Debt Ceiling Drama Continues

Biden tries to broker a deal with Hill Democrats. The President is looking at a confrontation with Republicans over the soon-to-expire debt limit. But he’s also got to try to get warring Democrats on the same page. To that end he began a series of meetings yesterday with Democrats representing multiple factions to try to get them to stop squabbling and agree on a consensus tax and spending plan.

Senate confirms Lily Batchelder to top Treasury tax post. The NYU tax professor and former top Senate Finance Committee tax aide was confirmed as Assistant Treasury Secretary for Tax Policy by a vote of 64-34. Biden announced her nomination eight months ago. The post has been filled temporarily by TPC director Mark Mazur.    

There’s advice, a counteroffer, a fallback, but no deal in sight. Former Treasury secretaries Hank Paulson and Steven Mnuchin tried to broker a debt ceiling deal in private talks with Treasury Secretary Janet Yellen and Senate Minority Leader Mitch McConnell. But obviously to no avail. Instead, McConnell offered a competing continuing resolution to fund the government through December 3 but not raise the debt ceiling. Could the Senate instead add debt limit language to the fiscal 2022 budget resolution? Yes, but is it likely? The drama continues.

If only they acted before there was a problem… TPC’s Len Burman likens raising the debt limit— authority for the Treasury to borrow money to pay for past tax or spending policies—to a common parental problem: Getting a toddler ready—really ready—to leave the house on a cold day. “The toddler needs to go potty before putting on his snow suit…. And Congress needs to authorize debt before it votes for the spending or taxes that will add to the debt. In both cases, failure to foresee inevitable consequences can produce a stinky mess.” Eventually, at least, toddlers grow up.

Meanwhile, pro-tax millionaires tell congressional progressives to issue an infrastructure ultimatum. The Patriotic Millionaires group urged  the Congressional Progressive Caucus to  block the $1 trillion bipartisan infrastructure bill unless it is “directly coupled” with the $3.5 trillion reconciliation package. At the same time, a group of moderate congressional Democrats threatens to sink the reconciliation bill if the infrastructure measure is not passed at the same time. 

Tennessee’s August tax revenues beat estimates. The Finance and Administration Commissioner reports the state’s revenues continue to exceed expectations. Tennessee collected $267.9 million more than anticipated, a total of $1.4 billion. Sales and corporate taxes comprised about 93 percent of the month’s growth, led by sales at eating and drinking establishments and consumer fuel purchases.

Former President Trump sues his niece and The New York Times. Trump is suing over The Times’ 2018 reporting on his personal and business taxes as well as other financial practices based on tax records his niece gave the newspaper. Trump claims the story should not have been published since the reporters were aware that a settlement agreement precluded the niece from disclosing the documents. He adds the newspaper and his niece were motivated by a “personal vendetta.” Said Times reporter Susanne Craig, “I knocked on Mary Trump’s door. She opened it. I think they call that journalism.”

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