“Joe Biden won the Democratic presidential nomination running as a moderate, rejecting the big-government plans of progressive rivals as unaffordable,” the Wall Street Journal reports.
“In the general election campaign, he has rolled out his own multitrillion-dollar platform that a new study finds would push long-term Washington spending to its highest level in decades.”
Playbook: “House Democratic leadership met in the Capitol for the first time in a while Monday evening, and they began to confront what many of them see as an only-in-a-Trump-presidency question: If Donald Trump loses, will he lash out and do something dramatic, like shut down the government?”
“The scenario was raised in the closed-door, no-staff meeting by Connecticut Democratic Rep. Rosa Delauro, and it’s more than a passing political hypothetical. It’s a real-life governing challenge that Democrats believe they are being forced to confront in the coming days.”
“Speaker Nancy Pelosi is working with Treasury Secretary Steven Mnuchin and Senate Majority Leader Mitch McConnell on how long to fund the government for after Sept. 30.”
Treasury Secretary Steven Mnuchin told CNBC that lawmakers should not allow fears over the size of the federal deficit or the Federal Reserve’s balance sheet to delay additional Covid-19 relief.
New York Times: “More than a month after Mr. Trump signed an executive memorandum to defer the collection of the payroll taxes that workers pay to help fund Social Security, few companies or people are taking part. Trade groups and tax experts say they know of no large corporations that plan to stop withholding employees’ payroll taxes this fall. As a result, economic policy experts now say they expect the deferral to have little to no effect on economic growth this year.”
Wall Street Journal: Some large employers reject Trump’s payroll tax deferral plan.
Playbook: “The government is slated to shut down in 22 days, and color us skeptical of all the ‘we-decided-not-to-shut-it-down’ talk from Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin. Does anyone actually actively plan to shut down the government? If the two sides don’t get an agreement, are we to believe that after all of the back and forth and calls for a Covid relief deal, Democrats are just gonna fold and agree to a clean government funding bill? And Republicans are going to give up on their priorities, too? Just weeks before an election? We’re not predicting a shutdown. We’re just saying that we don’t think we’ve seen the last frame of this movie yet — nor do many in the Capitol and White House.”
“As of right now, Senate Republicans are working behind the scenes to see if they can get 51 votes for a “skinny” Covid bill that they hope to release this week. That bill will include an extension of the PPP, more enhanced unemployment and money for schools and day care. The inability to get 51 GOP votes would be a big defeat for the White House and Senate GOP leadership. At this moment, the leadership is trying to find a sweet spot in policy that would get them 51 votes — and there’s no guarantee that will happen.”
“Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have agreed to work to avoid a government shutdown right before the election, and not let the stalemate over virus-relief legislation hold up a vital stopgap spending bill,” Bloomberg reports.
“Their informal agreement was made in a Tuesday phone call… While clearing the way for the government to keep running at the Oct. 1 start of the fiscal year, it doesn’t resolve the standoff over a new stimulus or whether some relief measures might be included.”
“We’re probably about three months or so away from the entire Republican Party, the conservative movement, the business press and many commentators becoming obsessed with deficits, inflation and tightening monetary policy.”
— Chris Hayes, on Twitter.
“U.S. government debt is on track to exceed the size of the economy for the 12 months ended Sept. 30, a milestone not hit since World War II that has been brought into reach by a giant fiscal response to the coronavirus pandemic,” the Wall Street Journal reports.
Playbook: “We should all begin to focus our attention on the end of this month and the fiscal stimulus/government funding mess that awaits Washington — because it is massive, can easily go off the rails and is very far from being figured out.”
“As we’ve mentioned a few times, government funding runs dry Sept. 30. Because Congress is Congress, and the Trump White House is the Trump White House, Covid relief remains unfinished as well.”
“These two discussions — government funding and Covid relief — will be paired this month, and it seems almost inevitable that they get wrapped into one package, which should pass by the end of the month. Our confidence level is low that this will happen without major turbulence, and perhaps a government shutdown. In other words, this is real, so brace for impact.”
