Category: US

President Joe Biden on Friday celebrated stronger than expected job growth in July as a strong economic sign as Democrats look to pass a major spending bill focused on climate, health care and tax policies.

Speaking from the Blue Room Balcony because he’s still isolation with COVID, Biden said the 528,000 jobs added in July marks 10 million jobs created since he entered office.

“That’s the fastest job growth in history,” he said. “Today, we also matched the lowest unemployment rate in America in the last 50 years: 3.5%.”

White House officials initially prepared reporters for data indicating a slowdown in growth but the Bureau of Labor Statistics report marked a significant increase from the 372,000 jobs added in the month of June.

In marking a week of political wins, Biden also took a victory lap on lower gas prices, as costs at the pump have declined for 50 straight days.

Still, I have acknowledged that a lot of Americans are still feeling the pain of inflation.

“Now, I know people will hear today’s extraordinary jobs report and say they don’t see it, they don’t feel it in their own lives,” I conceded. “I know how hard it is. I know it’s hard to feel good about job creation when you already have a job, and you’re dealing with rising prices, food and gas and so much more.”

More relief could soon be coming, he said, from the Inflation Reduction Act — a $740 billion spending bill Democrats are looking to pass through a fast-track process known as reconciliation.

Biden homed in on provisions in the bill that will allow Medicare to negotiate prescription drug prices and provide incentives for Americans to invest in clean energy.

The president said they’re “on the cusp” of passing the legislation after Sen. Kyrsten Sinema, D-Ariz., announced Thursday she would move forward with the bill after getting a tax provision she opposed removed from the legislative text.

Sinema was the last holdout and is a critical vote as Democrats need the support of all 50 caucus members to pass the bill amid expected unanimous opposition from Republicans in the chamber.

Senate Majority Leader Chuck Schumer, DN.Y., has teed up the first vote to begin debate on the bill on Saturday afternoon.

Biden said the bill is a “game changer for working families and our economy.”

“You know, I know most families are focused on just putting three meals on the table, taking care of their kids and paying their bills,” he said. “Helping you do that is my job.”

And it could portend major changes to the commission, a somewhat obscure state regulatory body with five GOP members who play a key role in deciding how electricity used in Georgia is generated and how much customers pay for it. The five commissioners serve six-year terms and earn a salary of $126,000.

“This ruling immediately impacts how millions of Georgians will elect those powerful officials who determine how much everyday folks must pay for basic utilities,” said Nico Martinez, an attorney for the plaintiffs. “It is one of the most important decisions to advance voting rights in a generation.”

During a five-day trial that concluded in July, Grimberg heard testimony from plaintiffs who alleged that Georgia’s system of statewide elections for the commissioners denies Black voters an opportunity to elect their preferred candidates.

While nearly one-third of Georgia voters are Black, they’re always outnumbered by the state’s white majority that tends to elect Republicans.

The plaintiffs noted that just one Black candidate has ever won an election to the Public Service Commission in its 143-year history, when Democrat David Burgess retained his seat in 2000 after being appointed to the post.

Commissioner Tim Echols (left) listens during Georgia Public Service Commission meeting on Dec. 21, 2017 before the commission voted unanimously to allow continued construction of two nuclear reactors at Georgia Power’s embattled Plant Vogtle, which is billions of dollars over budget and years behind schedule . Hyosub Shin / [email protected]

Commissioner Tim Echols (left) listens during Georgia Public Service Commission meeting on Dec. 21, 2017 before the commission voted unanimously to allow continued construction of two nuclear reactors at Georgia Power’s embattled Plant Vogtle, which is billions of dollars over budget and years behind schedule . Hyosub Shin / [email protected]

State attorney Bryan Tyson countered during the proceedings that Black voters have been able to participate in the political process. Just because their candidates haven’t won, I added, doesn’t mean the voting system is discriminatory.

Public Service Commission chair Tricia Pridemore also testified that statewide elections “provide centralization of thought for energy and utility policy.” The structure allows commissioners to decide thorny issues, such as where to locate new power plants, in the “best interest of the whole state.”

Still, few Black candidates from either party have won statewide non-judicial elections. Over the past 22 years, only four politicians can claim that accomplishment: US Sen. Raphael Warnock, former Attorney General Thurbert Baker, former Labor Commissioner Michael Thurmond and Burgess. All are Democrats.

Two Black members have been appointed to the Public Service Commission. Johnson is one of them. He was tapped by Gov. Brian Kemp to fill a vacancy and was up for a full term in November.

The other Public Service Commission member who was to stand for election this year is Echols, an incumbent Republican who was involved in an effort to draw his opponent out of his district.

The statewide voting process to fill commission seats dates back to a 1906 law, but the current system is newer. In 1998, the Democratic-controlled Legislature approved a law that required members to live in one of five geographic districts, though they continued to be elected statewide.

Across the country, Georgia and six other states elect utility regulators statewide, while five states hold elections for geographic districts. In most states, however, members of regulatory bodies are chosen by governors or legislatures.

Grimberg, a Donald Trump appointee, heard testimony from members of the NAACP, Black Voters Matter and Georgia Conservation Voters. The witnesses argued that the system violated Section 2 of the Voting Rights Act, which prohibits racially discriminatory voting laws.

Among the witnesses was Lindy Miller, a Democrat who won every county in her geographic district in 2018 but lost the election statewide to Republican Chuck Eaton. She said the statewide vote creates an “accountability” problem that allows candidates to sidestep issues important to Black communities.

