Day: September 29, 2021

Blue-state Democrats are fighting hard to repeal a cap on how much of their state and local taxes Americans can deduct from their federal taxes. Often left unspoken is that the tax most at issue isn’t state income taxes, it’s local property taxes.

Reinstating the full deduction would make a hypocrite of any Democrat who claims to care about income inequality or systemic racism. That’s because the deduction is one of the biggest drivers of inequality in blue states.

In fact, unlike most debates in Congress, this one doesn’t actually pit red states against blue states. Rather, it pits the interests of wealthy blue districts against less wealthy ones. That’s why liberals who care about inequality and systemic racism should be willing to let go of the deduction.

Better known by its acronym, SALT, the deduction allows taxpayers to subtract their local and state tax bills from their income and reduces the amount that they pay in federal taxes. The 2017 Tax Cuts and Jobs Act signed by former President Donald Trump limited that deduction to $10,000. Trump’s motives weren’t egalitarian — he imposed the cap to help offset the costs of the other tax cuts in the package, tax cuts that went primarily to the wealthy and large corporations. Many Democrats saw that move as a partisan financial hit aimed at blue states, and many now want to eliminate the limit.

But while Trump may have done the right thing for the wrong reason, lifting the cap now would be doing the wrong thing, full stop. Here’s why.

Property taxes are a large non-federal tax bill for many American homeowners. And the largest benefits of the deduction go to homeowners with the highest property taxes: residents of middle-class and wealthy communities that impose higher taxes to fund local priorities like better schools.

Consequently, places that can afford those higher taxes end up with better schools. When the unlimited SALT deduction was in place, the federal government essentially gave up being paid taxes by the homeowners in wealthy neighborhoods so that those homeowners could fund those better schools.

Many liberals are beneficiaries of this system. Many take out large mortgages to send their children to the public schools funded by those high property taxes. New York Democratic Rep. Tom Suozzi, who represents a wealthy part of Long Island, argued that Congress should repeal the state and local tax deduction limits because “we built a whole system around it.”

He’s right: We have built our whole housing system around it. That‘s why it’s called “systemic” racism.

The footings of this system of inequality reach deep into the ground of history. Developers on Long Island like Levitt & Sons put racial covenants in their deeds to prevent anyone except white people from living in them. The company had a financial reason to prevent Black residents from moving in: The Federal Housing Administration guaranteed loans only to areas that limited a neighborhood to white residents. The Levitts weren’t alone; most large developers on Long Island did the same thing. One of the effects is that residents of places like Levittown paid only to fund their own schools, which served only white students.

The inequality created by the system persists today. A major investigation by Newsday showed that, as recently as 2019, real estate agents didn’t show Black homebuyers houses in white neighborhoods. White Americans, meanwhile, rarely move into neighborhoods with more than a token number of neighbors of color. Home values in integrated neighborhoods, as a result, rise slower than in all-white neighborhoods and generate fewer property taxes to invest in schools.

This perpetuates systemic racism in two ways. First, it means that students of color disproportionately enroll in schools with fewer resources. And second, Black Americans and other Americans of color for decades were locked out of the real estate market and the opportunity to build equity and generational wealth. Well into the 20th century, in both the North and the South, federal, state and local governments allowed the seizure of Black Americans’ property at the same time that racial covenants and the racist basis for FHA loans that Levitt and others used locked out Black Americans from real estate markets.

Because FHA loans were central to this wealth, the federal government was the architect of the huge Black-white wealth gap built on the system Congressman Suozzi described. The wealth of Long Island villages like Manhasset, Great Neck and Glen Cove were built on this system. The system has also prevented Black Americans from enjoying the benefits of homeownership like increasing wealth and well-funded schools.

Let’s be clear: At this point, preventing the SALT deduction from returning will not reduce inequality between school districts. But by letting taxpayers keep money they would otherwise pay to the IRS, the federal government would continue to subsidize this system that maintains wealth inequality between white and Black Americans.

No evidence exists that the Republicans removed the SALT deduction to reduce inequality, and the rest of their tax cut legislation increased inequality. And the Republican Party opposes efforts to increase federal spending to improve educational outcomes while complaining any time racial inequality is even mentioned.

