Ongoing Infrastructure Talks, Making A Debt Limit Ultimatum

Infrastructure Day soon. Maybe. But not yet. Those bipartisan Senate negotiators say they have made “significant progress” and hope to have a specific infrastructure plan “in the coming days.” Yesterday, Republicans blocked the Senate from opening debate on the still-undrafted bill. Majority Leader Chuck Schumer will try again to bring up the plan if it gets at least 10 GOP votes. Senate Budget Committee Chair Bernie Sanders says he’s ready to roll the public works bill into an even bigger social spending bill if the bipartisan route fails.  

And who could forget the debt ceiling? Senate Minority Leader Mitch McConnell says no Republicans will support a “clean” increase of the debt limit, which expires at the end of the month. He says  Democrats should add it to the social spending bill  that they plan to pass on a party-line vote later this year. McConnell never objected to multiple debt limit increases during the Trump Administration. 

A $26 billion opioid settlement. A group of states announced a massive $26 billion settlement with the companies that sold the drugs. Tennessee, North Carolina, Pennsylvania, New York, Louisiana, Delaware, and Connecticut announced the deal and other states may join the settlement. Three companies will pay up to $21 billion over 18 years, while Johnson & Johnson will pay up $5 billion over nine years. States could start getting the money as soon as next year.

Do registered voters favor a permanent expansion of the CTC? A poll conducted by Morning Consult and Politico finds that 52 percent of registered voters say the expanded Child Tax Credit (CTC) should “probably not” or “definitely not” be made permanent. Only 35 percent say it should “probably” or “definitely” should. But a separate poll from Data for Progress and Mayors for a Guaranteed Income found that 56 percent of voters support a permanent expansion.

On the TPC modeling horizon: How households respond to expected tax policy changes. TPC’s Ben Page charts changes in our macroeconomic modeling and explains the differences with the traditional way we measure effects of major tax legislation. Until now, TPC has focused on  historical experience and empirical estimates of past responses to tax law changes. Now, TPC also will analyze the effects of expected tax changes using the OG-USA model designed by Richard Evans of Rice University and Jason DeBacker of the University of South Carolina. In their model, simulated households make choices about how much to work and save based on what they think future tax policy and macroeconomic conditions will look like.

And tune in today to TPC’s Prescription with Tony Nitti. The partner in RubinBrown’s Tax Services Group will discuss with TPC’s Howard Gleckman the implementation of the Section 199A income tax deduction for pass-through businesses created by the 2017 Tax Cuts and Jobs Act. The conversation starts at noon, here

News from Colombia: Tax reform. The South American nation’s government sent a $3.95 billion tax reform bill to its congress. The bill is far less than the $6.1 trillion bill that the government hoped to pass in the spring. It withdrew the bill after deadly protests and lawmaker opposition.

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