Politics

By Steve Holland

WASHINGTON (Reuters) -U.S. President Joe Biden’s campaign trail promise to increase taxes on corporations and the wealthy as part of a battle against glaring income inequality in the United States got an unexpected boost on Wednesday.

Early proposals to increase tax rates from Biden and his fellow Democrats hit a brick wall in Congress after Republicans — and some Democrats — opposed them. But a sudden reversal by West Virginia Democratic Senator Joe Manchin, a swing vote in the divided Senate, has given Biden’s tax agenda a new lease on life.

The amount U.S. companies contribute to tax revenue that funds roads and schools has plummeted https://graphics.reuters.com/USA-BIDEN/INVESTMENTS/xlbvgkbxlvq since the 1940s.

Biden has often said in office that companies should instead pay a “fair share,” a contrast to deference to private markets begun by Republicans with former President Ronald Reagan’s election in 1980, and buoyed by rounds of tax cuts and deregulation, by both parties.

The new compromise bill includes $430 billion in new spending on energy, electric vehicle tax credits and health insurance investments. It more than pays for itself by raising minimum taxes for big companies and enforcing existing tax laws, Manchin and Senate Majority Leader Chuck Schumer said in a statement.

Biden said during a speech on Thursday that the deal would “for the first time in a long time begin to restore fairness to the tax code – begin to restore fairness by making the largest corporations in America pay their fair share without any new taxes on people making under $400,000 a year.”

The bill would impose a 15% minimum tax on corporations with profits over $1 billion, raising $313 billion over a decade, they wrote. Companies could claim net operating losses and tax credits against the 15%.

The U.S. corporate tax rate dropped to 21% from 35% after a 2017 tax cut pushed by then-President Donald Trump and his fellow Republicans, but many companies pay much less than that, and some of the largest pay no federal taxes, research groups including the Institute on Taxation and Economic Policy have found.

Biden proposed raising that rate to 28% last year as part of an infrastructure spending bill, but the tax component was struck from the bill.

The new Manchin-Schumer bill also aims to close the so-called carried interest loophole, long a goal of Democrats.

Carried interest refers to a longstanding Wall Street tax break that let many private equity and hedge fund financiers pay the lower capital gains tax rate on much of their income, instead of the higher income tax rate paid by wage earners.

Eliminating the loophole would raise $14 billion, the senators say.

Schumer said he expected the Senate to vote on the legislation next week, to “lower prescription drug prices, tackle the climate crisis with urgency and vigor, ensure the wealthiest corporations and individuals pay their fair share in taxes, and reduce the deficit.”

The Manchin-Schumer measure is substantially smaller than the multitrillion-dollar spending bill Democrats had envisioned last year.

But it still represents a major advance for Biden’s policy agenda ahead of midterm elections on Nov. 8 that could determine whether Democrats retain control of Congress.

It came just as Biden celebrated Senate passage of a bill aimed at boosting the U.S. semiconductor industry, another key priority of his administration, and as he struggles with low job approval ratings and ebbing support from his own party after a series of conservative Supreme Court rulings.

“This bill will reduce the deficit beyond the record-setting $1.7 trillion in deficit reduction we have already achieved this year, which will help fight inflation as well,” Biden said in a statement.

“And we will pay for all of this by requiring big corporations to pay their fair share of taxes, with no tax increases at all for families making under $400,000 a year,” he said.

(Reporting By Steve Holland; Editing by Heather Timmons and Mark Porter)

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WASHINGTON (Reuters) – U.S. Democratic Senator Joe Manchin said on Wednesday he has reached a deal with Senate Democratic leader Chuck Schumer on a bill to increase corporate taxes, reduce the national debt, invest in energy technologies and lower the cost of prescription drugs.

Manchin has often been a roadblock to President Joe Biden’s policy goals, including those specifically addressed in the bill. He previously said he wanted to address high U.S. prescription drug costs, but was concerned more government spending could increase inflation.

