Tuesday, November 29, 2011

CQ Roll Call Daily Briefing: The New Revenue Revue

CQ Roll Call Daily Briefing

Tuesday, November 29, 2011

Today In Washington

THE SENATE: Convened at 10 with the expectation of votes this afternoon (after the caucus lunches) on several amendments to the defense authorization bill. Senators will reject a proposal by Colorado Democrat Mark Udall, who wants to scrap the controversial language requiring al Qaeda terrorism suspects to be generally held in military rather than civilian custody — and create a commission to study the detainee issue. A bid by Illinois Republican Mark Kirk to slap sanctions on Iran’s central bank has a better chance of success.

THE HOUSE: Convenes at 2 to debate four relatively non-controversial bills, with no amendments allowed. The votes on passage won’t come before 6:30. The most prominent measure would make a rare, if limited, foray into immigration policy — by ending per-country caps on employment-based immigrant visas (to allow more hiring of skilled foreign workers) and raising the per-country caps on family-sponsored immigrant visas. But the measure would not change the overall annual limits on immigrant visas.

The other bills would create an expedited airport security screening process for military personnel and their families, expand death and disability benefits for federal workers and extend special bankruptcy protections for Guard members and reservists who served in Iraq and Afghanistan.

THE WHITE HOUSE: Obama’s meeting in the Oval Office at 2:30 with Prime Minister Mark Rutte of the Netherlands. The euro crisis, trade and investment between their countries and the agenda for next May’s NATO summit in Chicago are on the agenda. (A 5:30 senior staff meeting is the only other item on the president’s public schedule.)

Biden arrived in Iraq this morning to begin his eighth visit there as vice president. He plans to spend the rest of the day in Baghdad, chairing a meeting of the U.S.-Iraq Higher Coordinating Committee, meeting with Prime Minister Nouri al-Maliki and speaking at a ceremony to honor war casualties.

TAXING MATTERS: For the next month, and the first 10 months of next year, the congressional story line will be about how both parties want to pound on their defining issues much more often than they want to pound out legislative achievements. The newest Exhibit A is being revealed this week: Senate Democrats are going to arrange for three separate votes on extending and expanding the Social Security payroll tax cut — and offsetting the cost in ways the Republicans will reject out of hand.

The first vote, on Friday, will be to on whether to impose a 3.25 percent surtax on incomes above $1 million in 2012, which would generate the $255 billion necessary to cover the cost of lowering the payroll tax another notch, to 3.1 percent from 4.2 percent now (it’s normally 6.2 percent) while also halving the Social Security tax businesses pay on the first $5 million of their payrolls. Republicans will all vote “no,” arguing that the move would prompt job creators to create fewer jobs. And Democrats will almost all vote “yes,” because they’ve gained confidence from recent polling that shows broadening and deepening public anger toward the expanding gap between the super-rich and everyone else. (It’s not only the Occupy Wall Street crowd that’s howling at the 1 percent; more and more voters are realizing they’re part of the 99 percent, and that it’s not class warfare to complain about it.)

For now, Reid’s not saying how he’ll engineer two more votes that allow him to make the same point as the first. But only after all that theater has played out — probably not for another two weeks — will Congress get down to the task of maintaining the current tax cut through 2012, and without any pay-for provision. (There was no offset when the payroll tax was trimmed a year ago, and that bothered neither the Republicans nor Obama, so in the end both will acquiesce in that approach; in essence, the White House already has, and Cantor has come pretty close.)

Alan Krueger, who chairs the president’s Council of Economic Advisers, will be in the West Wing press room at 1 to advocate for at least an extension of the payroll tax — and to rebut those in the GOP (a seeming minority, led by Kyl) who argue that reverting to the status quo wouldn’t throw any cold water on the economy. (The current cut has benefited 160 million workers, and ending it would mean $1,000 in additional federal taxes next year for a family earning $50,000.)

THEY LIVE: The payroll debate will be the only tax question Congress even touches before next year, and any serious debate about restructuring the corporate code — in a way that raises revenue by closing some of the loopholes that benefit targeted industries — is of course off until 2013 at the earliest. But that’s not stopping two of the stymied supercommitttee’s members, Senate Republicans Rob Portman and Pat Toomey, from taking some of the panel’s now-mothballed ideas and turning them into opening GOP bids whenever the tax debate is resurrected for real.

