Ukraine Aid Package Boosted to $14 Billion

The U.S. Capitol dome is seen reflected in a puddle in Washington
ERIN SCOTT
By Yuval Rosenberg

Good Tuesday evening and Happy International Women’s
Day! Let’s jump right in, much as we might want to take a brief
detour to discuss the NFL's big Russell Wilson trade:

Ukraine Aid Package Grows to $14 Billion as Congress Scrambles
on Spending Bill

Government funding expires at the end of the day on Friday. With
the deadline rapidly approaching, congressional negotiators and
staff reportedly spent Monday night and Tuesday trying to finalize
a sweeping $1.5 trillion spending package covering the rest of this
fiscal year along with an emergency aid package for Ukraine and
additional pandemic funding.

The Ukraine aid package has grown to a reported $13.6 billion,
up from an initial White House request for $6.4 billion and a later
request for $10 billion. "The money is expected to boost key
programs at the Pentagon, State Department and other agencies, so
that they can better deliver military assistance, help defend
against cyberattacks, respond to food insecurity in the region and
shore up other NATO allies in the face of any further Russian
aggression," The Washington Post’s Tony Romm
reports.

The Covid-19 funding, meanwhile, has been scaled back to $15
billion, about half what the Biden administration initially said
would be needed and a third less than the $22.5 billion the
administration later requested. The funding has shrunk as
Republicans questioned the need for additional pandemic spending
and demanded better accounting for the trillions of dollars already
approved for public health and other coronavirus relief efforts.
The additional funding reportedly may be repurposed from pandemic
relief funds approved for cities and states as Republicans have
insisted that any new spending be fully offset.

Congressional leaders reportedly still hope to unveil the
legislative text of the spending package on Tuesday, giving
lawmakers hours to review the massive package ahead of a planned
Wednesday vote in the House. "We’re almost done. We’re going to
vote tomorrow," House Appropriation Chair Rosa DeLauro told
reporters said. "It’s not going to get delayed. We’re going to vote
tomorrow."

Lawmakers also look to punish Russia: The race to pass
the massive spending package comes as the House is also set to vote
on a related bipartisan bill to further crack down on Russia after
its invasion of Ukraine. That legislation would ban the import of
Russian energy, enable the Biden administration to impose
additional sanctions and tariffs on Russia and seek to expel Moscow
from the World Trade Organization.

In a letter to colleagues, House Speaker Nancy Pelosi (D-CA)
said the legislation would further isolate and weaken Russia while
also representing a show of support for President Biden’s efforts
to hold Russian President Vladimir Putin accountable for "his
premeditated, unprovoked war against Ukraine."

Republican lawmakers also expressed support for the bill, which
would also have to pass the Senate. "I think there’s more at stake
than just the cost of gasoline," said Sen. John Cornyn (R-TX),
according to
The Washington Post. "I think it’s an important
message to send, so despite the president’s actions, I would like
to see Congress pass a law."

What’s next: Time to pass the omnibus is running short
given that House Democrats are schedules to leave town Wednesday
afternoon for their annual policy retreat in Philadelphia.
"Hopefully the House sends it to us tomorrow," Senate Majority
Leader Chuck Schumer (D-NY) said Tuesday. "We can then move it and
certainly pass it before the midnight Friday deadline."

House lawmakers sounded confident Tuesday that they’d be able to
get it done, though House Majority Leader Steny Hoyer (D-MD)
reportedly warned his members Tuesday that they may need to come
back on Friday if the Senate were to make changes to the package or
run into delays that required a stopgap bill to prevent a
government shutdown. Senate Republicans have threatened to block
speedy consideration of the omnibus, demanding votes on a proposal
to defund the Biden vaccine mandates and a more detailed fiscal
analysis of the spending package.

The bottom line: Lawmakers broadly expect to meet their
deadline. Democratic leaders signaled that more funding would
likely still be needed for both Ukraine and the pandemic

Quote of the Day: Biden Bans Russian Oil Imports

"This is a step that we’re taking to inflict further pain on
Putin. But there will be costs as well here in the United States. I
said I would level with the American people from the beginning. And
when I first spoke to this, I said defending freedom is going to
cost -- it’s going to cost us as well, in the United States.
Republicans and Democrats alike understand that. Republicans and
Democrats alike have been clear that we must do this."

− President Biden, announcing an executive order to
ban the importing of Russian oil, liquefied natural gas and
coal.

Biden had been hesitant to block energy imports from Russia,
mindful of the economic reverberations the move could have — and,
perhaps, the political pain that could accompany record gas prices
— but made the decision to do so after facing bipartisan pressure
from lawmakers and consulting with U.S. allies. Biden said that
some European allies, which are more dependent on Russian energy,
may not follow suit. The European Union said it planned to cut
imports of Russian natural gas by two-thirds.

