The U.S. has narrowly avoided an economy-wrecking national railroad shutdown, at least for the time being. We’ll also look at spiking mortgage rates, Yellen’s push for text message tax filing and Gensler’s spat with Republicans over climate rules.
🏈 But first, see which Hall of Fame quarterback is in hot water.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
How Biden helped avert a rail strike
The White House came close this week to facing yet another crisis, this time over a railroad dispute that could have taken a crowbar to the U.S. economy ahead of crucial midterm elections.
But in the end, a tentative deal was struck, with both sides crediting the Biden administration with stepping in to help avert a strike that was set to begin on Friday — one that could have further disrupted the nation’s fragile supply chain.
- Biden called into negotiations around 9 p.m. last night to say a shutdown was unacceptable, while Labor Secretary Marty Walsh led 20 hours of talks in the final stretch.
- A national rail shutdown would have slowed the U.S. economy to a crawl, as railroads transport nearly one-third of all freight.
Alex Gangitano and Amie Parnes have the details here.
It ain’t over ‘til it’s over: To end the threat of a strike, workers in all of the rail unions would need to vote to ratify the deal. That’s not a guarantee, as many workers are furious with railroads’ policies and had largely vowed to vote down the previous tentative agreement. Time will tell if the deal eases their concerns about unsafe working conditions and limited time off.
Karl gets into the specifics of the deal here.
RATE JUMP
Mortgage rates hit 6 percent for first time since 2008
The average interest rate on a 30-year fixed-rate mortgage rose above 6 percent for the first time since the financial crisis, according to federal data released Thursday.
- The average mortgage rate for the benchmark home loan rose to 6.02 percent as of Thursday, according to Freddie Mac, up 0.13 percentage points from last week and 3.16 percentage points above its level a year ago.
- It’s the first time the 30-year fixed rate mortgage rate was above 6 percent since the week of Nov. 20, 2008.
The background: Mortgage rates have risen steadily over the past year as the Federal Reserve ramps up interest rates across the economy to fight inflation.
The Fed is aiming to slow economic activity — including home sales and home price growth — to bring consumer and business spending down to a level that won’t spur inflation.
Sylvan has more here.
DON’T LEAVE THE IRS ON READ
Yellen hails text message tax filing in speech to IRS
Treasury Secretary Janet Yellen praised the notion of filing taxes via text message in a Thursday speech delivered to IRS employees in Maryland while championing the $80 billion funding boost for the agency recently passed by Congress.
“Tax filing should be simple,” she said. “I recently came across a statistic that it takes an average American 13 hours to file a tax return. Compare that with Sweden. There, some taxpayers can file simply by replying to a text message. We can and must do better.”
- Her remarks come as the IRS works to deliver a report to Congress on how it could set up a free, direct e-filing tax return system.
- Democrats’ Inflation Reduction Act (IRA) stipulated that the agency has nine months to deliver the report.
The Hill’s Tobias Burns breaks it down here.
ESG SHOWDOWN
SEC chair spars with senators over climate rules
Securities and Exchange Commission (SEC) Chairman Gary Gensler faced a grilling on Capitol Hill on Thursday, with the agency head defending the SEC’s approach to issues including climate disclosure and cryptocurrency regulation.
- The SEC’s proposed climate disclosure rules — which it released in March — would require publicly traded companies to calculate and publish the risks that climate change poses to their operations and what they are doing to address it.
- Republicans have criticized the rules as onerous, arguing they are an example of the SEC conducting policy beyond its mandate.
- Gensler joined two other Democratic commissioners in voting for the proposed rules in March, while the SEC’s lone Republican commissioner, Hester Peirce, voted no.
GOP lawmakers on the Senate Banking Committee on Thursday attempted to paint SEC climate disclosure policy as a backdoor and likely ineffectual attempt to reduce global temperatures.
The Hill’s Saul Elbein takes us there.
Good to Know
President Biden signed an executive order bolstering a regulatory committee’s powers to review and take action on foreign investment in the U.S. economy, including in the tech sector where officials are increasingly concerned about Chinese actors.
Here’s what else we have our eye on:
- A new poll found 48 percent of Latino voters consider inflation and the rising cost of living the most important issue in the upcoming election.
- The House on Thursday passed a bill that seeks to protect federal civil service employees from “Schedule F,” an executive order former President Trump signed that would make it easier for the White House to replace federal workers with loyalists.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.