WASHINGTON: Bipartisan negotiators in the US Senate will release as early as Friday a long-sought — and politically charged — agreement to stem the flow of migrants across the US-Mexico border, setting up a vote next week on a bill that would also provide fresh aid to Ukraine and Israel.
But the legislation already faces substantial opposition from Republicans in the Senate and the House of Representatives who are aligned with Donald Trump, the frontrunner for the Republican presidential nomination.
Senator Kyrsten Sinema, one of three bipartisan negotiators who have been working toward a border deal for months, said the emerging agreement will end the practice of releasing migrants caught crossing the border illegally, provide emergency authority to shut the border down and revamp the US asylum system.
“We are changing the policy dramatically,” the US senator from Arizona, an independent, told reporters.
Trump has called on lawmakers to reject any deal ahead of the November elections that will determine control of the White House and Congress.
But Senate Majority Leader Chuck Schumer, the top Democrat in Congress, announced that an initial Senate vote on the supplemental aid package will take place no later than next Wednesday.
“We cannot simply shirk from our responsibilities just because the task is difficult,” Schumer said on the Senate floor. “These challenges at the border and Ukraine and the Middle East are just too great.”
Schumer said the text of the bill would be released no later than Sunday.
President Joe Biden asked Congress in October to approve a $106 billion emergency spending bill, including $61 billion for Ukraine as it battles Russian invaders and $14 billion for Israel in the aftermath of the Oct. 7 raids by Hamas. That request has been stalled by Republicans’ insistence that it be tied to an unrelated shift in immigration policy.
The US-Mexico border is a top issue for Republicans, with record numbers of migrants caught illegally crossing into the United States since Biden, a Democrat, took office in 2021.
The US Border Patrol arrested about 2 million migrants at the border in fiscal-year 2023, similar to record-breaking totals during Biden’s first two years in office.
Immigration also ranks as the second-greatest worry for Americans, according a Reuters/Ipsos poll published on Wednesday. Some 17 percent of respondents said it was their top concern, a sharp increase from December.
Schumer’s announcement came a day after House Speaker Mike Johnson, the top Republican in Congress, cast doubt the future of any Senate border agreement, saying Biden does not need new laws to tackle the problem.
“From what we’ve heard, this so-called deal does not include transformational policy changes that are needed to actually stop the border catastrophe,” Johnson said.
But some Republicans take issue with fellow party members who have attacked the legislation without knowing what is in it.
“There are some in the Senate and in the House who are desperately trying to sabotage it,” Representative Dan Crenshaw, a Republican from Texas, told reporters, suggesting that blind Republican opposition was mainly about not helping Biden escape the issue in the November election.
“They’re making it seem like the rest of us are against the bill. But that’s just not true,” Crenshaw added. “I want to secure the border. That’s what I told my voters I would do.”
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US Senate nears release of bipartisan border deal Trump rejects
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US Senate nears release of bipartisan border deal Trump rejects
- The measure aims to stem the flow of migrants across the US-Mexico border and also provides fresh aid to Ukraine and Israel
- Donald Trump, the frontrunner for the Republican presidential nomination, wants his partymates to reject any deal ahead of the November elections
Trump’s new tariffs shift focus to balance of payments; economists see no crisis
President Donald Trump’s temporary 15 percent tariffs to replace those struck down by the US Supreme Court are meant to resolve a problem that many economists say does not exist: a US balance of payments crisis, making them potentially vulnerable to new legal challenges.
Hours after the high court on Friday struck down a huge swath of tariffs Trump had imposed under the International Emergency Economic Powers Act, the president announced the new duties under Section 122 of the Trade Act of 1974 — a never-used statute that even his own legal team dismissed as irrelevant months ago.
Collections of the new 15 percent tariffs began at midnight on Tuesday as IEEPA tariff collections of 10 percent to 50 percent halted.
The Section 122 law allows the president to impose duties of up to 15 percent for up to 150 days on any and all countries to address “large and serious” balance-of-payments deficits and “fundamental international payments problems.”
Trump’s tariff order argued that a serious balance of payments deficit existed in the form of a $1.2 trillion annual US goods trade deficit and a current account deficit of 4 percent of GDP and a reversal of the US primary income surplus.
Some economists, including former International Monetary Fund First Deputy Managing Director Gita Gopinath, disagreed with the Trump administration’s alarm.
“We can all agree that the US is not facing a balance of payment crisis, which is when countries experience an exorbitant increase in international borrowing costs and lose access to financial markets,” Gopinath told Reuters.
Gopinath rejected the White House’s claim that a negative balance on the US primary income for the first time since 1960 was evidence of a large and serious balance of payment problem.
She attributed the negative balance to a large increase in foreign purchases of US equities and risky assets over the past decade, which outperformed foreign equities over this period.
Mark Sobel, a former US Treasury and IMF official, said that balance of payments crises are more associated with countries that have fixed exchange rates, and noted that the floating-rate dollar has been steady, the 10-year Treasury yield fairly stable, with US stocks performing well.
Josh Lipsky, chair of international economics at the Atlantic Council think tank, agreed, noting that a balance of payments crisis occurred when a country could not pay for what it was importing or was unable to service foreign debt. That was fundamentally different from a trade deficit, he added.
Brad Setser, a currency and trade expert at the Council on Foreign Relations who served as a senior adviser to the US Trade Representative in the Biden administration, took a somewhat contrarian view, arguing in lengthy X posts on Sunday that the Trump administration may have a reasonable case that there is a “large and serious” balance of payments deficit.
