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Republican attorneys general seek assistance from courts in thwarting Biden’s agenda


WASHINGTON (AP) — These are busy days for Republican state attorneys general, filing repeated lawsuits that claim President Joe Biden and his administration are overstepping their authority on immigration, climate change, the environment and taxes.

The strategy harks back to what Democrats did during Trump’s presidency, heading to court in New York, California, Maryland and other states where they were likely to receive a friendly reception. Even before that, Republicans were frequent filers during Barack Obama’s White House years.

“This is something the Republicans have taken from the Democratic playbook, just as the Democrats had taken a lot of things from the Republican playbook during Trump’s tenure,” said New York University law professor Sally Katzen, who served in the Clinton White House.

The legal action reflects GOP opposition to Biden initiatives, but it also is providing the attorneys general, many with higher political ambitions, to showcase their willingness to stand up to Biden and unabashedly side with Trump.

Missouri Attorney General Eric Schmitt, seeking the Republican nomination for U.S. Senate in 2022, brags in a TV ad that he is “on the conservative front line suing to stop the Biden administration’s worst abuses.”

The main target of lawsuits filed so far have been executive orders issued by Biden.

But several states also have sued over a provision of the $1.9 trillion COVID-19 rescue plan that prohibits states from using their share of federal money to reduce taxes.

Chris Carr, the Georgia attorney general and new chairman of the Republican Attorneys General Association, said he and his colleagues have been cast in this role because Democrats control both houses of Congress and the White House.

“We’ve got a situation where President Biden says, ‘Look, I want to be more bipartisan in nature.’ But then he turns around and has issued more executive orders in the beginning of a term than any president in modern history, I’m told,” Carr said.

“Our job is to ensure the rule of law is upheld. It’s a natural tension we’ve seen throughout American history. How does the federal government stay in its lane?” he said.

It took only two days after Biden’s inauguration for the first legal fight to erupt.

Following the president’s announcement of a 100-day pause in deportations, Texas Attorney General Ken Paxton — who famously appealed to the U.S. Supreme Court to overturn Trump’s loss to Biden in a crucial set of swing states, drawing the support of 17 fellow state attorneys general and 106 Republican members of Congress — went to court and won a court order against the halt.

Several other states have since followed with similar claims.

Just since the middle of March:
• Texas, Montana and 19 other states filed suit in Texas to overturn Biden’s cancellation of the contentious Keystone XL oil pipeline from Canada.
• Louisiana Attorney General Jeff Landry led 13 states in suing the administration to end a suspension of new oil and gas leases on federal land and water and to reschedule canceled sales of leases in the Gulf of Mexico, Alaska waters and western states.
• Missouri sued over the restriction on state tax cuts as a condition of receiving money from the huge COVID-19 bill.

See: Atty. Gen. Ken Paxton battles Texas news media over records related to Capitol siege on Jan. 6

Also: Twitter sues Texas attorney general, claiming retaliation for its Trump ban

Earlier in March, Schmitt led 12 states in a suit that claims the administration lacks the authority to take account of the social costs of climate change. The president said on Jan. 20 that federal agencies must account for damages caused by increased greenhouse gas emissions, including changes in farm productivity, human health and property damage from increased flood risk.

In at least two instances, Republicans are trying to get the Supreme Court involved to keep in place Trump policies that Biden is reviewing or has indicated he will reverse.

Paxton is leading a push to get the justices to reimpose the Trump-era immigration rule denying green cards to immigrants who use public benefits like food stamps. A federal court has blocked the policy nationwide and the Biden administration dropped the defense of it.

Ohio Attorney General Dave Yost is leading a 19-state effort to keep the court from dismissing a case over the Trump policy that bans family planning programs that receive federal funds from referring women for abortions.

The administration and medical groups that had challenged the policy agreed to dismiss the case because the Health and Human Services Department shortly will propose a new rule rescinding the ban on abortion referrals.

Paxton’s predecessor was Greg Abbott, now the Texas governor. Abbott burnished his conservative credentials by frequently going to court over Obama initiatives. “I go into the office, I sue the federal government, and I go home,” he said in 2013, boasting then of having sued the administration 25 times.

By the middle of 2016, the Wall Street Journal counted at least 44 times that Texas went to court against the Obama administration.

