Congress
Trump advisers, Congress discuss tariff legislation
Advisers close to President-elect Donald Trump have been in discussions with House Ways and Means Chair Jason Smith (R-Mo.) on a broad tax package that is partially paid for by tariffs approved by Congress, according to two people familiar with the conversations who were granted anonymity to describe the internal discussions.
As part of those conversations, staffers and advisers close to the Trump team have also investigated whether House rules need to be changed to use tariffs as offsets for tax cuts, those people say.
A Ways and Means Committee spokesperson declined to comment.
The discussions come as Republicans are gearing up to pass a massive tax bill, which would include $4.6 trillion of expiring Trump tax cuts and potentially several other tax proposals floated by Trump on the campaign trail. They include Trump’s ideas to remove “tax on tips” and eliminate taxes on Social Security, among many others.
Trump repeatedly pledged on the campaign trail to use tariffs to help pay for those tax cuts, and the conversations signal that congressional Republicans could be open to imposing tariffs on Trump’s behalf via legislation.
However, Congress has not raised tariffs through legislation in almost 100 years — through the Smoot-Hawley Tariff Act of 1930 — and that has led to some confusion over how lawmakers should handle the issue as part of a broader tax package, the people said.
“We’re likely to see in a reconciliation bill … that’s raising revenue through tariffs on imports and taking that savings and using it to cut taxes and create incentives for domestic production,” said a person directly familiar with conversations between Trump’s advisers and Congress.
Reconciliation — a budget procedure possible only if Republicans sweep Congress — would allow Republicans to pass the tax cuts and tariffs without Democratic support and with only simple majorities in both chambers. But those rules and other House rules around bills that lose revenue can be exceedingly complex.
It’s very unlikely that tariffs could help pay for a significant portion of any tax cuts, though — despite Trump’s flirtation with the idea of using tariffs to completely eliminate the income tax. In fiscal year 2020, U.S. Customs collected $74.4 billion in tariffs, accounting for only roughly 2.2 percent of total federal revenue, according to the Congressional Research Service.
According to estimates by the Tax Foundation, the U.S. would need to implement an across-the-board tariff hike of 69.9 percent to completely replace income taxes.
Congress
House will vote Thursday on expected-to-fail surveillance patch
The House will vote Thursday on a three-week extension of a key surveillance program a day ahead of its expiration, Speaker Mike Johnson said Wednesday.
But leaders of both parties expect the measure to fail, risking a first-ever lapse of Section 702 of the Foreign Intelligence Surveillance Act as the House prepares to leave for recess until June 23.
The extension through July 2 is set to be debated Wednesday night under suspension of the rules, a fast-track House procedure that requires a two-thirds majority to pass.
But the vast majority of Democrats, including House Minority Leader Hakeem Jeffries, say they will not support a punt so long as President Donald Trump stands by plans to appoint a close political ally with no national security experience as his acting director of national intelligence. There is also a small but stubborn group of GOP holdouts who would oppose any attempt to pass an extension under regular order procedures.
“I certainly hope that everyone will do the right thing, put politics aside, for a short-term extension,” Johnson said Wednesday. “We’re not asking for anything heroic here.”
Johnson’s announcement of the Thursday morning vote capped a confusing back-and-forth between the two chambers Wednesday. Less than an hour before, he had said in an interview that “the ball’s in the Senate’s court.”
Senate Majority Leader John Thune, in turn, said in an interview he expected the House would need to move first on a short-term extension.
“We’ll see kind of again what they can come up with over there,” Thune said.
But by Wednesday evening it was clear that regardless of which chamber voted first, the necessary bipartisan coalition to pass an extension simply did not exist.
Senate Democrats quickly poured cold water on the proposed three-week extension, citing Trump’s decision to double down Wednesday on plans to install housing official Bill Pulte as acting DNI.
Sen. Mark Warner (D-Va.), who helped negotiate a three-year extension that has been thrown into limbo, said Trump should name Aaron Lukas, the Senate-confirmed deputy director of the office, the acting director instead of Pulte to ease the path for a short-term patch.
“If he is the acting director during this short-term extension, that’s within the law, and I could be supportive,” Warner said of Lukas.
Should the House leave for its recess after voting Thursday as planned, the Section 702 spy program allowing for warrantless surveillance of foreign sources would lapse for at least a week as World Cup games begin in multiple U.S. cities and the nationwide America 250 celebration approaches. The White House has been prepping an executive order that may cover some aspects of the intelligence data collection in the meantime, according to senior Republicans.
Congress
Introducing Rep. James Gallagher
Speaker Mike Johnson swore in Rep. James Gallagher (R-Calif.) Wednesday as the 431st member of the House, succeeding the late Rep. Doug LaMalfa, a Republican who died in January.
Gallagher brings the partisan balance of the chamber to 219-212, meaning Republicans can afford as many as three defections on party-line votes where all members are participating. But one GOP member, Rep. Tom Kean Jr. of New Jersey, has been absent since March and the exact date of his return is unclear.
Democrats are expected to pick up two additional seats in special elections before September. Special elections have yet to be scheduled to fill two other vacancies in GOP-leaning districts that are unlikely to be filled this Congress.
Congress
Bill Gates tells lawmakers he was ‘never interested’ in being Epstein’s friend
Tech mogul Bill Gates told the House Oversight and Government Reform Committee he had no knowledge of Jeffrey Epstein’s crimes, despite their years-long relationship after Epstein’s 2008 sex crime conviction.
The prominent philanthropist and founder of Microsoft, who is sitting for a transcribed interview Wednesday as part of the panel’s ongoing Epstein investigation, also maintained that he was “never interested” in having a personal friendship with Epstein and that he did not reciprocate advances to that end, according to a copy of his opening statement published on his website.
“I never witnessed nor had any indication that Epstein was engaged in ongoing criminal conduct,” Gates told lawmakers, according to the prepared remarks. “I never went to his island, his ranch, or his Florida home. I have never victimized anyone.”
While Gates has not been accused of any wrongdoing, he is featured prominently in photos released by Epstein’s state and emails made public by the Justice Department — and he is one of several powerful men who have come under scrutiny for his sustained ties with the late, convicted sex offender.
Gates said he was introduced to Epstein in 2011, when the financier “claimed he could raise billions of dollars for global health from people for whom he provided tax and estate services.”
Although he knew Epstein had legal troubles, Gates said conceded he accepted an introduction “without applying the scrutiny I should have.”
Gates said he cut off ties with Epstein in 2014 when it became clear the donors Epstein promised to deliver would not be making contributions to Gates’ philanthropic work: “I should never have met with Epstein in the first place. Based on what I know now, I understand that even if he had delivered the new donors he promised, it would not have justified associating with him.”
But Gates also said Epstein learned “sensitive information about my personal life, including the fact that I had been unfaithful in my marriage,” and used it “to pressure me to re-engage with him. He was unsuccessful in this effort, but it shows some of the ways he tried to leverage his interactions with me to further his agenda.”
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