Pelosi, Dems Press for Signs of Progress on Biden Agenda
Democratic leaders appear to have a plan to try and resolve the
intraparty divisions threatening to derail President Joe Biden’s
economic agenda: Show enough progress on a contentious — and
unfinished — $3.5 trillion spending and tax bill to ease the
concerns of progressives who want to see that legislation done
before voting for a $1 trillion bipartisan infrastructure
package.
House Speaker Nancy Pelosi (D-CA) has promised moderate in her
party that the infrastructure bill will be brought up for a vote
next week, but progressives have threatened to oppose that bill if
lawmakers don’t first address a larger package to expand the social
safety net and combat climate change. With the prospect of an
embarrassing defeat or delay looming, Pelosi, the White House and
Senate Democratic leaders are reportedly scrambling to pull
together a framework for the larger budget reconciliation bill that
moderates and progressives can coalesce around, clearing a path for
the infrastructure bill to pass with the support of liberals.
It won’t be easy — but that apparent plan may explain why Senate
Majority Leader Chuck Schumer announced Thursday morning that the
White House, Senate and House had agreed to a “framework” for
paying for whatever they agree to in their reconciliation
package.
“It’s a menu of options, and it will pay for whatever the
agreement on the investments comes to,” Schumer
said. He added that the menu had been agreed upon
by House Ways and Means Committee Chairman Richard Neal (D-MA) and
Senate Finance Committee Chairman Ron Wyden (D-OR).
Nothing new? But while party leaders were clearly eager
to tout any sign of progress, they also made clear that the
agreement did not mean they had settled on a topline number for the
size of the budget reconciliation package, and they provided little
in the way of details. So the announcement may not be much of a
breakthrough. “If you and I both walk into the Cheesecake Factory
and ask for menus, we have agreed upon a framework for lunch, but
we haven’t actually decided anything,” NBC News’s Garret Haake
noted.
A number of key Democratic lawmakers were reportedly surprised
by the announcement and unaware of the details. Some reportedly
criticized the announcement privately, saying it was more about
trying to demonstrate momentum that making real progress.
"We've been through this a million times. There are many, many
approaches as to how you can raise money ... so if that's what the
menu is, nothing particularly new I think," Sen. Bernie Sanders
(I-VT) said initially, according to
The Hill. And Sen. Joe Manchin (D-WV) said he
hadn’t seen the framework. “We don’t know what they’re talking
about,” he said.
A rare weekend vote: In another sign that Democratic
leaders are urgently trying to reach some consensus on the
reconciliation package, House Democrats said they would look to
push ahead with a Budget Committee markup of the proposed $3.5
trillion package
on Saturday, potentially setting the stage for the
full House to take up the package next week. The package isn’t
done, though, and Politico
notes that “the most critical parts of the
party-line social spending plan — including any changes to the $3.5
trillion price tag — would need to come through a
leadership-written ‘manager’s amendment.’ And that won’t be ready
for this weekend, since it's still missing budget scorecards from
the Congressional Budget Office.”
Thursday’s announcements came after President Joe Biden on
Wednesday hosted a trio of meetings with 23 lawmakers that lasted
some five hours. The White House and lawmakers expressed optimism
after the meetings, using terms like “productive” and
“constructive,” but the intraparty tensions hadn’t miraculously
melted away — and their plan for next week’s infrastructure vote
remained unclear.
“There is more work ahead in the coming days, and [Biden] and
his team will have follow-up meetings, starting tomorrow, to
continue to advance the process of passing these critical bills,”
the White House said in a readout released Wednesday night.
A senior White House official told
Politico that the most important development from
the meetings was that “moderates agreed that they need to coalesce
around an offer to the liberals.” But Manchin reportedly refused a
request by Biden Wednesday to specify a topline spending number he
would agree to, and Democratic leaders are hoping that their menu
of pay-fors can draw some specifics from Manchin and other
centrists who have balked at a $3.5 trillion price tag.
“Democratic senators say the biggest obstacle to reaching a deal
on a top-line spending number has been the lack of success in
getting Manchin to lay out precisely how large he thinks the
reconciliation package should be and what key provisions he could
or couldn’t support,” The Hill
reports, adding that one unnamed Democratic
senator said it was unclear to them whether Manchin “will actually
come to yes on any of this.”
What it all means: The scramble by Democratic leaders is
all about restoring trust, or at least a overcoming the mistrust
that has emerged between progressives and moderates. “I think
having a framework will add more confidence to people as to what we
are really planning on doing,” House Majority Leader Steny Hoyer
(D-MD) said. “One of the problems now is, people aren’t sure what’s
going on.”
