Potential Policy Changes, E.P.A. Auto Pollution Rules, and Economic News

Build Back Better Act/Spending Bill:

December 20: Behind Manchin’s Opposition, a Long History of Fighting Climate Measures

With every Republican opposing the bill in the evenly divided Senate, Democratic leaders could not afford to lose a single vote, and Mr. Manchin has said he had concerns about energy issues from the start.

“All of the prior conversations had been along the lines that he did not want to penalize fossil fuel but was fine incentivizing clean power,” Mr. Wetstone said. "We had not seen indications of pushback from Manchin or elsewhere from the clean energy provisions."

Though Mr. Manchin has always said his share of the coal brokerage is hidden in a blind trust, any general threat to coal power would impact that business. Chris Hamilton, president of the West Virginia Coal Association, said he had conveyed to Mr. Manchin that the clean energy tax credits would be a death knell for the state's coal industry.

Beginning in October, documents from America's Power, a coal industry trade organization, began circulating among members of Congress, including Mr. Manchin, outlining arguments against the tax incentives, according to industry and congressional officials.

Energy experts said Mr. Manchin's stated reasons for opposing the bill's climate provisions did not stand up to scrutiny.

Mr. Manchin on Sunday argued that "The energy transition my colleagues seek is already well underway," as the price of wind and solar energy drops, easing the utility and transportation sectors away from oil, gas, and coal.

December 19: Manchin Says He 'Cannot Vote' For Democrats' $2 Trillion Spending Package, Drawing Sharp White House Rebuke

Sen. Joe Manchin III on Sunday said he could not support Democrats' roughly $2 trillion bill to overhaul the country's health care, education, climate, immigration, and tax laws, dealing a potentially insurmountable political blow to the final piece of President Biden's economic agenda.

Illustrating its fury, the White House publicly attacked Manchin in an unusually personal statement, alleging he had misled the president in their private talks. In a separate statement, issued later Sunday, Manchin signaled that he still could continue negotiating with Biden and other top Democrats on a scaled-back version of the bill.

The discussions repeatedly stalled, as Manchin continued to demand significant changes to the size and scope of the spending package, threatening the ability of Democrats to deliver on many of the promises they made on the 2020 campaign trail.

The size and scope of that second spending package, eventually valued at roughly $3.5 trillion, immediately troubled Manchin - and prompted Democrats to embark on a months-long process to whittle their policy aspirations down to a size he would support.

"I cannot take that risk with a staggering debt of more than $29 trillion and inflation taxes that are real and harmful to every hard-working American at the gasoline pumps, grocery stores, and utility bills with no end in sight," Manchin said in his statement.

The White House saved its harshest condemnation of Manchin for his decision's impact on the child tax credit, which Democrats expanded as part of a coronavirus stimulus law enacted earlier this year.

December 16: Democrats drop year-end push on Biden plan amid discord

Senate Democratic leaders failed to break a deadlock over President Joe Biden's $2 trillion economic agenda, punting action on the tax and spending bill to January in a political blow to the White House.

Schumer, after a lunch meeting with Democrats, said only that the party had "Good discussions" on the tax and spending bill and separate voting rights legislation.

"We've got to get it done in the first couple of months" of 2022, Senator Chris Van Hollen, a Maryland Democrat, said when asked about retroactive tax issues in the bill.

Senator Mark Kelly, whose Arizona seat is competitive in the upcoming election, said Democrats should see much of the bill text by Thursday.

Manchin attributed the delay to the Senate parliamentarian's ongoing scrub of the bill to ensure it complies with strict rules for the process Democrats are using to avert a Republican filibuster.

Senate GOP leader Mitch McConnell was gleeful Thursday at the prospect of a delay in the bill, which he argues will add to inflation.

On the tax side, the bill would extend expanded Child Tax Credits and make them permanently refundable to those without sufficient income-tax liability to get the full benefit.

December 15: Biden admits Build Back Better likely to be put off to 2022

The president, in a statement released Thursday evening, expressed confidence that the measure would eventually pass and urged patience as negotiations continue with Senator Joe Manchin, a West Virginia Democrat who has raised objections to the package.

Biden's statement came as Senate Democrats punted their plans to debate the Build Back Better bill into January after it became clear that there was no easy way to get them to 50 votes in the evenly divided chamber before lawmakers leave Washington for the Christmas recess.

House Democrats passed their version of the bill last month but, after months of talks, Manchin remains a key holdout for Democrats.

