House Ways and Means Committee Chairman Dave Camp announced a comprehensive tax reform plan that would lower rates, broaden the spectrum of taxpayers and greatly simplify the tax code system, shrinking it by 25 percent.
“This legislation does not reflect ideas solely advanced by Democrats or ideas solely advanced by Republicans, nor is it limited to the halls of Congress,” the Michigan Republican said. “Instead, this is a comprehensive plan that reflects input and ideas championed by Congress, the administration and, most importantly, the American people.”
Camp’s plan comes as leaders in both the House and Senate have suggested it will be difficult, if not impossible, to embark on a tax reform debate in 2014, an election year when big legislation often gets sidelined.
House Speaker John Boehner, R-Ohio, said before the release of the plan that it would “start the conversation” on tax reform, but he would not commit to a vote.
In the Senate, Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., said they do not believe the Senate will vote a tax reform bill this year.
Camp is moving ahead nonetheless, and his proposal has drawn both praise and criticism.
House Budget Committee Chairman Paul Ryan, R-Wis., who may succeed Camp at the Ways and Means helm next year, called the proposal “a terrific first step toward a much-needed debate over how to best reform the tax code.”
But many are likely to find fault with it.
For instance, Camp’s plan reduces the mortgage interest deduction from $1 million to $500,000 by 2018 for new mortgages. He said the move would affect only 5 percent of homes now on the market, but lawmakers from districts with high housing prices are unlikely to support the provision.
And the plan rids the tax code of many smaller deductions, such as the ones for state and local taxes.
“Any proposal that eliminates the deduction for state and local taxes, as the Republican plan would do, is dead on arrival,” said Sen. Chuck Schumer, D-N.Y.
The plan shrinks the seven-bracket tax code to two brackets of 10 and 25 percent.
Camp’s plan would reduce the corporate tax rate from 35 percent to 25 percent, a move proponents say will invigorate the economy and create jobs. And it would simplify and increase standard tax deduction rates to $11,000 for individuals and $22,000 for married couples.
White House spokesman Josh Earnest praised Camp’s plan to close tax loopholes but criticized the elimination of the Earned Income Tax Credit for low-wage workers, which President Obama hopes to broaden.
— Susan Ferrechio, Chief Congressional Correspondent
MICHELLE OBAMA UNVEILS OVERHAUL OF NUTRITION LABELS
First lady Michelle Obama proposed changes to nutrition labels on food products, saying the new design must bring more attention to calories and serving sizes.
“Our guiding principle here is very simple: that you as a parent and a consumer should be able to walk into your local grocery store, pick up an item off the shelf and be able to tell whether it’s good for your family,” Obama said. “So this is a big deal, and it’s going to make a big difference for families all across this country.”
Among the proposed revisions to the nutrition labels: Listing the amount of added sugars in a food product, updating serving sizes the Obama administration contends are unrealistic and displaying the total calories for an entire package of food.
“We think it’s absolutely vital to the long-term health of the country,” a senior administration official said of the effort.
Administration officials said the public would have the chance to weigh in on the proposal before the Food and Drug Administration finalizes the new labeling.
The announcement from the first lady follows her latest push to end the marketing of junk food and sugary drinks in schools. Obama said schools should get rid of vending machines, cups and other promotional materials that feature the names of soft drink companies.
The White House’s public health campaign comes as they cheer the announcement that obesity rates over the last decade have plummeted by 43 percent among 2 to 5 year olds.
“Progress of this magnitude can only be explained by the leadership and hard work we are seeing across this country,” the first lady said.
However, obesity rates have not slowed at similar rates among older children. And critics of the first lady’s efforts say she is pursuing “nanny-state” solutions for problems that families, not the government, should address.
— Brian Hughes, White House Correspondent
FED COULD PAUSE THE TAPER, YELLEN SAYS
The Federal Reserve could halt the taper of its bond purchases if recent weak economic indicators reflect not just bad weather but underlying slow growth, Chairwoman Janet Yellen told Congress.
