Happy Thursday! Congress should be on the verge
of temporarily avoiding a debt disaster, though some GOP politics
could still force a delay. Here’s what you need to know.
Senate Has a Deal on Debt Ceiling, but Some Republicans Aren’t
Happy
The Senate is set to vote Thursday evening on an
agreement to raise the debt ceiling and avoid a government default
that could occur in less than two weeks, but some Republicans are
unhappy about the deal and it’s not clear yet whether the GOP will
be able to muster the necessary votes.
The agreement announced by Senate Majority Leader Chuck
Schumer (D-NY) Thursday would raise the debt ceiling by $480
billion above its current level of $28.4 trillion, allowing the
Treasury to continue financing federal spending without restraint
until December 3. The date is an estimate, though, and some
Republican lawmakers say the debt limit increase could push the new
potential default date into early January.
“There is no way to predict with any precision exactly how
much you would need to increase the debt limit by to get to a
certain date,” Shai Akabas, the director of economic policy at the
Bipartisan Policy Center,
told The New York Times.
Vote unclear: Quick passage of the deal would require
unanimous consent in the Senate. Just one Republican can object, in
which case the 50 Democrats would need to find at least 10
Republicans to vote with them to move the bill ahead, at which
point it could pass with a simple majority.
Several conservative Republicans, including Sens. Mike Lee (UT),
Ted Cruz (TX) and Rand Paul (KY) have indicated they would demand a
vote, and it’s not clear that there are 10 Republicans willing to
publicly support the bill.
Senate Republican Whip John Thune (SD) said that as of Thursday
afternoon, GOP lawmakers were still debating the measure. “We’re
having conversations with our members and kind of figuring out
where people are, but, as you might expect, this is not an easy one
to whip,” he said. “In the end we’ll be there, but it will be a
painful birthing process.”
Some Republicans are worried about how their base will respond
to the bill passing without GOP resistance, the Times’ Emily
Cochrane reports. Former President Donald Trump has been pushing
Republicans to keep fighting over the debt limit, increasing
pressure on GOP lawmakers to withhold their support.
Sen. Lindsey Graham (SC) is another one of the GOP lawmakers who
aren’t happy about the agreement. “I don’t understand why we’re
folding,” Graham said Thursday, referring to Senate Minority Leader
Mitch McConnell’s (R-KY) apparent retreat from his hardline
position on the matter. “This is a complete capitulation.”
McConnell still pushing reconciliation: McConnell, the
driving force behind Republican resistance to cooperating with
Democrats on the debt limit, said the agreement doesn’t change his
position on raising the ceiling. He still insists that Democrats
use the budget reconciliation process to raise the limit on their
own, with no Republican help. The deal simply pushes back the
deadline for getting that done.
But Democrats don’t appear to be any more interested in acceding
to McConnell’s demand now than they were before the short-term
agreement was announced. “He said all along that he wanted us to do
this through budget reconciliation. And we're not doing it,” said
Sen. Tammy Duckworth (D-IL) “We made it clear we're going to stand
strong.”
“The ultimate solution would be for a bipartisan vote to occur,”
Sen. Mazie Hirono (D-HI) said. “Clearly, Mitch McConnell continues
to not want to take any responsibility.”
Other lawmakers were exasperated by the need to address what
seems like an artificial and avoidable crisis. “This whole process
is stupidity on steroids,” Sen. Mark Warner (D-VA) said.
Another fiscal cliff coming: If or when the deal is
approved, Congress will have given itself a few more weeks to work
out a longer-term solution. But things may not be any easier in
December, and may in fact be more difficult, since lawmakers will
also be dealing with funding for the federal government, which is
scheduled to expire on December 3.
Tweet of the Day
From Washington Post congressional reporter Tony
Romm:
Column of the Day: Why Democrats Are Struggling to Raise Taxes
on the Rich
New York Times columnist David Leonhardt writes that Democrats
are struggling to raise taxes on the rich, even though most voters
support such a move and President Biden campaigned on it: “House
and Senate Democrats are shrinking Biden’s proposed tax increases,
and the party still does not have a consensus on what
a final bill should include. The tax plan will
probably end up closer to a proposal from [West Virginia Sen. Joe]
Manchin than Biden’s campaign platform.”
