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Tag: janet yellen
Biden's IRS Revamp Brings In $500M -- So Far -- From Millionaire Deadbeats

Biden's IRS Revamp Brings In $500M -- So Far -- From Millionaire Deadbeats

Despite false claims by congressional Republicans that Democrats would create a massive army of armed Internal Revenue Service agents to harass working families, the Biden administration’s modernization of the agency and crackdown on rich tax cheaters is paying dividends already. So far, the agency has collected about half a billion dollars in revenue owed by the wealthiest Americans.

According to an IRS statement released on January 12, funds from the Inflation Reduction Act of 2022 have enabled the agency to recover “$482 million in ongoing efforts to recoup taxes owed by 1,600 millionaires.” At least $360 million of that has come in since late October. The agency is also prioritizing enforcement efforts against large corporations that have underpaid what they owe.

Without a single Republican vote, Democrats in Congress and President Joe Biden enacted the 2022 law, which included an $80 billion investment in the IRS over a decade to tighten tax enforcement for wealthy individuals and businesses and to allow the agency to update its information technology systems.

Republicans in Congress, including members of the Michigan delegation, opposed the effort and repeatedly lied about it, saying that it would fund 87,000 new IRS agents to target the middle class.

“Dems are hiring 87,000 new IRS agents to come after you. That’s more people than can fit in Spartan Stadium,“ tweeted Rep. Lisa McClain (R-MI) in August 2022. “That’s a NO from me!”

“Inflation is at a 40-year high and the economy is in the grips of a recession. Democrats’ response is a massive spending bill that will raise taxes and hire 87,000 IRS agents to target hardworking families,” wrote Rep. Tim Walberg (R-MI). ”It’s reckless, wrong, and out of touch.”

Treasury Secretary Janet Yellen directed that the new funds not be used to increase the share of audits of families earning below $400,000 annually or of small businesses. “In fact, we expect audit rates for honest taxpayers to decline,” she predicted in a September 2022 speech, “once the IRS has the right technological infrastructure in place.”

After gaining a narrow majority in the House the midterm elections, Republicans attempted to repeal the new IRS funding entirely. In one of their first votes in January 2023, they passed the Family and Small Business Taxpayer Protection Act on a party-line vote.

Republican Reps. Jack Bergman, Bill Huizenga, John James, McClain, John Moolenaar, and Walberg all voted in favor.

According to a January 2023 CNN fact check, the false claim about 87,000 agents stemmed from a 2021 Treasury Department report that noted that the funds could enable 86,952 full-time employees to be hired over a decade. Not all of those would be agents, and many would replace 52,000 current employees expected to retire by 2028.

The bill has not come up for a vote in the Democratic-led Senate, though both parties have agreed on more modest IRS funding cuts of $20 billion as part of debt ceiling and budget compromises.

According to the nonpartisan Congressional Budget Office’s estimates, the original Inflation Reduction Act investment of $80 billion was expected to bring in about $180 billion in additional revenue owed to the government, bringing down the deficit by more than $100 billion over a decade.

A January 2022 poll by Data for Progress found that 68 percent of likely voters supported the IRS doing more “to make sure that wealthy Americans are paying their fair share in taxes.”

A January 2024 Navigator poll found 67 percent of registered voters support the Inflation Reduction Act in general, while 22 percent oppose it.

Reprinted with permission from The Michigan Independent

Hakeem Jeffries

Congressional Democrats And Biden Prepare To Thwart GOP Debt Extortion

Treasury Secretary Janet Yellen has informed Congress that the U.S. could default on payments as early as June 1. Congress, or possibly Biden unilaterally, will have to act to lift or suspend that cap. House Republicans have insisted that they won’t allow this to happen without the imposition of draconian budget cuts in return, a hostage-taking demand that poses a very real threat to the U.S. economy and would have "massive and far-reaching" impact on global trade and push other countries into a recession, as well.

In January, with Republicans already holding the debt ceiling hostage, House Democrats covertly set up the one legislative option they have for forcing a clean debt ceiling vote in the House. That “secret weapon” is a discharge petition. It’s a way for the lawmakers to bypass leadership in the House to force a bill onto the floor. It does require the participation of five Republicans, as a bare majority of 218 members have to be on board to make it work. The process takes a lot of time, so Jeffries and team got to work early, The New York Times reports, quietly introducing a bill called the "Breaking Gridlock Act."

In a letter to colleagues on Tuesday, House Democratic leader Hakeem Jeffries informed his colleagues that they had this option available.