“The U.S. government will implement an across-the-board payroll tax deferral for about 1.3 million federal employees starting in mid-September, potentially forcing these workers to take a temporary financial boost now that they will have to repay next year,” the Washington Post reports.
“The policy, confirmed Monday by a senior administration official, comes in response to a widely panned policy directive issued by President Trump earlier in August. Unions have sharply criticized the government’s decision, fearing federal workers may not have a choice in whether to take the deferral — resulting in them receiving smaller paychecks in 2021 until the past-due taxes are paid off.”
“The federal government’s ability to pay Social Security benefits could stop by mid-2023 if President Donald Trump were to permanently terminate the payroll tax and not offer another revenue source,” NBC News reports.
Joe Biden told told ABC News that he “will raise taxes for anybody making over $400,000,”adding, “no new taxes” would be raised for anyone making under $400,000.
“A raft of big-name business groups is warning many employers won’t participate in President Trump’s payroll tax deferral plan,” Politico reports.
“Calling it ‘unworkable,; they said in a letter Tuesday to Treasury Secretary Steven Mnuchin that it risks saddling their workers with large postponed tax bills they could have trouble paying back.”
“President Trump’s gambit to defer Social Security payroll taxes for the rest of the year and pressure Congress into forgiving them is turning into a logistical challenge, with its rollout complicated by his own unclear statements about the plan,” the Wall Street Journal reports.
Said Trump: “We’ll be terminating the payroll tax after I hopefully get elected.”
“He then said the government could use general taxes and strong economic growth to cover any shortfall in the Social Security trust fund, which is largely funded by the payroll tax.”
Meanwhile, the AP reports that the U.S. Chamber of Commerce thinks Trump’s plan is unworkable.
Axios: “President Trump is trying to lure Joe Biden into a Walter Mondale trap — attempting to force the Democratic nominee to embrace middle-class tax increases as part of his election strategy.”
“With his Saturday evening executive action to unilaterally rewrite the tax code, Trump again is demonstrating the lengths to which he’ll go to change the conversation — and try to make the election a choice between him and Biden, and not a referendum on him.”
“In Biden’s response, he didn’t take the bait. Instead, he used the White House effort to suspend payroll taxes as a way to double down on his appeal to seniors and cast himself as the defender of Social Security.”
The Trump administration and Democrats have not agreed to any “top-line numbers” and remain “trillions of dollars apart” on coronavirus stimulus negotiations, Axios reports.
Sen. Rand Paul (R-KY) tore into his fellow Republicans on Fox News for considering a coronavirus relief package that could cost more than $1 trillion.
Said Paul: “I am very upset with my colleagues. They went 8 years. They should apologize now to President Obama for complaining he was spending and borrowing too much. He was a piker compared to their borrowing and what they’re doing now.”
Axios: “Paul’s comments, while tongue-in-cheek, underscore the divisions within the Senate Republican conference, where as many as 20 GOP senators are likely to vote against any coronavirus relief bill — even if a deal is reached between Democrats and Trump administration.”
Washington Post: “From the presidentially ambitious Sens. Ted Cruz (R-TX) and Josh Hawley (R-MO), to onetime deficit hawks like Sen. Patrick Toomey (R-PA), conservatives are abandoning the president as his top aides struggle with negotiations on a pandemic relief bill that is Trump’s last, best chance to pass legislation that could help his floundering reelection bid.”
“Ignoring their own record of support for adding trillions of dollars to the national debt, these conservatives have signaled that they think, in a post-Trump Republican Party, that deficits will return to the forefront just as they did in the first years of the Obama administration.”
Taegan Goddard is the founder of Political Wire, one of the earliest and most influential political web sites. He also runs Political Job Hunt, Electoral Vote Map and the Political Dictionary.
Goddard spent more than a decade as managing director and chief operating officer of a prominent investment firm in New York City. Previously, he was a policy adviser to a U.S. Senator and Governor.
Goddard is also co-author of You Won - Now What? (Scribner, 1998), a political management book hailed by prominent journalists and politicians from both parties. In addition, Goddard's essays on politics and public policy have appeared in dozens of newspapers across the country.
Goddard earned degrees from Vassar College and Harvard University. He lives in New York with his wife and three sons.
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