What to Know in Washington: Pelosi-Mnuchin Stimulus Talks Start

Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi (D-Calif.) will kick off a first round of negotiations on the next virus relief plan even as Republicans are still hashing out an agreement among themselves.

With the pandemic surging across the country and economic data pointing to a stalled recovery, Pelosi and Mnuchin are scheduled to meet this afternoon, along with Senate Minority Leader Chuck Schumer (D-N.Y.) and White House Chief of Staff Mark Meadows.

Mnuchin and Meadows will meet earlier today with Senate Republicans, where the administration may face pushback from GOP lawmakers as they go over their ideas for getting schools reopened and businesses hiring.

The White House and Congress have only a few weeks to come up with another stimulus to prevent the economic rout caused by the coronavirus from deepening. The $2.9 trillion flood of federal money that’s been supporting the economy is about to start drying up while unemployment remains at levels not seen since the Great Depression.

The focus of the next phase of relief will be “kids and jobs and vaccines,” Mnuchin told reporters at the White House yesterday. Along with money still untapped from earlier rounds of stimulus, Republicans are “starting with another trillion dollars. We think that will make a big impact,” he said.

Senate Majority Leader Mitch McConnell (R-Ky.) said at the Capitol that Republicans will offer a “starting point” for talks on the stimulus with Democrats “hopefully as early as this week.” In addition to reaching an agreement with Democrats, who’ve proposed a $3.5 trillion stimulus, he will have to overcome some divisions within his party on what to include. Read more from Laura Litvan and Erik Wasson.

Economists Say $1 Trillion or More Needed: Economists are warning the nation is in danger of careening off a fiscal cliff unless Congress approves a rescue package to succeed the $2 trillion Cares Act. Key elements of that are set to expire this month, just as a resurgence of the virus in states that rushed to reopen their economies is making the nascent recovery look vulnerable. The Trump administration is calling on Republicans and Democrats to get legislation passed before the start of the summer recess in August.

A growing body of research shows the $3 trillion approved by Congress since March played an enormous role in preventing the economy from sinking into a depression. Most important, the Cares Act sent direct payments of $1,200 to low- and middle-income households, plus more to those with children, and topped up unemployment benefits by $600 a week. Income for some families increased, and they spent most of the money, providing the overall economy with desperately needed relief.

“It was definitely a godsend,” says David Beckworth, a senior research fellow at the Mercator Center at George Mason University, a group that champions free-market economic theory. “Nothing’s perfect, but in the absence of that we would now be very much worse off.” Read more from Christopher Condon and Erik Wasson.

Also Happening on the Hill

Shelton Nears Senate Panel Vote: Judy Shelton, Trump’s controversial pick to join the Federal Reserve’s Board of Governors, is heading for a vote before the Senate Banking Committee today without the confirmed support of a majority of the panel. Shelton, a former gold-standard advocate turned policy dove, as well as fellow nominee Christopher Waller, director of research at the St. Louis Fed, will finally receive their committee votes over five months after appearing before the panel to answer questions. Read more from Christopher Condon.

Vought Confirmed as Trump’s Budget Director: The Senate voted along party lines to confirm Russell Vought as Trump‘s budget director, a position he’s held in an acting capacity since January 2019. Democrats on the Senate’s Budget and Governmental Affairs committees were united in their opposition to Vought, in part due to the Office of Management and Budget’s role in the Ukraine funding scandal that ultimately led to the Trump impeachment saga. The Government Accountability Office found that OMB under Vought violated the Impoundment Control Act by temporarily withholding foreign aid to Ukraine, an action Vought said was legal.

Trump added fresh controversy to Vought’s nomination for OMB’s top post by tagging him in a tweet in May in which Trump threatened to “hold up funds” to Nevada due to the state’s plan to conduct its primary elections by mail. Read more from Cheryl Bolen and Jack Fitzpatrick.

House Backs Changes to Insurrection Act: The president and the Department of Defense would be required to certify to Congress that a state is not able or is unwilling to suppress unrest before active duty military forces can be deployed, under an amendment adopted 215 to 190 by the House as part of its fiscal 2021 national defense authorization measure. Trump has threatened to send military forces into cities to subdue national protests over racism under the Insurrection Act of 1807, but didn’t ultimately invoke the law, Roxana Tiron reports.

The House will complete consideration of the measure today, while the Senate continues consideration of its version of the defense legislation. Catch up on the latest in today’s BGOV Defense Briefing.

