On The Money: Federal judge vacates CDC’s eviction moratorium | Biden says he’s open to compromise on corporate tax rate | Treasury unsure of how long it can stave off default without debt limit hike
Happy Wednesday and welcome back to On The Money, where we’ll hopefully be heading to the Super Bowl. 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—Federal judge vacates CDC’s eviction moratorium: A federal judge on Wednesday vacated a nationwide freeze on evictions that was put in place by federal health officials to help cash-strapped renters remain in their homes during the pandemic.
The ruling was a win for a coalition of property owners and realtors, who brought one of several challenges against the Centers for Disease Control and Prevention’s (CDC) eviction moratorium, which was first enacted under former President TrumpDonald TrumpTrump’s Facebook ban to stay in place, board rules Trump allies launching nonprofit focused on voter fraud DOJ asks for outside lawyer to review Giuliani evidence MORE and later extended through June.
What went down: In a 20-page ruling, U.S. District Court Judge Dabney Friedrich, who was appointed by Trump, ruled that the agency exceeded its authority with the temporary ban.
“The question for the Court is a narrow one: Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not,” Friedrich wrote.
What happens now:
- Other judges have ruled on the eviction ban’s lawfulness, with landlords holding a slight advantage in their win-loss record against the federal government.
- Friedrich rebuffed the federal government’s request that she narrow the effect of her decision, indicating its reach would be nationwide.
- But a number of eviction freezes enacted by state and local governments will not be affected by Wednesday’s ruling, which concerns only the federal moratorium.
The Hill’s John Kruzel breaks it down here.
LEADING THE DAY
Biden says he’s open to compromise on corporate tax rate: President BidenJoe BidenCensus results show White House doubling down on failure Poll: Americans back new spending, tax hikes on wealthy, but remain wary of economic impact True immigration reform requires compromise from both sides of the aisle MORE said Wednesday that he is open to compromise on his proposal to raise the corporate tax rate, but said he would not back an infrastructure bill that is not paid for because of concerns about the deficit.
Biden was asked following remarks at the White House on Wednesday if he was open to an increase of the corporate tax rate to 25 percent instead of his proposed 28 percent.
“I’m willing to compromise but I’m not willing to not pay for what we’re talking about,” Biden told reporters. “I’m not willing to deficit spend. They already have us $2 trillion in the whole.”
The state of play: While most Democrats are squarely behind Biden’s tax plan, moderates such as Sen. Joe ManchinJoe ManchinBusiness groups target moderate Democrats on Biden tax plans Democrats fret over Biden spending Schumer works to balance a divided caucus’s demands MORE (W.V.) said the president’s proposed increase to the corporate tax rate was too high. The rate was set at 21 percent by former President Trump’s 2017 tax-cut bill.
Moderate Democrats are the key to any infrastructure package, whether a bipartisan deal with Republicans or a party-line bill passed through reconciliation, which is why lobbyists are starting to come calling.
- Groups like the U.S. Chamber of Commerce are targeting pro-business moderate Democrats in hopes of steering the conversation away from corporate taxes as a way to pay for infrastructure spending.
- In the past month, the Chamber has had 45 meetings with congressional offices on taxes in the infrastructure package and has 20 more meetings scheduled over the next few weeks with both Democratic and Republican offices.
- The Business Roundtable held nearly 70 meetings with congressional offices in April and launched a digital and radio advertising push in the Washington, D.C., area to tout the benefits of the existing tax system.
The Hill’s Naomi Jagoda and Alex Gangitano have more here.
Treasury unsure of how long it can stave off default without debt limit hike: The Treasury Department said Wednesday that it is unable to predict how long it could stave off a default on the national debt if the federal debt limit isn’t suspended or increased this summer because of the COVID-19 recession.
In a Wednesday statement, the department said that “substantial COVID-related uncertainty” makes it “very difficult” to project how long Treasury can take what it calls “extraordinary measures” to pay the federal government’s bills without borrowing more money.
- A 2019 budget deal suspended the legal limit on how much debt the federal government can hold until July 31.
- In previous years when the White House and Congress failed to reach a deal to raise the debt limit, Treasury was able to prevent a default by shuffling certain payments and obligations until the limit was raised again.
- But Treasury said Wednesday that the unprecedented economic shock and federal response to the COVID-19 pandemic has made it near impossible to know how long extraordinary measures can prevent an economic calamity.
“Treasury is evaluating a range of potential scenarios, including some in which extraordinary measures could be exhausted much more quickly than in prior debt limit episodes,” the department said Wednesday. I explain here.
ON TAP TOMORROW:
- The House Financial Services Committee holds its third hearing on the GameStop stock trading frenzy at 12 p.m.
- A House Small Business Subcommittee holds a hearing on job creation through infrastructure at 12 p.m.
GOOD TO KNOW
- The Dow Jones Industrial Average rose nearly 100 points Wednesday, closing at a new record as companies reported strong earnings.
- The House Ways and Means Committee on Wednesday advanced bipartisan legislation aimed at helping people save for retirement.
- The private-sector labor market had a strong showing in April, adding 742,000 jobs, according to payroll company ADP.
- Most Americans back new government spending on social programs and favor tax hikes for the wealthy, but remain wary of the broader economic impacts of such proposals, according to a Harvard CAPS-Harris Poll survey released this week.
- President Biden’s American Families Plan would have a modest negative impact on the economy, according to an analysis released Wednesday by the Penn Wharton Budget Model (PWBM).
ODDS AND ENDS
- Several high-profile Republican lawmakers on Wednesday suggested they would support antitrust reforms in the wake of Facebook’s Independent Oversight Board upholding former President Trump’s ban from the platform.
- The Federal Aviation Administration (FAA) is planning to levy heavy fines against two unmasked passengers accused of assaulting flight attendants on different flights.