Month: March 2025

The U.S. government’s fiscal strength is deteriorating as the trend of larger budget deficits and mounting debt continues, Moody’s Ratings said in a report released Tuesday.

Moody’s said that America’s fiscal health has worsened in the time since it lowered its outlook on the country’s AAA credit rating in November 2023. Fitch cut the U.S. credit rating one tier from AAA to AA+ in 2023 over fiscal challenges and debt limit brinksmanship, while Standard and Poor’s did so after the 2011 debt limit crisis that spurred a partial government shutdown.

The ratings agency is the last of the major ratings agencies to keep U.S. sovereign debt at its top level, AAA, though it took a more pessimistic view of the government’s debt in 2023 due to wider annual deficits and higher interest payments on the national debt.

“Even in a very positive and low probability economic and financial scenario, debt affordability remains materially weaker than for other AAA-rated and highly rated sovereigns,” Moody’s wrote.

The firm projects that the ratio of public debt to gross domestic product (GDP), a metric favored by economists in assessing government debt relative to the size of the economy, will rise from nearly 100% in 2025 to about 130% in 2035.

Debt affordability is expected to worsen at a faster rate, with interest payments accounting for 30% of revenue by 2035 — a dramatic increase from 9% in 2021, Moody’s wrote.

The firm explained that lower U.S. debt affordability meant that the central roles played by the dollar and the Treasury market in global financial markets have become more critical in supporting the AAA rating.

The state Building Commission again deadlocked on the Gov. Tony Evers’ capital budget, sending it to the GOP-run Joint Finance Committee with no recommendation as Republican lawmakers argued more discussion was needed.

Senate President Mary Felzkowski, R-Tomahawk, told Evers at the outset of yesterday’s meeting that a lot of worthy projects had been proposed. But she raised concerns about the more than $3.8 billion in new bonding he had proposed, noting it was more than what the Legislature had approved in the past five capital budgets combined.

“I think to get to a more appropriate level, further discussion is needed, and we need to hear from stakeholders and the public, and that just hasn’t happened,” Felzkowski said.

The four GOP lawmakers backed a motion upfront that would’ve sent the guv’s $4.3 billion capital budget to the Joint Finance Committee with no recommendation. But the guv, his appointees and the two Dem legislators opposed the move. The commission then deadlocked 4-4 on each agency proposal in the document, ending with the same result as the GOP motion.

It is the fourth straight time the commission has deadlocked with Republicans in control of the Legislature — giving them four spots on the body — and Evers in the East Wing, giving his party the other four.

The deadlocked vote six years ago was believed to be the first time the commission had sent the capital budget to the Finance Committee without a recommendation.

The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) is accepting applications for new Export Expansion Grants through April 9, 2025. These grants are funded through the Wisconsin Initiative for Agricultural Exports (WIAE).

Export Expansion Grants aim to accelerate the growth of Wisconsin dairy, meat, and crop product exports. Applicants must be not-for-profit organizations located in Wisconsin that are currently serving or can serve Wisconsin agribusinesses. Wisconsin agribusiness associations, technical colleges, universities, and economic development organizations are encouraged to apply.

Applications will be accepted for projects in two categories: meat or crop exports with awards from $25,000 to $50,000, or dairy exports with awards from $25,000 to $100,000. Matching funds are required at 20% of the grant award and can be cash or in-kind. Eligible project expenses include, but are not limited to, travel associated with trade promotion activities, event promotion, marketing materials, advertising, subscriptions, contractor fees, and translation services.

DATCP will select recipients through a competitive review process. Project work will begin in May 2025, and all projects must be completed by May 1, 2026.

Grant information and application materials are available at https://datcp.wi.gov/Pages/AgDevelopment/ExportExpansionGrants.aspx. Contact DATCP grants specialist Kevin Webb at DATCPDADGrants@wisconsin.gov or (608) 224-5049 with questions.

Consistent with the U.S. Department of the Treasury’s March 2, 2025 announcement, the Financial Crimes Enforcement Network (FinCEN) is issuing an interim final rule that removes the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act.

