Overnight Finance

On The Money: Schumer urges Democrats to stick together on $1.9T bill | Collins rules out GOP support for Biden relief plan | Powell fights inflation fears

Majority Leader Charles Schumer (D-N.Y.)
Greg Nash

Happy Tuesday and welcome back to On The Money, where we’re still trying to figure out how to spell “bilateral gynandromorph.” 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—Schumer urges Democrats to stick together on $1.9T bill: Senate Majority Leader Charles Schumer (D-N.Y.) warned Senate Democrats, including centrists who are balking at certain elements of President Biden’s proposal, that failure to pass a $1.9 trillion COVID-19 relief bill would be a political disaster.

Schumer, who scored a win earlier this month when all 50 Democrats voted to pass a budget resolution laying the groundwork for the bill, told colleagues on a conference call they need to stay completely unified in the weeks ahead.

What Schumer said: I made a pitch today to our entire caucus and I said that we need to pass this bill. The American people, the American public demands it and everyone is going to have things that they want to see in the bill and we’ll work hard to see if we can get those things in the bill,” he told reporters after holding a call with the Senate Democratic caucus Tuesday.

“Job No. 1 is to pass the bill. Pass the bill we must. And I have confidence we will do it.”

What Schumer is talking about:

  • Minimum wage hike opposition: Sen. Joe Manchin (D-W.Va.) opposes including a provision to raise the federal minimum wage to $15 an hour. Schumer also has to worry about centrist Sens. Jon Tester (D-Mont.) and Kyrsten Sinema (D-Ariz.), moderates known for bucking the party line from time to time.
  • No bipartisan support: Earlier on Tuesday, Sen. Susan Collins (Maine) said she would be surprised if any Republican colleagues vote for Biden’s $1.9 trillion rescue plan. That means just one Democratic defector can sink the stimulus bill.

Republicans dig in: Collins, one of the Republicans considered most likely to back Biden’s bill, all but ruled out any bipartisan backing for the measure. She said that while Republicans are willing to move up from their initial $618 billion offer, Biden’s refusal to meet them will cost him GOP votes.

“What we’re looking at now is whether there are changes that we could make. But I would be surprised if there was support in the Republican caucus if the bill comes out at $1.9 trillion even if we’re able to make some beneficial changes,” she said.

The Hill’s Alexander Bolton caught up with Collins here.

In a nutshell: Collins’ comments are a blow to Biden’s unity campaign, but not entirely surprising. Biden and congressional Democrats have prioritized going big and moving early over getting Republicans on board with their rescue plan. Even so, it makes curbing Democratic defections essential and may give moderates more leverage to shape the bill before it hits the Senate floor. 

LEADING THE DAY

Powell: Rampant inflation ‘not a problem’ in recovery from COVID-19: Federal Reserve Chairman Jerome Powell said Tuesday that rampant inflation is “not a problem” to fear amid the recovery from the coronavirus recession.

Powell told members of a Senate panel that while technical factors and the release of pent-up savings may push prices higher when the pandemic subsides, it won’t be enough to reverse decades of downward pressure on inflation.

“We’ve averaged less than 2 percent inflation for more than the last 25 years,” Powell told the Senate Banking Committee, referring to the Fed’s annual inflation target.

“Inflation dynamics do change over time, but they don’t change on a dime, so we don’t really see how a burst of fiscal support or spending that doesn’t last for many years would actually change those inflation dynamics.”

The background: Powell has tried for months to dispel concerns about the potentially inflationary impact of trillions in fiscal and monetary support for the struggling U.S. economy. 

  • Republican lawmakers, some Wall Street analysts and even a handful of center-left economists have expressed fears that President Biden’s $1.9 trillion relief bill and Fed measures could overheat the economy as the pandemic eases.
  • While Powell has not taken a position on Biden’s bill, he’s consistently called for further aid and warned against underestimating the stimulus needed to recover from the pandemic-driven recession.

“Once we get this pandemic under control, we could be getting through this much more quickly than we had feared, and that would be terrific, but it’s not done yet the job is not done,” Powell said.

I’ve got more here.

The bigger picture: Powell’s appearance comes as both he and the White House have been on the defensive about the inflation risks posed by supporting the economy. 

ON TAP TOMORROW:

  • Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee at 10 a.m.
  • A House Small Business subcommittee holds a hearing on raising the minimum wage at 10 a.m.
  • The Senate Small Business Committee holds a confirmation hearing for Small Business Administrator-designate Isabella Guzman at 2:30 p.m.
  • A House Financial Services subcommittee holds a hearing on racial discrimination in lending at 3 p.m.

GOOD TO KNOW

  • Wally Adeyemo appears on track for a swift, uncontroversial Senate confirmation as the first Black deputy Treasury secretary following a laudatory reception at the Senate Finance Committee on Tuesday.
  • Sen. Bob Menendez (D-N.J.) on Tuesday reintroduced legislation that would require public companies to disclose the racial, ethnic, gender and veteran composition of their corporate boards and senior management. 
  • Congressional Black Caucus (CBC) leaders are prepared to push for Shalanda Young to lead President Biden’s budget office if his original pick Neera Tanden is unable to get confirmed, CBC Chairwoman Joyce Beatty’s (D-Ohio) office confirmed to The Hill.
  • IRS Commissioner Charles Rettig said Tuesday that the agency doesn’t have any current plans to extend the tax-filing deadline nationally after a group of House Democrats urged him to do so last week.
  • Sens. Mitt Romney (R-Utah) and Tom Cotton (R-Ark.) on Tuesday rolled out a proposal to increase the minimum wage to $10 an hour over four years and tighten enforcement on hiring undocumented workers.
  • The House this week is set to pass legislation that would expand LGBT protections, but Democrats are looking for help from the business community to get it through the Senate with GOP support.

ODDS AND ENDS

  • Former Treasury Secretary Steven Mnuchin is reportedly launching a new investment fund that is expected to be partially backed by reserves in the Persian Gulf region.
  • A group backed by billionaire conservative activist Charles Koch is launching a new ad campaign in 10 states urging lawmakers to vote down President Biden’s $1.9 trillion COVID-19 relief bill.
Tags Bob Menendez Charles Schumer Joe Biden Joe Manchin Jon Tester Joyce Beatty Mitt Romney Neera Tanden Steven Mnuchin Susan Collins Tom Cotton Wally Adeyemo

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