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THE TOP
Snow, Congress and government funding
Happy Tuesday morning.
Let’s start here: D.C. Public Schools and the federal government are closed today due to the snow. We will keep you posted on how this impacts House and Senate votes scheduled for this evening.
We’re just three days from a partial government shutdown. There are a lot of dynamics we’re tracking right now.
First: The Office of Management and Budget has already sent shutdown guidance to federal agencies, agency officials said. OMB is required to do so one week before a potential shutdown.
Senate: The Senate is scheduled to hold a cloture vote tonight on the legislative vehicle for the bipartisan short-term continuing resolution that will extend government funding deadlines to March 1 and March 8. This vote is still on despite the snow, we were told late Monday.
Once the Senate invokes cloture as expected, Senate Majority Leader Chuck Schumer will lay down the CR as a substitute. That’s where things get tricky.
Without a time agreement, senators who oppose the CR can delay passage of the stopgap funding package until Sunday. And the House still has to vote after that. Speed is of the essence, which is never Congress’s strength.
So Schumer and Senate Minority Leader Mitch McConnell — who always opposes shutdowns — will work to resolve objections.
Passing a CR doesn’t solve any of the big outstanding issues facing our national political leaders. It has no impact on the migrant crisis at the U.S.-Mexico border. There’s no money for Ukraine, Israel or Taiwan. It doesn’t cut the deficit or help the economy.
But it’ll keep federal agencies open for another 40 days — wandering in the desert anyone? — so that appropriators can draft 12 appropriations bills and pass them before automatic spending cuts kick in by mid-April. That’s the hope, anyway.
The 118th Congress continues to set low expectations and then struggles to meet them.
House: The House returns to session today. As of late Monday night, the House Republican leadership seemed intent on keeping votes scheduled for this evening as well. Part of this is to instill some urgency in getting members back to Washington. If party leaders cancel votes tonight, lawmakers won’t make an effort to return to Capitol Hill, delaying the House’s business with a shutdown looming Friday night.
Speaker Mike Johnson and the House Republican leadership plan to host a closed-door party meeting Wednesday morning to talk through the week’s business. And, of course, the highlight of this week’s business is passing the government funding bill by Friday night.
Passage in the House will mean some hoop-jumping for GOP leaders. Johnson can’t put this bill through the Rules Committee. Former Speaker Kevin McCarthy stacked the panel with several conservatives a year ago in order to win the gavel. Those hardline conservatives are incredibly unlikely to give approval for another stopgap funding bill.
This means Johnson is going to have to rely on the suspension calendar to get this bill through. Floor passage under this requires a two-thirds majority, or 290 votes. And this is important to keep in mind — lawmakers can’t amend legislation that is considered under suspension of the rules. It’s an up-or-down vote.
Remember: The House Republican majority is incredibly tenuous right now. Historically tenuous.
There are currently 220 House Republicans and 213 Democrats. That’s a 3-vote margin. Rep. Hal Rogers (R-Ky.), the dean of the House, is expected to be out this week following a car accident. House Majority Leader Steve Scalise is also out while recovering from a stem-cell transplant. That leaves 218 GOP lawmakers available to vote, just a 2-vote margin, and Rep. Bill Johnson (R-Ohio) is leaving Congress next week. That’s a bare-bone majority. Yikes.
— Jake Sherman and John Bresnahan
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PRESENTED BY JOHNS HOPKINS UNIVERSITY BLOOMBERG CENTER
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Breaking: Negotiators have a $78B tax deal
Breaking news: House and Senate negotiators have agreed on a roughly $78 billion framework for a package of tax benefits aimed at businesses and low-income families, according to a source familiar with the negotiations.
The two sides expect to roll it out this morning.
The question now is whether Senate Finance Chair Ron Wyden (D-Ore.) and House Ways and Means Chair Jason Smith (R-Mo.) can build enough support to get their deal through both chambers. It’s iffy. More on that below.
First, the details. Here’s what’s expected to be in the proposal, according to the source.