Leonhardt asked Gabriel Zucman, a left-leaning economist
at the University of California, Berkeley, to estimate the effects
of Biden’s and Manchin’s tax proposals. You can see the difference
at the right edge of the chart here:
Why are Democrats having trouble? “The answer
from some frustrated progressives is that centrist Democrats like
Manchin have been bought off by the wealthy and their lobbyists,”
Leonhardt notes. “But campaign donations are at best a partial
explanation. It’s worth remembering that left-leaning Democrats
today are often better funded than moderates, thanks to a large
network of progressive donors. … If Manchin and Kyrsten Sinema of
Arizona — the Senate Democrat most skeptical of tax increases —
embraced Biden’s agenda, they would have no trouble raising
money.”
Leonhardt points to another explanation provided by
Matthew
Yglesias: Manchin and Sinema genuinely favor lower taxes
on the rich than the president and other Democrats.
The two centrists and their counterparts in the House may make
up only a small fraction of the Democratic caucus overall, but with
the party holding only a small majority in the House and a 50-50
Senate, the centrists have plenty of sway over what tax changes can
be enacted.
That leaves other Democrats facing a stark political reality:
“If Democrats want to enact larger tax increases on the rich — and
help pay for expansions of pre-K, college, health care, paid leave,
clean energy programs and more — the path to doing so is
straightforward,” Leonhardt says. “The party needs to win more
elections than it did last year.”
Read the full piece at The New York Times.
Send your feedback to yrosenberg@thefiscaltimes.com.
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News
McConnell Summons GOP in Scramble to Raise Debt
Ceiling – Politico
Global Tax Deal Inches Closer as Holdout Ireland Agrees to Sign
Up – CNBC
A Global Deal Aimed at Ending Tax Havens Gains
Momentum – New York Times
Democrats Weigh How to Bridge $2 Trillion Gap in Biden’s
Spending Bill – Bloomberg
Big Tobacco Comes Out Swinging Against Biden’s Build Back
Better Bill – Politico
Maxine Waters Ready to Battle Over Potential Cuts to Housing
Aid – Politico
Hundreds of Billions Were Spent by the Us in Afghanistan.
Here Are 10 of the Starkest Examples of ‘Waste, Fraud and
Abuse' – CNN
Pfizer, BioNTech Ask FDA to Authorize Coronavirus Vaccine for
Children 5 to 11 – Washington Post
Tensions Grow Between Moderna, White House Over Vaccine
Production – Politico
Where Biden’s Vaccine Mandate Will Hit and Miss –
Politico
How a Vaccine Mandate Could Worsen a Shortage of Home Care
Aides – New York Times
Views and Analysis
McConnell and Schumer Find a Temporary Solution to a Pretend
Crisis – Ben Jacobs, New York
Biden Can End Debt-Ceiling Sabotage Once and for
All – Mike Lofgren, New York Times
Why a Debt Ceiling Breach Would Not Be the First U.S.
Default – Glenn Kessler, Washington Post
Mitch’s Mini-Moment – Gail Collins, New York
Times
What a Trillion-Dollar Coin Can Teach Us – Peter
Coy, New York Times
It’s Bernie vs Manchin as Spending Breakthrough Remains
Elusive – Olivier Knox, Washington Post
Bernie Sanders Erupts at Joe Manchin, and a Deeper Dispute Is
Revealed – Greg Sargent, Washington Post
Bernie Sanders’s Curious Talking Point on Manchin and
Sinema – Aaron Blake, Washington Post
The Next Step for Democrats: Curb Their Ambitions
– Karl W. Smith and Michael R. Strain, Bloomberg
Why Democrats Would Be Fools to Slash Biden’s Housing
Plan – Paul Williams and Cea Weaver, Politico
Experts Weigh In on When the Public Health Emergency Should
End – Alexandra Ellerbeck, Washington Post
Who Will Take Merck’s New Covid-19 Pills? – Sam
Fazeli and Max Nisen, Bloomberg
Why the US Should Establish a Carbon Price Either Through
Reconciliation or Other Legislation – Sanjay Patnaik and
Kelly Kennedy, Brookings Institution