News: More on the debt limit — The changing face of America

Friday, August 13, 2021

More on the debt limit — The changing face of America — Warren on the tax system

Aug 13, 2021

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Quick Fix

More on the debt limit — Your regular MM correspondent is about to vanish for a week of vacation. And we leave still baffled by Democrats' failure thus far to just throw a debt limit hike into one of their spending bills. Could still happen, of course, but the logic behind not doing it quickly remains puzzling.

Former Pennsylvania GOP congressman Charlie Dent emails MM: "Your debt ceiling analysis is spot on. I voted for debt ceiling increases under Bush, Obama and Trump. If Democrats are prepared to vote for this extravagantly high level of spending on a partisan basis through reconciliation, why the hell would they fear throwing the debt ceiling into the same reconciliation bill?

"It's a no-brainer to throw the debt ceiling into the reconciliation bill. The debt ceiling debate this time around is a big bluff and a manufactured crisis. There is zero chance of default because the Democrats who control Washington would own the economic calamity."

The changing face of America — Via WSJ's Paul Overberg and John McCormick : "The first detailed results of the 2020 census show a diversifying nation where the total white population shrank for the first time in its history and where large metropolitan areas, especially in the South and Southwest, saw the strongest growth.

"The non-Hispanic white population dropped 2.6% between 2010 and 2020, a decline that puts that group's share of the total U.S. population below 60%. The number of people who identify as more than one race or ethnicity grew at the fastest rate of any group, partly due to changes that captured more detailed responses."

Real talk — The U.S. is getting less White and more urban and close-in suburban. Small towns and rural areas continue to see population drops. Phoenix is now America's fifth largest city, replacing Philadelphia. Demographic changes tend to favor Democrats. But Republicans are working very hard to counter these changes with new more restrictive voting laws.

GOOD FRIDAY MORNING — I'm headed out for a little break but you will be in good hands with Victoria Guida and others next week. Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben.

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Driving the day

ECONOMISTS SEE TAPER ANNOUNCEMENT NEXT MONTH — Via Reuters: "The Federal Reserve will announce a plan to taper its asset purchases in September, according to a solid majority of economists polled by Reuters who also said the U.S. jobless rate would remain above its pre-pandemic level for at least a year. …

"Nearly two-thirds of respondents, 28 of 43, said the Fed is likely to announce a taper of its asset purchases - currently set at $80 billion of Treasuries and $40 billion of MBS per month - at its September meeting. But while that timing has become more likely in the minds of many Fed watchers over the past month, it is by no means a done deal for all of them."

SCOTUS KNOCKS DOWN SOME OF NY EVICTION BAN — Our Josh Gerstein and Janaki Chadha: "The Supreme Court … issued an emergency order blocking a New York state law aimed at protecting renters from eviction during the coronavirus pandemic. The move, which came at the request of landlords and over the dissent of the court's three Democratic appointees, is another signal that virus-related eviction bans are in serious danger at the high court.

"However, the new order's significance for the ban President Joe Biden's administration reimposed last week under intense pressure from liberal activists is unclear since the legal bases for the challenges differ. … The court's majority signaled that the New York law was likely unconstitutional because landlords had no way to challenge a tenant's claim to have been hard hit by the pandemic."

CHILD TAX CREDITS LOWER FOOD INSECURITY — Our Helena Bottemiller Evich: "The percentage of American families with kids who report not having enough to eat fell dramatically after the first child tax credit payments were distributed last month, according to new data from the U.S. Census Bureau.

"The government's finding shows that the monthly payments are having a major and immediate impact on millions of households, potentially bolstering … Biden's push to extend the tax credit past the end of this year, when it is set to expire. … The monthly payments of up to $300 for each kid under five and up to $250 for each kid under 18 are the result of one of the most sweeping provisions in the American Rescue Plan, though the policy did not garner much media attention at the time."

Fly Around

ANITA DUNN LEAVES THE WHITE HOUSE — Our Myah Ward: "Top Biden adviser Anita Dunn will depart the White House … as her temporary position concludes, though she will still play a key role as an outside counselor to … Biden — similar to how she served in the Obama years.

"Dunn told POLITICO that her time at the White House was wrapping up Thursday .. She had stayed in the senior adviser post longer than expected, but had always envisioned being in a place to help see Biden's economic agenda gain steam in Congress."

ASIA DIPS AFTER WALL STREET HITS RECORDS — Via Bloomberg: "Most Asian shares slipped Friday as the spread of the delta Covid-19 variant and China's regulatory curbs restrained sentiment despite another record high close on Wall Street. The technology sector led losses on a slide in Chinese Internet giants and a retreat in chipmakers that hurt South Korean equities.

"U.S. equity futures were steady after the S&P 500 hit a fresh peak and the tech-heavy Nasdaq 100 rose. Airbnb Inc. slid in extended trading on a tough outlook due to the virus, while a surge in streaming demand boosted Walt Disney Co. U.S. Treasury 10-year yields were near a one-month high following a tepid 30-year auction and data highlighting price pressures and a recovery in the labor market. A gauge of the dollar held an advance."

LEFT WARNS DEMS NOT TO LESSEN $3.5T BILL — Our Laura Barrón-López: "One of the most powerful Democratic-allied groups in D.C. is warning party members that they risk leaving women voters behind if they don't back … Biden's social spending package. ... The Center for American Progress is pressing Democratic lawmakers to keep the $3.5 trillion reconciliation package as close to its original blueprint as possible, arguing that it's vital for helping women workers hit hard by the pandemic.

"Simply passing an infrastructure bill, the group warns, would create a massive divergence in the economic recovery along gender lines. … The push from CAP comes as Biden is ramping up promotion of his so-called Build Back Better agenda, which is expected to include funding for workers in elder and child care — fields that are dominated by women."

HOME PRICES SURGE — WSJ's Nicole Friedman: "Home prices surged in almost every corner of the U.S. in the second quarter as robust demand continued to overwhelm the supply of homes for sale. While the homebuying frenzy has shown signs of a slowdown in recent months, home-price growth has yet to cool.

"The median sales price for single-family existing homes was higher in the second quarter compared with a year ago for 182 of the 183 metro areas tracked by the National Association of Realtors, the association said Thursday. In 94% of those metro areas, median prices rose by more than 10% from a year earlier. Nationwide, the median single-family existing-home sales price rose 22.9% in the second quarter to $357,900 from a year ago, a record in data going back to 1968, NAR said."

WARREN ON THE TAX SYSTEM — Sen. Elizabeth Warren (D-Mass.) in a Wash. Post op-ed: "Now that the Senate has passed a budget resolution, we're one step closer to realizing … Biden's transformational agenda … The other half of the package — how to pay for these investments — is equally important.

"The already huge gap between the 0.1 percent and everyone else is just getting wider. …
I've proposed measures that would raise more than $5 trillion in revenue — far more than we need to enact the Biden plan. Though not every Democrat agrees with every one of my ideas, Biden campaigned aggressively on a suite of progressive tax policies, and voters embraced these changes at the ballot box. No matter how loudly Washington lobbyists bleat otherwise, progressive tax policies are wildly popular. "

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