Overnight Finance

On The Money — Will the billionaire tax survive Joe Manchin?

Happy Wednesday 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: Uncertainty clouds the future of the Democratic tax plan as Biden rushes to reach a deal before heading abroad.

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

Manchin dampens progressive hopes for billionaires tax

Democratic hopes of including a new tax on the super-wealthy to help pay for their social spending package were fading on Wednesday as centrist Sen. Joe Manchin (D-W.Va.) said he was uncomfortable with the idea.

  • The spending bill looks like it will still include some changes to the tax code, such as a 15 percent minimum corporate tax that Manchin has voiced support for.
  • But the billionaires tax itself seemed to be on life support given his opposition. Sen. Kyrsten Sinema's (D-Ariz.) reluctance to hiking tax rates had poured even more cold water on another left-wing goal.

"Every sensible revenue option seems to be destroyed," Senate Budget Committee Chairman Bernie Sanders (I-Vt.) told reporters Wednesday. "Should we raise corporate tax rates, personal income tax rates for the very wealthy? Of course we should, but at least one person in the caucus doesn't want to do that. Should we demand that the billionaires pay their fair share in taxes? Yes. There's another person who doesn't want to do that."

The Hill's Hanna Trudo has the latest here.

The background: The proposal unveiled by Senate Finance Committee Chairman Ron Wyden (D-Ore.) would tax the investment gains by billionaires annually, a shift from present law that only taxes such gains when an investment is sold. Any individual making more than $100 million per year for three years in a row or anyone who has $1 billion in collective assets would be covered by the tax.

Mike Lillis has the latest from Capitol Hill here.

Naomi breaks down the proposal itself here.


White House still thinks spending deal could be made before Europe trip

White House press secretary Jen Psaki said Wednesday that it is still possible President Biden could make a deal with congressional Democrats on his economic agenda before he leaves for Europe on Thursday. 

"Yes, we'll see," Psaki told reporters when asked if the timing is still realistic to come to an agreement on a sweeping social spending package. 

"It's 1:30 p.m., so we still have some time. The president would like a bill before he leaves for Europe," she added.

The context: The president met with moderate Democratic Sens. Joe Manchin (W.Va.), and Kyrsten Sinema (Ariz.) late Tuesday, and the White House said the three made progress without specifying any concrete agreements. 

Psaki told reporters on Wednesday that a deal is "very close" and noted that Democratic lawmakers are also "conveying a similar tone."

But there were few signs of progress toward that deal on the Hill today. 

The House Rules Committee will discuss portions of President Biden's massive social spending package on Thursday, the same day the president is set to head to Europe for a high-stakes global climate summit, Speaker Nancy Pelosi (D-Calif.) announced Wednesday afternoon.

Yet there remains no agreement on key elements of the nascent legislation, let alone a final legislative text, as liberals and moderates continue to joust over the enormous package's size and scope and how to pay for it. 

Biden officials stand by IRS proposal 

Biden administration pushing to include IRS proposal in spending bill despite criticism

The Biden administration is still working to include a version of its IRS bank-reporting proposal in Democrats' social spending package, according to an administration official, following criticism about the proposal from Sen. Joe Manchin (D-W.Va.) and several other Democratic lawmakers.

  • The administration official said there are efforts to adjust the proposal so that it focuses on taxpayers making over $400,000, and that negotiators are looking at whether a carve out could be created for those with income under that threshold.
  • The administration earlier this year proposed requiring financial institutions to report on existing IRS forms the total amount of money that came into a bank account during a year and the total amount that came out of it. 

The proposal is aimed at strengthening the IRS's ability to conduct enforcement on high-income taxpayers, and its proponents say it would raise revenue to help finance Democrats' spending priorities. But banks, GOP lawmakers, and now a growing number of moderate Democrats have criticized the proposal as intrusive. Naomi breaks it down here.


Consumer bureau chief bashes FTC and pledges focus on tech giants, big firms

Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra found rare common ground with Republicans on Wednesday over efforts to address market-shifting actions by tech giants.

Chopra told the House Financial Services Committee during a hearing that the CFPB would "focus most of its resources on the largest firms that are engaged in nationwide harm," instead of smaller companies less capable of fighting back.

"One of the things that drives me a little crazy is when federal agencies don't focus their efforts on nationwide or systemic or severe harm," said Chopra, a progressive Democrat, referring to the Federal Trade Commission (FTC). 

  • Chopra served as an FTC commissioner from 2018 until his confirmation as CFPB director earlier this month.
  • His criticism of fellow FTC commissioners for what he considered insufficient penalties for major tech companies drew high praise from Silicon Valley critics in both parties while alienating several of his colleagues.

I have more here.

Good to Know

Business groups are on the verge of cutting corporate tax increases out of Democrats' multitrillion-dollar social spending package in what would be a significant lobbying victory that seemed improbable just a few weeks ago. 

Here's what else have our eye on:

  • The National Retail Foundation (NRF) announced on Wednesday that the upcoming holiday season has the potential to break previous records, with holiday sales expected to increase by as much as 10 percent from last year.
  • House Democrats on Tuesday reintroduced a Social Security reform bill, which calls for extending the program's depletion date to give lawmakers more time to devise plans to maintain the long-term solvency of the trust funds, among other proposals.

A record amount of people are now saying that it is a good time to find a quality job, according to a new poll released by Gallup on Wednesday.

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.