Republican infighting over their next budget — the one that’s supposed to ease a tax code rewrite into gear — is tumbling into the July Fourth recess.
No doubt heath care is dominating lawmakers’ time back in their districts. (Ed O’Keefe and Dave Weigel have this report on how the week will test an emerging alliance between Democratic lawmakers and grassroots forces on the left.) And the Senate Republican scramble to pass their Obamacare repeal-and-replace package will remain the headline-grabber when lawmakers return for three weeks of work in July before leaving town again in August.
Yet the urgency to make progress on taxes, the party’s true passion project, is only getting more acute as the workdays left on the congressional calendar start to dwindle. And looming beyond health care is a Republican deadlock over the budget. That spending blueprint will include rules that allow Republicans to pass a tax overhaul with simple majorities in both chambers. But as Mike DeBonis reports, conservatives want it to cut more than $200 billion in mandatory spending — a number that moderates dismiss as a nonstarter — and to allow for a tax package that brings in less revenue than current law.
House Ways and Means Committee Chairman Kevin Brady (R-Tex.) told Mike in a Friday interview that Republicans remain on track to adopt a budget and then pass a major tax bill by the end of the year. But he also said the effort could use some help from the president. “No one has more at stake in delivering tax reform for the American people than President Trump,” he said. “Without presidential leadership, tax reform just doesn’t happen. We know that from history.”
Meanwhile, according to a splashy Axios report on Sunday night, Stephen K. Bannon, Trump’s senior strategist, is cannonballing into the debate with a push to raise taxes on wealthy individuals in order to slash them for middle and lower-income earners. Per the story, the senior strategist’s soak-the-rich gambit would pump the top marginal rate up somewhere north of 40% — higher than it’s been at any time since the last major rewiring of the code in 1986.
To which congressional Republicans will say: Good luck with that.
The leaders driving this process — in the administration and on the Hill — have pursued it from the start as a GOP-only project. Why? Because, to paraphrase one Senate Republican leadership aide’s distillation of the stakes, if Republicans can’t agree among themselves on cutting taxes, what’s the point of holding power? This is bedrock, first-principle stuff for the party.
Indeed, the promise of an overhaul that cuts rates across the board is one of the more important forces compelling Republican lawmakers to abide behavior from Trump that a third-grade teacher wouldn’t tolerate from a problem child. And the administration itself is on record — in the one-page statement of its tax-reform goals, released in April — backing a top marginal rate of 35 percent. There’s a lot that still divides the GOP on the path forward. They agree on this much at least: The rates should go down.
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— The president has been tweeting.
— The fight over the Senate Republican health-care package heads back to the states this week, where some GOP senators home for the recess will encounter opposition from an unlikely corner: Their own Republican governors. In Ohio, Nevada, and Arkansas, Republican senators backing an Obamacare repeal face resistance from governors of their own party who've embraced the law's Medicaid expansion, the Wall Street Journal reports.
It doesn't help that the party remains fundamentally at odds even in Washington, with Trump joining a pair of conservative Republican senators calling for an outright repeal of Obamacare even if the GOP can't match it immediately with a replacement plan. That approach has been dismissed by congressional Republican leaders and the health insurance industry itself, which says it would sow chaos in their markets.
— Small farmers and food manufacturers are nervous that Amazon's purchase of Whole Foods, a deal already reverberating through markets, will also disrupt their businesses.
If the acquisition bolsters larger, industrialized organic operations, it could cause trouble for smaller and midsize players. And if Amazon works to lower the price of organic products, that may force producers to adjust environmental and formulation standards, Caitlin Dewey writes.
"Those price pressures have already driven major changes in Whole Foods' supply chain and within the organic industry as a whole, which has consolidated in the face of increased competition. But at Whole Foods, sourcing from small producers has remained a priority — and some worry that Amazon will not be so protective of them."
— 11 states still haven't passed budgets this year, per the Associated Press.
Half of the states underestimated how much they would receive in taxes, the worst miss since the end of the Great Recession, according to the National Association of State Budget Officers. Some states, including New Jersey and Illinois, have not figured out spending plans (and Illinois on Saturday started it’s third year without one).
—In New Jersey, Gov. Chris Christie (R) shutdown the state government over the budget impasse, shutting down state parks and beaches over the holiday weekend.
The New York Times' Nick Corasaniti tweeted a list of what New Jersey’s shutdown would affect:
Photos published by NJ.com on Sunday showed the governor and his family spending time at Island Beach State Park at a summer beach house funded by the state.
At a news conference later Sunday, Christie said he “didn’t get any sun today,” NJ.com reported. But the governor’s spokesman Brian Murray later claimed, when asked about the photos, that Christie “did not get any sun. He had a baseball hat on.”
WNYC reporter Matt Katz tweeted one of the photos of Christie:
— Oregon is looking to be the first state in the country to require employers to give worker’s a week’s notice for their schedules. The state legislature passed the law that Gov. Kate Brown (D) is expected to sign.
The legislation mandates all retail and food companies, hotels and hospitals with more than 500 employees to give employees seven days’ notice starting in July 2018. The notice would increase to two-weeks notice in July 2020.
— Ten Republican senators want their leadership to consider canceling the August recess. The group, led by Sen. David Perdue (R-Ga.), is calling on Senate Majority Leader Mitch McConnell (R-Ky.) to limit or forgo the break altogether if Republicans don’t make major progress in July, Politico reported.
On their list: an Obamacare repeal, passing a budget, funding the government,, avoiding a debt default and rewriting the tax code.
"The stakes are much higher this year," the senators wrote. "We simply cannot afford to lose any additional time in resolving these issues when tax reform is hanging in the balance. Robust change to our tax code is our single most important economic growth tool, and there is already growing anticipation for us to act…Failure to deliver could have devastating economic consequences."
Here's something to know as you plan for July Fourth, from Bloomberg: Burger Costs Hit a 3-Year Low Ahead of Independence Day
--President Trump criticized one of the United States’ closest allies for its trade practices on Friday, Ana Swanson reports.
Ana writes: “The president welcomed South Korea’s cooperation on confronting the North Korean nuclear threat, even as he criticized the country for exporting more to the United States than it imports, restricting sales of U.S. autos, and enabling China in circumventing global trade rules.”
“From when the U.S.-Korea trade deal was signed in 2011 to 2016 — and you know who signed it, you know who wanted it — our trade deficit with South Korea has increased by more than $11 billion. Not exactly a great deal,” Trump said.
- The American Enterprise Institute is holding an event on housing finance reform with Federal Reserve Governor Jay Powell on Thursday.
- The Center for Strategic & International Studies will hold an event on “Export Financing in an Increasingly Competitive World” with remarks by acting chairman and president of the Ex-Im Bank Charles J. Hall on Thursday.
- Brookings Institution will host an event on manufacturing in the Trump administration on July 13.
- SIFMA announced Mnuchin will keynote its annual Capital Markets Conference later this year.
From The Post’s Tom Toles: What would it actually be like if the GOP reached out to Democrats?
Trump says U.S. relationship with South Korea is 'very good'
Is the GOP considering repealing the ACA now and replacing it later?
Trump says he is renegotiating ‘fair’ trade deal with South Korea:
And Stephen Colbert on President Trump's approval rating: