Pelosi Announces 'Official Impeachment Inquiry' into Trump

Pelosi Announces 'Official Impeachment Inquiry' into Trump

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Plus, Bernie Sanders' big new wealth tax
Tuesday, September 24, 2019

Trump Impeachment Inquiry: Forget About Anything Else Happening in Congress in 2019?

House Speaker Nancy Pelosi on Tuesday afternoon announced a formal impeachment inquiry against President Trump amid reports that Trump may have pressured the president of Ukraine to investigate former vice president Joe Biden and his family, a potential 2020 election opponent.

“The actions of the Trump presidency have revealed the dishonorable fact of the president’s betrayal of his oath of office, betrayal of our national security and betrayal of the integrity of our elections,” Pelosi said. “Therefore, today, I am announcing the House of Representatives is moving forward with an official impeachment inquiry.”

Trump on Twitter called the announcement “more breaking news Witch Hunt garbage” and “PRESIDENTIAL HARRASSMENT!”

Leaving aside the massive political implications, here’s one take on how the move could change the landscape for legislative progress ahead of the 2020 elections, via analyst Chris Krueger of the Cowen Washington Research Group:

“There are two competing interpretations of how impeachment will influence legislation: 1) impeachment moving forward freezes all legislative progress and all cooperation, and; 2) to inoculate vulnerable House Democrats from the "Do Nothing" talking-point, Speaker Pelosi will move a few bipartisan bills...probably led by USMCA. Perhaps Pelosi will schedule a vote on USMCA this year, but that strikes us as a political bridge too far...ratify Trump's signature trade achievement while calling for his impeachment?

Krueger notes that the outlook for the other major piece of potential legislation — a bill to lower prescription drug prices — is similar to that of Trump’s trade deal with Mexico and Canada. “If you believe in the second interpretation (Pelosi will pass at least one thing for her vulnerable members), drug pricing could get done,” he writes, “but we are very skeptical.”

Senate Republicans Back Trump’s Bid for $5 Billion in Border Wall Funding

Senate Republicans are backing President Trump’s request for $5 billion in funding for his proposed border barriers. On Tuesday, Trump’s Republican allies in the Senate unveiled a $71 billion draft funding bill for the Department of Homeland Security that includes the full $5 billion in wall funding Trump requested.

Senate Appropriations Homeland Security Subcommittee Chairwoman Shelley Moore Capito (R-WV) estimated that the spending bill would raise total funding for Trump’s wall to nearly $15 billion, according to The Hill. That includes the $6.1 billion Trump has redirected from Pentagon accounts toward barrier construction.

What’s next: “The money faces an uphill slog,” writes Andrew Taylor of the Associated Press. “Tuesday’s subcommittee vote was routine but a heated debate awaits on Thursday when the legislation is voted on in the full Appropriations Committee, where Democrats promise votes to cut the wall funding back.”

Democrats remain staunchly opposed to providing money for barrier construction, and the appropriations process remains mired in uncertainty and partisan disagreements. The House version of the homeland security spending bill includes no wall funding, and the Senate is scheduled to vote Wednesday on a Democratic measure to nix Trump’s declaration of a national emergency, which the administration has used to shift $3.6 billion in Pentagon funding toward barrier construction. Congress passed such a bill earlier this year, but Trump vetoed it.

Bernie Sanders One-Ups Elizabeth Warren With Larger Wealth Tax

Senator Bernie Sanders released a proposal Tuesday for a wealth tax designed to raise trillions of dollars while significantly reducing the fortunes of some of America’s richest households.

Saying he wants “to reduce the outrageous level of inequality that exists in America today,” Sanders proposes to establish what he calls a “tax on extreme wealth” — an annual tax on the wealthiest 0.1% in the U.S., or some 180,000 households with a net worth above $32 million. The money raised by the tax — $4.35 trillion over a decade, according to the proposal — would be used to help pay for new social welfare programs, including Medicare for All, universal childcare and affordable housing.