Yellen said at a Senate Banking Committee hearing that if there’s a “significant change in the outlook, certainly we would be open to reconsidering” the process of winding down the monthly large-scale asset purchases, which the Fed has decreased by $10 billion at each of its past two meetings to $65 billion.
She made similar remarks at a House hearing earlier in February. That appearance, required by law, was supposed to be followed days later by the Senate hearing. But it was canceled by a snowstorm that halted activity in Washington. Bad weather is to blame for the underwhelming news about economic growth before and since then, according to Yellen.
“We have seen quite a bit of soft data over the last month or six weeks,” Yellen acknowledged, citing disappointing reports regarding job growth, housing and industrial production that some analysts attributed to especially harsh winter conditions in many parts of the country.
“It’s clear that weather has played – unseasonably cold weather – has played a role in much of that,” Yellen said. But if future indications are that weather isn’t entirely to blame, slowing or halting the taper is an option.
Fed members have said all along that the monthly bond purchases are not on a preset course and depend on incoming economic data, Yellen noted.
— Joseph Lawler, Economics Writer
213 HOTEL ROOMS, FREE BREAKFAST BUFFET FOR BIDEN IN CHINA
It took 213 hotel rooms on the top of Beijing‘s posh St. Regis Hotel to house Vice President Joe Biden and his entourage during a December visit to China, according to newly released government documents.
The price of the stop: $384,479.19. But according to the documents, the breakfast buffet was free.
During his Dec. 4-6 visit, Biden met with Chinese officials and toured the city, even attending a traditional tea tasting, according to the White House.
The documents noted that back-up rooms at a J.W. Marriott hotel were also available.
Because U.S. officials wanted to keep the trip secret out of security concerns, only a handful of hotels the government has worked with were asked to bid. The St. Regis won because it offered prices at or just below the per diem paid by Uncle Sam.
The average price of a room, for example, was pegged at $230.26, just below the lodging per diem for Beijing, which is set at $258. The presidential suite was priced at $526 a night.
“An estimated 1,345 room nights are required to support this visit. Starting on November 19 with 4 rooms and hitting a peak of 213 rooms on the days of the visit, the hotel will provide lodging rooms as well as office space for security, communications and staff as necessary,” the State Department documents said.
— Paul Bedard, Washington Secrets Columnist
OBAMA TO HOST PALESTINIAN LEADER AT WHITE HOUSE
President Obama will host Palestinian Authority President Mahmoud Abbas at the White House in mid-March.
The two plan to discuss the ongoing Israeli-Palestinian peace talks and their continuing effort to “work cooperatively to strengthen the institutions that can support the establishment of a Palestinian state,” the White House said.
The March 17 meeting will come two weeks after Obama’s much anticipated March 3 meeting with Israeli Prime Minister Benjamin Netanyahu. Obama and Netanyahu have had a rocky relationship over the last few years as the Israeli leader has threatened to strike against Iran if it continues to pursue its nuclear development and Obama has tried to tamp down talk of military action.
Netanyahu has been critical of the Obama administration’s negotiations with Iran on a six-month deal to try to roll back parts of Tehran’s nuclear program in exchange for some sanctions relief. He has been far more charitable about Secretary of State John Kerry‘s efforts on the peace talks even though the efforts have yielded few tangible results.
Obama is expected to try to persuade Netanyahu to agree to a framework for a transition to peace between Israelis and Palestinians, according to a report in the New York Times, which said he will make a similar push when Abbas visits.
— Susan Crabtree, White House Correspondent
NO KEYSTONE XL CONFLICT OF INTEREST, STATE DEPT. WATCHDOG SAYS
The State Department was cleared of any wrongdoing in selecting a contractor to perform the environmental review for the Keystone XL oil sands pipeline, according to a report by the department’s internal watchdog.
The finding by State’s inspector general is a blow to environmental groups that oppose the pipeline, which would bring oil sands from Canada to the Gulf Coast. They had charged that the findings in State’s draft and final reviews were flawed because the contractor it used, London-based Environmental Resources Management, had previously done work for Keystone XL builder TransCanada Corp.
