Happy Monday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup.
Today’s Big Deal: Democrats raising the stakes over the game of fiscal chicken. We’ll also look at how Wall Street is reacting to a worrisome work for global markets and President BidenJoe BidenOvernight Energy & Environment — Presented by American Clean Power — Methane fee faces negotiations White House rejects latest Trump claim of executive privilege The No Surprises Act: a bill long overdue MORE’s pressure on taxes.
But first, some social justice-adjacent ice cream news.
For The Hill, I’m Sylvan Lane. Write me at firstname.lastname@example.org or @SylvanLane. You can reach my colleagues on the Finance team Naomi Jagoda at email@example.com or @NJagoda and Aris Folley at firstname.lastname@example.org or @ArisFolley.
Let’s get to it.
Democrats aim to suspend debt limit with bill to avoid government shutdown
House Democrats will combine a short-term government spending bill with a suspension of the debt limit, a package slated to hit the floor this week, Speaker Nancy PelosiNancy PelosiDemocrats face critical 72 hours Equilibrium/Sustainability — Presented by Southern Company — 'Too late to evacuate' after wildfire debris Greene fined a third time for refusing to wear mask on House floor MORE (D-Calif.) announced Monday.
- In a joint statement with Senate Majority Leader Charles Schumer (D-N.Y.), Pelosi said they will suspend the debt limit until the end of 2022.
- That timeline, the leaders said, reflects the $908 billion COVID-19 relief package approved by both parties in December, when former President TrumpDonald TrumpYoungkin ad features mother who pushed to have 'Beloved' banned from son's curriculum White House rejects latest Trump claim of executive privilege Democrats say GOP lawmakers implicated in Jan. 6 should be expelled MORE was still in office.
The move comes after weeks of debate over the best way to hike the government's borrowing limit and prevent a default in the face of opposition from Senate Republicans, who are threatening to oppose the measure to protest President Biden's spending plans.
By combining the debt limit increase with the continuing resolution, which will extend government funding into December, Pelosi is daring Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellBiden says he's open to altering, eliminating filibuster to advance voting rights Pelosi says GOP senators 'voted to aid and abet' voter suppression for blocking revised elections bill Manchin insists he hasn't threatened to leave Democrats MORE (R-Ky.) to sink the package and risk a government shutdown on Oct. 1.
The Hill’s Mike Lillis explains here.
The background: Congress has until Oct. 1 to pass a short-term funding bill to avert a shutdown and a few as two weeks after that to raise the federal debt limit. While Republicans are expected to support the former, they’ve ruled out supporting a debt ceiling increase and want to make Democrats do it through the budget reconciliation process, which would eat up floor time and snarl their massive spending bill.
Senate Minority Leader Mitch McConnell (R-Ky.) made that crystal clear in remarks on the Senate floor shortly after Pelosi and Schumer’s announcement.
"Senate Republicans would support a clean continuing resolution that included appropriate disaster relief and targeted Afghan assistance. We will not support legislation that raises the debt limit," McConnell said from the Senate floor.
So, what happens now? Barring Republicans abandoning their position en masse for some untold reason, the bill set to pass the House will likely die in the Senate, meaning Congress will need to pass a “clean” CR some time before October. After that point, who knows?
Read more about the battle over the debt limit: Five questions and answers about the debt ceiling fight
LEADING THE DAY
Stocks sink as debt ceiling standoff, global threats spook Wall Street
Stocks closed with losses Monday as wide-ranging concerns about the sturdiness of the economy drove a broad selloff on Wall Street.
- The Dow Jones Industrial Average closed with a loss of 593 points Monday, falling 1.7 percent after being down as much as 900 points earlier.
- The Nasdaq composite closed with a loss of 2.2 percent and the S&P 500 index closed with a loss of 1.7 percent, each also recovering ground before the closing bell.
- Investors and analysts attributed Monday’s selloff to a whirlwind of concerns weighing on the global economy, including the potential economic impact of the delta variant and how it could affect the Federal Reserve’s plans to taper stimulus.
- The rolling collapse of Chinese real estate giant Evergrande, which investors fear could cause a broader credit crunch in China, also loomed over the market.
“Investors have been itching for a meaningful pullback in the stock market. Now, we might finally be getting one,” wrote Lindsey Bell, chief investment strategist for Ally Invest.
A TAXING TIME
Biden pushes back at Democrats on taxes
President Biden is pushing to prevent congressional Democrats from scaling back his tax proposals, as lawmakers work on a $3.5 trillion social spending package aimed at advancing the president's economic agenda.
- The White House and congressional Democrats both want to raise taxes on the wealthy and corporations, and strengthen tax enforcement, to pay for investments in areas such as child care, health care and climate.
- But the legislation that the House Ways and Means Committee approved Wednesday raised some taxes by less than Biden had previously proposed, and left out some of Biden's proposals altogether.
It remains to be seen whether the administration can get lawmakers to be more aggressive on tax increases and enforcement, given Democrats' narrow majorities in Congress. Naomi explains why here.
NO PLACE LIKE HOME
Biden administration launches new national initiative to fight homelessness
The Biden administration on Monday launched a new national initiative to fight homelessness, which will work with local governments to help those suffering from the national housing crisis.
The initiative, dubbed “House America,” will call on city, county, state and tribal government leaders throughout the country to publicly vow to decrease homelessness in their areas.
The federal government will then provide guidance and support to help local jurisdictions supply permanent housing for individuals experiencing homelessness and construct new affordable housing options for people who are struggling, according to Bloomberg
Good to know
The pharmaceutical industry is on the verge of defeating a major Democratic proposal that would allow the federal government to negotiate drug prices.
Here’s what else have our eye on:
- A group of Senate Democrats is calling on the Federal Trade Commission (FTC) to develop new rules to protect data privacy amid stalled progress on a national framework.
- The progressive group Tax March on Monday announced that it is leading a new $2 million campaign aimed at pressing GOP lawmakers in key states and districts to back President Biden's economic agenda.
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.