Tag: economy
Greg Abbott

How Texas Gov. Abbott Ruined Eclipse Bonanza For A Small Border Town

The local economy of Eagle Pass, Texas was all set to rake in a huge financial windfall this weekend, when the town was expected to play host to tens of thousands of visitors eager to be the first in the US to see Monday's solar eclipse. Instead, Republican Gov. Greg Abbott's ongoing border standoff with the federal government ended up scaring most tourists away.

According to the Daily Beast, Aide Castano — the municipality's marketing and tourism director — told a meeting of the local Rotary Club last year that the town of 28,000 residents could expect to see its population temporarily swell to more than 100,000 people on the first weekend of April for the eclipse boom. The city scheduled a music festival to take place dubbed the "57 South Music Festival" set to last three nights, featuring 17 bands on two separate stages.

"If you’re a music lover and a celestial enthusiast, then there’s no better time to start planning your trip to Eagle Pass, Texas!" An advertisement from the city read.

"Mark your calendar for the eclipse, get your grocery shopping done, we’re gonna have 100,000 people in Eagle Pass, we’re gonna have millions of dollars in sales for downtown Eagle Pass," local resident Amerika Garcia-Grewell recalled Castano saying. In an interview with Texas Monthly, Castano said planning for this eclipse weekend first began in 2002, telling the publication that one of her coworkers said "this is like our Super Bowl."

"One of the real estate agents is like, ‘Airbnb will make $10,000 in the eclipse weekend,'" Garcia-Grewell recalled in an interview with the Beast.

However, Eagle Pass' economy became a secondary concern for Gov. Abbott, who heavily militarized the town's border crossing at the Rio Grande River center stage as part of his $10.5 billion Operation Lone Star protest of federal immigration policy under the Biden administration. Earlier this year, Abbott ordered a length of razor wire to be built along the Rio Grande in Eagle Pass to deter immigrants from crossing. The Supreme Court ordered Abbott to take it down, stating that international borders were under the jurisdiction of the federal government, not state governments.

After federal agents cut the razor wire, Abbott retaliated by building even more, and ordering national guardsmen to stand by at the border crossing in a show of force. Former President Donald Trump commended Abbott for his defiance of the Supreme Court, and posted a call to action to his Truth Social platform encouraging Republican governors to likewise deploy their national guard troops to the Southern border in Eagle Pass.

Meanwhile, the intimidating presence of troops and razor wire at the Rio Grande ended up scuttling the original plans for the 57 South Music Festival in Eagle Pass for the weekend of the solar eclipse. The Beast reported that the location for the festival was moved to the Kickapoo Lucky Eagle Casino, which is a 20-minute drive by car. As a result of the change, tickets for the festival dropped significantly in price. And at a March 14 town hall meeting, the town lowered their expectations for eclipse visitors from more than 100,000 to approximately 50,000.

Garcia-Grewell, the Eagle Pass resident, recalled to the Beast that she was told the city spent roughly $3.5 million on the festival, yet sold only 2,500 tickets. She further elaborated that the city would have had to sell tickets at $1,400 apiece just to break even when accounting for the total cost.

The 57 South Music Festival kicked off Friday afternoon, though crowds were sparse. Local music producer Tony Rodriguez said that he counted just 30 people at 4 PM local time, and only 150 people by 6 o'clock.

"The worst flop ever," he said.

Garcia-Grewell maintained that despite the swarm of soldiers and razor wire barrier, Eagle Pass was safe. Border crossings went from 2,000 per day in December to just a few dozen months later. While some of that could be attributed to Operation Lone Star, Mexico's government also stepped up their efforts to stem migrant traffic into the US.

"The State of Texas is making it look like a war zone, even though we’re one of the safest places in Texas,” she said. “And the city of Eagle Pass was not able to counter that. They won’t say anything against the state of Texas because Eagle Pass is so dependent on state funding."

Reprinted with permission from Alternet.

Biden Rebuffs 'Extreme' GOP But Expresses Optimism On Avoiding Default

Biden Rebuffs 'Extreme' GOP But Expresses Optimism On Avoiding Default

Washington (AFP) - Talks to avoid a US debt default were on a knife edge Saturday as President Joe Biden warned he would not accept "extreme" Republican demands but said he remained optimistic.

"I still believe we'll be able to avoid a default and we'll get something decent done," he told reporters at the G7 summit in Hiroshima, Japan.

With the Treasury Department warning that the US government could run out of money as early as June 1 -- triggering massive economic disruption in the world's biggest economy and likely around the globe -- the political battle in Washington has see-sawed without any clear sign of resolution.

