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Happy Monday morning.
Congress is back! The Senate is in session today, the House will return tomorrow. President Joe Biden will meet Tuesday with Mexican President Andrés Manuel López Obrador. Then it’s off to Israel (his first trip there as president) and Saudi Arabia for a controversial visit with a regime that he’s sharply criticized but is a pillar of U.S. policy in the region.
There are 120 days until Election Day.
The Jan. 6 select committee will hold what could be its last two public hearings this week, while the House takes up the defense authorization bill and pro-abortion rights legislation. The latest inflation data will be released early Wednesday morning, with the threat of a recession looming.
But let’s start here: Senate Majority Leader Chuck Schumer announced Sunday night he tested positive for Covid. Schumer’s office said he was only experiencing “very mild symptoms” and will quarantine for the week. Here’s Justin Goodman, a Schumer spokesperson:
“As a part of his regular testing regimen, Leader Schumer received a positive test result for COVID-19. The Leader is fully vaccinated and double boosted, and has very mild symptoms. He greatly appreciates the protection the vaccine has provided him and encourages everyone to test regularly and get vaccinated and boosted.
“Consistent with the CDC guidance, Leader Schumer will quarantine this week and work remotely. Anyone who knows Leader Schumer knows that even if he’s not physically in the Capitol, through virtual meetings and his trademark flip phone he will continue with his robust schedule and remain in near constant contact with his colleagues.”
Now this leads to an interesting situation. The Senate is supposed to be voting this week on the nomination of Steven Dettelbach to serve as director of the Bureau of Alcohol, Tobacco, Firearms and Explosives. There hasn’t been a Senate-confirmed ATF director since 2015, and the White House and Democratic leaders would like to get Dettelbach in place.
GOP Sens. Susan Collins (Maine) and Rob Portman (Ohio) voted with all 50 Democrats to discharge the nomination from the Senate Judiciary Committee, giving Dettelbach more than enough votes for confirmation. Schumer was going to schedule a cloture vote on Dettelbach’s nomination as early as Tuesday, with final passage to follow.
However, Schumer and Sen. Patrick Leahy (D-Vt.) are out. Leahy fell on June 29 and broke his hip. The 82-year-old Vermont Democrat underwent hip replacement surgery and is rehabbing.
In a statement, David Carle, Leahy’s spokesperson, said, “Senator Leahy’s recovery and physical therapy are proceeding well and he expects to be available for votes this week if necessary.”
Which is, of course, very good news, but as long as the Dettelbach vote is 48-48, then Vice President Kamala Harris can break the tie and Leahy’s presence isn’t required. Democrats will just have to see if all 50 Republicans show up. Also, Schumer can simply reschedule this vote for next week.
That leads us to reconciliation, which is THE issue for July.
Schumer and Sen. Joe Manchin (D-W.Va.) are negotiating a scaled-down, $1 trillion reconciliation package – Build Back Manchin – but serious hurdles remain. Schumer and the White House want to put a bill on the floor before the Senate leaves for the August recess – if there’s a deal. The fate of USICA, a massive China competitiveness bill, is tied to the reconciliation legislation as well.
Sources involved in the Schumer-Manchin talks say “good progress” has been made and they’re hopeful an agreement can come together. Schumer and Manchin were supposed to meet this week. That’s now postponed, but it’s certain they’ll talk.
Schumer has already submitted a Democrat-drafted Medicare prescription drug pricing proposal to the Senate parliamentarian for review. Democrats aren’t expecting any guidance from the parliamentarian’s office on the proposal this week. CBO estimates that the proposal would save the federal government nearly $288 billion over a decade.
Senate Democrats also have a deal to raise taxes on “pass through” income for small business owners who make more than $400,000 annually ($500,000 for couples), with the revenue generated by this tax going to boost Medicare’s solvency.
Yet there’s no agreement on a “global minimum tax,” a very important issue for corporate America. And party leaders will have to resolve the state and local tax deduction fight, with a block of blue state House Democrats saying they won’t vote for any reconciliation package that doesn’t address this matter. The price tag for this provision is high, and the politics are tough. How do Democrats vote to give millionaire homeowners a tax break right before an election?
