Congress is back, and it’s going to be
busy. House lawmakers returned today, meaning that both
chambers of Congress are in session for the first time since July.
They have a thicket of interconnected issues to deal with in the
coming days.
Let’s start with the big picture: Right now, Democratic efforts
to pass their $3.5 trillion budget reconciliation package and enact
the bulk of President Biden’s economic agenda look like a chaotic
mess. But as we head into the final days of September — and the
last 10 days of the fiscal year — lawmakers may have more urgent
issues to worry about, like funding the government to prevent a
shutdown and suspending the federal debt limit to prevent a global
economic convulsion.
Here’s what you need to know.
Democrats Play Hardball on Debt Limit
Democratic leaders said Monday that they would include a
suspension of the debt limit through December 2022 — as well as
emergency disaster relief and funding to help resettle Afghan
evacuees — as part of legislation to provide stopgap funding for
the federal government through the end of this year.
By tying the debt limit to the funding bill, which will require
bipartisan support to pass the Senate, Democrats are hoping to
force Republicans to swerve in a game of chicken over the
government’s borrowing authority.
House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader
Chuck Schumer (D-NY) said in a joint statement Monday that they
believe suspending the debt limit through next year would account
for the debt added by a bipartisan $908 billion Covid relief bill
signed into law by President Trump last December.
“The American people expect our Republican colleagues to live up
to their responsibilities and make good on the debts they proudly
helped incur in the December 2020 ‘908’ COVID package that helped
American families and small businesses reeling from the COVID
crisis,” Pelosi and Schumer said. “Addressing the debt limit is
about meeting obligations the government has already made, like the
bipartisan emergency COVID relief legislation from December as well
as vital payments to Social Security recipients and our veterans.
Furthermore, as the Administration warned last week, a reckless
Republican-forced default could plunge the country into a
recession.”
Republicans have insisted for months that they will not help
raise the debt limit, and certainly not while Democrats pursue a
partisan package of spending and tax increases. “Senate Republicans
would support a clean continuing resolution that includes
appropriate disaster relief and targeted Afghan assistance,” Senate
Minority Leader Mitch McConnell said Monday. “We will not support
legislation that raises the debt limit.”
McConnell last week signaled he won’t budge on the issue. “Do
you guys think I’m bluffing?” he asked Punchbowl News.
Democrats may not actually expect McConnell to fold. Even as
they try to squeeze Republicans with this latest maneuver, they are
reportedly also privately discussing options for extending the debt
limit without GOP support. “Well, ultimately they’re going to have
to vote for it or we’re going to have to have a vote and do it by
ourselves,” House Budget Committee Chair John Yarmuth (D-KY) told
MSNBC on Sunday. “We can do it through reconciliation. Leadership
has said they don’t want to do that. The reason is, if we do that
through reconciliation, we have to specify a number. That only
leads to further chaos in a certain period of time.”
Reconciliation bill won’t be ready by next week: On the
budget bill, House committees last week met the September 15
deadline set by Pelosi for sending their portions of the package to
the Budget Committee. But Punchbowl News reports that the Budget
Committee will not mark up the package this week, making it
official that the legislation won’t be ready for consideration by
the full House next week.
Instead, Democrats will continue to debate the details of their
bill as they try to find a path to passage in both the House and
Senate. “The process now shifts to backrooms as the sausage is
made,” analyst Chris Krueger of the Cowen Washington Research Group
told clients Monday morning, adding that all Beltway players will
be watching, and parsing, comments from Sens. Joe Manchin (D-WV),
Kyrsten Sinema (D-AZ) and Bernie Sanders (I-VT). “Adverbs,
adjectives & anecdotes will be the coins of the realm for the
coming weeks as everyone will be looking for clues on what is in
the bill and what is out. Super.”
A pair of senior House Democrats, Yarmuth and Rep. Jim Clyburn
of South Carolina, acknowledged on Sunday that the $3.5 trillion
package will likely be scaled back.
Bipartisan infrastructure bill in question: Democrats
were likely never going to be able to speed their budget
reconciliation package through by the end of the month, but the
timing of that legislation calls into question whether Pelosi will
allow a September 27 floor vote on the bipartisan infrastructure
bill passed by the Senate. Pelosi had agreed to a vote by that date
as part of a deal she struck last month with Democratic moderates
threatening to derail the larger budget package. Democratic leaders
had sought to link the two pieces of legislation so that
progressives would back the infrastructure bill favored by
moderates and moderates would back the social welfare package
sought by progressives. Pelosi will now have to decide whether to
allow the infrastructure vote to take place before the
reconciliation package is ready. Yarmuth said Sunday that, while
the vote would likely slip into October, Pelosi could preserve some
leverage by not sending it to Biden right away.
Sinema delivers an ultimatum: Sinema reportedly told
President Joe Biden last week that if the House delays its vote on
the bipartisan infrastructure bill, or if the vote fails, she won’t
back a reconciliation package.
Other moderate Democrats are taking the same position. “If
they delay the vote — or it goes down — then I think you can
kiss reconciliation goodbye,” Rep. Kurt Schrader (D-OR) told
Politico’s Playbook. “Reconciliation would be
dead.”