In that interim final rule, FinCEN revises the definition of “reporting company” in its implementing regulations to mean only those entities that are formed under the law of a foreign country and that have registered to do business in any U.S. State or Tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”). FinCEN also exempts entities previously known as “domestic reporting companies” from BOI reporting requirements.

Thus, through this interim final rule, all entities created in the United States — including those previously known as “domestic reporting companies” — and their beneficial owners will be exempt from the requirement to report BOI to FinCEN. Foreign entities that meet the new definition of a “reporting company” and do not qualify for an exemption from the reporting requirements must report their BOI to FinCEN under new deadlines, detailed below. These foreign entities, however, will not be required to report any U.S. persons as beneficial owners, and U.S. persons will not be required to report BOI with respect to any such entity for which they are a beneficial owner.

Upon the publication of the interim final rule, the following deadlines apply for foreign entities that are reporting companies:

• Reporting companies registered to do business in the United States before the date of publication of the IFR must file BOI reports no later than 30 days from that date.
• Reporting companies registered to do business in the United States on or after the date of publication of the IFR have 30 calendar days to file an initial BOI report after receiving notice that their registration is effective.

FinCEN is accepting comments on this interim final rule and intends to finalize the rule this year.

President Donald Trump wants to ramp up timber production by fast-tracking projects under laws that protect endangered species and other environmental regulations, which could expand logging of the Chequamegon-Nicolet National Forest.

Earlier this month, President  Trump issued an executive order directing federal agencies to issue guidance on increasing timber production and sound forest management. The order is intended to make the nation “more self-reliant” as Trump has imposed, and then paused, tariffs on Canada, the nation’s largest supplier of lumber.

Trump has called on leaders of multiple federal agencies to issue updated guidance by April on tools to ramp up timber production. Those tools may include the use of stewardship contracts and Good Neighbor Authority, or GNA, agreements.

Wisconsin signed a GNA agreement with the U.S. Forest Service in 2015 that authorized the state to assist with national forest management, including timber sales. Since 2015, the Department of Natural Resources said it’s conducted just shy of 200 timber sales spanning 32,000 acres under the agreement.

“Expanded timber production on the CNNF could lead to an increase in the amount of national forest timber sales available for the state to administer through our GNA agreement; however, it is uncertain how much additional volume beyond the current average of 25 million board feet annually the state would be capable of managing,” a DNR spokesperson said in an email.

The national forest and other federal forest land make up 9.4 percent of the state’s nearly 17 million acres of forest land. The forestry and logging sector directly employs around 4,400 of the 57,000 workers in Wisconsin’s nearly $27 billion forest products industry.

Logging advocates like Henry Schienebeck with the Great Lakes Timber Professionals Association said stakeholders may have to take a closer look at demand and the capacity of mills to handle more lumber. Even so, he said the order represents a golden opportunity for the public to have healthy, well-managed forests.

“I think they’re doing a great job between the state and the Forest Service working together to get the forest managed because we were behind, way behind, and we’re still behind a little bit,” Schienebeck, the group’s executive director, said.

The Federal Reserve in a closely watched decision Wednesday held the line on benchmark interest rates though still indicated that reductions are likely later in the year.

Faced with pressing concerns over the impact tariffs will have on a slowing economy, the rate-setting Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25%-4.5%, where it has been since December.  Along with the decision, officials updated their rate and economic projections for this year and through 2027 and altered the pace at which they are reducing bond holdings.

In its post-meeting statement, the FOMC noted an elevated level of ambiguity surrounding the current climate.

“Uncertainty around the economic outlook has increased,” the document stated. “The Committee is attentive to the risks to both sides of its dual mandate.”

The Fed is charged with the twin goals of maintaining full employment and low prices.

At the news conference, Powell noted that there had been a “moderation in consumer spending” and it anticipates that tariffs could put upward pressure on prices. These trends may have contributed to the committee’s more cautious economic outlook.

Early in-person voting is kicking off across Wisconsin ahead of the April 1 state Supreme Court race.

Although Tuesday, March 18 marks Wisconsin’s first day of early in-person voting in the spring election, the exact hours and locations for early voting vary from community to community. The last available day of early in-person voting will be Sunday, March 30.

