🟡NEW: WH tried reassuring Senate Ds on call they’re trying to clinch the best bipartisan debt limit deal possible, per aide on call. WH aide brought up federal spending freeze

But McCarthy is rejecting it, arguing that doesn’t amount to spending cut
semafor.com/article/05/22/… Neither side is walking away from talks. McCarthy said yesterday he’ll speak with Biden daily if needed to get an agreement.

Still, Ds unnerved about Rs leveraging debt limit for policy concessions. Sen. Whitehouse warned about deal collapsing in Senate semafor.com/article/05/22/…

House Budget Chair Jodey Arrington tells me on GOP debt limit bill voting timeline: “I expect we’ll be voting on it soon”

Rs entering now to conference meeting where they’ll go over late-night changes to work requirements, biofuel tax credits Rep. Tim Burchett, who has never voted to raise debt limit, says he’s still a no.

Burchett was supposed to meet with Rep. Graves yesterday. He waited ~30 mins & got blown off: “I just don’t like being taken for granted”

He tells me bill doesn’t do enough to curb spending

House GOP whip Tom Emmer walks into Speaker McCarthy’s office and says “We’re going to pass it tomorrow” Lots of unknowns on the debt limit bill!

Now stationed at 1100 Longworth for this morning’s House Ways and Means hearing, where the House GOP is taking the 1st step on a bill preparing for US default.

Expecting this to be a major skirmish between Rs and Ds in the debt ceiling’s “Phony War” semafor.com/article/03/03/… >@RepJasonSmith on Default Prevention Act :

"It is not a substitute for addressing the debt limit, but it would ensure we could avoid default as the US would be able to service its debt, and as importantly, we'd continue to provide health & retirement security to seniors"

New: Fresh debt prioritization leg text circulating in House Ways & Means switches underlying bill & introduces “tier” system of federal payments

Tier 1: Interest on debt
Tier 2: DoD and Vet benefits
Tier 3: N/A
Tier 4: Federal employees, exec branch salary
Tier 5: Congress pay Obvious caveat is that amendment process could change the bill even more by the end of tomorrow’s planned House Ways and Means hearing

🟡SCOOP: Sens. Angus King and Bill Cassidy are drafting bipartisan Social Security legislation that might create a sovereign wealth fund to finance future retirement benefits, per 3 people familiar. semafor.com/newsletter/01/… How this works: The government would establish an account (separate from SS Trust Fund) with borrowed money, then invest the cash into stocks, taking advantage of their usual higher rate of return compared to Treasuries.

Last proposed by Clinton in 1999
semafor.com/newsletter/01/…

🟡NEW: Republicans are increasingly anxious that a deal from McCarthy to put a national sales tax bill for a House floor vote will carry huge political consequences.

Anti-tax activist Grover Norquist: “This is a political gift to Biden and the Democrats” semafor.com/article/01/18/… Swapping the fed tax code w/a nat’l sales tax is an idea around for 2 decades.

Its like the Caddyshack gopher, a creature that periodically popped up only to burrow anew under attack.

@George_A_Callas: “We’re all trying to throw sticks of dynamite at it”
semafor.com/article/01/18/…

👀Treasury Secretary Yellen on the IRS:

"The IRS is horrendously under-resourced. It has fewer staff than it did 40 years ago.. it's operating with technology from the 1960s using a programming language that is archaic and no longer taught in any school in the country" Yellen said it was "amazing" considering the IRS's dire circumstances that it was able to issue three stimulus checks to most Americans along with monthly child tax credit checks to parents last year

>@MichaelBennet in floor speech urges Biden to pair student debt forgiveness with initiatives to fix a "broken" lending system and ensuring "new pathways to a living wage" for Americans who didn't go to college Wow: Bennet pilloried Biden's intent to cancel at least $10k in student debt

"It offers nothing to Americans who paid off their college debts or those who chose a lower-priced college as a way to avoid taking on debt"

"It ignores the majority of Americans who went to college"

Scooplet: @RepDonBeyer (tax-writing Dem on Ways amd Means) is drafting a bill to impose a 1000% excise tax on the AR-15 style weapons at the center of the recent carnage in Texas, NY, and Oklahoma.

The measure is meant to bypass the GOP in reconciliation
businessinsider.com/democrat-ar-15… In an interview, Beyer called it a “creative pathway to actually make some sensible gun control happen.”