The bill includes $430 billion in new spending on energy, electric vehicle credits and health insurance, and more than pays for itself by raising minimum taxes for big companies and enforcing existing tax laws, Schumer and Manchin said in a statement.

The measure is substantially smaller than the multitrillion-dollar spending bill Democrats had envisioned last year. But it still represents a significant advance for Biden’s policy agenda ahead of midterm elections on Nov. 8 that could determine whether Democrats retain control of Congress.

Schumer plans to pass the measure through a Senate maneuver called reconciliation that allows him to proceed with just a 51-vote majority, bypassing normal rules that require 60 of the 100 senators to agree to most legislation. That could allow him to pass the bill with only Democratic votes, if necessary, if every Democrat is on board.

Schumer said he expects the Senate Parliamentarian will rule in the coming days whether the bill qualifies for reconciliation under the chamber’s rules. He said the Senate will vote on the legislation next week.

Manchin and Schumer said in the statement that the bill would reduce the nation’s deficit by about $300 billion, lower carbon emissions by about 40% by the year 2030 and allow the government’s Medicare health plan to negotiate prescription drug prices.

Older and lower-income Americans could benefit, as well as some electric vehicle companies and green energy companies.

Out-of-pocket drug costs for recipients of Medicare, the U.S. health insurance for seniors and the disabled, would be capped at $2,000 a year and vaccines for seniors would be available for free, according to a summary of the bill.

It also includes a new $4,000 tax credit for used electric vehicles for lower-income people and new tax credits and grants for automakers to retool factories to build greener cars. [L1N2Z9027]

The new agreement will be paid for by raising the corporate minimum tax on big companies to 15%, ramping up Internal Revenue Service tax enforcement by adding $80 billion to its budget over a decade, lowering the price government agencies pay for prescription drugs and closing a loophole that lets some ultra-wealthy pay less tax, Schumer and Manchin said.

“I have worked diligently to get input from all sides on the legislation my Democratic colleagues have proposed and listened to the views of my Republican friends to find a path forward that removes inflationary policies so that Congress can respond to Americans’ suffering from high prices,” Manchin said.

Senator Kyrsten Sinema of Arizona, another Democrats who has at times blocked Biden’s agenda, declined immediate comment on news of the agreement.

In a letter to colleagues, House of Representatives Speaker Nancy Pelosi called the bill “a remarkable achievement” and “welcome news for House Democrats.”

CROSSING MCCONNELL

News of the agreement came hours after the Senate passed sweeping legislation to subsidize the domestic semiconductor chip industry with several Republican votes.

Last month, top Senate Republican Mitch McConnell promised to block the “Chips bill” as it is known, unless Democrats abandoned their plans for a reconciliation bill like the one Manchin and Schumer outlined. The House will vote on the “Chips bill” on Thursday, but Republicans don’t have the votes to block it on their own.

McConnell criticized the reconciliation bill on Wednesday, saying it would “kill many thousands of American jobs.”

The reconciliation bill does not include an expansion of a federal deduction for taxes paid to states and local entities. Expanding the deduction, known as SALT for State and Local Taxes, has been a demand of lawmakers in higher-tax states such as California, New Jersey and New York, especially in suburbs where Democrats seek to retain control in the November elections.

(Reporting by Eric Beech, David Morgan and Makini Brice, writing by Katharine Jackson; Editing by Scott Malone, Heather Timmons, Bill Berkrot, Cynthia Osterman and Raju Gopalakrishnan)

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By David Shepardson

WASHINGTON (Reuters) -A Senate Democratic deal includes a new $4,000 tax credit for used electric vehicles and other new tax credits and grants for automakers to retool factories to build greener cars.

The deal struck between Senate Majority Leader Chuck Schumer and Democratic Senator Joe Manchin also includes an expansion of the existing $7,500 EV tax credit as well as a new $10 billion investment tax credit to build clean-technology manufacturing facilities, according to a summary from Schumer’s office.

The bill that Schumer and Manchin agreed to also includes $2 billion in cash grants to retool existing auto manufacturing facilities “to manufacture clean vehicles, ensuring that auto manufacturing jobs stay in the communities that depend on them.”

