Can Joe Manchin Broker a Debt Deal as Republicans Try to Unseat
The centrist West Virginia Democrat, who faces re-election in 2024, has made it clear he believes he can help broker a compromise to raise the debt ceiling.
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By Luke Broadwater
WASHINGTON — As Democrats unleashed relentless criticism against Speaker Kevin McCarthy last week, portraying him as a reckless politician willing to force the country into default and slash bedrock entitlement programs, one of their own spoke up in the top Republican’s defense: Senator Joe Manchin III of West Virginia.
Mr. Manchin emerged from a one-on-one meeting with Mr. McCarthy on Wednesday insisting that the House Republican leader had assured him that he would not demand cuts to Social Security and Medicare as a condition of raising the debt ceiling — and in fact was interested in a reasonable compromise.
“Kevin McCarthy’s nature is to want to show some really good leadership,” Mr. Manchin said in an interview.
It was concrete evidence that Mr. Manchin, the centrist who has been both a thorn in the side of his fellow Democrats and a pivotal player in many of their achievements over the past two years, is positioning himself to play a major role in forging a deal in a divided Congress to avert a looming fiscal crisis.
In doing so, he is once again breaking with President Biden, who has said he will not negotiate over raising the debt limit — a position that Mr. Manchin has called “a mistake” — and undercutting his party’s message, which has been to cast Republicans’ plan to block a debt-limit increase without deep spending cuts as one that could, in Mr. Biden’s words last week, “wreck our economy.”
“We’re going to have to bring a group of Democrats together that is willing to work and meet him halfway,” Mr. Manchin said of Mr. McCarthy in an interview, adding that he has been in conversations with centrists in the House who could be part of such a coalition. “I think we all know that we’re going to vote for the debt ceiling. It just depends how much how much punishment goes on as we go down that road, and how much blame can be laid upon somebody.
“I’m trying to avoid an embarrassment that makes the United States look like the kind of country we don’t want to be,” Mr. Manchin said.
What is the debt ceiling? The debt ceiling, also called the debt limit, is a cap on the total amount of money that the federal government is authorized to borrow via U.S. Treasury securities, such as bills and savings bonds, to fulfill its financial obligations. Because the United States runs budget deficits, it must borrow huge sums of money to pay its bills.
The limit has been hit. What now? America hit its technical debt limit on Jan. 19. The Treasury Department will now begin using “extraordinary measures” to continue paying the government’s obligations. These measures are essentially fiscal accounting tools that curb certain government investments so that the bills continue to be paid. Those options could be exhausted by June.
What is at stake? Once the government exhausts its extraordinary measures and runs out of cash, it would be unable to issue new debt and pay its bills. The government could wind up defaulting on its debt if it is unable to make required payments to its bondholders. Such a scenario would be economically devastating and could plunge the globe into a financial crisis.
Can the government do anything to forestall disaster? There is no official playbook for what Washington can do. But options do exist. The Treasury could try to prioritize payments, such as paying bondholders first. If the United States does default on its debt, which would rattle the markets, the Federal Reserve could theoretically step in to buy some of those Treasury bonds.
Why is there a limit on U.S. borrowing? According to the Constitution, Congress must authorize borrowing. The debt limit was instituted in the early 20th century so that the Treasury would not need to ask for permission each time it had to issue debt to pay bills.
In a town known for its cynicism and toxic partisanship, Mr. Manchin’s determination to be the broker of an improbable fiscal deal is the latest evidence of his almost quixotic confidence in his ability to bring rival factions together on any issue. (In the past he has expressed shock and dismay after he couldn’t convince Republicans to investigate the Jan. 6, 2021, attack on the Capitol or streamline the permitting of energy projects.)
“Manchin believes with all that is within him that if he could just get everybody in the room and lock the door and order pizza, that he can get a deal,” says Hoppy Kercheval, a radio host who is known as the dean of West Virginia broadcasters.
It’s a trait that can be infuriating to Mr. Manchin’s Democratic colleagues, and one that leads to a curious political disconnect: The Democrat in Congress most eager to ally himself with Republicans is the same one they are targeting most intensely for defeat.
Senate Republicans have rolled out an aggressive ad campaign against the West Virginia senator who is up for re-election in 2024, declaring war on the man they have dubbed “Maserati Manchin” — a reference to his expensive sports car — as part of a pressure campaign designed to dissuade him from seeking a third term.
