Good Friday evening. It has been 10 days since former House Speaker Kevin McCarthy was ousted from his position, and it will be at least a couple days more — potentially even longer — until the House again has a permanent speaker as Republicans will take the weekend to try to round up support and win over holdouts for their latest nominee. Here’s the latest.
Hardliner Jim Jordan Wins GOP Speaker Nomination, but Still Faces Challenges
Republican lawmakers on Friday voted to make Rep. Jim Jordan of Ohio their latest nominee to be the next speaker of the House, but — yes, you’ve heard this before — it remains unclear whether Jordan can get the floor votes he’d need to win the gavel.
Jordan, a hard-right firebrand who chairs the House Judiciary Committee, withstood a surprising challenge from Rep. Austin Scott of Georgia, who is an ally of ousted former speaker Kevin McCarthy.
Jordan reportedly won the first round of GOP balloting by a vote of 124 to 81. He then moved somewhat closer to the total he’ll need in a second round of secret balloting to see if members would support him on the floor. The tally in that vote was 152-55.
Jordan will reportedly spend the weekend in private talks with members to see if he can convince holdouts to back him and get to the magic number of 217. But the Friday vote totals illustrate the ongoing divisions within the House Republican conference. Jordan, who was endorsed by former president Donald Trump, had lost an earlier vote for the Republican Party’s speaker nomination to House Majority Leader Steve Scalise and then backed Scalise for the job. But it quickly became apparent that Scalise did not have — and could not win — the support he would need.
Now Jordan, the combative cofounder of the hard-right House Freedom Caucus, faces a similar math problem, with continued opposition to his bid from more moderate Republicans leaving doubt about whether the new nominee can unite his conference.
The bottom line: The House still doesn’t have a speaker. The GOP drama will drag into next week at least — and potentially much longer — leaving legislative work such as action on the war in Israel and movement toward funding the government in limbo. If Jordan can’t get win the gavel, Reps. Kevin Hern of Oklahoma, chair of the Republican Study Committee, and Mike Johnson of Louisiana, a member of House GOP leadership, are reportedly considered potential candidates.
Quote of the Day: A Way Out for Republicans
“Dysfunction within the Republican Party in general, and the House in particular, has been building for at least three decades and there’s no reason to expect a solution to arrive any time soon. The best we can hope for is that they'll find a way to muddle through without doing too much damage. In the meantime, it's hard to see why anyone who has the skills to be a capable speaker would want the job — or whether anyone with those tools could win the backing of enough Republicans to win it.”
— Bloomberg Columnist Jonathan Bernstein, writing about Republicans’ chaotic effort to pick the next speaker of the House. Bernstein says one way out for Republicans, who seem unable to agree on a leader, is to empower Speaker Pro Tempore Patrick McHenry, who replaced Kevin McCarthy after he was removed from power last week. “There’s a lot of uncertainty about what exactly the job is supposed to entail, but if McHenry simply started acting as a de facto speaker and the House backed him, then it would be settled,” Bernstein writes.
Tax Gap Grows to Nearly $700 Billion: IRS
The “tax gap” is getting bigger, according to the latest estimate of the amount of money Americans owe in federal taxes but fail to pay.
The IRS said Thursday that Americans failed to pay $688 billion in taxes they owed in 2021, the largest estimate of the tax gap yet. In 2020, the tax gap came to an estimated $601 billion.
The announcement marks the first time the IRS has released estimates for single years rather than a range of years, and the tax agency said it plans to continue to release one-year estimates in the future. Previous estimates put the tax gap at $550 billion a year for 2017-2019 and $496 billion a year for 2014-2016.
The IRS breaks the tax gap into three components: nonfiling (defined as “tax not paid on time by those who do not file on time”), underreporting (“tax understated on timely filed returns”) and underpayment (“tax that was reported on time, but not paid on time”). In tax year 2021, nonfiling accounted for $77 billion of the total tax gap, underreporting contributed $542 billion, and underpayment totaled $68 billion.
IRS Commissioner Danny Werfel said the size of the tax gap highlights the need for improving the tax agency’s capabilities. “This increase in the tax gap underscores the importance of increased IRS compliance efforts on key areas,” he said. “With the help of Inflation Reduction Act funding, we are adding focus and resources to areas of compliance concern, including high-income and high-wealth individuals, partnerships and corporations. These steps are urgent in many ways, including adding more fairness to the tax system, protecting those who pay their taxes and working to combat the tax gap."
Number of the Day: $7 Billion
The Biden administration on Friday announced that it has selected seven regional hubs that will receive federal funding to enhance the commercial development of clean, low-cost hydrogen energy. The $7 billion in funding for the project was provided by the Bipartisan Infrastructure Law, which President Joe Biden signed in 2021.
According to the White House, the hubs will produce both hydrogen fuel and related infrastructure to make it more widely available and useful. The selected sites include the Appalachian region, California, the Gulf Coast, the mid-Atlantic, the Midwest, the Pacific Northwest and a “Heartland Hydrogen Hub” encompassing North Dakota and Minnesota.
“With this historic investment, the Biden-Harris Administration is laying the foundation for a new, American-led industry that will propel the global clean energy transition while creating high quality jobs and delivering healthier communities in every pocket of the nation,” Energy Secretary Jennifer Granholm said in a statement.
Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to sign up here for their own copy of this newsletter.
Fiscal News Roundup
- Republicans Pick Jim Jordan as Nominee for House Speaker, Putting Job Within the Trump Ally’s Reach – Associated Press
- Divided G.O.P. Nominates Jordan for Speaker, Elevating a Hard-Right Figure – New York Times
- Democratic Centrists Offer to Back McHenry as Temporary House Leader – The Hill
- 4 Democratic Centrists to McHenry: Let's Make a Deal – Politico
- Kaiser Permanente Reaches Tentative Deal With Health Care Workers – New York Times
- Federal Public Defenders Warn Proposed Funding Would Cause Layoffs, Court Delays – Roll Call
- Americans Failed to Pay Record $688 Billion in Taxes in 2021, IRS Says. Look for More Audits – CBS News
- How the ‘Yield Curve’ Is Scrambling Recession Signals – Bloomberg
Views and Analysis
- A Speakerless Week in the House Ends in Chaos – Drew Goins, Washington Post
- House Republicans Collapse Into Anarchy – Dana Milbank, Washington Post
- Nancy Pelosi’s Advice for the Next GOP Speaker – Karen Tumulty, Washington Post
- There's No Quick Fix for GOP Chaos in the House – Jonathan Bernstein, Bloomberg
- Restoring Fiscal Accountability Through Budgetary Oversight – Rep. Jack Bergman (R-MI), The Hill