Democrats still clashing over health care: Sinema also
told the White House that she opposes the prescription drug pricing
proposals in bills being developed in both the House and Senate,
according to
Politico (which also notes that the Arizona
senator has been a leading recipient of pharmaceutical industry
campaign donations, according to a
Kaiser Health News analysis from earlier this
year).
But Sinema is not the only Democrat taking issue with the
party’s health care reform proposals. A number of other lawmakers
also oppose a proposal to allow Medicare to negotiate drug prices
with pharmaceutical companies and indexing prices to those paid by
other developed countries — changes that would save hundreds of
billions of dollars, which party leaders had envisioned helping pay
for the expansion of other benefits.
As moderates and progressives continue to argue over the size
and scope of their reconciliation package, health care remains a
key sticking point, as Jonathan Weisman and Sheryl Gay Stolberg
report at
The New York Times:
“Southern Democrats, in particular, are urging their leaders
to prioritize insurance coverage for 4.4 million working poor
people in the 12 states, mostly in the South, with Republican or
divided leadership that have refused to expand Medicaid under the
Affordable Care Act. But progressives, led by Senator Bernie
Sanders, the Vermont independent and former presidential candidate,
are adamant about giving older Americans dental, hearing and vision
coverage. … Some Democrats, moreover, say Congress should not
reward states that refused to expand Medicaid by creating a
separate insurance program, financed entirely by the federal
government, for their working poor. Under the Affordable Care Act,
states that expand Medicaid pay 10 percent of the cost.”
Manchin wants a pause: The centrist senator from West
Virginia is telling people that Congress should take a “strategic
pause” — until next year — before taking up the $3.5 trillion
budget reconciliation package, Axios’s Hans Nichols
reports. Manchin, who has said he’d only support a
package of up to $1.5 trillion and has expressed concerns about
specific parts of the Democratic plan, had floated the idea of a
“strategic pause” in an op-ed for The Wall Street Journal earlier
this month but did not specify the length of the delay at the
time.
Other Democrats worry that any pause would threaten the
prospects for passing the reconciliation bill — and the bipartisan
infrastructure bill.
Senate parliamentarian nixes Dems’ immigration plan: In
another blow to Democrats’ reconciliation plans, Senate
Parliamentarian Elizabeth MacDonough said in a ruling released
Sunday night, that the package can’t include the party’s plan to
provide a path to citizenship for millions of undocumented
immigrants. The parliamentarian’s office said that the proposed
immigration changes represented “a policy change that substantially
outweighs the budgetary impact of that change” and thus did not
qualify under the Senate’s reconciliation rules.
Revolving Door Helps Accounting Firms Game the Tax System:
Report
There is something of a revolving door between federal tax
agencies and the top accounting firms, according to a report
published Monday by The New York Times, and the cozy relationship
between government officials and accounting executives can mean
that rules are written or interpreted in ways that can save
corporate clients millions or even billions of dollars in taxes
while reducing the flow of revenues to the Treasury.
The Times’ Jesse Drucker and Danny Hakim sum up the
arrangement:
“The largest U.S. accounting firms have perfected a remarkably
effective behind-the-scenes system to promote their interests in
Washington. Their tax lawyers take senior jobs at the Treasury
Department, where they write policies that are frequently favorable
to their former corporate clients, often with the expectation that
they will soon return to their old employers. The firms welcome
them back with loftier titles and higher pay, according to public
records reviewed by The New York Times and interviews with current
and former government and industry officials.”
During the last four presidential administrations,
the Times found at least 35 instances in which accounting
executives took jobs in the Treasury’s tax policy office, the IRS
or the Congressional Joint Committee on Taxation, and then returned
to their old firms. In at least 16 of those cases, the returning
tax specialists became partners at their firms.
Some tax experts say the system simply rewards work
experience and seniority, but the Times analysis suggests that it
contributes to the maintenance of a tax system that rewards the
wealthy and well-connected.
Read the full New York Times report.
How Much It Takes to Be in the Top 1%
Democrats are in the middle of a major effort to raise taxes on
the wealthiest Americans to help offset the cost of their proposed
expansion of the social safety net. In light of Democrats’ effort,
CNN’s Tami Luhby took a look at some key
characteristics of today’s top 1%, including these three
numbers:
* $540,000: That’s how much income it took to claim a
spot among the top 1% in 2018, according to the IRS.
* 21%: The top 1% of earners claimed about 21% of all
total adjusted gross income in 2018, with most of that income
coming from capital gains and dividends, not labor. By comparison,
the bottom 50% of taxpayers claimed about 11.6% of all total
adjusted gross income.
* $615 billion: The top 1% paid about
$615 billion in federal income taxes in 2018, which accounted for
about 40% of all federal income taxes paid. The bottom half of the
income distribution paid about 3% of federal income taxes that
year.
Coronavirus Death Toll Surpasses 1918 Influenza Pandemic
The U.S. has now reported 675,446 deaths due to Covid-19,
according to data from Johns Hopkins University, surpassing the
estimated U.S. death toll from the 1918 influenza pandemic.
While there are many important differences between the two
pandemics — in 1918, more young people were struck by the virus, in
a population that was about a third the size — hitting the
century-old milestone is a bit of a shock to some experts, given
the availability of modern health treatments and the enormous
federal response to the crisis.
“People were desperate for treatment measures in 1918.
People were desperate for a vaccine,” historian Christopher
McKnight Nichols of Oregon State University
told ABC News.