The delay denies Biden a major year-end victory that his allies hoped would bolster his sagging poll numbers and show voters that Democrats, with control of the White House and both chambers of Congress, can deliver for Americans.

The failure of Biden's signature economic plan to pass this year is just the latest and starkest reminder of the limits Democrats face with their narrow Senate majority that includes a few members who are more conservative than much of the party.

U.S. President Joe Biden speaks at the White House in mid-December 2021. Al Drago/Bloomberg The economic bill hit a wall this week as Manchin negotiated directly with Biden but made little progress, people familiar with the negotiations have said.

As the talks with Manchin stalled, Biden and Schumer tried to pivot to trying to pass the John Lewis Voting Rights Advancement Act and the Freedom to Vote Act before the end of the year.

Potential Upcoming Policy Changes: 

December 20: Schumer Will Try to Change Senate Rules if G.O.P. Stalls Voting Bill

Stymied by Republicans on voting rights legislation, Senator Chuck Schumer on Monday gave the clearest sign yet that he would try to force a fundamental change in Senate rules if needed to enact federal laws to offset voting restrictions being imposed by Republican-led legislatures around the country.

In a letter to colleagues, Mr. Schumer, the New York Democrat and majority leader, said that the Senate would take up stalled voting rights legislation as early as the first week of January and that if Republicans continued to filibuster, the Senate would "Consider changes to any rules which prevent us from debating and reaching final conclusion on important legislation."

Mr. Schumer's new stance shows that he is ready to take the next step and start a rules fight on the Senate floor though he has so far lacked the 50 Democratic votes needed to force through a change over Republican opposition.

Mr. Schumer's frustration boiled over in his letter, saying it was unfair to let states set new rules through partisan majority votes while Republicans were preventing the Senate from doing the same.

"If the right to vote is the cornerstone of our democracy, then how can we in good conscience allow for a situation in which the Republican Party can debate and pass voter suppression laws at the state level with only a simple majority vote, but not allow the United States Senate to do the same?".

Mr. Schumer has in the past said mainly that "All options are on the table" when it comes to pressing voting rights legislation, refraining from a direct threat on Senate rules.

Instituting such a change would require the support of all 50 Democrats and the vote of Vice President Kamala Harris presiding to break a tie in the 50-50 Senate.

Tax Policy:

December 20: With Biden's plan adrift, tax bills for rich Americans are in doubt

A tax year that just months ago was set to end with a frantic scramble by wealthy Americans to complete moves averting the biggest tax increases in a generation is instead concluding with a cloud of confusion.

With President Joe Biden's signature tax-and-spending bill bogged down in wrangling among congressional Democrats and punted until next year, tax advisors are at a loss for how to guide their rich clients.

That's after months of counseling individuals to be ready to post more income in 2021, before the tax changes took effect.

"There is no understanding of how the game is played. There are real business decisions that people need to make." Biden's Build Back Better plan, which has passed the House but is stalled in the Senate, calls for changes including: A surtax on individuals earning at least $10 million; The expansion of a 3.8% investment levy on income from pass-through entities and a restriction on how their losses can be used to offset profits; A bigger federal deduction for state and local taxes that would cut the overall burden for many high-earning households; and, A series of tax increases on corporate operations.

Senate Finance Committee Chairman Ron Wyden said he's been talking with tax professionals who have concerns about the timing of the bill.

"We still have work to do, and I'm very much aware." Working guidance Advisors are telling their clients to make decisions based on the current Tax Code.

"It's now mostly, 'Let's wait until 2022.'" One of the most pressing tax issues for Democrats to sort out is an expansion of the SALT deduction, a key political priority for many lawmakers representing high-tax locations in New York, New Jersey and California.

December 20: Wyoming Trusts, Protected By Strong Privacy Laws, Draw Global Elite

The cocktail and variations of it - consisting of a Wyoming trust and layers of private companies with concealed ownership - allow the world's wealthy to move and spend money in extraordinary secrecy, protected by some of the strongest privacy laws in the country and, in some cases, without even the cursory oversight performed by regulators in other states.

A dozen international clients who created Wyoming trusts were identified in the Pandora Papers, a trove of more than 11.9 million records obtained by the International Consortium of Investigative Journalists and shared with The Washington Post that exposes the movement of wealth around the world.

There is no evidence in the Pandora Papers documents that the trusts in Wyoming sheltered criminal proceeds.