But just because Republicans bumbled into doing the right thing doesn’t mean that Democrats should reinstate the SALT deduction. Reinstating the SALT deduction would cede ground to Republicans who could call out Democratic hypocrisy — correctly.

By removing the SALT deduction, Congress dismantled one pillar of a racist system, one that impedes racial equality. We should not rebuild it. Instead, let’s fund programs that will actually take steps to make America more equitable.

National politics seeped into Tuesday night’s Virginia governor debate, with the candidates weighing in on the reconciliation price tag, the Biden administration’s withdrawal from Afghanistan and a potential 2024 presidential run for former President Donald Trump.

Former Democratic Gov. Terry McAuliffe said he thought $3.5 trillion was “too high” for the Democrats‘ reconciliation bill.

“They got to stop their little chitty-chat up there, and it is time for them to pass it. Let’s get this infrastructure bill passed for America,” McAuliffe said, slamming lawmakers for this week’s chaotic back-and-forth on how to get President Joe Biden’s infrastructure package through Congress.

Republican Glenn Youngkin, who was endorsed by former President Donald Trump earlier this year, also didn’t avoid taking his time to weigh in on the national political scene. When asked about Afghan refugees in Virginia, Youngkin took the opportunity to slam Biden on the Afghanistan withdrawal and an influx of migrants at the southern border.

“We saw an abject failure of leadership from Joe Biden: He abandoned our military. He abandoned American citizens. He abandoned our allies, and he abandoned Afghans who had gone shoulder to shoulder with us, trying to make a way forward,” Youngkin said, before turning to Texas’ “open borders” — tapping into another common Trump talking point.

McAulliffe frequently criticized Youngkin as a “wannabe Trump” during the debate, prompting Youngkin to call out how often his opponent said the former president’s name.

During one of the final questions, Youngkin was asked whether he would support Trump as the nominee in 2024. Youngkin, who has made somewhat of an effort to pivot toward the center of the Republican Party after winning the GOP nomination, gave a shaky response.

“Who knows who is going to be running for president in 2024?” Youngkin said, before being pressed again on whether he’d support the former president as the nominee.

“If he’s the Republican nominee,” Youngkin said, “I’ll support him.”

ALEXANDRIA, Va. — Terry McAuliffe and Glenn Youngkin bickered their way through the second and final debate of Virginia’s competitive governor’s race on Tuesday, trading attacks and accusations from the start of the hourlong meeting.

They called each other liars. McAuliffe accused Youngkin of skirting local taxes by housing “fancy horses” on his Northern Virginia property and running a company that performed root canals on “babies.” Youngkin said McAuliffe would end Virginia’s “right-to-work” status and supports President Joe Biden’s “failure of leadership” and “open borders.”

Beginning with an argument over vaccine mandates for workers — McAuliffe supports them, Youngkin opposes them — and ending with hot-button national concerns, the two men disagreed throughout the debate. And McAuliffe frequently returned to his refrain in a state Biden carried by 10 points: tying Youngkin to former President Donald Trump.

“We need leadership as governor, not trying to be a Trump wannabe and doing the talking points,” McAuliffe said while attacking Youngkin over vaccine mandates.

Youngkin has been endorsed by Trump and has accepted his endorsement, but bristled when McAuliffe raised the former president on the stage, accusing him of trying to take attention away from state issues. “There’s an over and under tonight on how many times you are going to say ‘Donald Trump,’ and it was 10,” Youngkin said Tuesday night. “And you just busted through it. You are running against Glenn Youngkin.”

The debate was held in vote-rich Northern Virginia, an area that would be key to any potential Democratic victory. The sprawling region is one that heavily favors McAuliffe and is emblematic of the shift of suburban voters throughout Trump’s tenure in the White House.

And Democrats’ surrogates ahead of the debate also point to the type of voters they are trying to keep in their camp with Trump out of the White House — squishy suburbanites who broke away from the GOP due to Trump. The state party held a press availability ahead of the debate, trotting out former Republican state Del. David Ramadan and Bill Kristol, the longtime neoconservative never-Trump pundit, and McAuliffe shouted out both men on stage.

