Schumer Rushes Unwritten Spending Package to a Vote

Plus, Child Tax Credit payments arrive for millions  [The Fisc](   By Yuval Rosenberg and Michael Rainey Schumer Rushes Unwritten Infrastructure Package to a Vote Chuck Schumer is playing hardball. The Senate majority leader on Thursday said the Senate will vote to begin debate on the bipartisan infrastructure package on Wednesday, setting a deadline for the legislation even as negotiators continue to haggle over key details and the text of the bill has yet to be finalized. Schumer’s Wednesday deadline also applies to Democrat’s push to finalize a $3.5 trillion budget resolution setting the parameters for a go-it-alone package of “human infrastructure” spending, the other major portion of President Joe Biden’s economic agenda. "I am setting the same deadline next Wednesday for the entire Senate Democratic Caucus to agree to move forward on the budget resolution with reconciliation instructions. The time has come to make progress," Schumer said. Senators behind the bipartisan deal calling for $579 billion in new infrastructure spending continue to work to resolve their differences, but Schumer’s move ramps up the pressure on them — and on Democrats working to reach unity on their own budget blueprint. “I’ve talked to some of our Democratic members of the bipartisan group. They’re making very good progress. There’s no reason why we can’t start voting next Wednesday, and that’s what we’re going to do,” Schumer told reporters. The Senate could start debate before final text of the bill is ready and then swap in the bipartisan agreement once it’s done. But key details of the deal remain up in the air, and Republican members of the bipartisan negotiating group have warned that they may not vote to proceed if those details aren’t buttoned up by Wednesday. “I think there’s a lot of drafting that has to be done and there are still a number of outstanding issues that have to be resolved,” said Sen. Mitt Romney (R-UT), one of the lawmakers negotiating the bipartisan deal. “And I think we’ll, we’ll move quickly but we’re not going to vote on something until we actually have a bill.” Some Republicans called Schumer’s deadline artificial and arbitrary, expressing frustration that the Democratic leader was looking to jam them as the delicate talks continue. “Several Senate Republicans read Schumer’s Wednesday vote as an effort to sink the bipartisan talks, given the absence of legislative text and the likelihood that members will not yet have a score from the Congressional Budget Office by Wednesday,” Politico [reports]( adding that Sen. John Cornyn (R-TX) asked “whether Sen. Schumer is just setting this all up to fail so he can then move to the budget. That may part of his Machiavellian scheme.” IRS funding in question: The bipartisan package calls for increased funding for IRS enforcement, a provision that negotiators said could raise $100 billion in revenue from unpaid taxes. But the added funding for the tax agency raised objections among some Republicans and now appears likely to be removed from the package, or shifted to the Democratic bill, setting negotiators scrambling to find alternate funding options. What’s next: The Senate is done for the week, but members of the bipartisan negotiating group said they would work through the weekend. Negotiators reportedly also still need to resolve details on the spending side of the deal, including provisions related to water infrastructure and broadband. Even with Schumer’s deadline meant to speed up the process, both pieces of legislation are likely to still face a long road ahead. Child Tax Credit Payments Arrive for Millions of Families Direct payments for the child tax credit began flowing Thursday, with millions of American families receiving their first monthly payments worth as much as $300 per child. The Treasury Department said that about $15 billion was paid out to roughly 35 million families with nearly 60 million children. The program marks a significant shift in the federal government’s approach to helping poor and middle-class families. “This is the biggest anti-poverty effort since Lyndon B. Johnson’s War on Poverty,” Joshua McCabe, a historian of U.S. welfare policy, [told The Washington Post](. “This is a once-in-a-longtime chance to significantly reduce child poverty.” Key details: The payments are a result of the American Rescue Plan, the $1.9 trillion economic package that became law in March through the budget reconciliation