Latest news with #SenateBudgetCommittee
Newsweek
4 days ago
- Business
- Newsweek
US on 'Precipice of Recession,' Warns Leading Economist
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A leading economist believes that recent reports on the health of the U.S. economy point to an impending downturn. "The economy is on the precipice of recession. That's the clear takeaway from last week's economic data dump," Moody's Chief Economist Mark Zandi posted to X on Sunday. "Consumer spending has flatlined, construction and manufacturing are contracting, and employment is set to fall." Why It Matters Zandi has sounded several similar alarms about the state of the U.S. economy in recent months, and the risks of a recession, which he has attributed largely to the trade policies of the administration and viewed as exacerbating more long-term vulnerabilities. What To Know Last week saw a tranche of key economic data published by various government agencies. America's trade deficit narrowed in June, consumer sentiment measures for July improved modestly following months of declines, and gross domestic product (GDP) growth rebounded sharply in the second quarter from a troubling contraction in the first, according to an advance estimate from the Department of Commerce. However, as Zandi noted, other indicators were less encouraging. Manufacturing activity slowed in July, job openings in June fell by a greater-than-expected 275,000 and consumer spending, though growing, still lags behind the robust growth seen in 2024. Much of this data was eclipsed by Friday's employment report from the Bureau of Labor Statistics (BLS). This revealed that the U.S. economy added 73,000 jobs in July, well below forecasts. In addition, revisions to May and June's figures showed that employment during these months was 258,000 lower than previously reported. Moody's Analytics Chief Economist Mark Zandi speaks with reporters after a Senate Budget Committee hearing on debt ceiling legislation on Capitol Hill May 4, 2023. Moody's Analytics Chief Economist Mark Zandi speaks with reporters after a Senate Budget Committee hearing on debt ceiling legislation on Capitol Hill May 4, 2023. Francis Chung/POLITICO via AP Images The substantial revision led President Donald Trump to say that the figures had been "RIGGED in order to make the Republicans, and ME, look bad," and he immediately fired BLS Commissioner Erika McEntarfer. The White House has defended McEntafer's dismissal by pointing to perceived aberrations in both this and previous employment reports during her leadership, considering such large revisions "hard evidence" of politically motivated data manipulation. But the move has been roundly criticized by Democratic lawmakers and certain Republicans, with many warning this sets a dangerous precedent for political interference in statistical reporting and will erode trust in the bureau's future work. "Any notion that the economic data misrepresents the reality of how the economy is performing is way off base," Zandi wrote on Sunday. "The data always suffers big revisions when the economy is at an inflection point, like a recession. It's thus not at all surprising that we are seeing big downward revisions to the payroll employment numbers." He added that cuts to the federal workforce by the Department of Government Efficiency (DOGE) were a "key factor" in the BLS revisions, given that government departments are often late in reporting payrolls to the bureau. What People Are Saying Moody's Chief Economist Mark Zandi, via X: "It's no mystery why the economy is struggling; blame increasing U.S. tariffs and highly restrictive immigration policy. The tariffs are cutting increasingly deeply into the profits of American companies and the purchasing power of American households. Fewer immigrant workers means a smaller economy." Economist Jared Bernstein wrote on Monday: "It's not that the BLS did something wrong. It's that, as usual, they did something right. They got new data with which they updated/revised the old data. The fact that the revision was history large and negative just tells us that the labor market was a lot weaker than we thought it was." He added that the downward revision does "not necessarily" mean the U.S. is headed for a recession, but that weak consumer spending and investor demand will continue to weigh on economic growth and labor market health. White House press secretary Karoline Leavitt said following last week's GDP reading: "Today, GDP growth came in above market expectations, and yesterday, consumer confidence rose. Americans trust in President Trump's America First economic agenda that continues to prove the so-called 'experts' wrong. President Trump has reduced America's reliance on foreign products, boosted investment in the U.S., and created thousands of jobs—delivering on his promise to Make America Wealthy Again." What Happens Next? As Zandi noted in his post, resilient labor market conditions had been one of the key factors factors undergirding the Federal Reserve's wait-and-see approach, and holding off on rate cuts while it works to get a clearer grasp on inflationary pressures. But, with inflation still ticking above its 2 percent target, he said "it is tough for the Fed to come to the rescue." On Friday, Goldman Sachs Chief Economist Jan Hatzius said the troubling revisions to recent jobs data made it "very, very likely" the central bank would cut rates at its September meeting.