“Northern Virginia, if not the state overall, is still in my opinion, a third, a third and a third,” said Ramadan, referencing a third for either party and a third independent. “Both parties are going to bring out their bases, right? But what it comes down to here is, are the independents going to come out?”

The question is, however, how much of that swing toward Democrats has stuck with Trump out of office. Public and private polling has suggested that this race will be closer than Biden’s blowout win in 2020. The latest sign was a poll from Monmouth University released on the eve of the debate that had McAuliffe up 5 points over Youngkin among registered voters — a narrow yet stable lead compared to an earlier August poll from the university.

Republicans are hoping that with Trump gone, they can claw back some ground. And Democrats have relentlessly been trying to turn the November election into a referendum on Trump’s sway on the commonwealth, casting Youngkin as an acolyte of Trump.

For his part, Youngkin — a former private-equity executive — tried to stick to his core message, focused on the economy and crime. He hit McAuliffe for saying he would support a bill repealing the state’s “right-to-work” law.

“This bill is going to come to his desk, and Terry McAuliffe will sign it. He said that, and the minute he said he would sign it, every union in America endorsed him,” Youngkin said. “It will be the death blow for Virginia’s business climate. This is why every business organization in Virginia that has offered an endorsement so far has given it to me. Not to you, Terry, but to me.”

McAuliffe, who had previously said he supports repealing the right-to-work law, didn’t explicitly say again if he would or would not back it, saying it has no political path in the state legislature.

On the airwaves, Youngkin has been focused on a message surrounding law enforcement. Over the last week, nearly 70 percent of his TV ad airings in the race have been a variation of a spot that has a former Richmond police officer talking about when she was shot, according to data from the ad tracking firm AdImpact, attacking McAuliffe over the state’s parole board and saying the state “won’t be safe” with him.

Youngkin’s campaign sought to drive that focus home before the debate, announcing the endorsement from the state Fraternal Order of Police on Tuesday morning, following earlier endorsements from the state’s Police Benevolent Association and a sheriff’s association. “Youngkin is the only gubernatorial candidate to sit down with the Fraternal Order of Police and outline his goals as governor,” Virginia FOP President John H. Ohrnberger said in a statement circulated by the campaign.

On the debate stage, the two men also sparred over abortion: McAuliffe hit Youngkin for supporting additional restrictions on abortion rights, while Youngkin called McAuliffe’s position “extreme.” And Youngkin spun a question about Afghan refugees being housed in Virginia into a lengthy and strenuous criticism of the Biden administration’s handling of the troop pullout.

Near the end of the hour, the moderator, NBC News Political Director Chuck Todd, sought to pin the candidates down on national issues. Asked about Democrats’ $3.5 trillion reconciliation bill currently working through Congress, McAuliffe said it was too costly. Youngkin, meanwhile, told Todd he would support Trump if the former president was Republicans’ nominee in 2024.

The debate was produced by Washington’s WRC-TV and aired on NBC affiliates throughout Virginia.

The next five weeks of the campaign are expected to attract a windfall of attention — and money — from national organizations in an already incredibly expensive race that has saturated the airwaves and mailboxes of voters in the region.

The state has no contribution limits, and both parties’ national gubernatorial committees have given their candidate and state parties millions: $6.6 million from the Republican Governors Association, and $4.7 million from their Democratic counterparts, according to data from the Virginia Public Access Project. And strategists at the upper echelon of both parties have said they have no plans to shut off that fire hose anytime soon.

The final stretch of the race is also expected to draw increased attention from the White House, POLITICO previously reported, which is fearful that a McAuliffe loss could kick off a cascade of second-guessing and nervousness from Democrats across the country.

And other groups are increasingly getting involved, as well. The Virginia branch of the Service Employees International Union will roll out a $4 million field, paid media and Get Out the Vote campaign on Wednesday morning. The plan, shared first with POLITICO, includes $400,000 budgeted for English- and Spanish-language digital ads and direct mail.

It’s a meeting of allies eager to show a united front as a bulwark against China.

U.S. and European Union officials gather in Pittsburgh on Wednesday for the first meeting of the EU-U.S. Trade and Tech Council, a trans-Atlantic effort aimed at tackling joint challenges to maintain the West’s influence in technology and trade.