If it becomes law, it will further provide up to $20 billion in loans to build new clean vehicle manufacturing facilities and $30 billion for additional production tax credits “to accelerate U.S. manufacturing of solar panels, wind turbines, batteries, and critical minerals processing.”

Schumer said the Senate was expected to vote on the proposed legislation next week and it would next go to the Democratic-controlled House of Representatives.

President Joe Biden last year proposed boosting EV tax credits to up to $12,500 per vehicle — including $4,500 for union-made vehicles — and lifting a cap of 200,000 vehicles per manufacturer on the $7,500 credit. Automakers including General Motors and Tesla have hit the cap and are no longer eligible for the existing EV tax credit.

Toyota Motor Corp said this month it had hit the sales cap, which means its $7,500 credit will phase out over the next year.

Automakers have heavily lobbied for an extension of the EV tax credit, warning they cannot meet aggressive goals to cut emissions without tax incentives that make electric vehicles more cost competitive.

The new EV tax credits would be limited to trucks, vans and SUVs with a suggested retail price of no more than $80,000 and to cars priced at no more than $55,000. They would be limited to families with adjusted gross incomes of up to $300,000 annually.

    They also would be subject to rising annual requirements limiting sources of critical minerals used in batteries. Congressional aides and automakers said the provision was aimed at China, which produces much of the world’s critical minerals for batteries.

The deal would further provide $3 billion for the U.S. Postal Service to buy zero-emission vehicles and such EV infrastructure as charging stations.

Republicans have harshly criticized Democrats for touting EVs as a solution to rising gasoline prices, saying they are not affordable. Democrats argue the tax credits are crucial to shifting Americans away from gasoline-powered vehicles.

Biden has set a target to make half of all new vehicles sold in 2030 EVs or plug-in hybrids but has refused to endorse setting a date for phasing out internal combustion vehicles.

In the bill, a further $1 billion would be set aside for schools and other government entities to purchase heavy-duty vehicles, such as school and transit buses and garbage trucks.

The bill will also include new tax credits and grants “to support the domestic production of biofuels, and to build the infrastructure needed for sustainable aviation fuel (SAF) and other biofuels.” The SAF tax credit is worth at least $1.25 a gallon.

The Energy Department already has $2.9 billion in grants it is planning to award for battery production and is offering low-cost loans for cleaner automotive and parts production.

On Monday, the department said it planned to lend $2.5 billion to a joint venture of GM and LG Energy Solution to help finance construction of new lithium-ion battery cell manufacturing facilities in Ohio, Tennessee and Michigan.

(Reporting by David Shepardson; Editing by Sandra Maler and Bradley Perrett)

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By Timothy Gardner

WASHINGTON (Reuters) -The nearly $370 billion in climate and energy security measures in the budget reconciliation deal U.S. Senate Democrats struck on Wednesday were whittled down from previous versions of the bill, but highly praised by backers of clean energy.

Early versions of the bill had $555 billion in tax breaks for clean energy such as wind and solar power as well as batteries and nuclear reactors.

Still, Wednesday’s package would cut U.S. emissions 40% by 2030, a summary released by Senate Majority Leader Chuck Schumer’s office said.

The baseline for the cut was 2005, Leah Stokes, a professor of climate and energy policy at the University of California, Santa Barbara, who advised Democrats on the bill.

Clean energy backers said it would go a long way toward President Joe Biden’s goal of decarbonizing the U.S. economy by 2050.

“It’s an absolutely transformative package,” said Stokes. She said the bill would boost American manufacturing in everything from batteries to solar energy to electric vehicles and contains the largest environmental justice investment ever.

Biden, who has faced soaring oil prices and record gasoline prices that have helped drive inflation to 40-year highs, said in statement the bill would “improve our energy security and tackle the climate crisis.”

Heather Zichal, the head of American Clean Power, a group of renewable energy companies, said Congress is now close to passing “the biggest climate and clean energy investment in American history.”

