at his press conference this afternoon that “slowing down was the right move”.“I think it’s enabled us to see more data and it will continue to do so. We have to always balance the risk of not doing enough and not getting inflation under control against the risk of maybe slowing down economic activity too much,” he said. “We thought that this rate hike, along with the meaningful change in our policy statement, was the right way to balance that.Asked about the possibility of a recession, Powell seemed optimistic that the Fed could achieve a “soft landing” – keeping interest rates high without seeing huge impacts on unemployment. He noted that even as rates have hit 5% over the last 14 months, the unemployment rate stands at 3.5%.“It’s possible that we can continue to have a cooling in the labor market without having the big increases in unemployment that have gone with many prior episodes,” he said.Of course, Powell noted earlier in the press conference that the full impacts of the interest rate increases have yet to be seen, acknowledging uncertainty about the full economic impact of rate hikes.Federal Reserve chair Jerome Powell emphasized the importance of raising the debt ceiling, though noted that the debt limit is “fiscal policy matters”.“It’s essential that the debt ceiling be raised in a timely way so that the US government can pay all of its bills when they’re due. Failure to do that would be unprecedented,” he said. “We’d be in uncharted territory.Powell noted that the Fed doesn’t “give advice to either side” and also noted that “no one should assume that the Fed can protect the economy from the potential short- and long-term effects” upon default.He also noted that debt limit standoff did not play a role in the Fed’s decision today to increase interest rates.Federal Reserve chair Jerome Powell is holding a press conference after the central bank announced a quarter-point interest rate increase. Powell’s tone in the press conference has changed since he last addressed the press in March. The Fed is no longer anticipating needing more rate increases, but will monitor the economy in determining future interest rate changes.While Powell is still reiterating the Fed’s inflation target of 2%, he acknowledged that the economy is “seeing the effects of our policy tightening on demand and the most interest-rate-sensitive sectors of the economy, particularly housing and investment”. In other words, the Fed sees its interest rate hikes taking effect in the slowing of the economy.“There are some signs that supply and demand in the labor market are coming back into balance,” Powell said. He added that the “economy is likely to face further headwinds from tighter credit conditions”, meaning the full effects of the interest-rate hikes have yet to be seen.Taking a question from a reporter on whether the Fed’s statement today should be taken as a hint that officials will pause rate hikes, Powell said the officials did not make a decision on a pause, but noted that they intentionally updated their stance in today’s press statement that removed a line suggesting more increases would be appropriate.“Instead, we’re saying that in determining the extent to which [more hikes are needed], the Committee will take into account certain factors,” he said. “That’s a meaningful change that we are no longer saying we anticipate [changes] and we will be driven by incoming data meeting by meeting.”The press statement that came with the Federal Reserve’s announcement of another interest rate hike is nearly identical to the one that was released at its last meeting on 22 March, with one key exception.In its 22 March release, Fed officials in the Federal Open Market Committee (FOMC) hinted that more interest rates are to come, saying: “The Committee anticipates that some additional policy firming may be appropriate” in order to bring inflation down to the target of 2%.In today’s statement, that line was cut.The rest of the statement was in line with FOMC’s March meeting statement. They reiterated their stance that “inflation remains elevated” and the jobs market has been strong, with the unemployment rate low. They emphasized that “the US banking system is sound and resilient” and that they are “highly attentive to inflation risks”.Analysts have been wondering whether this interest rate increase will be the Fed’s last, with pauses to come after as the interest rate is held steady at future meetings.Any more hints about what is next for interest rates after this most recent hike will likely be made at Fed chair Jerome Powell’s press conference at 2.30pm ET.The Federal Reserve just announced a quarter-point interest rate increase. This brings the interest rate to a 16-year high at 5% to 5.25%. The central bank has been on a year-long campaign to temper inflation, though it has had to delicately balance the potential of shaking the economy too much with stringent rate increases.Fed chair Jerome Powell will lead a closely watched press conference, where he will discuss the Fed’s view on the state of the economy.The United Auto Workers (UAW) union said in an internal memo that it is holding off on a Joe Biden endorsement due to the president’s electric vehicle policies.UAW president Shawn Fain said in the memo that union leaders met with Biden last week and discussed “our concerns with the electric vehicle transition”, according to the New York Times. The union is concerned that auto workers will suffer during the transition to EV as less workers are needed to assemble EVs.“The EV transition is at serious risk of becoming a race to the bottom,” the memo reads, referring to electric vehicles. “We want to see national leadership have our back on this before we make any commitments.”The union has 400,000 members across the country, though members are primarily in auto-industry heavyweight Michigan, a key election battleground state.The FBI arrested a man in Florida on Tuesday for his involvement in the January 6th Capitol riots, specifically for setting off an “explosive device” in the US Capitol tunnel that leads into the building. Daniel Ball, 38, was first arrested last week by the Citrus County Sheriff’s Office for assaulting seven people, including law enforcement officers, in Florida. Ball’s probation officer, upon being shown photos and videos of the Capitol riot, identified Ball as the person throwing an explosive device in the tunnel, where law enforcement was blocking rioters.Ball faces multiple charges related to the riot, including assaulting police officers and entering a restricted area with a deadly weapon.The justice department said in March that at least 1,000 people have been arrested on charges related to the riots, with 518 pleading guilty to federal crimes so far.Election denier Jim Marchant announced that he will be running for US Senate, challenging Democrat incumbent senator Jacky Rosen for the seat she won last year.During his announcement speech on Tuesday, Marchant said that he is running to “protect Nevadans from the overbearing government, from Silicon Valley, from big media, from labor unions, from the radical gender-change advocates,” the Washington Post reported.His election campaign was acknowledged by Rosen on Twitter, who replied to Marchant’s announcement:
      Nevadans deserve a Senator who will fight for them, not a MAGA election denier who opposes abortion rights even in cases of rape and incest…
      While far-right politicians like Jim Marchant spread baseless conspiracy theories, I’ve always focused on solving problems for Nevadans.
      Marchant has described himself as a “MAGA conservative”, the Post reports, and is an avid supporter of Donald Trump. More