→ | Businesses: The agreement would bring back full, upfront deductions for domestic research and development costs along with bigger deductions for businesses’ interest expenses and purchases of machinery and equipment — all through 2025. It’s also expected to increase immediate deductions that smaller businesses can take for buying equipment and machinery, and raise the threshold to $1,000 for sending tax forms for payments to certain non-employees. |
→ | Child tax credit: The deal would gradually raise the maximum child tax credit to $2,000 for families who owe less than that in taxes. It would also allow low-income families with multiple children to phase in eligibility for more benefits faster, and let families use the previous year’s income to qualify for benefits in 2024 and 2025. In a broader change, the child tax credit’s maximum benefit would be tied to inflation, with a potential increase from $2,000 to $2,100 likely in 2025. |
→ | Housing: The low-income housing tax credit — which incentivizes developers to build affordable rental units — gets a boost in the deal, restoring a higher credit allocation to states and lowering the bond-financing threshold. |
→ | Disaster aid: In a win for lawmakers from areas ravaged by storms and wildfires, we expect a disaster tax relief bill to be included in the framework. This could help sweeten the pot for some wary members on both sides. |
→ | Taiwan: The deal is expected to include a widely-backed bill to extend tax treaty-like benefits to Taiwan. |
→ | The big loser: Wyden and Smith would cut back the pandemic-era employee retention tax credit by shortening the time period for when new claims could be filed. That’s expected to provide enough deficit savings to cover the package’s price tag. |
Up next — building support: Smith is expected to have more conversations this week with Republicans beyond his panel about the package.
We’re also keeping an eye on the business lobby, which is likely to ramp up pressure on the House to pass the proposal as we reported Sunday.
The announcement expected this morning is, notably, not a Four Corners agreement. Sen. Mike Crapo (Idaho), the top Republican on Finance, and Rep. Richie Neal (Mass.), the top Democrat on Ways and Means, haven’t signed off on the deal.
But some rank-and-file members in both parties want to get it done. Sens. Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) are teaming up to boost the deal, as we scooped Sunday.
How the Senate GOP and House Democrats respond to the deal will be critical. We’ll be covering it closely.
Premium Policy members had many of these details in their inbox first in The Sunday Vault and our Premium Policy coverage throughout the week. Not a member yet? Subscribe today.
— Laura Weiss
Weekday mornings, The Daily Punch brings you inside Capitol Hill, the White House, and Washington.
WASHINGTON X THE WORLD
Sanders to force Israel vote amid Dem tensions
The Senate is scheduled to hold a first-of-its-kind vote Tuesday evening that takes aim at Israel’s military operations in Gaza and President Joe Biden’s handling of the war.
Senators will vote on a resolution directing the State Department to issue a report on whether Israel is using U.S.-provided weapons in a way that violates international human rights standards. The Foreign Assistance Act allows lawmakers to force such votes, but this particular provision has never been invoked before.
The effort, led by Sen. Bernie Sanders (I-Vt.), reflects progressives’ deepening frustrations with the Biden administration’s posture on the war. And it’s sure to reignite tensions within the Democratic Party over U.S. support for Israel.
“The concern that I have is not that Israel does not have the right to defend itself against Hamas — they do have that right,” Sanders told us in an interview on Monday. “The concern that I have is that we are now going to war against the Palestinian people in general.”
We spoke with Sanders about the resolution, the pushback he’s getting from Democrats and how Israel’s war in Gaza may be hurting Biden’s standing with progressives and young voters in an already difficult election year.
The details: The Senate will vote on whether to discharge the resolution from the Foreign Relations Committee. It will fail — by a lot. The White House opposes it, as will all Republicans and most Democrats.
But Sanders is channeling progressives’ anger about how Israel has conducted its military campaign against Hamas since the Oct. 7 terror attacks that left more than 1,200 Israelis, Americans and other victims dead. Hamas is still holding more than 130 hostages — including Americans — although the group claimed two hostages were killed in Israeli airstrikes. Israeli officials disputed this report.
More than 20,000 Palestinians have been killed in the subsequent Israeli operations in Gaza, where a humanitarian crisis has also unfolded.
“It is totally appropriate for the U.S. Senate to ask what role our weapons and military equipment has played in that reality,” Sanders told us.
The timing: Sanders said it’s “only appropriate for the Senate to be monitoring closely how U.S. military assistance is being used,” calling it ”a very good precedent.”
In a statement, National Security Council spokesperson John Kirby said the Biden administration doesn’t believe the resolution is “the right vehicle to address these issues.”
Kirby also said now isn’t the “right time,” noting that Israel may soon be shifting their Gaza operations to a “lower intensity.” And it comes as senators, including Majority Leader Chuck Schumer, are set to host families of the hostages held by Hamas to mark 100 days since they were first kidnapped.
“If the fact that hundreds of thousands of children are facing imminent starvation is not the right time to raise this issue, then I don’t know when the right time is,” Sanders said in response to Kirby. “Despite what the president has said… [Prime Minister Benjamin] Netanyahu continues to go along his merry way.”
The politics: There’s no question in Sanders’ mind that Biden has suffered politically with his base. At nearly every recent public event, Biden has been confronted by protesters demanding a ceasefire and criticizing Israel’s military operations.
Sanders said progressives are concerned about the United States’ “willingness to give more money to Netanyahu’s right-wing government to continue this terrible military campaign.”