The cost of an AR-15 style weapon really varies based on location. But the tax would add *$5,000 to $20,000* to its final sales price
businessinsider.com/democrat-ar-15…

**The @TaxPolicyCenter out with an analysis of Sen. Rick Scott’s “skin in the game” income tax proposal

They project the poorest families earning less than $27k would pay *$1,000 more* in taxes due to the elimination of tax credits

Via @howard_gleckman
forbes.com/sites/howardgl… Scott didn’t release enough details for a full analysis. But TPC modeled the proposal with a $100 minimum tax for singles and $200 for couples.

Over 80% of the tax increase would fall on families earning $54k or less
taxpolicycenter.org/model-estimate…

>@POTUS now condemning Putin's "brutal attack" on Ukraine and announces a fresh round of sanctions

"Putin chose this war. And now he and his country will bear the consequences" Biden: "We will limit Russia's ability to do business in dollars, euros, pounds, and yen to be part of the global economy"

He notes the Russian ruble plunged today

Sen. Joe Manchin reiterated earlier that BBB is “dead,” putting Biden’s economic agenda on ice.

I’d argue the situation facing Ds is no better nor worse. Manchin already came out against BBB in December.

Some thoughts on Manchin, BBB and where things could go from here 🏛 The conservative West Virginia Dem said later he meant the $2T House-approved package was “dead.”

That bill included programs he’s objected to - like the expanded child tax credit and 4 weeks of paid leave.

Ds eventually hope to pass a skinnier plan. businessinsider.com/joe-manchin-sa…

Sen. Susan Collins (R-Maine) suggests some GOP senators would back lifting the debt limit if D’s totally abandoned their $3.5 trillion spending package.

She said it “appears unlikely, but that’s an agreement that could be reached” Collins also took issue with D’s trying to suspend the debt limit until *after the midterms*

The House cleared a bill last week that’s bound to run into GOP blockade this week

Sen. Joe Manchin this AM on monthly child tax credit:

“Let’s make sure we’re getting it to the right people. There’s no work requirements whatsoever. There’s no education requirements.. Don’t you think if you want to help the children, the people should make some effort?” Worth pointing out the revamped CTC is still a means-tested benefit program since it applies income thresholds for singles/couples to get the $$

- $75k and below for individuals
- $150k and under for couples

9 House D moderates warn Pelosi they will oppose advancing $3.5T budget blueprint unless bipartisan infrastructure bill gets a vote:

- Josh Gottheimer
- Carolyn Bourdeaux
- Kurt Schrader
- Filemon Vela
- Ed Case
- Vicente Gonzalez
- Jared Golden
- Jim Costa
- Henry Cuellar Fresh reminder of D’s 3 vote margin in the House and if these 9 House D moderates stick to their threat, that’s more than enough to torpedo the $3.5T spending plan

https://twitter.com/josephzeballos/status/1425542943696379912

Dem Sens. Mark Warner and Ron Wyden just walked from Senate subway onto the floor having what looked like serious crypto discussions.

Both have dueling amendments on crypto tax enforcement

Overheard this from Wyden: “Revenue is very important to me” Sen. Pat Toomey (GOP co-sponsor w/Cynthia Lummis + Wyden) indicates few signs of progress toward crypto compromise:

“I think we have an amendment that works,” he tells me

🚨🚨 Sen. Joe Manchin (D-W.Va) signaled he *won’t* back renewal of federal aid for gig workers/long term unemployed past Sept. 6

"I'm done with extensions. The economy is coming back,” he tells me

At least 7.5m people may lose all UI
businessinsider.com/sen-joe-manchi… Manchin: “Look guys, read your own print.. The economy is stronger now, the job market is stronger. Nine million jobs we can't fill. We're coming back”

Experts concerned about how surge of Delta infections may slow recovery
businessinsider.com/sen-joe-manchi…

Breakdown of bipartisan infrastructure plan spending, per WH fact sheet:

- $110B for roads, highways and bridges
-$66B for rail
-$65B for broadband
-$55B for clean water
- $43B for ports/airports
- $39B for public transit The offsets: unspent COVID relief $$, tax enforcement on cryptocurrencies, targeted corporate user fees

Also listed as pay-for: “revenue generated from higher economic growth as result of investments”

Rick Santorum: “We have a bunch of people running around, particularly progressives, who all they want to talk about is let the people’s will be done.”

“No! No, no no, we don’t want the people’s will to be done immediately”
More Santorum: "Remember our constitution was set up to protect who? Minority rights. Not the majority rights."