The Hill’s Morning Report — Sinema’s ask; Rep. Walorski dies in crash

Capitol Hill remained the center of attention on Wednesday, as Sen. Kyrsten Sinema (D-Ariz.) described her demands for the reconciliation report that could win her support, and Rep. Jackie Walorski (R), 58, died in an auto accident in her home state of Indiana.

The future of the Democrats’ $739 billion budget package remains cloudy, in large part because Sinema wants changes after more than a year of negotiations.

According to multiple reports, the Arizona senator’s ask includes dropping a provision in the bill that would roll back the carried interest loophole, a move that would alter how some investment income is taxed. Eliminating it would reduce the measure’s projected revenue by $14 billion, which undermines what Democrats would like to spend while also touting deficit reduction. Sinema also wants to add $5 billion in drought funding because Arizona routinely has water supply issues (Politico).

The senator, who has said nothing publicly while her staff says she’s reviewing the plan, also hinted that she has questions about the legislation’s proposed 15 percent minimum tax on corporations. During a call on Wednesday with business groups, she asked if that provision is “written in a way that’s bad” (CNN).

▪ Bloomberg News: Sinema seeks to keep private equity break, curb corporate tax.

▪ The New York Times: With climate deal in sight, Democrats turn hopes on Sinema.

▪ Politico: Electric cars, drug costs and more: 5 battles Democrats could lose on their marquee bill.

Sinema’s reluctance to raise taxes through carried interest, which is a share of profits earned by general partners of private equity, venture capital and hedge funds, would be the latest blow to President Biden and top Democrats who propose requiring wealthy Americans and corporations to pay higher taxes.

As The Hill’s Tobias Burns details, previous proposals now scrapped include raising the individual income tax rate, the estate tax and capital gains and a proposed surtax on high-income households. As a result, the bill’s price tag has been whittled to a fraction of the original $3 trillion envisioned by the majority party.

There are, however, other issues Democrats may have to consider. Automakers are calling on Sen. Joe Manchin (D-W.Va.) to revisit the newly structured $7,500 electric vehicle tax credit over fears that it could be unworkable. According to Reuters, the complaint centers on new sourcing requirements for battery components and critical minerals, but Manchin has shown little interest in heeding their wishes.

“Tell [automakers] to get aggressive and make sure that we’re extracting in North America, we’re processing in North America and we put a line on China,” Manchin told reporters. “I don’t believe that we should be building a transportation mode on the backs of foreign supply chains. I’m not going to do it.”

▪ Business Insider: Sen. Bernie Sanders (I-Vt.) tears into Manchin’s surprise deal.

▪ Bloomberg News: Automakers, including Ford, General Motors and Toyota, are blitzing Congress to fix an electric vehicle tax credit they can’t use.

▪ The Hill: Manchin deal could raise new hurdles for electric vehicle incentives.

▪ The Hill: Democrats’ plan would decrease the deficit by more than $100 billion, according to the Congressional Budget Office.

Tragedy struck the Capitol Hill community on Wednesday when Walorski, a six-term lawmaker, and two staff members died in a car crash. The two-vehicle accident occurred in Indiana around 12:30 p.m., according to the Elkhart County Sheriff’s Office.

Walorski was traveling with Zachery Potts, 27, and Emma Thomson, 28. The congresswoman’s office confirmed the deaths.

“Dean Swihart, Jackie’s husband, was just informed by the Elkhart County Sheriff’s office that Jackie was killed in a car accident this afternoon,” the office’s statement said. “She has returned home to be with her Lord and Savior, Jesus Christ. Please keep her family in your thoughts and prayers. We will have no further comment at this time.”

Walorski, the top GOP member on the House Ethics Committee, was remembered by lawmakers as a hard worker who cared deeply about representing her constituents. Prior to winning her seat in 2012, Walorski spent five years in the Indiana House of Representatives and served alongside her husband as a missionary in Romania for four years.

“Jackie was a dear friend, trusted advisor, and the embodiment of integrity who achieved the admiration and respect of all her colleagues in the House. She always put others first,” House Minority Leader Kevin McCarthy (R-Calif.) said in a statement, calling her death “absolutely devastating.”

Speaker Nancy Pelosi (D-Calif.) and Biden ordered the flags at the Capitol and White House, respectively, to be flown at half-staff to honor Walorski (The Hill), the third lawmaker this year to die. The others: Reps. Don Young (R-Alaska) and Jim Hagedorn (R-Minn.) (Roll Call).

© Associated Press / J. Scott Applewhite | The late Rep. Jackie Walorski (R-Ind.), 2014.