Mr. Manchin was not surprised, he said in an interview. “The toxic part of this political process is, whoever’s in cycle is the enemy.”
For now, he is being coy about his political future.
“I haven’t decided,” he said, “whether I run for Senate or whether I’m taking on a new adventure in life. I really haven’t. I’m not ready to make a decision yet.”
His Senate seat, in a deep red state that former President Donald J. Trump carried by about 39 percentage points, is now the most coveted target for Senate Republicans, who believe they can take back the chamber by picking off Mr. Manchin and two other Democratic senators from more conservative states: Senator Jon Tester of Montana (where Mr. Trump won by 16 percentage points) and Senator Sherrod Brown of Ohio (where Mr. Trump won by 8 percentage points).
Mr. Manchin’s Republican opponents have been queuing up to take him on. Governor Jim Justice — who has vacillated between being an ally and a foe of Mr. Manchin throughout his career and once fired Mr. Manchin’s wife, Gayle — says he is “seriously considering” a run for Senate, and Representative Alex X. Mooney, who is further to the right, has already announced his candidacy.
But even as they attack him, Mr. Manchin says Republicans in Congress are still working on him “every day” to switch parties, though the requests no longer come from Senator Mitch McConnell, the top Senate Republican from Kentucky, whose relationship with Mr. Manchin grew strained last year.
“McConnell’s given up, he’s tried so many times,” Mr. Manchin said.
In the interim, Mr. Manchin has an outsized share of leverage in Washington. Both Mr. Biden and Senator Chuck Schumer, the New York Democrat and majority leader, badly need Mr. Manchin to seek a third term if they hope to preserve Democratic control of the chamber, a strong incentive to keep the former West Virginia University quarterback happy.
Mr. Manchin says he has been watching the polls closely. He knows when he has opposed Mr. Biden, his numbers shot up in West Virginia. When he agreed with the Biden agenda, his ratings declined.
At no time was this more evident than when he backed the party-line climate and tax legislation, which aims to counter the toll of climate change on a rapidly warming planet, takes steps to lower the cost of prescription drugs and revamps portions of the tax code to pay for it all.
“He knew it was going to be really hard on his approval ratings,” said Senator John Hickenlooper, Democrat of Colorado. “And he knew he was going to be up for re-election. And yet he did it because he thought it was the right thing for West Virginia and the right thing for this country.”
As such, Mr. Manchin has lately undertaken a rebranding tour about the bill, which was called the Inflation Reduction Act but was mostly hailed as an environmental success. In media interviews and public appearances, Mr. Manchin, who has a personal financial interest in the coal industry, has sought to reframe legislation he helped draft as a domestic “energy security” bill whose primary goal is to ensure the United States doesn’t need to rely on other nations for fuel; he emphasizes that it ensures drilling in the Gulf of Mexico, requires the federal government to auction off more public lands for oil drilling, and expands tax credits for carbon capture technology to benefit coal or gas-burning power plants.
“It’s the greatest fossil support deal that we’ve ever had — you can’t talk about that!” Mr. Manchin said. “Well, let me tell you one thing: We’re not putting no damn windmill in the Gulf of Mexico unless we’re drilling.”
Headed into 2020, he predicted a closely divided Senate would be a “golden opportunity” for bipartisan deal-making, and, indeed, it was: For an institution better known for paralysis, the 117th Congress pulled off an extraordinarily productive run, with Mr. Manchin in the center of many of those deals.
They included passage of the biggest investment in clean energy in U.S. history, the largest financing of bridges since the construction of the interstate highway system, the first bipartisan gun safety legislation in a generation, a huge microchip production and scientific research bill to bolster American competitiveness with China, a major veterans health care measure, and an overhaul of the electoral system designed to prevent another Jan. 6-style attempt to overturn a presidential election.
While deeply involved in those negotiations, Mr. Manchin often was the voice of “no” within the party, demanding smaller bills and “raising hell,” as he describes it, about the danger of prompting out-of-control inflation. The biggest setback he dealt to Mr. Biden’s agenda was when he killed the president’s sweeping “Build Back Better” domestic policy legislation, a move Mr. Manchin asserts “saved the country from going into a truly hard, hard recession.”
