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The World
The U.S. House Rules Committee said it will meet on Tuesday afternoon to discuss the debt ceiling bill, which needs to pass a narrowly divided Congress before June 5, when the U.S. Treasury says it would run short of money to cover all its obligations. The 99-page bill would authorize more than $886 billion for security spending in fiscal year 2024 and over $703 billion in non-security spending for the same year, not including some adjustments. It would also authorize a 1% increase for security spending in fiscal year 2025. (Reuters)
Speaker Kevin McCarthy hunkered down in a mostly desolate Capitol building on Monday to build support for his debt limit compromise, dogged by claims of promises he made to become speaker. For days, the California Republican has said he could “get to yes” on House passage of a cross-party agreement to prevent the nation from defaulting on its $31.4 trillion in debt. Already, the task is appearing stickier than simply rounding up enough floor votes to pass the deal he struck over the weekend with President Joe Biden. (Politico)
Here’s what’s in — and out — of the deal. (Washington Post)
Raises the debt ceiling beyond the 2024 election
Largely holds funding flat for domestic programs
Claws back some money for the IRS
Slight funding boosts for the military, veterans affairs
New work requirements on federal programs
Major natural gas pipeline in West Virginia
Out of the deal: Closing tax loopholes, cutting student debt relief
Why the debt deal infuriates climate activists: The deal does little for the clean energy transition, and expedites a natural gas pipeline. But it keeps intact spending in Biden’s climate bill — an early target for the GOP. (Washington Post)
Read the bill here.
China has rebuffed a U.S. request for a meeting between their defense chiefs on the sidelines of an annual security forum in Singapore this coming weekend, the Pentagon said Monday, showing the limits of a tentative rapprochement between the two rival powers. The decision by China formally to inform the Pentagon shuts the door for now on a meeting between Defense Secretary Lloyd Austin and Li Shangfu, China’s new defense minister, which the U.S. had proposed on the sidelines of the annual Shangri-La Dialogue security forum. (Wall Street Journal)
Japan has threatened to shoot down any projectile posing a risk to its territory after North Korea signaled its intention to launch its first military reconnaissance satellite within the next two weeks. Japan’s defense ministry said that it had put its ballistic missile defenses on alert and was preparing “destructive measures” after Pyongyang made a rare notification through the International Maritime Organization of a satellite launch planned between May 31 and June 11. (Financial Times)
Russia Launches a Rare Daytime Missile Attack on Kyiv: As ballistic missiles exploded in the clear blue skies on Monday, frightened pedestrians hurried to get off the streets of Ukraine’s capital, watching the battle unfold over their heads in a rare daytime missile attack on Kyiv. Air-raid alarms sounded shortly after 11 a.m. local time, sending parents racing to get their children to safety and hospital workers to take cover in bomb shelters. Powerful explosions echoed around the city within minutes, as Ukrainian air defenses sprung into action. Children wearing backpacks started to run and scream when booms resounded on one Kyiv street, a video widely shared by Ukrainian officials on social media showed. (New York Times)
President Recep Tayyip Erdogan of Turkey, invoking themes of Turkish nationalism and counterterrorism, has been the main obstacle toward Sweden joining the NATO alliance after Russia’s invasion of Ukraine. His fierce public opposition played well in his re-election campaign. So did his role as a power broker, vital to NATO but also as an intermediary, able to maintain good relations with both Russia and Ukraine. Now safely re-elected on Sunday as president of Turkey, Mr. Erdogan is expected to project the same image, by tightening his grip on power at home while balancing between his allies inside NATO and his economic dependency on Russia. (New York Times)
Uganda's President Yoweri Museveni has signed one of the world's toughest anti-LGBTQ laws, including the death penalty for "aggravated homosexuality", drawing Western condemnations and risking sanctions from aid donors. Same-sex relations were already illegal in Uganda, as in more than 30 African countries, but the new law goes further. It stipulates capital punishment for "serial offenders" against the law and transmission of a terminal illness like HIV/AIDS through gay sex. It also decrees a 20-year sentence for "promoting" homosexuality. (Reuters)
Biden warns Uganda may face sanctions if anti-gay law not repealed. (Axios)
Shanghai breaks more than century-old heat record in sweltering May: Shanghai saw its hottest day in May for more than 100 years on Monday with temperatures hitting 36.1 degrees Celsius (97 degrees Fahrenheit), continuing a brutal trend of unusually hot weather in the country since March. Several southern Chinese provinces are expected to swelter under extreme heat over the next few days and weather experts have already predicted another blistering summer, a repeat of last year's record-breaking more than two-month stretch. (Reuters)
Elite High School’s Admissions Plan May Face Supreme Court Test: The justices will soon rule on race-conscious admissions plans at Harvard and U.N.C. A new appeals court case asks whether schools can use race-neutral tools to achieve racial diversity. (New York Times)