Here’s how Sanders’ proposed wealth tax would work:

  • 1% tax on net worth of more than $32 million for a married couple
  • 2% from $50 million to $250 million
  • 3% from $250 million to $500 million
  • 4% from $500 million to $1 billion
  • 5% from $1 billion to $2.5 billion
  • 6% from $2.5 billion to $5 billion
  • 7% from $5 billion to $10 billion
  • 8% on wealth over $10 billion

In keeping with Sanders’ view that the very existence of billionaires is a problem — “I don’t think that billionaires should exist,” Sanders told The New York Times — the tax would hit the wealthiest especially hard. Amazon founder Jeff Bezos, for example, would pay $9 billion in taxes this year under the plan, according to CNBC.

More than just money: The Sanders campaign claims that the tax would reduce the wealth of billionaires by 50% in 15 years, as part of its effort to “reduce wealth inequality in America and stop our democracy from turning into a corrupt oligarchy.” The Wall Street Journal’s Richard Rubin highlighted the effect the tax would have on great wealth: “An 8% or 5% wealth tax doesn't sound big. When the base is net worth, it's a lot. For some, it's equivalent to a tax rate over 100% on income. To advocates, that's a feature, not a bug--a goal here is eroding fortunes.”

New rules and enforcement: In order to address the problem of potential tax evasion, Sanders calls for the creation of a “national wealth registry” as well as additional third-party reporting requirements. Americans who leave the country would face a 40% wealth tax on assets under $1 billion and a 60% tax on assets above that level. And the IRS would receive increased funding to audit 30% of tax returns among the top 1% and all billionaires’ returns.

Dueling wealth taxes: Sanders’ proposal goes further than one offered by Elizabeth Warren, whose proposal would impose a 2% tax on households with assets worth more than $50 million and a 3% tax on households with assets worth more than $1 billion, producing an estimated $2.75 trillion over 10 years.

Presidential primary politics: Sanders released his proposal as new polls show Warren surging in Iowa and New Hampshire. Sanders is trying to remind voters that he is still very much in the race, Axios’s Mike Allen suspects — and is trying to show that he has a plan to raise money to pay for the trillions of dollars’ worth of proposals he has made during the campaign.

Plenty of challenges: Tax experts have questioned whether wealth taxes can deliver the kinds of revenues their proponents project, with many arguing that tax avoidance strategies and enforcement issues would sharply reduce the actual amount. (Economist Greg Mankiw recently outlined one such strategy.) And if the tax does succeed, it could create longer-term shortfalls. "A wealth tax of this magnitude would tend to shrink the amount of wealth held by billionaires over time," Kyle Pomerleau, chief economist at the conservative Tax Foundation, told the Associated Press. "So he may be able to make his plans add up in the short run, but it becomes more questionable over time as the wealth tax raises less and less." To Sanders, that again is a feature, not a bug. Even so, there are also serious questions about the legality of a wealth tax, which would almost certainly be challenged on constitutional grounds, were it ever to become law.

Trump Administration Threatens to Withhold Highway Funds from California

The Trump administration is ramping up it’s war with California. The Washington Post reports that Environmental Protection Agency Administrator Andrew Wheeler sent a letter Monday to the California Air Resources Board threatening to withhold federal highway funds from the state. The letter says the state “has the worst air quality in the United States” and “has failed to carry out its most basic tasks under the Clean Air Act.”

The Post’s Juliet Eilperin and Dino Grandoni explain: “California receives billions in highway funding from the U.S. government every year, and federal officials have the right to halt that money if they determine that a state is not taking sufficient steps to show how it aims to cut air pollution such as soot or smog-forming ozone.” At the same time, the Trump administration last week revoked California’s authority to set stricter pollution limits on cars and trucks.

“Isn’t it ironic that EPA is taking away some of the important regulatory tools for meeting the federal health-based standards, and then sanctioning California?” Bill Becker, president of Becker Environmental Consulting, told the Post. “It’s like the kid killing his parents, and then pleading for mercy because he’s an orphan.”

Congressional Report of the Day: The US Pays Nearly 4 Times More for Drugs

The House Ways and Means Committee released a new analysis of drug prices in the U.S. compared to 11 other developed nations, and the results, though predictable, aren’t pretty. Here are the key findings from the report:

  • The U.S. pays the most for drugs, though prices varied widely.
  • U.S. drug prices were nearly four times higher than average prices compared to similar countries.
  • U.S. consumers pay significantly more for drugs than other countries, even when accounting for rebates.
  • The U.S. could save $49 billion annually on Medicare Part D alone by using average drug prices for comparator countries.

Read the full congressional report here.


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