It was ultimately reborn in a smaller form as the climate, health and tax measure and rebranded as the Inflation Reduction Act.
“I know he frustrated some of my colleagues, but I think he played an enormously positive role” in negotiations, including paring down the domestic policy bill, said Senator Mark Warner, Democrat of Virginia. “In retrospect, it was too big. It was basically trying to solve virtually every problem in a single piece of legislation.”
Mr. Warner added: “Let’s face it: The Fed was wrong; most economists cited by the administration were wrong; I was wrong — I didn’t think inflation was going to get as bad as it did — and he was more directionally right.”
Mr. Manchin concedes the current deal-making environment on Capitol Hill will be “more challenging” than in the last Congress, now that Republicans control the House. His vote is also slightly less pivotal, since Democrats have firmer control with a 51-to-49 majority rather than 50-50.
But Republicans and Democrats said Mr. Manchin will still be crucial. Senator Susan Collins of Maine, the top Republican on the Senate Appropriations Committee and an ally of Mr. Manchin’s, says she hopes a group of centrists can figure out how to make deals in the current Congress, just as they did for the past two years.
“There’s going to have to be a lot of give and take and negotiation in order for us to get the people’s business done,” Ms. Collins said. “And Joe will be front and center.”
WeWork reaches deals to cut debt, extend maturities
(Reuters) -WeWork Inc said on Friday it had struck deals to cut debt by about $1.5 billion and extend the date of some maturities, in a bid to preserve cash as the flexible-workspace provider feels the heat of mass layoffs on its business.
The company, which offers workstations, private offices and customized floors, had enjoyed a pandemic-driven shift to flexible work outside traditional offices, but is now gearing up for a potential fallout from a likely economic downturn.
WeWork said it will also infuse the company with about $540 million in new funding.
Last month, the company forecast weak current-quarter revenue, after having announced moves to cut 300 jobs and exit 40 underperforming U.S. locations in a move aimed at curbing its real-estate footprint.
Under the deals announced Friday, key investor SoftBank Group Corp’s $1.0 billion unsecured notes would be converted to equity. The Japanese company held a stake of about 46% in WeWork before the restructuring was announced, as per Refinitiv data.
About $1.9 billion of pro-forma debt will now mature in 2027, WeWork said, adding that it would have less than $2.0 billion in net debt once the deal closes.
The agreements also cover an ad-hoc group which represent over 60% of the company’s public bonds and a third-party investor, WeWork said. The group includes King Street Capital Management L.P. and BlackRock Inc.
WeWork, which went public in 2021 after a two-year struggle, is yet to post a quarterly profit. But the company said on Friday it expects to turn a core profit this year, helped by cost cuts.
PJT Partners LP advised WeWork on the debt restructuring, while Houlihan Lokey advised SoftBank.
(Reporting by Priyamvada C and Kannaki Deka; Editing by Shailesh Kuber.
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2023 New York Yankees Betting Preview: Odds to win AL East, World Series, over/under win
The 2023 Yankees look like a real contender to win their 28th World Series championship in franchise history and their first since ’09. The Yanks might very well have the best starting rotation in baseball, headlined by Gerrit Cole and Carlos Rodon, and the offense is going to remain near the top of the league in most offensive categories thanks to a nine-year, $360 million contract to keep newly dubbed captain Aaron Judge in pinstripes.
The betting market also agrees that the Yankees are one of the top contenders to hoist the Commissioners Trophy this fall, giving them the second-lowest odds to win the 2023 World Series at +750, per DraftKings Sportsbook. New York’s also expected to win the AL East for a second consecutive season, entering the year as the odds-on favorite with +110 odds.
Below, we’ll list the various New York Yankees futures markets bettors can delve into and advise how to approach betting on them.
Odds courtesy of DraftKings Sportsbook
2023 New York Yankees regular season win total: Over or under?
OVER 94.5 wins (-105)
UNDER 94.5 wins (-120)
Last season, the Yankees entered the season with a 92-win over/under and surpassed that number by finishing with a 99-63 record. This year, the Yankees’ regular season win total has increased to 94.5 wins, which is a fair number for a team who seemingly got better in the offseason.