Republicans, who control the House of Representatives, are demanding steep budget cuts as a price for allowing an extension of the government's borrowing authority. The White House is seeking to whittle down Republican demands, while arguing that the traditionally uncontroversial annual debt ceiling increase is being weaponized for political gain.

Hopes for a settlement took a blow Friday when Republicans walked out of negotiations, declaring a "pause."

However, the talks restarted hours later, leading White House Press Secretary Karine Jean-Pierre to say "we are indeed optimistic."

Biden, on the other side of the world for the gathering of rich democracies, was briefed on the situation early Saturday, which was still Friday night in Washington, the White House said.

Biden communications director Ben LaBolt said "Republicans are taking the economy hostage and pushing us to the brink of default, which could cost millions of jobs and tip the country into recession after two years of steady job and wage growth."

While Biden will not accept "extreme" Republican policies, "there remains a path forward to arrive at a reasonable bipartisan agreement if Republicans come back to the table to negotiate in good faith," LaBolt said.

Taxing And Spending

More borrowing is required by the US government just to meet expenditures already made, meaning that refusal by the Republicans to lift the debt ceiling would leave Washington unable to pay its bills, triggering an array of economic shockwaves.

Republicans argue that the more than $31 trillion in US national debt is too high to accept and that there should be agreement on getting the books more balanced, rather than simply authorizing a still-higher debt allowance. They passed three increases in the debt limit without dissent while Donald Trump was president.

Democrats say that they are willing to discuss the budget but that first the debt ceiling needs to be raised without condition so that the existing bills can be paid and US financial credibility preserved.

Briefly calling off the talks on Friday, House Speaker Kevin McCarthy said: "We've got to pause," because "we can't be spending any more money next year." He failed to acknowledge that Trump increased the debt by nearly $8 trillion -- an historic record.

Biden's team says the raft of spending cuts being demanded by Republicans are fueled by the agenda of the party's increasingly dominant hard-right wing.

In his statement, LaBolt said that the Republican budget cuts would lead to large-scale job losses and the weakening of social safety nets, while extending tax breaks for the wealthy. The counter-proposal from the White House is to raise taxes on the wealthy to improve revenue and to accept more limited spending cuts.

In his remarks to reporters, Biden expressed a willingness to be patient.

"It's a negotiation. It goes in stages," he said. Asked if he was worried, he replied: "Not at all."

The president leaves Japan for Washington on Sunday, cutting short a trip that had been set to take him to Papua New Guinea and Australia next week.

Biden Will Meet With Republican Leaders Tuesday To Thwart Default Disaster

Biden Will Meet With Republican Leaders Tuesday To Thwart Default Disaster

Washington (AFP) - Washington's power brokers love playing chicken. But the rest of the world will watch in dread Tuesday when President Joe Biden and Republican leaders meet to negotiate the US debt ceiling -- praying that one side finally blinks.

The White House summit between Biden, House Speaker Kevin McCarthy and Senate Republican leader Mitch McConnell sets in motion the deciding round of a power struggle whose outcome will impact the global economy and could upset the 2024 US presidential election.

The immediate issue is raising the debt ceiling, an arcane budgeting procedure that most years passes with little controversy. Basically, the US government always spends more than has been budgeted but, unlike in most countries, then requires congressional approval to borrow extra.

This year, McCarthy and his radicalized right-wing party have decided to say no, unless Democrats first agree to sweeping budget cuts, giving in to the Republican message that Biden has been profligate and irresponsible.

Biden, who will be joined in the White House talks by the Democratic minority leader in the House of Representatives, Hakeem Jeffries, and the Democratic majority leader in the Senate, Chuck Schumer, accuses Republicans of "hostage" taking.

He insists that the debt ceiling first be raised -- as in other years -- and only then can he and the Republicans discuss cutting the budget to reduce that decades-old accumulated debt, currently the world's biggest at $31 trillion.

A dispute over sequencing might sound academic.

However, with both sides dug in and the deadline approaching, the debate has turned into a life-or-death test of political strength.

Fail to authorize more borrowing and the government will run out of money and default.

Cue worldwide panic.

Soaring interest rates, stock sell-offs, Treasury bond downgrades, and near certain US recession will be on the menu -- and that's before factoring in long-term harm to the US geopolitical brand.

"Even getting close to a breach of the US debt ceiling could cause significant disruptions," warned a White House analysis. "An actual breach of the US debt ceiling would likely cause severe damage."

When is doomsday? No one knows for sure.

But US coffers could run dry as early as June 1, according to the Treasury.

That's just over three weeks from the Tuesday sit-down.

Huge Divide

As the clock ticks away, the divide appears unbridgeable.

The White House is clinging to an "irrational, reckless" strategy and Democrats are "terrified" about allowing "clueless" Biden to negotiate, tweeted the Freedom Caucus -- the group of hard-right Republicans effectively controlling the razor-thin Republican majority in the House.

