Economy

LONDON (Reuters) -Britain’s opposition Labour Party leader said on Monday he expects his party to back a new deal on post-Brexit trading arrangements for Northern Ireland, and he set out plans for the economy while warning that the country may soon be poorer than eastern European nations.Prime Minister Rishi Sunak is expected to announce a new deal on post-Brexit trade rules for Northern Ireland on Monday after a meeting with visiting European Commission President Ursula von der Leyen.Despite not having seen the details of the government’s deal to resolve tensions caused by the 2020 post-Brexit arrangements governing the British province, Labour leader Keir Starmer said any agreement would be an “improvement”.Answering questions after a speech on the economy in central London, Starmer said he believed it is “almost inevitable” that the European Court of Justice will continue to play a role in governing any deal in Northern Ireland.Asked if he would back the deal, Starmer said: “Yes. We haven’t seen the deal yet, but I’m completely across what the issues are and what the practical solutions are.”Frankly, any step in those directions is going to be an improvement on what we’ve got, which is why I can say with confidence we expect to be able to back the deal.”Setting out his battlelines for the next national election, expected in 2024, Starmer last week promised to ensure Britain has the fastest growing economy among the G7 on a sustained basis if it wins power.Britain’s economy narrowly avoided recession in late 2022 but faces a difficult 2023 as the effects of double-digit inflation hit households. Labour published an analysis showing a measure of living standards in Britain could fall behind that of Poland by 2030 and eventually Hungary and Romania without changes to policy.The party said that, based on average 0.5% annual growth between 2010 and 2021 in Britain, that figure would fall behind Poland’s per capita GDP by 2030 if Poland kept up its 3.6% average annual growth.The comparison was based on purchasing power parity, a measure that takes into account what money can buy in different countries and usually shows narrower differences than in unadjusted comparisons.Poland, a former communist state, has experienced rapid growth since joining the European Union in 2004, in part thanks to the injection of hundreds of billions of euros worth of development funding from the bloc. Like Britain, it is experiencing high inflation and an expected slowdown.Labour did not respond to a request for details on who had conducted the analysis. Using the same analysis, the party said that by 2040, Britain on its current trajectory would fall $12,000 per person behind Romania and $8,000 per person behind Hungary, providing they also remained on the same trajectory. More

Hello and welcome back to Trade Secrets, to which I’m returning after a short break. Many thanks to Aime Williams for filling in last week. If you missed it, here is her intriguing account of how the transatlantic row over electric vehicle tax credits has widened and metastasised. Sharp-eyed readers will note that both last week’s newsletter and now this defer yet further the occasion when Trade Secrets doesn’t mention US president Joe Biden’s EV tax credits. It’s only a matter of time before I have done with it and renamed this newsletter Electric Vehicle Subsidy Transatlantic Argy-Bargy Secrets. Today’s piece is on the new leadership at the World Bank. Charted Waters continues the green energy theme by looking at the market for solar energy.Running the bank: the who . . . The nomination of former Mastercard chief executive Ajay Banga as president of the World Bank is at least a reasonable effort in box-ticking by the Biden administration. Being an American with a business background will help keep Congress happy and funding the bank, a central reason for the US lock on the presidency. Meanwhile Banga’s strong Indian credentials give at least a nod to developing countries’ concerns that it’s time they had a go. Appointing a business type without extensive development experience or economics training isn’t necessarily a terrible idea: it’s as much a management and political job as anything. Before Banga, who has a first degree in economics, the departing David Malpass seems to have been the only bank president with much formal economics training since Robert McNamara in 1968, and much good it did the bank and him. Banga has not previously managed a big public sector organisation and this will mean a steep learning curve, and coming into the job without a lot of personal political heft to throw around even more so.The big substantive issue the new boss will grapple with is the bank’s role in climate finance. But first, let’s look at the job itself.Let’s be clear: there never has been and never will be a widely-admired president of the World Bank. There are big disagreements about how to do