Democrats hope to pass the bill by a simple majority in the Senate. The bill must also pass the House, where Democrats also have a razor-thin majority, and be signed by Biden.

It contains a “methane emissions reduction program” to cut leaks of the potent greenhouse gas methane from drilling of natural gas, according to the summary.  

It was not immediately clear if a methane fee many Democrats had wanted on the emissions that would penalize energy companies for the leaks had been modified.  

Senator Joe Manchin, a conservative Democrat and the swing vote who has received more donations from oil and gas companies than any other lawmaker in recent years, had pushed for companies to not face the fee if they were unable to build a pipeline to carry the gas to market.

Manchin said the bill will invest in hydrogen, nuclear power, renewables, fossil fuels and energy storage.

“This bill does not arbitrarily shut off our abundant fossil fuels,” said Manchin, who has sought for months to preserve federal oil and gas leasing projects and natural gas pipelines in talks on the bill.  

Democrats, he added, “have committed to advancing a suite of commonsense permitting reforms this fall that will ensure all energy infrastructure, from transmission to pipelines and export facilities, can be efficiently and responsibly built to deliver energy safely around the country and to our allies.”

The measure has more than $60 billion in environmental justice programs to fight pollution and address public health harms in disadvantaged communities. It also has $20 billion for “climate-smart” agriculture practices, the summary said without providing details.

The bill contains a $10 billion investment tax credit to build clean technology manufacturing plants for EVS, wind turbines and solar panels, the summary said.

It also has an estimated $30 billion investment in production tax credits to accelerate U.S. manufacturing of batteries and wind and solar power components and critical minerals processing.  

(Reporting by Timothy Gardner; Editing by Bradley Perrett and Michael Perry)

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By Trevor Hunnicutt and Jeff Mason

WASHINGTON (Reuters) -U.S. President Joe Biden celebrated his recovery from COVID-19 on Wednesday with an appeal to Americans to get vaccinated and a comparison of his mild symptoms and work-from-home performance to the more serious case experienced by his predecessor.

Biden, who is 79, ended his isolation period from COVID-19 after testing negative on Tuesday evening and again on Wednesday morning. During remarks to staff and reporters at the White House, he said he recovered without fear thanks to good care and readily available medicine.

Biden won the 2020 presidential election in part on a promise to take the pandemic more seriously than former President Donald Trump, whose own COVID case in the middle of the election campaign resulted in a trip to the hospital.

“My symptoms were mild, my recovery was quick and I’m feeling great. The entire time I was in isolation I was able to work, to carry out the duties of the office without any interruption. It’s a real statement on where we are in the fight against COVID-19,” Biden said.

Biden remains fever-free and is no longer taking acetaminophen (Tylenol), his physician, Dr. Kevin O’Connor, said in a memo released earlier by the White House. The president had mild symptoms including cough, sore throat and body aches since his initial positive test last Thursday.

“His symptoms have been steadily improving, and are almost completely resolved,” O’Connor said.

Biden, who could potentially face Trump again in the 2024 election if both men run and win the nomination of their respective parties, made reference to his former opponent’s fate.

“Here’s the bottom line: When my predecessor got COVID, he had to get helicoptered to Walter Reed Medical Center. He was severely ill. Thankfully, he recovered,” Biden said. “When I got COVID, I worked from upstairs in the White House – in the offices upstairs – for the five-day period. The difference is vaccinations, of course.”

Biden has overseen the rollout of vaccines developed under Trump’s tenure and urged Americans to get inoculated and consider wearing masks as a new wave of the Omicron BA.5 subvariant of the coronavirus sweeps across the United States.

Biden wore a mask on his way to the Rose Garden and took it off for his remarks there. He will wear a mask for 10 full days when he is around others, O’Connor said, mindful of potential exposure to Secret Service personnel and White House staff who are in close proximity to him.

O’Connor said Biden would be tested regularly to watch for a potential “rebound” COVID-19 case of a sort experienced by some patients who have been treated with Paxlovid, the drug the president received.