Finally, there was legislative action on Wednesday as the Senate overwhelmingly greenlighted a resolution ratifying Sweden’s and Finland’s admittance into NATO. Senators voted 95-1 to do so, with Sen. Josh Hawley (R-Mo.) being the lone “no” vote. Sen. Rand Paul (R-Ky.) voted present.

The pre-recess vote was pushed heavily by Senate Minority Leader Mitch McConnell (R-Ky.), who panned any lawmaker who opposed NATO entry to the two Nordic countries. The move sends another signal that Congress remains unified in opposing Russian invasion of Ukraine and aggression toward Europe.

“There is just no question that admitting these robust democratic countries with modern economies and capable, interoperable militaries will only strengthen the most successful military alliance in human history,” McConnell said on the Senate floor.

Finland made the NATO push due in part to the 800-mile border it shares with Russia. Sweden, meanwhile, shares a strategic interest with Moscow in the Baltic Sea, which gives the Russian naval fleet access to the Atlantic (The Hill).

Related Articles

▪ Bloomberg News and Reuters: China on Thursday test-fired missiles in military drills around Taiwan one day after Pelosi’s departure.

▪ The New York Times: Pelosi’s Taiwan visit risks undermining U.S. efforts with Asian allies. 

▪ The Washington Post: Pelosi’s Taiwan visit ushers in new phase of China’s pressure campaign.

▪ The Wall Street Journal: Pelosi trip delays Contemporary Amperex Technology’s (a Chinese-based electric-vehicle battery supplier for Tesla) North America plant announcement.

▪ The Associated Press: After Taiwan, Pelosi is in South Korea to meet political leaders.

LEADING THE DAY

➤ POLITICS

Are GOP voters so enthralled with former President Trump, so raw about the 2020 election and so willing to embrace Trump’s endorsees that midterm GOP candidates are becoming more vulnerable this year than the Republican Party imagines? The Hill’s Brett Samuels asked political analysts to help answer that question.

Trump’s false claims that the 2020 election was stolen did not poison outcomes for hard-right GOP candidates in Tuesday’s primaries, presenting new questions about how contenders will perform in November’s general election. Republican primary voters overwhelmingly chose candidates who made the 2020 election a central part of their campaign messages, The Hill’s Julia Manchester reports.

Alexander Bolton, The Hill: McConnell manages midterm expectations after Trump-backed candidates win.

Michigan Rep. Peter Meijer (R) is the latest casualty of Trump’s pledge to exact revenge on conservatives who voted to impeach him after the Jan. 6 attack at the U.S. Capitol. He became the second of 10 Republicans who broke with the party to back impeachment and was ousted in a GOP primary.

Meijer lost on Tuesday to John Gibbs, a former Housing and Urban Development official who snagged Trump’s endorsement in the race for the state’s 3rd District. The defeat turned a spotlight on the Democratic House campaign arm’s feint to back the most pro-Trump contender across the aisle, hoping to wind up with opponents the party could paint as extremist Trump acolytes and peddlers of the “big lie.”

As The Hill’s Max Greenwood writes, the Democratic Congressional Campaign Committee spent nearly half a million dollars on ads boosting Gibbs, believing that he might prove in November to be easier for Democratic nominee Hillary Scholten to defeat. Many analysts warn that Democratic officials are playing with fire by trying to game the GOP field (The Hill).

The New York Times: Meijer’s defeat in Michigan shows Republican intolerance for Trump’s antagonists.

© Associated Press / J. Scott Applewhite | Rep. Peter Meijer (R-Mich.), 2021.

As was always the case ahead of November’s election dramas, much for Democrats rides on overcoming inflation and pocketbook fears, ginning up high turnout from blocs of progressives and even independents, and finessing Biden’s low job approval and the left’s assumption that the party in power in the White House usually loses seats in off-year elections.

▪ The New York Times: Here’s who won and lost in Tuesday’s key primaries in five states.

▪ Henry Olsen, The Washington Post: The GOP is blowing its chance to make the midterms a referendum on Democrats.

▪ Jeff Greenfield, Politico Magazine: How the November midterms could still surprise us. (“When it comes to gaming out the next three months, even at the most basic level, we don’t really know what we think we know.”)

Democrats were thrilled but astonished on Tuesday to see primary voters in red-state Kansas back abortion rights by nearly 59 percent. The next political battlefields will be in Kentucky, Michigan and Montana, among other states (The Hill).

What abortion message resonated in the Sunflower State ahead of Tuesday’s amendment question, “Should the Kansas constitution be amended to remove protections of abortion rights?”

“This idea that government shouldn’t be involved or shouldn’t mandate what you do when it comes to your health care, that it is a personal decision — that’s the philosophy that was really identified by the opponents of this amendment as something that could really take hold with Kansas voters,” Brianne Heidbreder, an associate professor of political science at Kansas State University, told The New York Times.