There’s no way the budget reconciliation package can be written
and brought to a vote in the Senate by Monday — and it’s unlikely
that Democrats can settle on a budget reconciliation framework in
time, either. So Thursday’s announcements ultimately did little to
clarify the path forward on the two legislative packages. The one
thing that is clear: The week ahead is going to be hectic.
Federal Government Prepares for a Shutdown
With lawmakers still wrangling over how to fund the
government when the new fiscal year begins on October 1, the Biden
administration instructed federal agencies on Thursday to begin
preparing for a possible shutdown after September 30.
A spokesperson for the Office of Management and Budget
said the move is being made as a precaution.
“We fully expect Congress to work in a bipartisan fashion
to keep our government open,” OMB’s Abdullah Hasan said. “In the
meantime, prudent management requires that the government plan for
the possibility of a lapse in funding.”
Funding expected: Leaders from both parties have
expressed confidence that a shutdown can be avoided, though they
have been unable to agree on how to do so. Earlier this week
Democrats in the House passed a continuing resolution, known as a
CR, to fund the government at current levels through December 3,
but Republicans in the Senate have vowed to kill the bill because
it includes a measure to suspend the federal debt
ceiling.
Pelosi told reporters Thursday that as far as she is
concerned, there will be no shutdown. “Whatever it is, we will have
a CR that passes both houses by September 30,” she said at a press
conference.
Senate Minority Leader Mitch McConnell (R-KY), who has led
the Republican opposition to the House bill, has indicated that he
would support a continuing resolution to keep the government open
as long as it does not include a provision addressing the debt
ceiling, which he wants Democrats to deal with on their own, with
no help from the GOP.
Lots of work to do: Although the path forward seems
to be clear — Congress will likely vote on some kind of continuing
resolution before the end of the fiscal year to keep the government
open for a period of weeks or months – there is still a lot of work
to and little time to do it, especially given the other pressing
issues facing lawmakers.
While just about everyone in Washington expects to avoid a
shutdown next week, the extremely tight timeframe, combined with
the recent hostilities between party leaders over the debt ceiling,
means that there is still a chance things could go awry. Shutting
down the government is expensive and wasteful, and as the
Bipartisan Policy Center’s Bill Hoagland told
The Washington Post, it would be particularly
problematic in the middle of a pandemic.
“This would be the first shutdown during a declaration of
national emergency,” Hoagland said, noting that parts of the
Centers for Disease Control and Prevention and the National
Institutes of Health would be closed in a shutdown. “In the midst
of an ongoing pandemic and non-resolved issues related to the delta
virus, to have a shutdown of some of the major federal agencies
would add unbelievable complications to our ability to
recover.”
Ultra-Wealthy Pay 8.2% Tax Rate: White House Report
The 400 richest families in the U.S. — worth between $2.1
billion and $160 billion and representing the top 0.0002% of all
taxpayers — paid an effective tax rate of 8.2% between 2010 and
2018, according to a
new analysis released by a pair of Biden
administration economists.
The analysis is part of the White House’s effort to pay for new
social spending by increasing the tax burden on the country’s
wealthiest households, who don’t pay “their fair share in taxes,”
as President Biden put it earlier this week.
How do the ultra-wealthy get away with paying such low effective
tax rates? Here’s how White House economists Greg Leiserson and
Danny Yagan explain it:
The wealthy pay low income tax rates, year after year, for two
primary reasons. First, much of their income is taxed at preferred
rates. In particular, income from dividends and from stock sales is
taxed at a maximum of 20% (23.8% including the net investment
income tax), which is much lower than the maximum 37% (40.8%)
ordinary rate that applies to other income.
Second, the wealthy can choose when their capital gains income
appears on their income tax returns and even prevent it from ever
appearing. If a wealthy investor never sells stock that has
increased in value, those investment gains are wiped out for income
tax purposes when those assets are passed on to their heirs under a
provision known as stepped-up basis.
Unrealized capital gains are a big part of the story, but are
also controversial when it comes to measuring income and taxation,
since technically such gains aren’t income unless and until the
underlying assets are sold. But the White House economists included
capital gains as income in their analysis, arguing that they are an
important source of wealth that can be “tapped to finance
consumption and can improve financial wellbeing.”
As Jim Tankersley of The New York Times
notes, other analyses of taxes paid by the
ultra-wealthy have found higher average rates. An analysis by the
Tax Policy Center, for example, found that the top 0.001% — roughly
1,400 households — paid an average effective tax rate of 24% in
2015, compared to an average effective rate of 14% overall. TPC did
not include unrealized capital gains in its analysis, producing
lower income estimates and higher tax rates for wealthy
households.
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