The one thing that has changed since the last Democratic administration is that Trump was able to move appeals courts across the country to the right, adding six judges each to appeals courts that hear cases from Ohio and Texas and four to the court that includes Missouri. All three already leaned conservative.

Even the famously liberal 9th U.S. Circuit Court of Appeals in San Francisco, which hears appeals from Montana, became more evenly balanced in the past four years, with the addition of 10 Trump appointees.

“Republican attorneys general might take extra comfort from the fact that there were a significant number of conservative judges confirmed during the Trump administration, and there are a number of courts of appeals where the balance was tipped. So, it’s an even better shot than before,” Katzen said.

MarketWatch contributed.



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Future

Stock-market futures slip, bond yields pop near 1% amid razor-thin Georgia races


Wall Street had Georgia squarely on its mind Tuesday night, with equity futures and bonds mostly in the crosshairs as investors eyed dual contests for key Senate seats coming down to razor-thin margins in early returns.

MarketWatch’s Victor Reklaitis reported that analysts are describing the Georgia races as “about as close as you can get,” and there are expectations that the winners won’t be declared until Wednesday morning.

At last check, tallies from populous Democratic-leaning counties, particularly in Dekalb, which could swing the vote tally, were looming.

Democratic challenger Jon Ossoff was trailing incumbent Republican Sen. David Perdue, with over 90% of the vote counted, after enjoying a handy lead earlier, according to data aggregated by the Associated Press.

In the other runoff, Democrat Raphael Warnock was also running slightly behind against incumbent GOP Sen. Kelly Loeffler.

The Senate races are runoffs from the November general election, when none of the candidates hit the 50% threshold required to be declared winner.

At stake for the markets is the prospect of a slim Democratic majority in the Senate if candidates can upend GOP incumbents.

Senate Republicans, if either Loeffler or Perdue wins Tuesday night, can be expected to block further coronavirus relief legislation and crimp any Democratic plans for expansive spending after President-elect Joe Biden takes office, experts said.

A Democratic sweep in Georgia, however, would give that party virtual control of that chamber because Vice President–elect Kamala Harris would cast tiebreaking votes as the chamber’s president.

Futures for the S&P 500 index
ESH21,
-0.64%

ES00,
-0.64%

were off 0.7%, while those for the Dow Jones Industrial Average
YMH21,
-0.24%

YM00,
-0.24%

were 0.3% lower, and Nasdaq-100 futures
NQH21,
-1.34%

NQ00,
-1.34%

were off 1.3% late Tuesday.

In the regular session, the Dow
DJIA,
+0.55%
,
S&P 500 index
SPX,
+0.71%

and the Nasdaq Composite Index
COMP,
+0.95%

finished the session solidly higher ahead of the political face-offs.

However, some of the biggest moves were emanating from the bond market, with the 10-year Treasury yield
TMUBMUSD10Y,
1.000%

knocking on the door of 1%, at around 0.985%, as prices fell, after rates finished at 0.955%, marking its highest 3 p.m. Eastern close since Dec. 4, according to Dow Jones Market Data. The 30-year Treasury bond
TMUBMUSD30Y,
1.762%

also was up nearly 4 basis points yielding 1.744% vs. an afternoon close at 1.705%, also its highest rate in a month.

For the bond market, Democratic wins could add to the bearish pressure on Treasurys as analysts say inflation expectations have risen in response as Congress may be more inclined to pass additional fiscal spending measures with a majority, which would weigh on bond prices, dragging yields up.

“It looks like a couple of the larger democratic counties haven’t been totally counted yet so my belief is this may very well swing to the Democrats,” Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities, told MarketWatch.

“If that does happen rates will continue to rise over the next few days. We could very well see 10yr yields near 1.2% shortly,” he wrote.

It is nearly impossible to surmise what outcome Wall Street deems is best suited to push stocks further higher in 2021. Last year, market participants had been wagering that a Biden presidential victory, coupled with Democrats achieving a majority in the Senate, would provide the best scenario for additional financial relief measures to help sustain the economy’s recovery from the Covid-19 pandemic.

However, a blue wave failed to manifest and markets surged into the final weeks of 2020 regardless.



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