Another big challenge – what to do about enhanced premium subsidies for Obamacare enrollees? This additional support runs out at the end of the year, and millions of enrollees could see massive increases in their premiums if nothing is done. Manchin has concerns about this provision, as we’ve reported. But it’s a big priority for Democratic leaders on the Hill, Democratic governors and the White House.
Democratic Sen. Kyrsten Sinema of Arizona, who was deeply involved in crafting the tax provisions for the Build Back Better Act, has yet to show her hand on this new effort. So far, she’s letting Manchin take the lead. But there’s no deal without Sinema’s assent, of course. And she’s been skeptical of tax increases.
Finally, there are environmental and climate change provisions. There’s been a lot of focus on electric vehicle tax credits, something Manchin has complained about for awhile. Manchin – worried about the impact of high energy costs – also wants to ramp up fossil fuel production in the short run while the United States eventually transitions to cleaner sources. There’s been some progress on this issue, as our friend Tony Romm of the Washington Post reported, yet no agreement.
Let’s step back and look at the politics of reconciliation for a moment.
This is the last bout of real legislating before the midterm elections, which as we noted at the top are less than four months away. It’s Democrats’ final opportunity at enacting a package that could help them with voters.
It’s true that passing a reconciliation package at this point may not make any substantive difference for Democrats in light of the political headwinds they face – an unpopular president; the traditional losses for the president’s party in the first midterms; high inflation, including soaring gas, food and housing costs; rising crime and gun violence; a lingering pandemic; a potential recession; and an overwhelming perception among the American public that things are getting worse.
Yet doing nothing, especially after the shocking blow of the Supreme Court’s decision to strike down Roe v. Wade, would be a double defeat for Biden and Schumer. Especially now that Schumer and Manchin have revived talks about a potential deal.
The focus on reconciliation by Democrats also spurred a threat from Senate Minority Leader Mitch McConnell to tank the USICA legislation, which has strong support from high-tech companies and both parties in the Capitol. While many Democrats believe McConnell overplayed his hand here, the Kentucky Republican doesn’t really have any other choice but to take this hardline stance. Democrats are looking to undo portions of the 2017 GOP tax cut. McConnell will do anything possible to oppose that, as will all the other Republican senators. The potential of tax hikes will become Republicans’ top concern, and McConnell must respond.
One question we have here is where does this effort go in the House? Speaker Nancy Pelosi has a paper-thin majority. What is rank-and-file Democrats’ risk tolerance four months before the election?
– John Bresnahan and Jake Sherman
REMINDER: Don’t forget about our event tomorrow (Tuesday, July 12 at 9 a.m. ET) with Rep. Brad Sherman (D-Calif.) about how Washington is looking to regulate capital markets and financial reporting in an effort to maintain trust in a changing economy. RSVP here!
PRESENTED BY COALITION FOR APP FAIRNESS
For too long, Apple & Google have abused their monopoly power to eliminate competition on mobile devices. For consumers, that has meant fewer choices, reduced innovation and higher costs.
And consumers know it. 83% of voters agree that the Open App Markets Act will give them more freedom to decide how and what apps are downloaded on their phones.
It’s time for Congress to pass the Open App Markets Act.
JAN. 6 COMMITTEE
Inside tomorrow’s Jan. 6 hearing
The Jan. 6 select committee will hold its seventh hearing tomorrow, focusing heavily on the violent mob that stormed the Capitol, how it was summoned to Washington by former President Donald Trump and the far-right extremists who coordinated the deadly attack on the Capitol.
The select committee won’t release the witnesses for tomorrow’s hearing until later today, but NBC reported that a former spokesperson for the Oath Keeper, a right-wing militia group, will testify.
There will be testimony from at least one but maybe two rally attendees, we’re told.
The hearing will also focus heavily on a Dec. 18 meeting in the Oval Office between Trump and some of his biggest election conspiracy allies, including Sidney Powell and former National Security Adviser Michael Flynn.
“This hearing really brings us up to the night of Jan. 5 and the morning of Jan. 6,” said one source close to the committee.
