Hard No, Hell No, and Scant Maneuvering Room: BGOV Starting Line

One ‘Hard No,’ One ‘Hell No’

When the House Ways and Means Committee hunkers down this afternoon to mark up the tax portion of the Republicans’ tax-debt limit-spending-cut bill, watch the only New Yorker on the majority side of the room.

Rep. Nicole Malliotakis (R-N.Y.) will have to decide whether to settle for a thinner boost in the state and local tax deduction than her fellow New Yorkers want — knowing that if the legislation goes to the floor as initially written, two of her delegation colleagues are ready to vote against it.

Republicans from districts with higher state and local taxes have felt the wrath of constituents since the longtime tax deduction was capped at $10,000 in the 2017 tax law. The bill headed to markup would make the cap $30,000, which Rep. Nick LaLota (R-N.Y.) called insulting. He said he’d be a “hell no” vote against it while Rep. Mike Lawler (R-N.Y.) said in a Bloomberg Television interview he’s a “hard no” unless the cap is increased.

Speaker Mike Johnson (R-La.) told reporters there’s not yet a final decision on the SALT limit. Even if it comes out of committee as-is, party leaders could modify it before a floor vote. Read More

The work done to set up today’s markups (two other committees also are scheduled to start work on their segments of the package) created a wide array of gifts and give-backs. Chris Cioffi counts up the major winners and losers and BGOV clients can dig deeper in today’s Hill Tax Brief, Congress Tracker, and Budget Brief.

See also:

• SALT Cap Increased in GOP Tax Bill to Assuage Swing Districts
• GOP Plans Anti-Hunger Spending Rollback to Cover Trump Agenda
• Health Coverage for Millions of Americans at Risk Under GOP Plan
• Republicans Revive Drug Middlemen Reforms in Budget Bill

Drug Price Redo

This isn’t President Donald Trump’s first lower-drug-prices rodeo. His executive order tying pharmaceutical prices to the lower prices charged abroad is a do-over from his first term, when a judge ruled that the administration failed to consider public comment and violated procedural requirements.

Health reporter Nyah Phengsitthy covers how Trump’s attacking the issue differently this time around, by engaging in a lightning-lane version of the regulatory procedure. His order tells the Department of Health and Human Services to pursue rulemaking within 30 days if the agency doesn’t make progress in negotiating most-favored-nation price targets with pharmaceutical manufacturers.

“There’s a lot of bluster with limited meat on the bone in terms of what they’re actually planning to do,” said Zach Baron, a director of the Center for Health Policy and the Law at Georgetown University’s O’Neill Institute. “The first time Trump tried the most favored nation approach, they lost on procedural grounds.”

“The question, now, is what are the procedural steps and process that they’re going to go through?” Baron said. Read More

See also: Drugmakers Avoid Worst-Case Scenario as Trump Targets Price Cuts

Eye on the Economy

If you’re worried about inflation, pay attention when the Bureau of Labor Statistics updates a key measurement, the consumer price index.

Analysts who follow the economy say this morning’s report will show the first impact of the tariffs imposed on China last month — though it may not be a full picture because so many of the products on store shelves arrived in the US before the new levies took effect.

Economists surveyed by Bloomberg say they’re expecting the new numbers will be higher than the last couple months but lower than they were at the end of last year.

Now that bird flu cases have declined, so have egg prices, and that in turn could tamp down the grocery portion of the inflation index. Then, going forward, forecasters have to figure out the effect of a new promise by the US and China to temporarily lower tariffs on each others’ products. Read More

On the Tariff Front

The about-face on China tariffs had an immediate beneficiary: Boeing. China has removed its retaliatory ban on delivery of Boeing aircraft.

The company had been caught in the middle when Trump imposed combined levies of 145% on most Chinese imports and China responded with 125% duties on US goods. That priced Boeing jets out of the market for Chinese carriers, plus some jets had to be flown back to the US after being refused by Chinese customers.

There’s now a three-month reprieve and temporarily lower tariffs. Read More

See also: Xi Defiance Pays Off as Trump Meets Most China Trade Demands

Scrolling Not Clicking

Foreign workers’ interest in US jobs has plummeted, according to data from the Indeed Hiring Lab. The share of clicks on US job listings coming from people outside the country was almost 30% lower in March than at its August 2023 peak, Indeed reported — a shift that could exacerbate labor shortages in industries such as health care. Read More

At the Crossroads of Immigration and IRS Privacy

The IRS today will be able to cross-check tax records to help Immigration and Customs Enforcement to identify undocumented immigrants who pay taxes.

The go-ahead came last night when US District Judge Dabney Friedrich refused to block a new information-sharing agreement between IRS and the Department of Homeland Security, Tristan Navera reports.

Less than a month ago, the acting IRS commissioner resigned rather than allow the agency to look up records for ICE.

Two nonprofit groups had sought a preliminary injunction; the judge said the organizations were unlikely to establish that they had standing to sue. The plaintiffs partially won on one point: the judge ordered that that the IRS-DHS memorandum “be almost entirely unsealed” (it was previously only available to the public in a redacted form.) Read More

Other immigration developments:

• The Trump administration set July 12 as the date when immigration protections will end for nearly 12,000 Afghans who fled the Taliban government. DHS Secretary Kristi Noem said Afghanistan’s security and economy have improved, ending the need for temporary protected status, Andrew Kreighbaum reports. TPS protections already have been ended for Venezuelans and Haitians. Read More
• Dozens of white South Africans arrived in the US after being granted refugee status by the Trump administration, which made it virtually impossible for any other refugees to seek safe haven in America, The New York Times reports.

Before You Go

Emoluments clause: There’s a wide range of reactions on Capitol Hill after President Donald Trump talked about Qatar’s interest in gifting him a luxury Boeing 747-8 to use as Air Force One. Trump said it would be “stupid” to turn down the plane. Majority Leader John Thune (R-S.D.) called the free jet “a hypothetical,” and four Foreign Relations Committee Democrats issued a joint statement saying “The Constitution is clear: elected officials, like the president, cannot accept large gifts from foreign governments without consent from Congress.” Read More from Lillianna Byington.

Senate Finance Committee Democrats are demanding to know whether IRS commissioner nominee Billy Long or other incoming Trump administration officials have a deal with a company to legitimize tax credits that the Treasury Department and IRS said don’t exist, Erin Schilling and Cioffi report. Read More

The courts are poised to tackle broad separation-of-powers arguments against the Trump administration’s historic cuts to the federal workforce. Parker Purifoy and Austin R. Ramsey take a deep dive into the question of who has the authority to reorganize the federal government. Read More

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