Musk ascends as a political force beyond his wealth by tanking budget deal

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Musk ascends as a political force beyond his wealth by tanking budget deal

2024-12-20 06:59 Last Updated At：07:00

In the first major flex of his influence since Donald Trump was elected, Elon Musk brought to a sudden halt a bipartisan budget proposal by posting constantly on his X megaphone and threatening Republicans with primary challenges.

The social media warnings from the world's wealthiest man preceded Trump's condemnation of a measure negotiated by GOP House Speaker Mike Johnson, which effectively killed the stopgap measure that was designed to prevent a partial shutdown of the federal government.

Washington was scrambled a day after Musk's public pressure campaign. Trump on Thursday first declined to say whether he had confidence in Johnson. But later in the day, Trump praised him and House leaders for producing “a very good Deal,” after they announced a new plan to fund the government and lift the debt ceiling.

Before the new deal was reached, Congressional Democrats mocked their GOP counterparts, with several suggesting Trump had been relegated to vice president.

“Welcome to the Elon Musk presidency,” Democratic Rep. Robert Garcia of California wrote on X.

What was clear, though, is Musk’s ascendance as a political force, a level of influence enabled by his great wealth. In addition to owning X, Musk is the CEO of Tesla and Space X.

“There is no doubt he does wield a lot of influence over Republicans right now due to his proximity to Trump,” said Chris Pack, former communications director for the National Republican Congressional Committee and the Senate Leadership Fund.

But Pack also said that Musk's threats pose potential risks for House Republicans, who begin next year with a five-seat majority that will shrink temporarily because of Trump’s nomination of some GOP lawmakers to administration posts.

“This isn’t going to help pass the agenda if you are going to cost a bunch of Republicans in very razor-thin moderate seats if you’re going to make them lose in primaries,” Pack said. “All that does is give the keys to these districts over to the Democrats.”

Musk spent an estimated $250 million during the presidential campaign to support Trump, contributing heavily to America PAC, a super political action committee that deployed canvassers, aired TV ads and reached voters digitally in battleground states. He had signaled after the election he was willing to back GOP primary challenges to Republican members of Congress seeking re-election in 2026 who waver on Trump's appointments and agenda.

He renewed the threat pointedly Wednesday.

“Any member of the House or Senate who votes for this outrageous spending bill deserves to be voted out in 2 years!” he wrote on X. He also called it “one of the worst bills ever written.”

Musk wasn't alone in fanning GOP anger against the bill, which included several compromise measures to get Democratic support in the Senate in the final weeks before Republicans take control of that chamber. Biotech entrepreneur and former GOP presidential candidate Vivek Ramaswamy, who is Musk’s partner leading the new Department of Government Efficiency, also posted against the bill, as did Trump's eldest son, Donald Trump Jr.

Musk played down his role at times, suggesting after some praise online, “All I can do is bring things to the attention of the people, so they may voice their support if they so choose.” And the president-elect told NBC News that he had spoken to Musk prior to the Tesla CEO's first posts.

“I told him that if he agrees with me, that he could put out a statement,” Trump said.

Karoline Leavitt, the incoming White House press secretary, pushed back against Democratic critics who suggested Musk was calling the shots.

“As soon as President Trump released his official stance on the CR, Republicans on Capitol Hill echoed his point of view," Leavitt said in a statement, referring to the continuing resolution. "President Trump is the leader of the Republican Party. Full stop.”

Throughout the day Wednesday, Musk replied to posts on X from Republican House members announcing opposition to the bill with words of thanks, and punctuating their public commitments.

And he took a victory lap after Trump came out against the bill: “The voice of the people was heard. This was a good day for America."

He was responding to Kentucky Rep. Andy Barr's post: “The phone was ringing off the hook today. And you know why? Because they were reading tweets...from Musk and Vivek Ramaswamy.”

By late afternoon Thursday and before the new plan was put to a vote, Musk declared success and posted a picture of the new, slimmed down alternative alongside the voluminous, original measure he helped kill. “This shows how much your voice matters,” he posted. “And having a President like @realDonaldTrump means that your voice is finally heard.”

Conservative activists at the annual AmericaFest gathering in Phoenix cheered Musk Thursday and hailed the suggestion he could replace Johnson as speaker. There’s no requirement that the speaker be an elected member of the House of Representatives.

“Should Mike Johnson remain speaker of the House?” conservative media host Jack Posobiec asked his audience during a live taping of his talk show, prompting a chorus of “Noooooo!!!” from his audience.

Johnson had been scheduled to attend AmericaFest, but canceled after the budget deal fell apart.

“Should Elon Musk be speaker of the House?” Posobiec asked his audience, prompting cheers.

Beaumont reported from Des Moines, Iowa. Associated Press Bill Barrow contributed to this report from Phoenix.

