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Trump advisers, Congress discuss tariff legislation

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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.

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Congress

Rep. Raúl Grijalva dies at 77

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Rep. Raul Grijalva has died at 77, according to a statement from his office. The 12-term Arizona Democrat had been under treatment for cancer.

“Rep. Grijalva fought a long and brave battle,” the statement said. “He passed away this morning due to complications of his cancer treatments.”

Grijalva had been largely absent from Congress since the beginning of the year due to his health struggles. He was set to retire from the House at the end of this term and had stepped aside from his position as the top Democrat on the House Natural Resources Committee.

Grijalva is the second House Democrat to die in office this month. Rep. Sylvester Turner of Texas died on March 5.

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Senate confirms Pulte as top housing regulator, with market’s future at stake

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The Senate on Thursday voted 56-43 to confirm Bill Pulte as the nation’s top housing regulator, putting him at the center of a fight over the future of two government-controlled companies that prop up half the residential mortgage market.

As the director of the Federal Housing Finance Agency, Pulte will have oversight of mortgage giants Fannie Mae and Freddie Mac, which have been in government conservatorship for more than 16 years.

The Trump administration is widely expected to seek to release Fannie and Freddie from government control — a complicated process that will rekindle debate about the role of the federal government in housing at a time when affordability has emerged as a major political concern.

Pulte gave few clues during his confirmation hearing with the Senate Banking Committee about what would happen with the companies, which buy mortgages and package them into securities for sale to investors.

“While [Fannie and Freddie’s] conservatorships should not be indefinite, any exit from conservatorship must be carefully planned to ensure the safety and soundness of the housing market without upward pressure on mortgage rates,” he told the panel.

Pulte expanded slightly on that position in a written response to questions for the record from Sen. Elizabeth Warren of Massachusetts, the top Democrat on the committee.

“My priority in overseeing Fannie Mae and Freddie Mac is ensuring a stable and thriving housing and mortgage market, and to this end, any decisions related to if or when Fannie or Freddie are released from conservatorship would involve the President and the Secretary of the Treasury,” he wrote.

Pulte declined to answer Warren’s question about whether he has consulted with outside advisers including Bill Ackman, the billionaire hedge fund founder who has held sizable positions in both companies for years in the hopes that they would eventually be privatized.

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Sarah McBride says she lives ‘rent-free’ in Republicans’ heads

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LEESBURG, Va. — Rep. Sarah McBride said she lived to “rent-free in the minds of some of my Republican colleagues” amid a controversy about GOP lawmakers referring to her by the wrong gender.

Speaking Thursday at a news conference with House Minority Whip Katherine Clark and first-term Democratic women lawmakers, McBride said Republicans were “obsessed with culture war issues” and said it was “weird” and “bizarre.”

“We will not take a lecture on decorum from a party that incited an insurrection,” the first openly transgender member of Congress said, making reference to the Jan. 6, 2021, Capitol riot.

Rep. Keith Self (R-Texas) referred to her as “Mr. McBride” during a congressional hearing earlier this week, sparking a confrontation between Self and Rep. Bill Keating (D-Mass.) over the issue. Other GOP lawmakers have targeted McBride’s identity, with Rep. Mary Miller (R-Ill.) addressing her as “the gentleman from Delaware” while presiding on the House floor at one point.

House Republicans have sought to turn transgender rights into a wedge issue against Democrats this Congress. Rep. Nancy Mace (R-S.C.) led an effort to ban transgender women from using women’s bathrooms on Capitol Hill. She responded to McBride’s comments Thursday with an X post addressing her as “Sir.”

McBride has generally shied away from weighing in on the attacks on her identity. Thursday’s remarks were her first public comments on the incident beyond a Tuesday post on X where she wrote: “No matter how I’m treated by some colleagues, nothing diminishes my awe and gratitude at getting to represent Delaware in Congress.”

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