Capitol Hill remained in the spotlight Wednesday as Sen. Kirsten Sinema (D-Ariz.) outlined her demands for a reconciliation report that could win her support, and Rep. Jackie Walorski (R), 58, died in a car crash in her home state of Indiana.
The future of the Democrats’ $739 billion budget package remains murky, in large part because Sinema wants changes after more than a year of negotiations.
According to multiple reports, the Arizona senator’s request includes dropping a provision in the bill that would eliminate the carried interest loophole, a move that would change how investment income is taxed. Removing it would reduce projected revenue from the measure by $14 billion, undercutting what Democrats would like to spend while touting deficit reduction. Sinema also wants to add $5 billion in drought funding as Arizona regularly experiences water problems (Politico).
The senator, who has not said anything publicly while her staff says she is reviewing the plan, also hinted she has questions about the legislation’s proposed 15 percent minimum corporate tax. During a conversation Wednesday with business groups, she asked if that provision was “written in a way that’s bad” (CNN).
▪ Bloomberg news: Sinema seeks to retain private equity, corporate tax cap.
▪ The New York Times: With climate deal looming, Democrats turn hopes to Sinema.
▪ Politico: Electric cars, drug costs and more: 5 battles Democrats could lose on their bill.
Sinema’s reluctance to raise taxes through carried interest, which is a share of profits earned by general partners of private equity, venture capital and hedge funds, would be the latest blow to President Biden and top Democrats who propose requiring the wealthy Americans and corporations to pay higher taxes.
As The Hill’s Tobias Burns details, previous proposals that have now been scrapped include increases in the individual income tax rate, property and capital gains tax, and a proposed additional tax on high-income households. As a result, the cost of the bill has been reduced to a fraction of the original $3 trillion projected by the majority party.
However, there are other issues that Democrats may need to consider. Automakers are calling on Sen. Joe Manchin (DW.Va.) to reconsider the newly structured $7,500 electric vehicle tax credit over concerns it may be unenforceable. According to Reuters, the complaint centers on new requirements for sourcing battery components and critical minerals, but Manchin has shown little interest in listening to their wishes.
“I say [automakers] to get aggressive and make sure we mine in North America, refine in North America and put a line on China,” Manchin told reporters. “I don’t believe we should be building a mode of transportation on the backs of foreign supply chains. Will not do it.”
▪ Business Insider: Sen. Bernie Sanders (I-Vt.) weighs in on Manchin’s surprise deal.
▪ Bloomberg News: Automakers including Ford, General Motors and Toyota are pushing Congress to set a tax credit for electric vehicles they can’t use.
▪ The Hill: Manchin’s deal could put new hurdles ahead of electric vehicle incentives.
▪ The Hill: The Democratic plan would reduce the deficit by more than $100 billion, according to the Congressional Budget Office.
Tragedy struck the Capitol Hill community on Wednesday when Walorski, a six-term lawmaker, and two staffers were killed in a car crash. The two-vehicle crash happened in Indiana around 12:30 p.m., according to the Elkhart County Sheriff’s Office.
Walorski was traveling with Zachery Potts, 27, and Emma Thomson, 28. The congressman’s office confirmed the death.
“Dean Swihart, Jackie’s husband, has just been informed by the Elkhart County Sheriff’s Office that Jackie was killed in a car accident this afternoon,” the office said in a statement. “She returned home to be with her Lord and Savior Jesus Christ. Please keep her family in your thoughts and prayers. We will have no further comment at this time.”
Walorski, the top GOP member of the House Ethics Committee, was remembered by lawmakers as a hard worker who cared deeply about representing her constituents. Before winning her seat in 2012, Walorski spent five years in the Indiana House of Representatives and served with her husband as a missionary in Romania for four years.
“Jackie was a dear friend, a trusted adviser and the epitome of integrity who won the admiration and respect of all her colleagues in the House. She always put others first,” House Minority Leader Kevin McCarthy (R-Calif.) said in a statement, calling her death “absolutely devastating.”
Speaker Nancy Pelosi (D-Calif.) and Biden ordered flags at the Capitol and the White House, respectively, to be flown at half-staff to honor Walorski (D-Hill), the third lawmaker to die this year. The others: Reps. Don Young (R-Alaska) and Jim Hagedorn (R-Minn.) (by name).
