Debt Ceiling: We Could Have A Deal!

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Hi everyone—

If you’re heading out this Memorial Day weekend, “pack your patience!” (Just kidding— Mo News Podcast listeners know that expression is our pet peeve when it comes to TV lingo.)

But here is some news you CAN use: This holiday weekend is projected to be the third busiest on record, with air travel back to pre-pandemic levels, and overall travel up 7% from last year. With gas prices about a dollar less per gallon than last year at this time, 42.3 million Americans are expected to drive to their destination this weekend.

When is the BEST time to travel by car? AAA says Saturday and Sunday will have the lightest traffic. And if you have to travel today— try to leave before noon.

The WORST time to head out: Between 3 to 6 pm today. And, if you can, avoid returning after 10am Monday.

On the plus side, if you’re stuck in traffic, check out some of our special podcast episodes & interviews. Apple | Spotify

BTW— We’re off on Monday for the holiday and will see you back here Tuesday. Have a good weekend.

Mosheh, Jill, & Courtney

🗞 DEBT TALKS NEAR AGREEMENT 🤞 

We’re just one week from the U.S. government running out of money to pay the bills.

WHY THIS MATTERS
The Treasury Secretary has said next Thursday, June 1, is the date at which the U.S. could default for the first time in history. If that happens, it would likely spark a selloff in financial markets both in the U.S. and abroad.

It would also mean that many Americans who get Medicare, Medicaid, Social Security and other benefits— may not get their checks on time. Bottom line: The government will be an unprecedented situation of having to decide what bills not to pay. It comes as Bloomberg reported Thursday that the US treasury cash balance is now under $50 billion. It was at $1 trillion at this time last year.

TSK TSK TSK
This week, we got a new warning from the Fitch credit rating agency, one of the big three ratings agencies. Fitch says it’s now placed the United States’ AAA status on “rating watch negative.”

Fitch is suggesting that if Congress can’t reach a deal to either raise or suspend the debt limit before the June 1 deadline, they’ll downgrade America’s credit rating from AAA. The last time the US saw a credit downgrade was the 2011 debt ceiling standoff. A last-second deal was reached back then, but S&P determined that the US no longer was worthy of their AAA rating.

WHERE THINGS STAND
On one side: President Biden. On the other side: House Speaker Kevin McCarthy.

They appear— at least as we write this newsletter— to be nearing some type of deal that would cut spending and raise the government's $31.4 trillion debt ceiling. Republicans are demanding some significant spending cuts before they agreed to raise the ceiling.

WHAT’S IN THE DEAL?
It looks like the White House has agreed to freeze some discretionary (optional) spending, including defense spending. However, Republicans want to spend more on the military and make up for it with cuts elsewhere. That may mean President Biden will have to agree to allow military spending to go up while accepting flat annual spending or even cuts for things like education and housing. That reinforces a fear on the left that Biden would concede too much. On the right, some are saying the cuts don’t go far enough.

Sources tell Reuters, the two sides are just $70 billion apart on a total savings figure that would be well over $1 trillion.

WHAT DO AMERICANS THINK?
There’s some new polling that shows how Americans feel when it comes to the possibility that the US could default on its debt.

• Defaulting on debt is very unpopular: 84 percent of Americans believe Washington must find a way to avoid defaulting on the debt.

• At the same time, most Americans want some type of cuts to federal spending. 63 percent of respondents in an AP/NORC poll say a debt ceiling increase should be attached to spending cuts.

• Half of the public has been paying close attention to the current debate (CNN & Monmouth polls).

⏳ SPEED READ

📌 30 Tons of an explosive chemical lost during rail shipment, officials say (NBC NEWS)

📌 Supreme Court limits E.P.A.’s power to address water pollution. (NY TIMES)

📌 DeSantis campaign raises $8.2 million in first 24 hours (FOX NEWS)

📌 U.S. State Department warns China could hack infrastructure, including pipelines, rail systems (REUTERS)

📌 Killer whales wreck boat off coast of Spain (REUTERS)

📌 Elon Musk’s brain implant company Neuralink announces FDA approval of in-human clinical study (CNBC)

📌 As federal officials delayed rules on infant loungers, babies continued to die. Infants can quickly suffocate on cushioned loungers, research shows. (NBC NEWS)

📌 Man arrested after car crashes into Downing Street gates (BBC)

📌 Hurricane outlook for 2023: NOAA announces prediction for how many hurricanes will form in the Atlantic (USA TODAY)

📌 Kim Kardashian goes public on Pete Davidson split (LA TIMES)

🗓 ON THIS DAY: WEEKEND EDITION MAY 26-28

• 1896: The Dow Jones Industrial Average is first published. The Dow Jones is one of the world's most important stock market indices. It originally included 12 companies—among them General Electric. Today it comprises data from 30 major U.S. companies (GE was dropped from the DJIA in 2018.)

• 1937: Volkswagen is founded by the Nazi party in Germany.

  In addition to his ambitious campaign to build a network of autobahns/highways across Germany, Hitler’s pet project was the development and mass production of an affordable yet still speedy vehicle for $140. That car eventually became known as the Beetle.

• Happy Birthday: Lauryn Hill, 48; Lenny Kravitz, 59; Miles Davis
  

• 1983: 'Flashdance... What a Feeling' by Irene Cara reached #1 on the Billboard Hot 100

• 1968: Creedence Clearwater Revival released their debut studio album, May 28, 1968