Senators Offer Bill Opposing Russia in G-7: Senate Democrats led by Minority Whip Dick Durbin (D-Ill.) are proposing a resolution opposing Russia’s inclusion in the Group of Seven, according to a statement. The resolution would state the Senate’s position that it opposes Russia from being readmitted “unless it ceases its malign actions against Ukraine, our allies, and the U.S.,” Durbin said in a statement. Trump has showed a willingness to reinvolve President Vladimir Putin into summits like the G-7, Elizabeth Elkin reports.

Microsoft President Raised Apple Issues to Panel: Microsoft President Brad Smith raised concerns to lawmakers about what the company regards as Apple’s anti-competitive behavior around its app store, according to a person familiar with the matter. Smith, who is also chief legal officer, was invited by the House’s antitrust subcommittee to share his experiences around Microsoft’s own antitrust battle with the U.S. government in the late 1990s. During the conversation, which occurred weeks ago, he discussed the company’s issue with Apple, said the person, who asked not to be identified because the discussion was private. The House Judiciary Antitrust Subcommittee will hold a hearing with the CEOs of Apple, Amazon, Facebook and Google-parent Alphabet on July 27. Read more from Dina Bass.

Lobbying & Influence

Brownstein Tops Akin Gump as Lobbying Leader: Guiding clients through new programs created to address the coronavirus crisis propelled law and lobbying firm Brownstein Hyatt Farber Schreck over Akin Gump Strauss Hauer & Feld as Washington’s top-earning lobbying shop in the second quarter of this year.

Brownstein disclosed its highest quarterly lobbying receipts ever, taking in nearly $13 million from the period, which runs from April through June. That was a 15% spike over the first three months of 2020. The firm reported $10.1 million in lobbying revenue during 2019’s second quarter. Lobbying disclosure filings to Congress for the second quarter wee due by the end of yesterday.

“Helping convey to members of Congress and the administration the points of view about where a program is not fulfilling the needs of various companies is part of the reason why we continue to grow,” said Marc Lampkin, the managing partner of Brownstein’s Washington office, touting the bipartisan team the firm has been building. Clients are also paying close attention to the Trump administration’s executive actions, such as those on China and pharmaceuticals, Lampkin said.

Akin Gump, which had been K Street’s top earner since 2014, brought in $12.4 million in lobbying fees during the second quarter, a slight drop from the previous three months, but a 20% jump from the $10.2 million it earned during the same period last year. Read more from Megan R. Wilson.

Pharma Firms Boost Lobbying: Several drugmakers bolstered their federal lobbying in the second quarter of the year as the coronavirus pandemic created an urgent and potentially lucrative race for medicines, vaccine research and new tests. Gilead Sciences reported $1.26 million in lobbying spending in the three months ending June 30, according to disclosures. That was up 17% from a year ago and came as U.S. officials in May issued an emergency use authorization for Gilead’s remdesivir as a treatment for Covid-19 after a trial found it sped recovery by about four days in hospitalized patients. Read more from Charlie McGee and Ben Brody.

TikTok Parent Spends Record on Lobbying: The Chinese owner of the popular TikTok video app spent a company record on federal lobbying in the second quarter as it fought allegations that it’s funneling Americans’ data to Beijing, according to lobbying disclosures. Beijing-based ByteDance spent $500,000 in the three months ended June 30, up from its previous record of $300,000 in the first quarter, according to the company’s disclosure.

TikTok is responding to an onslaught of pressure from U.S. politicians over its Chinese roots — tension that has escalated in the third quarter, including calls by Trump to consider banning the app entirely and proposed legislation to disallow downloads on government-issued mobile devices. Read more from Shelly Banjo and Ben Brody.

Elections & Politics

Biden’s $775 Billion Plan Funded by Real Estate Taxes: Joe Biden today unveiled a $775 billion plan to bolster child care and care for the elderly that would be financed by taxes on real estate investors with incomes of more than $400,000 as well as increased tax compliance by high-income earners. The Biden campaign did not fully explain how the plan for a “caring economy” would be financed, but officials highlighted some tax breaks they would seek to eliminate to raise revenue.

In particular, a senior campaign official said a Biden administration would take aim at so-called like-kind exchanges, which allow investors to defer paying taxes on the sale of commercial real estate if the capital gains are reinvested in another property. The official also said they would prevent investors from using real estate losses to lower their income tax bills. Biden is scheduled to deliver a speech on the policies this afternoon in New Castle, Del. Read more from Tyler Pager.

