Raising the Debt Limit and Increasing Cybersecurity
October 28, 2015
White House and Congress strike a deal to raise the debt limit and set a budget for the next 2 years; a major cybersecurity bill in the senate could help secure nation’s digital infrastructure by encouraging private companies to share their information; consumer confidence falls in October due to lower job availability; US business investment plans fall for second straight month in September, possibly suggesting slowing economic growth.
- The White House and Congress struck a deal late Monday to effectively raise the federal debt limit and set a budget for the next two years. The deal would remove the risk that the government defaults and diminish the prospect of a partial government shutdown in December. It extends the Treasury Department’s borrowing authority through mid-March 2017 and increases spending by $80 billion through September 2017. The $80 billion over the next two years would increase both defense and domestic spending. Specifically, the deal increases spending by $50 billion in fiscal year 2016 and $30 billion in fiscal year 2017, split evenly between military and domestic spending. On Nov. 3, the Treasury will exhaust the emergency cash-management measures it has employed since March if the debt limit isn’t increased or extended. Meanwhile, Congress faces a looming Dec. 11 deadline when government funding runs out. The House is expected to vote Wednesday on the agreement, before the legislation moves to the Senate. [WSJ, Reuters]
- A major cybersecurity bill is quietly moving in the Senate, in the midst of fiscal issues and leadership fights in Congress. Senators on Tuesday will consider multiple proposed changes before making a final vote. Supporters of the legislation, which was drafted in the Intelligence Committee, say that it could help secure the nation’s digital infrastructure by allowing private companies to share information about threats and attacks with federal government and help companies to better protect themselves. Senator Mitch McConnell of Kentucky says that the legislation’s voluntary information-sharing provisions are “key to protecting the personal information of the people we represent.” Critics of the measure, on the other hand, say that it could lead to more government snooping and grant access to private information without substantially reducing the possibility of damaging disclosures of personal data. Despite the criticism, the measure has bipartisan support and is likely to pass and move into negotiations with the House. [NYT]
Economic Indicators & News
- The Conference Board, a private research group, said Tuesday that its index of consumer confidence fell to 97.6 in October from a revised 102.6 in September. This index was lower-than-expected, according to economists surveyed by the Wall Street Journal who had expected a reading of 102.8. Consumers say that there are fewer jobs available than there were in September and that jobs are harder to get. Despite expectations for a decrease in consumer confidence, the consumer confidence index has been posting a series of very strong readings amidst troubles in foreign demand and global financial markets. The Conference Board survey also found similar adjustments to expectations about incomes, with slightly fewer people expecting a raise and more expecting a decline in income. [Bloomberg, WSJ]
- According to Reuters, a gauge of U.S. business investment plans fell for a second straight month in September. This may suggest a slowdown in economic growth and cast doubts on whether the Federal Reserve will raise interest rates this year. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dropped 0.3 percent last month after a downwardly revised 1.6 percent decline in August, according to the Commerce Department. [Reuters]