Senate Fails To Pass Cloture On Fast Track Legislation To Give President Obama Greater Autonomy In Negotiating International Trade Agreements

Policy Watch

• The Senate failed to pass cloture (60 votes) on Fast Track legislation yesterday, as the chamber voted 52-45 for the bill that would give President Obama greater autonomy in negotiating international trade agreements. Only one Democrat, Sen. Tom Carper (D-DE), joined 51 Republicans in support of the measure that would allow for quicker approval of the 11-nation Trans-Pacific Partnership (TPP)—the largest trade deal since President Clinton’s passage of the North American Free Trade Agreement (NAFTA). Specifically, Fast Track would give Congress the authority to approve or reject, but not amend, trade deals negotiated by the White House.  Opponents of Fast Track and TPP, including Sen. Elizabeth Warren (D-MA), Ron Wyden (D-OR), and Sherrod Brown (D-OH), claim that the tariff agreements would do little to protect Americans from unfair trade practices like the dumping of cheap exports and currency manipulation among partner countries. Democrats cite the many factory closures and job loses attributed to NAFTA as reason to oppose TPP. If passed, the Trans-Pacific Partnership would create a free trade zone covering 40% of the world economy. [WSJ] [Reuters]

Economic Indicators & News

• The Department of the Treasury reported its largest monthly budget surplus last month since April 2008, as government receipts totaled $471.8 billion, the largest monthly total on record, due to a 12.9% gain in personal income tax collection and an 11.8% increase in corporate tax revenues. The total surplus was $156.7 billion, which was driven by an 8.9% surge in total revenues. Despite April’s surplus, the Congressional Budget Office is forecasting a FY 2015 budget deficit on of $486 billion. Government outlays over the past seven months have totaled $2.17 trillion, up 6.4% from the year-ago period. [Treasury]
• Data on import and export prices for April released by the Bureau of Labor Statistics today featured price declines for both imports and exports.  Import prices fell by 0.3%, which is in line with reductions of 0.2% and 0.4% seen over the previous two months.  Export prices declined more sharply, falling by 0.7%.  Fuel import prices increased by 0.7% to contribute to the decline in import price levels, somewhat countering non-fuel import prices, which fell by 0.4%.  The fall in export prices was virtually the same whether agricultural exports are included or not. [BLS] 
• Retail sales data released today for the month of April suggest that retail sales were unchanged last month.  In March, retail sales had increased by a revised 1.1%, as consumer purchases picked up in the close of a quarter of weak economic growth.  April’s unchanged retail sales mark is a product of a decline in automobile and general merchandise sales.  Without auto factored in, retail sales actually increased slightly. [Census]
• Business inventories rose 0.1% in March in a month in which total business and consumer sales reported their biggest gain in eight years, lowering the inventory-to-sales ratio from a recovery-high of 1.37 to 1.36. The combined value of sales and manufacturers shipments increased 0.4% to $1.31 trillion, which is 2.1% lower than the year-ago period. Inventories increased the most in the building materials material and fell by the greatest magnitude in department stores. [Census]