Government careens toward shutdown after Trump’s wall demand

WASHINGTON — The federal government was careening toward a partial shutdown Friday after President Donald Trump’s quest for a border wall left Congress without a clear plan to keep the government running past a midnight deadline.

The Senate was being called back to session to consider a package approved by House Republicans late Thursday that includes the $5.7 billion Trump wants for the border with Mexico. It is almost certain to be rejected by the Senate. Senators already passed their own bipartisan package earlier in the week to keep the government running with border security at existing levels, $1.3 billion, but no money for the wall. Both bills would extend funding through Feb. 8.

The White House said Trump will not travel to Florida on Friday as planned for the Christmas holiday if the government is shutting down. More than 800,000 federal workers will be facing furloughs or forced to work without pay if a resolution is not reached before funding expires at midnight Friday.

“The president’s been clear from the beginning, he wants something that gives border security and he’s not going to sign something that doesn’t have that,” White House press secretary Sarah Huckabee Sanders told reporters.

At issue is funding for 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.

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

The shutdown crisis could be one of the final acts of the House GOP majority before relinquishing control to Democrats in January. Congress had been on track to fund the government but lurched when Trump, after a rare lashing from conservative supporters, declared Thursday he would not sign a bill without the funding. Conservatives want to keep fighting. They warn that “caving” on Trump’s repeated wall promises could hurt his 2020 re-election chances, and other Republicans’ as well.

Senate Majority Leader Mitch McConnell, R-Ky., warned senators they may need to return to Washington for a vote Friday. Many senators already left town for the holidays.

“Now we find compromise,” House Majority Leader Kevin McCarthy, R-Calif., said. “We have time right now to get it done.”

Late Thursday, the GOP-led House voted largely along party lines, 217-185, to attach the border wall money to the Senate’s bill after GOP leaders framed the vote as a slap-back to Nancy Pelosi. She is poised to become House speaker on Jan. 3 and had warned Trump in a televised Oval Office meeting last week that he wouldn’t have the votes for the wall.

House Republicans also tacked on nearly $8 billion in disaster aid for coastal hurricanes and California wildfires.

Some Republicans senators cheered on the House, but prospects in the Senate are grim amid strong opposition from Democrats. Even though Republicans have a slim majority, 60 votes are needed to approve the bill there.

One possibility Friday is that the Senate strips the border wall out of the bill but keeps the disaster funds and sends it back to the House. House lawmakers said they were being told to stay in town for more possible votes.

With Pelosi’s backing, the Senate-passed bill likely has enough support for House approval with votes mostly from Democratic lawmakers, who are still the minority, and some Republicans.

Others were not so sure. “I don’t see how we avoid a shutdown,” said retiring Rep. Dennis Ross, R-Fla.

Rep. Mark Meadows, R-N.C., the chairman of the conservative Freedom Caucus, said he was not convinced after a White House meeting with GOP leaders that Trump would sign the Senate bill.

“I looked him in the eyes today, and he was serious about not folding without a fight,” Meadows said.

Trump’s sudden rejection of the Senate-approved legislation, after days of mixed messages, sent Republican leaders scrambling for options days before Christmas.

House Speaker Paul Ryan, exiting the hastily called meeting with Trump at the White House, said Thursday, “We’re going to go back and work on adding border security to this, also keeping the government open, because we do want to see an agreement.”

By afternoon, Trump shifted his terminology, saying he’s not necessarily demanding a border wall but “steel slats” — which is similar to the border security fencing already provided for in the bill.

“We don’t use the word ‘wall’ necessarily, but it has to be something special to do the job,” Trump said at a farm bill signing at the White House. The nuance could provide Trump a way to try to proclaim victory since the Senate bill includes money for fencing, but not the wall.

Democratic leaders have made clear they will not budge on their opposition to the border wall that Trump campaigned on saying Mexico would pay for it. Mexico has refused.

“The Trump temper tantrum will shut down the government, but it will not get him his wall,” said Senate Minority Leader Chuck Schumer. Democrats favour border security, Schumer said, but he denounced the wall as “ineffective, unnecessary and exorbitantly expensive.”

Ryan and McCarthy had endured complaints during a private morning meeting earlier Thursday from rank-and-file Republicans in the Capitol that they were closing out their majority without a fight on a major issue.

Trump interrupted the basement session with a phone call to Ryan, and then the president lashed out at Republican leaders on Twitter.

Ryan had promised a “big fight” after November’s midterm elections, but as Republicans lost House control, negotiations over the year-end spending bill have largely been between Trump and Democrats.

“I was promised the Wall and Border Security by leadership,” Trump tweeted.

Trump has bounced back and forth with mixed messages. Just last week he said he would be “proud” to shut down the government over the wall. Earlier this week he appeared to shelve shutdown threats, with the White House saying he was open to reviewing whatever bill Congress could send him.

“Republicans are in a state of disarray,” said Pelosi. “Wall funding is a nonstarter.”

___

Associated Press writers Alan Fram and Kevin Freking 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.