THE LONG GAME: Biden proposes billionaires’ tax; Covid funding stalemate
In his FY2023 budget unveiled on Monday, President Biden called for a new minimum tax targeting billionaires. The tax would raise approximately $360 million over the next decade. The tax would impact the 700 wealthiest Americans by creating a 20 percent minimum tax on all households worth more than a $100 million; over half of the revenue would come from those worth more than $1 billion. A recent study by the White House Council of Economic Advisors found that 400 billionaire households paid an average federal tax rate of just over 8 percent between 2010 and 2018. “This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters,” reads the budget document from the White House. Alternate plans to tax billionaires have been proposed by Sens. Elizabeth Warren (D-MA) and Ron Wyden (D-OR). Overall, Biden’s budget would reduce the deficit by $1 trillion over ten years. Facing a stalemate on Capitol Hill, Biden Administration officials renewed calls last week for Congress to approve funding to combat the Covid-19 pandemic without cutting other programs to pay for it. The White House has sought $22.5 billion in funding. Without it, the administration says, the government risks running out of money to pay for vaccines, testing and treatments. The push comes two weeks after new Covid-relief money was pulled from the omnibus spending bill passed by Congress. The bill originally included $15.6 billion to combat the virus, but was eliminated after many Democrats rejected cuts that their leaders had negotiated with Republicans to pay for the relief, including a claw back of $7 billion sent to states last year. Republicans insist that the money required for new expenditures should be found in the trillions that Congress has approved over the past two years.
Washington Watch is published weekly when Congress is in session. Published monthly during extended recess or adjournment.
Spotlight on Puerto Rico
FOMB approves 18 renewable energy projects In one of the final acts of Natalie Jaresko’s tenure as its Executive Director, the Financial Oversight and Management Board approved 18 renewable energy projects last week. The decision comes more than two years after the Board ordered the cancelation of some 14 renewable projects whose price tags exceeded the amount authorized in the Puerto Rico Electric Power Authority (PREPA)’s fiscal plan; the new projects, according to FOMB Infrastructure Director Alejandro Figueroa, will reportedly save Puerto Rico $347 million in comparison to the canceled ones. According to the FOMB, the new projects will allow Puerto Rico to produce 844 megawatts—844,000 kilowatts—of renewable energy, helping Puerto Rico reach its goal of obtaining 23% of its energy from renewable sources by 2024 in accordance with the Public Energy Policy set in Act 17. This law also set the goal of 40% renewable energy by 2025, and had set the goal of 20% by 2022, which the Island did not meet. Currently, only 4% of Puerto Rico’s power is obtained from renewable sources. Following elimination of restrictions, COVID cases once again on the upswing Less than three weeks after Governor Pedro Pierluisi issued executive orders loosening or eliminating most COVID restrictions, there are signs that progress to contain the virus since the beginning of the year is becoming undone. While there is no way to definitely link the governor's actions to increasing COVID rates, the trends are concerning. The positivity rate as of Monday morning was 5.79%, compared to 3.9% two weeks ago, and the seven-day average of new cases (including both confirmed and probable cases) is now 232, compared to 154 two weeks ago. It is also possible that a considerable number of cases have gone unreported: as El Nuevo Día reports, molecular COVID testing has gone down significantly, from 29,791 on December 22 to 3,300 on March 21. Among the groups sounding the alarm is the Puerto Rico Citizens’ Task Force, a collective of volunteers who compile, analyze, and share health data. On Sunday, Bill Burleson of the Task Force posted a statement on Facebook: “Yesterday, we informed the Health Department that we are officially in a rebound...In approximately fourteen days we should see a change in direction in both hospitalization and intensive case numbers. This should not be cause for alarm, but rather cause to remain informed.” Puerto Rico emergency response body NMEAD undermined by bureaucracy, budget woes During abnormal weather events like hurricanes and similar events, it falls upon the Bureau for Emergency Management and Disaster Administration (NMEAD, in Spanish), to provide mitigation assistance and manage the immediate response. However, as El Nuevo Día reports, recent events, like the heavy rains that flooded parts of Puerto Rico in February, have highlighted how the Bureau has grown increasingly less capable of carrying out its mission. During the rains, which forced some to evacuate their homes to escape flooding, NMEAD failed to contact mayors to inform them of the risks, failed to activate the Emergency Operations Center (COE, in Spanish) and failed to coordinate messages from government officials to warn people of the dangers. Recent reorganizations, such as the one that placed NMEAD under the Department of Public Safety (DPS) in 2017, have caused the Bureau to shift its focus away from core duties such as prevention, preparation, recovery, and mitigation, and to shift increasingly into emergency response. The Bureau’s leadership also reflects this shift: the last three heads of NMEAD have a security background, and not an emergency response one. Pierluisi signs teacher pay raise into law Responding to extended protests by Puerto Rico’s teachers, Governor Pedro Pierluisi on March 16th, signed into law the bill increasing public educators’ base salary to $2,750 per month, or $33,000 per year. “I understand the determination and commitment the Island’s teachers possess, and that their work is fundamental to the development of our children and youth...As a government we will keep working to continue doing them justice,” stated the governor in a press release. Although the pay increase does not meet all of the teachers’ demands, leaders among the educators acknowledged the significance of the victory, and of the protests that led to it.
View From The White House
Under new rules announced on Thursday, officials of the U.S. Citizenship and Immigration Services will weigh the merits of asylum seekers who fear persecution in their home countries, a task currently undertaken by 500 immigration judges.
While in Brussels, President Biden announced that the U.S. will take in up to 100,000 Ukrainian refugees.
According to published reports, the Biden Administration will give Americans age 50 and older the opportunity to receive a second booster of either the Pfizer-BioNTech or Moderna vaccine.
3121 SOUTH STREET NW, SUITE 100 WASHINGTON, D.C. 20007 TEL. (202) 337-1016