But diplomatic skirmishes and industrial fault lines between the trading partners threaten to undermine those efforts before the group has made its formal debut.

These differences could compromise the council’s broader goal of determining how the world handles challenges posed by emerging technologies like artificial intelligence. And they do not augur well for President Joe Biden’s attempts to smooth over international alliances after trade wars and tensions set in motion by former President Donald Trump.

Officials from both sides of the Atlantic frame the meeting as a much-needed chance to reset their rocky relationship and tackle technological problems.

“Future conflicts will be fought very differently,” Valdis Dombrovskis, EU’s trade commissioner, said during a speech in Washington before the meeting. “The fight over tech will be the new battleground of geopolitics.”

Those charged with rebuilding the frayed relationship this week include Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo and Trade Representative Katherine Tai on the U.S. side. In addition to Dombrovskis, the European Commission is sending Margrethe Vestager, its competition chief.

The leaders plan to emerge from the inaugural gathering with five areas to focus on, including how to regulate artificial intelligence, tackle export controls and conduct so-called investment screening. Though it is just the first of many expected meetings, it will set the tone for how they cooperate, particularly against the rise of China as a technological superpower.

“The U.S. and EU have aligned interests in ensuring the next generation of technology is based on democratic principles,” said Tyson Barker, head of the technology and global affairs program at the German Council on Foreign Relations, and a former State department official. “The potential is there, but it’s already been bogged down by the tyranny of headlines,” he added.

Practically, the council will need to overcome several other challenges. Here are four key issues that lie ahead:

Will France be a willing partner?

An unrelated flare-up this month between Washington and Paris nearly derailed the council’s start. A new security pact between Australia, the U.K. and the U.S. surprised EU officials and resulted in a Paris-backed company losing out on a multibillion-dollar submarine contract. France lobbied the EU to delay the Pittsburgh meeting and had help from the Germans, who asked Washington to postpone the event during bilateral talks last week.

Though the council is moving forward on schedule, U.S. relations with the French are not back to normal. France successfully pushed to water down the commitments on semiconductors to merely focus on the short-term global shortage of microchips. More in-depth discussions on linking U.S. and EU chipmaking will happen at the next transatlantic gathering planned in spring 2022, most likely somewhere in France, according to two U.S. and EU officials who spoke on the condition of anonymity.

Biden and French President Emmanuel Macron are scheduled to meet in Europe next month to continue smoothing over tensions. But some European leaders feel trust between the longtime allies has been broken, especially after Biden promised a hard reset following the contentious Trump era and Europe’s dissatisfaction with how the withdrawal from Afghanistan was handled.

European officials with hopes of rekindling greater ties with the U.S., though, have downplayed the standoff or sought to move past the issue.

“Especially in times of difficulties, it’s important that we keep our communication channels open; that we discuss how we overcome those difficulties,” Dombrovskis told reporters on Tuesday. “We, in a sense, should not allow those disagreements to cloud our outlook.”

What happens with data privacy?

Privacy and data ownership are at the core of several issues the Trade and Technology Council hopes to tackle. Those include plans to align the U.S. and EU approaches to regulating artificial intelligence and how governments regulate data. Other topics for discussion include how to stop authoritarian governments from gaining access to sensitive technologies and early-stage talks about combating online disinformation, according to draft versions of the meeting’s final communiqué obtained by POLITICO.

Washington and Brussels have been locked in parallel data talks trying to hammer out a successor to the so-called Privacy Shield, an agreement that allowed companies to move people’s personal information from the EU to the U.S. Europe’s highest court invalidated the current deal in July 2020.

It’s the second time the Court of Justice of the European Union has ruled that a transatlantic data deal does not sufficiently protect EU citizens’ information. The failed agreement raises questions about whether Europeans’ privacy rights can be upheld in the U.S., where surveillance laws give agencies wide scope to collect and use people’s information.

Dombrovskis insisted Monday the lack of a transatlantic privacy agreement won’t hamstring the council’s work. Officials on both sides have pledged to press ahead with those talks over the coming months, and a deal may be finalized by the end of the year.

The business sector is nevertheless ramping up the pressure on both sides to iron out a solution — even though the Privacy Shield deal will not be officially on Wednesday’s agenda.

