Biden Threatens to Veto GOP Spending Bills

Plus: A 'major policy change' for the IRS ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Monday! The spending fights expected this fall are already starting to simmer. Here’s what’s happening. (Reuters) Biden Threatens to Veto GOP Spending Bills Accusing Republicans of abandoning the bipartisan deal on 2024 spending levels that was agreed to just last month, the White House said Monday that President Joe Biden would veto a pair of appropriations bills currently making their way through the lower chamber of Congress, should they make it to his desk. The bills — two of 12 appropriations measures Congress needs to pass before the end of the fiscal year in September — provide less funding than defined by the bipartisan agreement. Republicans are expected to bring the bills, which cover appropriations for military construction and the Department of Veterans Affairs along with Agriculture, Rural Development and the Food and Drug Administration, to the House floor for a vote this week. The White House said that the administration “negotiated in good faith with the Speaker on bipartisan legislation to avoid a first-ever default and protect the Nation’s hard-earned and historic economic recovery.” It noted that, in addition to lower funding levels, the appropriations bills include recissions that would reduce funding for clean energy initiatives, as well as new policy provisions that would reduce access to reproductive healthcare and threaten the safety of sexual minorities. “House Republicans had an opportunity to engage in a productive, bipartisan appropriations process, but instead, with just over two months before the end of the fiscal year, are wasting time with partisan bills that cut domestic spending to levels well below the FRA [Fiscal Responsibility Act] agreement and endanger critical services for the American people,” the Office of Management and Budget said in a [statement](. Long way to Biden’s desk: The House bills will have to make it through the Senate before they can get to the White House, and it’s unlikely they will survive without significant alteration. Senate committees are writing their own versions of the bills, which not only stick to the agreed spending levels but add billions more in “emergency” appropriations. Lawmakers will have to hash out the differences between the two chambers before Congress can send the bills to Biden, and that could take some time. Shutdown becoming more likely: House conservatives and Speaker Kevin McCarthy say the 2024 spending deal defined only upper limits on spending, with lower levels still an option. By rejecting the deal, however, they are raising the odds of a government shutdown when funding runs out at the end of September. In addition to spending levels, conservatives may be unhappy if the House fails to pass each of the 12 spending bills as a separate piece of legislation. McCarthy has backed away from his pledge to do so, indicating that some of the spending bills could be combined into “minibus” bills. And the many cultural issues that are being targeted by the House GOP in the appropriations bills — including abortion access, diversity training and health care for transsexuals — will likely make it that much more difficult for lawmakers to come to an agreement. TD Cowen analyst Chris Krueger wrote Monday that “at this point, a government shutdown seems like a question of when in 2023, not if.” Reviewing the dynamics of a shutdown, The Washington Post’s Jeff Stein [recalled]( that the most recent government shutdown, in 2018, was over an inability of Congress to agree on funding for a hot-button issue, the border wall with Mexico. Still, Congress can always pass a continuing resolution that maintains funding at current levels — an option that some analysts think is becoming more likely by the day. But unlike in the past, there is now a built-in limit to how long a continuing resolution can last without additional consequences. Under the terms of the spending agreement, if Congress cannot pass appropriations bills by the end of the calendar year, automatic spending cuts of 1% kick in — a reduction that would hit the military particularly hard given the structure of the deal. The bottom line: Congress leaves town at the end of the week for its August recess and won’t be back until after Labor Day. Lawmakers will then have just a few weeks to figure out an agreement on 2024 spending before the fiscal year ends on September 30. At this point, there is little hope that they will finish their work by then, suggesting that this fall could be filled with ongoing skirmishes over 2024 spending levels, potentially culminating in an all-out battle just before the winter holidays. Numbers of the Day: $7.4 Billion and $123 Million CQ Roll Call’s Peter Cohn and David Lerman [report]( that House Republicans have “stacked the earmarking deck in their favor in appropriations bills for the upcoming