On The Money — Biden takes aim at GOP tax plan

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President Biden is attacking Republicans’ tax proposals. We’ll also look at the impact of a recent explosion at a Texas natural gas terminal, more crypto industry layoffs and Ben Bernanke’s latest inflation prediction.

But first, see which GOP leader might back the bipartisan gun safety bill.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan LaneAris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

Biden slams GOP tax plan in union worker address

President Biden on Tuesday ramped up attacks on Sen. Rick Scott’s (R-Fla.) tax plan in his address at the AFL-CIO convention in Philadelphia.

The president warned that Scott’s plan would sunset all federal legislation after five years and require Congress to reauthorize programs such as Social Security, Medicare and Medicaid.

  • Biden has consistently criticized Scott’s plan in remarks recently and the White House has tied congressional Republicans to the plan. However, other lawmakers have either distanced themselves from the plan or declined to embrace it. 

  • Scott’s 11-point plan states that “all federal legislation sunsets in 5 years. If a law is worth keeping, Congress can pass it again.” While it doesn’t explicitly call for ending those federal programs, it has been criticized as a move to end such benefits. 

  • The president also called on Congress to pass the Protecting the Right to Organize Act, a legislative priority for unions that has stalled in the Senate. The bill would stiffen penalties for employers who violate workers’ rights and strengthen protections for employees against retaliation.

The context: The speech to the AFL-CIO was a high-profile event for the president, giving him the opportunity to emphasize his support for labor as Democrats worry they could lose more blue-collar workers to Republicans in the midterms.

Biden had pledged to be the most pro-union president in U.S. history, and recently he has ramped up his engagements with workers, including by hosting union organizers from Amazon and Starbucks at the White House and other speeches at labor conferences.

The Hill’s Alex Gangitano has more on this here.

ENERGY INCIDENT

Explosion at Texas terminal injects uncertainty into global energy market

Last week’s explosion at Texas natural gas terminal Freeport LNG has injected further chaos into international energy markets as the U.S. has stepped up to replace Russian gas exports to Europe.

Experts said Friday that while the facility is offline, it will likely keep about 1.33 billion cubic feet (bcf) of liquefied natural gas (LNG) per day off the market for the next three weeks.

Before the explosion, it had a daily capacity of about 2 bcf. On Tuesday, the facility lengthened the forecasted shutdown period, saying it was aiming for a partial restart in 90 days, with full-service restoration not expected until late 2022.

  • Experts say that the incident will further tighten global energy supply and send record gas prices even higher this summer. 

  • The explosion will have a huge impact on Europe, as Freeport sent about 85 of its total delivered volumes to Europe in April and 78 percent in May.  

  • Still, producers are optimistic that other LNG exporters will be able to fill the void.

The Hill’s Zack Budryk has more here.

CRYPTO CUTS

Coinbase to lay off 18 percent of staff amid ‘crypto winter’

Coinbase will lay off 18 percent of its workforce amid plummeting cryptocurrency prices and a global economic slowdown, the company announced Tuesday.

CEO Brian Armstrong told employees in a memo that the crypto exchange needs to keep costs down to survive a bear market, which requires a “different mindset” to navigate.

  • The announcement comes after cryptocurrencies took a beating to start the week. Bitcoin has plunged nearly 20 percent, a nosedive that was spurred by crypto lender Celsius Network’s decision to prevent users from pulling funds due to “extreme market conditions.”  

  • Armstrong told employees in the memo that Coinbase grew too quickly, noting that its workforce expanded by roughly 200 percent since the beginning of 2021.

Karl has more here.

ALMOST CERTAINLY

Bernanke: Great Inflation of the 1960s and ’70s ‘almost certainly’ won’t be repeated now

Former Federal Reserve chair Ben Bernanke wrote in an opinion piece published Tuesday that despite current high inflation, the U.S. is likely not in danger of repeating the experiences of the 1960s and 1970s.

Bernanke wrote in The New York Times that while inflation in recent months “evokes memories of America’s Great Inflation of the 1960s and ’70s,” the country is “almost certainly not” heading for a repeat of that era.

  • Bernanke admitted that the current economic situation had some similarities to the past, such as heavy federal spending and shocks on global energy and food prices, but he wrote that there are critical differences as well. 

  • The former Federal Reserve chair said that inflation was met with “stiff political resistance” in the past, first using former President Lyndon Johnson as an example.

Check out more here from The Hill’s Rachel Scully.

Good to Know

The IRS has announced that it will boost the optional standard mileage rate for the remaining months of this year.

The agency said that the standard mileage rate will increase by four cents to 62.5 cents per mile starting July 1 to “better reflect the recent increase in fuel prices.”

Here’s what else we have our eye on:

  • Taiwan’s top trade negotiator told Reuters that a Chinese military attack on the island would harm the global economy more than Russia’s invasion of Ukraine.  

  • A Food and Drug Administration advisory panel recommended the agency expand the authorization of Moderna’s COVID-19 vaccine to children and teenagers ages 6 to 17.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.

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