In that meeting, the group encouraged Trump to take any action necessary — including declaring a national security emergency and seizing voting machines — in order to prevent the certification of Joe Biden’s victory.
“Big protest in D.C. on January 6th. Be there, will be wild!” Trump tweeted the next day.
This will be the panel’s first public meeting since former White House counsel Pat Cipollone testified behind closed doors on Friday.
The 1 p.m. hearing Tuesday will feature video snippets from Cipollone’s testimony, we’re told by sources familiar with the committee’s planning.
Cipollone was deposed for more than eight hours Friday, describing repeated instances in which he thought about resigning, not just on Jan. 6.
The former White House counsel also invoked executive privilege throughout the lengthy interview, but it was a “reasonable number of times,” per a committee source.
Cipollone was a central witness and participant in many of the key events in the weeks leading up to and during the insurrection. As former White House aide Cassidy Hutchinson testified, Cipollone repeatedly warned that Trump and others could face criminal charges if the president went to the Capitol on Jan. 6 to try to thwart certification of the election.
Cipollone also pushed back on Trump’s efforts to install Justice Department environmental lawyer Jeffrey Clark as acting attorney general on Jan. 3 in order to help Trump try to overturn the election.
While a final decision hasn’t been made, Cipollone isn’t expected to testify publicly, we’re told.
Sarah Matthews, the former White House deputy press secretary who resigned after Jan. 6, won’t testify tomorrow although she could appear at an upcoming hearing.
The committee will have at least one more hearing, in prime time, on Thursday. That hearing will center around the 187 minutes Trump was silent as the violent mob overtook the Capitol.
What about Bannon? Don’t expect the Jan. 6 committee to take Steve Bannon up on his offer to testify publicly before the panel.
Bannon informed the committee over the weekend that he was willing to testify after Trump waived executive privilege that panel members say didn’t even exist in the first place.
Of course, the huge about-face comes as Bannon heads to trial next week on criminal contempt of Congress charges for defying the panel’s subpoena. If convicted, Bannon faces up to two years in jail and significant fines.
Despite his claims this weekend, Bannon has yet to cooperate with the committee, including turning over documents requested by the panel. Bannon’s lawyer told our good friend Kyle Cheney of Politico on Sunday that his client does intend to comply with the document request.
— Heather Caygle
What we’re watching
→ Tuesday: Senate Banking has a hearing on the implementation of the bipartisan infrastructure law. Federal Transit Administration Administrator Nuria Fernandez will testify. Senate Judiciary will have a hearing on the legal consequences of the Dobbs decision. Illinois Lt. Gov. Juliana Stratton is among those testifying. Senate Intel has a closed briefing at 2:30 p.m.
→ Thursday: House Judiciary will have a hearing on “the threat to individual freedoms in a post-Roe world.”
– Jake Sherman
Who we’re watching
→ President Joe Biden: Biden has had a tough couple of weeks. The White House’s seemingly tepid response to overturning Roe v. Wade has angered Democratic activists, including an incendiary comment from a top aide. Biden faces questions over whether he should run again, and a story in the New York Times about whether he even can. His polling is terrible. Biden will finally meet with Mexican President Andrés Manuel López Obrador, who snubbed him a few weeks ago, then he heads to the Middle East to meet with the Israelis – including former Prime Minister Benjamin Netanyahu – and the Saudis.
→ Senate Minority Mitch McConnell: The Kentucky Republican threatened to derail a major high-tech research and manufacturing bill – USICA – if Senate Democrats moved ahead with reconciliation. Well, Democrats are moving ahead with reconciliation. We expect McConnell will do what he promised. Yet the issue has already come up in the Ohio Senate race, senior Biden administration officials are hitting McConnell over it, and Senate Majority Leader Chuck Schumer has scheduled a classified briefing for senators Wednesday to highlight the stakes for U.S. semiconductor makers and defense industry.
– John Bresnahan
PRESENTED BY COALITION FOR APP FAIRNESS
68% of voters think Big Tech has too much power – but there is a solution: the Open App Markets Act.