process with only Democratic support. The legislation expanded the current child tax credit, providing $3,600 per child under age the age of 6 and $3,000 for children between the ages of 6 and 17. It also required the Treasury Department to send direct payments to beneficiaries, with half of the money delivered on a monthly basis between July and December. The program will cost about $120 billion on an annual basis. It is scheduled to expire at the end of the year, though Democrats hope to extend the program as part of the $3.5 trillion spending package currently being written in Congress. Biden celebrates: Speaking at the White House, President Biden praised the temporary program, saying it would deliver the largest one-year reduction in child poverty in U.S. history. “It’s a reflection of our belief that the people of this country who need a tax cut aren’t the folks at the top — they’ve gotten plenty of tax cuts, they’re doing fine — but it’s the people in the middle, the folks who are struggling or who are just looking for a little bit of, as my dad would say, a little breathing room,” Biden said. Some experts say the program could cut child poverty by 50%, though questions have emerged about the federal government’s ability to reach the poorest households, some of which do not file income tax forms. “This is a hard population to reach; in the worst of times, you’ve offered thousands of dollars, and they have not signed up,” Gene Sperling, the White House official in charge of implementing the program, said. “That is why we must stay at it and work smarter and harder to get more people signed up.” Democrats Eye Major Expansion of Medicare Coverage The $3.5 trillion budget blueprint agreed to by Democrats on the Senate Budget Committee reportedly includes vision, dental and hearing coverage through Medicare – a major change for the program that provides health insurance for more than 32 million Americans. The added benefits have long been a goal for progressive Democrats, though they are not part of President Biden’s proposal for Medicare, which focuses on lowering the Medicare eligibility age and reducing drug costs through direct negotiations with pharmaceutical firms. If enacted, the expansion would provide millions of older Americans with coverage they currently lack. “This would be a very significant change for Medicare,” Tricia Neuman of the Kaiser Family Foundation [told Bloomberg News](. “How big an impact it will have will depend on the details of the proposals.” Democrats are considering adding the benefits to Medicare Part B, which covers outpatient services. Preventive services would be free, and elective services would include limited copays. Premiums for Part B, which is voluntary, could rise with the addition of the new benefits. More bills to pay: According to a Congressional Budget Office analysis of an earlier but similar proposal, the additional benefits would cost about $358 billion over a 10-year period ending in 2029, with most of the spending going toward dental care. Democrats have pledged to cover any new costs produced by their still-developing spending bill. Political Strife and Rising Debt Could Damage America’s Credit Rating: Fitch America’s political dysfunction and rising debt could tarnish the country’s perfect AAA credit rating, Fitch Ratings said this week. “The U.S. sovereign rating is supported by structural strengths that include the size of the economy, high per capita income and a dynamic business environment,” Fitch [said in a credit rating update]( but the country’s outlook is “negative” due to growing political and fiscal risks. With respect to debt, Fitch said that while public finances have improved relative to previous forecasts thanks to a stronger-than-expected economic recovery and fiscal tightening as emergency aid programs wind down, interest rates could climb and/or deficits could increase, “potentially creating downside risk.” In terms of politics, “governance is a weakness relative to the 'AAA' median,” Fitch said. “The failure of the former president to concede the election and the events surrounding the certification of the results of the presidential election in Congress in January, have no recent parallels in other very highly rated sovereigns. The redrafting of election laws in some states could weaken the political system, increasing divergence between votes cast and party representation. These developments underline an ongoing risk of lack of bipartisanship and difficulty