WASHINGTON — With Democrats already sniping at each other over the size of their budget deal, expect a lot of fights in the coming weeks over how much to spend and especially how to finance it.
Here’s the upshot for Democrats, according to a new analysis by the Wharton School at the University of Pennsylvania: The money is there. Under a straight reading of Biden’s own proposals for new taxes, revenue raisers and savings, there should be $4.2 trillion over the next decade to cover the $3.5 trillion budget framework.
But Democrats are unlikely to stick to Biden’s plan to the letter, so analysts used the Penn Wharton Budget Model to produce “medium” and “low” revenue scenarios as well.
“We mostly defined the ‘high’ option to be what we think the administration's most ambitious goals are,” John Ricco, Associate Director of Policy Analysis at PWBM, told NBC News.
The “medium” scenario is $1.8 trillion, which is technically the amount that Democrats could raise while still spending the full $3.5 trillion under the letter of the budget resolution. In practical terms, though, moderates could thwart attempts to spend too far beyond the pay-fors. The “low” is about $1 trillion, enough to finance a stripped-down compromise. There are also potential pay-fors outside the scope of their analysis.
Some areas already appear likely to fall short of Biden’s initial requests. Sen. Joe Manchin, D-W.V., has said he prefers a 25 percent corporate tax rate to Biden’s 28 percent (a $376 billion difference). There’s Democratic skepticism towards Biden’s call for taxing capital gains as regular income for high earners, which would set the top rate at 43.4 percent, as well as his plan to require heirs to large fortunes to pay taxes on the prior gains.
The PW analysis includes a 28 percent capital gains rate in its “medium” scenario ($128 billion less). There’s also a $300 billion-plus range of savings from potential drug pricing reform plans, an area where Democrats in areas with a strong pharmaceutical industry presence could resist more far-reaching changes.
What separates the high-end revenue generators from the lower ones is that they often require more significant changes to the underlying system, rather than just turning the dial on tax rates up a notch. That likely will take more political capital to pull off.
“The ‘low’ is tweaking around margins, it’s low-hanging fruit, it’s not any major reform to how things work,” Ricco said. “It’s when you get to the more fundamental reform aspects where there are clear winners and losers within industries and among types of taxpayers that it becomes more of an issue.”
So, for example, boosting IRS spending to audit high earners might raise up to $91 billion. But pairing it with new reporting requirements for banks to make it easier to spot taxable income could raise nearly half a trillion dollars. And Democrats might raise up to $728 billion by overhauling the way business profits abroad are taxed. No easy task, but the benefits are also clear: The more they raise, the more they can spend on items members want.
Biden to speak again on Afghanistan
At 1:00 p.m. ET, President Biden will deliver remarks at the White House on the U.S. evacuation efforts of Americans and Afghans from the country after the Taliban takeover.
Vice President Harris, who heads tonight on her trip to Singapore and Vietnam, also will be in attendance.
Three Texas Democrats return to Lone Star State, ending boycott
A month ago, we asked if Texas Democrats who fled to DC to deny state Republicans a quorum were only delaying the inevitable – since those kinds of escapes can’t last forever.
Well, it turns out they were.
“The Texas House of Representatives got back to work Thursday evening after three members returned to the House floor — ending the boycott that paralyzed the chamber for five weeks as Democrats sought to block a sweeping elections bill from passing,” NBC’s Jane Timm writes.
Maybe the bigger defeat for Dems: In the past month since those Texas Dems fled to DC, the national party hasn’t gotten any closer to passing federal legislation protecting voting rights.
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Data Download: The numbers you need to know today
Approximately 3,000: The number of people the Biden White House says were evacuated from Afghanistan on Thursday.
More than 1,200 per day: The average amount of children in U.S. hospitals with Covid as of Wednesday, four times the number from the beginning of July.
Three: The number of U.S. Senators who announced yesterday they tested positive for Covid after being vaccinated, bringing the total in recent weeks to four.
More than 40 million: The number of people exposed in the recent T-Mobile data hack.
37,483,226: The number of confirmed cases of coronavirus in the United States, per the most recent data from NBC News and health officials. (That’s 159,981 since yesterday morning.)
629,883: The number of deaths in the United States from the virus so far, per the most recent data from NBC News. (That’s 1,846 since yesterday morning).
51.1 percent: The share of all Americans who are fully vaccinated, per the CDC.
62 percent: The share of all American adults at least 18 years of age who are fully vaccinated, per CDC.