The White House has been eager to show Biden at work during his convalescence. He held virtual events from the White House residence on multiple days and did video remarks on the first day he tested positive to reassure Americans that he was OK.

“Now, I get to go back to the Oval Office,” Biden said at the end of his remarks on Wednesday to cheers from White House staff.

(Reporting by Trevor Hunnicutt and Jeff Mason; additional reporting by Kanishka Singh, Doina Chiacu and Chris Gallagher; Editing by Howard Goller)

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“You don’t need to be president to get these tools,” he said.

Biden had a mild bout with the virus that has killed millions of people around the world and disrupted daily life for more than two years.

“God bless you all, and now I get to go back to the Oval Office,” he said as he finished his remarks in the Rose Garden and returned to the West Wing.

Biden tested negative for the virus on Tuesday night and Wednesday morning.

Biden’s tweet included a photo of a rapid COVID-19 test with the line showing a negative result.

“Thanks to Doc for the good care, and to all of you for your support,” the president’s tweet said.

Biden’s symptoms were almost “completely resolved,” O’Connor reported.

“Given these reassuring factors, the president will discontinue his strict isolation measures,” the doctor wrote.

Biden plans to wear a “well-fitting” face mask for five more days anytime he is around others.

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WASHINGTON (Reuters) – A federal judge Wednesday declined a request to acquit Donald Trump’s former presidential adviser Steve Bannon on two contempt of Congress charges, but he left open the door to consider possibly dismissing the charges instead.

(Reporting by Sarah N. Lynch)

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WASHINGTON (Reuters) -Marc Short, who was a top staffer to Republican former Vice President Mike Pence, on Monday confirmed he had testified before a federal grand jury investigating the Jan. 6, 2021, attack on the U.S. Capitol and efforts to overturn the 2020 presidential election.

“I did receive a subpoena for the federal grand jury and I complied with that subpoena,” Short told CNN. He declined to provide any details on his testimony.

ABC News first reported that Short, who served as Pence’s chief of staff, had testified on Friday afternoon. Both ABC’s cameras and Reuters cameras captured footage of Short leaving the federal courthouse in Washington, D.C., alongside his attorney Emmet Flood.

Short is the most high-profile official known to have appeared before the grand jury, which is also probing the effort by former President Donald Trump’s allies to submit slates of fake electors to overturn the 2020 election.

Short’s appearance is a sign the U.S. Justice Department’s investigation into the attack on the Capitol and the fake elector plot is heating up.

In the interview with CNN, Short said it was unfair to characterize the pro-Trump mob as simply exercising their First Amendment free speech rights.

“Certainly there were probably some people who foolishly got caught up in the events that were happening on the sixth, but I think it’s unfair to describe the rioters as patriots who were merely expressing their First Amendment rights,” he said.

Short said although the Secret Service wanted to evacuate Pence from the Capitol, where he was preparing to certify the presidential election results, the vice president wanted to stay.

“The vice president didn’t want the image of a 15-car motorcade fleeing the hallmark of democracy for the world to see,” he told CNN.

In an interview with CNN earlier this year, Deputy Attorney General Lisa Monaco confirmed the Justice Department had received referrals about slates of alternative fake electors that were sent to the National Archives, and said prosecutors were reviewing them.

Copies of the phony electoral slates submitted to the National Archives by pro-Trump Republicans in Arizona, Georgia, Michigan, New Mexico, Nevada, Pennsylvania and Wisconsin were made public in March by the non-profit watchdog group American Oversight, which obtained them through a public records request.

The Office of the Federal Register, part of the National Archives, coordinates some functions of the Electoral College between the states and Congress, including receiving the certificates from the states that identify their electors and receiving the certificates of votes by the electors.

The fake elector plot has featured prominently in multiple hearings of the Democratic-led U.S. House of Representatives committee probing the attack on the U.S. Capitol.

Rusty Bowers, the Arizona state House Republican speaker, testified in June that Trump and his close aides, including his personal lawyer Rudy Giuliani and adviser John Eastman, urged Bowers to reject the election results.

