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US treasury pushes back as budget office warns Biden’s bill will swell deficit - as it happened

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Nancy Pelosi speaks about the Build Back Better Act in Washington DC.
Nancy Pelosi speaks about the Build Back Better Act in Washington DC. Photograph: Jim Watson/AFP/Getty Images
Nancy Pelosi speaks about the Build Back Better Act in Washington DC. Photograph: Jim Watson/AFP/Getty Images

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Key events

Today's politics recap

  • The House is expected to vote this evening on the $2tn Build Back Better. The nonpartisan Congressional Budget Office is saying that contrary to Biden’s promise that the climate change and social policy package would pay for itself, it would increase the federal deficit. The Treasury Secretary disagrees. This point is expected to come up as lawmakers debate the package.
  • The White House is discussing a diplomatic boycott of the 2022 Beijing Winter Olympic Games. Meanwhile, senators Todd Young and Tim Kaine appear to be working on a diplomatic boycott separate from the White House.
  • The governor of Oklahoma, Kevin Stitt, has granted clemency to Julius Jones, a death row inmate who faced execution on Thursday afternoon. Following a recommendation from the state pardon and parole board, Stitt, a Republican, acted with hours to spare before the scheduled state killing.

‘Zero-Covid is not going to happen’: experts predict a steep rise in US cases this winter

Jessica Glenza
Jessica Glenza

A steep rise in Covid-19 cases in Europe should serve as a warning that the US could also see significant increases in coronavirus cases this winter, particularly in the nation’s colder regions, scientists say.

However, there is more cause for optimism as America enters its second pandemic winter, even in the face of likely rises in cases.

Evidence shows vaccine-conferred protection against hospitalization and death remains high several months after inoculation, vaccines for children older than five can reduce Covid transmission, and new antiviral medications hold the promise of making Covid-19 a treatable disease.

“I do expect to see cases increasing – we’ve started to see this in the last week or so,” said Dr David Dowdy, an associate professor of epidemiology at Johns Hopkins University. “I don’t think what we’re seeing in Europe means we’re in for a huge surge of serious illness and death as we [saw] here in the US,” last winter.

In the last three weeks, new cases have increased in several cold weather states across New England and the midwest. However, vaccines remain roughly 85% effective at preventing hospitalization and death.

“Even if cases go up this winter, we’re very unlikely to see the overcrowded [intensive care units] and morgues of a year ago,” said Dowdy.

Vaccine-conferred immunity against infection may allow cases to rise, he said, but far fewer people will need hospitalization. The vast majority of people who were hospitalized or died from Covid-19 this summer, more than 90% in one CDC study, were not fully vaccinated.

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So what does this all mean?

The nonpartisan Congressional Budget Office is saying that contrary to Biden’s promise that the Build Back Better climate change and social policy package would pay for itself, the plan would increase the federal deficit by $160b over the next decade (or $367b not counting revenue recouped from tax enforcement).

The CBO found that the bill’s tax cuts and spending programs were almost paid for by tax increases and savings in spending on prescription drugs. But those alone wouldn’t fully pay for the package, the CBO says.

But the budget office disagrees with the White House on how much of the deficit the Internal Revenue Service would make up by cracking down on big tax dodgers. The Treasury secretary says it would be a lot – more than enough.

While the CBO estimates the IRS can rake in an extra $207b over 10 years, the White House says it’s $400b that the IRS could grab over the same period.

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In a new statement today, Yellen reiterated her previous message. Countering the CBO’s top line, she said:

The combination of CBO’s scores over the last week, the Joint Committee on Taxation estimates, and Treasury analysis make it clear that Build Back Better is fully paid for, and in fact will reduce our nation’s debt over time by generating more than $2 trillion through reforms that ask the wealthiest Americans and large corporations to pay their fair share. A particularly salient aspect of the revenue raised by the legislation is a historic investment in the IRS to crack down on high-earners who avoid paying the taxes that they owe, which Treasury estimates would generate at least $400 billion in additional revenue.

With this bill, members of Congress have a unique opportunity to put our economy on a path to increased growth, productivity, labor force participation, and equity, while ensuring we do not burden future generations with unsustainable debt. I urge them to pass it.

The Congressional Budget Office is estimating that enacting Biden’s Build Back Better plan would result in a net increase in the deficit totaling $367b during the period from 2022 to 2031.

That is not counting any additional revenue generated by increased tax enforcement.

Earlier this month, the Treasury secretary Janet Yellen said, “The investments and revenue provisions of the Build Back Better package would raise over $2tn in offsets, making the entire package paid for over ten years and would reduce deficits over the long term. By making our tax system more fair and asking the highest-income earners and big corporations to pay what they owe, Congress has put together a package that is fiscally responsible and critical to the future prosperity of our economy.”

