Washington Weekly - June 14

This Week:

The House and Senate are in session.

Federal:

Tax Markups: The House Ways and Means Committee is marking up its proposed tax package.  The purpose of this legislation is three-fold.  First, it aims to roll back some of the green tax benefits Democrats had included in last year’s Inflation Reduction Act (IRA) and re-allocating those funds for Republican fiscal priorities or to use the savings towards further spending cuts.  Second, the legislative package seeks to provide extensions to provisions from the 2017 Infrastructure Investment and Jobs Act (IIJA) that sunset by next year.  Third, it provides a starting point for negotiations with the White House and the Senate.  Some of the highlights: 1. Green energy tax credit cuts will be more restrained than where they started out with the debt limit/spending legislation earlier this year.  Many of the EV credits will revert to pre-IRA status, changing which EVs receive federal tax credits while cutting additional subsidies for green energy generation and used EVs, along with taking away additional taxation on crude oil to fund environmental cleanup.  2. New York and California Republicans continue to push for an increase in State and Local Tax (SALT) deductions on federal taxes.  The IIJA established a $10,000 cap and Rep. Nicole Malliotakis (R-NY) has a bill that will increase the threshold for two years – keep in mind that the Speaker McCarthy is from California, while House Minority Leader Hakeem Jeffries and Senate Majority Leader Chuck Schumer hail from New York.  3. There will be additional focus on enhancing development in rural areas, by enhancing rural economic opportunity zones.

Internal Debate: After having several bills blocked by 10 Republicans last week, House GOP leadership has negotiated a settlement within its caucus that would see an additional $120 billion beyond the debt limit agreement negotiated by President Biden and Speaker McCarthy.  It could potentially set up a friction point later in the year, preventing a budget from being passed, especially if House and Senate Democrats oppose the move. 

Cooking With Gas:  One of the bills blocked last week was a prohibition on gas stove bans.  This is relevant to a case moving through the courts where the California Restaurant Association sued the City of Berkeley, CA in 2019, after the municipality banned gas hookups in new construction.  After losing that case, the lower court’s decision was reversed by the United States Court of Appeals for the 9^th Circuit, which ruled that the fuel ban was in violation of federal law, specifically the Energy Policy and Conservation Act.  This week, the Biden Administration filed a friend of the court brief siding with Berkeley, CA.  The result of this case will have reverberations across the country.  In the meantime, 24 states have passed fuel choice legislation, protecting consumer choice. 

Politics:

Trump:  Former President Donald Trump was indicted on 37 federal counts and arraigned this week.  He remains the frontrunner in the Republican nomination for President, and the news over the last week has appeared to solidify his position.  On Tuesday, a USA Today/Suffolk Poll had Trump leading Florida Governor Ron DeSantis 48-23, and an Emerson Poll had him leading DeSantis, 53-19.  This is uncharted territory when it comes to political punditry and there’s a long way to go before Iowa.  Stay tuned.

President Biden Job Approval (RCP Average): 42% Approve – 56% Disapprove. The House currently has a composition of 222 Republicans to 212 Democrats. The Senate is comprised of 51 Democrats and 49 Republicans. Special Elections: Democratic: (RI-1 Primary: 9/5/2023; General 11/7/2023).  Rep. Chris Stewart (R-UT) announced that he will resign due to his wife’s health issues in September 2023.