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Obama offers corporate tax rate cut in exchange for new spending

On Tuesday, President Obama promised to support a cut in the corporate tax rate - a move generally supported by the GOP - if Republicans would in turn support additional spending aimed at spurring job growth.

President Obama pitched the idea as a "grand bargain," Republican leaders, however, dismissed the idea as little more than political gamesmanship and maintain that there is nothing new in the President's proposal.

Obama's proposal for a corporate tax cut was initially made in 2012, during his Presidential re-election campaign effort, and calls for the corporate tax rates reduced from 35 percent to 28 percent with a lower rate of 25 percent offered to manufacturers.

House leadership pulls Transportation, Housing and Urban Development bill from floor

For the second time in as many weeks, House Republican leadership has pulled an appropriations bill from consideration. This week, House leaders pulled the Transportation, Housing and Urban Development (THUD) bill from the floor. While claiming the move was just a timing issue - as they did with the Labor, Health and Human Services, and Education bill - insiders say the real reason the bill was pulled was because they lacked the votes necessary to pass it.

Because of the Ryan Budget that Republicans passed earlier this year, appropriations bills - like THUD - are subject to substantial cuts. These cuts guaranteed that no Democrat will support the bill and have some Republicans having second thoughts as well.

House Appropriations Chair Hal Rogers (R-KY) reacted angrily to the decision to pull the bill. Rogers said that, "with this action, the House has declined to proceed on implementation of the very budget it adopted just three months ago."

Rogers also said he believes the House, Senate, and White House must come together as soon as possible “on a comprehensive compromise.” He described that as one that “repeals sequestration, takes the nation off this lurching path from fiscal crisis to fiscal crisis, reduces our deficits and debt, and provides a realistic top-line discretionary spending level to fund the government in a responsible—and attainable—way.”

House passes student loan legislation

By a vote of 392-31 the House passed legislation dealing with student loan rates. The House passed bill, which previously passed the Senate by a vote of 81-8, ties student loan rates to the 10-year Treasury bond rate.

Speaker of the House John Boehner (R-OH) was quick to point out that the legislation passed this week was remarkably similar to legislation passed earlier by the House. In a strange political twist, House Republicans and President Obama were on the same page when it came to student loan legislation - both sides favoring tying rates to the 10-year bond. It was progressive Democrats in the Senate who had provided the opposition, which was finally overcome last week.

No movement on immigration reform in House before recess

Speaker of the House John Boehner (R-OH) had hoped the House would have acted on immigration reform before the August recess, however, as House Republicans head home for the break they have fallen short of that goal.

While some may view the inaction as a failure, House Republican leadership cast the decision not to act as a tactical move designed to boost the chances of passage of immigration reform.

Republican leaders claim they want to avoid a situation where members went home to face a firing squad in the form of angry town hall meetings reminiscent of the heated 2009 town halls that helped galvanize opposition to Obamacare.

Rep. Paul Ryan (R-WI) said that while there was no vote on immigration reform before the August recess, there could be a vote on immigration reform proposals in the House in October of this year.

Ways and Means to markup tax reform in October

This week, House Ways and Means Chairman Dave Camp (R-MI) announced plans to markup comprehensive tax reform legislation in October. Camp told members of the Ways and Means committee that he plans to write a tax bill that would cut the top corporate and individual rates to 25 percent and repeal the Alternative Minimum Tax for both corporations and individuals.

An October markup would occur just before an expected November showdown over raising the federal debt limit, and aides to Chairman Camp refused to rule out the possibility that he would link debate over comprehensive tax reform legislation to debt limits talks.

Cabinet update

On Monday, the Senate confirmed President Obama's nominee to head the FBI on a 93-1 vote, after Senate Majority Leader Harry Reid (D-NV) and Sen. Chuck Grassley (R-IA) negotiated an agreement to forgo an expected cloture vote.

On Tuesday, the Senate voted to confirm all five of President Obama's picks to the National Labor Relations Board.

On Thursday, the Senate confirmed Samantha Power to serve as U.S. Ambassador to the United Nations by a vote of 87-10.

Political Bits:

House

Alabama 1st Congressional District Special: A timeline to replace Rep. Jo Bonner (R-AL) has been decided. A primary election will be held on September 24, with a potential primary runoff scheduled for November 5. If no runoff is necessary, the general election will be held on November 5.

Senate

Arkansas: Rep. Tom Cotton (R-AR) is expected to announce his bid for the Senate seat currently held by Democrat Mark Pryor. Pryor is one of the Republican's top targets in 2014.

Montana: EMILY's List President Stephanie Schriock said Tuesday that she would pass on a bid for Montana's open Senate seat next year. Democrats are still scrambling to find a candidate in the wake of the announcement by former Governor Brian Schweitzer that he would not seek the seat of retiring Senator Max Baucus (D-MT) in 2014.

North Carolina: Rep. Renee Ellmers (R-NC) announced Tuesday that she would not challenge freshman Sen. Kay Hagan (D-NC) in 2014. Republicans continue to look for a marquee challenger to Hagan in red-leaning North Carolina.


A look ahead:

The House and Senate are not in session next week.

Washington by the numbers

$12 BILLION – The amount the one-year delay of the Obamacare employer mandate will cost the federal government, according to a CBO report.

Washington humor

“Donald Trump said: ‘[Weiner] is dangerous, unstable, and disgusting. So look for him next season on Celebrity Apprentice.’” - NBC’s Jimmy Fallon

 

 Steven C. LaTourette, President | 202.559.2600

McDonald Hopkins Government Strategies LLC
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