Makarov, the Russian billionaire, turned to Wyoming in late 2016, setting up a Wyoming trust and an unregulated private trust company to manage it, Pandora Papers documents show.

Celia María Agueda Munilla, the 83-year-old matriarch of the Baggio family in Argentina, also set up a trust overseen by an unregulated private trust company in Wyoming.

In 2019, Haché, his wife and two daughters set up a Wyoming trust and an unregulated private trust company to own two British Virgin Islands companies with bank accounts in Miami, the Pandora Papers records show.

In a statement, the Wyoming Trust Association said it "Supports effective and meaningful regulatory oversight of the trust industry." The association also said the industry would support increases in the fees paid to the state by regulated trust companies.

Environmental Policy: 

December 20: E.P.A. Announces Tightest-Ever Auto Pollution Rules

Climate experts said the new tailpipe rule is a first step in Mr. Biden's push to rapidly shift American drivers from cars and trucks powered by the internal combustion engines of the last century to zero-emission electric vehicles.

Among the bill's provisions is a tax credit of $7,500 for purchasers of electric vehicles, plus an additional incentive of $4,500 if the vehicles are assembled by union workers.

A significant step was taken last month when Congress passed a $1 trillion infrastructure bill that included $7.5 billion to build about 500,000 electric charging stations nationwide, plus another $7.5 billion to help bolster supply chains needed to produce electric vehicles.

So E.P.A. officials are working on a future regulation for vehicles built in the model year 2027 and beyond that would compel automakers to ramp up sales of electric vehicles.

Because tailpipe emissions rules pertain to the average mileage per gallon of all vehicles sold by a carmaker, stringent standards are designed to force auto companies to sell more electric cars to offset the sales of conventional pickup trucks, sports utility vehicles, and other models that get low mileage.

"E.P.A.'s final rule for greenhouse gas emissions is even more aggressive than originally proposed, requiring a substantial increase in electric vehicle sales, well above the 4 percent of all light-duty sales today," John Bozzella, president of the Alliance for Automotive Innovation, a lobbying group that represents the world's largest auto companies.

Autoworkers have expressed concerns over the electric transition because the production of an electric vehicle requires about one-third less human labor than a vehicle powered by an internal combustion engine.

Economic News:

December 15: Fed Shifts Policy To Tackling Inflation, Moving Focus Away From Shoring Up Jobs

The Federal Reserve made its strongest move yet toward tackling inflation on Wednesday, moving up the timeline for what could be as many as three interest rate hikes next year. The Fed's policy pivot toward inflation, and away from boosting the job market, marks a significant shift in how the Fed is responding to rising costs during the coronavirus pandemic.

"There's a real risk now, we believe - I believe - that inflation may be more persistent," Fed Chair Jerome H. Powell said at a news conference Wednesday.

As inflation becomes more persistent throughout the economy, pressure is building on the Fed to take action. Still, Tim Duy, an economist and Fed expert at the University of Oregon, said the Fed's policy shift sent a signal that wasn't just about triaging the coronavirus crisis or patching holes in the recovery.

"It tells us the Fed is moving beyond the pandemic, as far as monetary policy is concerned, and is looking toward a different path for rates," Duy said. Fed watchers are waiting to see how the Fed will decide if the "Full employment" threshold has been met, before addressing high inflation.

For Fun: 

December 21: NASA’s Webb Telescope to See Deeper Than Hubble to Edge of Universe

As big as a tennis court and 100 times as powerful as the Hubble Space Telescope, the James Webb Space Telescope will reveal the outer reaches of the universe in more detail than ever before.

In addition to providing fresh insights into our own solar system, the new telescope-with its giant golden mirror and infrared eyes-will go beyond what Hubble can see and capture images of some of the very first stars and galaxies as they appeared more than 13.5 billion years ago, according to the National Aeronautics and Space Administration.

In the 31 years since its launch in 1990, Hubble has taken more than 1.5 million photos, helped reveal that the universe is 13.8 billion years old, and extended our understanding of how planets form.

The Webb telescope is designed to see mostly infrared light. Hubble sees in the 90- to the 2,500-nanometer range, while Webb will see an even wider range of light wavelengths-from 600 to 28,500 nanometers. The Webb mirror has 6.25 times as much collecting area as the Hubble's. The Webb mission is expected to continue for five to 10 years, with NASA expecting the telescope to produce its first scientific photo this summer.