Funding government without border wall appears back on table

WASHINGTON — President Donald Trump appeared to back off his demand for $5 billion to build a border wall, signalling for the first time that he might be open to a deal that would avoid a partial government shutdown.

The White House set the tone Tuesday when press secretary Sarah Huckabee Sanders indicated that Trump doesn’t want to shut down the government, though just last week he said he’d be “proud” to do so. The president would consider other options and the administration was looking at ways to find the money elsewhere, Sanders said.

It was a turnaround after days of impasse. Without a resolution, more than 800,000 government workers could be furloughed or sent to work without pay beginning at midnight Friday, disrupting government operations days before Christmas.

One option that has been circulating on Capitol Hill would be to simply approve government funding at existing levels, without a boost for the border, as a stopgap measure to kick the issue into the new Congress next month. The chairman of the Appropriations Committee, Sen. Richard Shelby, R-Ala., confirmed late Tuesday his office was preparing legislation to keep government funded, likely into February. The White House preference was for a longer-term package, although the conversation remained fluid and Trump has been known to quickly change course, said a person familiar with the negotiations but not authorized to discuss them by name.

“We want to know what can pass,” Sanders said at a press briefing. “Once they make a decision and they put something on the table, we’ll make a determination on whether we’ll move forward.”

She also said the president “has asked every agency to look and see if they have money that can be used.”

The turn of events kick-started negotiations that had been almost nonexistent since last week’s televised meeting at the White House, when Trump neither accepted nor rejected the Democrats’ offer. They had proposed keeping funding at current levels of $1.3 billion for border security fencing and other improvements, but not for the wall.

The Senate’s top Republican and Democratic leaders began negotiating new proposals and talks were expected to continue.

Senate Majority Leader Mitch McConnell said he was confident there would not be a government shutdown. McConnell said a stopgap measure could be approved, though he suggested that House Minority Leader Nancy Pelosi, who is poised to become House speaker when the Democrats take control Jan. 3, would not want to saddle the new year with a budget brawl.

“If I were in her shoes, I would rather not be dealing with this year’s business next year,” McConnell said.

Pelosi and Senate Minority Leader Chuck Schumer have made it clear they are not interested in funding Trump’s border wall.

During a meeting earlier Tuesday on Capitol Hill, McConnell had proposed $1.6 billion for border fencing, as outlined in a bipartisan Senate bill, plus an additional $1 billion that Trump could use on the border, according to a senior Democratic aide unauthorized to speak about the private meeting.

Democratic leaders immediately spurned the proposal. Schumer called McConnell to reject it.

“We cannot accept the offer they made of a billion-dollar slush fund for the president to implement his very wrong immigration policies,” Pelosi told reporters. “So that won’t happen.”

Democrats also rejected the administration’s idea of shifting money from other accounts to pay for Trump’s wall. Schumer said there will be no wall money, “plain and simple.”

Pelosi will probably be able to quickly approve a longer-term measure to keep government running in the new year. She called it a “good sign” that the White House appeared to be backing off its demands.

The White House showed its willingness to budge as it became apparent the president does not have support in Congress for funding the wall at the $5 billion level. Sanders said Tuesday there are “other ways” to secure the funding.

“At the end of the day, we don’t want to shut down the government,” Sanders said on Fox News Channel. “We want to shut down the border from illegal immigration.”

Sanders pointed to the Senate’s bipartisan appropriation measure for the Department of Homeland Security, which provides $26 billion, including $1.6 billion for fencing and other barriers. It was approved by the committee in summer on a bipartisan vote.

“That’s something that we would be able to support,” she said, as long as it’s coupled with other funding.

But House Democrats largely reject the Senate’s bill because it includes 65 miles of additional fencing along the Rio Grande Valley in Texas.

Trump had campaigned on the promise that Mexico would pay for the wall. Mexico has refused.

It’s unclear how many House Republicans, with just a few weeks left in the majority before relinquishing power to House Democrats, will even show up midweek for possible votes. Many Republicans say it’s up to Trump and Democrats to cut a deal.

The standoff dispute could affect nine of 15 Cabinet-level departments and dozens of agencies, including the departments of Homeland Security, Transportation, Interior, Agriculture, State and Justice, as well as national parks and forests.

Shelby expected the stopgap measure, which would cover the seven appropriation bills for those departments, would pass. “Who would want to shut the government down?” he said.

Congress did pass legislation to fund much of the government through the fiscal year, until Oct. 1. But a partial shutdown would occur at midnight Friday on the remaining one-fourth of the government.

About half the workers would be forced to continue working without immediate pay. Others would be sent home. Congress often approves their pay retroactively, even if they were ordered to stay home.

Many agencies, including the Pentagon and the departments of Veterans Affairs and Health and Human Services, are already funded for the year and will continue to operate as usual. The U.S. Postal Service, busy delivering packages for the holiday season, wouldn’t be affected by any government shutdown because it’s an independent agency.

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Associated Press writer Laurie Kellman in Washington contributed to this report.

Lisa Mascaro, Matthew Daly And Catherine Lucey, The Associated Press

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Taxpayers Federation calling on BC Government to scrap failed Carbon Tax

Published on January 16, 2025

Todayville

From the Canadian Taxpayers Federation

By Carson Binda

BC Government promised carbon tax would reduce CO2 by 33%. It has done nothing.

