The Hill’s Morning Report – Presented by Citizens’ Climate Lobby – Biden floats infrastructure, tax concessions to GOP
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Total U.S. coronavirus deaths reported each morning this week: Tuesday, 594,568; Wednesday, 595,213; Thursday, 595,833; Friday, 596,434.
The gulf between the White House and Senate Republicans when it comes to roads, bridges and ports — and corporate taxes — appears to be hundreds of billions of dollars wide, even as President Biden privately floated new concessions this week in search of a bipartisan deal.
On Wednesday, the president broached a significantly lower floor for a compromise on infrastructure, touting $1 trillion in news spending, signaling to Sen. Shelley Moore Capito (R-W.Va.) and her GOP colleagues that although he might be willing to trim his plan, they would need to come up from the $257 billion level they recently proposed for new spending, The New York Times reported.
The president has staked out some new middle ground during talks with Republicans, suggesting he might be willing to forfeit more than half the total infrastructure and job creation spending included in his original plan. He has not officially moved off his proposal to finance infrastructure investments with higher taxes on wealthy corporations, according to the Times. Republicans have rejected the idea of raising taxes as part of any deal, favoring user fees. The parties may be closer on overall cost structure but are far apart on how to finance the legislation, which is why a bipartisan deal is seen as unlikely. Biden and Capito will speak again on Friday, likely by phone.
The Washington Post and The Associated Press reported that Biden privately broached in conversation with the West Virginia senator a fallback to create a new minimum tax rate of 15 percent on corporate profits, plus the possibility of tapping revenues from increased IRS enforcement as a possible compromise revenue stream.
White House press secretary Jen Psaki said on Thursday that the president had “absolutely not” abandoned a proposed 28 percent corporate tax rate included in his American Jobs Plan, but was trying to give Republicans a path to back infrastructure without violating their red line of keeping corporate tax rates at current levels.
Senate Minority Leader Mitch McConnell (R-Ky.), in close contact with Capito, said the two conferred following the Wednesday meeting at the White House. “We’re still hoping we can come to an agreement on a fully paid for and significant infrastructure package,” he said.
In classic fashion, McConnell has blessed weeks of discussions with the White House without endorsing any details or specifics. Republicans want to find a way to support a smaller and fully offset infrastructure compromise, he says, while making it clear his party opposes tax hikes as part of any legislative compromise, especially ahead of the 2022 midterms. “I don’t think that’s gonna appeal to members of my party, and I think it’ll be a hard sell to the Democrats,” he added on Thursday.
While Senate Republicans want to shrink Biden’s plan, and the president himself has entertained that possibility, the president’s legislative strategy could wind up bigger, harder and longer.
Senate Parliamentarian Elizabeth MacDonough‘s recent guidance that Senate Democrats can use one rather than two reconciliation packages this year shifts the political calculus for Biden’s agenda if Democrats decide to move ahead without Republicans, as has been anticipated (The Hill). One enormous bill for infrastructure, jobs and other policies would also need to include Democrats’ favored health care reforms, such as expanding Medicare, and broader tax changes on state and local tax deductions and capital gains. The potential scope under a reconciliation strategy means a measure would be unlikely to pass in July, as Democrats originally hoped, and instead stretch into the fall or even late December.
The Hill: Sen. Joe Manchin (D-W.Va.) said Thursday he is not ready to support an infrastructure measure passed by Democrats alone: “We’ve got to work together and that takes a lot of time and energy and patience.” He anticipates a briefing from Capito next week.
More in Congress: Sen. Kirsten Gillibrand (D-N.Y.), a lead sponsor of legislation that would cut out the military chain of command from decisions over prosecutions of service members for sexual assault and other serious crimes, faces tough opposition from Senate Armed Services Committee leaders Sens. Jack Reed (D-R.I.) and James Inhofe (R-Okla.). “They are both against my bill, and they would like to kill it in committee,” she said last week. “They have such a deep respect for the chain of command that they are often overly deferential to it” (The New York Times). … More than a dozen Capitol Police officers are still on medical leave following injuries sustained during the Jan. 6 Capitol riots (The Hill). … After a two-year battle, the House Judiciary Committee will interview former Trump White House counsel Don McGahn today as part of a federal court agreement (The Associated Press).
