The Archive

CHIPS!

News: Raimondo and Austin warn about national security consequences on chips

Commerce Secretary Gina Raimondo and Defense Secretary Lloyd Austin are sending a letter to House and Senate leaders this morning urging passage of the CHIPS bill in “the coming weeks,” warning of a potential national security crisis and steep economic consequences if Congress doesn’t act.

This legislation, part of the broader USICA package to boost U.S. high-tech competitiveness with China, would provide tens of billions of dollars in financial support for the U.S. semiconductor industry.

Raimondo is scheduled to take part in a classified briefing by senior Biden administration officials this afternoon for senators on “global innovation and the technology race,” including the impact these proposals would have on U.S. national security.

Here’s the Raimondo-Austin letter and here are the important excerpts:

Raimondo and Austin make a national security argument here, which is somewhat new, and dovetails with the message we expect Raimondo and other administration officials to deliver today.

We’ve written extensively about how the CHIPS bill – and the broader USICA package – is in trouble. Senate Minority Leader Mitch McConnell has threatened to hold it up if Democrats decided to advance reconciliation.

Well, Democrats are advancing a reconciliation package, and McConnell acknowledged two potential offramps, which we wrote about in Tuesday’s AM edition – the House could simply pass the Senate’s USICA bill or Congress could approve $52 billion in funding for semiconductor manufacturers as a stand-alone bill. There are serious hurdles for both of those options.

The House is in no position to pass the Senate’s USICA bill, nearly everyone in the leadership acknowledges. And we aren’t quite at the phase yet where Congress will try to pass a $52 billion chip funding package. That’s not to say Congress will never get to that point, it’s just not there yet.

– Jake Sheman and John Bresnahan

RUH ROH

Northeastern Democrats will vote against reconciliation without SALT

If you rewind your memory to last year, you may remember that a band of northeastern House Democrats vowed to vote against any reconciliation bill that included tax changes but left aside lifting the state-and-local tax deduction cap.

Guess what: they’re back!

Reps. Josh Gottheimer (D-N.J.) and Tom Suozzi (D-N.Y.) both told us that they’ll oppose Build Back Manchin – this name is catching on, by the way – if it includes major changes to the tax code but doesn’t lift the SALT cap. Remember: the 2017 GOP tax bill limited the SALT deduction to $10,000. Northeastern Democrats, who represent some of the highest tax areas in America, feel the cap is punitive.

Here’s Gottheimer:

And here’s Suozzi: “No SALT, no deal.”

There’s no sign that the Senate is considering lifting the SALT cap. It’s an extraordinarily expensive proposal with a very limited constituency in the Capitol. Some Democrats suggest an $80,000 cap on SALT deductions, which is what the House has previously supported.

Rep. Mikie Sherrill (D-N.J.) took it a step further. Sherrill told us she’s “not for any type of legislation that raises taxes.” “That’s just … [my] position in general. But especially right now, as my constituents are facing inflation, cost of living [increases], … housing prices,” Sherrill said. Here’s more from Sherrill on what she wants to see in a reconciliation package:

Sherrill said she’s been in conversations with fellow Democrats about resisting any package including new taxes.

Needless to say, this is a big problem for Democratic leaders on any reconciliation package. Sen. Joe Manchin (D-W.Va.) and Senate Majority Leader Chuck Schumer have discussed raising taxes on high earners and pass-through businesses as part of a bill that would also let Medicare negotiate on drug prices.

Speaker Nancy Pelosi has a four-seat margin to pass any legislation through her chamber. Northeasterners are going to be a problem if there are tax increases. And that’s before any other issues arise among Democrats.

– Jake Sherman and John Bresnahan

THE INVESTIGATION

Bennie Thompson dishes on the future of the Jan. 6 committee

The Jan. 6 committee turned in another compelling hearing Tuesday, filled with interesting details about the madness in the White House leading up to and on the day of the insurrection.

But afterwards, Rep. Bennie Thompson (D-Miss.), the panel’s chair, dished on a few newsy elements that help us better understand the committee’s work.

This follows months of tension between DOJ and the Jan. 6 committee over access to the panel’s transcripts of its roughly 1,000 interviews. Justice officials publicly criticized the panel last month, saying its “failure” to provide access to the transcripts has hampered DOJ’s ability to “investigate and prosecute” criminal misconduct related to the Jan. 6 attack.

– Jake Sherman and Heather Caygle

THE MONEY GAME

Up-and-coming congressional spenders

Here at Punchbowl News, we love taking a look at up-and-coming members of Congress who are trying to make a name for themselves by donating big sums to their party committees. Here’s a rundown of some new members throwing around their weight.

Jacobs, a freshman representing San Diego, has established herself as a major financial player in Democratic circles. This cycle, Jacobs’ campaign has given $323,000 to the DCCC. That sum is by far the most of any freshman Democratic representative.

Jacobs is the granddaughter of billionaire Qualcomm co-founder Irwin Jacobs. Jacobs, who self-funded much of her campaign last cycle, is seen as a rising star. With a safe seat in the influential California delegation, Jacobs will likely be in the Democratic scene for years to come.

Auchincloss began to assert his financial heft when he launched a leadership PAC — an uncommon occurrence for a freshman. Auchincloss has paid $100,000 in DCCC dues for the 2022 cycle and is committing to pay an additional $150,000.

Trone is a long-time Democratic mega-donor. The Maryland Democrat’s giving dates back to when he was CEO of Total Wine and More before he arrived in D.C. As a member, Trone has cut $500,000 checks to House Majority PAC in December 2021, the Democratic Grassroots Victory Fund in May 2022 and to the Biden Victory Fund in 2020. Trone also donated $255,500 to the DCCC in February 2021 and an additional $219,00 in March 2021.

Gonzales is the fifth-highest donor to the NRCC outside of leadership. A leadership favorite who sits on the House Appropriations Committee, Gonzales has given $1,720,254 to the NRCC this cycle, according to internal party data we got our hands on. It’s a giant figure for a freshman.

Pfluger, who represents a deep red Texas district formerly represented by Rep. Michael Conaway, has raised $1,708,842 for the NRCC this cycle, according to internal party data. This marked the fifth-most for a non-leadership House Republican, right behind Gonzales.

— Max Cohen

THE CAMPAIGN

– Jake Sherman

WHAT REP. BRAD SHERMAN TOLD US

Catch up on our conversation with Rep. Brad Sherman (D-Calif.) here. We discussed cryptocurrency regulation, changes to the auditing space and much more.

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MOMENTS

All times eastern

8:20 a.m.: President Joe Biden will land at Ben Gurion Airport in Tel Aviv.

8:30 a.m.: Biden will speak at the airport in an arrival ceremony.

9:20 a.m.: Biden will get a briefing on the Iron Dome and Iron Beam Air Defense System.

9:40 a.m.: Biden will leave Tel Aviv for Yad Vashem in Jerusalem.

10:15 a.m.: House Democratic Caucus Chair Hakeem Jeffries, Vice Chair Pete Aguilar and Reps. Jason Crow (Colo.), Andy Kim (N.J.) and Mikie Sherrill (N.J.) will hold a news conference after the closed Democratic meeting.

10:45 a.m.: House Minority Whip Steve Scalise, House Republican Conference Chair Elise Stefanik and Reps. Bill Huizenga (Mich.) and Steve Womack (Ark.) will hold a news conference after their party meeting.

10:35 a.m.: Biden will lay a wreath at Yad Vashem.

2:30 p.m.: House Majority Leader Steny Hoyer will hold his pen and pad meeting.

CLIP FILE

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