“The filing of a debt ceiling measure to be brought up on the discharge calendar preserves an important option. It is now time for MAGA Republicans to act in a bipartisan manner to pay America’s bills without extreme conditions.” - Hakeem Jeffries in a letter to colleagues

The legislation was introduced by California Rep. Mark DeSaulnier, a relatively unknown Democrat whose legislative activity was likely to go unnoticed. That was step number one: avoid attracting attention by not having a prominent member offer the bill. Step two was writing it as a “Swiss Army knife” bill, one with a lot of options for moving forward. It was written to be relevant to as many committees as possible, increasing the chances it would make it out of one of them for a potential vote in the House.

The plan worked: The bill was referred to 20 committees and it has sat in those committees, waiting to be deployed as the discharge petition on a clean debt ceiling hike.

That is important because the rule for discharge petitions requires that they have to sit in committee, or “ripen,” for 30 legislative days, meaning days when the House is actually in session. Since the congressional calendar allows extensive time off for holidays and district work, that can be the equivalent of a couple of months in normal human working time. So, the bill has already “ripened” and is ready to be discharged if Democrats can win over at least five Republican votes.

This is the hard part: Getting the bill discharged requires 218 signatures and that means finding five Republicans to sign on. So far, no Republicans are biting. Without them, and because there are further delays built into the process after those 218 signatures on the petition are secured, the discharge petition is absolutely not a guaranteed fix for the crisis.

So far, Republican leaders say their coalition will stick together. In an interview with The Hill, Rep. Scott Perry said, “They’re not going to get any Republicans…..We already passed our bill.”

That’s big talk from a Texas Republican in a secure seat. But what about those Republicans in swing districts? This discharge petition might provide a wedge to splinter some away from McCarthy and the extremists in the Freedom Caucus, who seem to be running the show. They might balk as the clock keeps ticking down toward global economic disaster and Democrats, led by Jeffries, have given them a place to land.

There’s an outside chance that Congress and the White will end up kicking the can down the road with a short-term fix, a suspension of the debt limit for several weeks or a few months, or whatever negotiators can work out. The possibility of this temporary solution could get stronger as the X-date (the day when the Treasury Department runs out of money to pay the bills) gets closer. If a short reprieve happens, that would give House Democrats more time to deploy their discharge petition weapon and try to win over those swingy Republicans

While the House Democrats are pursuing that, the Times also reports, the White House has been exploring what’s been dubbed by Cornell Law School Professor Michael C. Dorf as the “least unconstitutional option.” That involves Biden taking Section Four of the 14th Amendment literally: a constitutional challenge to the debt limit.

This means Biden could declare that Congress is failing in its constitutional duty to pay the debts it incurs, so as president, he is constitutionally bound to uphold the clear directive of the 14th Amendment: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

“Top economic and legal officials at the White House, the Treasury Department and the Justice Department have made that theory a subject of intense and unresolved debate in recent months,” the Times reports, citing ”several people familiar with the discussions.”

As of now, the official position of the White House is that this is something Congress is obligated to do, with no strings attached. It’s an encouraging sign that the option is being seriously considered, because it’s a perfectly valid one and it provides yet another pressure point to force Republicans into doing their job. “If you don’t do it,” Biden could say, “I’ll do it without you.”

It would be a good idea, though, for Biden to start preparing the American public for this possibility, clearly laying out the stakes for the nation and the world about the very real danger Republicans are posing to the U.S. economy and well beyond. Biden should declare he will not let that happen on his watch. In the meantime, it’s time to tighten those screws on the swingy Republicans and get them to pull up—before we all go off the fiscal cliff together.

Reprinted with permission from Daily Kos.

Senate Advances Bill To Raise Debt Limit And Avert Disastrous Default

Senate Advances Bill To Raise Debt Limit And Avert Disastrous Default

By Richard Cowan and David Morgan

WASHINGTON (Reuters) -The U.S. Congress' months-long drive to raise the federal government's $28.9 trillion debt limit, and avert an unprecedented default, took a step forward on Thursday as the Senate advanced the first of two bills needed for the hike.

Fourteen Republicans joined the chamber's 48 Democrats and the two independents who caucus with them in voting to end debate on the first bill, spurning right-wing demands that they boycott any measure leading to an increase in the Treasury Department's borrowing authority.

"I'm optimistic that after today's vote we will be on a glide path to avoid a catastrophic default," the chamber's top Democrat, Majority Leader Chuck Schumer, said in a speech before the 64-36 vote on a measure he negotiated with Republican counterpart Mitch McConnell to speed passage.

Treasury Secretary Janet Yellen has urged Congress to raise the limit before December 15.

