Budget Remains in Spotlight, Biden Trilateral Summit

Key Takeaways
  • House Republicans held a conference call on Monday evening to discuss the looming October 1 deadline for 12 federal budget bills.
  • Conservative Republicans' desire to roll spending back to FY2022 levels might result in Speaker McCarthy needing Democratic votes to get budget legislation passed.
  • The leaders of U.S., Japan, and South Korea are meeting in Camp David this weekend, with China-related issues expected to dominate discussions.

The budget news of the week was a conference call on Monday night with House Republicans led by Speaker McCarthy.  During the call, the Speaker brought up the subject of the budget and the need to take action by October 1 in order to avoid a partial government shutdown.  On the call, the Speaker raised the issue of a Continuing Resolution (CR) that would buy time for the House and Senate to work out the 12 budget bills that fund the government.

Senate Leader Chuck Schumer told the press that he indeed has had preliminary talks with the Speaker about a CR; but as news spread, a group of conservative Republicans raised doubts about a CR, and a continuation of policies they oppose.  A CR maintains spending at current year levels, but conservative Republicans want to roll back spending to FY 2022 levels. They would have a hard time supporting spending at FY 2023 levels. With only a five-seat majority, the Speaker is likely to find himself in a bind where he will need Democratic votes to replace those he may lose from Republicans.  While this strategy worked on the debt ceiling, there is concern that it won’t work again on the budget.

US/Japan/South Korea summit

President Biden invited the leaders of Japan and South Korea to join him at Camp David to discuss trilateral issues.  The focus is on how the three can coordinate policies as they relate to the growing threat of China. 

Japan and South Korea have a long history of disputes, and the summit will test the President’s international relations skills.  The Chinese navy has had drills near the territorial waters of both South Korea and Japan, and of course, both nations have concerns with the growing military power of North Korea. North Korea has sent missiles over the air spaces of both Japan and South Korea. 

A joint communique is expected by the end of the weekend.

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