Happy Thursday and welcome back to On The Money. 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—Senate braces for a nasty debt ceiling fight: Republicans are digging in on the federal debt limit, warning Democrats that it will be up to them to avoid a default as President Biden pushes for trillions more in spending.
- GOP senators are taking a firm line as Democrats plot a path for their $3.5 trillion spending measure, which the party plans to pass with budget reconciliation rules that will prevent the GOP from blocking it with a filibuster.
- For that reason, Republican senators say they won’t lift a finger to help Democrats raise the debt ceiling.
“I’m not sure why there’s much of an incentive right now given what the Democrats are doing, trying to run roughshod over the minority in the Senate, to help them,” said Sen. John Thune (S.D.), the No. 2 Senate Republican.
The stakes: The government will reach its debt limit on July 31, though the Treasury Department will be able to shuffle funds for an additional period to prevent the U.S. from breaking the ceiling.
- Actually doing so would cause a severe disruption to markets and the economy, as the U.S. government would be unable to meet demands from its creditors and pay its bills.
- Trillion of dollars in Treasury bonds held by foreign governments and investors are underpinned by faith in the federal government’s ability to pay its bills. A default on the national debt could shatter that confidence and trigger a catastrophic financial crisis.
- Experts have said that the coronavirus pandemic is making it harder to estimate precisely when the U.S. would default on its obligations absent any action.
“There is so much spending that is going out in a relatively short period of time, and because there’s lots of uncertainty about when that spending is going out the door, it makes it even more difficult than usual to predict what spending patterns in August, September, October, etc. are going to look like,” said Shai Akabas, director of economic policy for the Bipartisan Policy Center, a nonpartisan think tank.
The Hill’s Naomi Jagoda, Jordain Carney and I have more here.
LEADING THE DAY
Democrats pushing for changes to bipartisan infrastructure deal: Senate Democrats are warning that they will ask for changes to an infrastructure deal being worked on by a bipartisan group of senators, as they try to get reassurances on key priorities.
- The bipartisan group is still working to finalize their deal, and resolve a remaining sticking point of transportation funding.
- But the requests from Democrats are an early sign of the hurdles the bill could face even if it is able to get the 60 votes needed to start debate.
What’s in play: A group of Democrats is pushing for assurances that the Drinking Water and Wastewater Infrastructure Act, a drinking water and sanitation bill that previously passed the Senate in an 89-2 vote, would be fully funded through the bipartisan group’s infrastructure bill.
Sens. Chris Murphy and Sen. Richard Blumenthal (D-Conn.) are pushing for more rail funding.
The Hill’s Jordain Carney updates us here.
Top Democrat presses IRS for improvements to web tool on child tax credit: Senate Finance Committee Chairman Ron Wyden (D-Ore.) on Thursday pressed the IRS for improvements to a web tool that allows low-income families to register for the new monthly child tax credit payments.
“If this inadequacy is not rectified, millions of American families could be denied the opportunity to provide a more secure future for their children and break the cycle of poverty for so many,” Wyden wrote in a letter to IRS Commissioner Charles Rettig.
- The IRS last week sent out the first batch of the monthly advanced child tax credit payments that were authorized by President Biden’s coronavirus relief law.
- The agency will make monthly payments on or near the 15th of each month through the end of the year. Families are eligible for monthly payments of up to $300 for each child under six and up to $250 for each child ages six to 17.
The issue: Families who filed 2019 or 2020 tax returns are receiving the monthly payments automatically. However, some families who are not required to file tax returns, typically because they have low incomes, need to use an IRS web tool to sign up for the payments. Democratic lawmakers and officials at nonprofits have also raised concerns the IRS web tool could be hard for non-filers to use because it is not mobile-friendly or available in Spanish.
Naomi explains here.
Housing prices hit new high in June, up 23 percent in year: The median sale price of an existing home rose to a record high of $363,300 in June as purchases broke a four-month streak of declines, according to data released Thursday by the National Association of Realtors (NAR).
- As home sales rose 1.4 percent last month, the median sale price of an existing home soared 23.4 percent in the year since June 2020 — just 0.2 percentage points below May’s record-setting annual increase.
- The median sale price of an existing home one year ago was $294,000.
A small increase in the housing supply helped sales increase for the first time since February, said NAR chief economist Lawrence Yun, but did little to cool the staggering rise in prices that suppressed sales earlier this year.
“Huge wealth gains from both housing equity and the stock market have nudged up all-cash transactions, but first-time buyers who need mortgage financing are being uniquely challenged with record-high home prices and low inventory,” Yun explained. “Although rates are favorably low, these hurdles have been overwhelming to some potential buyers.” I’ve got more here.
GOOD TO KNOW
- The Internal Revenue Service (IRS) is doubling down on warnings about the possibility of child tax credit scams.
- New applications for unemployment insurance rose last week after reaching a new pandemic low, according to data released Thursday by the Labor Department.
- White House senior adviser Anita Dunn will brief Democratic members of Congress on a messaging strategy surrounding President Biden’s agenda on Thursday as the Senate prepares to soon take up a sweeping $3.5 trillion budget bill with his priorities.
- The IRS says it has now delivered more than $400 billion in American Rescue Plan coronavirus stimulus checks.
ODDS AND ENDS
- Mercedes-Benz on Thursday became the latest car manufacturer to unveil plans for a greater investment in electric vehicles, saying that it hopes to transition to solely manufacturing electric vehicles by 2025.
- A number of businesses that condemned Georgia’s sweeping voting rights bill have since contributed thousands of dollars to supporters of the legislation after it was signed in March by Gov. Brian Kemp (R).