THE BIG ONE: Reid stated the obvious last night, but at least in so doing, he gave some more shape to the final legislative weeks of the year. No other stand-alone spending bills (for the fiscal year that’s now one-sixth over) will be debated in the Senate — only a single package combining the nine unfinished appropriations bills.

So such an $800 billion-or-more behemoth has become the best case scenario for replicating the new norms of the budget process. But it will be super-tough to get such a bill done in the time remaining before Christmas, because the dwindling days give every dilatory advantage to the Republicans who want to cut $20 billion below what this summer’s debt deal allows. Democrats are going to resist just as forcefully — especially now that disarming next year’s sequester triggers has become a virtual non-starter. The likeliest outcome remains another stopgap spending bill lasting until February. (Conceding that such a CR is inevitable sooner rather than later is also the only plausible way Congress might go home for the holidays in three weeks, rather than four.)

HOME PRICES: Home prices dropped in September from August in 17 of the 20 big cities tracked by the Standard & Poor’s/Case-Shiller index, which put out its latest report this morning. (The exceptions were Washington, New York and Portland.) It was the first such broad decline after five months in which at least half the cities in the survey showed gains — the latest signal that the troubled housing market remains on shaky ground. Atlanta, San Francisco and Tampa  posted the biggest monthly price declines. Prices in Atlanta, Las Vegas and Phoenix fell to their lowest points since the housing crisis began four years ago.

AFTER BARNEY: For House Democrats, the most palpable fallout from Barney Frank’s surprise retirement will be a pitched battle for the party’s top seat on the Financial Services Committee. The race between Maxine Waters of Los Angeles and Carolyn Maloney of Manhattan will compel the caucus to confront issues of race, because Maloney is white and Waters is African-American; congressional ethics, because Waters may yet face House sanctions for her efforts to promote the interests of a bank in which her husband was a player; seniority, which Maloney will argue shouldn’t matter the same way it didn’t matter to her colleagues when they bypassed her for the top spot on the Oversight panel a year ago; and the party’s efforts to maintain some bridges to Wall Street, which employs thousands of Maloney’s best-heeled constituents.

The election is a year away, but at the outset Waters is the clear if not prohibitive favorite, for three reasons: The ethics case against her remains a muddle, the notion of putting Wall Street’s congresswoman in the committee’s second chair won’t appeal to many caucus members, and the Congressional Black Caucus (which already has four members in top committee seats) will pull out every stop to elect her.

CAIN UPDATE: Five weeks before the Iowa caucuses, Herman Cain pressed ahead with his presidential campaign today and said it would not move to bridge a glaring discrepancy between the candidate and his own attorney. Yesterday Cain categorically said he never had a sexual relationship with Atlanta businesswoman Ginger White, who detailed the 13-year extramarital affair she says the two ended shortly before he started seeking the GOP nomination. But his lawyer issued an expansive statement with no such denial — saying, essentially, that the press had no business probing the intimate lives of two consenting adults. Cain was preparing to make a speech at Hillsdale College in Michigan later in the day. No other interviews or appearances were planned.

QUOTE OF NOTE: “You should be wary of any candidate who carries the endorsements of every member of Congress, because it means they’re going to be a status quo president,” Jon Huntsman (who has no such backing) said of Mitt Romney in Merrimack, N.H. last night. Romney’s Hill endorsers will grow to 48 today, when he campaigns in Florida with Miami-area Republicans leana Ros-Lehtinen and Mario Diaz-Balart.

HAPPY BIRTHDAY: Republican Rep. Jean Schmidt of Ohio (60), who’s still the fastest woman in Congress — she ran Cincinnati’s Thanksgiving Day 10K in 47 minutes, 46 seconds. Mayor Rahm Emanuel of Chicago (52), Homeland Security Secretary Janet Napolitano (54)

— David Hawkings, editor

Become a Facebook fan at facebook.com/DavidHawkingsDC. Or follow me on Twitter at twitter.com/davidhawkings.

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