Stock market today: Wall Street ends little changed after giving up a big morning gain

2024-12-20 06:56 Last Updated At：07:00

NEW YORK (AP) — An early rebound for U.S. stocks on Thursday petered out by the end of the day, leaving indexes close to flat.

The S&P 500 edged down by 0.1% following Wednesday’s tumble of 2.9% when the Federal Reserve said it may deliver fewer cuts to interest rates next year than earlier thought. The index had been up as much as 1.1% in the morning.

The Dow Jones Industrial Average rose 15 points, or less than 0.1%, following Wednesday’s drop of 1,123 points, while the Nasdaq composite slipped 0.1%.

This week’s struggles have taken some of the enthusiasm out of the market, which critics had been warning was overly buoyant and would need everything to go correctly for it to justify its high prices. But indexes remain near their records, and the S&P 500 is still on track for one of its best years of the millennium with a gain of 23%.

Traders are now expecting the Federal Reserve to deliver just one or maybe two cuts to interest rates next year, according to data from CME Group. Some are even betting on none. A month ago, the majority saw at least two cuts in 2025 as a safe bet.

Wall Street loves lower interest rates because they give the economy a boost and goose prices for investments, but they can also provide fuel for inflation.

Micron Technology was one of the heaviest weights on the S&P 500 Thursday. It fell 16.2% despite reporting stronger profit for the latest quarter than expected.

The computer memory company’s revenue fell short of Wall Street’s forecasts, and CEO Sanjay Mehrotra said it expects demand from consumers to remain weaker in the near term. It gave a forecast for revenue in the current quarter that fell well short of what analysts were thinking.

Lamb Weston, which makes French fries and other potato products, dropped 20.1% after falling short of analysts’ expectations for profit and revenue in the latest quarter. It also cut its financial targets for the fiscal year, saying demand for frozen potatoes is continuing to soften, particularly outside North America. The company replaced its chief executive.

Such losses helped overshadow a 14.7% jump for Darden Restaurants, the company behind Olive Garden and other chains. It delivered profit for the latest quarter that edged past analysts’ expectations. The operator of LongHorn Steakhouses also gave a forecast for revenue for this fiscal year that topped analysts’.

Accenture rose 7.1% after the professional services company likewise topped expectations for profit in the latest quarter. CEO Julie Sweet said it saw growth around the world, and the company raised its forecast for revenue this fiscal year.

Amazon shares added 1.3%, even as workers at seven of its facilities went on strike Thursday in the middle of the online retail giant’s busiest time of the year. Amazon says it doesn’t expect an impact on its operations during what the workers’ union calls the largest strike against the company in U.S. history.

In the bond market, yields were mixed a day after shooting higher on expectations that the Fed would deliver fewer cuts to rates in 2025. Reports on the U.S. economy came in mixed.

One showed the overall economy grew at a 3.1% annualized rate during the summer, faster than earlier thought. The economy has remained remarkably resilient even though the Fed held its main interest rate at a two-decade high for a while before beginning to cut them in September.

A separate report showed fewer U.S. workers applied for unemployment benefits last week, an indication that the job market also remains solid. But a third report said manufacturing in the mid-Atlantic region is unexpectedly contracting again despite economists’ expectations for growth.

The yield on the 10-year Treasury rose to 4.57% from 4.52% late Wednesday and from less than 4.20% earlier this month.

But the two-year yield, which more closely tracks expectations for action by the Fed in the near term, eased back to 4.31% from 4.35%.

The rise in longer-term yields has put pressure on the housing market by keeping mortgage rates higher. Homebuilder Lennar fell 5.2% after reporting weaker profit and revenue for the latest quarter than analysts expected.

CEO Stuart Miller said that “the housing market that appeared to be improving as the Fed cut short-term interest rates, proved to be far more challenging as mortgage rates rose” through the quarter.

“Even while demand remained strong, and the chronic supply shortage continued to drive the market, our results were driven by affordability limitations from higher interest rates,” he said.

A report on Thursday may have offered some encouragement for the housing industry. It showed a pickup in sales of previously occupied homes.

All told, the S&P 500 slipped 5.08 points to 5,867.08. The Dow Jones Industrial Average added 15.37 to 42,342.24, and the Nasdaq composite lost 19.92 to 19,372.77.

In stock markets abroad, London’s FTSE 100 fell 1.1% after the Bank of England paused its cuts to rates and kept its main interest rate unchanged on Thursday. The move comes as inflation there moved further above the central bank’s 2% target rate, while the British economy is flatlining at best.

The Bank of Japan also kept its benchmark interest rate unchanged, and Tokyo’s Nikkei 225 fell 0.7%. Indexes likewise sank across much of the rest of Asia and Europe.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.