“Data flows are the lifeblood of the modern economy, certainly the lifeblood of the trans-Atlantic economy,” said Marjorie Chorlins, senior vice president for European Affairs at the U.S. Chamber of Commerce. “If we can’t get that right, it’s hard to see how the TTC achieves really meaningful outcomes since so much of what is anticipated to be on the agenda of the TTC has a direct tie to data.”

What happens with China?

China has become a wedge issue between Brussels and Washington ever since Biden took office. That conflict, too, is playing out in the Trade and Tech Council.

The U.S. views the gathering as a prime opportunity to push back against China by forging common tech and trade standards, but the EU has taken pains to play down any sense that Beijing was a target.

EU countries, especially economic powerhouses France and Germany, are hesitant to push back too hard against China because of their significant economic ties to the world’s second-largest economy. Internal wrangling within the 27-country bloc has left Europe divided on how strongly to push back against China’s rise.

“We don’t speak with one voice on that issue,” one EU official said. “We still need to come together on an internal position before we can discuss that in detail.”

The differences about how to approach China were discussed until the final days ahead of the meeting, according to multiple officials directly involved in the discussions. For instance, there was disagreement over whether to include fisheries in the council’s final statement on combating forced labor, with several EU countries pushing back.

China has taken notice of the divisions. On Tuesday, Chinese Foreign Minister Wang Yi suggested Brussels and Beijing should hold their own high-level talks on trade and technology while praising the EU for not embracing the United States’ “new cold war” against China.

What happens with domestic politics?

The U.S. and the EU are still trying to bolster their respective semiconductor manufacturing with subsidies, while debating how to regulate A.I. and digital giants like Facebook. So far, Brussels has taken the lead on such digital rulemaking, but the U.S. Congress is starting to churn through the gears with its proposals.

The lack of clarity on what will happen to domestic rules could hamstring trans-Atlantic efforts to work together on areas like how to tackle online misinformation and what to do about tech’s online dominance.

Without agreements at home, U.S. and EU officials are not in a position to make commitments with each other internationally, and both sides still have differing views on the need for tech regulation. As part of Wednesday’s communiqué, Washington and Brussels will make it clear that the trans-Atlantic talks do not supersede whatever regulation may be passed domestically.

EU officials, for instance, were pleased that language about the need to reduce the harms from artificial intelligence was included in the official statement written for this week’s meeting. But neither Washington nor Brussels has settled on a domestic rulebook for the emerging technology, and it’s unclear to what extent lawmakers will be guided by the council’s discussions.

Barbara Moens contributed to this report.

The House committee investigating Donald Trump’s role in the Jan. 6 assault on the Capitol is quietly devising plans to pressure hostile witnesses to spill their secrets.

The select panel’s leaders are preparing a narrow set of legal and tactical options as they brace for Trump allies to invoke a wide range of constitutional protections to avoid testifying — from claiming executive privilege to invoking their constitutional right to avoid self-incrimination.

Whether it’s coaxing reluctant witnesses with offers of immunity or bludgeoning them with criminal contempt of Congress, lawmakers say they’ll be ready for whatever obstacles witnesses throw their way. The goal: prevent lengthy court battles that could derail the Jan. 6 investigation the way Trump stymied House and Senate investigators for his entire term.

“We have the full panoply of sanctions available for people who refuse to comply with a congressional subpoena,” said Rep. Jamie Raskin (D-Md.), one of the Jan. 6 Committee’s nine members. “We want the truth to come out, not just about the foot soldiers but about the generals too.”

“We’re very aware that time is of the essence,” added Rep. Zoe Lofgren (D-Calif.), a member of the panel and a veteran of three presidential impeachments.

The Jan. 6 panel signaled its impatience last week when it skipped the usual haggling over voluntary invitations to testify, instead slapping former White House chief of staff Mark Meadows, longtime Trump aide Dan Scavino, former Trump adviser Steve Bannon and national security aide Kash Patel with subpoenas. Only one of the witnesses would comment in public — Patel, who complained about the process.