development and the sprawling, labyrinthine institution itself contains, let’s say, the odd divergent strand of opinion. The IMF over the street has a unified ideology while the bank is a continual raucous conversation: as someone once said to me, the fund is the People’s Liberation Army while the bank is the Harvard Faculty of Arts and Sciences.Malpass was unpopular because he was a Trumpite, suspect on climate change and highly critical of the bank before his appointment. But his predecessor Jim Yong Kim, who surprised everyone by resigning early in 2019, also alienated staffers with what they saw as high-handed and disruptive management.Perhaps the last president fundamentally to change the nature of the bank was Australia-born former investment banker Jim Wolfensohn. Wolfensohn, a Friend of Bill (Clinton), was dynamic and politically well-connected, and successfully moved the bank beyond its economic-liberalisation-plus-building-big-dams model towards a more holistic view of development. And yet staff complaints about his style were also legion.. . . and the whatJournalists can start writing their “New President Struggles To Reverse Underpowered World Bank’s Legitimacy Problems” stories right now, because that’s what all presidents have to do. The last paid-in capital increase for its main lending and private-sector arms was in 2018, and the bank’s transfers to developing countries continue to be dwarfed by private investment and indeed migrant remittances.The global green transition, together with climate mitigation, have a strong development and public good element to them. The bank has quite a lot of in-house experience with environmental issues, including water management.But it’s coming up against an old, old problem. The bank’s management has fought heroically over the years to move away from country-by-country lending to financing global public goods, but it often faces resistance from developing countries that want more traditional loans.The bank needs more money to fund the green transition, which will cost a cosmic $125tn by 2050, according to research commissioned by the UN climate champions. The big idea is to leverage up its balance sheet, which I’ve written about before.As my colleagues (including the great Aime Williams again) have written, ironically it’s the rich countries whose backing does most to bolster the bank’s rock-solid triple A credit rating that are keen to leverage up its balance sheet to lend more for green finance. The resistance comes from the bank’s management itself — not just Malpass but also senior permanent staff. They’re concerned that any threat to the bank’s credit rating will damage its credibility and long-term political support, whatever the rich-country governments say now.The staff’s scepticism is shared by lower-income countries that don’t really like the idea that green transition and climate mitigation necessarily equal development. (A powerful argument along the same lines from the economist Tyler Cowen here.) Developing countries are concerned about interest rates on loans rising if the bank starts to leverage its balance sheet, and say money must continue to go to health and education rather than just modish environmental causes. Green spending based on increasing the bank’s capital: fine. Green spending based on leveraging the balance sheet: steady on there.The rich countries look progressive while the developing countries look conservative. It looks odd, but that’s the World Bank for you. I’ll keep an eye on how it gets resolved.As well as this newsletter, I write a Trade Secrets column for FT.com every Thursday. Click here to read the latest, and visit ft.com/trade-secrets to see all my columns and previous newsletters too.Charted watersSticking with matters green, the FT has today published its latest Road to Net Zero report. Apart from being well worth a read, it highlights the rather encouraging news that solar power will overtake other energy sources by 2027.This is a remarkable achievement for a technology that a little over a decade ago accounted for less than 1 per cent of global energy production, as the chart above shows.The reason has been the frenetic pace of solar installations across the globe. Energy security concerns highlighted by Russia’s invasion of Ukraine will only fuel this construction boom. Record numbers of installations are now planned for each of the next five years.The catch? Well, as anyone looking out today on London’s leaden skies will appreciate, solar power production can be patchy. Some suppliers have also found it difficult to obtain permits and there is a shortage of the necessary skilled labour, creating bottlenecks and driving up costs. That has squeezed profits for some publicly listed suppliers in competitive markets. Every silver lining has a cloud. (Jonathan Moules)Trade linksA particularly good podcast from Trade Talks, this one on the mixed history of sanctions