Uddrag fra Zerohedge:
Update (1010ET): President Biden’s brief trip to Capitol Hill to try and sell his new social spending and climate change framework to progressives is over. According to BBG, he has left the Dem caucus meeting with his top negotiators and Nancy Pelosi, whom he was seen chatting with as they departed. Biden will address the American people in a little over an hour.
Biden is pushing for a vote on the infrastructure bill Thursday (which seems more like a fantasy than an achievable goal) although that goal was parroted to the press by at least a few House progressives. Speaker Pelosi has confirmed that she wants to have the vote on the infrastructure bill on Thursday – as in today.
Meanwhile at least one progressive – Rep. Ilhan Omar – says she won’t support a spending bill until she sees the full text.
Update (0900ET): As President Biden prepares to meet with Congressional Democrats ahead of a 1130ET presser from the White House to officially unveil the plan, more details of the Dems’ new $1.75 trillion spending-and-climate plan are leaking out. Biden has reportedly struck an agreement with moderates like Manchin and Sinema on the deal (which encompasses an expansion of the social safety net, and elements of the ‘Green New Deal’).
Here’s CNBC with more specific details from the plan, some of which were previously known, and some of which are novel:
After months of negotiations, “the package contains a wide-ranging set of programs that, if enacted, will profoundly impact the lives of families with children, low-income Americans and the renewable energy economy,” per CNBC and Bloomberg.
The details include:
- Universal preschool for all 3- and 4-year olds, which is funded for at least 6 years.
- Subsidized child care that caps what parents pay at 7% of their income, which is funded for 6 years.
- A 15% minimum tax on corporate profits for firms with earnings over $1 billion reported to shareholders, and a 1% surtax on stock buybacks
- An additional 5% tax on incomes above $10 million, as well as an additional 3% on incomes above $25 million
- $555 billion in clean energy and climate provisions
- A one-year extension of the current expanded Child Tax Credit, which impacts approximately 35 million households nationwide.
- Expanded tax credits for 10 years for utility and residential clean energy, including electric vehicles.
- Extend the current, pandemic-related Affordable Care Act subsidies for 4 years.
- Allow Medicare to cover the cost of hearing.
- The framework also raises the possibility of immigration reform being included in the reconciliation package, but the scope isn’t clear. It forecasts a cost of $100 billion, in addition to the $1.75 trillion topline.
The framework is also notable for what the framework excludes, per CNBC:
A longstanding proposal to create a federal paid family and medical leave system was dropped from the bill on Wednesday afternoon after Sen. Joe Manchin, a key Democratic swing vote, said he did not believe the program belonged in the bill.
The primary purpose of Biden’s trip to the Hill Thursday morning is to convince progressives to back the plan, though Biden says “everybody” is already on board with the new plan. Per CNBC, the bigest challenge for Dems will be convincing the progressives to accept it, since the plan falls far short of “the Squad” and their allies’ grand vision for a $3.5 trillion reworking of the social safety net. Biden will deliver an address to the nation later this am after the meetings on the Hill.
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After abandoning a plan to strictly monitor Americans’ bank accounts in an effort to crack down on tax cheats following an outburst of popular opposition, Democrats finally came together yesterday and agreed on a corporate minimum tax that might offset at least some of the spending from President Biden’s “Build Back Better” initiative.
But given the fractiousness inherent to the Democratic Party, which has seen the House and Senate tax-writing committees and their leaders and members constantly bickering over what new taxes would and would not be acceptable – while Republicans stoke public resistance by warning that the Dems are trying to push through the biggest tax increase in decades – it looks like (after Sen. Kyrsten Sinema agreed to a minimum corporate tax rate) the Democratic caucus has finally ceded something that we at Zero Hedge have suspected all along.
According to Bloomberg, the two main takeaways from Wednesday evening’s tax agreement are this:
1) the bulk of President Trump’s tax cuts will be left in place although
2) corporations will face a new slightly higher minimum tax.
But let’s put the tax side of the program aside for a moment, because WaPo and WSJ have just reported that President Biden is preparing to share a $1.75 trillion framework for his spending bill before he leaves for an extended trip abroad.
That would mean the size of the Dems’ social spending program has shrunk below $2 trillion to $1.75 trillion according to a report released minutes ago by WSJ . That’s down from the initial target of $3.5 trillion. Lawmakers are also waiting to pass a $1.2 trillion “bipartisan” infrastructure bill that passed the Senate back in August, but has been held up by progressive Democrats in the House, who are demanding that the social spending plan get a vote first, so to guarantee that it doesn’t fall by the wayside. Biden has indicated his supports this strategy.
After Treasury Sec Janet Yellen and other Dems hinted at the possibility of taxing unrealized capital gains – an idea that elicited horrified responses from Dems and GOPers alike – BBG says it looks like formerly “core” proposals to increase the top marginal income tax rate and the rate on capital gains tax have been abandoned while “more creative” measures like a minimum tax on the profits on corporate financial statements and a surtax on millionaires are still a possibility.
The new framework is expected to include funding for expanded health coverage, housing, universal prekindergarten and child care, and climate programs, among other provisions. WSJ says. Dems also abandoned a key push to mandate paid family leave on Wednesday.
Here’s a rundown from BBG:
Source: BBG
After weeks of secretive discussions, Sen. Sinema has given the Biden admin a list of specific tax policies she will support in order to raise revenue for the social spending plan, per BBG’s sources on the Hill.
She would back the billionaires’ tax put forth by Senate Finance Committee Chairman Ron Wyden or a 3% income surcharge for earners above $5 million, as well as a 15% corporate minimum tax, the people said on condition of anonymity to discuss sensitive negotiations.
As Dems continue to debate what an acceptable tax and spend plan might look like, it appears Dems have also abandoned a plan to increase inheritance taxes, while a potential surtax on billionaires’ wealth has also started to gain their momentum.
But before President Biden leaves for a lengthy trip to Europe for the G-20 climate talks in Rome and the climate summit in Glasgow that will be the first major global climate summit since the Paris Accords in 2015, he’s expected to visit the Hill. Per WSJ, Biden’s also expected to make an address from the White House Thursday at 1130ET to explain to ‘average joe’ what the latest version of the Dems’ spending framework looks like.
