News of the Day

Treasury Secretary Janet Yellen on Friday notified Congress that the U.S. government will reach its statutory debt limit next Thursday.

After that, the Treasury Department this month will begin “taking certain extraordinary measures to prevent the United States from defaulting on its obligations,” Yellen wrote in a letter to new House Speaker Kevin McCarthy, R-Calif.

The Treasury “is not currently able” to estimate how long those emergency actions will allow the U.S. to pay for government obligations, she wrote.

But, “It is unlikely that cash and extraordinary measures will be exhausted before early June,” Yellen added.

Congress in December 2021 increased the federal debt limit to about $31.4 trillion.

Yesterday, the Internal Revenue Service today announced Monday, January 23, 2023, as the beginning of the nation’s 2023 tax season when the agency will begin accepting and processing 2022 tax year returns.

More than 168 million individual tax returns are expected to be filed, with the vast majority of those coming before the April 18 tax deadline. People have three extra days to file this year due to the calendar.

The filing deadline to submit 2022 tax returns or an extension to file and pay tax owed is Tuesday, April 18, 2023, for most taxpayers. By law, Washington, D.C., holidays impact tax deadlines for everyone in the same way as federal holidays. The due date is April 18, instead of April 15, because of the weekend and the District of Columbia’s Emancipation Day holiday, which falls on Monday, April 17.

Taxpayers requesting an extension will have until Monday, October 16, 2023, to file.

The Labor Department said Thursday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, fell 0.1% in December from the previous month. Prices climbed 6.5% on an annual basis.

It marked the slowest annual inflation rate since October 2021 and the slowest monthly rate since April 2020, at the height of the COVID-19 lockdowns. Still, inflation remains about three times higher than the pre-pandemic average, underscoring the persistent financial burden placed on millions of U.S. households by high prices.

Core prices – which strip out the more volatile measurements of food and energy – climbed 0.3% in December from the previous month, up from 0.2% in November. From the same time last year, core prices jumped 5.7%. Those figures were also in line with economists’ expectations.

Rent costs jumped 0.8% over the month and 8.3% on an annual basis. Rising rents are a concerning development because higher housing costs most directly and acutely affect household budgets. Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home, climbed 0.8% from the previous month.

Gov. Tony Evers said Tuesday he’s confident his administration will find enough common ground with the Republican-controlled legislature this year to end one of the state’s oldest taxes.

Businesses across Wisconsin pay the personal property tax on equipment such as furniture, equipment and fixtures.

Republican lawmakers are circulating a bill at the Capitol that would eliminate the tax. Evers, who was visiting Watertown Tuesday, told reporters he also wanted to get rid of the tax and was optimistic the legislature will iron out the wrinkles that caused him to veto the bill in 2021.

“We should be able to get through that this session,” Evers said. “There was some minor things that were of concern. It’s my understanding they have been addressed, and so I would anticipate we will be in good shape there.”

Detractors of the tax say it’s unfair because businesses already pay a sales tax when purchasing the equipment. The Wisconsin Grocers Association is among the business groups lobbying for the tax to be eliminated.

“Those small, mom-and-pop retailers are gonna have to categorize, they’re gonna have to track each one of these assets, and then pay tax on it every single year,” Mike Semmann, the association’s vice president of government affairs said. “That’s something that we’re hoping goes away pretty quick.”

Federal Reserve Chair Jerome Powell said Tuesday it would be “inappropriate” for the central bank to plunge itself into the fight against climate change.

“Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals. We are not, and will not be, a ‘climate policymaker,’” Powell said Tuesday.

Powell argued that going beyond the Fed’s basic mandate of stable prices and maximum employment would “undermine the case” for the bank’s independence from Congress and the White House, which allows it to raise and cut interest rates without approval from elected officials.

“It is essential that we stick to our statutory goals and authorities, and that we resist the temptation to broaden our scope to address other important social issues of the day,” Powell said.

The Federal Trade Commission proposed a rule Thursday that would ban U.S. employers from imposing noncompete clauses on workers, a sweeping measure that could make it easier for people to switch jobs and deepen competition for labor across a wide range of industries.

The proposed rule would prevent employers from imposing contract clauses that prohibit their employees from joining a competitor, typically for a period of time, after they leave the company.

Advocates of the new rule argue that noncompete agreements contribute to wage stagnation because one of the most effective ways to secure higher pay is switching companies. They argue that the clauses have become so commonplace that they have swept up even low-wage workers.

Opponents argue that by facilitating retention, noncompete clauses have encouraged companies to promote workers and invest in training, especially in a tight labor market. The public has 60 days to submit commentary on the rule before it takes effect.

The proposal is based on a preliminary finding that noncompete clauses quash competition in violation of Section 5 of the Federal Trade Commission Act. It would not generally apply to other types of employment restrictions, like non-disclosure agreements.

But Emily Dickens, chief of staff and head of public affairs for the Society of Human Resources Management, said the proposed FTC rule is overly broad and could potentially harm businesses that depend on them to thrive. She cited very small, emerging industries where crucial know-how cannot be safeguarded through non-disclosure agreements alone.

Dickens said SHRM, a group of more than 300,000 human resources professionals and executives around the world, will encourage its members to present specific situations that could justify noncompete clauses during the FTC’s commentary period.

Yesterday, Governor Tony Evers signed Executive Order #182 recreating 28 non-statutory committees working to conduct studies and advise the governor on various issues of statewide interest and importance.

State Representative David Steffen (R – Howard) and Senator-elect Rachael Cabral-Guevara (R – Appleton) announced their goal to make retirement tax-free in Wisconsin.

The budget amendment, if taken up by the Joint Committee on Finance or the Governor, would exempt the first $100,000 of retirement income for each individual age 67 or older, and the first $200,000 for married-joint filers.

The Wisconsin Department of Revenue estimates that less than 2% of all tax paying retirees in Wisconsin would still have an individual income tax liability on retirement income under this proposal.

The proposal has been developed in coordination with Representative Macco (R – Ledgeview) who has played a leadership role in reviewing and vetting tax-related polices as chair of the Assembly Committee on Ways and Means.

“Thanks to prudent fiscal leadership by the Republican legislature the past ten years, Wisconsin finds itself in an enviable position. Exempting retirement income is the first piece of a comprehensive tax reform package that we will introduce this session. I look forward to delivering fair, low, and simple tax reform for all Wisconsinites,” said Rep. Macco (R-Ledgeview).

Governor Tony Evers plans to outline a largely liberal agenda in his second inaugural address Tuesday, while calling for working together on issues that have long divided Republicans and Democrats — including protecting abortion rights, expanding Medicaid, legalizing marijuana and fighting water pollution.

While short on details, his speech serves as a guidepost for the issues he will prioritize during a second term. In February, Evers will release his two-year state budget plan, which will include details about the state’s projected $6.6 billion surplus.

On Tuesday, Evers doesn’t plan to mention the surplus specifically — instead he’ll highlight key priorities such as cutting taxes for the middle class and not just wealthy residents. Evers opposes a Republican plan to move toward a flat income tax rate, which would lower taxes more dramatically for those at the highest tax rate.

Evers is also calling for “generational, transformative improvements as to how we invest in our local communities and keep them safe.” He has called for increased funding to local governments, while Republican legislative leaders are discussing a plan that would give counties, cities, towns and villages a portion of the state sales tax revenue.

In addition to Evers, others being sworn in Tuesday included Lt. Gov. Sara Rodriguez; Attorney General Josh Kaul; Secretary of State Doug La Follette; state Treasurer John Leiber; 17 members of the state Senate and all 99 members of the Assembly.