Americans Favor Tighter Review of Foreign Land Ownership in Light of Chinese Espionage Concerns: Half of U.S. adults are at least somewhat opposed to allowing foreign entities to buy real estate in the United States. When asked what justifies additional scrutiny of foreign land purchases, U.S. adults most often pointed to military security. Rural respondents were even more likely to cite military security, and were notably no more likely than the general population (13%) to say that food security is the primary reason to screen foreign purchases of U.S. land. (Morning Consult)
Economy
More High-School Grads Forgo College in Hot Labor Market: More high-school graduates are being diverted from college campuses by brighter prospects for blue-collar jobs in a historically strong labor market for less-educated workers. The college enrollment rate for recent U.S. high-school graduates, ages 16 to 24, declined to 62% last year from 66.2% in 2019, just before the pandemic began, according to the latest Labor Department data. The rate topped out at 70.1% in 2009. Job growth at restaurants, theme parks and other parts of the leisure and hospitality sector—which tend to employ young people and typically don’t require a college degree—has increased more than twice as fast as job gains overall in the past year. There also remains a high number of job openings in construction, manufacturing and warehousing, fields that often require additional training, but not college degrees. (Wall Street Journal)
US retailers are warning of a surge in thefts, costing some of them hundreds of millions of dollars as they try to outwit organized criminals with extra security and surveillance. Target has alerted investors that “shrink” — an industry term covering shoplifting, employee theft and organized retail crime — will cut its profits this year by $500mn more than in 2022. DIY retailers such as Home Depot and dollar stores including Dollar Tree said shrink had cut their gross margins by several basis points in the first quarter, while Foot Locker was among several retailers citing a “significant” year-on-year increase. (Financial Times)
Disney’s Orlando Campus Cancellation a Blow to Neighboring Projects: Walt Disney’s decision to scrap a proposed $900 million office park in Orlando, Fla., creates a 60-acre hole inside an 11,000-acre master planned community, clouding the near-term future of many other real-estate projects already under way there. The company cited changing business conditions and new leadership when it announced this month that it wasn’t proceeding with plans for the office space or the relocation of 2,000 employees from California. (Wall Street Journal)
It’s Getting Harder to Insure Your Property If You Live in California: California residents now have fewer options to insure their homes, after State Farm General Insurance Co. announced it’s no longer accepting new applications for property and casualty coverage in the state. State Farm, one of the biggest property and casualty insurers in California and the US, pointed to growing “catastrophe exposure” and substantial increases in construction costs for its decision, which took effect Saturday. The move affects both business and personal applications. It doesn’t impact personal auto insurance. (Bloomberg)
Technology
Nvidia’s chief executive hailed a new era of computing in which “everyone is a programmer”, as the world’s most valuable semiconductor group unveiled a new supercomputer platform to stay at the forefront of the artificial intelligence revolution. Jensen Huang warned in a speech in Taiwan that the traditional tech industry would not keep pace with AI’s advancements, adding that the technology had dramatically lowered the barrier to entry to computer coding. “We have reached the tipping point of a new computing era,” Huang said, arguing that AI now enabled individuals to create programs simply by plugging in commands. (Financial Times)
Nvidia announces AI products and updates, including the DGX GH200 supercomputer platform, gaming features, data center networking tools, and a robotics platform. (Bloomberg)
In July, NYC will start enforcing a law requiring firms using AI in hiring to notify candidates of its use and have independent auditors check for bias annually. (New York Times)
The AI Boom Runs on Chips, but It Can’t Get Enough: ‘It’s like toilet paper during the pandemic.’ Startups, investors scrounge for computational firepower. (Wall Street Journal)
A survey of 3,000 US Boomers, Gen Xers, Millennials, and Gen Zers: 85% used AI tools to perform tasks at work; Millennials lead with 89% having used AI at work. (Checkr)
Streaming services are removing tons of movies and shows — it’s not personal, it’s strictly business: Consumers thought streaming would be forever, but library content is disappearing as studios seek to cut costs. Wall Street has turned up the heat on media companies, now focusing on if and when streaming will be profitable versus if they’re putting up big subscriber numbers. Removing content from streaming platforms is a way for streamers to avoid residual payments and licensing fees. (CNBC)
Smart Links
Cleveland Clinic outpaced expense growth to return to profitability in Q1. (Healthcare Dive)
Why Are Markets So Calm? It’s Revenge of the Quant Funds. (Wall Street Journal)
Inside South Korea's race to become one of the world’s biggest arms dealers. (Reuters)
China says it plans to put astronauts on the moon by 2030. (Washington Post)
Is there a retail exodus in San Francisco, or is Union Square still ‘beating strong’? (Los Angeles Times)