Democrat Floats ‘Patriot Tax’ on the Wealthy

Plus, why the infrastructure deal will be a hard sell  [The Fisc](   By Yuval Rosenberg and Michael Rainey Selling the Bipartisan Infrastructure Deal Won’t Be Easy The sales pitch has started for the bipartisan infrastructure bill negotiated by 10 senators. Closing a deal with the White House and fellow lawmakers won’t be easy. “Some Democrats already have expressed discomfort with the early details of the nearly $1 trillion, five-year package, arguing it should be bigger and more robust in scope. Republicans, meanwhile, signaled there may not be widespread support for it within their own party, either,” The Washington Post’s Tony Romm [reports](. The White House said last week it [has questions]( about the $974 billion, five-year proposal, which would add up to $1.2 trillion if extended out to the White House’s preferred eight-year timeframe. And with some Democrats losing patience with the process, party leaders have said they are pushing ahead on two tracks, one bipartisan and the other that wouldn’t require GOP support. Politico’s [Playbook]( on Monday offered some details of the dynamics at play, suggesting that the White House is seriously considering the deal, according to senior Democrats, but wants to see if party members are open to it. And congressional Democrats reportedly want assurances from two centrists pushing the deal, Sens. Kyrsten Sinema (D-AZ) and Joe Manchin (D-WV), that they’ll back a second, broader infrastructure package if this deal is adopted. “There would have to be clarity that we’re getting the second package. Manchin and Sinema are going to have to give assurances to Bernie [Sanders],” one senior Democratic source told Politico. House Speaker Nancy Pelosi (D-CA) indicated as much on Sunday. In an interview with CNN’s “State of the Union,” Pelosi said, “I don’t know how we can possibly sell [the bipartisan deal] to our caucus unless we know there is more to come.” For his part, Sanders is pressing ahead with the second track, a broader reconciliation bill that could be passed by a simple majority. “He’s focused on building momentum for a reconciliation bill that will be the most consequential legislation for working people enacted since the 1930s,” a Sanders aide told [Politico](. The White House, meanwhile, reportedly wants more details on the financing in the bipartisan deal, more funding for climate priorities and some assurance that 10 Republican senators will back the compromise agreement, since there are just five in the group that negotiated it. Playbook summed up the challenges involved by harkening all the way back to Rodney Dangerfield’s 1986 movie [“Back to School”]( “One way to think about why this deal is like the Triple Lindy of legislating for Biden: to pull it off, the two most conservative Democrats (Manchin and Sinema) need to deliver the most liberal senator (Sanders) in their caucus while the five most anti-Trump Republicans (Portman, Romney, Murkowski, Collins, and Cassidy) need to deliver five of their Trumpy colleagues. Sounds hard!” House Democrats Propose $1.5 Trillion for Discretionary Spending Democrats in the House unveiled a resolution that would authorize roughly $1.5 trillion in discretionary spending for fiscal year 2022. The so-called deeming resolution would allow the House to move ahead without debating a budget resolution and enable lawmakers to start working on the details of next year’s spending plan. House Budget Committee Chair John Yarmuth (D-KY) said he hopes to have a budget resolution by July. In the meantime, House appropriators will begin drafting the 12 annual spending bills that fund much of the government. A major boost in spending: The $1.5 trillion topline number represents a 9% increase in overall spending from the previous year. The deeming resolution does not specify the split between defense and non-defense spending, but the numbers within the individual bills are expected to stick close to what the Biden administration proposed — about $770 billion for domestic programs and $753 billion for defense, with the domestic spending increasing 16.5% and defense spending increasing 1.6%. Budgetary strategy: Skipping over the budget debate allows Democrats to avoid what could be difficult votes on key details, not least the relative levels of defense and non-defense spending, an issue that has the potential to divide liberal and moderate members of the party. Democrats are also attempting to lay the groundwork to advance their spending plans under different scenarios. If Republicans and Democrats are unable to agree on a deal on infrastructure spending, Democrats could move ahead on their own through the reconciliation process, the instructions for which would come in the budget resolution to be released later. Again bypassing the normal budget process: Republicans complained Monday about the failure to produce a budget resolution. “It has been nearly 900 days since Democrats became the majority in the