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BY JOHN BRESNAHAN, ANNA PALMER AND JAKE SHERMAN

THE TOP

Go Nats. The season finally begins today at 4:05 p.m. against the Atlanta Braves. 

OK, buckle up, drink some coffee — whatever you need to do, do it. There’s a lot to run down this morning.

What we know: At 6:20 p.m. last night, Senate Majority Leader Chuck Schumer’s office released this statement:

“The Parliamentarian has advised that a revised budget resolution may contain budget reconciliation instructions. This confirms the Leader’s interpretation of the Budget Act and allows Democrats additional tools to improve the lives of Americans if Republican obstruction continues. While no decisions have been made on a legislative path forward using Section 304 and some parameters still need to be worked out, the Parliamentarian’s opinion is an important step forward that this key pathway is available to Democrats if needed.” 

This, to most every onlooker, seems to indicate that Senate Parliamentarian Elizabeth MacDonough ruled Democrats can amend the fiscal 2021 budget reconciliation to get another opportunity to pass tax-and-spending legislation with a simple majority vote instead of the 60 votes it takes to pass nearly everything in the Senate.

It’s important to note that we haven’t seen MacDonough’s actual ruling and, of course, we’ll want to review it closely. There’s going to be a lot of discussion on what it means and how it would work. Schumer’s office even nods to this in its statement by saying “some parameters still need to be worked out.”

Republicans, for their part, are withholding official comment on this until they work through it as well. Privately, senior GOP officials are telling us the ruling doesn’t say exactly what Democrats are saying it does. So there will be a lot on this in the coming days.

But let’s talk about what happens if this holds up and Democrats indeed get another opportunity to use the fast-track reconciliation process.

What it means: Typically, Congress gets one opportunity each year to pass legislation under the reconciliation process, so this ruling gives Schumer and the Democrats all sorts of potential strategic options. We’ll caution that Schumer hasn’t said he’s going to use this flexibility, just that he’s considering it. Although it seems apparent that Democrats will do it. Why ask for the ruling if you aren’t prepared to move ahead?

→ Clearly, the American Jobs Plan will get done using reconciliation. That was always going to be the case, no matter what President Joe Biden and White House officials say. But that just requires one reconciliation package — not the two that Schumer asked for.

→ What could Democrats do with another reconciliation bill? A lot, potentially. For instance, could they try to pass Sen. Bernie Sanders’ (I-Vt.) proposal to lower the qualifying age for Medicare to 55 or 60? Or something on prescription drugs? This gives people looking for changes to the social safety net a big, big opportunity.

What’s important here is Democrats don’t get bogged down on just passing an infrastructure bill. Schumer now has options to pass other legislative items — or at least try.

→ Appropriations: Congress’s annual 12-bill process to fund the government will likely come to a stop for now. If Democrats amend the FY 2021 budget, then that will impact FY 2022 and all this will impact appropriations. Will the White House even release a “skinny budget?” Possibly not. Also, it’s hard to see Republicans agreeing to any kind of spending deal if Democrats do another big reconciliation package. It was hard to see that happening after the American Rescue Plan anyway. So start thinking about a stop-gap funding bill this fall. The debt limit debate isn’t going to be fun either.

→ No earmarks on reconciliation. Just worth noting that House Democrats went through all that trouble of bringing earmarks back, House Republicans followed and we may not even see them at all. 

Limitations: Reconciliation isn’t a process that will magically make Sen. Joe Manchin (D-W.Va.) agree with all Democratic priorities. Reconciliation just gives Democrats the ability to pass tax-and-spend legislation with a simple majority and not get stopped by a filibuster. Manchin and Sen. Kyrsten Sinema (D-Ariz.) have stuck together this year so far, and we would expect that to continue. Democratic moderates in both chambers will have problems with tax increases.

BTW: This whole process empowers Manchin further. 

