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Trump's massive spending bill clears Senate by razor-thin margin, heads to House

Trump's massive spending bill clears Senate by razor-thin margin, heads to House

Malay Mail12 hours ago
WASHINGTON, July 2 — The Republican-led US Senate approved President Donald Trump's mammoth domestic policy bill Tuesday by the narrowest of margins, despite misgivings over delivering deep welfare cuts and another US$3 trillion (RM12.6 trillion) in national debt.
Republican leaders had struggled to corral support during a record 24-hour 'vote-a-rama' amendment session on the Senate floor, as Democrats offered dozens of challenges to the most divisive aspects of the package.
But Senate Majority Leader John Thune was able to turn around wavering moderates to deliver a 50-50 vote, with Vice President JD Vance breaking the tie.
The sprawling text now heads to the House of Representatives, where it faces unified Democratic opposition and multiple Republicans balking at the budget-busting costs, as well as slashed health care and food aid programs for poor Americans.
Trump's bill proposes a US$4.5 trillion extension of his first term tax cuts, contentiously offset with US$1.2 trillion in savings mainly targeting the Medicaid health insurance programme, as well as federal food aid.
The health care cuts could see an estimated 12 million low-income and disabled Americans lose coverage.
The package also rolls back billions of dollars in green energy tax credits while providing a US$350 billion infusion for border security and Trump's mass migrant deportation programme.
The president made clear that the goal remains to get the bill through the House in the coming days and sign it into law by Friday's July 4 Independence Day holiday.
'It's going to get in, it's going to pass, and we're going to be very happy,' Trump told reporters ahead of the vote.
'Utter shame'
Polls show the bill is among the most unpopular ever considered, and Democrats hope to leverage public anger ahead of the 2026 midterm elections when they aim to retake the House.
Backed by extensive independent analysis, they say the bill's tax cuts would disproportionately benefit the wealthy at the expense of social safety net programs for the poorest Americans.
'Today, Senate Republicans betrayed the American people and covered the Senate in utter shame,' said Chuck Schumer, the leader of the Senate Democratic minority.
'In one fell swoop Republicans passed the biggest tax break for billionaires ever seen — paid for by ripping away health care for millions of people and taking food out of the mouths of hungry kids.'
A handful of senators in the Republican majority had threatened to upset the apple cart, voicing concerns that the bill would add more than US$3.3 trillion to the nation's already yawning budget deficits over a decade.
The most high-profile opposition came in the shape of tech billionaire and estranged former Trump aide Elon Musk, who balked at the bill's debt implications and stripping of clean energy subsidies.
A furious Trump on Tuesday said he would consider deporting Musk — whose electric car company Tesla gives him extensive interests in green energy — and ending federal funds for his companies.
'Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa,' Trump posted on social media.
Focus on House
Although the House of Representatives has already passed its own version of the bill, it will have to come back to the lower chamber for a final rubber stamp before it reaches Trump's desk.
House Republicans were watching anxiously from the sidelines to see if their Senate colleagues would adopt changes that would be hard for Speaker Mike Johnson to sell to his lawmakers.
Fiscal hawks in the lower chamber are furious at what they say is US$651 billion of extra deficit spending in the Senate's tweaks.
A House vote could come as early as Wednesday but even with full attendance, House Republicans can only afford to lose three votes.
'The House will work quickly to pass the One Big Beautiful Bill that enacts President Trump's full America First agenda by the Fourth of July,' Johnson said after the vote.
'The American people gave us a clear mandate, and after four years of Democrat failure, we intend to deliver without delay.' — AFP
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Ukraine left scrambling after US says halting weapons shipments
Ukraine left scrambling after US says halting weapons shipments

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  • The Sun

Ukraine left scrambling after US says halting weapons shipments

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Bonded to interest rates
Bonded to interest rates