The inspector general report said that wasn’t the case, as it concluded State had followed proper procedures to root out a potential conflict of interest.
“Based on the information provided and interviews conducted, [the Office of Inspector General] found that the process the department used to select [Environmental Resources Management] … substantially followed its prescribed guidance and at times was more rigorous than that guidance,” the report said.
The State Department’s environmental review found that Keystone XL would not significantly contribute to climate change because demand would bring oil sands to market regardless of whether the pipeline was built.
The agency is overseeing a 90-day interagency review that will be used to determine whether building the pipeline is in the national interest. While the review will wrap up by June, there’s no timeline for a final decision from the White House, although Republican Oklahoma Gov. Mary Fallin said Obama told her a ruling would come “in a couple months.”
— Zack Colman, Energy & Environment Writer
ARIZONA GOV. JAN BREWER VETOES RELIGIOUS FREEDOM BILL
Arizona Gov. Jan Brewer vetoed a bill in the state legislature that would have allowed residents with strongly held religious beliefs to refuse to serve gays.
“Senate Bill 1062 does not address a specific or present concern related to religious liberty in Arizona,” Brewer said. “I have not heard of one example in Arizona where a business owner’s religious liberty has been violated.
“The bill is broadly worded and could result in unintended and negative consequences,” Brewer continued. “After weighing all of the arguments, I have vetoed Senate Bill 1062 moments ago.”
Brewer acknowledged proponents’ beliefs about gay marriage, but said she believed the Religious Freedom Restoration Act would “create more problems than it purports to solve.”
“Religious liberty is a core American and Arizona value,” Brewer continued. “So is non-discrimination.”
Brewer had received pressure from both sides of the debate — and nationwide — including from the state’s U.S. senators, religious groups and the NFL, which threatened to pull the Super Bowl from the state in 2015.
— Ashe Schow, Commentary Writer
KERRY WARNS PUTIN: ‘THIS IS NOT ‘ROCKY IV’ ‘
Secretary of State John Kerry warned Russian President Vladimir Putin to stay clear of the political turmoil in Ukraine, adding that the U.S. doesn’t view the international tussle over the democratic movement in Kiev as a continuation of the Cold War.
“We do not believe this should be an East-West, Russia-United States. This is not ‘Rocky IV,’ believe me. We don’t see it that way,” Kerry said in a reference to the popular film in which Sylvester Stallone’s character is pitted against a Soviet bully.
Appearing on MSNBC‘s “Andrea Mitchell Reports,” Kerry urged Putin to be “very careful” as he plots a Ukraine strategy, and urged the Russian president to respect the independence movement — and Washington’s attention to the issue.
“We are not looking for confrontation. But we are making it clear that every country should respect the territorial integrity here, the sovereignty of Ukraine. Russia has said it will do that and we think it’s important that Russia keeps its word,” Kerry said.
— Paul Bedard, Washington Secrets Columnist
NANCY PELOSI ‘TOO BUSY’ TO RETIRE
While several longtime House Democrats have announced their retirements this year, House Minority Leader Nancy Pelosi said not to expect her name to be added to the list anytime soon.
“I’m too busy” to retire, the California Democrat told reporters. “As long as there’s one in five children in America who lives in poverty, what I do is get up every morning revved to the task.”
Some of Pelosi’s top lieutenants have said they will step down at the end of their current terms in January. The list includes Reps. John Dingell of Michigan, Jim Moran of Virginia, Carolyn McCarthy of New York and George Miller and Henry Waxman of California.
Fifteen House Democrats have said they won’t seek re-election or already have left office, compared with 22 House Republicans.
But Pelosi, 73, who has served in the House since 1987, said her colleagues’ retirements have no influence on her decision to stay or leave office.
“They go at their pace; I go at mine,” she said. “I have enough to invigorate me. And everybody’s timetable around here isn’t everybody else’s timetable.”