fiscal year” — so much so, in fact, that the top Democratic recipient of earmarked dollars doesn’t crack the top 60. Cohn and Lerman write that the more than 4,700 earmarks in the 2024 appropriations bills total nearly $7.4 billion. “While Democrats requested 65 percent of those earmarks, they are receiving less than 38 percent of the dollars at nearly $2.8 billion,” they add. They also [point out]( some potentially surprising earmark requests: “Seven of the biggest anti-spending conservative House Republicans have secured nearly $123 million worth of earmarks in the fiscal 2024 appropriations bills they say they’ll oppose unless GOP leaders agree to steeper cutbacks.” IRS Says Agents Will Mostly Stop Making Unannounced Visits to Taxpayers In what it called a “major policy change,” the Internal Revenue Service said Monday that its agents will largely stop making unannounced visits to taxpayers’ homes, reversing a decades-long practice that had revenue officers turn up unexpectedly to collect unpaid taxes and unfiled tax returns. The change is part of a larger strategic operating plan meant to transform the agency using funding from last year’s Inflation Reduction Act. The agency last week announced improved metrics for taxpayer service for the 2023 filing season and said that it had collected $38 million in unpaid taxes from more than 175 high-income taxpayers in just the past few months. "We are taking a fresh look at how the IRS operates to better serve taxpayers and the nation, and making this change is a common-sense step," IRS Commissioner Danny Werfel said in a statement. "Changing this long-standing procedure will increase confidence in our tax administration work and improve overall safety for taxpayers and IRS employees." The Washington Post’s [Julie Zauzmer Weil]( cuts through the jargon: The shift, she writes, is “meant to protect employees’ safety due to the fear of potentially irate taxpayers answering the door.” Weil notes that IRS agents have long had to worry about their safety, but that “recent rhetoric from Republicans opposed to last year’s increase in IRS funding has raised more concerns about agents showing up announced on citizens’ doorsteps.” Tony Reardon, President of the National Treasury Employees Union, which represents IRS workers, applauded the decision and said it “will help protect those whose jobs have only grown more dangerous in recent years because of false, inflammatory rhetoric about the agency and its workforce.” The tax agency isn’t ending the practice of unannounced visits entirely, but the new policy will likely cut the annual number from tens of thousands under the previous policy to less than a few hundred now, in cases involving what the agency calls “a few unique circumstances.” Most visits will be replaced by letters mailed to schedule meetings. Vaccine Politics May Have Led to Higher Rate of Republican Deaths in Pandemic: Study The politicization of Covid-19 vaccines may have led to a higher rate of “excess deaths” among Republicans, according to a [new study]( in the journal JAMA Internal Medicine. Yale University researchers examined data on more than 500,000 deaths in Florida and Ohio between March 2020 and December 2021. They found that excess mortality — the difference between the number of reported deaths and those that would have been expected — for Republicans and Democrats experienced similar surges early in the pandemic, before the vaccines were produced. After the shots became available, though, excess deaths among Republican voters began to climb relative to that for Democrats. “[T]he excess death rate among Republican voters was 43% higher than the excess death rate among Democratic voters,” the study says. “The gap in excess death rates between Republican and Democratic voters was larger in counties with lower vaccination rates and was primarily noted in voters residing in Ohio.” Why it matters: The differences in excess mortality by political affiliation suggest that the politicization of the vaccine and resulting vaccination attitudes played a role in the severity and trajectory of the pandemic, the authors say. The study adds, though that differences between counties, including racial and ethnic composition, rurality and educational levels, may have also affected excess death rates. Still, the bottom line remains pretty clear: “The Yale study,” [writes]( The Washington Post’s David Ovalle, “adds to a growing body of research indicating that Republican messaging on vaccines and other public health measures such as mask-wearing, limiting crowds and social distancing may have led to preventable deaths.” --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [GOP Braces for Republican vs. Republican Spending Fight in House]( – The Hill - [Senate Aims to Sidestep Culture War Land Mines in Race to Pass Defense Bill]( – Politico - [The Federal Government Could Shut down in October. 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