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      Alexandria Ocasio-Cortez ‘not planning’ to run for Senate seat in 2024

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      Alexandria Ocasio-Cortez will not run for a seat in the US Senate next year, according to her office, clearing the way for incumbent New York senator Kirsten Gillibrand, a Democrat, to run for re-election unopposed by the progressive congresswoman.“She is not planning to run for Senate in 2024. She is not planning to primary Gillibrand,” Lauren Hitt, Ocasio-Cortez’s spokesperson, told Politico.Gillibrand, who launched her re-election campaign in January for a third Senate term, was widely believed to be facing a number of potential challengers in the state primary, including Ocasio-Cortez.The announcement follows indications from other New York progressives, including Mondaire Jones and representatives Jamaal Bowman and Ritchie Torres, that they are not considering a challenge.New York Democrats were hit hard in the midterm elections last year and the loss of four seats to Republican candidates is widely blamed for the party losing control of Congress. Avoiding an acrimonious challenge from the progressive wing of the party, and concentrating on recovering the 2022 losses, is considered to be Democrats’ political priority.“I think it’s divisive. And unless you think you can win, it’s divisive unnecessarily,” Jay Jacobs, chair of the New York Democratic party, told Politico. “It’s using up resources we need to preserve for more coordinated work and the rest.”Camille Rivera, a New York-based progressive strategist, said that an intra-Democrat contest “could be pretty bruising and give a Republican a leg up”.Signs of a deal between Ocasio-Cortez and Gillibrand came after rumors of a Senate seat challenge began to circulate last year. Gillibrand has faced criticism for her part in forcing former senator Al Franken’s resignation, accepting donations from indicted crypto king Sam Bankman-Fried and ties to Wall Street.But Ocasio-Cortez’s staff’s choice of language – “not planning to run” is not the same as “not running”. Bronx representative Jamaal Bowman told the outlet he heard AOC’s name “weeks ago or months ago maybe” as a primary contender but hadn’t heard it since.Ocasio-Cortez’s indication comes as high-profile progressives have said they’ll support Joe Biden’s re-election bid, despite misgivings about parts of his agenda. Ocasio-Cortez has said she “unequivocally” supports the party’s nominees.Since Biden’s re-election soft launch on Tuesday, the sitting president has received endorsements from congressional progressive caucus leader Pramila Jayapal, representative Ro Khanna, and squad members Ilhan Omar, Greg Casar and Delia Ramirez.skip past newsletter promotionafter newsletter promotionThe endorsements come despite disquiet about Biden’s recent push to the middle on crime, energy policy and immigration.“I think that people are looking at the incredible accomplishments, particularly the investments in climate change and equity, racial justice, and seeing that this is night and day from what anyone else has been able to do,” Jayapal told the Hill.Senator Elizabeth Warren has said she’s “delighted” about Biden’s decision. “I’m in all the way,” she told the outlet. Vermont senator Bernie Sanders, who ran for the Democrat nomination against Biden in 2020, told CNN’s State of the Union Sunday: “If you believe in democracy, you want to see more people vote, not fewer people vote, I think the choice is pretty clear, and that choice is Biden.”But Sanders leaned on Biden to be stronger on working-class issues, and urged the president and the party “to make it clear that we believe in a government that represents all, not just the few; take on the greed of the insurance companies, the drug companies, Wall Street, all the big money interests; and start delivering for working-class people.”“You do that, I think Biden is going to win in a landslide,” Sanders added. More