in the context of Russia and particularly its gas pipelines to Europe. For those who prefer reading to listening, the transcript is here.The French Institute of International Relations examines the digital technology policies of eight middling powers (Brazil, India, Israel, Japan, Kenya, Nigeria, Russia, South Korea and the UK) and concludes that all except Russia are maintaining balancing acts between the three great centres of tech regulation: the EU, US and China.The US-China shipping business remains in trouble as cargo volumes and freight rates continue their slump, with US retailers continuing to run down inventories rather than buy in more imports, though a bellwether shipping line reckons things will pick up in the second half of 2023.The EU, dogged in its defence of multilateralism, has produced a paper calling for more “focused deliberation” at the World Trade Organization rather than concentrating just on negotiations themselves. Sounds fine in principle but unlikely to entice the US back to enthusiastic participation.European Commission president Ursula von der Leyen is in the UK today to try to finalise the UK’s latest climbdown, that is to say agreement between equals, to fix the post-Brexit Northern Ireland problem. Meanwhile in the latest Global Britain sunlit uplands news, UK salad imports are down by more than half: poor harvests in Spain and north Africa have hit the UK more than most because of higher transport costs and post-Brexit paperwork.Trade Secrets is edited by Jonathan Moules More

(Reuters) – Global equity investors are finding financials-heavy European markets more alluring than their U.S. counterparts packed with expensive technology stocks in their rush for better returns amid growing signs of interest rates staying higher for longer. Banks accounted for nearly 16% of the STOXX 600 index and have benefited from the high-rate environment, gaining nearly 20% to hit their highest in almost five years.In contrast, 35% of the S&P 500, the world’s largest index by market value, are technology companies. Tech stocks on the index have gained just 9% this year as rising rates make future profits for tech companies less valuable. Looking at the broader market, the STOXX 600 has added nearly 7.5% in 2023, more than double the 3.4% gain in the S&P 500, marking its strongest performance versus the U.S. benchmark since 2017, according to Refinitiv data.”In a market that prefers value-style investments in a high interest-rate environment, that clearly works in Europe’s favour,” said Edward Stanford, head of European equity strategy at HSBC.The European equity market saw the least outflows among major economies last week, of $100 million, while the U.S. recorded the biggest outflows, of $9.1 billion, according to Deutsche Bank (ETR:DBKGn).”It’s been a good few months for Europe relative to the U.S., but there is more room for this trade to run over the course of 2023,” said Hugh Gimber, a global market strategist at J.P. Morgan Asset Management.”The attractiveness is not only at the index level but also within sectors as well.”Even though Russia’s year-old invasion of Ukraine sent the cost of natural gas and electricity to record high and pushed the region to the brink of a recession, Europe’s economy is looking a lot less fragile.The winter has been warmer than usual and the region’s gas storage tanks are full. Along with billions of euros in government aid to homes and businesses, the economy has shown resilience. Stoxx v SPX relative outperformance https://fingfx.thomsonreuters.com/gfx/mkt/zgvobnkdjpd/STOXX%20SPX%20RELATIVE.png THE CHINA BOOSTGreater exposure to China at a time when the United States has been trying to reduce its dependence on the world’s second largest economy has also helped Europe’s automakers, miners and luxury companies. Exports from the eurozone to China account for about 3% of the region’s total GDP and 3.5% of Germany’s output, according to Barclays (LON:BARC).The Paris stock market, which houses premier luxury names including LVMH, Kering (EPA:PRTP) and Hermes International (OTC:HESAF), has benefited more from China demand as its economy emerges from a strict pandemic-related lockdown. “We are starting to turn more positive on consumer discretionary,” said Laura Cooper, senior macro strategist at BlackRock (NYSE:BLK).France’s blue-chip index hit a record high earlier this month, while London’s FTSE 100 recently notched a string of all-time highs. “The resilience of the consumer is evident with the recent economic data, and largely in Europe over the U.S. because we’re starting to see deterioration in some of the consumer gauges in the U.S.,” Cooper said.CHEAPER IN EUROPEOn the valuation front too, the European stock market is much cheaper than the U.S. The STOXX 600 trades at about 13 times its 12-month forward price-to-earnings ratio, while the S&P 500 trades at some 18 times.”Europe remains cheap compared to their U.S. counterparts but this, at least at the index level, has a lot to do with sector composition,” said Julien Lafargue, chief market strategist at Barclays Private Bank.Despite this advantage, it is yet to be seen if the outperformance by European markets will be sustained long term. A Reuters poll found that analysts and strategists were cautious on European shares and expect the STOXX 600 to fall slightly in 2023 against the backdrop of a likely cut to earnings and doubts over the outlook for monetary policy. “In addition, what drives long-term performance is not valuations but earnings. And on that front, we see no reason to believe that there has been a paradigm shift in favour of Europe,” Lafargue said. More