The Star

time2 hours ago

  • The Star

Bonded to interest rates

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Bank Negara has also held the OPR steady at 3% in its recent meeting, but reduced the statutory reserve requirement (SRR) to 1% from 2% that resulted in the release of an additional RM19bil in liquidity into the banking system to support the economy. However, despite the SRR decision, experts said there was still a high risk for an OPR cut in the second half of the year. In comparison, the bond yield spread between the 10-year UST and the 10-year MGS stood at 0.84% on June 5, 2025, based on the Bond Pricing Agency Malaysia's (BPAM) data. The 10-year UST on that date was at 4.40% and the 10-year MGS was at 3.56%. BPAM chief executive officer Meor Amri Meor Ayob told StarBiz several challenges could weigh on the ringgit bond market in 2025, with US monetary policy being one of them. 'UST continues to offer relatively higher yields compared to MGS, which may limit the appeal of MGS going forward. 'Moreover, with growing expectations that Bank Negara may cut the OPR in the second half of the year, yield differentials could widen further, potentially dampening foreign appetite for ringgit-denominated bonds. 'If the Fed maintains the current interest rates while Bank Negara cuts its OPR, the widening yield between the UST and MGS differential could reduce the attractiveness of Malaysian bonds to foreign investors and put pressure on the local ringgit,' he added. Meor Amri said another challenge lies in geopolitical uncertainties, especially around US trade policies under President Trump's administration, which could trigger market volatility and risk-off sentiment. He said the recent surge in foreign demand for ringgit bonds in March and April 2025 was driven by uncertainty surrounding President Trump's flip-flopping tariff policies and his proposed 'One Big Beautiful Bill'. These developments have prompted some bond investors to reduce their exposure to UST and seek diversification in emerging market assets such as MGS, he noted. Foreign net buying of Malaysian bonds surged to RM10.2bil in April this year compared to RM3.2bil in March, marking the second consecutive month of net inflows, despite 'Liberation Day' tariffs announced on April 2, 2025. The increase was primarily driven by strong demand for MGS and government investment issues (GII), which attracted RM9.7bil of inflows (March inflow: RM3bil), as well as the shorter-term Malaysian Treasury Bills (MTB) and Malaysian Islamic Treasury Bills (MITB). OCBC Bank (M) Bhd head of global markets Stantley Tan said the future demand from foreign investors for ringgit-denominated bonds would largely depend on a variety of macroeconomic and domestic factors. Since the onset of 2025, he said global economic uncertainties have escalated, primarily due to rising geopolitical risks and inconsistencies in US tariff policies. He said the imposition of substantial trade tariffs by the United States on its trading partners has disrupted global trade flows and increased the risk of a recession, particularly within the United States. As trade negotiations continue, investors have also rebalanced their portfolios, reallocating investments towards emerging markets and economies less impacted by the tariff conflicts. 'On the domestic front, Bank Negara has reiterated its confidence in the resilience of Malaysia's economy, which is fundamentally supported by robust domestic demand. 'However, the tone of the monetary policy committee (MPC) statement has shifted from cautious optimism to a neutral-dovish stance, reflecting the heightened external risks. 'In its latest meeting, the MPC reduced the SRR by 1% to provide additional liquidity support to the economy,' Tan said. He said the ringgit bond market has started to price in the possibility of a policy rate cut in the coming months following the central bank's slightly dovish tone. However, he said the risks to the current bond valuations remain, particularly if the economy proves resilient, prompting Bank Negara to hold policy rate steady, which could lead to a repricing of the bond market. 'A significant fiscal improvement by the government could mitigate the risk of a sell-off by easing the supply of MGS and GII in future issuances. Additionally, external risks may arise from the potential resolution of the US fiscal situation, which is currently under intense scrutiny by global investors. Should the US fiscal outlook improves, there is a possibility that investors may shift back to safe-haven assets, resulting in potential outflows from emerging markets including Malaysia,' Tan noted. RAM Rating Services Bhd economist Nadia Mazlan said foreign investor appetite for Malaysian bonds may continue to be under pressure in 2025 amid continued heightened uncertainties arising from US protectionist trade policies. She said the 'risk-off' sentiments among investors at the start of the year and at the onset of the 'Liberation Day' tariffs have already triggered a sell-off across both the equity and bond markets, including in Malaysia. Nadia said while there was some temporary reprieve from the postponement of higher reciprocal tariffs and signs of easing US-China trade tensions, which contributed to the net inflows in March and April, the continued unpredictability of US policies may still haunt global investors. 'The continued easing of market volatility recently may help support investor appetite for risker emerging market bonds in the short term, but it may be capped by the still-elevated uncertainties, especially as the 90-day pause on higher reciprocal tariffs is nearing its end. 'The potential future volatility from other proposed tariffs will likely leave foreign investors teetering on the edge,' she said. However, she said a tapering yield differential between the UST and MGS may help buoy some foreign demand for domestic bonds this year. 'With the Fed widely expected to reduce the federal funds rate in the face of slower economic growth, Bank Negara is expected to keep its OPR at 3%. This could help compress the UST-MGS yield spread, which should increase the appeal of Malaysian bonds and strengthen the ringgit this year. 'The country's strong economic fundamentals and prudent fiscal discipline also play important roles in making the country an attractive investment destination. 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Singapore and Cambodia to expand collaboration in renewable energy, carbon markets and agri-trade
Singapore and Cambodia to expand collaboration in renewable energy, carbon markets and agri-trade