In recent months, the U.S. Attorney’s office in Washington, D.C., has started issuing grand jury subpoenas to electors, including some who signed the bogus certificates.

According to one subpoena seen by Reuters that is focused on the phony slate of electors in Georgia, investigators are seeking copies of documents from October 2020 related to “any effort, plan or attempt to serve as an elector in favor of Donald J. Trump and/or Mike R. Pence.”

They are also seeking copies of communications between would-be electors and any federal government employees, any employees or agents of Trump, as well as communications with a long list of people including Giuliani and Eastman.

Arizona’s Republican party chair, Kelli Ward, and her husband, Michael Ward, who both signed their names on one of the slates of alternate electors for Trump, have also received subpoenas.

    Alexander Kolodin, an attorney for the Wards, told Reuters earlier this month that the DOJ’s investigation is “based on allegations that our clients engaged in core First Amendment-protected activity, namely petitioning Congress for redress of grievances.”

(Reporting by Sarah N. Lynch and Tim Ahmann in Washington and Karen Freifeld in New York; Editing by Scott Malone and Leslie Adler)

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WASHINGTON (Reuters) -Two senior U.S. House of Representatives Democrats called on Tuesday for Department of Homeland Security Inspector General Joseph Cuffari to recuse himself from the investigation into Secret Service text messages related to the probe into the Jan. 6, 2021, attack on the Capitol.

House of Representatives Oversight Chairperson Carolyn Maloney and House Homeland Security Chairperson Bennie Thompson, who also leads the panel probing the Capitol attack, said in a letter they lost confidence in the watchdog after he failed to inform Congress for months that Secret Service messages around Jan. 6, 2021, might have been erased.

“These omissions left Congress in the dark about key developments in this investigation and may have cost investigators precious time to capture relevant evidence,” Maloney and Thompson wrote.

The House Jan. 6 Select Committee subpoenaed the Secret Service earlier this month, seeking text messages from Jan. 5 and Jan. 6, 2021, after the Secret Service said data from some phones had been lost during a system migration that was initiated prior to the inspector general’s request.

A spokesperson for the Secret Service had no new comment on the letter, but pointed to previous statements from the agency confirming its continued cooperation with all oversight and investigations related to Jan. 6.

(Reporting by Kanishka Singh and Patricia Zengerle;Editing by Chris Reese and Marguerita Choy)

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(Reuters) – The U.S. Justice Department is investigating Donald Trump’s actions in its criminal probe of the former president’s attempts to overturn his 2020 election defeat, the Washington Post reported on Tuesday, citing sources.

The Justice Department has been interviewing former White House officials, including the former chief of staff to former Vice President Mike Pence, who confirmed on Monday that he had testified to a federal grand jury investigating the Jan. 6, 2021, attack on the U.S. Capitol and efforts by Trump and his allies to overturn his defeat.

Prosecutors questioning witnesses before the grand jury have asked about conversations with Trump and his lawyers and others close to him, the Post reported, citing two people familiar with the matter.

The testimony of Pence’s former Pence chief of staff, Marc Short, the most high-profile official known to have appeared before the grand jury, is a sign the Justice Department’s investigation of the attack on the Capitol and the fake elector plot is heating up.

Justice Department investigators in April also received phone records of important officials such as Trump’s former chief of staff Mark Meadows, the Washington Post said.

The Justice Department could not be immediately reached for comment.

A spokeswoman for Trump did not reply to a request for comment from Reuters. Trump has denied wrongdoing.

In an interview with CNN earlier this year, Deputy Attorney General Lisa Monaco confirmed the Justice Department had received referrals about slates of alternative fake electors that were sent to the National Archives, and said prosecutors were reviewing them.

The fake elector plot has featured prominently in multiple hearings of the Democratic-led U.S. House of Representatives committee probing the attack on the Capitol.

(Reporting by Costas Pitas in Los Angeles; Editing by Scott Malone and Leslie Adler)

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