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LEADING THE DAY
ADMINISTRATION: The president today will speak about the latest employment snapshot from May’s Labor Department data, to be released this morning, following a disappointing report in April. As the administration and Democrats seek congressional support to expand government by trillions of dollars, Biden’s justification to voters has been that the economy needs stimulus to recover, and that the nation cannot expand and compete in the future without significant federal investments.
On Thursday, weekly jobless claims for the week ending May 29 dropped to 385,000, another low since the outset of the pandemic-induced downturn and further evidence of an economy on the mend. More Americans are shopping, traveling, dining out and venturing to entertainment venues including theaters and stadiums. All that renewed spending has led companies to seek new workers (The Associated Press).
The Wall Street Journal: U.S. hiring likely picked up in May while unemployment fell.
Biden is surrounded by economic advisers with experience stretching back to the Clinton White House, including Treasury Secretary Janet Yellen. They remember when balancing the budget was in vogue in both parties before red ink returned under former President George W. Bush and continued under former Presidents Obama and Trump.
Biden has proposed the largest government expansion since World War II, and some respected economists, including a few Democrats, have sounded cautionary notes about inflation and a potentially overheating economy. One prominent naysayer is Lawrence Summers, a former Treasury secretary and current critic of Biden’s agenda, whose frequent opining from op-ed sidelines (and occasionally revisionist history) has irked progressive Democrats.
The Washington Post reports that Biden privately phoned Summers recently to discuss the economy and policy proposals still moving through Congress. Late last month, Summers urged policymakers to pay for new infrastructure spending in part by repurposing unspent money from the coronavirus relief law, an approach endorsed by congressional Republicans but thus far rejected by the White House. Summers (pictured below in 2009 when he directed Obama’s National Economic Council) also said policymakers should consider letting unemployment benefits expire sooner than the current deadline of September — another recommendation the administration has not endorsed.
> Ransomware: The Justice Department is elevating investigations of ransomware attacks to a priority level akin to terrorism in the wake of the Colonial Pipeline hack and mounting damage caused by cyber criminals (Reuters). … The White House warned corporate executives and business leaders on Thursday to step up security measures to protect against ransomware attacks. There has been a significant hike in the frequency and size of such attacks, Anne Neuberger, cybersecurity adviser at the National Security Council, said in a letter. “The threats are serious and they are increasing. We urge you to take these critical steps to protect your organizations and the American public,” she added. The recent cyberattacks have forced companies to see ransomware as a threat to core business operations and not just data theft, as ransomware attacks have shifted from stealing to disrupting operations, she said (Reuters and CNN).
> Immigration: The Biden administration has quietly tasked six humanitarian groups to recommend to the government which migrants should be allowed to stay in the United States instead of being rapidly expelled from the country under federal pandemic-related powers that block people from seeking asylum. The groups will determine who is most vulnerable in Mexico, and their criteria has not been made public (The Associated Press).
> Student debt: Biden has said he supports $10,000 rather than a proposed $50,000 in forgiveness for student loan debt, but progressives and advocates want to see momentum this year. Local leaders are not relenting while trying to lobby Washington’s powerbrokers. Several city councils have passed resolutions that call on the federal government to act on student loan forgiveness. Advocates for such beneficence say economic equity — a Biden theme — is a goal advanced by wiping away some students’ crushing indebtedness. U.S. student loan debt in 2021 is estimated at $1.7 trillion (The Hill and Forbes).
> Royal audience: The president and first lady Jill Biden are scheduled to meet Queen Elizabeth II at Windsor Castle on June 13, a Sunday, while the president is in the United Kingdom for the annual Group of Seven summit. The president will also meet with Turkish President Recep Tayyip Erdoĝan on June 14 while in Brussels to confer with NATO leaders (The New York Times).
IN FOCUS/SHARP TAKES
POLITICS: Public appearances by former President Trump are set to ramp up in the near future as he continues to keep focused on audits and potential voting reviews by GOP allies in key states and spread the false idea that he will be reinstated as president in August.
Trump will reappear publicly as he will address the North Carolina Republican Party at its dinner during the state convention on Saturday night — representing his first speech since his appearance at the Conservative Political Action Conference (CPAC) in February.
The former president is also expected to announce a batch of “upcoming rallies,” which he teased in a statement last month. Jason Miller, a top aide to the former president, also announced that Trump will appear in Dallas next month to address activists at a CPAC event (Fox News).