House of Representatives and during that entire time they have failed to pass anything close to a real budget,” House Budget Committee ranking member Jason Smith (R-MO) said. The budget watchdogs at the Committee for a Responsible Federal Budget also expressed their concerns. “Deeming discretionary levels should be a last resort, not a first resort. With a unified government, Congress has absolutely no excuse for not passing a budget,” said CRFB’s Maya MacGuineas in a statement. “Yet almost two months past the legal deadline for Congress to finish a budget, neither the House nor the Senate Budget Committees have released so much as a draft. After putting forward a budget nearly every year since 1998, this could be the third year in a row where the House fails to even introduce a real budget resolution. This is a clear-cut failure of leadership, and it is no way to run a country.” Democratic Lawmaker Floats 'Patriot Tax' on the Wealthy A Democrat who sits on the House Ways and Means Committee says he’s exploring the idea of a one-time wealth tax to help fund President Biden’s ambitious spending plans. Rep. Thomas Suozzi [told The Hill]( Friday that he’s exploring the idea of a “patriot tax” of 2.5% on households worth between $50 million and $100 million and 5% on households worth more than $100 million, to be paid over a five-year period. Suozzi’s office says the one-time tax could raise $450 billion. “We all know that people who are wealthy did very well during the pandemic and people that were low-income people did not do well,” Suozzi said, adding that the levy would be “a way to help your country to build back better.” The tax could also help defray the cost of restoring the state and local tax deduction in its entirety, the congressman said, citing a high-priority issue for some lawmakers from New York and other states with relatively high property values and local taxes. The bottom line: A wealth tax of any kind is a long shot, facing enormous political and possibly legal hurdles. But the release of a [report last week]( from ProPublica on the relatively modest level of taxes paid by some of the country’s wealthiest citizens has brought the issue back to the forefront, and the interest in such a tax expressed by Suozzi, a member of the bipartisan Problem Solvers Caucus, suggests that it could remain part of the political conversation in the coming months. Send your feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And please tell your friends they can [sign up here]( for their own copy of this newsletter. News - [House Democrats Propose $1.5 Trillion Spending Ceiling]( – Roll Call - [Collins Says New Infrastructure Offer Won't Include Gas Tax Hike]( – Politico - [Why Bernie’s Not Sweating White House's Infrastructure Dance With GOP]( – Politico - [Biden’s Nominations for the Fed Can Change the Economy. But His First Is Stuck in Limbo]( – Washington Post - [Elon Musk Explains His Extremely Low Tax Rate]( – The Hill - [‘Poor Chuck’: Schumer Confronts Midyear Mess]( – Politico - [Biden Pleads for People to Get Vaccinated 'as Soon as Possible']( – The Hill - [Novavax Offers U.S. a Fourth Strong Covid-19 Vaccine]( – New York Times - [Anti-Vax Groups Rack Up Victories Against Covid-19 Push]( – Politico - [600,000 Dead: With Normal Life in Reach, Covid’s Late-Stage Victims Lament What Could Have Been]( – Washington Post - [Inflation Expectations Jump, Another Data Point for the Fed to Keep Watch On]( – New York Times Views and Analysis - [Inside the IRS Files of the Ultrawealthy]( – Kara Swisher and Jesse Eisinger, New York Times (podcast) - [What the Rich Don’t Want to Admit About the Poor]( – Ezra Klein, New York Times - [Is It Time to Limit Personal Wealth?]( – Christine Emba, Washington Post - [Warren Buffett and the Myth of the ‘Good Billionaire’]( – Anand Giridharadas, New York Times - [Americans Hoarded ‘Mattress Money’ to Survive During Pandemic]( – Peter Coy, Bloomberg - [Wealthy Investors Are Not the Answer for Revitalizing Black Neighborhoods]( – Christopher J. Tyson, Bloomberg - [The Latest Bipartisan Infrastructure Deal Is Likely Dead on Arrival. Biden Should Reconsider]( – Henry Olsen, Washington Post - [The Debate Over the FDA-Approved Alzheimer’s Drug Showcases Our System’s Skewed Priorities]( – Helaine Olen, Washington Post - [There Will Be Another Pandemic — Are We Prepared For It?]( – Sens. Bob Menendez (D-NJ) and Susan Collins (R-ME), New York Times - [Pfizer, AstraZeneca … or Both? A Mixed Approach May Hold Promise.]( – Roxanne Khamsi, New York Times - [Lawmakers Are Deciding the Future of Telehealth]( – Paige Winfield Cunningham, Washington Post - [Congress Must Pass $8 Billion USPS Electrification Proposal to Jump-Start US EV Leadership]( – Dennis C. Blair and Robbie Diamond, The Hill - [Are Democrats Doomed in the Midterms? Not If They Can Do This First.]( – Greg Sargent, Washington Post Copyright © 2020 The Fiscal Times, All rights reserved. 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