in formulating policy and passing laws in Congress.” Looking ahead: Fitch analysts expect Democrats to pass a spending package in the range of about $1 trillion over 10 years, well below the $3.5 trillion currently under discussion. Debt is expected to stabilize at about 121% of GDP in 2024, with “shallow” increases in the years following. Surgeon General Warns of ‘Urgent Threat’ of Covid Disinformation With Covid-19 rates spiking in many parts of the country, the U.S. surgeon general is calling for a war against “health misinformation” related to the pandemic. Dr. Vivek Murthy released an [advisory]( Thursday warning about the “urgent threat” posed by misinformation around the disease – falsehoods that put lives at risk and threaten to extend the pandemic. “I am urging all Americans to help slow the spread of health misinformation during the COVID-19 pandemic and beyond,” he said. “Health misinformation is a serious threat to public health. It can cause confusion, sow mistrust, harm people’s health, and undermine public health efforts. Limiting the spread of health misinformation is a moral and civic imperative that will require a whole-of-society effort.” Misinformation about vaccines is a particular problem. “Every life that is lost to COVID-19 when we have vaccines available, is a preventable tragedy," Murthy [told NPR](. Murthy said that one way individuals can have an effect is to avoid spreading questionable materials online. “If you're not sure, not sharing is often the prudent thing to do,” he said. He also called on social media firms to do more to help stem the tide of misleading information, citing Facebook by name at a White House briefing. “The tech companies actually have a much better sense of how much misinformation is being transacted on their platforms, and without understanding the full extent of it ... it's hard to formulate the most effective strategies,” he said. News - [Schumer Sets New Infrastructure Deal Deadline as IRS Provision Faces Strong Blowback]( – Washington Post - [Senate Nears Pivotal Vote on Bipartisan Infrastructure Deal That’s Still Unwritten]( – Politico - [As IRS Audits Waned, Big Businesses Racked Up Unapproved Tax Breaks]( – Washington Post - [Advocacy Groups Urge Pelosi, Schumer to Keep Pentagon Funding Out of Infrastructure Bills]( – The Hill - [Democratic Group Pledges $10 Million Ad Campaign to Support Biden Agenda]( – Axios - [GOP Senators Invite Yellen to Brief Them on Debt Ceiling Expiration, Inflation]( – The Hill - [Business, Labor Groups Teaming in High-Speed Rail Push]( – The Hill - [Cleveland Clinic, Mount Sinai Not Administering New Alzheimer's Drug]( – The Hill - [Fed Chair Powell Grilled by Grouchy Senators Over Inflation and Climate Change, Even as Economy Rebounds]( – CNBC - [Jobless Claims Fall to Pandemic Low, Underscoring U.S. Rebound]( – Bloomberg - [HHS Launches Campaign to Bolster ACA Sign-Ups Before Aug. 15 Deadline]( – Axios - [COVID-19 Infections Rise in 48 States]( – USA Today - [New York Lawmaker Rolls Out Green New Deal for Public Schools]( – Washington Post Views and Analysis - [Nobody Knows if Beefing Up the IRS Will Really Pay Off. We Should Do It Anyway]( – Allan Sloan, Washington Post - [How to Tell Whether the Child Tax Credit Is Working]( – Karl W. Smith, Bloomberg - [Everything You Need to Know About the 2021 Child Tax Credit]( – Eric Levitz, New York - [Medicare Needs to Cover Dental, Hearing and Vision Care]( – Max Nisen, Bloomberg - [Medicare Expansion Would Be Financial Balm for an Aging US]( – Katia Dmitrieva and Alexander Ruoff, Bloomberg - [Don’t Make Young Americans Pay for Medicare Expansion]( – Ben Ritz, Forbes - [Democrats Are Also Aiming for Medicaid Expansion in Their Go-It-Alone Bill]( – Paige Winfield Cunningham, Washington Post - [Bonds Are Predicting Another Hawkish Fed Mistake]( – John Authers, Bloomberg - [Biden’s Dreams and Nightmares Could Both Come True]( – Jonathan Bernstein, Bloomberg - [Biden Would Be Insane to Nominate Anyone Other Than Jerome Powell for Fed Chair]( – Josh Barro, Insider - [Why Democrats Should Fear Inflation]( – Timothy Noah, New Republic - [The Fed Needs to Recognize the Recovery]( – Bloomberg Editorial Board - [The Fed Has a Real Estate Fight on Its Hands]( – Lisa Abramowicz, Bloomberg - [Just Give the Homeless a Home. It Worked Before]( – Noah Smith, Bloomberg Copyright © 2020 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, [thefiscaltimes.com]( or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](