Aurelia Butler

WASHINGTON (Reuters) -A handful of hard-right Republican lawmakers said on Monday they would oppose a deal to raise the United States’ $31.4 trillion debt ceiling, in a sign that the bipartisan agreement could face a rocky path through Congress before the U.S. runs out of money next week.Although expected, the opposition illustrates the hurdles that Democratic President Joe Biden and top congressional Republican Kevin McCarthy will have to overcome to see the Republican-controlled House of Representatives and Democratic-controlled Senate pass the package.Florida Governor Ron DeSantis, a candidate for the Republican 2024 presidential nomination, said the deal does not do enough to change the fiscal trajectory. “After this deal, our country will still be careening toward bankruptcy,” he said on Fox News.Still, backers predicted it would clear Congress before the United States runs out of money to pay its bills, which the Treasury Department says will happen on June 5.”This thing will absolutely pass. There’s no question about that,” said Republican Representative Dusty Johnson, who said he had talked to dozens of fellow lawmakers. Biden said he had been working the phones, as well. “It feels good. We’ll see when the vote starts,” he told reporters. The 99-page bill would suspend the debt limit through Jan. 1, 2025, allowing lawmakers to set aside the politically risky issue until after the November 2024 presidential election. It would also cap some government spending over the next two years.A crucial first test will come on Tuesday, when the House Rules Committee takes up the bill, in a necessary first step before a vote in the full House. Though the panel is normally closely aligned with House leadership, McCarthy was forced to include some skeptical conservatives as a price for winning the speaker’s gavel.One of those conservatives, Representative Chip Roy, said on Tuesday he did not support the bill.”It’s not a good deal. Some $4 trillion in debt for – at best – a two-year spending freeze and no serious substantive policy reforms,” Roy wrote on Twitter.Another panel member, Ralph Norman, has already come out against the agreement. McCarthy told reporters on Monday he was not worried about the package’s prospects in the committee.In the Senate, Republican Mike Lee also came out against the bill, which could point to a difficult vote there, where any member has the power to delay action for days. Democrats control the Senate by 51-49.McCarthy has predicted it will draw the support of most of his fellow Republicans, who control the House 222-213. House Democratic Leader Hakeem Jeffries said he expects support from his side of the aisle — though many on his party’s left may vote “no” as well. Representative Raul Grijalva, a progressive Democrat, wrote on Twitter that the bill’s changes to environmental rules were “disturbing and profoundly disappointing.”Grijalva was referring to an element of the bill that would speed up the permitting process for some energy projects. The bill would also claw back unused COVID-19 funds, and stiffen work requirements for food aid programs for poor Americans.It would shift some funding away from the tax-collecting Internal Revenue Service, though White House officials say that should not undercut enforcement in the near term. Initial reaction has been positive from financial markets, which would be thrown into chaos if the United States was unable to make payments on its securities, which form the bedrock of the global financial system.But some investors are wary that the spending cuts secured by McCarthy could weigh on U.S. growth. Investors are also bracing for potential volatility in the U.S. bond market.Republicans have argued that steep spending cuts are necessary to curb the growth of the national debt, which at $31.4 trillion is roughly equal to the annual output of the economy.Interest payments on that debt are projected to eat up a growing share of the budget in the decades to come as an aging population pushes up health and retirement costs, according to government forecasts.The deal would not do anything to rein in those fast-growing programs. Most of the savings would come by capping spending on domestic programs like housing, border control, scientific research and other forms of “discretionary” spending. Military spending would be allowed to increase over the next two years. More

NEW DELHI (Reuters) -India has filed a graft case against Britain’s BAE Systems (OTC:BAESF) plc and Rolls-Royce (OTC:RYCEY) Holdings for “criminal conspiracy” in the procurement and licensed manufacturing of 123 advanced jet trainers, a federal police document showed.The case is based on the findings of an investigation launched by India’s Central Bureau of Investigation (CBI) in 2016, the document dated May 23 said. Rolls-Royce said the allegations being investigated were disclosed back in 2017, when it paid a 497 million pound fine to Britain’s Serious Fraud Office (SFO) to settle a case involving transactions with countries including China, India and Thailand. A spokesperson for the company said it was continuing to assist Indian authorities in their investigation, and that it was now “a fundamentally different business”.”We will not tolerate business misconduct of any sort and are committed to maintaining high ethical standards,” the spokesperson said. In its response BAE said it would be inappropriate to comment on an ongoing probe. India’s defence ministry did not respond to a request for comment.The document seen by Reuters alleged the manufacturers of the trainer jet paid commissions in violation of Indian defence contract rules to middlemen who helped them get the contracts by exerting “undue influence” on Indian government officials.It also said that Rolls-Royce India and its officials entered into a criminal conspiracy with unknown officials of India’s defence ministry and two middlemen between 2003 and 2012 for contracts linked to the trainer jets.India in 2005 signed a deal to buy 24 Hawk 115 advanced jet trainers for 734.21 million pounds ($926.65 million), and licensed manufacturing of 42 jets for 308.25 million pounds, along with the supply of materials and transfer of technology.This was done, the CBI said in its document, “in lieu of huge bribes, commissions and kickbacks paid by the said manufacturer and its officers to intermediaries”. Between 2008 and 2010, it said the Indian government approved the licensed manufacturing of an additional 57 jets for 95 billion rupees ($1.16 billion) under a separate agreement with BAE Systems (Operations) Ltd. The filing of the document is the first step towards a formal trial.($1 = 0.7923 pounds)($1 = 81.7800 Indian rupees) More