Rishi Sunak will on Monday claim he has negotiated “fundamental” changes to the post-Brexit trading regime in Northern Ireland as he seeks to end a bitter row that has overshadowed UK ties with the EU.The British prime minister and Ursula von der Leyen, the European Commission president, are expected to seal the deal to reform the so-called Northern Ireland protocol at Windsor after months of diplomacy.Von der Leyen will also separately meet King Charles, adding a sense of occasion to what UK insiders are dubbing the “Windsor agreement”. Sunak hopes the deal will be a watershed moment in UK-EU relations.Sunak will then begin the daunting task of selling the reforms to pro-Brexit Tory MPs and to Northern Ireland’s Democratic Unionist party, with a statement to parliament scheduled for Monday afternoon.British officials claim Sunak has secured “fundamental” reforms to the protocol, part of Boris Johnson’s 2019 Brexit deal.They say the agreement will fix concerns over trade friction on goods travelling between Great Britain and Northern Ireland and what local politicians have called a “democratic deficit”, giving them a say over new EU rules in the region.Two people with knowledge of the deal have said that the revised settlement, which runs to more than 100 pages, is an “implementation agreement”.Brussels will have to make some changes to existing EU law — as it did last year to resolve an issue over access to generic medicines for Northern Ireland — in order to give effect to the changes. “It’s a fix that will allow the EU to say ‘we haven’t reopened the text of the deal’, but the UK can say ‘we’ve won material legal changes to the package’,” one insider said.Among the expected changes is a derogation on pet passports that will enable UK residents to take their dogs to Northern Ireland without microchips and pet passports as if they were travelling to the EU, as currently required.The EU is also expected to soften its stance in other areas of contention that make Northern Ireland residents feel their place in the UK’s internal market is being constrained — for example, around receiving parcels from Great Britain by post.Another area that officials are confident will be resolved is a spat over steel quotas that led to HM Revenue & Customs warning UK producers last August that some steel products would be required to pay 25 per cent tariffs when shipped to Northern Ireland.The UK decision to provide full data transparency to the EU, alongside building border control posts at Northern Irish ports, is expected to unlock a radical simplification of the processes needed for Great Britain traders to send products to Northern Ireland.It is anticipated that those who register products via a trusted trader scheme and label products for consumption “NI-Only” will not be required to present full customs and animal-health certification at the border, although full details of the scheme have yet to emerge.The UK will say the package represents a significant improvement in the functioning of the trade border in the Irish Sea that Johnson agreed as part of the original Northern Ireland protocol deal in 2019.More problematic for Sunak may be convincing the DUP and hardline Brexiters in his own party that the deal addresses the constitutional issues thrown up by the protocol.Officials conceded that the agreement would not remove EU law or European Court of Justice jurisdiction from Northern Ireland, which remains part of the single market for goods, as demanded by Brexit hardliners.Insiders on both sides indicated that Brussels had not moved substantially on the role of the ECJ in enforcing the protocol, although the UK is expected to argue that the amount of EU law being enforced will effectively have been reduced.Nor will the deal meet the DUP’s recent demand for a dual regulatory regime in the region, with producers able to choose to apply UK standards, rather than EU rules, for exports into the British market.The protocol also requires the UK to refer subsidy or “state aid” decisions that might affect the Northern Ireland goods trade market to Brussels. The insiders indicated this would remain, but that only the largest decisions required referral.