The Star

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  • The Star

Singapore and Cambodia to expand collaboration in renewable energy, carbon markets and agri-trade

SINGAPORE: Singapore and Cambodia will deepen their collaboration in several areas, including renewable energy, high-quality carbon credits and trade in food products, as the two countries mark 60 years of diplomatic relations. Prime Minister Lawrence Wong said this on Wednesday (July 2) in the Cambodian capital of Phnom Penh, the latest in his series of introductory visits to Asean capitals. At a luncheon hosted by Cambodian Prime Minister Hun Manet at the Peace Palace, PM Wong thanked Manet for his invitation to visit and said the two countries' relationship had continued to grow from strength to strength over the last 60 years. 'Our ties... were built on the strong foundation laid by then-Prime Minister Lee Kuan Yew and His Majesty King-Father Norodom Sihanouk,' PM Wong said in a toast speech. 'It is a foundation of mutual respect, trust and friendship that continues to guide our relationship today.' He noted that Singapore is one of Cambodia's largest investors and trading partners. In 2024, the Republic was Cambodia's third-largest foreign investor, with bilateral trade between the countries increasing 7.1 per cent year on year to S$4.83 billion. During his visit, PM Wong called on Cambodian King Norodom Sihamoni at the Royal Palace. He also called on Senate President Hun Sen. At his meeting with Manet, the two leaders discussed several priority areas of cooperation. The first such area is renewable energy, in which the two countries' cooperation will help build a greener and more interconnected Asean, said PM Wong. He cited a project for Singapore to, which will be a key building block towards an Asean Power Grid. The plan is for the grid to link up the electricity networks of the group's member countries and enable cross-border power trading by 2045. Some progress has already been made on this front, with Singapore's Keppel having inked a pact in 2023 with Cambodia's Royal Group Power for the long-term import and sale of 1 GW of low-carbon electricity. In the area of high-quality carbon credits, the countries are working together on an implementation agreement for an earlier memorandum of understanding. 'This will mobilise financing for clean-energy projects, uplift rural communities and improve livelihoods, while enabling both our countries to hit our net-zero goals,' said PM Wong. PM Lawrence Wong at a luncheon hosted by his Cambodian counterpart, Hun Manet, at the Peace Palace in Phnom Penh on July 2, 2025. - Photo: ST With Cambodia being a key agricultural exporter and Singapore importing almost all its food, the two countries will also deepen their cooperation in this field. 'We are also keen to diversify our sources of food imports, so closer collaboration in this area will be mutually beneficial for both our countries,' said PM Wong. Both countries also agreed to continue working to strengthen Asean centrality and unity, to keep the grouping relevant and advance the region's collective interests. 'In this uncertain global environment, it is more important than ever for Asean to stay cohesive, uphold open channels of dialogue, and work together to resolve our differences peacefully,' said PM Wong. He added that Singapore and Cambodia continue to be steadfast partners in human development, with nearly 19,000 Cambodian officials having received training in areas like public health, digital governance and public administration under the Singapore Cooperation Programme (SCP). Much of this training is conducted right in Phnom-Penh at the Cambodia-Singapore Cooperation Centre, noted PM Wong. The centre is one of three Singapore Cooperation Centres that the SCP has been operating since the Initiative for Asean Integration was launched under Singapore's chairmanship of Asean in 2000. The other centres are in Laos and Vietnam. PM Wong said Cambodia has made remarkable strides over the past six decades to transform from a post-conflict society to a rapidly developing nation, and that under Manet's leadership it has charted an ambitious strategy to become a high-income nation by 2050. 'Singapore will continue to walk alongside Cambodia in this development journey,' he said. He added: 'I am confident that with Prime Minister Manet's support and leadership, we will continue to deepen our bilateral partnership and expand our cooperation for win-win outcomes, and deliver meaningful benefits for both our people.' - The Straits Times/ANN

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