On The Money: Progressives dig in for fall fight with centrists on Biden budget plan

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THE BIG DEAL—Progressives dig in for fall fight with centrists: Progressives are digging in for a fall fight with centrists following a House budget deal to advance the Democratic Party’s top social priorities.

• Democrats close to House liberals believe Speaker Nancy Pelosi (D-Calif.) and Rep. Pramila Jayapal (D-Wash.), the Congressional Progressive Caucus leader, have so far jointly handled the intraparty standoff in a way that favors the left flank over moderates.
• Some on the left have threatened to vote against the bipartisan infrastructure bill if it comes to the floor before the $3.5 trillion reconciliation package.
• Now, leading progressives are planning to boost pressure on leadership and their centrist colleagues to ensure the sweeping social benefits package passes Congress and becomes law.

“We’ve been very clear and very consistent from the beginning that the only way that this infrastructure plan has a chance is if reconciliation comes through,” said Rep. Alexandria Ocasio-Cortez (D-N.Y.). The Hill’s Hanna Trudo, Scott Wong and Cristina Marcos break it down here.

The fault lines: 

• Liberals have long argued that tackling social spending before infrastructure is crucial to help scale back systematic inequality on multiple fronts. 
• But a vocal group of 10 centrists, led by Rep. Josh Gottheimer (D-N.J.), publicly called for holding an immediate vote on infrastructure before adopting the budget resolution for the $3.5 trillion package.

Pelosi ultimately struck a deal with the moderates — which she later downplayed as a “clarification” —  by saying the House would vote to send the infrastructure bill to President Biden’s desk before October. 

“I think this was meaningless,” Rep. Ilhan Omar (D-Minn.) said of the agreement Pelosi reached with centrists. “It’s not binding. There’s no leverage that I believe was gained by them. I actually think they lost leverage by doing this little fiasco.” 

LEADING THE DAY

Fed reappointment splits progressives: Liberals are split over whether President Biden should reappoint Jerome Powell as chairman of the Federal Reserve, with some urging the White House to switch gears. 

• Powell is supported by some liberal lawmakers, economists and activists who argue his undaunted push for an employment-focused Fed is exactly what the central bank needs to continue. 
• Many liberal economists say Powell has played a foundational role in refocusing the bank on the needs of the vulnerable.
• Yet other progressive activists say Powell needs to go when his term expires in February. They say that he undermined the economy — let alone his case for nomination — by rolling back key safeguards created by the Dodd-Frank Wall Street reform law.

“I don’t see how you can be considered a full employment champion if you are actively exacerbating a significant threat to full employment,” said Gregg Gelzinis, associate director for economic policy at the Center for American Progress, a liberal think tank. “Financial crises have awful impacts on the labor market and financial regulation, and monetary policy can work hand in hand toward achieving the goal of full employment,” he continued.

I have more here.

Senate Democrats release more details of international tax plan: A trio of Senate Democrats on Wednesday released additional details of their proposal to overhaul international taxation as Democrats turn their attention to drafting a wide-ranging bill that advances President Biden’s economic agenda.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) and committee members Sherrod Brown (D-Ohio) and Mark Warner (D-Va.) released draft legislation that builds on a proposal they released in April. The draft bill is aimed at increasing taxes on multinational corporations and raising revenue to pay for Biden’s social spending proposals.

“Our draft legislation would generate critical revenue to pay for priorities in Democrats’ reconciliation bill, and encourage additional investment in our country and its workers,” Wyden said in a statement.

The Hill’s Naomi Jagoda has more on what’s inside here.

GOOD TO KNOW

• Only 11 percent of federal rental aid has made it into the hands of tenants, landlords or utility companies, according to data released Wednesday by the Treasury Department.
• The Biden administration convened more than two dozen leaders of key groups across a variety of fields at the White House for a cybersecurity meeting on Wednesday intended to serve as a “call to action” to address escalating cyber threats. 
• As industries become increasingly dominated by a small number of companies, they typically spend more on federal lobbying, according to a new study released Wednesday.

ODDS AND ENDS

• The U.S. has reportedly approved license applications for the embattled Chinese telecom company Huawei to purchase chips for its auto component business.