→ House Democrats have a four-seat margin right now. It may go up, it may go down (there’s a lot of stuff happening). But Speaker Nancy Pelosi’s (D-Calif.) margin is going to be slim no matter what. Let’s assume Rep. Jared Golden (D-Maine) votes no on whatever package comes up — which seems safe considering his record — Pelosi won’t have a lot of room to maneuver no matter how many reconciliation bills they have.

→ A second reconciliation isn’t a magic wand that will make it easier for Democrats to pass gun-control legislation or H.R. 1. Reconciliation is still narrowly targeted to spending and tax issues. Remember the minimum wage fiasco? 

What we don’t know: Does this mean that the Senate can now do multiple reconciliation bills?

Downsides: Sometimes legislative flexibility is a burden. Sometimes too many options give too many rank-and-file lawmakers too many ideas. 

Also, remember: If Republicans take back the majority, they can employ the same tools as Democrats.

How Republicans will attack it: They will say Democrats are changing the Senate rules to get their agenda through. 

OPPOSITION BUBBLING

In an empty Capitol, Warner issues warning on jobs package

Every few days during a congressional recess, the Senate opens up and one lawmaker presides over the chamber. Usually it’s someone who lives nearby, and yesterday it was Sen. Mark Warner (D-Va.).

Warner was asked about President Joe Biden’s American Jobs Plan, which he wanted more time to look at before commenting on. 

The Virginia Democrat was then asked about a proposal he introduced yesterday with Senate Finance Committee Chair Ron Wyden (D-Ore.) and Banking Committee Chair Sherrod Brown (D-Ohio) to set up a new way to tax profits earned by U.S. companies overseas. It’s a long, senatorial answer, but remember that Warner had a very successful business career before he got into politics, so pay attention to it closely:

[T]here’s two ways to raise revenues. One is the corporate rate directly. The other is to try to correct some of the mistakes that were made on international [taxes]  in 2017. You know I think that the overriding effort in 2017, which was to kind of get rid of deferral made sense. But the implementation and the complexity of both the guilty and the beach, you know, in practice, actually incented the companies to move things like research and development offshore, didn’t accomplish the goal. It’s part of the problem that you have — and I say this not just in terms of international tax regime — but when you make big policy changes with only one party, your ability to come back and fix things when you make mistakes, is undermined and clearly there were a lot of mistakes made in 2017 beyond the overall macro philosophical view of, you know, should there have been that much tax forgiveness to the highest, the wealthiest Americans.  

Warner clearly wants a bipartisan agreement on tax policy changes. He’s a moderate and tries hard to do this in other areas as well. 

Warner also warns about what happens “when you make big policy changes with only one party,” which Republicans did in 2017. This is exactly what Democrats are threatening to do on the American Jobs Plan if the GOP doesn’t go along with them. We just wanted be sure you saw it too.

TAX HIKES ON A1

MAKING IT PERMANENT

WM Chair Richie Neal call for massive expansion in childcare support

House Ways and Means Committee Chairman Richie Neal (D-Mass.) is calling for dramatic expansion in childcare support for American families, saying it “needs to be a guarantee, not an expensive hassle that drives parents out of the workforce or makes them choose between wages and family” in a letter to Democratic members of his panel. 

Neal also wants paid family and medical leave for all Americans as part of the American Jobs Plan that Congress will begin debating. So add this to the list of items Democrats want in the infrastructure bill.

Neal’s panel took the lead in boosting the child tax credit and other pro-family provisions as part of the massive, $1.9 trillion American Rescue Plan to help deal with the Covid-19 pandemic. Now Neal wants to make those provisions permanent, and include paid family and medical leave as part of the new infrastructure plan. These would be huge, potentially very expensive provisions that are going to attract a lot of attention and controversy.

“This is our opportunity to reduce child poverty by permanently extending the changes to the Child Tax Credit, Earned Income Tax Credit, and the Child and Dependent Care Tax Credit that we made in the American Rescue Plan,” Neil wrote.

