On The Money: Pelosi says no debt ceiling hike until deal on spending caps | McConnell pressures White House to strike budget deal | Warren bill would wipe out billions in student debt | Senate passes IRS reform bill

On The Money: Pelosi says no debt ceiling hike until deal on spending caps | McConnell pressures White House to strike budget deal | Warren bill would wipe out billions in student debt | Senate passes IRS reform bill
© Stefani Reynolds, Greg Nash

Happy Thursday and welcome back to On The Money, where we’re wondering if Rep. Chip RoyCharles (Chip) Eugene RoyHouse passes bill to grant flexibility for small business aid program The Hill's Morning Report - Presented by Facebook - Major space launch today; Trump feuds with Twitter House Republicans to file lawsuit to halt proxy voting MORE ever got his juice box and Fruit Roll-Up. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL—Pelosi: No debt ceiling increase until deal on spending caps: Speaker Nancy PelosiNancy Pelosi Sunday shows preview: Leaders weigh in as country erupts in protest over George Floyd death 5 things to know about US-China tensions over Hong Kong Pelosi calls Trump's decision to withdraw US from WHO 'an act of extraordinary senselessness' MORE (D-Calif.) on Thursday said she would not agree to raise the debt ceiling until Congress strikes a deal with the White House to raise spending caps for government funding.

“When we lift the caps then we can talk about lifting the debt ceiling — that would have to come second or simultaneous, but not before lifting the caps,” Pelosi told reporters at a press conference in the Capitol. The Hill’s Niv Elis has more here.

The deadline: Congress will need to suspend or increase the federal debt limit by the fall to prevent the government from defaulting on its loans. A federal default would derail global financial markets, potentially cause a financial crisis and significantly damage the Treasury Department's ability to raise money by selling government bonds.


The obstacles: Negotiations over the debt limit have been tied to discussions over raising the mandatory spending caps.

  • Failing to lift the spending caps would trigger automatic declines of about 10 percent in defense and domestic spending in fiscal 2020, which begins Oct. 1.
  • The White House has demanded that the statutory caps remain in place while raising defense spending through a budget maneuver.
  • House Democrats, meanwhile, have been passing spending bills that would increase funding levels by $17 billion for defense and $34 billion for nondefense.


Pressure from McConnell: Negotiations between the Democratic-controlled House, the GOP-led Senate and the White House have made little headway in recent months. The deadlock has pushed Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellFor city parks: Pass the Great American Outdoors Act now US ill-prepared for coronavirus-fueled mental health crisis Schumer to GOP: Cancel 'conspiracy hearings' on origins of Russia probe MORE to boost pressure on the White House to agree to a two-year budget deal with Democrats, according to The Hill’s Alexander Bolton.



Warren bill would wipe out nearly all student debt in US: Sen. Elizabeth WarrenElizabeth WarrenThe Memo: Trump ratchets up Twitter turmoil Hillicon Valley: Twitter flags Trump tweet for 'glorifying violence' | Cruz calls for criminal investigation into Twitter over alleged sanctions violations | Senators urge FTC to investigate TikTok child privacy issues Warren condemns 'horrific' Trump tweet on Minneapolis protests, other senators chime in MORE (D-Mass.) on Thursday announced a bill that would forgive billions of dollars in outstanding student loans and wipe out almost all student debt held in the U.S.

Warren’s bill would forgive up to $50,000 in student loan debt for anyone with a total household income below $100,000. Debtors with between $100,000 and $250,000 in total household income would have less of their debt eliminated the closer they are to the upper limit on eligibility for forgiveness.

“The student debt crisis is real and it’s crushing millions of people -- especially people of color,” Warren said in a statement. “It’s time to decide: Are we going to be a country that only helps the rich and powerful get richer and more powerful, or are we going to be a country that invests in its future?” I’ve got more on the plan here.


Senate passes bipartisan IRS modernization bill: The Senate on Thursday passed a bipartisan bill to make improvements to the IRS, after the House passed the measure earlier this week.

The bill, known as the Taxpayer First Act, passed the Senate by voice vote. It now heads to President Trump's desk for a signature.

“This bipartisan, bicameral bill represents years of hard work and consensus building," Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyExpanding tax credit for businesses retaining workers gains bipartisan support Grassley, Leahy urge Roberts to permanently air Supreme Court arguments Democrats broaden probe into firing of State Department watchdog MORE (R-Iowa) said in a statement.

"It’s a big first step toward strengthening taxpayer protections and turning the IRS into the customer service organization it ought to be,” he said. “I look forward to President Trump signing it into law so the IRS can begin implementing long overdue reforms that will put taxpayers first.”

The bill contains a host of provisions designed to modernize the IRS, in areas such as customer service, taxpayer rights during the enforcement process, information technology, identity-theft protection and electronic systems. The Hill’s Naomi Jagoda breaks it down here.



  • A bipartisan pair of senators on Thursday warned the Trump administration against using Chinese telecom giant Huawei as a "bargaining chip" in U.S.-China trade talks, calling the federal government's actions against the company a matter of "national security."
  • European Central Bank policymaker Francois Villeroy de Galhau urged Thursday for central banks to consider risks from climate change when setting monetary policy, according to Reuters.



  • Apple CEO Tim Cook on Thursday became the latest tech executive to pay a visit to the White House this year.
  • The Trump administration ruled that Tesla will not be exempt from paying 25 percent tariffs on various parts imported from China that make up the interior of Tesla's vehicles.