Trump Aims to Push Biden Into Gaffe: Trump’s struggling campaign is increasingly pinning his re-election on the claim that Biden is mentally unfit for the job — and is looking toward the presidential debates as an opportunity to goad the 78-year-old Democratic nominee into a gaffe that will sink his rising poll numbers. Biden is enjoying front-runner status but has accomplished that largely with a highly scripted campaign. Although the coronavirus pandemic has ended the informal glad-handing with voters and parrying with reporters that Biden relishes, it has also protected him from his own famously runaway tongue.The Trump campaign says more debates would put Biden’s age on display. Read more from Gregory Korte.

Biden Teases Veep List: Biden is still considering four Black women to be his running mate but would not pledge to select one of them over other women on his list. “I am not committed to committing any but the people I’ve named and among them are four Black women,” the Democratic nominee said yesterday on MSNBC.

Biden resisted efforts to name the Black women, though Sen. Kamala Harris (D-Calif.), former National Security Adviser Susan Rice, Rep. Val Demings (D-Fla.) and Rep. Karen Bass (D-Calif.) are most likely to be on the list. Others still in consideration include Sen. Elizabeth Warren (D-Mass.), Sen. Tammy Duckworth (D-Ill.) and Gov. Michelle Lujan Grisham. Read more form Ryan Teague Beckwith.

What Else to Know Today

Trump’s Sudden Push for Mask-Wearing: Trump’s administration yesterday pushed to encourage mask-wearing, explicitly endorsing a measure widely seen as crucial to stemming the coronavirus pandemic, and potentially quelling a bitter debate that experts say costs lives. The president, who for months resisted covering his face in public, tweeted that “it is Patriotic to wear a face mask when you can’t socially distance.” And Vice President Mike Pence told governors in a teleconference that he supported their mask mandates, with the administration even sending a memorandum to New Jersey recommending that it continue its order. The reversal followed polls that showed Trump’s refusal to champion masks was out of step with citizens terrified by rising case counts nationwide.

It also comes as Republican governors, facing outbreaks spiraling beyond control, begin to break with Trump on the issue. Texas Gov. Greg Abbott (R) last week cast masks as key to ensuring the state wouldn’t need to shut down its economy a second time, though he resisted ordering their use. Mississippi Gov. Tate Reeves (R) yesterday required residents of 23 hard-hit counties to start wearing masks. Read more from David R. Baker and Margaret Newkirk.

  • Trump will hold a press conference at 5 p.m. today.

Fauci to Throw Out First Pitch: The Washington Nationals said Anthony Fauci will throw out the ceremonial first pitch on opening day for the reigning World Series champions. Fauci, the top U.S. infectious disease official, made sports headlines in June when he said it would be “very hard to see how football is able to be played this fall.” That brought criticism from Trump, and later Fauci tried to walk back his comments. Read more from Brandon Kochkodin.

Portland Surge Stokes Tensions: Trump is escalating tensions with state and local authorities by seeking to deploy more federal agents into cities gripped by protests and spikes in crime, a policy that appeals to his base ahead of the election but faces legal challenges. Twice in recent days, Trump has said he wants more federal law enforcement officers sent to cities such as Chicago and New York following the dispatch of Department of Homeland Security personnel to Portland, Ore., to protect federal property. In Portland, pitched battles have erupted between federal agents and protesters, prompting state officials to sue the Trump administration — yet the president remained undeterred. Read more from Chris Strohm and Josh Wingrove.

Lockheed in Talks to Pay DOD for Flawed F-35: Lockheed Martin has agreed to compensate the Pentagon over parts it provided for the F-35 jet that weren’t ready to install and is in discussions with the Department of Defense over how that reimbursement would be paid. The nation’s No. 1 defense contractor and Pentagon contracting officers “are now negotiating appropriate consideration for parts delivered incomplete” and hammering out the amount of refunds or equivalent services the company should provide, the Pentagon’s F-35 program office said in a statement. Read more from Tony Capaccio.

Security Review Sought for China, Russia A.I. Support: The U.S. government should require national security reviews of countries like China and Russia that invest in U.S. development of sensitive technology such as artificial intelligence, according to a federal advisory panel. The race to develop A.I. is “a competition in values,” Robert Work, vice chairman of the National Security Commission on Artificial Intelligence, said at a meeting yesterday where the panel released the recommendations. Read more from Andrea Vittorio.

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Loren Duggan at lduggan@bgov.com; Michaela Ross at mross@bgov.com