Neal added: “We will give every worker the right to paid family and medical leave, whether it’s because they’ve just welcomed a new child into their family, they have a loved one in need of care, or they are dealing with their own medical issue. And if employers or states already have paid leave policies that support their workers, we will provide additional support so they can maintain and improve them.”

This is hugely ambitious stuff that would have a big impact across the country. But Neal said, “Americans are counting on us to not only make jobs available at the end of this tunnel, but to vastly improve their working conditions.”

The tax credits impact millions of low-income Americans and families, particularly Black and Latino families, and the Democrats hailed the one-year boost as part of the American Rescue Plan as a huge tool for fighting poverty. Low-income families spend a far higher percentage of their income on child care than more affluent families while having even fewer choices.

Yet it will cost a lot of money to do all this, a lot, and it will have to come from somewhere else. The Tax Foundation estimated that making the child tax credit permanent alone could cost $1.6 trillion over a 10-year window.

HAPPENING TODAY

Yellen to huddle with House Democrats

Treasury Secretary Janet Yellen will speak this afternoon at a virtual meeting of House Democrats. 

The meeting is at 4 p.m., and is being billed as focused on “The American Rescue Plan, the president’s recovery package and the road ahead for rebuilding America’s economy.” We imagine this meeting will be a mix of implementation of past legislation and chatter about the American Jobs Plan. Curiously, Yellen is not part of the administration’s “Jobs Cabinet,” so she’s not directly involved with selling this new $2.5-trillion plan. But Yellen may be the most important voice in Biden’s Cabinet, in a lot of ways, so Democrats will follow what she says closely.

CLIP FILE

NYT: “Biden and Democrats Detail Plans to Raise Taxes on Multinational Firms,” by Jim Tankersley and Alan Rappeport

“Biden Plan Spurs Fight Over What ‘Infrastructure’ Really Means,” by Jim Tankersley and Jenna Smialek

“New York State Is Set to Raise Taxes on Those Earning Over $1 Million,” by Luis Ferré-Sadurní and Jesse McKinley

WaPo: “Republicans ramp up attacks on corporations over Georgia voting law, threaten ‘consequences’” by Marianna Sotomayor and Todd C. Frankel

“Arkansas governor vetoes bill banning medical treatments for transgender youths,” by Samantha Schmidt

WaPo: “U.S. and Iran set to begin indirect talks on reviving nuclear deal in Vienna,” by Loveday Morris in Berlin and Ann Gearan in D.C.

“Capitol Police officer was killed by car striking him, D.C. police say,” by Tom Jackman and Emily Davies

WSJ Editorial Board: “Anatomy of a Biden Tax Hike”

AP: “North Korea says it won’t participate in Tokyo Olympics,” by Kim Tong-Hyung

“Iran prosecutor says 10 indicted for Ukraine plane shootdown,” by Jon Gambrell in Dubai, United Arab Emirates

Politico: “Florida’s Trump country stands with Gaetz,” by Gary Fineout

MOMENTS

10 a.m.: VP Kamala Harris will travel to Chicago from Los Angeles.

10:30 a.m.: President Joe Biden will receive his intelligence briefing.

12:00 p.m.: Jen Psaki will hold her press briefing. 

1:45 p.m.: Biden will visit a vaccination center in Virginia.

2:10 p.m.: Harris will tour a vaccination site in Chicago. The site is a joint project of the city and the Chicago Federation of Labor. 

3:45 p.m.: Biden will speak about vaccinations in the State Dining Room at the White House.

5 p.m.: Harris will leave Chicago for D.C. 

DOWNTOWN MOVES

Two big pick ups for Squire Patton Boggs:

→ Tommy Andrews, a longtime presence on Capitol Hill and former aide to Donald Trump, is joining SPB as a principal. Andrews has worked for two speakers — John Boehner and Paul Ryan — and in the leg affairs shop at the Whtie House. He’s being reunited with Boehner at SPB.

→ Caren Street, who is chief of staff to Rep. Karen Bass (D-Calif.). Bass has a very bright future in the House Democratic Caucus.

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Editorial photos provided by Getty Images