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WASHINGTON WATCH: June 6, 2023



 

THE LONG GAME: POTUS signs debt ceiling bill; GOP preps tax cuts package

President Biden signed legislation on Saturday suspending the nation’s $31.4 trillion debt ceiling, just two days before the U.S. would have defaulted for the first time in its history. The bill signing was closed to the press, although Biden on Friday evening made his first address from the Oval Office touting the compromise reached with House Speaker Kevin McCarthy (R-CA). “No one got everything they wanted. But the American people got what they needed,” Biden said. The deal suspends the debt ceiling until 2025. In the end, the GOP failed to institute the full scope of cuts that its members sought: the bill will reduce spending by $1.5 trillion over the next decade, compared to the $4.8 trillion that Republicans originally advocated. However, Republicans were able to achieve some key policy goals as part of the package. For example, the deal claws back about $28 billion in unspent COVID relief funds; cuts roughly $20 billion in new IRS enforcement funding; calls for a resumption of student debt payments; and imposes new work requirements on many people who use the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families. The bill passed the House by a vote of 314 to 117, a wider margin than many had predicted; it passed the Senate by a margin of 63 to 36.  


While Washington has been largely focused on the debt ceiling crisis, House Republicans have been preparing for the next major item on their agenda: a large package of tax cuts. The bill would likely include big tax breaks for businesses, making permanent some provisions from the 2017 Tax Cuts and Jobs Act scheduled to expire in 2025. Among them would be a revival of credits for research and development, full bonus depreciation and the removal of caps on business interest expensing. Progressives argued that it is inconsistent for the GOP to push for new tax cuts while at the same time pressing for spending cuts as part of this deal. In a letter sent by Sens. Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), and Ed Markey (D-MA) to the U.S. Chamber of Commerce, the lawmakers pointed out that the 2017 tax law increased the nation’s deficit by $1.9 trillion. According to the Institute on Taxation and Economic Policy, the wealthiest fifth of Americans would receive nearly two-thirds of the benefits of the TCJA Permanency Act, while the poorest fifth of Americans would receive just 1 percent of the total benefits of the bill.


Washington Watch is published weekly when Congress is in session. Published monthly during extended recess or adjournment.



 



Spotlight on Puerto Rico


Reps. Velazquez and AOC lead FEMA letter for renewable power grids in Puerto Rico 

Reps. Nydia Velazquez and Alexandria Ocasio-Cortez (both D-NY) drafted a letter to FEMA last week urging the agency to redirect electrical grid funding toward the development of more renewable energy sources and programs. FEMA originally allocated nearly $11.4 billion for grid reconstruction and modernization. The letter, which was co-signed by Senators Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) among others, recommends investments in roof solar panels, storage batteries, and microgrids. The letter argues that Puerto Rico will continue to be impacted by natural disasters, and alternative, distributed renewable energy systems are a better option than the fragile centralized network that has powered, and failed, the Island for decades. 

Puerto Rico dredging project in court this week 

A federal district court will hear oral arguments this week in a lawsuit brought by environmental advocates El Puente, CORALations and the Center for Biological Diversity challenging a U.S. Army Corps of Engineers project in the San Juan Bay. The project would expand shipping channels to the bay, allowing for larger tankers. The lawsuit alleges that the environmental impact review was inadequate and failed to consider the impact of continued fossil fuel dependency for the Island. The suit also alleges that natural animal habitats will be negatively affected by this project. 

Puerto Rico aging demographic crisis the worst in the nation 

Puerto Rico’s population is aging much faster than most places around the globe, driven mostly by the massive exodus of more than 700,000 people between ages 20-64 in the past fifteen years. The lack of multigenerational family networks is creating a strain on services for the elderly. Nearly one-fourth of people on the Island are over 65 years old, making Puerto Rico’s share of older people the tenth highest in the world. In 2007, 48% of Puerto Rico’s 65-and-over population reported having an adult child living off the Island, but that number has dramatically increased due to natural disasters, the pandemic, and political issues, among other factors. As a result, there are not enough nursing homes or independent living facilities or staff available to serve this population. 




 

View From The White House



  • The Biden administration announced on Thursday reforms aimed at deterring racism in the home appraisal process, including a requirement that banks ensure that their algorithms are not racially biased.

  • The State Department imposed financial sanctions on four companies and visa restrictions on several individuals in connection with the ongoing political violence in Sudan.

  • The National Highway Traffic Safety Administration on Wednesday proposed a rule requiring that all new cars and SUVs come equipped with automatic emergency braking systems, a technology that could save an estimated 300 lives per year and prevent 24,000 injuries.


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