Based on interviews with seven lawmakers on the Jan. 6 Committee, here are the options the committee is poised to pursue, should these witnesses and others decide to fight back:

1) Civil and Criminal Contempt

Rep. Adam Schiff (D-Calif.) previewed the possibility of holding resistant witnesses in contempt last week, emphasizing that while Congress’ citations often went ignored during the Trump presidency, the Biden Justice Department is less likely to stand in the way. It seems to be the first step the Jan. 6 committee will take if any Trump allies defy subpoenas.

Asked about the possibility of contempt proceedings, Rep. Elaine Luria (D-Va.) told reporters the committee had “discussed all the actions, and we will wait to see how people respond and then decide what the appropriate action is after that.”

2) “Use” Immunity

Congress has been reluctant to offer immunity to witnesses in politically sensitive investigations, fearing that extending even limited protection to potential wrongdoers could derail potential prosecutions. But the Jan. 6 investigation could be an exception.

Multiple members of the panel said that, if necessary to cajole testimony from a reluctant witness, immunity offers were in their arsenal. And they emphasized that their decisions are carefully coordinated with the Justice Department to ensure they don’t disrupt the DOJ’s parallel Jan. 6 investigation.

“There has been ongoing conversation with the Department of Justice as we move forward,” Thompson said.

Congressional investigators could drill down even further on this tactic and offer a specific immunity known as “use” immunity, according to Lofgren. Use immunity permits witnesses to testify about their conduct without risking prosecution for anything they say in the deposition.

Though prosecutors could theoretically still bring charges based on evidence collected separately, the Justice Department has encountered major problems in the past in prosecuting witnesses who testified under such immunity. As such, “use immunity” provides significant protection for witnesses to discuss potentially criminal actions that they or their associates might have committed.

One odd wrinkle could aid the committee’s information gathering. Lofgren noted that anyone pardoned by Trump for conduct connected to the committee’s investigation would be unable to invoke a Fifth Amendment right to decline testimony. It’s unclear which witnesses might fit this description, but Trump issued post-election pardons to a handful of witnesses the Jan. 6 committee has expressed interest in obtaining information about: Bannon, Roger Stone, Michael Flynn, Bernard Kerik and George Papadopoulos.

3) Outside pressure

Members of the Jan. 6 committee say they have one cudgel that wouldn’t require them to go to court at all: fear of the unknown. An untold number of witnesses have come forward to provide voluntary testimony — and their cooperation could spook some ex-Trump hands to work with investigators, rather than let others speak for them.

“At a certain point, these people might begin to wonder what kind of information we already have,” Raskin said. “Nobody should be telling himself that they’re going to sweep the facts under the rug.”

“We have a number of individuals who have reached out to us who are coming in without subpoenas coming in to talk to us,” said Committee Vice Chair Liz Cheney (R-Wyo.). She added that the committee had already met with some witnesses “in some cases.”

The committee has even gleaned useful information from a public tip line, including “valuable leads and additional people,” Luria said.

4) Joe Biden

Perhaps the most important weapon in the Jan. 6 Committee’s arsenal is the current president. Only Biden — the chief executive — can invoke executive privilege to prevent the disclosure of a predecessor’s secrets. And the White House has signaled that Biden is strongly considering waiving the privilege when it comes to material sought by the Jan. 6 panel.

That might also apply to the testimony of former White House aides, some of whom would conceivably have been considered part of Trump’s inner circle.

5) Inherent Contempt

Perhaps the least likely option in the committee’s toolbox is inherent contempt: Congress’ unilateral authority to fine or even jail recalcitrant witnesses.

Though there’s little dispute Congress has this authority, it has languished in disuse for a century. And in recent congressional probes — despite howls from some Democratic factions to dust it off — House Counsel Doug Letter has made clear this option simply would not be feasible, both practically and politically.

Schiff has noted that attempting to wield inherent contempt might still wind up before federal courts, bogging down the process for months and undermining the decision to deploy it in the first place.

But that hasn’t stopped lawmakers from musing about the possibility. House Majority Leader Steny Hoyer, asked Tuesday about the prospect of inherent contempt, said the process “is on the table and will remain on the table.”

Raskin confirmed the committee hasn’t ruled it out.

“There is a growing appetite for using Congress’ own contempt powers,” he said.

Josh Gerstein contributed to this report.