▪ The Associated Press: Abortion vote in Kansas sparks new hope for Democrats in midterms.

▪ The New York Times: Tuesday’s abortion rights support in Kansas involved huge turnout across party and geographic lines.

▪ The New York Times: Biden on Wednesday issued an executive order to protect abortion rights — by further studying what he could do to protect abortion rights.

Niall Stanage, The Hill’s The Memo: Will abortion restrictions adopted by GOP state legislators and signed by conservative governors undermine a perceived advantage for Republicans in midterm contests? Democrats are increasingly hopeful, but some observers remain skeptical because so many top-of-mind issues will influence voters in November.

IN FOCUS/SHARP TAKES

➤ ENERGY & ADMINISTRATION

The Organization of the Petroleum Exporting Countries, headquartered in Austria and also known as OPEC+, said on Wednesday that it would produce an additional 100,000 barrels a day in September, a tiny increase in output amid fears that a global recession will crimp demand. The price of Brent benchmark crude is now trading at around $100 per barrel as traders fear a global recession.

OPEC’s meeting by videoconference, inclusive of allies such as Russia, was the first since Biden visited Saudi Arabia in July and urged the group’s biggest oil producer to pump more (Bloomberg News). … The average price of gas is approaching $4 a gallon nationwide, part of a nearly 60-day decline from unprecedented spikes earlier this year (The Hill).

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OPINION

■ After Kansas, Democrats see an opportunity, by James Hohmann, columnist, The Washington Post. https://wapo.st/3OYTMNn

■ Pelosi has nailed the optics of her Taiwan trip to China’s detriment, by Matthew Brooker, Bloomberg Opinion columnist. https://bloom.bg/3OSJzBX

WHERE AND WHEN

The House is out for the August recess and will return to Washington on Sept. 13. The lower chamber could convene later this month, pending Senate action.

The Senate convenes at noon and willresume consideration of a joint resolution providing for congressional disapproval of the rule submitted by the Council on Environmental Quality relating to “National Environmental Policy Act Implementing Regulations Revisions.”

The president will receive the President’s Daily Brief at 10:45 a.m. Biden will host a virtual roundtable discussion about the pending Inflation Reduction Act with business and labor leaders.

Vice President Harris heads to Boston this morning. She will receive the President’s Daily Brief via a virtual meeting at 10:45 a.m. Two hours later, Harris is scheduled to hold a roundtable about reproductive rights with Massachusetts state legislators and local leaders and speak at the International Brotherhood of Electrical Workers Local 103. The vice president will travel from Boston to Martha’s Vineyard at 2:35 p.m. and speak at a Democratic National Committee finance event at 6:15 p.m. at a private residence in Vineyard Haven, Mass. Harris will return to Washington tonight.

Treasury Secretary Janet Yellen will attend a virtual roundtable event at the White House with business and labor leaders to discuss the pending Inflation Reduction Act.

Secretary of State Antony Blinken is in Phnom Penh, Cambodia, participating in the U.S.-ASEAN ministerial meeting, the East Asia Summit foreign ministers’ meeting and the ASEAN Regional Forum.

Second gentleman Doug Emhoff and AmeriCorps CEO Michael Smith will visit Civic Works Urban Lot in Baltimore at 10:45 a.m. and assist AmeriCorps members who are building an urban green space.

Economic indicators: The Bureau of Economic Analysis at 8:30 a.m. will report on the trade deficit in June. … The Labor Department at 8:30 a.m. reports on filings for unemployment benefits in the week ending July 29. … For chief executive officers, the era of courting employees with solicitous outreach in a tight labor market may be ending (The Wall Street Journal).

The White House daily briefing is scheduled at 2:45 p.m.

🖥  Hill.TV’s “Rising” program features news and interviews at http://thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here.

ELSEWHERE  

➤ INTERNATIONAL

Canada will get an in-person visit from an “eager” Biden, the question is the timing, U.S. Ambassador David Cohen said Wednesday during an interview (Politico).

The Iran nuclear talks will resume in Vienna today at the instigation of the European Union after being stalled for months. Diplomats will be present from the U.S., Iran, China, Russia, Germany, Britain and France, as well as the EU, which is acting as a mediator since Iran refuses to talk directly to the U.S. (Politico).

Near Iceland’s Keflavik Airport, the country’s international air traffic hub, an erupting volcano led the headlines on Wednesday and a live video feed from the site showed molten lava spewing from a narrow fissure. The 2021 eruption in the same area produced spectacular lava flows for several months, attracting hundreds of thousands of spectators (The Associated Press). This week there are travel fears and risky photo opportunities (The Washington Post).