The Hill
4 days ago
- Business
- The Hill
CBO projects ‘big, beautiful bill' would add $5T to deficit if temporary tax cuts extended
The Congressional Budget Office informed Senate Budget Committee Ranking Member Jeff Merkley (D-Ore.) in a letter Monday that the One Big, Beautiful Bill Act, President Trump's signature domestic policy accomplishment, would add $5 trillion to the deficit over the next decade if its temporary tax relief provisions are extended for a full 10 years. The budget office projects that if temporary tax relief provisions, such as the tax exemption on tipped wages up to $25,000 and the $6,000 senior deduction, are made permanent, it would add another $789 billion to the debt over the next 10 years. That and $718 billion in debt-servicing costs bring the total price tag for Trump's 'big, beautiful bill' to nearly $5 trillion over a decade. The CBO estimates that as a result, the total amount of federal debt held by the public would increase by 11.5 percentage points by the end of 2034. 'Each and every analysis from the nonpartisan Congressional Budget Office continues to show the same result regardless of how you look at it: this bill explodes the debt by trillions of dollars to fund tax breaks for billionaires,' Merkley said in a statement. 'It is the height of hypocrisy coming from the party that claims to be fiscally responsible,' he said. CBO produced its estimate in response to Merkley's request asking for the budgetary impact of making 10 provisions in Trump's domestic policy law that are due to sunset in the next few years. They include the senior deduction, the tax exemption for tipped income, the tax deduction on overtime income up to $12,500 for individuals and $25,000 for joint-filers, and the tax deduction on auto loans for new cars made in the United States. The CBO noted to Merkley that the Joint Committee on Taxation has estimated that making those 10 provisions permanent would increase primary deficits over the 2025–2034 period by an additional $789 billion. 'That change would increase the cumulative effect on the deficit to $5.0 trillion,' the CBO wrote to Merkley. 'As a result, and net of any changes in borrowing for federal credit programs, CBO estimates that debt held by the public at the end of 2034 would increase by 11.5 percentage points relative to the agency's January 2025 projection of GDP,' it estimated.
Yahoo
22-07-2025
- Business
- Yahoo
Alarming report warns that huge number of once-valuable homes may soon be 'worthless': 'State of crisis'
Alarming report warns that huge number of once-valuable homes may soon be 'worthless': 'State of crisis' A study has shown that destructive weather patterns are causing massive strain on the California home insurance market, according to InsuranceNewsNet. What's happening? California has been battered by catastrophic wildfires in recent years, leaving properties and lives in shambles. Direct air capture company Deep Sky has released findings showing that one in five homes in the most extreme fire risk areas of California have lost insurance coverage since 2019. Many insurance companies pulled coverage just months before the record-setting Palisades fires in January 2025. "The home insurance market is in a state of crisis. The highest risk areas of California have effectively become uninsurable and will soon become unaffordable," said the report. "Banks will not approve mortgages without home insurance, and few will buy a house without a mortgage (in a high risk wildfire area no less). Without significant policy intervention, these properties will eventually become worthless." Why is home insurance important? "We are in a statewide insurance crisis, affecting millions of Californians," said Insurance Commissioner Ricardo Lara, per InsuranceNewsNet. "Taking this on requires tough decisions. This is not a game." This sentiment has been shared by the U.S. Senate Budget Committee, which has projected that climate shifts will prompt a housing market crash worse than the one in 2008. What's being done about home insurance hikes? Wildfire season has begun in the state, and solutions are hard to find. "California is just entering the worst phase of its crisis," said Diane Delaney, executive director of the Private Risk Management Association, per InsuranceNewsNet. "Regulatory limitations have made it difficult for insurers to adjust pricing or expand capacity in high-risk areas." While California has a state-backed insurer of last resort, the amount of risk they're able to be exposed to is limited. Florida has attempted several reforms, which have included financial support for insurers, but homeowner rates have continued to rise despite the "corporate welfare." Do you feel like your home is well-insulated? Definitely In most areas Only in some rooms Not at all Click your choice to see results and speak your mind. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet. Solve the daily Crossword
Yahoo
10-07-2025
- Politics
- Yahoo
Oregon Democratic Sen. Jeff Merkley says he's running for reelection
PORTLAND, Ore. (AP) — Democratic U.S. Sen. Jeff Merkley of Oregon said Thursday that he will run for reelection next year to seek a fourth term in Congress. In a statement, the 68-year-old denounced the Trump administration and described efforts to stand against growing threats to democracy as 'the fight of our lives, and I'm not backing down.' "This is a dark and dangerous time for our democracy, and the only way through it is together,' he said. Merkley is the top Democrat on the powerful Senate Budget Committee. His most recent reelection to the Senate was in 2020, with nearly 57% of the vote. Merkley has served in Congress since 2009. Before that, he served roughly a decade in the Oregon House of Representatives. Oregon's other Democratic senator, Ron Wyden, isn't up for reelection until 2028.
Hamilton Spectator
10-07-2025
- Politics
- Hamilton Spectator
Oregon Democratic Sen. Jeff Merkley says he's running for reelection
PORTLAND, Ore. (AP) — Democratic U.S. Sen. Jeff Merkley of Oregon said Thursday that he will run for reelection next year to seek a fourth term in Congress. In a statement, the 68-year-old denounced the Trump administration and described efforts to stand against growing threats to democracy as 'the fight of our lives, and I'm not backing down.' 'This is a dark and dangerous time for our democracy, and the only way through it is together,' he said. Merkley is the top Democrat on the powerful Senate Budget Committee. His most recent reelection to the Senate was in 2020, with nearly 57% of the vote. Merkley has served in Congress since 2009. Before that, he served roughly a decade in the Oregon House of Representatives. Oregon's other Democratic senator, Ron Wyden, isn't up for reelection until 2028. Error! Sorry, there was an error processing your request. There was a problem with the recaptcha. Please try again. You may unsubscribe at any time. By signing up, you agree to our terms of use and privacy policy . This site is protected by reCAPTCHA and the Google privacy policy and terms of service apply. Want more of the latest from us? Sign up for more at our newsletter page .