© Associated Press / J. Scott Applewhite | The late Rep. Jackie Walorski (R-Ind.), 2014.
Finally, there was legislative action on Wednesday, when the Senate overwhelmingly gave the green light to a resolution ratifying the admission of Sweden and Finland to NATO. Senators voted 95-1 for it, with Sen. Josh Hawley (R-Mo.) being the lone no vote. Sen. Rand Paul (R-Ky.) voted absent.
The vote before the recess was heavily pushed by Senate Minority Leader Mitch McConnell (R-Ky.), who rejected any lawmaker who opposed the two northern countries joining NATO. The move sends yet another signal that Congress remains united in its opposition to Russia’s invasion of Ukraine and aggression toward Europe.
“There is no doubt that embracing these stable democracies with modern economies and capable, interoperable militaries will only strengthen the most successful military alliance in human history,” McConnell said on the Senate floor.
Finland made the NATO push in part because of the 800-mile border it shares with Russia. Meanwhile, Sweden shares a strategic interest with Moscow in the Baltic Sea, which gives the Russian Navy access to the Atlantic (The Hill).
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▪ Bloomberg News and Reuters: China on Thursday test-fired missiles in military exercises around Taiwan, a day after Pelosi left.
▪ The New York Times: Pelosi’s visit to Taiwan risks undermining US efforts with Asian allies.
▪ The Washington Post: Pelosi’s visit to Taiwan marks the beginning of a new phase of the campaign to pressure China.
▪ The Wall Street Journal: Pelosi’s trip delays announcement of North American plant of Contemporary Amperex Technology (a China-based supplier of electric vehicle batteries for Tesla).
▪ Associated Press: After Taiwan, Pelosi is in South Korea to meet with political leaders.
LEADING THE DAY
➤ POLICY
Are GOP voters so enamored with former President Trump, so tough on the 2020 election, and so willing to accept Trump supporters that midterm GOP candidates are becoming more vulnerable this year than the GOP realizes? The Hill’s Brett Samuels asked political analysts to help answer that question.
Trump’s false claims that the 2020 election was stolen didn’t poison the results for hard-right GOP candidates in Tuesday’s primaries, raising new questions about how the contenders will fare in November’s general election. Republican primary voters overwhelmingly chose candidates who have made the 2020 election a central part of their campaign messages, The Hill’s Julia Manchester reports.
Alexander Bolton, The Hill: McConnell manages midterm expectations as Trump-backed candidates win.
Michigan Rep. Peter Meyer (R) is the latest victim of Trump’s vow to retaliate against conservatives who voted to impeach him after the Jan. 6 attack on the US Capitol. He became the second of 10 Republicans to break with the party to support impeachment and was ousted in the GOP primary.
Meyer lost Tuesday to John Gibbs, a former housing and urban development official who won Trump’s endorsement in the race for the state’s 3rd District. The defeat turned the spotlight on a ploy by the House Democratic campaign to back the most pro-Trump challenger across the aisle, hoping to end up with opponents the party could paint as extremist Trump supporters and peddlers of the “big lie”.
As The Hill’s Max Greenwood writes, the Democratic Congressional Campaign Committee has spent nearly half a million dollars on ads supporting Gibbs, believing he may prove easier to beat than Democratic nominee Hillary Scholten in November . Many analysts warn that Democrats are playing with fire by trying to play the GOP (The Hill) turf.
The New York Times: Meijer’s defeat in Michigan shows Republican intolerance of Trump antagonists.
© Associated Press / J. Scott Applewhite | Rep. Peter Meijer (R-Mich.), 2021
As has always been the case before November’s election dramas, much of the Democrats are banking on overcoming inflation and wallet fears, picking up voter turnout from blocs of progressives and even independents, and finessing Biden’s low job approval ratings and the assumption of the left that the party in power in the White House usually loses seats in off-year elections.
▪ The New York Times: Here’s who won and lost in Tuesday’s key primaries in five states.
▪ Henry Olson, The Washington Post: The GOP is blowing its chance to turn the midterms into a referendum on Democrats.
▪ Jeff Greenfield, Politico Magazine: How November’s midterms can still surprise us. (“When it comes to games in the next three months, even at the most basic level, we don’t really know what we think we know.”)
Democrats were thrilled, but puzzled…
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