Did McConnell Blink? Dems Claim Victory on Debt Limit

Plus, how the US lags on toddler care. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey [*] Democrats Say They’ll Take McConnell’s Debt Limit Offer Senate Democrats on Wednesday said they were prepared to accept an offer from Republican Leader Mitch McConnell of a short-term increase in the debt ceiling. The deal would delay — but not completely defuse — a showdown over nation’s borrowing limit, pushing the deadline for a longer-term increase from the middle of this month into December. Democrats portrayed the agreement as a win, if likely a fleeting one. “In terms of a temporary lifting of the debt ceiling, we view that as a victory, a temporary victory with more work to do,” Sen. Tammy {NAME} (D-WI) told CNN. “Mitch McConnell blinked and it allows us to spend from here until November focused on finalizing the Build Back Better plan,” Sen. Chris Coons (D-DE) told CNN. “So I think that's progress.” “McConnell caved,” said Sen. Elizabeth Warren (D-MA), according to [The Hill](. “And now we’re going to spend our time doing child care, health care and fighting climate change.” Yet even as Democrats said they were prepared to take McConnell’s offer, they indicated that the debt limit clashes may be far from over. In a [statement]( released Wednesday afternoon, McConnell made clear that, while he was offering to raise the debt limit by a fixed amount to cover spending into December, he still expects Democrats to go it alone from there. “This will moot Democrats’ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass standalone debt limit legislation through reconciliation,” he said. Democrats continued to insist that they won’t take that path, which they have rejected as too time-consuming and risky. Setting up another fiscal cliff: By pushing the debt limit deadline into December, the deal sets up another major fiscal cliff, given that an extension of government funding just passed by Congress is set to expire on December 3. The politics at play: McConnell’s offer may have been prompted, at least in part, by Democrats’ talk of carving out [an exception to the filibuster rule]( for raising the debt ceiling, allowing an increase with a simple majority vote rather than requiring 60 votes. President Biden late Tuesday called that [“a real possibility.”]( Biden has sought to put pressure on McConnell over his refusal to raise the debt limit, and the president met with a group of top business leaders Wednesday to continue that campaign. McConnell’s offer requires Democrats to put a number on how much the debt limit is lifted rather than suspending the limit for a period of time, as Congress has done recently. Democrats have preferred a suspension since the fixed number could make its way into political attack ads. The bottom line: With the clock ticking toward an October 18 deadline to lift the debt ceiling and avoid a potentially calamitous default, the tentative deal coming together Wednesday could represent a breakthrough that keeps the Treasury Department from running out of money. But disagreements about the details of the deal and whether Democrats will use reconciliation reportedly could still scuttle the whole thing — and even if lawmakers finalize a temporary debt limit increase, they could be back to brinksmanship within weeks. Sanders to Manchin, Sinema: What Do You Want? Senate Budget Committee Chairman Bernie Sanders (I-VT) on Wednesday had some tough words for two colleagues who are complicating negotiations over the size and scope of President Joe Biden’s domestic agenda. Publicly addressing Sen. Joe Manchin (D-WV), who has said he wants to reduce the plan’s spending total while avoiding any provisions that would create an "entitlement" society, Sanders told reporters that it’s time for the West Virginia lawmaker to be more specific about what he wants. “Senator Manchin has been extremely critical of the $3.5 trillion proposal that many of us support,” Sanders said. “The time is long overdue for him to tell us with specificity — not generalities, but beyond generalities, with specificity — what he wants and what he does not want, and to explain that to the people of West Virginia and America.” Sanders also had words for Sen. Kyrsten Sinema (D-AZ), who reportedly opposes some tax increases included in the Biden plan, but who has avoided publicly stating her concerns and preferences. “Sen. Sinema’s position is that she does not negotiate publicly,” Sanders said. “I don’t know what that means … Don’t know where she’s coming from.” For both senators, Sanders said he had a simple request: “Tell us what you want.” Manchin affirms limit: Although Manchin recently signaled that he’s willing to go above his previously stated upper limit for the size of the plan of $1.5 trillion over 10 years, on Wednesday he sounded more firmly wed to that cap. “My number has been $1.5. I've been very clear,” he told reporters. Manchin also repeated his concerns about the government proving too many goods and services. “I've been very clear when it comes to who we are as a society, who we are as a nation. ... I don't believe that we should turn our society into an entitlement society. I think we should still be a compassionate, rewarding society," he said, explaining that the government should focus on taking care of those who can’t take care of themselves. Sanders addressed Manchin’s concerns at his press conference, asking, “Is protecting working families and cutting childhood poverty an entitlement?” Referring to Democrats’ effort to include dental, vision and hearing benefits in Medicare, Sanders asked, “Does Sen. Manchin really believe that seniors are not entitled to digest their food, and they're not entitled to hear and see properly? Is that really too much to ask?” Number of the Day: $1 Billion The Biden administration announced Wednesday that it would spend $1 billion on at-home rapid coronavirus tests, with the goal of quadrupling their availability. Jeffrey Zients, the White House’s Covid-19 coordinator, said 200 million rapid tests would be available on a monthly basis by the end of the year. “The changes reflect the administration’s growing emphasis on at-home testing as a tool for slowing the spread of Covid-19,” The New York Times’ Noah Weiland [reports](. Chart of the Day: How the U.S. Lags on Toddler Care The United States provides far less financial support for toddler care than other developed nations, writes Claire Cain Miller at The New York Times: “The U.S. spends [0.2 percent]( of its G.D.P. on child care for children 2 and under — which amounts to about $200 a year for most families, in the form of a once-a-year tax credit for parents who pay for care. “The other wealthy countries in the Organization for Economic Cooperation and Development spend an average of [0.7 percent]( of G.D.P. on toddlers, mainly through [heavily subsidized child care]( On the other hand, Cain Miller notes, the United States spends more than any OECD country except Luxembourg on elementary school through college. “We as a society, with public funding, spend so much less on children before kindergarten than once they reach kindergarten,” Elizabeth Davis, an economist studying child care at the University of Minnesota, tells Cain Miller. “And yet the science of child development shows how very important investment in the youngest ages are, and we get societal benefits from those investments.” The pandemic has highlighted the importance — and economic value — of child care, and Democrats are looking to provide more support for younger children as part of their bill to expand the social safety net, but the details of that bill, and options to cut costs, are still being negotiated. [Read the full article at The New York Times.]( --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- News - [Dems Take GOP’s Short-Term Debt Fix Offer, Kicking Deadline to December]( – Politico - [Debt Deal Still Being Drafted Into Legislation, Democratic Senator Says]( – CNN - [Biden Enlists Big Bank CEOs to Pressure GOP on Debt Limit]( – Bloomberg - [Finance Executives Say the Risk of a Default Is Already Damaging the Economy]( – New York Times - [What the Debt Ceiling Means for Social Security and More]( – New York Times - [Biden Team Seeks to Pare Back Economic Agenda in Strategy Shift]( – Bloomberg - [Manchin’s Opioids Tax Plan Faces Pushback From Lobbying Groups]( – Roll Call - [Flush With COVID-19 Aid, Schools Steer Funding to Sports]( – Associated Press - [Major Insurers Running Billions of Dollars Behind on Payments to Hospitals and Doctors]( – Kaiser Health News - [Troubled Student Loan Forgiveness Program Gets an Overhaul]( – New York Times - [A ‘Historic Event’: First Malaria Vaccine Approved by W.H.O.]( – New York Times - [Secret Trove Illuminates the Lives of Billionaires]( – Washington Post Views and Analysis - [How Democrats Can Close the Deal on Build Back Better]( – Washington Post Editorial Board - [Biden’s Frustration With Manchin and Sinema Captures a Dark Truth]( – Greg Sargent, Washington Post - [Republicans, Be Careful How You Oppose the Reconciliation Bill]( – Henry Olsen, Washington Post - [A Carbon Tax Is Not the Solution to Global Climate Change]( – Eric Toder, Tax Policy Center - [The Budget Wreck Is Congress’ Fault — and Yours]( – Kevin R. Kosar, The Hill - [Offshore Accounts Aren’t for Evading Taxes. They’re for Evading Laws Altogether]( – Brooke Harrington, Washington Post - [How to Make Retirement Saving Easier for Millions of Americans]( – Renu Zaretsky, Tax Policy Center - [The Federal Reserve Is Fighting the Wrong Inflation War]( – Bill Dudley, Bloomberg Copyright © 2020 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website 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](