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      US House passes debt ceiling bill in tactical victory for Kevin McCarthy

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      House Republicans narrowly passed sweeping legislation on Wednesday that would raise the government’s legal debt ceiling by $1.5tn in exchange for steep spending restrictions, a tactical victory for the House speaker Kevin McCarthy as he challenges Joe Biden to negotiate and prevent a catastrophic federal default this summer.Biden has threatened to veto the Republican package, which has almost no chance of passing the Senate in the meantime, where Democrats hold a slim majority.The president has so far refused to negotiate over the debt ceiling which the White House insists must be lifted with no strings to ensure America pays its bills.But McCarthy’s ability to swiftly unite his slim majority in the House and bring the measure to passage over opposition from Democrats and even holdouts in his own party gives currency to the Republican speaker’s strategy to use the vote as an opening bid forcing Biden into talks. The two men could hardly be further apart on how to resolve the issue.The bill passed by a razor-thin 217-215 margin.“We’ve done our job,” McCarthy said after the vote.“The president can no longer ignore” the issue of federal spending limits, he said. “Now he should sit down and negotiate.”As the House debated the measure, Biden indicated he was willing to open the door to talks with McCarthy, but not on preventing a first-ever US default that would shake America’s economy and beyond.“Happy to meet with McCarthy, but not on whether or not the debt limit gets extended,” Biden said. “That’s not negotiable.”Passage of the sprawling 320-page package in the House is only the start of what is expected to become a weeks-long political slog as the president and Congress try to work out a compromise that would allow the nation’s debt, now at $31tn, to be lifted to allow further borrowing and stave off a fiscal crisis.The nation has never defaulted on its debt, and the House Republican majority hopes to maneuver Biden into a corner with its plan to roll back federal spending to fiscal 2022 levels and cap future spending increases at 1% over the next decade, among other changes.In exchange for raising the debt limit by $1.5 trillion into 2024, the bill would roll back overall federal spending and:
      Claw back unspent Covid-19 funds.
      Impose tougher work requirements for recipients of food stamps and other government aid.
      Halt Biden’s plans to forgive up to $20,000 in student loans.
      End many of the landmark renewable energy tax breaks Biden signed into law last year. It would tack on a sweeping Republican bill to boost oil, gas and coal production.
      Democrats derided the Republican plan as a “ransom note”, a “shakedown” and “an unserious bill” that was courting financial danger.It’s a first big test for the president and the Republican speaker, coming at a time of increased political anxiety about the ability of Washington to solve big problems amid the need to raise the federal debt limit in a matter of weeks.The treasury department is taking “extraordinary measures” to pay the bills, but funding is expected to run out this summer. Economists warn that even the serious threat of a federal debt default would send shockwaves through the economy.A nonpartisan congressional budget office analysis estimated the Republican plan would reduce federal deficits by $4.8tn over the decade if the proposed changes were enacted into law.In the Senate, leaders were watching and waiting.Senate majority leader Chuck Schumer said House passage of the legislation would be a “wasted effort” and that McCarthy should come to the table with Democrats to pass a straightforward debt-limit bill without GOP priorities and avoid default.Senate Republican leader Mitch McConnell, who stepped aside to give McCarthy the lead, said the speaker has been able to unite the House Republicans.Now, he said, Biden and McCarthy must come to agreement. Otherwise, he said, “We’ll be at a standoff. And we shouldn’t do that to the country.” More

