House vote this week on Build Back Better? Maybe not. Sen. Joe Manchin yesterday said he wants to see an official budget score before he signs off on President Biden’s now-$1.75 trillion social spending and tax bill. Manchin expressed concerns about whether the latest bill hides its true cost by phasing out various provisions. He also objected to House progressives blocking a vote on the infrastructure bill until he publicly supports the social spending package. Manchin didn’t say he’d support the social spending bill as is, but he didn’t say he’d oppose it either. Liberals still want the House to pass both bills this week.
Treasury Secretary Yellen is OK with using budget reconciliation to raise the debt limit. Over the weekend she told The Washington Post that budget reconciliation is a viable way to raise the debt limit and avoid default on the nation’s debt. “If Democrats have to do it by themselves, that’s better than defaulting on the debt to teach the Republicans a lesson.” Senate Majority Leader Chuck Schumer has resisted using reconciliation.
Put the billionaire’s tax back in the spending plan, says group of millionaires. About 250 millionaires urged congressional leaders and tax committee chairs to include an annual tax on billionaires’ unrealized investment gains in the scaled down Build Back Better plan. Manchin opposed this proposal, first offered by Senate Finance Committee Chairman Ron Wyden.
But add SALT, and the rich could get a tax break in the spending plan… The Committee for a Responsible Federal Budget’s (CRFB’s) latest analysis finds the reconciliation bill may deliver a tax cut to the rich if it repeals the federal $10,000 cap on state and local tax (SALT) deductions. The group says the current SALT cap repeal plan would reduce taxes on the top 5 percent of earners by over $70 billion in FY 2023.
Dynamic Scoring 101. TPC’s Ben Page talks with TPC’s John Buhl about the complicated and controversial method of measuring the macroeconomic costs and benefits of tax and spending proposals. The tool makes it possible to better understand how policy changes affect the overall economy and, in turn, impact the budget. Ben thinks the Biden administration might be disappointed by dynamic scoring of the reconciliation bill since estimated effects on the economy would be modest. It might be especially difficult to estimate the dynamic effects of infrastructure spending.
Michigan advocacy group aims to get around gubernatorial veto of scholarship tax credits. The Let MI Kids Learn formed a committee this week to collect signatures for a ballot measure to allow donors to claim a tax credit if they contribute to a statewide scholarship fund for private K-12 education. The GOP-controlled state legislature voted to create such a program, but Democratic Governor Gretchen Whitmer says she’ll veto it. If the committee collects enough signatures, the question will be on the 2022 ballot and a victory would reverse Whitmer’s veto.