Senate Races to Avert a Debt Disaster

Plus, why Democrats are struggling to raise taxes on the rich ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey 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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