Turkey’s lira weakened in the aftermath of Recep Tayyip Erdoğan’s re-election, as analysts warned that the next big test for the victorious president would be addressing the country’s shaky $900bn economy.Many economists argue that Erdogan’s policies of low interest rates and emergency measures to prop up the currency cannot continue. The lira hovered around record lows on Monday after breaching TL20 to the US dollar late last week.“The current policy stance has become unsustainable,” said Liam Peach at Capital Economics in London. “Turkey cannot continue with very low interest rates, very loose fiscal policy and burning through all sorts of foreign currency reserves for much longer.”Turkey’s reserves have dropped by about $27bn this year as the country has attempted to prop up the lira and finance a current account deficit at near record levels. Official data puts the reserves, including foreign currency and gold, at just above $101bn. However, net reserves, a figure that strips out liabilities, are in effect zero, and deeply negative when excluding tens of billions of dollars in money borrowed from the local banking system, according to JPMorgan.Clemens Grafe, an economist at Goldman Sachs in London, said reserves were now “close to levels when previously lira volatility sharply increased”. But immediately after securing his victory in Sunday’s run-off vote with 52 per cent of the vote, Erdoğan insisted he would maintain his low-interest rate policy, even though inflation is currently above 40 per cent.“If anyone can do this, I can do it,” he said. “[The central bank’s main interest rate] has now been reduced to 8.5 per cent and you’ll see inflation will also fall.”He added that “eliminating the problems of price increases caused by inflation and the loss of welfare are the most urgent topics of the coming days” — but gave no specifics.Investors are also concerned about the equivalent of $121bn that Turks have put in special savings accounts paying out at the government’s expense if the lira depreciates.The measure has slowed the rate at which Turks have been purchasing foreign currencies, but Nureddin Nebati, finance minister, said the accounts had cost the country roughly TL95.3bn ($4.7bn) since they were introduced in 2021.The hit to public finances could increase rapidly if the lira falls faster in coming weeks.However, Erdoğan may be able to draw on fresh funding from allies in the Middle East and Russia, analysts maintain. The president said last week that unnamed Gulf states had contributed funds to help stabilise Turkey’s markets, but did not elaborate. Erdoğan would probably receive a short-term boost from summer tourist cash receipts that tend to ease strains on the country’s finances, said Wolf Piccoli at the Teneo consultancy.Turkey’s Bist 100 stock index, which has been boosted by locals seeking refuge from high inflation, also jumped more than 4 per cent on Monday.

Some economists say that Erdoğan may appoint a new economic team, bringing back names that are well-known to foreign investors. “With the elections behind us, all eyes will be on the composition of the economic team and the credibility of the initial policy response,” said Ilker Domac at Citigroup. But Domac also warned that it would be “increasingly challenging” for Turkey’s central bank to keep interest rates far below inflation, “particularly during the last quarter of the year and thereafter”.Other economists signalled a greater degree of alarm.“Be ready for the worst, which may entail formal capital controls or serious deposit flight from the banking system,” wrote Atilla Yesilada at the GlobalSource Partners consultancy in Istanbul. More

Auto makers, tech companies and semiconductor producers could be among investors in the parks, Economy Minister Raquel Buenrostro said this month, noting officials were pitching the project to companies from the U.S., Canada, Taiwan and Germany.Lopez Obrador said last week the government is willing to provide subsidies and grant tax cuts to companies that set up operations in the so-called Inter-Oceanic Corridor.The project is taking shape along the stretch connecting the Pacific port of Salina Cruz in Oaxaca state with the Gulf coast hub of Coatzacoalcos in Veracruz state. It ultimately aims to compete with the Panama Canal as a channel to move goods. More