Republicans for months have been maneuvering to try to force Democrats to raise the debt limit on their own, seeking to link the move to President Joe Biden's proposed $1.75 trillion "Build Back Better" domestic spending bill.

Democrats note that the legislation is needed to finance substantial debt incurred during Donald Trump's administration, when Republicans willingly jacked up Washington's credit card bill by about $7.85 trillion, partly through sweeping tax cuts and spending to fight the COVID-19 pandemic.

The Senate could vote as early as Thursday evening to pass the first of two pieces of legislation needed to raise the borrowing limit to a still-under-negotiation amount intended to cover Washington's expenses through the 2022 midterm elections that will determine control of Congress.

Democrats will need only a simple majority, including Vice President Kamala Harris' tie-breaking vote, to pass the two pieces of legislation and raise the debt limit.

A final vote, in the House of Representatives, is likely on Tuesday and President Joe Biden is expected to sign both bills into law once they pass.

'Right Thing To Do'

Republican Senator Lisa Murkowski, who is up for re-election next year, told reporters that she voted to advance the first bill because "It was the right thing to do."

She added that at a time when Russia is amassing troops on its border with Ukraine, "we don't need to be sending signals anywhere in the world that we're not going to back the full faith and credit in the United States."

The break in the legislative deadlock came just two months after Congress agreed on a short-term lift to the debt ceiling, to avert an unprecedented default by the federal government on its obligations, which would have dire implications for the world economy.

For years, lawmakers have squirmed over raising the statutory limit on the country's growing debt, fearing voter backlash.

The emergence in 2010 of the conservative, small-government "Tea Party" movement increased the rancor in Congress over such legislation, even as lawmakers voted for tax cuts and spending increases that contribute to the debt.

The Bipartisan Policy Center think thank warned last week that the government could risk default by late this month if Congress does not act.

Democrats noted that they had voted in the past to authorize debt ceiling hikes to cover Republican measures, such as the Trump tax cuts.

(Reporting by Richard Cowan, David Morgan, Susan Cornwell and Moira Warburton; Editing by Scott Malone, Peter Cooney and Andrea Ricci)

Yellen: Debt Default Would 'Permanently' Weaken America

Yellen: Debt Default Would 'Permanently' Weaken America

By David Lawder

WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen issued a fresh plea for Congress to raise the federal debt ceiling on Sunday, arguing a default on U.S. debt would trigger a historic financial crisis.

In a Wall Street Journalopinion piece , Yellen said that the crisis triggered by a default would compound the damage from the continuing coronavirus pandemic, roiling markets and plunging the U.S. economy back into recession at the cost of millions of jobs and a lasting hike in interest rates.

"We would emerge from this crisis a permanently weaker nation," Yellen said, noting that U.S. creditworthiness has been a strategic advantage.

Yellen did not offer a new timeline for a possible default, but described economic damage that would fall on consumers through higher borrowing costs and lower asset prices.

She has said previously that a default could come during October when the Treasury exhausts its cash reserves and extraordinary borrowing capacity under the $28.4 trillion debt limit.

"We can borrow more cheaply than almost any other country, and defaulting would jeopardize this enviable fiscal position. It would also make America a more expensive place to live, as the higher cost of borrowing would fall on consumers," Yellen wrote. "Mortgage payments, car loans, credit card bills—everything that is purchased with credit would be costlier after default."

Republicans have refused to support raising or suspending the $28.4 billion. Senator Bill Cassidy from Louisiana said earlier on NBC's "Meet the Press" program that Democrats want to increase the borrowing cap to fund trillions of dollars in "Democratic wish list" spending.

Yellen argued the debt ceiling is about paying for past spending obligations, and said waiting too long to lift the debt ceiling can still cause damage, citing a 2011 debt ceiling crisis that pushed the federal government to the brink of default that prompted a credit rating downgrade.

"This led to financial-market disruptions that persisted for months. Time is money here, potentially billions of dollars. Neither delay nor default is tolerable."

House of Representatives Speaker Nancy Pelosi, in a statement, cited Yellen's past remarks on the issue and noted that Congress addressed the debt ceiling on a bipartisan basis three times during the Trump administration.

"When we take up the debt limit this month, we expect it to be bipartisan once more," Pelosi said.

Still, House Majority Whip Jim Clyburn on Sunday that Democrats may have to pass the debt ceiling hike without Republican support.

"I think we ought to do what's necessary and message to the American people exactly who is trying to destroy this great democracy that we hope to keep in place," he told CNN.

(Reporting by David Lawder and David Shepardson; Additional reporting by Phil Stewart; Editing by Diane Craft and Daniel Wallis)