Happy Wednesday and welcome back to On The Money, where we’re officially switching our endorsement for the next “Jeopardy!” host to LeVar Burton. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Biden says compromise ‘inevitable’ on infrastructure plan: President Biden said Wednesday that compromise on his infrastructure and jobs proposal is “inevitable” but insisted that inaction was not an option.
“Compromise is inevitable, changes are certain,” Biden said in remarks from the White House. “We’ll be open to good ideas and good faith negotiations. But here’s what we won’t be open to. We will not be open to doing nothing. Inaction simply is not an option.”
Biden’s next steps:
- The White House says that Biden plans to meet with Republicans and Democrats after they return to Washington next week on how to move forward.
- Biden specifically said Tuesday he is open to negotiation on how to pay for the package, after Republicans and Sen. Joe Manchin (D-W.Va.) expressed opposition to his proposal for a hike in the corporate tax rate to 28 percent.
Biden’s proposal has been met with a swell of opposition from Republicans, who argue that the plan is too expensive and includes too many provisions that are not infrastructure. Republicans have also vehemently opposed the proposed corporate tax hike, saying it would push businesses out of the U.S. and hurt American companies. The Hill’s Morgan Chalfant brings us up to speed here.
What happens from here: Sen. Chris Coons (D-Del.), a Biden ally on Capitol Hill, suggested during an interview with Punchbowl News Tuesday that Democrats and Republicans may be able to coalesce around a smaller package and not necessarily cover the entire cost.
Even so, Coons said that while a bipartisan deal would be better late than never, Republicans can’t make Biden wait forever.
“I believe President Biden is open to spending the next month negotiating what that possibility is,” Coons said. “There is also, though, a real sense of urgency.” The Hill’s Niv Elis explains here.
Treasury lays out Biden tax plan: Though the final infrastructure bill is likely to change, The Treasury Department on Wednesday released a report detailing Biden’s proposals to increase corporate taxes to fund infrastructure investments.
- Department officials said the proposals would raise about $2.5 trillion over 15 years and fully offset the cost of the new infrastructure spending.
- During a call with reporters, Treasury Secretary Janet Yellen argued that the plan will be beneficial for both the federal government and businesses.
“Tax reform is not a zero-sum game, with corporations on one side and government on the other. There are policies that are mutually beneficial,” Yellen said. “Win-win is a very overused phrase, but we have a real one in front of us now.”
Under Biden’s plan, “America will compete on our ability to produce talented workers, cutting-edge research and state-of-the art research, not on whether we have lower tax rates than Bermuda or Switzerland,” Yellen said. The Hill’s Naomi Jagoda breaks it down here.
Democrats jockey over tax hikes: Of course, what tax policies actually make it into the law are up in the air and the subject of lots of internal discussion among Democrats.
- Reaching consensus on taxes will be among the top challenges for Democrats as they work to enact an infrastructure and jobs package in the coming months.
- Democrats will need to craft legislation that can get near-universal support in the party, since Republicans have signaled that they will oppose any measure close to what Biden proposed.
Naomi tells us what’s on the table here.
LEADING THE DAY
IRS: Stimulus checks on the way to beneficiaries of Social Security: The Treasury Department announced Wednesday that the IRS has distributed 156 million direct payments under President Biden’s COVID-19 relief bill after sending $36 billion to another roughly 25 million households.
The latest round of stimulus payments will begin arriving in bank accounts and mailboxes Wednesday, the IRS said, with the vast majority of payments heading to beneficiaries of Social Security and other federal programs.
- More than 19 million payments within the new batch will go to recipients of Social Security retirement, survivor or disability benefits,
- 3 million will go to Supplemental Security Income beneficiaries,
- And 85,000 payments will go to Railroad Retirement Board beneficiaries.
Treasury’s announcement means severely delayed relief should soon be in the hands of some of the most financially vulnerable Americans. The Social Security Administration’s weeks-long holdup in providing new income information to the IRS for federal beneficiaries kept millions of households that depend on the government to get by from receiving additional relief.
Biden to unveil 2022 spending request Friday: The Biden administration is set to unveil its proposed top-line spending numbers for the 2022 government budget on Friday, after a brief delay.
- The discretionary proposal, which is expected to be short on details, will include proposed spending figures for defense as well as non-defense funding.
- Budget watchers expect the defense figures to stay relatively stable, while the other spending covers every other government agency, ranging from Agriculture to Housing and Urban Development to Education to the State Department.
- The proposal, which in recent years has amounted to approximately $1.4 trillion, will allow Congress to kick off of its annual appropriations process.
Niv tells us what to expect here.
GOOD TO KNOW
- The Group of 20 (G20) countries anticipate reaching an agreement on international tax issues, including a global minimum corporate tax rate, by July, Italian Finance Minister Daniele Franco said Wednesday.
- And top International Monetary Fund (IMF) officials on Wednesday lent support to key aspects of President Biden’s corporate tax proposals, including raising the rate and implementing a global minimum.
- JPMorgan Chase President and CEO Jamie Dimon predicted Wednesday that a post-pandemic U.S. economic expansion may stretch “well into 2023” with the proper federal investments.
- A major U.K. bank is moving hundreds of staffers to work-from-home positions on a permanent basis after more than 70 percent of the bank’s 1,800 call center employees volunteered to do so.
ODDS AND ENDS
- The U.S. trade deficit rose to its highest monthly level on record in February, hitting $71.1 billion, a 4.8 percent increase from the previous record set in January.
- Commerce Secretary Gina Raimondo said Wednesday reviews are ongoing about how the Biden administration will address Chinese companies Huawei and TikTok.