Islands in the Caribbean are being choked by a record amount of seaweed, impacting tourism and killing wildlife. Scientists say more research is needed to determine why sargassum levels in the region are reaching new highs, but the United Nations’s Caribbean Environment Program says possible factors include a rise in water temperatures as a result of climate change and nitrogen-laden fertilizers and sewage waste fueling algae blooms (The Associated Press).

© Associated Press / Ricardo Mazalan | Seaweed along the Atlantic shore in Frigate Bay, St. Kitts and Nevis on Wednesday.

➤ STATE WATCH

San Francisco District Attorney Brooke Jenkins (D) announced on Wednesday that she has revoked 30 plea offers for drug cases made by her predecessor, former District Attorney Chesa Boudin (D), who was recalled in June. Boudin was booted in part due to progressive policies he pushed, including ending cash bail and offering defendants the opportunity to enter a rehabilitation program instead of prison. According to Jenkins’s office, one of the plea offers she nullified involved a case in which a defendant had six open cases for dealing fentanyl and was arrested with more than 100 grams of the drug. Instead, she will now seek a felony charge that includes jail time (The Hill).

➤ PANDEMIC 

​The president on Wednesday tested positive for the fifth day after being diagnosed with a rebound case of COVID-19 following treatment with the antiviral drug Paxlovid (The Hill). His doctor continues to describe Biden as “feeling well,” despite his bouts with the coronavirus. The yo-yo phenomenon underscores why scientists are still studying the Pfizer drug and its dosages, durations and impacts on specific categories of patients (The Hill).

One health benefit that emerged from the grim pandemic was a reduction in tobacco purchases and smoking. A highly transmissible respiratory virus that in the pre-vaccine months had a high mortality rate appeared to inspire smokers to quit, according to a new study conducted in Denmark (The Hill).

Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,032,097. Current average U.S. COVID-19 daily deaths are 387, according to the Centers for Disease Control and Prevention.

➤ CARTWHEEL GALAXY

Looking like a wagon wheel, flower or rotary dial on a telephone, the Cartwheel Galaxy, located about 500 million light-years away in the Sculptor constellation, is NASA’s latest photo release, courtesy of the James Webb Space Telescope (CBS News).

The Sunshine State is preparing enthusiastically for another NASA rocket launch Aug. 29, in part because such events are good for Florida business. Artemis I, the first launch of NASA’s moon-focused Space Launch System rocket, is attracting travel bookings and spurring tourism ahead of next month’s liftoff from the Kennedy Space Center. Standing 322 feet tall, the rocket promises to be the most powerful soaring from Florida’s Space Coast in years (USA Today).

➤ SPORTS

Phil Mickelson and 10 other golfers on the Saudi-backed LIV Golf circuit filed an antitrust lawsuit against the PGA Tour seeking to overturn their suspensions. The LIV series argues that the PGA Tour has a monopoly over professional golf, with the latter organization suspending those golfers for joining the new golf venture. The 11 golfers involved in the suit claim the PGA Tour is trying to hurt their careers. A number of other golfers who joined LIV Golf were not suspended by the PGA Tour and, instead, resigned their membership (The Wall Street Journal).

THE CLOSER

Take Our Morning Report Quiz!

© Associated Press / Nick Wass | San Diego Padres outfielder Juan Soto, formerly of the Washington Nationals, in June.

And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Alert to all sorts of exchanges and transactions in the news, we’re eager for some smart guesses about swaps and trade.

Email your responses to asimendinger@thehill.com and/or aweaver@thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday.

Why did baseball experts this week describe the Washington Nationals’ trade of Juan Soto to the San Diego Padres as a monumental midseason event in the sport?

1. He’s the first player 23 or younger to be traded in-season in a year when he was an All-Star

2. He is viewed as baseball’s best hitter

3. Soto has the potential to be an all-time great with the change in teams

4. All of the above

China deployed trade sanctions on Wednesday among retaliatory responses to show Taiwan it opposed Speaker Nancy Pelosi’s visit. Which export to the independent island did Beijing block?

1. Sand

2. Pineapples

3. Shark fins

4. None of the above

The administration wants to swap imprisoned WNBA star Brittney Griner and former Marine Paul Whelan, both held in Russia, reportedly for Russian arms dealer Viktor Bout, who has been behind bars in Illinois since 2012. What is Bout’s nickname, according to news accounts?   

1. “Merchant of Death”

2. “Bloody Bout”

3. “Putin’s Puppet”

4. “Reaper Man”

The first ship since the onset of war in February carrying Ukrainian corn for trade left Odessa this week. Can you name the merchant vessel?

1. “Nirvana”

2. “Moskva”

3. “The Razoni”

4. “Ever Given”

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