The deal is also expected to include a system to significantly improve the level of consultation with the Northern Ireland assembly about new EU rules and regulations applying in the region. However, the consultative mechanism, which is expected to be similar to the one enjoyed by Norway as part of its deal to implement EU single market legislation, will not amount to a veto. Sunak hopes the deal will eventually persuade the DUP to rejoin the Stormont power-sharing executive, which it is boycotting in protest at the operation of the protocol.But the prime minister is also targeting a much bigger prize of improved relations with the EU, including on scientific collaboration, and warmer ties with US president Joe Biden, who has expressed concerns about the stand-off over the Northern Ireland issue.

Video: The Brexit effect: how leaving the EU hit the UK More

LONDON (Reuters) – Central banks need to “get the job done” when it comes to getting inflation back under control, the Bank for International Settlements has said, urging them to avoid the mistakes of the 1970’s by declaring victory too early.The BIS, dubbed the bank for central banks, said it was vital authorities didn’t repeat the stop-start cycles of the 1970s when interest rates had to be hiked to painfully high levels after attempts to lower them resulted in an inflation surge.”Central banks have been very, very clear that at this stage the most important aspect is to get the job done,” the head of the BIS’ Monetary and Economic Department, Claudio Borio, said as part of a quarterly report. “A cautious attitude designed to make sure that one is not declaring victory too early is the appropriate one”.Global borrowing costs have risen at the fastest pace in decades over the last year as the Federal Reserve has lifted U.S. rates 450 basis points from near zero, the European Central Bank has hiked the euro zone’s by 300 bps and other parts of Europe and many developing economies have done even more.There are concerns, however, that though inflation in many major economies is beginning to come down, it will remain stubbornly high due to volatile energy and food prices, as China’s economy reopens and as workers demand higher wages.Data on Friday showed U.S. consumer spending increased by the most in nearly two years in January amid a surge in wage gains, adding to the view among economists that the Fed will continue raising its rates well above 5% this year.In Europe too, the ECB is expected to extend what is already its steepest-ever streak of rate hikes next month with another 50 basis points hike that would take its key rate to 3%.”What you don’t want to do at all costs is to repeat the stop-go policies of the 1970s when you are reversing (rates) and you then realise that the job has not been done,” Borio said. “Then you have to go back and forth.”The BIS’ report also included research showing that rate rises are more likely to cause financial system stress when private debt levels are high, although tougher “prudential policies” can reduce the risk and give central banks more room for manoeuvre.Another section looks at how higher commodity prices and the U.S. dollar exchange rate significantly affects the risk of stagflation – weak growth and high inflation – especially in developing market economies. The race to raise rates https://www.reuters.com/graphics/CANADA-CENBANK/zjpqjwaolvx/chart.png More

Central banks will keep borrowing costs high for long enough to ensure that inflation is brought under lasting control, the Bank for International Settlements has said, as it warned investors were overestimating the chances of rate cuts next year. “Central banks have been very clear about the priority of getting the job done and of being cautious about declaring victory too early,” said Claudio Borio, head of the monetary and economic department at the BIS. “[This] cautious attitude is the appropriate one.”The BIS said the pricing of financial assets still signalled a “firm expectation” among investors “that rate hikes would stop before the end of this year and that policy rates would decline materially in 2024”.This was in “sharp contrast” to cautious communications from rate-setters, which “gave no indication that easing was on the horizon”.The message from the quarterly bulletin of the BIS, often referred to as the central bankers’ bank, comes as investors become increasingly nervous that rate-setters will raise borrowing costs to higher levels than they hoped — and keep them there for longer than expected. Market expectations earlier this year were for the US Federal Reserve, which has raised rates by 4 percentage points since last March, to begin cutting rates before the end of 2023 or early in 2024. This view has been challenged in recent weeks by higher than expected US inflation figures and strong jobs data. A rally in global bond markets earlier this year has crumbled, while stocks have fallen sharply. In the eurozone, where the European Central Bank has raised rates by 3 percentage points since last summer, investors have started pricing in more rate rises over the coming months. While headline inflation rates have fallen since the autumn on the back of a fall in commodity prices, cost pressures remain far higher than rate-setters would like. Annual price growth remains several multiples higher than central banks’ 2 per cent goals. In the eurozone, core inflation — which strips out changes in food and energy prices, and is seen as a better measure of underlying price pressures — hit a fresh record high of 5.3 per cent in January.

