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—White House sees GOP proposal as legitimate starting point: An elusive bipartisan breakthrough on an infrastructure deal may have gotten marginally more likely today.
- The White House on Thursday signaled it would be open to further talks with Republican lawmakers after they proposed a significantly reduced infrastructure plan to counter President Biden’s $2.3 trillion proposal.
- Press secretary Jen Psaki told reporters the administration believes the $568 billion proposal from Senate Republicans unveiled earlier in the day is a legitimate starting point for ongoing talks.
- She said the president would likely host lawmakers at the White House for further discussions in the coming weeks.
“It’s the beginning of a discussion,” Psaki said. “And the next steps will be conversations at the staff level, conversations between senior members of our administration, members of Congress, appropriate committee staff through the course of next week, and then as I noted the president will invite members down to the White House. But there are a lot of details to be discussed.”
The Hill’s Brett Samuels has more here.
The background:
- Republicans have shot down Biden’s American Jobs Plan proposal, which allocated $2.3 trillion toward roads, bridges, railways, electric vehicles, broadband, long-term care workers, weatherizing buildings and climate friendly industries.
- They’ve also rejected corporate tax hikes Biden proposed to pay for it.
Instead, the GOP offer narrows down the definition of infrastructure and focuses on funding for roads and bridges, public transit systems, rail, wastewater infrastructure, airports and broadband infrastructure. They also proposed user fees for electric vehicles and repurposing unused federal spending allocated by the $1.9 trillion economic relief signed in March to cover the cost.
The reception: That the White House would be open to starting from a proposal so much smaller than its own—particularly after ignoring the GOP’s counteroffer on stimulus—was a little bit surprising. Even Sen. Joe Manchin (D-W.V.), a crucial moderate wild card, has expressed comfort with several trillion in spending as long as it’s paid for.
But while Sen. Chris Coons (D-Del.), the heir to Biden’s Senate seat, said he’s down to start from there, several of his Democratic colleagues are very much not. Sen. Bob Casey (D-Pa.) dismissed the proposal as a “slap in the face” and said he refused to be “a part of any scheme that sells out our seniors. And Sen. Ron Wyden (D-Ore.) said it was “far too small” and “not a serious effort to do anything at all about the climate crisis.”
Climate change? In this economy? A central focus of the Democratic infrastructure bill is, in fact, fighting climate change through the economy, which is another area of major disagreement for the parties.
That GOP criticism was on display Thursday at a Senate Banking Committee hearing, where Democrats touted the Biden administration’s “whole-of-economy” approach to fighting climate change.
- The proposal would allocate hundreds of billions of dollars toward accelerating the shift away from fossil fuels, with the goal of creating thousands of green energy jobs in the process.
- GOP lawmakers already have blasted Biden for shutting down the Keystone XL pipeline and actively pushing the U.S. away from oil and gas.
- Massive investments in renewable energy production, however, are a no-brainer proposal for Democrats, who see Biden’s proposal as a generational chance to turn the tide against both climate change and income inequality.
I’ll take you to the contentious hearing here.
Read more:
- President Biden announced a new international climate finance plan on Thursday that seeks to eventually double U.S. financing for climate-related programs in developing countries and put limits on international investment in fossil fuels.
- Climate change’s toll on agriculture, global health and physical infrastructure, as well as redirected government spending, among other issues, could cause the global economy to lose 10 percent of its value by 2050, according to a study released Thursday by a global reinsurance company.
LEADING THE DAY
Biden plan would nearly double capital gains tax for wealthy: report: President Biden is reportedly preparing a proposal for a near-doubling of the capital gains tax for wealthier Americans, increasing the rate to 39.6 percent, up from the current top rate of 20 percent, according to a report in Bloomberg News.
- The increase, in line with his campaign proposal, would impose the higher rate on those earning more than $1 million.
- When added to a 3.8 percent surcharge on investments put in place by the Affordable Care Act, the top rate could reach 43.4 percent.
- Additional capital gains taxes in high-tax states could push investment taxes up further for residents.
The Hill’s Niv Elis breaks it down here.
The timeline: Biden is expected to include the proposal as part of his American Families Plan to be presented before a joint session of Congress next week. But it’s far from clear when that proposal would be introduced, when it could pass, and if it would still be that high.
White House press secretary Jen Psaki said the plans were not finalized, but that Biden believed investments in infrastructure and child care should be paid for.
“His view is that that can be on the backs of the wealthiest Americans who can afford it, and corporations and businesses who can afford it. And his view, and the view of our economic team, is that that won’t have a negative impact,” she said Thursday.
That was enough to cause some selling on Wall Street, however. The Dow Jones Industrial Average, S&P 500 and Nasdaq composite closed with losses of 1 percent each shortly after the report.
Weekly jobless claims hit new pandemic low of 547,000: Initial jobless claims for the week ending April 17 fell to a seasonally adjusted 547,000, a 39,000 drop from the previous week and the lowest level since pandemic lockdowns began last March. The continued drop in weekly claims is a sign of an improving labor market but also indicates how tough conditions remain.
The weekly figure is still over double the pre-pandemic level, and an emergency pandemic unemployment program for the self-employed and gig economy workers saw an uptick in filings.
GOOD TO KNOW
- The Biden administration is withdrawing a Trump-era proposal that sought to loosen protections for transgender homeless people.
- Acting Federal Trade Commission (FTC) Chairwoman Rebecca Kelly Slaughter criticized the Supreme Court’s unanimous decision Thursday to limit the agency’s ability to secure monetary relief for consumers from companies found to engage in deceptive practices.
- Securities and Exchange Commission (SEC) Chairman Gary Gensler’s lengthy to-do list for regulating U.S. financial markets has Wall Street anxiously awaiting his first moves.
- Liberal groups and progressives in Congress are pushing back on efforts by Democrats from high-tax states to repeal the state and local tax (SALT) deduction cap, posing a challenge as the party tries to build consensus on President Biden’s infrastructure package.
ODDS AND ENDS
- Two groups within conservative mega-donor Charles Koch’s political network called on the Biden administration Thursday to release all the temporary worker visas allocated by Congress for fiscal 2021.
- Chevron hired lobbyists to warn against sanctions on Myanmar Oil and Gas Enterprise (MOGE), which could impact the oil and gas giant’s operations in Myanmar.