During designated hours, voters can fill out absentee ballots in-person and then return those ballots at those locations.

Along with voting at the polls, voters have the option to turn in absentee ballots by mail so long as the ballot is received no later than 8 p.m. on election day.

In some communities, drop boxes are available for returning absentee ballots.

Democrat-backed Susan Crawford and Republican-backed Brad Schimel are competing for a 10-year term to replace a retiring justice. The race will determine whether liberals keep or lose their narrow majority on the state’s high court. By some estimates, it’s already become the most expensive judicial race in U.S. history.

Also on April 1, voters will decide whether conservative Brittany Kinser should unseat liberal State Superintendent Jill Underly in a position overseeing Wisconsin’s Department of Public Instruction.

There’s also a referendum on statewide ballots that asks whether a voter ID requirement should be added to the state constitution.

The federal government’s budget deficit has grown by more than $300 billion in the first five months of fiscal year 2025, according to the latest data.

The Treasury Department’s latest monthly treasury statement showed that February’s monthly deficit was $307 billion — up from $128 billion in January. That figure is also about $10.7 billion higher than in February 2024.

Since fiscal year 2025 began on October 1, the federal budget deficit has totaled a new record of $1.146 trillion, according to Treasury data. Compared with the first five months of fiscal year 2024, this year’s budget deficit is tracking more than $318 billion larger.

The nonpartisan Congressional Budget Office (CBO) released an analysis that broke down the changes in federal spending and tax revenue, which found that the former far outpaced the latter.

Federal spending in the first five months of fiscal year 2025 was 13% higher than the prior year, while tax receipts were 2% higher. Spending increased by $356 billion in that period when compared with a year ago, with notable increases in several categories.

The three largest mandatory spending programs saw their spending rise by a collective $73 billion, or 6%, in the first five months of fiscal year 2025.

Social Security spending was up $38 billion because of a higher cost-of-living adjustment (COLA) and a rise in the number of beneficiaries. Medicare spending was up $20 billion because of increased enrollment and payment rates, while Medicaid spending increased $15 billion due to rising costs per enrollee.

Expenses related to paying the net interest on the national debt increased by $44 billion, or 12%, because the debt is larger than it was a year ago.

Department of Defense spending was up $27 billion, or 8%, with most of the increases due to operations, maintenance and procurement.

Outlays for certain refundable tax credits rose by $26 billion, or 29%, which the CBO attributed primarily to increased enrollment in health insurance marketplaces under the Affordable Care Act.

Retail sales rose 0.2% last month after a revised 1.2% decline in January, the Commerce Department’s Census Bureau said on Monday.

Retail sales excluding automobiles, gasoline, building materials and food services increased 1.0% in February after a revised 1.0% decline in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.

Online spending helped boost the sales number for the month, with nonstore retailers reporting a 2.4% increase. Health and personal care showed a 1.7% gain while food and beverage outlets saw a 0.4% rise.

On the downside, bars and restaurants reported a 1.5% decrease, while gas stations were off 1% amid falling prices at the pump.

Sales overall increased 3.1% on a year-over-year basis, better than the 2.8% inflation rate as measured by the consumer price index.

As the Department of Government Efficiency, or DOGE, initiates federal funding cuts and mass layoffs, Wisconsin Republicans’ version is just getting started.

GOAT was created in December by Wisconsin Assembly Speaker Robin Vos, R-Rochester, with the stated goal of exposing and addressing inefficiency in government. Its launch comes as DOGE has become practically a household name, and the two cover similar topics.

Tuesday’s informational hearing focused on remote work and included testimony from heads of the state Department of Administration, Department of Public Instruction, Department of Health Services, Department of Safety and Professional Services and the Universities of Wisconsin.

GOAT Chair Amanda Nedweski, a Republican from Pleasant Prairie, said lawmakers have seen increased demand from state residents for transparency with regard to remote work.

“The people who pay the salaries of the state employees want to know that there’s more accountability than just, move your mouse every few minutes,” Nedweski said.

As the committee contemplates remote work, a bill authored by Nedweski seeking to end the practice for most state employees is currently circulating in the state Capitol. She said the legislation may not be necessary if agencies were more open about remote work practices.