Borio said it was “much easier to get inflation from 8 per cent to 4 per cent when the work is done by [falling] commodities prices, than it is to get it from 4 per cent to 2 per cent, which is the part that central banks will have to do”. Hyun Song Shin, the BIS’s head of research, said the lesson of the high inflation of the 1970s was that price pressures could rise again after falling as new shocks materialise. “The reason central banks have been emphasising [the importance of] going the last mile on bringing inflation down is that, if you are not fully back to target and relax too early, you will undo all the work you have done before,” he said.He added that there was evidence that consumer demand had become less sensitive to changes in central bank policy rates, making the job of bringing inflation under control harder. More

LONDON (Reuters) -Economists at UK-based banks Barclays (LON:BARC) and NatWest believe the U.S. Federal Reserve could ramp up the pace of its interest-rate rises in March, by delivering a half-point hike, following data on Friday a key gauge of inflation. NatWest said on Friday it also expects 25-basis point hikes at the May and June meetings, which would take the terminal rate to 5.75%, up from an earlier estimate of 5.25%. “Given (Friday’s) inflation backdrop, and the fact our monthly core inflation profile now shows the Fed’s preferred core PCE deflator holds above 4% y/y through July, we are raising our Fed funds terminal rate forecast to 5.75%,” said NatWest Markets chief U.S. economist Kevin Cummins (NYSE:CMI) in a note on Friday. Barclays on Monday also said persistent inflationary pressures and economic resilience could lead the Fed to hike rates by 50 basis points next month, especially if the non-farm payrolls data due before the Fed’s meeting in March was strong.”The bond market has moved to “higher for longer,” feeding negative reactions in credit,” the bank said.Economic data had indicated inflation was starting to slow, prompting the Fed to downshift to a quarter-point rate rise at its Jan. 31-Feb.1 policy meeting, but the numbers since then may have thrown into doubt Fed chair Powell’s view that the “disinflationary process” has begun. Strong labour market data, sticky consumer prices, rising producer prices and now accelerating PCE price index – the Fed’s preferred measure of inflation – have prompted markets to price in additional rate hikes and price out rate cuts at the end of the year. Money markets now price in a terminal Fed funds rate of around 5.4% by the July meeting, up from 4.50-4.75% currently, according to Refinitiv data. That’s up from an estimated peak of 5.2% just two weeks ago.NatWest and Barclays, as well as a raft of other banks, including Goldman Sachs (NYSE:GS) believe there will be more rate hikes from the Fed. More

WASHINGTON (Reuters) – U.S. House Republicans are eyeing $150 billion in spending cuts that reflect a hardline drive to target education, healthcare and housing – particularly efforts to address racial inequities that conservatives deride as “woke” – as they push forward in talks on the federal debt ceiling.House of Representatives Budget Committee Chairman Jodey Arrington said Republicans are assembling a budget along the lines of a budget proposal developed by Russell Vought, who served as Republican President Donald Trump’s budget chief.”It is consistent with what’s in his budget,” Arrington said in an interview. The congressman, whose party controls the House, did not provide specifics of what cuts he would suggest to his fellow Republicans, who return to Washington on Monday after a two-week break.Republican House Speaker Kevin McCarthy has vowed not to allow an increase in the $31.4 trillion legal limit on federal borrowing without an agreement from President Joe Biden’s Democrats in Congress to rein in federal spending. Failing to lift the debt ceiling could trigger a default on the federal government’s debt that would take a heavy toll on the American and probably world economies. A prolonged 2011 debt-cap standoff led to a cut in the government’s top-tier credit rating.During Biden’s State of the Union speech early this month, Republicans loudly vowed not to pursue cuts to the Social Security retirement or Medicare healthcare programs. They also mostly oppose military cuts. That leaves them