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On The Money: IRS funds snag infrastructure deal | Biden touts 'transformative' child tax credit payments | Powell's uncertain future

Happy Thursday and welcome back to On The Money, brought to you by the Bill Murray of political news outlets. 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—IRS funding snags bipartisan infrastructure deal: A bipartisan group of Senate negotiators is looking to replace a proposal to provide $40 billion in new funding for the Internal Revenue Service, which is projected to net $100 billion in new revenues through tougher tax enforcement, because the idea is drawing heat from conservatives.

  • Members of the group and sources briefed on the discussion say that negotiators are looking for an alternative in the bipartisan infrastructure bill, which is seen as a major source of revenue. 
  • But there aren’t any obvious options for finding $100 billion in revenue to replace the IRS provision.

The background: Republicans have become increasingly hostile to adding more money for the IRS and a coalition of conservative groups circulated a letter among GOP lawmakers last week warning them against the idea. Right-leaning politicians and activists have not gotten over the 2014 scandal of the targeting of certain nonprofits, and a recent leak of tax information to ProPublica has deepened the mistrust. The Hill’s Alexander Bolton brings us up to speed here.

GOP fumes over Schumer hardball strategy: Meanwhile, Republicans are also upset about Senate Majority Leader Charles SchumerChuck SchumerBiden needs to help end federal cannabis prohibition Biden hails ‘transformative’ child tax credit payments Watchdog files FEC complaint against super PACs linked to congressional leaders MORE’s (D-N.Y.) hardball strategy to try to force them to finalize the bipartisan infrastructure deal in a matter of days.

The plan: Schumer announced on the Senate floor Thursday that he will force a key test vote on Wednesday. He will need at least 60 votes to advance the shell legislation—so at least 10 Republicans if every Democrat also goes along with the strategy. If Republicans agree to start debate, they could then substitute in the bipartisan text when it’s done.

The problem: 

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  • Republican negotiators and members of leadership believe Schumer is trying to jam them.
  • For that reason, they’re warning that they won’t vote to start debate Wednesday, even on a shell bill that the Democratic leader is intending to use as a vehicle for the bipartisan deal once it’s finalized.

“It’s a bad idea if the bill’s not ready. … Our guys aren’t going to vote for a bill they haven’t seen,” said Sen. John ThuneJohn Randolph ThuneOn The Money: IRS funds snag infrastructure deal | Biden touts ‘transformative’ child tax credit payments | Powell’s uncertain future GOP fumes over Schumer hardball strategy The Hill’s Morning Report – Presented by Goldman Sachs – Biden rallies Senate Dems behind mammoth spending plan MORE (S.D.), the No. 2 Senate Republican.

Several of the most likely “yes” votes—the Republicans helping negotiate the bipartisan bill—were frustrated by Schumer’s strategy. His office even acknowledged it was a hardball move aimed at providing the bipartisan group with a deadline to finalize its bill and prevent talks from dragging on.

“The bottom line is there’s plenty of time to get this done. It’s almost a week, and we should get it done,” Schumer said when asked about the GOP pushback. 

The Hill’s Jordain Carney explains here.

 

LEADING THE DAY

Biden hails ‘transformative’ child tax credit payments: President BidenJoe BidenJ.D. Scholten: Democratic Party is ‘getting blown out of the water’ by not connecting to voters Children under 12 could be able to receive the COVID-19 vaccine by winter: report Georgia secretary of state calls for Fulton County elections officials to be fired MORE on Thursday hailed the expanded child tax credit as a “transformative” achievement that would offer needed relief for families, and made the case for Congress to further extend the payments in forthcoming legislation.

  • In remarks from the White House, Biden said the payments would spur the largest one-year decrease in child poverty in the United States and outlined how eligible families can expect to receive payments or sign up to receive them. 
  • Experts say that the tax credit could slash child poverty in half if the credit can reach all of its eligible recipients, which is a significant challenge for the IRS.

The background: The Treasury Department and IRS on Thursday began distributing the first batch of monthly child tax credit payments, sending payments to roughly 35 million families with almost 60 million children. The payments total roughly $15 billion and are funded by the $1.9 trillion coronavirus relief bill that Biden signed into law in March, his first major legislative accomplishment as president. The Hill’s Naomi Jagoda tells you everything you need to know here.

 

Fed chief’s uncertain future casts shadow over Senate hearing: Federal Reserve Chair Jerome Powell’s uncertain future cast a shadow over his appearance before a Senate panel Thursday as senators raised concerns about his leadership of the central bank.

While Powell’s testimony focused on challenges facing the U.S. economy, questions from both sides of the dais reflected the growing intrigue over whether President Biden will renominate him to lead the Fed for another term.

  • Powell, a Republican, has enjoyed broad bipartisan support during his nearly four years chairing the Fed board and would likely coast through another Senate confirmation vote. 
  • Even so, progressives are urging Biden to take advantage of a generational opportunity to reshape the Fed and nominate a left-leaning regime to tighten bank regulations loosened or streamlined under Powell.

“During your tenure, the Fed has rolled back important safeguards,” said Sen. Sherrod BrownSherrod Campbell BrownOn The Money: IRS funds snag infrastructure deal | Biden touts ‘transformative’ child tax credit payments | Powell’s uncertain future Fed chief’s uncertain future casts shadow over Senate hearing Democrats hit crunch time in Biden spending fight MORE (D-Ohio), chairman of the Senate Banking Committee and a fierce critic of the financial sector. “It’s time to try something different. We need a banking system that works for everyone.”

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I bring you to the hearing here.

 

GOOD TO KNOW

  • The number of new applications for jobless benefits fell to a record post-lockdown low last week, according to data the Labor Department released Thursday.
  • A group of Senate Republicans has invited Treasury Secretary Janet YellenJanet Louise YellenOn The Money: IRS funds snag infrastructure deal | Biden touts ‘transformative’ child tax credit payments | Powell’s uncertain future The Hill’s 12:30 Report – Presented by Facebook – Merkel visits the White House before stepping down GOP senators invite Yellen to brief them on debt ceiling expiration, inflation MORE to brief them at a private lunch meeting on the looming expiration of the federal debt ceiling on July 31 and on signs of rapidly rising inflation.
  • A coalition of businesses and labor groups is calling on Congress to include hundreds of billions of dollars of funding for high-speed rail in the forthcoming infrastructure bills.
  • Corporate PACs have resumed bankrolling House Minority Leader Kevin McCarthyKevin McCarthyOn The Money: IRS funds snag infrastructure deal | Biden touts ‘transformative’ child tax credit payments | Powell’s uncertain future Corporate PACs resume donations to McCarthy after brief pause The Hill’s 12:30 Report – Presented by Facebook – Merkel visits the White House before stepping down MORE (R-Calif.) after briefly shunning him for challenging the 2020 election results.

ODDS AND ENDS

  • Republicans on the House Oversight and Reform Committee are asking the airline industry to explain a recent surge in flight cancellations, lawmakers announced Thursday.
  • Op-Ed: “The Child Tax Credit will keep millions of children out of poverty”