US Lawmakers Pass $1.2trn Fiscal Package

Macro Monday

It's forecast that there are 1.47 billion cars in the world. One car for every 5.75 people on the planet. Unsurprisingly, China has the most cars at 415 million, or one car per 3.3 people, whereas the US has 358 million cars, or one car for every 1.6 people.

US Lawmakers Pass $1.2trn Fiscal Package

As concerns over the prospect of a US government shutdown intensified, this weekend Capitol Hill passed a $1.2trn fiscal package. At a vote taking place at 2am, the Senate passed the package with 74 votes to 24 with President Biden singing it into law shortly after. This followed the House of Representatives pushing the bill though to the Upper House after securing 286 votes to 134.

Following the ratification into law, President Biden said that “The bipartisan funding bill I just signed keeps the government open, invests in the American people, and strengthens our economy and national security,”

The bill funds around 7 in 10 of the dollars spent by the federal government. Such spending includes funding the departments of defence, state, education, justice and homeland security departments to the 30 September – which marks the end of the fiscal year.

The bill also follows Congress last year passing the Fiscal Responsibility Act by into law. This was the bipartisan deal assembled by President Joe Biden and House Speaker Kevin McCarthy to ensure the US avoids a technical default by suspending the debt ceiling until 2025.

The bill passed over the weekend does not include the additional military support for Ukraine, Israel, or Taiwan. Such measures are instead included in a separate $95bn foreign aid package which has passed the Senate though remains gridlocked in the House.?

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Triple Lock

Speaking on Sunday with Laura Kuenssberg, yesterday the Chancellor indicated that he would maintain the Triple Lock system if the conservatives win the next election.

With Hunt trying to appeal to the support of the elder proportion of the electorate ahead of the next general election, the PM stated that the "expensive" pledge would be funded by economic growth.

The triple lock ensures that that pensions rise by the highest of either inflation, average earnings, or 2.5%. Hence, given where inflation was last year, in April 2023 the triple lock secured a 10.1% increase, and this April pensioners are set for a 8.5% increase. With the state pension costing over ￡110bn in FY2022-23, its estimated that the bill for FY2023-24 will rise to ￡124bn according to the OBR. Roughly speaking, this means that the state pension accounts for around half the governments total spend of benefits.

Its unclear whether the Labour Party will look to keep the Triple Lock if in power, with Sir Keir Starmer not commenting on the issue when questioned by The Sun last week.

US?

Today, former President Donald Trump is due to pay a bond to cover the $464m fraud judgment that was given to him last month. In February, he was ordered to pay $454m after he was found to have mislead people on the value of his assets to gain stronger credit terms.

With Trump’s 30-day grace period all but over, it is understood that the New York attorney general could look to seize his assets if he doesn’t pay. While, Trump has called on the State Appeals court to intervene, they have not provided a decision.

Last month, we looked at how the daily interest being accrued against Donald Trump’s legal bill was some $112,00, with monetary conditions being at their tightest level in the US for 22 years.

This comes as Trump safely secured the Louisiana primary vote on Saturday for the Republican Party while Biden comfortably held the Democratic primary. Here, Trump took some 89.8% of the vote in the Republican contest while Biden took 86.1% in the Democratic.

As we looked at earlier this month, polling aggregations from RealClearPolitics (up to 1 March), Donald Trump’s 47.5% leads Joe Biden’s 45.5%, giving the Republican frontrunner a two-percentage point lead.?