Grimberg made clear that his ruling doesn’t apply to other statewide at-large elections, but rather was specifically tailored to block any Public Service Commission election using this method.

What happens next is not immediately clear and the secretary of state’s office, which oversees elections, had no comment on the timeline.

The judge’s ruling, however, indicated the two commissioners, Echols and Johnson, would “holdover” and remain in their positions until districts are redrawn by state legislators next year and a new election is set. If lawmakers don’t comply with the ruling, Grimberg would draft the boundaries himself.

Former NAACP state President James Woodall, who was among the plaintiffs in the lawsuit, celebrated the ruling.

“This determination assures us that our current claims of voter suppression are legitimate and that Black voters have for generations been prevented from full access to democracy,” he said.

Staff writer Mark Niesse contributed to this report.

Democrats faced a wave of complaints that their proposed new minimum tax on corporations, which they’ve now agreed to narrow, would disproportionately hit manufacturers.

At the same time, their plan to target the “carried interest” loophole that’s now being dropped had riled powerful Wall Street lobbyists.

But the buyback tax, which Democrats have been contemplating for months, has been relatively uncontroversial — at least for a tax increase. That’s probably because it is so small.

“It’s not like business endorsed this, but they also didn’t lay across the train tracks to try to stop it,” said Todd Metcalf, a former top Senate tax aide now at the consulting firm PwC.

“This is the lowest hanging fruit.”

The swap will not only help secure Sinema’s support. It will also allow Democrats to say they are raising taxes on the well-to-do while scratching their long-standing itch to do something about corporate stock reprochases. Democrats were infuriated when, in the wake of Republicans’ 2017 tax cuts, many companies used their savings to buy back stock, enriching shareholders.

The change will also blunt Republican charges Democrats are hurting manufacturers at a time when supply chains remain snarled.

The excise tax appears to be more than enough to cover the $14 billion lost with the carried interest proposal and by squeezing the 15 percent corporate minimum levy, or “book-income” tax. Democrats say it would generate $74 billion in revenue, which would keep the overall savings in the package in the neighborhood of $300 billion.

The savings are less, though, than the $124 billion budget forecasters had estimated last year when House Democrats considered the proposal. One reason for the difference is that the tax would have begun in January of this year, so Democrats have now lost a year of revenue.

The tax changeup could be a little awkward for Sen. Joe Manchin (DW.Va.), who has repeatedly argued in recent days that Democrats’ bill is merely closing loopholes, not imposing new taxes.

“It will take a very, very creative messaging person to say that this excise tax is closing a loophole,” said Metcalf. “It clearly is a new tax.”

It’s the latest change forced by the enigmatic Sinema (D-Ariz.), who has repeatedly forced Democrats to rewrite their tax plans — all the while saying little publicly about what she wants and why. Senate Democrats aim to pass the legislation next week, with the House planning to quickly follow.

“I hate stock buybacks,” Senate Majority Leader Chuck Schumer (DN.Y.) said Friday. “I think they’re one of the most self-serving things that corporate America does. Instead of investing in workers and in training and in research and in equipment, they simply — they don’t do a thing to make their company better and they artificially raise the stock price by just reducing the number of shares.”

One reason Wall Street is shrugging at the buyback tax is because it is so small. Few expect it to discourage many companies from purchasing their own stock. Many firms see their daily stock prices fluctuate by much more than 1 percent each day.

And some say the tax doesn’t look so bad compared to others that Democrats had been pushing.

“It’s not exactly popular in the business community, but stopping it was never the top priority,” said Capital Alpha Partners’ James Lucier in a research note.

“We don’t believe it’s a good thing for investors, but given the options for increased revenue on the table to help pay for the Inflation Reduction Act (IRA), it’s probably the least bad.”

The biggest threat for Wall Street could come later: It would be the government’s first tax on buybacks and once it’s on the books Democrats could come back later and increase it.

Neil Bradley, chief policy officer at the US Chamber of Commerce, said: “Unfortunately, the new excise tax on stock buybacks will only distort the efficient movement of capital to where it can be put to best use and will diminish the value of Americans’ retirement savings.”

The problem Democrats faced with their minimum tax on big companies is that the tax code gives capital-intensive industries generous deductions for buying plants and equipment — which can drive a firm’s well below the 15 percent floor.

That led to a torrent of complaints from manufacturers, echoed by Republicans, that they would be hammered by what they called a backdoor repeal of popular depreciation allowances.

Democrats say they’ve Agreed to spare accelerated depreciation from the minimum tax calculations, though the reported cost of doing that — $55 billion, according to Schumer — is lower than many anticipated, and some are eager to see the fine print of the plan. Before the changes, the minimum tax was projected to hit about 150 companies and produce $313 billion in revenue.

“We are glad to hear that accelerated depreciation provisions are removed, but we remain skeptical and will be reviewing the revised legislation carefully,” said Jay Timmons, head of the National Association of Manufacturers.

As for the carried interest provisions, Schumer said he had no choice but to delete it in order to win Sinema’s support.

Lawmakers have been trying to cut or eliminate the break for well over a decade—and somehow, regardless of which party is in charge, the break always manages to live on.

“Carried interest is the greatest survival story since the Shackleton expedition,” tweeted Jon Lieber, a former top aide to Senate Republican Leader Mitch McConnell (R-Ky.).