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      Trump committed treason and will try again. He must be barred from running | Robert Reich

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      The most obvious question in American politics today should be: why is the guy who committed treason just over two years ago allowed to run for president?Answer: he shouldn’t be.Remember? Donald Trump lost re-election but refused to concede and instead claimed without basis that the election was stolen from him, then pushed state officials to change their tallies, hatched a plot to name fake electors, tried to persuade the vice-president to refuse to certify electoral college votes, sought access to voting-machine data and software, got his allies in Congress to agree to question the electoral votes and thereby shift the decision to the House of Representatives, and summoned his supporters to Washington on the day electoral votes were to be counted and urged them to march on the US Capitol, where they rioted.This, my friends, is treason.But Trump is running for re-election, despite the explicit language of section three of the 14th amendment to the constitution, which prohibits anyone who has held public office and who has engaged in insurrection against the United States from ever again serving in public office.The reason for the disqualification clause is that someone who has engaged in an insurrection against the United States cannot be trusted to use constitutional methods to regain office. (Notably, all three branches of the federal government have described the January 6 attack on the US Capitol as an “insurrection”.)Can any of us who saw (or have learned through the painstaking work of the January 6 committee) what Trump tried to do to overturn the results of the 2020 election have any doubt he will once again try to do whatever necessary to regain power, even if illegal and unconstitutional?Sure, the newly enacted Electoral Count Reform Act (amending the Electoral Count Act of 1887) filled some of the legal holes, creating a new threshold for members to object to a slate of electors (one-fifth of the members of both the House and the Senate), clarifying that the role of the vice-president is “solely ministerial” and requiring that Congress defer to slates of electors as determined by the states.But what if Trump gets secretaries of state and governors who are loyal to him to alter the election machinery to ensure he wins? What if he gets them to prevent people likely to vote for Joe Biden from voting at all?What if he gets them to appoint electors who will vote for him regardless of the outcome of the popular vote?What if, despite all of this, Biden still wins the election but Trump gets more than 20% of Republican senators and House members to object to slates of electors pledged to Biden, and pushes the election into the House where Trump has a majority of votes?Does anyone doubt the possibility – no, the probability – of any or all of this happening?Trump tried these tactics once. The likelihood of him trying again is greater now because his loyalists are now in much stronger positions throughout state and federal government.skip past newsletter promotionafter newsletter promotionYes, they were held back in the 2020 midterms. But in state after state, and in Congress, Republicans who stood up to Trump have now been purged from the party. And lawmakers in what remains of the Republican party have made it clear that they will bend or disregard any rule that gets in their way.In many cases, the groundwork has been laid. As recently reported in the New York Times, for example, the Trump allies who traveled to Coffee county, Georgia, on 7 January 2021 gained access to sensitive election data. They copied election software used across Georgia and uploaded it on the internet – an open invitation to election manipulation by Trump allies in 2024.If anything, Trump is less constrained than he was in 2020.“In 2016, I declared I am your voice,” Trump said last month at the Conservative Political Action Conference, a line he repeated at his first 2024 campaign rally, in Waco, Texas, a few weeks later. “Today, I add: I am your warrior. I am your justice. And for those who have been wronged and betrayed, I am your retribution.”Filing deadlines for 2024 presidential candidates will come in the next six months, in most states.Secretaries of state – who in most cases are in charge of deciding who gets on the ballot – must refuse to place Donald Trump’s name on the 2024 ballot, based on the clear meaning of section three of the 14th amendment to the US constitution. More

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      Supreme court justices think selves exempt from rules, top Democrat says