As for his own reelection, Sanders told us he hasn’t yet decided whether he’ll seek a fourth Senate term.
— Andrew Desiderio
PRESENTED BY JOHNS HOPKINS UNIVERSITY BLOOMBERG CENTER
Join us for The Bridge on Feb. 29 to hear about the future of AI policy with Senators Mark Warner and Todd Young. RSVP now.
The latest on Hunter Biden and Mayorkas
It’s another week in the GOP-controlled House and that means oversight is top of the agenda.
The House was set to vote to hold Hunter Biden in contempt of Congress this week for defying a congressional subpoena.
But Hunter Biden’s new offer to testify privately — combined with a recent GOP pledge to issue a new subpoena — will likely affect the scheduled vote.
House Oversight Committee Chair James Comer (R-Ky.) and House Judiciary Committee Chair Jim Jordan (R-Ohio) said over the weekend they would work to subpoena Hunter Biden again as per his lawyer’s request. This could pave the way for a deposition.
So we’ll have to see whether the contempt vote is still on. But it’s our understanding the GOP investigators will ask leadership to pause the contempt proceedings if Hunter Biden’s team is seen as working in good faith to schedule a deposition.
However, it can sometimes take weeks to hammer out a date that’s acceptable for both camps.
The other impeachment effort: The House Homeland Security Committee will hold its second impeachment hearing on Thursday into DHS Secretary Alejandro Mayorkas.
The hearing will be titled “Voices for the Victims: The Heartbreaking Reality of the Mayorkas Border Crisis.”
Witnesses have not yet been announced.
House Republicans had been pushing for Mayorkas to appear before the panel this week but he declined, citing a scheduling conflict. Mayorkas is due to meet with Mexican officials at the same time.
— Max Cohen and Mica Soellner
📆
What we’re watching
Tuesday: The House Rules Committee will meet to prepare several bills for the floor, including the resolution to hold Hunter Biden in contempt of Congress.
Wednesday: The House Transportation and Infrastructure Committee will hold a hearing on the state of transportation. The House Science and Technology Committee will hold a hearing on keeping Artemis on track.
The House Foreign Affairs Committee will hold a hearing on the flow of U.S. money into China. Among the witnesses is Matthew Pottinger, the former Trump administration official. The Senate Foreign Relations Committee will have a closed briefing on the implications of the election in Taiwan.
Thursday: Secretary of State Antony Blinken will brief members of the Senate Foreign Relations Committee.
— Jake Sherman
PRESENTED BY JOHNS HOPKINS UNIVERSITY BLOOMBERG CENTER
Don’t miss our AI discussion with Senators Warner and Young. RSVP now.
MOMENTS
ALL TIMES EASTERN
10 a.m.
President Joe Biden will get his daily intelligence briefing.
1:30 p.m.
Karine Jean-Pierre and John Kirby will brief.
CLIPS
NYT
“Voters Look Past Legal Problems to Give Trump a Big Victory”
– Shane Goldmacher in Des Moines, Iowa
NYT
“5 takeaways from Trump’s runaway victory in the Iowa caucuses”
– Lisa Lerer, Maggie Haberman and Jonathan Swan
WaPo
“Iowa was Trump’s to win. Can anyone stop his march to the nomination?”
– Dan Balz in Des Moines, Iowa
WaPo
“U.S. forces recovered Iranian warheads in Navy SEAL mission gone awry”
– Alex Horton
Bloomberg
“Ramaswamy Leaves 2024 Race, Throws Support Behind Trump”
– Jennifer Jacobs and Christian Hall
WSJ
“Houthis Turn Their Sights on U.S. Ships, Vow to Keep Attacking Red Sea Targets”
– Benoit Faucon and Costas Paris
AP
“Iran strikes targets in northern Iraq and Syria as regional tensions escalate”
– Qassim Abdul-Zahra and Salar Salim in Irbil, Iraq
Politico
“GOP campaigns will now sprint to New Hampshire”
– Lisa Kashinsky
PRESENTED BY JOHNS HOPKINS UNIVERSITY BLOOMBERG CENTER
In only a few short years, AI has gone from science fiction trope to everyday reality. On Feb. 29 at 9:30 AM, join Senators Mark Warner (D-Va.) and Todd Young (R-Ind.), Punchbowl News founder and CEO Anna Palmer, and senior congressional reporter Andrew Desiderio for a critical conversation about AI policy. They’ll be joined by experts from Johns Hopkins University. We look forward to seeing you at The Bridge, a new bipartisan discussion series at the Hopkins Bloomberg Center, where Washington comes to think. RSVP now.
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.
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