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September 16, 2020

What to expect in Washington (September 16)

House Speaker Nancy Pelosi (D-CA) told her members yesterday (September 15) that they wouldn't leave before the election without a bipartisan agreement on additional coronavirus relief legislation, but, as a practical matter, members won't be required to be in Washington beyond October 2. Rather, they will be on notice to return if a deal materializes, as was the case during other recesses. Still, the Speaker told members, "We have to stay here until we have a bill." White House Senior Advisor Jared Kushner said on CNBC "The hope is that we'll still get to a deal. It may have to be after the election."

Democrats have been holding out for $2.2 trillion in additional relief, and yesterday dismissed a bipartisan House Problem Solvers Caucus compromise plan at $1.5 trillion, which is the level Treasury Secretary Steven Mnuchin has signaled the Administration could support. Frustration from rank-and-file members was said to boil over during the call with the Speaker. "'Rep. Abigail Spanberger (D-Va.), responded to a comment from a fellow lawmaker who said members should be following their convictions by saying: 'My conviction is to actually do my goddamn job and come up with a solution for the American people. We have to bring something to the floor,'" the Washington Post reported.

A Washington Post editorial said the Problem Solvers proposal skirts the issue of the size of the overall package "by including a mechanism that would permit its $1.5 trillion price tag either to grow by $400 billion or shrink by $200 billion, depending on how quickly public health and economic indicators improve by early 2021."

A Wall Street Journal editorial argued that there is "no reason for Mr. Trump to give a break to the swing-district Democrats who are shouting at Mrs. Pelosi to do a deal," and the President should just campaign "against the Pelosi Democrats for refusing to compromise."


President Trump was in Philadelphia — and tweeted a picture of himself with a regional delicacy cheesesteak sub — to participate in an ABC News town hall during which he said, "We're very close to having a vaccine" and "we're within weeks of getting it." The President won Pennsylvania by less than a percentage point in 2016 and it is one of the main battleground states in this year's election. Reflecting Republican reluctance to provide additional state and local funding, the President asserted that Democratic-led states like New York and Illinois are poorly run. He also continued to warn of the economic stakes in the election: "If Joe Biden ever got in, I think you'd have a depression the likes of which we have never seen in this country. If you look at his policies, where he wants to raise everybody's taxes … ."

The Washington Post reported another economic angle to the election: "Investors have a new worry when it comes to the election: That the outcome may remain unknown for weeks. It's a departure from investors' usual handicapping of which candidate would better serve the stock market and broader economy. But the challenges of voting amid the pandemic — including the expectation that millions could rely on mail-in ballots, which President Trump has roundly bashed — are making the possibility Election Day might turn into election weeks or even months more likely."

Democratic nominee Joe Biden was in Florida and, reflecting an imperative of his campaigning there, said, "more than any other time, the Hispanic community, Latino community holds in their palm of their hand, the destiny of this country." He told reporters the case he would make to voters there would involve some of the priorities that would be paid for with tax increases: "education, healthcare, immigration, the whole notion of dealing with Covid in a way that doesn't so damage the Hispanic community, which is hurt very badly," Biden said, as reported by the Wall Street Journal.

New CNN battleground polls released yesterday said among likely voters in North Carolina, 49% support Biden, 46% Trump; in Wisconsin, likely voters are 52% for Biden to 42% for Trump.


During a press conference hosted by House Republicans on their fall agenda, "Commitment to America," House Ways and Means Committee Ranking Member Kevin Brady (R-TX) said, "We'll make the GOP tax cuts permanent, because the proven way to rebuild local economies is to let families and businesses keep more of what they work so hard to earn. We'll guarantee moms can keep their $2,000 a child tax credit. We'll make sure Opportunity Zones keep driving hope and investment into America's poorest neighborhoods."

Revisiting the President's payroll tax deferral, the Government Accountability Office (GAO) confirmed that IRS Notice 2020-65 was submitted under the Congressional Review Act (CRA) and is automatically treated as a rule. Senate Democratic leader Chuck Schumer (D-NY) and Finance Committee Ranking Member Ron Wyden (D-OR) had called on the GAO September 2 to determine whether the guidance is subject to the CRA, which could eventually compel a Senate vote of disapproval of the action.


Yesterday in trade, the U.S. Trade Representative:

  • announced it would drop the 10% tariff imposed in August on imports of Canadian aluminum
  • criticized a World Trade Organization (WTO) panel report "that stated that actions taken by the U.S. to combat China's widespread and damaging theft of American technology and intellectual property were inconsistent with WTO rules"

Senate Finance Committee Chairman Chuck Grassley (R-IA) said in response: "I'm glad tariffs will not be re-imposed on Canadian aluminum. It's ridiculous to think that aluminum imports from our Canadian friends present a national security concern. The problem isn't Canada; it's China, whose massive subsidies have distorted the international marketplace for aluminum."


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For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
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