Biden blamed Russian President Vladimir Putin for rising U.S.
gas prices. "I’m going to do everything I can to minimize Putin’s
price hike here at home," he said.

A new
Wall Street Journal poll found that 79% of
Americans said they favor a ban on Russian oil imports even if it
means higher energy prices.

Deficit Totals $475 Billion for First Five
Months of Fiscal 2022

The federal budget deficit totaled $475 billion in the first
five months of the 2022 fiscal year, the Congressional Budget
Office said Tuesday in its monthly
budget review.

Total receipts between the beginning of the fiscal year in
October 2021 and February 2022 came to $1.8 trillion, CBO
estimated, while total outlays came to nearly $2.3 trillion.

Receipts are up by $371 billion this year compared to the same
period last year, driven in large part by higher individual income
and payroll taxes, which rose by $313 billion. Corporate tax
receipts were also higher, by $28 billion, as were customs duties
and excise taxes. Total outlays are down by $201 billion on a
year-over-year basis, driven in part by a $139 billion decrease in
unemployment compensation.

Spending on servicing the debt increased by $31 billion, or 22%,
as the Treasury paid more in interest on inflation-protected
securities.

Overall, the deficit so far this year is considerably smaller
than the one recorded in the pandemic-scarred years of 2020 and
2021. Last year, the deficit was a bit over $1 trillion in the
first five months of the fiscal year, or about twice as large,
while in 2020 the deficit came to $624 billion by this point.

Pelosi Takes Aim at Rick Scott’s Tax Plan

House Speaker Nancy Pelosi (D-CA) on Tuesday highlighted a new
analysis that shows that a proposal by Republican Sen. Rick Scott
of Florida to have all Americans pay at least some federal income
tax would end up raising taxes on more than half of all
households.

"In every state across the country the hardest working families
would shoulder huge tax increases – but more than 40 percent of
taxpayers living and working in Mississippi, West Virginia,
Arkansas, Louisiana, Alabama, Kentucky, Oklahoma, Georgia, New
Mexico, South Carolina and Florida would see their tax bills
skyrocket," Pelosi said in a statement.

The analysis of Scott’s proposal was done by the liberal-leaning
Institute on Taxation and Economic Policy, which looked at the
effects of the plan on taxpayers in each state. Crucially,
the analysis assumes that, under Scott’s plan,
low-income taxpayers would lose the refundable tax credits provided
by programs such as the Earned Income Tax Credit or the Child Tax
Credit, up to the point where they have some tax liability. This
isn’t spelled out in Scott’s plan, which provides virtually no
details, but ITEP’s Steve Wamhoff says it follows from the
proposal. "The only possible interpretation of Sen. Scott’s
proposal is that everyone who has negative federal income tax
liability under current law would instead have federal income tax
liability of at least $1," he writes.

Under that assumption, ITEP found that individual tax bills
would rise by more than $1,000 on average for the poorest 40% of
Americans, once the value of lost tax credits is taken into
account.

Scott has said that his proposal would not apply to seniors or
those who are not "able bodied," but those clarifications left it
unclear how the plan would have all Americans have some "skin in
the game," as the senator’s plan put it.

Pelosi said the think tank’s analysis shows the sharp contrast
between the parties on fiscal policy: "While Republicans plan to
squeeze America’s hardest-working families with higher tax hikes
and try to rip away their health care, Democrats are still hard at
work to pass legislation to further lower everyday prices, fight
inflation and cut taxes for middle-class families, paid for by
finally making giant corporations and the wealthiest pay their fair
share."

For their part, Republicans have distanced themselves from
Scott’s proposal. Although the Florida Republican defended his plan
in a Wall Street Journal
op-ed last week, Senate Minority Leader Mitch
McConnell (R-KY) bashed the proposal, saying that while he does not
plan to release a GOP agenda, under no conditions would Republicans
support a tax hike.

Sen. Ron Johnson (R-FL) said Monday that while he agrees with
"most of" Scott’s proposed agenda, he recognized that some things
would have to change — presumably including the idea of raising
taxes on millions of low-income households. At the same time,
Johnson said Republicans need to make it clear what they plan to do
if they win power in the coming elections. Johnson’s idea is a bit
of a throwback to the glory years of the Trump presidency: "For
example, if we’re going to repeal and replace Obamacare — I still
think we need to fix our health-care system — we need to have the
plan ahead of time so that once we get in office, we can implement
it immediately, not knock around like we did last time and fail,"
Johnson said.

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