On The Money — Democrats confident cuts won’t water down bill
Happy Friday 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 are expressing confidence in a pared-down spending bill’s ability to resonate with voters. We’ll also look at Sen. Kyrsten Sinema’s (D-Ariz.) position on tax hikes and also examine a major anti-redlining action.
But first, a congressman is mad at Meghan, the Duchess of Sussex.
For The Hill, I’m Sylvan Lane. Write me at email@example.com or @SylvanLane. You can reach my colleagues on the Finance team Naomi Jagoda at firstname.lastname@example.org or @NJagoda and Aris Folley at email@example.com or @ArisFolley.
Let’s get to it.
Democrats brush off risks of paring down spending package
Democrats are brushing off the political risks of slashing their sweeping social spending measure, arguing voters will reward them for getting something done and not punish them because the legislation is smaller than the $3.5 trillion package that President Biden and his party had initially hoped to secure.
- The package now looks like it will top out at just $2 trillion and it appears it won’t include key components championed by progressives such as a clean electricity program and free community college.
- But Democrats say that getting something passed is better than nothing — and that they would surely be punished by voters if neither the social spending and climate bill nor a separate infrastructure measure already passed by the Senate failed to reach Biden’s desk.
“What will matter is that the bills are done,” Matt Bennett, executive vice president for public affairs at centrist Democratic think tank Third Way, said on a recent call with reporters. “When they are done, they are certain to be big and robust. I mean, we’re not talking about small measures here. Something in the neighborhood of $2 trillion is a lot of money, and so that will be plenty for Democrats to be able to run on.”
White House officials and Democrats on Capitol Hill are still steeped in negotiations around the measure in hopes of landing on a compromise that satisfies both moderates and progressives after Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) telegraphed their resistance to the original $3.5 trillion price tag and certain policies within the legislation.
Morgan Chalfant and Amie Parnes explain more here.
LEADING THE DAY
Sen. Kyrsten Sinema’s office on Friday outlined the senator’s opposition to raising tax rates, saying the Arizona Democrat thinks that just increasing rates “will not in any way address the challenge of tax avoidance or improve economic competitiveness.”
The statement comes as Democrats have been scrambling in recent days to figure out how to pay for their social-spending package given Sinema’s opposition to increasing tax rates on corporations and high-income individuals.
“Senator Sinema has been engaged for months in substantive, nuanced policy negotiations and is well-versed in the range of current tax proposals being considered,” Sinema spokesman John LaBombard said in a statement.
“She is committed to ensuring everyday families can get ahead and that we continue creating jobs,” LaBombard added. “She has told her colleagues and the president that simply raising tax rates will not in any way address the challenge of tax avoidance or improve economic competitiveness.”
Naomi decodes that for us here.
OUT OF LINE
Trustmark Bank to pay $5 million ‘redlining’ fine
Trustmark National Bank will pay $5 million in fines to federal regulators to settle allegations it actively avoided offering and marketing home loans to Black and Hispanic customers, federal officials announced Friday.
The Justice Department, Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) announced a joint consent order with Trustmark, accusing the bank of a pattern of “redlining” in the Memphis, Tenn., region.
- Redlining covers a broad range of techniques used by banks and lenders to avoid offering mortgage loans to non-white customers.
- While redlining historically involved explicit bans on loan offers to customers from majority Black or Hispanic neighborhoods, it can also include a failure to broadly market mortgage loans or make them easily available in those areas.
Federal officials alleged that between 2014 and 2018, Trustmark avoided locating branches in majority-Black and Hispanic communities, failed to assign a single loan office to majority-Black and Hispanic communities, failed to monitor its compliance with fair lending laws and discouraged home loan applications from Black and Hispanic borrowers.
THE PANDEMIC PINCH
US deficit hits $2.8 trillion, second largest in history
The Treasury Department said Friday that the federal deficit reached $2.8 trillion in fiscal 2021, the second largest deficit in history. The number, however, is down $360 billion from the record set during the previous fiscal year.
On Friday, the new budget report said governmental revenue totaled $4 trillion in fiscal 2021, up 18.3 percent from the previous year and exceeding previous projections forecast in the president’s budget.
The budget report accredited the increase in spending “to higher net individual and corporation income taxes from the improved economy.”
Aris has the details here.
Good to Know
Citigroup has agreed to undergo an independent racial equity audit, the bank announced Friday.
Here’s what else have our eye on:
- Which proposals will survive in the Democrats’ spending plan?
- The White House on Friday said using the National Guard to help deal with the supply chain issues is not currently being considered.
ON TAP NEXT WEEK
- The Senate Finance Committee holds a confirmation hearing for several Biden administration nominees at 9 a.m.
- A House Financial Services subcommittee holds a hearing on the risks posed by foreign securities issuers at 10 a.m.
- The Senate Banking Committee holds a hearing on the nominations of Reta Jo Lewis to be president of the Export-Import Bank and Elizabeth de Leon Bhargava to be assistant secretary of Housing and Urban Development at 10 a.m.
- The Senate Agriculture Committee holds a hearing on the nomination of Rostin Behnam to serve as chairman of the Commodity Future Trading Commission at 10 a.m.
- Consumer Financial Protection Bureau Director Rohit Chopra testifies before the House Financial Services Committee on the agency’s semiannual report to Congress at 10 a.m.
- The Joint Economic Committee holds a hearing on the labor market at 2:30 p.m.
- The Senate Small Business Committee holds a hearing on women entrepreneurs at 2:30 p.m.
- The Senate Special Committee on Aging holds a hearing on building a stronger retirement system at 9:30 a.m.
- Consumer Financial Protection Bureau Director Rohit Chopra testifies before the Senate Banking Committee on the agency’s semiannual report to Congress at 10 a.m.
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 next week.
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