The new appearances come as Trump continues to tell allies and supporters that he expects to be reinstated as president in August — something that is not feasible in any way, shape or form and will not happen. After reports by The New York Times and The Washington Post in recent days, National Review Online’s Charles C.W. Cooke confirmed the report as well, saying that Trump “does indeed believe quite genuinely” audits in key states, including Arizona and Georgia, will make that happen.
However, one family member poured cold water on the chatter. Lara Trump, a former top Trump campaign adviser, told Fox News on Thursday that it won’t happen (The Hill).
The Associated Press: Talk of Trump 2024 run builds as legal pressure intensifies.
The Wall Street Journal: Pennsylvania Republicans tour Arizona audit and call for their own.
The Associated Press: Trump’s grip on GOP sparks fears about democratic process.
CNN: Former Vice President Mike Pence on Trump: “I don’t know if we’ll ever see eye to eye” on January 6.
The Washington Post: Jan. 6 riot caused $1.5 million in damage to Capitol — and U.S. prosecutors want defendants to pay.
While Trump keeps his attention peeled to the audits, there are other key happenings at the state level. As The Hill’s Reid Wilson writes, GOP state legislators are advancing election overhaul legislation that changes the way voters get help at the polls.
Among the provisions being included in a host of bills are bans on ballot harvesting to prohibitions on giving someone else a ride to a vote center. Put simply, the bills create new barriers for voters who live far away, lack transportation or need assistance because of a physical disability.
The Hill: Nevada governor signs bill permanently expanding mail-in voting to all registered voters.
James Hohmann: What if America’s future looks more like Florida than California?
The Hill: Sen. Ron Johnson (R-Wis.) is “undecided” about running for reelection.
The Hill: Pence, a potential 2024 presidential candidate who is seeking to tout his conservative bonafides and tie himself closely to the Trump administration’s record, slammed Biden’s agenda during a speech to New Hampshire Republicans on Thursday.
Politico Magazine: What makes Caitlyn Jenner run?
*****
CORONAVIRUS: The White House on Thursday announced it will donate 25 million doses of COVID-19 vaccine abroad, with roughly three quarters allocated to the World Health Organization’s COVAX initiative, and the rest donated directly to handpicked countries.
“We are sharing these doses not to secure favors or extract concessions. We are sharing these vaccines to save lives and to lead the world in bringing an end to the pandemic, with the power of our example and with our values,” Biden said in a statement.
Nineteen million doses of the allocation will go to COVAX, which purchases and distributes vaccines to low-and middle-income countries. Administration officials said that about 6 million doses will go to Latin America and the Caribbean, 7 million doses will go to Asia, and 5 million will go to Africa.
The remaining 6 million doses will go directly to countries in need, including Mexico, Canada and South Korea, and to United Nations front-line workers (The Hill).
While laying out plans to aid the world, health officials were celebrating the work done domestically to tamp down the pandemic. Centers for Disease Control and Prevention (CDC) Director Rochelle Walensky noted to reporters on Thursday that the U.S. daily average of cases is under 16,000 — the lowest mark since last March amid the start of the outbreak.
Walensky said that the current case rate represents a more than 30 percent decrease from the previous seven-day average and a 94 percent decline from the peak of COVID-19 cases in January.
“This is the type of news I like to deliver, and certainly these data are encouraging and uplifting as we battle this pandemic,” Walensky said (The Hill).
Despite the decline, the White House is not slowing down in its efforts to vaccinate the masses. As The Hill’s Peter Sullivan notes, the president announced a number of new partnerships earlier this week, creating new incentives for individuals to get jabbed, especially for those who are the hardest to reach. The White House has laid out a July 4 deadline for getting 70 percent of the U.S. to receive at least one shot. As of this morning, 50.9 percent of the total population have had at least one dose, while 60.3 percent of the eligible population has gotten one, according to the CDC.
The Associated Press: Heart reaction probed as possible rare vaccine link in teens.
The Wall Street Journal: The COVID-19 calculus of herd immunity.
The Hill: European Union unveils plans for digital ID wallet.
The Associated Press: Holiday chaos as United Kingdom removes Portugal from travel green list.
The Morning Report is created by journalists Alexis Simendinger and Al Weaver. We want to hear from you! Email: asimendinger@digital-release.thehill.com and aweaver@digital-release.thehill.com. We invite you to share The Hill’s reporting and newsletters, and encourage others to SUBSCRIBE!