— Sean Lengell, Congressional Correspondent
OBAMA TELLS SUPPORTERS THEY ARE DOING ‘GOD’S WORK’
President Obama told his young supporters they’re doing “God’s work” and urged them to help him raise the minimum wage and boost enrollment in his health care reform law.
“The work you are doing is God’s work,” Obama said at the National Organizing Summit, hosted by Organizing for Action, the nonprofit group formed from the remnants of Obama’s 2012 re-election campaign that has helped promote his policies and played a key role in signing up consumers for Obamacare.
The president said young volunteers who have worked to enroll consumers in the law’s new insurance exchanges have helped the administration handle the rough start of the healthcare.gov website, and touted Obamacare’s 4 million sign-ups.
“I could not be prouder of the work you’ve done to help Americans get covered,” Obama said.
“Because of you we now have 4 million Americans who have signed up for insurance through the marketplace exchanges,” he continued. “That’s on top of the 3 million young people who have been able to get coverage staying on their parents’ plan and the millions of Americans who are signing up to get Medicaid.”
But he cautioned that their efforts were not over.
“We’ve got more work to do.” said Obama. “We want everyone covered, not just some.”
Obama also asked the group to “make sure that we are giving America a raise” and back his efforts to convince lawmakers to increase the minimum wage.
— Meghashyam Mali, Assistant Managing Editor
OBAMA TELLS PENTAGON TO PLAN FOR FULL AFGHANISTAN WITHDRAWAL
President Obama has ordered the Pentagon to begin drafting plans for a complete withdrawal of American troops from Afghanistan by the year’s end in case the Bilateral Security Agreement is not signed.
Obama notified Afghan President Hamid Karzai of the decision in a phone call, the White House said.
“President Obama told President Karzai that because he has demonstrated that it is unlikely that he will sign the BSA, the United States is moving forward with additional contingency planning,” the statement said.
“Specifically, President Obama has asked the Pentagon to ensure that it has adequate plans in place to accomplish an orderly withdrawal by the end of the year should the United States not keep any troops in Afghanistan after 2014,” the statement added.
Afghan and U.S. negotiators last year agreed on a postwar security pact governing the role of American forces after the 2014 drawdown of the NATO-led mission.
But Karzai has refused to sign, despite the deal being approved by a council of Afghan elders, saying that the next president of his country should approve the agreement.
Afghan elections are slated for April, but the administration has repeatedly pressed Karzai to quickly sign the deal, arguing that they cannot delay planning for the eventual withdrawal of U.S. forces.
Critics say that without an agreement and U.S. troop presence, the international community risks seeing their decade-plus effort to build a stable Afghanistan lost.
— Meghashyam Mali, Assistant Managing Editor
VOLUNTEERISM FALLS TO 10-YEAR LOW
Volunteering fell to the lowest rate in 2013 since the government has been measuring it, the Bureau of Labor Statistics reported.
Roughly 62.6 million Americans volunteered through or for an organization at least once between September 2012 and September 2013, according to the BLS, or about 25.4 percent of adult Americans.
In 2002, the first time that the BLS conducted its survey on volunteerism, the rate was 27.6 percent. The decline last year was also a 1.1 percentage point drop from 2012.
Volunteerism has declined in each of the past three years. But it isn’t clear whether the decline last year marks a broader trend away from volunteerism or an aberration. It also isn’t apparent what might have caused Americans to volunteer less.
The drop can’t be attributed to an improving labor market — employed workers consistently volunteer at a higher rate than those out of work.
Although the decline may be related to an aging population, that trend is offset by the fact that the over-65 age group is the only one that has seen an increase in volunteering since 2002.
The turn toward slightly lower participation in volunteer activities is most pronounced among white and black Americans, and Hispanics have increased their participation in each of the past four years.
Women are still significantly more likely to volunteer than men, with a 28.4 percent participate rate versus only 22.2 for men.
Religious activities remain the main outlet for service, with volunteers contributing a third of their time to church-related efforts. The top activities were prepping and serving food, fundraising and tutoring.
— Joseph Lawler, Economics Writer
