On The Money — Dems eye Build Back Better revival
Top Democrats are again setting sights on a potential revival of the president’s stalled tax and spending agenda, with midterm elections just months away.
We’ll also look at the Supreme Court’s rejection of a challenge to a key Trump-era tax provision, the World Bank’s gloomy growth forecast and more.
But first, see why some Taco Bell fans are rejoicing today.
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Dems prep to take second run at spending plan
Top Democrats and the White House are eyeing a revival of a stalled-out tax-and-spending bill as the party tries to show deliverables to voters heading into a November election where they are facing tough political headwinds.
The hopes of reviving Build Back Better — albeit significantly altered and likely with a different name — comes after Sen. Joe Manchin (D-W.Va.) deep-sixed a roughly $2 trillion, House-passed bill late last year. Since then they’ve struggled with when, or how, to revive the issue with most of the political oxygen focused on a Supreme Court
vacancy and Russia’s invasion of Ukraine.
- Neither Senate Democratic leadership nor the White House have set a firm deadline for when they would want to get a revived deal. But some Democratic senators have floated Memorial Day, or at the latest mid-summer, before they pull the plug for good.
- They’ll have to win over Manchin, who recently stated he would nix many of the earlier package’s social programs and has expressed concerns about surging inflation.
- The White House is signaling that they could try to assuage Manchin’s concerns by packaging debt reduction with programs aimed at cutting costs for Americans into a bill.
The stacked legislative calendar is another issue: Congress is still working on legislation to boost the nation’s competitiveness with China and provide another $10 billion in COVID-19 aid in addition to numerous other priorities.
The Hill’s Jordain Carney has more here.
SALT IN THE WOUND
Supreme Court won’t hear challenge to key tax deduction
The Supreme Court on Monday declined to review a challenge to the $10,000 ceiling imposed on the state and local tax (SALT) deduction, one of the most controversial provisions of the 2017 tax bill ushered into law by President Trump and a GOP-led Congress.
The court’s move, which came in a brief unsigned order without noted dissent, effectively ended a legal challenge brought by a number of high-tax, Democratic-led states.
- The Republican-led tax cuts capped at $10,000 the amount of state and local taxes that individuals could deduct from their federal income taxes, a move that effectively increased the tax burden on high-earners in states like New York and California.
- Efforts to remove the cap were a divisive issue among Democrats last year as they crafted a budget reconciliation package — which eventually stalled over opposition from Sen. Joe Manchin (D-W.Va.). Democrats from some of the districts and states most affected by the change sought to eliminate or raise the ceiling on deductions, while other Democrats argued that would largely benefit wealthy households.
- The limit on the SALT deduction was one of the biggest revenue-raising provisions of the 2017 Tax Cuts and Jobs Act. It was needed to offset tax cuts in order to meet the House reconciliation requirement that the legislation contribute no more than $1.5 trillion to the federal deficit over the 10-year budget window.
In response, four states — New York, Connecticut, Maryland and New Jersey — brought a legal challenge in 2018, claiming the tax-deduction cap amounted to congressional overreach and an infringement of states’ rights.
Attorneys general for those states argued that “a deduction for all or a significant portion of state and local taxes is constitutionally required because it reflects structural principles of federalism embedded in the Constitution.”
Check out more here from The Hill’s Tobias Burns and John Kruzel.
White House hammers Rick Scott’s tax plan
The White House on Monday used the occasion of Tax Day to go after Sen. Rick Scott’s (R-Fla.) proposed tax plan, arguing it shows the gulf between GOP proposals and the Biden administration’s priorities.
A fact sheet released by the White House press office highlighted aspects of Scott’s policy proposals that would raise taxes on middle-class and lower-income Americans, contrasting it with Biden policy proposals like the child tax credit and subsidies for the Affordable Care Act.
“This Tax Day, it’s a clear choice. And the President is going to continue fighting for middle-class tax relief and to make sure the richest Americans and largest corporations don’t pay a lower rate than middle-class families,” the White House said in its fact sheet. “And he will fight against the Republican plan to raise taxes on middle-class families and to threaten the future of Social Security and Medicare, while continuing giant hand outs to very top and the largest corporations.”
- The White House tied congressional Republicans to Scott’s plan, despite the fact that many in the GOP have distanced themselves or have yet to embrace the senator’s proposals. The fact sheet alleges the Republican plan would increase taxes on middle class families by an average of nearly $1,500 this year, and would cut Social Security and Medicare benefits.
- Biden has repeatedly pledged not to raise taxes on any American making less than $400,000 as he and congressional Democrats discuss ways to fund billions in spending on climate, health care and family care programs.
Read more here from The Hill’s Brett Samuels.
World Bank reducing global growth forecast due to invasion of Ukraine
The World Bank is lowering its growth forecast for the year because of Russia’s invasion of Ukraine.
World Bank President David Malpass announced during a conference call on Monday that the global growth forecast for 2022 will be downgraded from 4.1 percent to 3.2 percent.
“The war in Ukraine and China’s COVID-related shutdowns are pushing global growth rates even lower and poverty rates higher,” Malpass said in his opening remarks at the spring meetings 2022 media roundtable.
- The nearly 1 percentage point decrease was driven by a reduction in the outlook for Europe and central Asia, which is now expected to see a 4.1 percent contraction.
- Additionally, Malpass said the board of the international financial institution will likely talk about a 15-month crisis response package worth roughly $70 billion that will span from April 2022 through June 2023.
The Hill’s Mychael Schnell has more here.
Good to Know
A federal judge in Florida on Monday struck down the Centers for Disease Control and Prevention’s mask mandate for travel on planes, trains and buses.
Judge Kathryn Kimball Mizelle, an appointee of former President Trump, wrote that the CDC exceeded its statutory authority with the order.
Here’s what else we have our eye on:
- Former Vice President Mike Pence’s advocacy group is launching ads in three Democratic-held congressional districts hitting President Biden and Democrats over rising gas prices.
- The CDC on Monday removed all the remaining countries from its highest coronavirus risk advisory category.
- The nation’s largest flight attendant union urged travelers to remain patient and await further guidance after a federal judge in Florida struck down the federal government’s mask mandate for planes, trains and buses on Monday.
- Most low-wage workers are shelling out around $100 dollars to file their taxes despite being eligible for free filing services, a recent survey from the Shift Project found.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.
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