OPINIONS
The University of Virginia is investing $100 million in saving democracy. Can it make a difference? by Karen Tumulty, columnist, The Washington Post. https://wapo.st/34LryBe
Yes, it’s still the economy, stupid, by Karl Rove, columnist, The Wall Street Journal. https://on.wsj.com/3ifww11
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WHERE AND WHEN
The House meets at 9:30 a.m. for a pro forma session. Lawmakers resume legislative work in the Capitol on June 14.
The Senate will reconvene on Monday at 3 p.m. and will resume consideration of the nomination of Julien Neals to be U.S. district judge for the District of New Jersey.
The president will receive the President’s Daily Brief at 9 a.m. Biden will speak about the U.S. employment outlook at 10:15 a.m. before returning to Washington from Rehoboth Beach, Del., at 12:10 p.m. Biden is expected to speak again with West Virginia Sen. Capito about Republicans’ proposed approaches to infrastructure spending.
Yellen will be in London today and Saturday participating in the Group of Seven finance ministers meeting ahead of the G-7 summit later this month in Cornwall, England. The finance ministers aim to broker a global tax deal (Reuters).
Secretary of State Antony Blinken will participate in a virtual roundtable with Palestinian American community leaders at 10:15 a.m., followed by a virtual roundtable at 11:45 a.m. with Jewish community leaders.
Economic indicator: The Labor Department at 8:30 a.m. releases its monthly unemployment report for May.
The White House press briefing is scheduled at 1 p.m.
Hill.TV’s “Rising” program features news and interviews at http://digital-release.thehill.com/hilltv or on YouTube at 10:30 a.m. ET at Rising on YouTube.
ELSEWHERE
➔ U.S.-CHINA: Biden signed an executive order on Thursday to expand a Trump-era ban on U.S. investment in Chinese companies that support China’s military to include those selling surveillance technology, calling the entities a threat to U.S. interests and values. The president moved authority for the ban to the Treasury Department from the Defense Department, to give it stronger legal grounding, senior administration officials said. The ban takes effect on Aug. 2 (The Washington Post and The Hill).
➔ AIR TRAVEL: The supersonic Concorde died out in 2003. Is it time for a U.S. version in 2021? United Airlines said it would buy ultra-fast jets from Denver-based aerospace company Boom Supersonic, bringing back supersonic passenger travel (Reuters). … United Airlines announced plans on Thursday to roll back alcohol services. The airline will only offer alcoholic drinks only on domestic flights longer than 800 miles or from hub to hub, having initially said it would allow service for flights longer than 200 miles. The move follows the lead of Southwest and American Airlines, which both suspended alcohol sales in the past week (CBS News).
➔ SUPREME COURT: Justices on Thursday limited prosecutors’ ability to use an anti-hacking law to charge people with computer crimes. Justice Amy Coney Barrett, writing for the 6-3 majority, said the government’s interpretation of the federal Computer Fraud and Abuse Act “would attach criminal penalties to a breathtaking amount of commonplace computer activity.” Conservative and liberal justices agreed that prosecutors overreached when they used the law to charge a Georgia police sergeant who used a database he had access to for work for a non work purpose. Lawyers for the police sergeant had warned that if the court ruled against him it could make a federal crime out of using a computer for virtually any unauthorized purpose, from “checking sports scores at work to inflating one’s height on a dating website” (The Associated Press).
THE CLOSER
And finally … A big round of applause for this week’s Morning Report Quiz winners!
Here’s who knew their trivia about the Iron Horse, Lou Gehrig as the baseball world celebrates him this week: Mary Anne McEnery, Patrick Kavanagh, Pam Manges, Joe Erdmann, Randall S. Patrick, John Donato and Ki Harvey.
They knew that 7 major league ballplayers (including Gehrig and Cal Ripken Jr.) have played in at least 1,000 consecutive games.
In 1939, Gehrig became the first of 22 New York Yankees to have his number retired in the famed monument park at Yankee Stadium.
Gehrig’s streak of 2,130 consecutive games-played began when he replaced Paul “Pee Wee” Wanninger as a pinch hitter on June 1, 1925.
Finally, the longtime Yankees first baseman became the first athlete in history to appear on a Wheaties box, starting a tradition that continues 96 years later.
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