Business & Economy

On The Money — Democrats confident cuts won’t water down bill

Happy Friday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: digital-stage.thehill.com/newsletter-signup.

Today’s Big Deal: Democrats are expressing confidence in a pared-down spending bill’s ability to resonate with voters. We’ll also look at Sen. Kyrsten Sinema’s (D-Ariz.) position on tax hikes and also examine a major anti-redlining action.

But first, a congressman is mad at Meghan, the Duchess of Sussex.

For The Hill, I’m Sylvan Lane. Write me at slane@digital-stage.thehill.com or @SylvanLane. You can reach my colleagues on the Finance team Naomi Jagoda at njagoda@digital-stage.thehill.com or @NJagoda and Aris Folley at afolley@digital-stage.thehill.com or @ArisFolley.

Let’s get to it.

 

Democrats brush off risks of paring down spending package 

Democrats are brushing off the political risks of slashing their sweeping social spending measure, arguing voters will reward them for getting something done and not punish them because the legislation is smaller than the $3.5 trillion package that President Biden and his party had initially hoped to secure.

“What will matter is that the bills are done,” Matt Bennett, executive vice president for public affairs at centrist Democratic think tank Third Way, said on a recent call with reporters. “When they are done, they are certain to be big and robust. I mean, we’re not talking about small measures here. Something in the neighborhood of $2 trillion is a lot of money, and so that will be plenty for Democrats to be able to run on.”

White House officials and Democrats on Capitol Hill are still steeped in negotiations around the measure in hopes of landing on a compromise that satisfies both moderates and progressives after Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) telegraphed their resistance to the original $3.5 trillion price tag and certain policies within the legislation.

Morgan Chalfant and Amie Parnes explain more here.

LEADING THE DAY 

Sen. Kyrsten Sinema’s office on Friday outlined the senator’s opposition to raising tax rates, saying the Arizona Democrat thinks that just increasing rates “will not in any way address the challenge of tax avoidance or improve economic competitiveness.”

The statement comes as Democrats have been scrambling in recent days to figure out how to pay for their social-spending package given Sinema’s opposition to increasing tax rates on corporations and high-income individuals.

“Senator Sinema has been engaged for months in substantive, nuanced policy negotiations and is well-versed in the range of current tax proposals being considered,” Sinema spokesman John LaBombard said in a statement.

“She is committed to ensuring everyday families can get ahead and that we continue creating jobs,” LaBombard added. “She has told her colleagues and the president that simply raising tax rates will not in any way address the challenge of tax avoidance or improve economic competitiveness.”

Naomi decodes that for us here.

OUT OF LINE

Trustmark Bank to pay $5 million ‘redlining’ fine

Trustmark National Bank will pay $5 million in fines to federal regulators to settle allegations it actively avoided offering and marketing home loans to Black and Hispanic customers, federal officials announced Friday.

The Justice Department, Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) announced a joint consent order with Trustmark, accusing the bank of a pattern of “redlining” in the Memphis, Tenn., region. 

Federal officials alleged that between 2014 and 2018, Trustmark avoided locating branches in majority-Black and Hispanic communities, failed to assign a single loan office to majority-Black and Hispanic communities, failed to monitor its compliance with fair lending laws and discouraged home loan applications from Black and Hispanic borrowers.

I have more here.

THE PANDEMIC PINCH

US deficit hits $2.8 trillion, second largest in history

The Treasury Department said Friday that the federal deficit reached $2.8 trillion in fiscal 2021, the second largest deficit in history. The number, however, is down $360 billion from the record set during the previous fiscal year. 

On Friday, the new budget report said governmental revenue totaled $4 trillion in fiscal 2021, up 18.3 percent from the previous year and exceeding previous projections forecast in the president’s budget. 

The budget report accredited the increase in spending “to higher net individual and corporation income taxes from the improved economy.”

Aris has the details here.

 

Good to Know

Citigroup has agreed to undergo an independent racial equity audit, the bank announced Friday.

Here’s what else have our eye on:

 

ON TAP NEXT WEEK

Tuesday:

Wednesday:

Thursday:

 

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 next week.