Even in an ultra-competitive AL East, the Yankees won 47 of their 76 divisional games, giving them a respectful 62-percent win rate. However, with MLB instituting a balanced schedule, New York will play just 13 games against divisional foes instead of 19. While that might seem like a positive thing given how deep and competitive the AL East is, considering the Yankees’ inner-division success, that might hinder their chances of getting to 95 wins.
New York began last season as arguably the best team in baseball, entering the All-Star break with a 64-28 record, but it played .500 baseball to finish out the regular season. Considering how dominant they were in the first half, it was unlikely the Yankees maintained their .696 winning percentage throughout the whole season.
The Yankees still managed to boast an above-.500 winning percentage in both home (.704) and road games (.519) and had just one month (August) where they failed to play .500 ball (10-18). So, which Yankees team will we see more often in 2023? The one that dominated the first half or managed to get by in the second half?
We’ll side with a mix between the two, with more consistency throughout the season that leads the Bronx Bombers to eclipse their regular season win total of 94.5. Between an offense that ranked fourth in wRC+ (115) and a pitching staff that held hitters to the third-lowest xwOBA (.290), New York has a real shot to cash their regular-season win total OVER for a second consecutive season.
2023 New York Yankees odds to win AL East
New York Yankees +110
Toronto Blue Jays +215
Tampa Bay Rays +380
Boston Red Sox +1700
Baltimore Orioles +2200
A team projected to win close to 95 games should also be projected to win its division, so it’s no surprise to see the Yankees priced as the team to beat in the AL East at +110. While the Blue Jays’ odds to win the AL East (+215) appear to be more enticing, it’s tough to bet against a team that had an above-.500 winning percentage against every divisional foe last season.
The AL East is likely to be a two-team race between the Yankees and Blue Jays, but you can never count out the Rays (+380). The Red Sox (+1700) have too many glaring holes on their roster to compete for an AL East title, and although the Orioles (+2200) put together an 83-79 season, they failed to post a winning record against their AL East opponents, something you can’t have if you’re vying for the division title.
While we think the Yankees are on track for another successful regular season, we profiled the Blue Jays as our favorite bet to win the division in our divisional odds preview. We think the Jays’ odds should be a bit shorter than +215, therefore we see some value on the Jays to take the AL East. As a bettor, it’s tough to find value on the Yankees, as they’re always a public darling, and bettors tend to pay more of a premium to bet on them. There might not be betting value on the Yankees to win the AL East, but considering the betting market gives them a 47.62-percent chance to win the division, it tells you the market still sees them as the most complete team in the AL East.
2023 New York Yankees AL pennant odds
Yankees odds to win the American League: +360 (implied probability: 21.74 percent)
The Yankees sit right behind the Astros with the second-best odds to win the American League at +360. New York hasn’t won the AL pennant in over a decade (13 seasons) but has reached the ALCS three times in the past six seasons.
The Astros have been the Yankees’ kryptonite, ending their hopes of winning the AL pennant the past three times. Houston’s roster is just as, if not even more, as impressive as last season, with the addition of 2020 AL MVP Jose Abreu bolstering an already dangerous lineup. While they’ve had their struggles against the Astros in the postseason, it’s only a matter of time until Aaron Boone’s bunch breaks through to the World Series considering they’ve reached the ALCS 50 percent of the time over the past six years.
The betting market correctly priced the Yankees’ AL pennant odds, but they could still be a worthwhile bet at +360 for those higher on the Yankees than the market.
2023 New York Yankees World Series odds
As previously mentioned, the Yankees have the second-best odds to win the 2023 MLB World Series at +750, trailing only the Astros (+600). Granted they’re able to stay healthy, New York’s pitching rotation is going to be tough to score runs against the October, and as long as they’re able to clutch up with runners in scoring position, New York has as good of a chance as ever to hoist the Commissioner’s Trophy this fall.
A modest wager on the Yankees to win it all in 2023 isn’t a bad way to dish out a portion of your bankroll, but with the World Series odds market available throughout the season, it’s usually a good idea to wait a bit before making your bet. The odds likely won’t be around 7.5-1 if they again get off to a hot start, but New York could be around 10-1 if they start slowly. Of course, it’s all part of the gamble, but we recommend holding pat for the time being while reevaluating the World Series markets after a month or so.
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