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Checking One Item Off The Fiscal To-Do List


A clean continuing resolution. The House and Senate plan to vote today to keep the government running through December 3. After (twice) forcing Senate Republicans to block a bill to keep the government running and extend its borrowing authority, Democrats bowed to the inevitable and stripped out the debt limit measure. Unless both houses agree by midnight tonight, the federal government faces a partial shutdown.    

Then there is the bipartisan infrastructure bill. Speaker Nancy Pelosi still is aiming for a vote today but has left room for rescheduling House consideration. Under pressure from liberal Democrats, the Speaker says she will not ask for a vote on the infrastructure bill without some progress on the big social spending bill that Democrats want to pass through budget reconciliation. Democrats still are trying to resolve big differences on that measure.   

The debt ceiling debate is just getting started. Senate Majority Leader Chuck Schumer said that Democrats will not raise the debt ceiling through reconciliation. That of course is exactly what Senate Republicans want Democrats to do. The House Rules Committee advanced a bill to suspend the federal debt limit through December, 2022. But Republicans vow not only to oppose it but also to continue to block Democrats from even bringing it up in the Senate—at least for now. 

Absent a debt limit increase, the President would be forced to violate one law or another.  TPC’s Gene Steuerle explains that when Congress increases spending and cuts taxes then fails to extend the nation’s debt limit, it effectively orders the president to run deficits and bars him from borrowing the money to support those deficits. But that could force the president to stop spending money that Congress already has appropriated, which violates the law.  Gene plays out what this means.

TPC answers two questions about its analysis of the House Ways & Means tax bill. Why did TPC create a set of distributional tables that includes all major provisions of the bill and another set that includes the individual income tax, the payroll tax, and the estate tax, but excludes the corporate income tax and excise taxes? Why didn’t TPC include the bill’s proposed increase in tobacco taxes when it showed how many taxpayers in each income group would pay more under the bill? TPC’s Howard Gleckman offers answers, and a reminder: “TPC’s tax model is a sophisticated and ever-evolving tool. But, like all models, it has its limits.”

Speaking of ever-evolving: Tune in at noon for today’s Prescription with Rohit Kumar. The former domestic policy director for Senate Republican Leader Mitch McConnell and co-leader of PriceWaterhouseCoopers’ National Tax practice will discuss tax and budget policy with TPC’s Howard Gleckman.  Register and watch here.

 

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at dailydeduction@taxpolicycenter.org.



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