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From Guardian staff and agencies:

A bipartisan coalition of US state attorneys general has opened an investigation into Facebook for promoting Instagram to children despite the company’s own awareness of its potential harms.

The investigation, which involves at least eight states, comes as Facebook faces increasing scrutiny over its approach to children and young adults. Documents leaked by a former employee turned whistleblower recently revealed the company’s own internal research showed the platform negatively affected the mental health of teens, particularly regarding body image issues.

The investigation will cover whether the company violated consumer protection laws and put young people at risk and will be led by a coalition of attorneys general from California, Florida, Kentucky, Massachusetts, Nebraska, New Jersey, Tennessee and Vermont. “For too long, Meta has ignored the havoc that Instagram is wreaking on the mental health and wellbeing of our children and teens,” said California’s attorney general, Rob Bonta, in an emailed statement. “Enough is enough. We’ve undertaken this nationwide investigation to get answers about Meta’s efforts to promote the use of this social media platform to young Californians – and to determine if, in doing so, Meta violated the law.”

Facebook, now known as Meta, did not immediately respond to a request for comment.

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Today so far

The House rules committee is set to meet at 5:30pm local time on the Build Back Better Act, now that the Congressional Budget Office has come back with all the final estimates on the bill. From there, the House of Representatives is expected to vote on the package.

  • Both the White House and members of Congress are discussing a diplomatic boycott of the 2022 Beijing Winter Olympic Games.
  • The governor of Oklahoma, Kevin Stitt, has granted clemency to Julius Jones, a death row inmate who faced execution on Thursday afternoon.
  • Joe Biden met with Mexico president Andrés Manuel López Obrador.
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We’ve got an update on the Build Back Better Act: it looks like the pieces are in place for, at the very least, a vote to take place in the House of Representatives today.

To recap, members of the House were all waiting for the final estimates from the Congressional Budget Office. The CBO set a Friday deadline for itself, but it appears they have beaten it.

NEW: Rules will now meet at 5:30 p.m.
Dems moving ahead with hopes for final passage tonight.

This train is moving folks! https://t.co/jfIhtcoTHQ

— Heather Caygle (@heatherscope) November 18, 2021

Last of the 13 committee scores released. And before 5 p.m. as Pelosi hoped! https://t.co/65OnarM7xa

— Lindsey McPherson (@lindsemcpherson) November 18, 2021

Dems got some good news on the Rx drug pricing portion too:

The White House estimated it would raise $250 billion.

CBO meanwhile says $300 billion.

— Heather Caygle (@heatherscope) November 18, 2021
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Despite court challenges to the federal order, White House press secretary Jen Psaki urged large businesses to continue with pushing forward with their Covid-19 vaccine mandates for their workforces.

The Occupational Safety and Health Administration said earlier this week that it would suspend enforcement of vaccine mandates after a federal appeals court reaffirmed its decision to suspend the mandate.

“Our message to businesses right now is to move forward with measures that will make their workplaces safer and protect their workforces from Covid-19,” Psaki said. “That was our message after the first stay issued by the fifth circuit. That remains our message and nothing has changed.”

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White House press secretary Jen Psaki addressed the negotiations over the Build Back Better Act, which could possibly advance in the House of Representatives today.

In question at this point in negotiations is Salt deductions - the deduction of state and local tax. Salt deductions are a way for taxpayers to bypass double-paying on taxes by allowing individuals to deduct their state and local taxes from their federal income taxes.

Democrats in states with high state and local taxes - cough, California and New York - are supportive of a high cap. However, the argument now is that raising the cap on deductions would primarily benefit the wealthy.

Bernie Sanders on SALT provisions in House’s Build Back Better bill: “I think it’s wrong. I think it's bad politics. It's bad policy. … We’ve got to demand that the wealthy start paying their fair share of taxes, not give them more tax breaks,” he told reporters this AM

— Manu Raju (@mkraju) November 18, 2021

Pelosi just defended the SALT provisions, saying they’re necessary in cities that provide lots of services and says it’s a “fight” she’s willing to have https://t.co/SSaoFlNwA0

— Manu Raju (@mkraju) November 18, 2021

“It obviously wasn’t what he proposed in his initial package,” Psaki said. “It’s been conveyed to him by leaders in the House and the Senate that this needs to be included in order for this legislation to move forward.”

PSAKI is asked if POTUS is OK with SALT tax in BBB being a tax break for the wealthy - Psaki notes it wasn't in the President's original proposal, calls it "a part of compromise, not something that would add to deficit as it stands now"

— Jacqui Heinrich (@JacquiHeinrich) November 18, 2021

White House keeps its distance from SALT cap increase in BBB. "This is not what we proposed. But this is compromise. It's in the package," @presssec says. "The president's excitement about this is not about the SALT deduction, it's about the other key components of the package."

— Jennifer Epstein (@jeneps) November 18, 2021
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