Biden is not budging.

A strong economic recovery from the Covid era is one of Biden's main cards in his bid for a second term next year. So the 80-year-old has all the more reason to steer the country clear of crisis.

Yet he's also adamant about not caving into the Republican attempt to link budget negotiations to the debt ceiling, saying this will transform a basic, fundamental obligation into a political football.

"They're trying to hold the debt hostage to (get) us to agree to some draconian cuts," he told advisors Friday.

Biden repeated one of his favorite stats, noting that Republicans had voted, without imposing any conditions, to extend the debt ceiling three times during the presidency of Republican Donald Trump.

"No one's ever not voted to increase the debt limit." he said. "I'm going to reiterate to congressional leaders that they should do what every other Congress has done -- that is, pass the debt limit, avoid the default."

Analysts say there are several potential exit ramps from imminent default.

The two sides could simply punt, extending the debt ceiling for a few weeks, while talks continue.

They could come to a messy compromise that resolves the issue by promising yet-to-be-determined budget cuts, but condemning the nation to repeat the whole drama in an election year.

Failing all else, the White House has not ruled out invoking a constitutional power to bypass Congress altogether and unilaterally authorize more borrowing -- except this would likely be challenged in court.

"I've not gotten there yet," Biden said late Friday in an MSNBC interview on use of the 14th Amendment.

Short of an unexpected political truce, however, there are no easy options.

And while much of the world looks on nervously, some countries are watching in glee, the Biden administration warns.

"They love to see chaos in the American system," White House budget director Shalanda Young said, referring to China and Russia. "They love to see that we can't do our basic jobs."

 Mitch McConnell

Moody's Chief Economist Warns GOP Blackmail Will Drive Economy 'Off A Cliff'

The Senate Budget Committee held its first congressional hearing on the debt limit/spending cuts extortion bill the House Republicans passed last week. Dubbing it "Default on America," Sen. Sheldon Whitehouse said he called the hearing because House Speaker Kevin McCarthy broke his promise of transparency and regular order in passing a bill “cobbled together by House extremists in back rooms, in the dark of night.”

Democrats were marginally successful in getting their message out: Republicans are holding the nation’s economy hostage with two disastrous choices, both promising economic chaos. Republicans reinforced that message by hijacking the hearing to talk about the dangers of the deficit—no Republican was swayed by being lumped in with the House extremists.

"Attempting to extract partisan policy confessions with threats to intentionally drive the American economy off a cliff is the very definition of extremism," Whitehouse said, kicking off the hearing. He pointed out that 275 pages out of the bill’s 315 pages were giveaways to the fossil fuel industry.

Mark Zandi, chief economist at Moody’s Analytics, was the Democrats’ chief witness. He reiterated that either of the options Republicans were offering would send the country into recession and steep unemployment. It would be economic chaos either way, which seems fine with most Republicans in the Senate.

Most Republicans are fine with it. One, Sen. Mitt Romney, the “moderate,” acknowledged it “would be awful” to default on the debt, but it would all be the Democrats’ fault because they didn’t fix it when they had the chance.

No, really. That’s what he said. “Don’t forget that that could have been solved a long time ago by our Democrat friends simply in their reconciliation bill doing what Leader McConnell asked them to do, which is just raise the debt ceiling yourselves—didn’t need a single Republican vote, not a single vote!” Romney railed. Politics got in the way, he said. Not Republicans who refuse to do the bare minimum requirement of their job: keeping the nation economically afloat. Why can’t Democrats save us from ourselves! Romney lamented.

Other Republicans barely acknowledged the ticking time bomb of a default, just three weeks away. Like Romney, they followed the lead of Minority Leader Mitch McConnell, washing their hands of any responsibility for fixing this. They went with beating up on President Joe Biden instead.

The top Republican on the committee, Iowa Sen. Chuck Grassley, blasted Democrats for “showboating.” Louisiana Republican Sen. John Kennedy went with calling Biden “immature” for insisting that it’s dangerous to take the the full faith and credit of the nation hostage. Kansas’ regrettable choice for a senator, Republican Roger Marshall, used his time to rail about Democrats’ focus on climate change.

What every single Republican who spoke Thursday demonstrated was that they’re as much in the pocket of the Freedom Caucus maniacs as McCarthy. They’re rooting for economic chaos, making the calculation that a ruined economy will be good for their 2024 election prospects.

That should have been the message from Democrats in the hearing Thursday: Republicans are willing to blow the whole economy to pieces to put the likes of Donald Trump back in the White House. Biden and congressional Democrats need to make that the sharp focus: How far Republicans will go to win.

Reprinted with permission from Daily Kos.