“The Biden administration is asking for billions of dollars for ‘urgent’ extreme weather recovery efforts and the resettlement of Afghan refugees in its proposal to keep the government funded past September 30,” CNN reports.

Politico: “Those special requests will increase the political pain for any lawmaker planning to oppose the funding patch Congress needs to pass this month to keep government agencies open beyond Sept. 30. Top Democrats have also been flirting with the idea of adding action on the debt limit to that package, a move that would further squeeze Republicans who have pledged zero cooperation as the Treasury Department nears a breaking point on the nation’s borrowing limit.”

“The combination would present a triple threat, daring GOP lawmakers to go on record in opposition to aid for disaster-hit communities, staving off a debt default that could throw financial markets into chaos and preventing a government shutdown.”

“Why?”

— Speaker Nancy Pelosi (D-CA), responding to a reporter who suggested she would need to downsize the $3.5 trillion reconciliation bill to accommodate moderates.

Punchbowl News: “As the brutal behind-the-scenes brawl plays out over the Democrats’ $3.5 trillion reconciliation package, Rep. Thomas Suozzi of New York is warning once again that he and a group of blue state Democrats won’t support any legislation that fails to restore the full deduction for state and local taxes (SALT) eliminated by the 2017 GOP tax bill.”

Said Suozzi: “No SALT, no deal. I’m pushing for full repeal.”

“Progressive Democrats, who had hoped unified party control of the government could spur transformative tax increases on multinational companies and wealthy individuals, look like they will have to settle for a more modest outcome,” the Wall Street Journal reports.

“Tax-code changes moving through Congress this month would still likely raise more than $1 trillion over a decade and reverse many Trump-era changes to help fund an expanded social safety net. Key pieces remain unresolved, and progressive activists hope Democrats can be swayed by last-minute pressure campaigns and the party’s desire to unite behind President Biden.”

Punchbowl News: “There are 24 days until the federal government runs out of money. Will an all Democratic-run Washington allow the government to shut down? We don’t see that happening, but we don’t feel terribly confident about the direction things are heading in either.”

“Why? Because the White House and Democratic congressional leaders have been insistent that they’ll attach a debt ceiling increase to the must-pass government funding bill. Republicans, especially Senate Minority Leader Mitch McConnell, have vowed to oppose this approach. And there’s been no progress on the issue as of now.”

“In their initial rollout, Democratic leaders said the plan would be fully offset with higher taxes on companies and wealthy households along with spending reductions, such as letting Medicare negotiate for lower drug prices,” the Wall Street Journal reports.

“But as they confront detailed choices, senior lawmakers have begun suggesting that the intraparty consensus on taxes might not provide enough money. That scenario could prompt them to increase federal borrowing or pare back spending ambitions.”

“The imminent choices are likely to inflame already-high tensions between the party’s centrist and liberal wings, which both must back the legislation to muscle it through Congress without GOP support.”

“Executives of hedge fund Renaissance Technologies LLC will personally pay as much as $7 billion in back taxes, interest and penalties to settle a long-running dispute with the Internal Revenue Service, the firm said, a tax settlement that may be the largest in history,” the Wall Street Journal reports.

“Democrats are hustling to finalize their gigantic social spending plan during the dog days of summer recess, wary they will blow their target date to finish as Congress faces a crush of deadlines later this month,” Politico reports.

“Speaker Nancy Pelosi has ordered committee leaders to battle it out with their Senate counterparts to resolve all major disputes this week on what will be included in the up-to-$3.5 trillion bill. But wide gulfs remain between the House and Senate on central pieces of the package, including expanding Medicare, shoring up Obamacare, raising taxes and curbing carbon emissions.”

“Social Security will have to cut benefits by 2034 if Congress does nothing to address the program’s long-term funding shortfall,” CNN reports.

“That’s one year earlier than reported last year. By that time, the combined trust funds for Social Security will be depleted and will be able to pay only 78% in promised benefits to retirees and disabled beneficiaries.”

Jonathan Chait: “Biden campaigned on a proposal to increase taxes on the wealthy by roughly $3.5 trillion over a decade. Nobody in Washington currently believes he will sign a tax hike anywhere close to that magnitude. The current predictions floating around — Politico’s tax newsletter is one publication that has used this estimate — peg the total at around a trillion, give or take.”

“The most striking thing about the decision by moderate Democrats to scale back Biden’s plan by some three-quarters is that we have no idea what the rationale is.”

Politico: “Senate Republicans are digging in deeper and deeper in their resistance to raising the nation’s borrowing limit, with 46 of them vowing to oppose an increase this fall that will need at least 10 Republican votes. Yet Democrats still plan to burn their most expedient ticket out of the debt mess, with no intention to shift course and pass an increase along party lines.”

“Their move to pass a budget resolution without tackling the debt ceiling, completed last week, adds a perilous deadline to Democrats’ season full of lofty promises on infrastructure and social spending. It’s not only the majority party facing a fall challenge, however: Republicans will have to actually block a debt ceiling increase instead of just talking about it.”

Bloomberg: “Moderate and progressive Democrats are on a collision course over how to pay for President Joe Biden’s economic agenda, a disagreement that has the potential to stall the legislation or sink it entirely.”

“Moderates want a smaller overall package of tax increases and are hesitating on some of Biden’s plans. Progressives view a total rewrite of the tax code as a moral imperative in order to fund social programs and climate measures as well as address a widening wealth gap.”

Said House Ways and Means Chairman Richard Neal (D-MA): “Sometimes in congressional life people want their dessert without having their vegetables. That generally doesn’t work with revenue.”

Punchbowl News: “This is quite interesting: Senate Budget Committee Chair Bernie Sanders (I-VT) is traveling to Republican-held areas in Iowa and Indiana to hold town hall meetings in support of the Democrats’ $3.5 trillion reconciliation plan, according to a source familiar with the situation.
Sanders will be in Indiana on Aug. 27, and Iowa on Aug. 29.”

“Sanders is targeting districts where the Trump vote grew in 2020, arguing that the massive package Democrats are putting together will have huge benefits for middle-class Americans in those states, especially working families.”

“Nearly 61% of U.S households paid no federal income taxes during pandemic-stricken year of 2020, because of declines in income and boosts to government subsidies that wiped away tax liabilities,” Bloomberg reports.

“The 60.6% proportion for last year compares with 43.3% over the five years before the pandemic struck.”

“Democrats are betting Republicans will blink and agree to raise the debt ceiling before it expires, a risky wager after a weeks-long standoff that threatens the health of the financial markets and continued U.S. government operations,” Bloomberg reports.

“Should market turmoil and a federal shutdown ensue this fall, it could overshadow Democrats’ efforts to push through President Joe Biden’s $4.1 trillion economic agenda and serve a blow to the party heading into next year’s midterm elections.”

HuffPost: “Union members could benefit from a tax break that Democrats are considering as part of their new $3.5 trillion budget plan.”

“Labor groups are pushing lawmakers to include a provision that would allow workers to deduct the cost of union dues from their taxable income. Such a tax break could defray the cost of union membership and, the thinking goes, encourage more workers to join unions.”

ProPublica: “In the first year after Trump signed the legislation, just 82 ultrawealthy households collectively walked away with more than $1 billion in total savings, an analysis of confidential tax records shows.”

“Republican and Democratic tycoons alike saw their tax bills chopped by tens of millions, among them: media magnate and former Democratic presidential candidate Michael Bloomberg; the Bechtel family, owners of the engineering firm that bears their name; and the heirs of the late Houston pipeline billionaire Dan Duncan.”