THE MONEY GAME
Scalise pulled in $7.2M in Q2
News: House Minority Whip Steve Scalise raised $7.2 million in the second quarter. He has raked in a whopping $46.2 million this cycle and has transferred $20.9 million to the NRCC.
Scalise’s re-election campaign has $8.3 million in the bank.
– Jake Sherman
→ News: Frontline Rep. Dan Kildee’s (D-Mich.) second ad of the cycle touts his support from Michigan farmers. The 30-second spot features the story of fourth-generation farmer Ben Ritter, who says Kildee “has our back.” The spot also says the Michigan Farm Bureau AgriPac endorsed Kildee.
“Dan Kildee has worked to open new markets for Michigan farmers and stop foreign sugar from being dumped here at home,” Ritter says. “Dan Kildee delivers for Michigan farmers and the folks we feed.”
The ad’s focus on rural issues and lack of partisan appeals reflects the kind of campaign vulnerable Democrats are running in a tough cycle.
Kildee’s district shifted redder after redistricting and is rated a toss-up by the Cook Political Report with Amy Walter. The Michigan primary is Aug. 2.
→ Free-market conservative group American Commitment is airing a new ad in multiple West Virginia media markets attacking Sen. Joe Manchin (D-W.Va.). The spot takes aim at Manchin’s reported agreement with Senate Majority Leader Chuck Schumer that would allow Medicare to negotiate prescription drug prices.
Here’s the ad’s narrator addressing Manchin directly:
“You and AARP support government price-setting schemes that will give liberal politicians billions in funds meant for Medicare to spend on unrelated government programs or pad big insurers’ profits.”
— Max Cohen
PRESENTED BY COALITION FOR APP FAIRNESS
79% of voters agree 👆
9 a.m.: President Joe Biden will get his daily intelligence briefing.
11 a.m.: Biden will host an event celebrating the signing of the gun bill.
3:45 p.m.: Karine Jean-Pierre will brief.
5 p.m.: Biden and Vice President Kamala Harris will get a briefing from NASA officials to see the images from the Webb Space Telescope.
→ “Most Democrats Don’t Want Biden in 2024, New Poll Shows,” by Shane Goldmacher
→ “Bannon, Facing Jail and Fines, Agrees to Testify to Jan. 6 Panel,” by Luke Broadwater and Maggie Haberman
→ “Defense Firm Said U.S. Spies Backed Its Bid for Pegasus Spyware Maker,” by Mark Mazetti and Ronen Bergman
→ “Biden Will Find a Changed Middle East on His Coming Visit,” by Patrick Kinglsey in Jerusalem
→ “‘Hit the kill switch’: Uber used covert tech to thwart government raids,” by Faiz Siddiqui and Joseph Menn
→ “Biden’s Middle East Trip Is a High-Risk Bid to Reset Saudi Relations,” by Stephen Kalin in Riyadh and Andrew Restuccia in D.C.
→ “Mexico, US presidents to meet amid newly tense relationship,” by Mark Stevenson in Mexico City and Zeke Miller in D.C.
→ “Biden says he’s mulling health emergency for abortion access,” by Hannah Fingerhut in Rehoboth Beach, Del.
→ “House GOP marches into deeper blue terrain as Dem prospects fade,” by Ally Mutnick and Sarah Ferris
PRESENTED BY COALITION FOR APP FAIRNESS
A recent poll showed that nearly 70% of voters disapprove of the job Congress is doing in regulating Big Tech. And 79% SUPPORT the commonsense, bipartisan Open App Markets Act.
OAMA would bring an end to the anticompetitive practices of mobile gatekeepers. It would open up app stores, giving consumers the freedom to choose where to get apps and how to make purchases inside apps. It would allow developers to communicate directly with their customers, without a middleman. And it would ban app store owners from giving their apps an advantage over others.
The bill has widespread support from developers and consumers alike, along with security experts who say greater competition on mobile devices will increase security and accountability.
It’s time for Congress to bring an end to the anticompetitive practices of Apple and Google and pass the Open App Markets Act.
Editorial photos provided by Getty Images
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