Plus, what it takes to be in the top 1%
â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â â Â [The Fisc]( Â Â By Yuval Rosenberg and Michael Rainey Congress is back, and itâs 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. Letâs start with the big picture: Right now, Democratic efforts to pass their $3.5 trillion budget reconciliation package and enact the bulk of President Bidenâs economic agenda look like a chaotic mess. But as we head into the final days of September â and the last 10 days of the fiscal year â 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. Hereâs 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 â as well as emergency disaster relief and funding to help resettle Afghan evacuees â 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 governmentâs 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. âThe 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 â908â COVID package that helped American families and small businesses reeling from the COVID crisis,â Pelosi and Schumer said. âAddressing 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.â 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. âSenate Republicans would support a clean continuing resolution that includes appropriate disaster relief and targeted Afghan assistance,â Senate Minority Leader Mitch McConnell said Monday. âWe will not support legislation that raises the debt limit.â McConnell last week signaled he wonât budge on the issue. âDo you guys think Iâm bluffing?â 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. âWell, ultimately theyâre going to have to vote for it or weâre going to have to have a vote and do it by ourselves,â House Budget Committee Chair John Yarmuth (D-KY) told MSNBC on Sunday. âWe can do it through reconciliation. Leadership has said they donât 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.â Reconciliation bill wonât 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 wonât 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. âThe process now shifts to backrooms as the sausage is made,â 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). âAdverbs, 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.â 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 wonât back a reconciliation package. Other moderate Democrats are taking the same position. âIf they delay the vote â or it goes down â then I think you can kiss reconciliation goodbye,â Rep. Kurt Schrader (D-OR) told [Politicoâs Playbook](. âReconciliation would be dead.â 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 partyâs 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 â 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]( âSouthern 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.â
Manchin wants a pause: The centrist senator from West Virginia is telling people that Congress should take a âstrategic pauseâ â until next year â before taking up the $3.5 trillion budget reconciliation package, Axiosâs Hans Nichols [reports](. Manchin, who has said heâd 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 âstrategic pauseâ 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 â and the bipartisan infrastructure bill. Senate parliamentarian nixes Demsâ immigration plan: In another blow to Democratsâ reconciliation plans, Senate Parliamentarian Elizabeth MacDonough said in a ruling released Sunday night, that the package canât include the partyâs plan to provide a path to citizenship for millions of undocumented immigrants. The parliamentarianâs office said that the proposed immigration changes represented âa policy change that substantially outweighs the budgetary impact of that changeâ and thus did not qualify under the Senateâs 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 Timesâ Jesse Drucker and Danny Hakim sum up the arrangement: âThe 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.â
During the last four presidential administrations, the Times found at least 35 instances in which accounting executives took jobs in the Treasuryâs 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 Democratsâ effort, [CNNâs Tami Luhby]( took a look at some key characteristics of todayâs top 1%, including these three numbers: * $540,000: Thatâs 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 â in 1918, more young people were struck by the virus, in a population that was about a third the size â 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. âPeople were desperate for treatment measures in 1918. People were desperate for a vaccine,â historian Christopher McKnight Nichols of Oregon State University [told ABC News](. A Message From Our Partner
Connect the dots between financial policy, politics, and citizen and legislative action, with the latest from The American Prospect. Read it [HERE](. News - [White House Rules Out Concessions Over Debt Ceiling While GOP Refuses to Help Avert Crisis]( â Washington Post
- [Pelosi Tries to Hold Line as Democrats Start to Crack on Debt Ceiling Standoff]( â Washington Examiner
- [Debt Limit Options Narrowing, 14th Amendment Chatter Returns]( â Roll Call
- [Biden Pushes Back at Democrats on Taxes]( â The Hill
- [Conservatives' 2022 Big Target: Tax Increases]( â Axios
- [Audit: Pentagon Lags in Fight Against Fraud]( â Roll Call
- [7-Day Average of U.S. COVID Deaths Passes 2,000 for the First Time Since March 1]( â New York
- [Republicans Maneuver to Block Vaccine Mandates, Undercutting a Policy Widely Seen as an Effective Tool to End Pandemic]( â Washington Post
- [Covid Vaccine Prompts Strong Immune Response in Younger Children, Pfizer Says]( â New York Times Views and Analysis - [Washingtonâs Oldest Contact Sport: Lobbyists Scrum to Dilute or Kill Democratsâ Tax Bill]( â Albert Hunt, The Hill
- [The Biggest Hurdle on the Road for Bidenâs Economic Plan]( â John Hardwood, CNN
- [The Economic Mistake the Left Is Finally Confronting]( â Ezra Klein, New York Times
- [Does the U.S. Economy Still Need Booster Shots?]( â Peter Coy, New York Times
- [Kyrsten Sinema Needs to Show Us What She Believes In]( â Paul Waldman, Washington Post
- [The People Have Spoken: Infrastructure Means Roads and Bridges]( â Sadek Wahba, The Hill
- [Our Drug Supply Is Sick. How Can We Fix It?]( â Farah Stockman, New York Times
- [Americans Who Refuse Vaccinations Are Costing US Big Bucks as Well as Lives]( â Steve Kamin and John Kearns, The Hill
- [House Democrats Should Be Careful They Donât Get BTUâd]( â Bruce Thompson, Roll Call
- [Congress Needs to Increase My Taxes]( â Rep. David Trone (D-MD), Roll Call Copyright © 2020 The Fiscal Times, All rights reserved.
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