On The Money – Senate moves forward with Schumer-Manchin deal

The Senate is beginning consideration of Democrats’ massive tax, health care and climate plan, teeing up a weekend of around-the-clock votes. We’ll also look at what three former IRS chiefs have to say about the bill, an update on the nation’s jobless claims and more. 

But first, see which Democrats are dodging questions about Biden’s 2024 bid. 

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

First vote set up for Schumer-Manchin deal 

Senate Majority Leader Charles Schumer (D-N.Y.) announced that the Senate will begin consideration of a $740 billion budget reconciliation package that would reform the tax code and tackle climate change on Saturday afternoon, setting up a weekend of around-the-clock votes.   

“For the information of Senators, the Senate will next convene on Saturday at noon. The next vote will be at 12:30 p.m. on Saturday, on a motion to discharge a nomination. We expect to vote on the motion to proceed to the reconciliation legislation on Saturday afternoon,” Schumer announced on the floor.   

• If senators vote to proceed, they’ll then debate for up to 20 hours before holding an open-ended series of votes, known as a vote-a-rama. 
   
• That process would set the stage for a final vote on Sunday or perhaps early Monday morning, senators say.  
  
• The announcement signals that Sen. Kyrsten Sinema (D-Ariz.), a key moderate, is expected to vote to proceed with the bill. 

The context: Sinema is still negotiating to make changes to the legislation, according to people familiar with the discussion, but it appears Schumer is optimistic he can strike a deal with her before the package comes to final vote on the floor.   

Alexander Bolton lays it out here. 

Read more: What does a ‘vote-a-rama’ have to do with Biden’s agenda? 

CATCHING CHEATS 

Ex-IRS heads say reconciliation bill will help agency target wealthy tax cheats

Three former heads of the Internal Revenue Service (IRS) are throwing their support behind a Democratic effort to boost funding for the tax agency to help target higher-income individuals and corporations they say “illegally evade their tax obligations.” 

Fred Goldberg, who headed the agency under then-President George H. W. Bush, joined Charles Rossotti and John Koskinen, who led the IRS under the Clinton and Obama administrations, respectively, in signing onto a statement released Thursday backing the reconciliation spending bill effort.  

• In the statement, the former commissioners bemoaned what they described as “the status quo” at the IRS, saying the agency “has shrunk to 1970s levels with technological infrastructure that is decades out-of-date and an audit rate that has dropped by 50 percent.” 
  
• The commissioners argued Democratic efforts to invest $80 billion in the agency to help beef it up and bolster enforcement of tax laws would lead to “vastly improved services for taxpayers.” 
  
• The proposal is one of several tax-related provisions included in Democrats’ Inflation Reduction Act to raise revenue to help cut the nation’s deficit over the next decade, which they argue in turn will combat inflation. There is disagreement among experts about how much of an impact the bill would have on rising prices, though. 

Aris has more here. 

NEW JOBS DATA

Jobless claims tick higher as layoffs rise 

New applications for jobless benefits ticked higher during the final week of July, according to data released Thursday by the Labor Department. 

In the week ending July 30, initial claims for unemployment insurance rose to 260,000, up by 6,000 from the previous week. While claims still remain near pre-pandemic lows, they’ve risen to the highest level since November as the job market slows down. 

• As the Federal Reserve hikes interest rates, businesses tend to hire fewer employees and avoid offering higher wages. 
  
• Still, the U.S. has added more than 2.5 million jobs since the start of 2022, including more than 1 million over the past three months alone. 

Sylvan has the details here.

KEEP YOUR MONEY 

Inflation Reduction Act drops most of Biden’s proposals to tax the rich 

The deal struck last week by Sens. Charles Schumer (D-N.Y.) and Joe Manchin (D-W.Va.), a slimmed-down version of the Build Back Better Act, leaves out most of President Biden’s proposals to pull in greater government revenues from rich taxpayers.  

Increases in individual income tax rates for high earners, increases in the estate tax, increased taxes on capital gains like stock and property holdings, a tax on billionaires, a plan to build out the net investment income tax and a surtax on high-income households are plans that have been scrapped from the Inflation Reduction Act.  

“The administration proposed many, many tax increases that aren’t reflected in this legislation,” UCLA tax economist and former tax analyst for the Treasury Department Kimberly Clausing said on a call with reporters.   

Here’s more from Tobias Burns. 

Good to Know

Senate Majority Leader Charles Schumer (D-N.Y.) plans to call Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley’s (R-Iowa) antitrust bill targeting tech giants to a floor vote, according to a spokesperson for the top Democrat. 

“Sen. Schumer is working with Sen. Klobuchar and other supporters to gather the needed votes and plans to bring it up for a vote,” the spokesperson said in a statement.  

Here’s what else we have our eye on: 

• Semiconductor giants are pushing for immigration reform that would allow more highly skilled workers to remain in the U.S. after Congress passed a bill to strengthen domestic chip manufacturing. 
  
• The retail giant Walmart is laying off about 200 corporate workers, a source familiar with the situation told The Hill, a week after it reported inflation was affecting its overall profits.  
  
• A federal judge threw out two resource management plans developed by the Bureau of Land Management, finding they failed to account for the risk of fossil fuel leasing on public lands in Montana and Wyoming. 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

VIEW FULL VERSION HERE