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      Dick Durbin, the Democratic chair of the Senate judiciary committee leading a push for supreme court ethics reform, accused the top court of being a panel of “nine justices [who] believe they are exempt from the basic standards of disclosure”.His claim came amid growing criticism of the conservative justice Clarence Thomas, whose judicial record is under scrutiny after he became embroiled in scandal over taking undeclared gifts from a Republican mega-donor.The last US Congress considered a bill demanding the inclusion of the supreme court in existing judicial conference regulations but it did not clear the Senate and the chief justice, John Roberts, has been mostly silent on the issue.Speaking to NBC’s Meet the Press on Sunday, Durbin said he hoped Roberts would take advantage of an invitation to testify before the judiciary committee on 2 May, to explain how he intended to handle ethics reform.“This is John Roberts’s court,” the Illinois Democrat said. “We are dealing with a situation where history will remember it as such. He is an articulate, well-schooled man when it comes to presenting his point of view. I’m sure he’ll do well before the committee.“But history is going to judge the Roberts court by his decision as to reform, and I think this is an invitation for him to present it to the American people.”Asked why he didn’t ask Thomas to appear, Durbin said: “I know what would happen to that invitation. It would be ignored. It is far better from my point of view to have the chief justice here.”Durbin’s statement that he thought all nine justices considered themselves above ethics standards came when he was asked what a code of conduct might look like.“[It] would look an awful lot like the code that applies to the rest of federal government and other judges, and basically would have timely disclosures of transactions like this purchase of the justice’s mother’s home,” he said, referring to Thomas’s failure to declare the sale to the mega-donor Harlan Crow.“It would also give standards for recusal so that if there’s going to be conflict before the court and recusal, it’d be explained publicly, and investigations of questions that are raised. It’s the same across the board code of conduct, ethics laws, applied to the court.“Why this supreme court, these nine justices, believe they are exempt from the basic standards of disclosure, I cannot explain.”Durbin’s invitation to Roberts did not mention Thomas, referring instead to “a steady stream of revelations regarding justices falling short of the ethical standards expected of other federal judges and, indeed, of public servants generally”.The court’s “decade-long failure” to address those problems has “contributed to a crisis of public confidence”, Durbin wrote.He said the 2 May hearing would focus on “the ethical rules that govern the justices of the supreme court and potential reforms to those rules”, noting that the “scope of your testimony can be limited to these subjects, and that you would not be expected to answer questions from senators regarding any other matters”. More

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      Senate Democrats urge supreme court investigation of Clarence Thomas

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      The US Senate judiciary committee’s Democratic members on Monday unanimously urged the supreme court chief justice, John Roberts, to investigate luxury trips taken by associate justice Clarence Thomas that were paid for by a hugely wealthy Republican party donor.The senators deemed the justice’s conduct inconsistent with ethical standards for “any person in a position of public trust”, they said.The committee will hold a hearing in the coming days on the matter, chairman Richard Durbin, the senior senator from Illinois, and the panel’s 10 other Democratic members wrote in a letter to Roberts.The hearing, they said, would focus on “the need to restore confidence in the supreme court’s ethical standards”.“And if the court does not resolve this issue on its own, the committee will consider legislation to resolve it,” they told Roberts. “But you do not need to wait for Congress to act to undertake your own investigation into the reported conduct and to ensure that it cannot happen again. We urge you to do so.”ProPublica reported last Thursday that Thomas accepted expensive trips from Republican donor and real estate magnate Harlan Crow over decades without disclosing them.Thomas defended the trips on Friday, saying he had been advised he was not required to report that type of “personal hospitality”. But the conservative justice said he would abide by new, tighter rules that recently took effect.Crow told ProPublica he had “never sought to influence Justice Thomas on any legal or political issue”.The senators in the letter told Roberts: “You have a role to play as well, both in investigating how such conduct could take place at the Court under your watch, and in ensuring that such conduct does not happen again.”The report by ProPublica found that Thomas had repeatedly vacationed with Crow, including on his private jet and superyacht in the US and around the globe. The news outlet said the frequency of the gifts has “no known precedent in the modern history of the US supreme court”.skip past newsletter promotionafter newsletter promotion“The report describes conduct by a sitting justice that he did not disclose to the public and that is plainly inconsistent with the ethical standards the American people expect of any person in a position of public trust,” the senators wrote.Democratic US representative Alexandria Ocasio-Cortez said on Sunday she wants Thomas impeached over his trips.“It is the House’s responsibility to pursue that investigation in the form of impeachment,” she told CNN in an interview.Ocasio-Cortez acknowledged, however, it was unlikely the Republican majority in the House of Representatives would want to take action against the conservative justice. More