On The Money: Battle over timing complicates Democratic shutdown strategy | Biden's plans would increase revenue by $3T, spending by $5T, analysis says | Mnuchin: Now is not the time to worry about deficits

On The Money: Battle over timing complicates Democratic shutdown strategy | Biden's plans would increase revenue by $3T, spending by $5T, analysis says | Mnuchin: Now is not the time to worry about deficits
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Happy Monday and welcome back to On The Money. 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—Battle over timing complicates Democratic shutdown strategy: The November election is complicating the Democratic strategy in the looming government shutdown fight.

Feeling momentum as they aim to win back the Senate and the White House, Democrats are divided over whether to agree to the GOP-favored stopgap bill that lasts into December or push for a longer deal to fund the government into early 2021. 

“We’ve gone back and forth, it’s a split decision in the caucus. If you can tell us what happens Nov. 3 it is a lot easier. ... The uncertainty about the presidential election is an element,” Senate Democratic Whip Dick DurbinRichard (Dick) Joseph DurbinMcConnell focuses on confirming judicial nominees with COVID-19 talks stalled Senate Republicans signal openness to working with Biden Top GOP senator calls for Biden to release list of possible Supreme Court picks MORE (Ill.) said when asked about the length of a bill.

The Hill’s Jordain Carney walks us through the battle here.

How we got here: Congress has until Sept. 30 to strike a deal and pass a stopgap funding bill known as a continuing resolution, which will continue current funding levels and let Washington avoid a messy shutdown roughly a month before the election. 

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LEADING THE DAY

Analysis: Biden's plans would increase revenue by $3T, spending by $5T: Democratic presidential nominee Joe Biden’s plans would increase tax revenue by $3.375 trillion and raise federal spending by $5.35 trillion over a 10-year period, according to an analysis released Monday by the Penn Wharton Budget Model (PWBM).

After accounting for macroeconomic effects, Biden’s plans would slightly increase the federal debt and decrease gross domestic product in 2030, but the debt would decrease and GDP would increase compared to current law by 2050, the analysis found.

“At the end of the day, they actually decrease debt because they do have significant revenue raisers,” Richard Prisinzano, director of policy analysis for PWBM, said in an interview with The Hill. “And the economy is more productive. As we put in things like education and infrastructure, workers become more productive, and that gives a boost to the economy.”

The Hill’s Naomi Jagoda breaks it down here.

Mnuchin: Now is not the time to worry about deficits: Treasury Secretary Steven Mnuchin on Monday said the country should not be focused on deficits as it struggles under the economic weight of the COVID-19 pandemic.

“Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet,” Mnuchin said in a CNBC interview.

The Hill’s Niv Elis explains here

The background: The deficit has been a central issue of concern for Republican negotiators on a stalled COVID-19 relief bill.

  • The federal deficit is on track to reach an unprecedented $3.3 trillion when the fiscal year closes out at the end of the month, driven in large part by the COVID-19 response.
  • Mnuchin credited the large stimulus and extraordinary measures by the Federal Reserve for helping the economy survive the shock of the pandemic.

“I think both the monetary policy working with fiscal policy and what we were able to get done in an unprecedented way with Congress is the reason the economy is doing better,” he said.

GOOD TO KNOW

  • The economic downturn caused by the COVID-19 pandemic hit the world's major economies four times harder than the global financial crisis did at their respective peaks, according to the OECD.
  • The Nasdaq composite bounced back Monday from its worst week of losses since March as a rally in tech and pharmaceutical shares lifted the market.
  • Business groups are throwing their support behind a pandemic insurance bill modeled after a post-9/11 law that created a federal backstop for claims related to acts of terrorism.

ODDS AND ENDS