The Canadian Taxpayers Federation is calling on the British Columbia government to scrap the carbon tax as new data shows the province’s carbon emissions have continued to rise, despite the oldest carbon tax in the country.

“The carbon tax isn’t reducing carbon emissions like the politicians promised,” said Carson Binda, B.C. Director for the Canadian Taxpayers Federation. “Premier David Eby needs to axe the tax now to save British Columbians money.”

Emissions data from the provincial government shows that British Columbia’s emissions have risen since the introduction of a carbon tax.

Total emissions in 2007, the last year without a provincial carbon tax, stood at 65.5 MtCO2e, while 2022 emissions data shows an increase to 65.6 MtCO2e.

When the carbon tax was introduced, the B.C. government pledged that it would reduce greenhouse gas emissions by 33 per cent.

The Eby government plans to increase the B.C. carbon tax again on April 1, 2025. After that increase, the carbon tax will add 21 cents to the cost of a litre of natural gas, 25 cents per litre of diesel and 18 cents per cubic meter of natural gas.

“The carbon tax has cost British Columbians a lot of money, but it hasn’t helped the environment as promised,” Binda said. “Eby has a simple choice: scrap the carbon tax before April 1, or force British Columbians to pay even more to heat our homes and drive to work.”

If a family fills up the minivan once per week for a year, the carbon tax will cost them $728. The carbon tax on natural gas will add $435 to the average family’s home heating bills in the 12 months after the April 1 carbon tax hike.

Other provinces, like Saskatchewan, have unilaterally stopped collecting the carbon tax on essentials like home heating and have not faced consequences from Ottawa.

“British Columbians need real relief from the costs of the provincial carbon tax,” Binda said. “Eby needs to stop waiting for permission from the leaderless federal government and scrap the tax on British Columbians.”

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The problem with deficits and debt

Published on January 13, 2025

Todayville

From the Fraser Institute

By Tegan Hill and Jake Fuss

This fiscal year (2024/25), the federal government and eight out of 10 provinces project a budget deficit, meaning they’re spending more than collecting in revenues. Unfortunately, this trend isn’t new. Many Canadian governments—including the federal government—have routinely ran deficits over the last decade.

But why should Canadians care? If you listen to some politicians (and even some economists), they say deficits—and the debt they produce—are no big deal. But in reality, the consequences of government debt are real and land squarely on everyday Canadians.

Budget deficits, which occur when the government spends more than it collects in revenue over the fiscal year, fuel debt accumulation. For example, since 2015, the federal government’s large and persistent deficits have more than doubled total federal debt, which will reach a projected $2.2 trillion this fiscal year. That has real world consequences. Here are a few of them:

Diverted Program Spending: Just as Canadians must pay interest on their own mortgages or car loans, taxpayers must pay interest on government debt. Each dollar spent paying interest is a dollar diverted from public programs such as health care and education, or potential tax relief. This fiscal year, federal debt interest costs will reach $53.7 billion or $1,301 per Canadian. And that number doesn’t include provincial government debt interest, which varies by province. In Ontario, for example, debt interest costs are projected to be $12.7 billion or $789 per Ontarian.

Higher Taxes in the Future: When governments run deficits, they’re borrowing to pay for today’s spending. But eventually someone (i.e. future generations of Canadians) must pay for this borrowing in the form of higher taxes. For example, if you’re a 16-year-old Canadian in 2025, you’ll pay an estimated $29,663 over your lifetime in additional personal income taxes (that you would otherwise not pay) due to Canada’s ballooning federal debt. By comparison, a 65-year-old will pay an estimated $2,433. Younger Canadians clearly bear a disproportionately large share of the government debt being accumulated currently.

Risks of rising interest rates: When governments run deficits, they increase demand for borrowing. In other words, governments compete with individuals, families and businesses for the savings available for borrowing. In response, interest rates rise, and subsequently, so does the cost of servicing government debt. Of course, the private sector also must pay these higher interest rates, which can reduce the level of private investment in the economy. In other words, private investment that would have occurred no longer does because of higher interest rates, which reduces overall economic growth—the foundation for job-creation and prosperity. Not surprisingly, as government debt has increased, business investment has declined—specifically, business investment per worker fell from $18,363 in 2014 to $14,687 in 2021 (inflation-adjusted).

Risk of Inflation: When governments increase spending, particularly with borrowed money, they add more money to the economy, which can fuel inflation. According to a 2023 report from Scotiabank, government spending contributed significantly to higher interest rates in Canada, accounting for an estimated 42 per cent of the increase in the Bank of Canada’s rate since the first quarter of 2022. As a result, many Canadians have seen the costs of their borrowing—mortgages, car loans, lines of credit—soar in recent years.

Recession Risks: The accumulation of deficits and debt, which do not enhance productivity in the economy, weaken the government’s ability to deal with future challenges including economic downturns because the government has less fiscal capacity available to take on more debt. That’s because during a recession, government spending automatically increases and government revenues decrease, even before policymakers react with any specific measures. For example, as unemployment rises, employment insurance (EI) payments automatically increase, while revenues for EI decrease. Therefore, when a downturn or recession hits, and the government wants to spend even more money beyond these automatic programs, it must go further into debt.

Government debt comes with major consequences for Canadians. To alleviate the pain of government debt on Canadians, our policymakers should work to balance their budgets in 2025.