He noted that the current account deficit was far higher than when then-president Richard Nixon erected tariffs in 1971 to address a balance of payments crisis, and the US net international investment position is much worse. This “gives the administration a real argument,” in favor of its tariffs, Setser wrote.
The White House, US Treasury and US Trade Representative did not immediately respond to requests for comment about the use of Section 122.
WRONG STATUTE FOR THE JOB
Despite the Trump administration’s new focus on balance of payments, the Justice Department had previously argued that Section 122 was the wrong statute to handle a national emergency over the trade deficit.
In court filings in its defense of IEEPA tariffs, the Justice Department said Section 122 would not have “any obvious application here, where the concerns the president identified in declaring an emergency arise from trade deficits, which are conceptually distinct from balance-of-payments deficits.”
Neal Katyal, who argued at the Supreme Court on behalf of plaintiffs challenging the IEEPA tariffs, told CNBC that the Trump administration’s stance against the use of Section 122 for a trade deficit will make those tariffs vulnerable to litigation.
“I’m not sure it will necessarily even need to get to the Supreme Court, but if the president adheres to this plan of using a statute that his own Justice Department has said he can’t use, yeah, I think that’s a pretty easy thing to litigate,” Katyal said.
It is unclear who might take the lead in challenging the Section 122 tariffs.
Sara Albrecht, chair of the Liberty Justice Center, a nonprofit, public-interest law firm representing several small businesses that challenged the IEEPA tariffs, said the group would closely monitor any new statutes being invoked.
Albrecht did not reveal any future litigation strategy, adding: “Our immediate focus is simple: making sure the refund process begins and that checks start flowing to the American businesses that paid those unconstitutional duties.”
In its ruling, the Supreme Court did not give instructions regarding refunds, instead remanding the case to a lower trade court to determine next steps.
Hours after the high court on Friday struck down a huge swath of tariffs Trump had imposed under the International Emergency Economic Powers Act, the president announced the new duties under Section 122 of the Trade Act of 1974 — a never-used statute that even his own legal team dismissed as irrelevant months ago.
Collections of the new 15 percent tariffs began at midnight on Tuesday as IEEPA tariff collections of 10 percent to 50 percent halted.
The Section 122 law allows the president to impose duties of up to 15 percent for up to 150 days on any and all countries to address “large and serious” balance-of-payments deficits and “fundamental international payments problems.”
Trump’s tariff order argued that a serious balance of payments deficit existed in the form of a $1.2 trillion annual US goods trade deficit and a current account deficit of 4 percent of GDP and a reversal of the US primary income surplus.
Some economists, including former International Monetary Fund First Deputy Managing Director Gita Gopinath, disagreed with the Trump administration’s alarm.
“We can all agree that the US is not facing a balance of payment crisis, which is when countries experience an exorbitant increase in international borrowing costs and lose access to financial markets,” Gopinath told Reuters.
Gopinath rejected the White House’s claim that a negative balance on the US primary income for the first time since 1960 was evidence of a large and serious balance of payment problem.
She attributed the negative balance to a large increase in foreign purchases of US equities and risky assets over the past decade, which outperformed foreign equities over this period.
Mark Sobel, a former US Treasury and IMF official, said that balance of payments crises are more associated with countries that have fixed exchange rates, and noted that the floating-rate dollar has been steady, the 10-year Treasury yield fairly stable, with US stocks performing well.
Josh Lipsky, chair of international economics at the Atlantic Council think tank, agreed, noting that a balance of payments crisis occurred when a country could not pay for what it was importing or was unable to service foreign debt. That was fundamentally different from a trade deficit, he added.
Brad Setser, a currency and trade expert at the Council on Foreign Relations who served as a senior adviser to the US Trade Representative in the Biden administration, took a somewhat contrarian view, arguing in lengthy X posts on Sunday that the Trump administration may have a reasonable case that there is a “large and serious” balance of payments deficit.
He noted that the current account deficit was far higher than when then-president Richard Nixon erected tariffs in 1971 to address a balance of payments crisis, and the US net international investment position is much worse. This “gives the administration a real argument,” in favor of its tariffs, Setser wrote.
The White House, US Treasury and US Trade Representative did not immediately respond to requests for comment about the use of Section 122.
WRONG STATUTE FOR THE JOB
Despite the Trump administration’s new focus on balance of payments, the Justice Department had previously argued that Section 122 was the wrong statute to handle a national emergency over the trade deficit.
In court filings in its defense of IEEPA tariffs, the Justice Department said Section 122 would not have “any obvious application here, where the concerns the president identified in declaring an emergency arise from trade deficits, which are conceptually distinct from balance-of-payments deficits.”
Neal Katyal, who argued at the Supreme Court on behalf of plaintiffs challenging the IEEPA tariffs, told CNBC that the Trump administration’s stance against the use of Section 122 for a trade deficit will make those tariffs vulnerable to litigation.
“I’m not sure it will necessarily even need to get to the Supreme Court, but if the president adheres to this plan of using a statute that his own Justice Department has said he can’t use, yeah, I think that’s a pretty easy thing to litigate,” Katyal said.
It is unclear who might take the lead in challenging the Section 122 tariffs.
Sara Albrecht, chair of the Liberty Justice Center, a nonprofit, public-interest law firm representing several small businesses that challenged the IEEPA tariffs, said the group would closely monitor any new statutes being invoked.
Albrecht did not reveal any future litigation strategy, adding: “Our immediate focus is simple: making sure the refund process begins and that checks start flowing to the American businesses that paid those unconstitutional duties.”
In its ruling, the Supreme Court did not give instructions regarding refunds, instead remanding the case to a lower trade court to determine next steps.
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