US Adds 18,000 Jobs in June
On Friday, the Department of Labor announced that the U.S. economy added only 18,000 jobs in the month of June, edging the national unemployment rate up for the third straight month to 9.2 percent. June’s report of 18,000 new jobs is the lowest number in nine months and far below economists’ expectations of an increase of 90,000 new jobs.
Debt Limit Talks Continue into the Weekend
On Friday, a week after Vice President Biden’s debt limit negotiations halted, the White House announced that President Obama and congressional leaders would reconvene Sunday to try to finalize a deal. On Thursday, President Obama announced that he and Speaker Boehner had discussed a $4 trillion 10-year deficit reduction package that demands spending cuts and tax increases. Under this possible deal, Republicans would agree to extend the Bush-era tax cuts only for those making less than $250,000 annually, and Democrats would agree to a rewrite of the tax code that would eliminate dozens of tax breaks to lower marginal income tax rates. However, Speaker Boehner reiterated in his Friday press conference that no deal is imminent, and he believes both sides have much left to negotiate in order to agree to a deal before the August 2nd deadline.
Trade Agreements Delayed
This week during House and Senate committee hearings on the South Korea, Colombia and Panama free trade agreements, Republicans and Democrats continued to spar over unemployed workers’ retraining funding linked to the agreements. While the Congressional Budget Office has yet to provide a cost estimate for extending the retraining program, the funding is expected to be $1 billion over the course of the three-year extension. The White House’s position continues to be that approval of the trade pacts must include renewal of the retraining funding. On Thursday, House Ways and Means Chairman Dave Camp offered a compromise approach that would allow votes on the retraining programs on the same day as the trade agreements if the Administration submits them separately. While the House and Senate continue their negotiations, the final decision on how to move forward rests with the White House under fast-track authority granted when the pacts were originally negotiated.
House Republicans Push for Community Bank Capital Requirements
On Friday, the House Financial Services Committee held a hearing regarding the Federal Deposit Insurance Corporation’s demands on community banks to increase their levels of capital. The hearing focused on legislation recently introduced by Rep. Bill Posey (R-FL) that would require regulators to more narrowly focus on a whether a bank’s loans are being repaid on time and not whether others are making payments on behalf of the borrower. FDIC Deputy Director George French argued that the Posey bill would have banks and regulators disregard financial information indicating that the borrower lacks the ability to fully repay the principal and interest on the loan, even though the loan is current. French added that this would allow banks to add to their regulatory capital even though the expectation is that the loan will likely not be repaid. The bill is expected to be marked up by the Committee in the near future.
If you have any questions regarding any of these issues, please contact:
Matt Jessee, Policy Advisor
1 314 259 2463