Tag Archives: Congressional Budget Office

U.S. infrastructure deal teeters after Republicans reject IRS funds

By Jarrett Renshaw and David Morgan

WASHINGTON (Reuters) -The White House and U.S. congressional negotiators are scrambling to salvage a $1.2 trillion bipartisan infrastructure deal after Republicans balked at funding to enforce existing tax laws – a key way to pay for the plan – leaving both sides searching for a way forward.

Senators and Biden administration officials still hope to hammer out the deal, including a plan to finance it, for a Senate vote on Wednesday, but both parties were growing increasingly skeptical Tuesday.

“(It’s) hard to think there will be a bill by the time we vote tomorrow,” Republican Senator Bill Cassidy, one of the bipartisan infrastructure negotiators, told Reuters. “There’s still more issues,” he said, including how the Congressional Budget Office scores the bill’s impact on U.S. federal finances.

White House press secretary Jen Psaki said on Tuesday that the president supports Senate Majority Leader Chuck Schumer’s plan to take a procedural vote to move to a debate on the bill on Wednesday, despite the lack of text and agreement on how to pay for it.

“There are no secrets in this legislation” Psaki told reporters.

The next step, Democrats say, could be jettisoning the bipartisan agreement entirely, which needs 10 Republican votes to pass the Senate, and putting all of U.S. President Joe Biden’s spending priorities into a “budget reconciliation bill” that can pass along party lines.

“Patience is wearing thin for Democrats and I am fully expecting the party’s leadership to pivot towards the go-alone approach shortly. Then, the blame game will begin,” said one Democratic aide involved in the negotiations.

Last month, Biden and a bipartisan group of senators agreed on a $1.2 trillion infrastructure package with roughly $600 billion in new spending financed in part by increased enforcement of tax laws.

Both sides agreed to add $40 billion to the Internal Revenue Service budget, a move that Biden said would focus on enforcing tax laws for large corporations and people who earn more than $400,000.

The funding would yield about $100 billion in tax revenue, negotiators said, or a sixth of the package’s new spending cost.

Republicans, under pressure from anti-tax groups who claimed it would empower auditors to harass business owners and political opposition, rejected that plan over the weekend.

Ohio Senator Rob Portman said Sunday that Republicans believed Biden had agreed the full extent of IRS enforcement funding would be in the bipartisan bill; instead Democrats are planning to add billions more to IRS enforcement to the later reconciliation bill.

The IRS budget fell to about $11.95 billion in 2020 from an inflation-adjusted $14.6 billion in 2010, largely as a result of Republican-driven budget cuts that Democrats want to reverse.

On Monday Biden took a dig at Republicans who have backed away from the deal, saying “we shook hands on it.”

Asked if it will be time to forge ahead with reconciliation if Wednesday’s Senate vote fails, Representative Alexandria Ocasio-Cortez, a leading Democratic progressive, told reporters: “Yes … they’ve been killing time for months and at this point, I believe that it’s starting to get to a point where this bipartisan effort is seeming to serve less on investing in our infrastructure and serving more the end of just delaying action on infrastructure.”

(Reporting by Jarrett Renshaw and David Morgan; Writing by Heather Timmons; Editing by Andrea Ricci)

Congress faces coronavirus, government funding battles as summer recess ends

By Patricia Zengerle and Richard Cowan

WASHINGTON (Reuters) – The U.S. Congress faces a tight deadline to avoid a government shutdown as lawmakers begin returning to Washington next week, complicated by bitter conflicts between Republicans and Democrats over the next package of coronavirus aid.

The Republican-led Senate is due back on Tuesday, while the Democratic-led House of Representatives plans to hold votes on bills starting the following week.

With congressional elections on Nov. 3, both chambers have very few days left to finish work as lawmakers plan to campaign in their home states for much of October.

The federal fiscal year ends on Sept. 30, so they will have to scurry to reach a deal on legislation funding government programs and averting a partial shutdown that could be especially damaging to lawmakers facing re-election in November.

On Thursday, White House Press Secretary Kayleigh McEnany expressed optimism that agreement will be reached in a timely way.

Congress is widely expected to pass a temporary measure mainly funding the government at current levels, leaving budget decisions for after Election Day.

But the issue is complicated by rancor over how best to address the coronavirus, especially amid the yawning federal budget deficit.

On Wednesday, the nonpartisan Congressional Budget Office said the fiscal 2020 deficit would hit $3.3 trillion, or 16% of gross domestic product, fueled by emergency pandemic aid already enacted into law.

More than $3 trillion in coronavirus relief was enacted earlier this year. But the Republican-led Senate left town last month without taking up another $3 trillion aid package the House passed in May or an alternative.

The two parties are sharply divided, but there are also disputes among Trump’s fellow Republicans. Many of the Senate’s 53 Republicans are on record opposing additional federal coronavirus relief, and most of the others want to pass a far smaller bill than the House’s.

One senior Senate Republican aide said disagreement among Republicans was so great that it was not clear whether a smaller, partisan bill could come up for a vote. Senate Democratic Leader Chuck Schumer has said he opposes a so-called “skinny” coronavirus bill and his party could block one from passing.

Alternatively, lawmakers could tuck coronavirus relief into the must-do government funding bill. Provisions could include extra unemployment benefits to replace the $600-per-week payments that expired in July, measures to prevent evictions or aid for schools or local governments.

But a spokesman for House Speaker Nancy Pelosi told Reuters that Democrats want a “clean” government-funding bill. That usually means a measure without controversial add-ons.

Republican President Donald Trump is running for re-election, and one- third of the 100-member Senate and all 435 House seats are up for grabs when voters head to the polls on Nov. 3.

A government shutdown just before the elections, as the coronavirus pandemic continues, could be particularly damaging to Republican prospects since they control the White House and Senate.

(Reporting by Patricia Zengerle and Richard Cowan; editing by Jonathan Oatis)