scouring only a sixth of the budget for cuts.Arrington said the $150 billion in cuts he is eyeing would mostly hit nondefense discretionary spending, whose programs cost about $900 billion in the last fiscal year ended Sept. 30. Even eliminating those programs wouldn’t erase the roughly $1.6 trillion deficit – a measure of how far the government runs into the red each year.BALANCE ‘ASPIRATIONAL’That makes the conservative goal of a balanced budget within 10 years “aspirational” for now, Arrington said. Vought, whose plan also calls for $150 billion in cuts, said Democratic control of the Senate makes limited austerity more politically realistic.”We’re in divided government. So what’s the easiest place to cut spending? It’s the bureaucracy, and that’s where we want to focus the fight,” Vought said in an interview, adding that he would go after programs he considered “significantly woke and unaccountable.”Vought, who directed the Office of Management and Budget between 2019 and 2021 and now heads a conservative think tank, said the cuts he proposes would eventually slice the deficit by just a third if they were sustained for 10 years.Biden and Senate Majority Leader Chuck Schumer say they will not discuss spending cuts until after the debt ceiling is raised, which is needed to cover the costs of spending and tax cuts previously approved by Congress.Nonetheless, Treasury Secretary Janet Yellen said in an interview the fiscal year 2024 budget Biden plans to unveil on March 9 would contain “substantial deficit reduction over the next decade.” TARGET LISTVought’s proposals move the debate forward from the back-and-forth on Social Security and Medicare that dominated much of the past month.He did not provide a full accounting of the proposed $150 billion in cuts, but said it included about $25 billion from the Department of Education, including what he called “woke” policies such as score-improvement programs and culturally responsive schooling.Republicans have increasingly used “woke” as a pejorative term regarding liberal views on race, gender and sexuality, for example attacking school courses about U.S. racial injustice and LGBTQ rights.Vought said he would seek cuts to the departments of Housing and Urban Development and Health and Human Services, as well as to foreign aid, and to Centers for Disease Control and Prevention programs aimed at preventing chronic and sexually transmitted diseases.He said his ideas have been best received in the conservative House Freedom Caucus.Arrington said his goal is to return domestic spending to its fiscal 2022 level, while keeping defense spending flat, in the fiscal 2024 budget proposal House Republicans aim to unveil by April 15.He said his main priority is producing a 2024 budget that can serve as a baseline for years of spending reductions.”You can save over $1.5 trillion over that 10 years,” he said. “That’s real savings.”Another Budget Committee Republican, Freedom Caucus member Ralph Norman, described in general terms a debt-ceiling playbook, backed by other conservatives, that aligned with Vought’s plan.Like other committee hardliners, Norman wants to cut nondefense discretionary spending to pre-pandemic levels. The conservatives also want to hold defense spending steady and increase outlays on security along the U.S.-Mexico border.McCarthy spokesman Mark Bednar said federal spending growth was “entirely unsustainable, and House Republicans were elected to bring it to an end.”    The House Budget Committee’s top Democrat, Brendan Boyle, expressed skepticism that the hardliners’ plan would win wide backing: “Republicans needed 15 rounds just to elect a speaker, so I can’t imagine they will have an easy time advancing a budget that all of their members will support.”    But budget committee and Freedom Caucus member Bob Good, one of 20 hardline conservatives who forced McCarthy to undergo 15 floor votes before being elected House speaker, said the political drama surrounding the speakership election should empower McCarthy to take a hard position with Biden and Schumer.     “When Kevin McCarthy says Republicans won’t vote for doing what we’ve always done and just raising the debt ceiling without meaningful spending cuts and reforms, I think the president and the Senate majority leader will recognize that he’s telling the truth,” Good said. More