Overnight Finance

On The Money — Democrats tee up Senate spending battles with GOP

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: Senate Democrats released several spending bills today and ignited several flights over federal funding. We'll also look at backlash to Biden's tax enforcement plan and why Republican lawmakers are willing to ride for Jerome Powell.

But first, Cam Newton is looking for a job.

For The Hill, I'm Sylvan Lane. Write me at slane@thehill.com or @SylvanLane. You can reach my colleagues on the Finance team Naomi Jagoda at njagoda@thehill.com or @NJagoda and Aris Folley at afolley@thehill.com or @ArisFolley.

Let's get to it.

Senate Democrats unveil remaining spending bills, teeing up clash with Republicans

Senate Appropriations Committee Chairman Patrick Leahy (D-Vt.) on Monday unveiled the remaining batch of spending bills for fiscal 2022.

  • The bills include funding for commerce, defense, financial services, homeland security, labor, interior, legislative branch, foreign operations and transportation.
  • The bills represent nine of the 12 total appropriations bills Congress has to consider to fund the upcoming fiscal year. The Senate Appropriations Committee advanced the other three spending bills for energy, agriculture and veteran affairs in early August.

Overall, the bills would include a 13 percent increase for nondefense discretionary programs and a 5 percent increase for defense-related programs, a move that has already drawn pushback from Republicans who say more funding is needed for defense spending.

The fault lines: Senate Minority Leader Mitch McConnell (R-Ky.) has warned that Republicans will block the appropriations bills in absence of a larger bipartisan spending deal in the 50-50 Senate. But to strike a deal, he has said there would need to be equal levels of growth on defense and nondefense spending.

Aris breaks it down here.

LEADING THE DAY

Democrats face growing storm over IRS reporting provision

Democrats are facing a firestorm of criticism over a proposal to increase the amount of bank account information reported to the IRS, posing a challenge as they craft their wide-ranging social spending bill.

  • The proposal is a top priority of the Biden administration, which argues it will help the IRS go after wealthy tax cheats. 
  • But it has come under a barrage of attacks from banks and Republicans, who say it raises significant privacy concerns. 
  • Financial institutions have been mobilizing their customers to speak out against the proposal to lawmakers.

Congressional Democrats are expected to make changes to the administration's initial proposal, but are generally supportive of the idea. The increasing attacks on the proposal has prompted lawmakers and administration officials to go on the defensive.

"Ultimately, the President's proposal seeks to pare back tax evasion by shedding some light on opaque sources of income that accrue disproportionately to the top 1 percent of earners," Natasha Sarin, deputy assistant secretary for economic policy at the Treasury Department, wrote Thursday in a post on the department's website.  

"As such, it is unsurprising that substantial resources are being deployed to defeat these efforts, because many tax cheats stand to lose from a fairer tax system," Sarin added. 

Naomi explains here.

NO PLACE TO HYDE

Senate Democrats ditch Hyde Amendment for first time in decades

Senate Democrats on Monday for the first time in decades left out an amendment from their annual government funding bills that blocks people from using Medicaid or other federal health programs to cover abortion services.

The provision, also known as the Hyde Amendment, was omitted from legislation to fund the Labor, Health and Human Services and Education (LHHS) Departments. The bill was unveiled by Senate Appropriations Committee Chairman Patrick Leahy (D-Vt.) on Monday afternoon.

  • The Hyde amendment bans the use of federal funds for abortions in most cases and has been included in annual government funding bills since it was introduced by then-Rep. Henry Hyde (R-Ill.) in the 1970s.
  • The bill also did not include the Weldon Amendment, which bars entities that don't want to provide abortion care from being denied federal dollars, as well as an amendment to block federal funds from being used for abortions specifically in Washington, D.C.

Still, the new LHHS spending bill faces an uphill battle in the Senate, where Democrats need to notch at least 10 Republican votes to pass the appropriations measure later this year.

THE PUNT FROM RED OCTOBER

Treasury to use extraordinary measures despite debt ceiling hike

Treasury Secretary Janet Yellen announced Monday that her department will continue to use extraordinary measures to prevent the accrual of debt after Congress provided "only a temporary reprieve" to a potential default.

In a Monday letter to congressional leaders, Yellen wrote that while a recent increase to the debt ceiling will likely keep the U.S. solvent through Dec. 3, "it is imperative that Congress act to increase or suspend the debt limit in a way that provides longer-term certainty that the government will satisfy all its obligations."

  • President Biden signed Thursday a bill to increase the federal debt limit by $480 billion, which Yellen said "provides a high degree of confidence" that Treasury will be able to pay expenses as they come due until Dec. 3. 
  • A short-term deal to fund the federal government will also lapse then, setting up a potential dual fiscal crisis less than three weeks before Christmas.

I try to explain why this is happening here.

Good to Know 

Republicans are signaling that they will help bail out Jerome Powell if he's renominated to lead the Federal Reserve amid opposition and skepticism from progressives. 

Here's what else have our eye on:

  • More than 300,000 women exited the labor force last month, even as the nation saw tens of thousands of jobs added to the economy overall, an analysis from the National Women's Law Center (NWLC) shows.
  • Democrats are ramping up pressure on President Biden to act on student loan forgiveness as he struggles to bring a divided party together around his 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.

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