What to Know in Washington: Tax Returns Add to Debate Battle

Donald Trump and Joe Biden kick off their first debate tonight with contentious topics like the Supreme Court and the coronavirus pandemic suddenly joined by yet another potentially explosive question — whether the president ducked paying his taxes.

Trump got elected in 2016 after boasting about paying little income tax, but Washington — and the candidates — are focused on a New York Times report that Trump paid just $750 in federal income taxes in 2016 and 2017.

For Biden, the report that Trump minimized his tax bill allows him to draw a distinction, in his words, “between Scranton and Park Avenue” — his symbols for abundant wealth and the working-class environment into which he was born in Pennsylvania.

For Trump, spokesman Hogan Gidley said, the campaign welcomes a discussion on taxes — even if it’s about the candidate avoiding paying them — so the Trump camp can highlight what it says is Biden’s plan to raise taxes once in office.

Even if Trump successfully turns the conversation to Biden’s tax plans, or winks at voters that he managed to avoid the taxes people hate to pay, a cavalier attitude may still rankle voters who are struggling to make ends meet amid staggering job losses and a virus that has kept many businesses closed.

The two nominees face off at 9 p.m. Washington time at Case Western Reserve University in Cleveland. Trump’s tax returns are not one of the planned topics, and the Commission on Presidential Debates declined to comment on whether moderator Chris Wallace of Fox News would change his lineup, which also includes racial justice, urban protests and election integrity among other issues.

If the two candidates air out their views on Trump’s tax bill, analysts say it’s unlikely to fundamentally change a race with few undecided voters and firm opinions of the two candidates with 35 days to go until the election.

“I doubt this will move the numbers because so many people have made up their minds about Donald Trump,” said Karlyn Bowman, who studies taxes and public opinion at the American Enterprise Institute. “Not only have they made up their minds about Trump, they may also have made up their minds about his taxes.”

The issue also rates well below other voter concerns like the coronavirus, the economy, and the Supreme Court. Read more from Gregory Korte, Tyler Pager and Mario Parker.

Photographer: Matthew Hatcher/Bloomberg
The debate will be held at Case Western Reserve University in Ohio.

Trump’s Refund Stuck With Little-Known Panel: The details published about Trump’s tax returns were a revelation to the public but not to a small group of attorneys who work for a little-known congressional panel. Trump has been in the middle of a dispute with the IRS over a 2010 claim of a $72.9 million tax refund, according to the New York Times. The size of the refund claim brought it before the Joint Committee on Taxation.

Whenever there is a proposed refund of more than $2 million for individuals and $5 million for corporations proposed, the committee staff reviews it before payment by the IRS. Part of the rationale for such reviews is to make sure tax laws are working the way Congress intended. In Trump’s case, the IRS initially sent an audit of the refund to the joint committee in 2011 and an agreement was reached in 2014. But an expanding audit meant that the IRS resubmitted the refund documentation for review in 2016, where it has sat unresolved since then, the Times reported. Mike Dorning has more.

Trump Gained Riches, Aura From ‘Apprentice’: Trump earned $427 million from his role on the television show “The Apprentice,” and that program’s success also projected the false image of a successful real estate mogul, which eventually helped him win the White House, according to a separate report by the New York Times. Trump earned $197 million directly from the “The Apprentice” over 16 years, plus an additional $230 million from the licensing deals, sponsorships and seminars that came with his elevated profile, according to a New York Times report that looked at more than 20 years of the President’s tax records.

The cash infusion rescued his personal finances that were struggling as losses mounted from his Atlantic City casinos. He used the proceeds from his reality television star fame to finance a shopping spree of golf resorts, but then those lost money too, the newspaper reported last night. Read more from Laura Davison.

Happening on the Hill

Democrats Release New $2.2 Trillion Stimulus: House Democrats released a scaled back $2.2 trillion proposal to extend support to the U.S. economy in face of the continuing damage from the pandemic. The proposal follows through on discussions last week to prompt a last-ditch attempt at negotiations with White House officials and break an impasse on Covid-19 relief that’s lasted since early August. Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin talked yesterday evening after the Democratic plan was released and plan to speak again today, Pelosi’s spokesman said.

While the details of the legislative text adds clarity to the talks, the top-line level of federal spending is no closer to that supported by Republicans. Trump has indicated he could support as much as $1.5 trillion in relief, still higher than the $650 billion put forth in a “skinny” aid package by Senate Republicans earlier this month. Should no deal be forthcoming, House Democrats said they’ll proceed on their own in voting on the new plan, allowing the party’s candidates in the Nov. 3 elections to highlight a recent vote on pandemic relief. Read more from Erik Wasson and Billy House.

  • In the bill, which includes more than $28 billion in payroll assistance for the airline industry, workers facing mass job losses later this week would get a six-month reprieve. The package would give $25 billion to passenger firms and $3 billion to airline contractors to cover their payrolls through to next March. Read more from Alan Levin.
  • Colleges and universities are substantially raising their requests to lawmakers for pandemic relief as the costs of containing the coronavirus and continuing classes grow. Although some colleges started the semester virtually, others brought students back and are now dealing with significant outbreaks. There have been over 130,000 Covid cases at over 1,300 schools, according to The New York Times. Read more from Andrew Kreighbaum.
  • The stimulus talks will reach a fork in the road today as both sides either quickly seal a deal or the House moves to pass a Democratic proposal and leave town for pre-election campaigning. The White House greeted last night’s proposal with silence. Its reaction will likely come in a morning call between Pelosi and Mnuchin that largely determines whether another coronavirus stimulus gets done, Erik Wasson and Billy House report.

Barrett Confirmation Fight Adds to Battle For Senate: A bruising Senate confirmation fight over Trump’s Supreme Court choice may seal the fates of several incumbent senators in the November election, though it has yet to drastically alter the odds for which party will control the chamber. Trump’s decision to nominate Judge Amy Coney Barrett to the high court with just weeks to go before Election Day has mostly hardened existing partisan lines, which favor Democrats gaining a slim Senate majority on Nov. 3.

Jessica Taylor, Senate editor of the Cook Political Report, and other analysts said that while views could shift once confirmation hearings get under way, initial signs show the basic shape of the contest for Senate control hasn’t changed. “This is still a map where Republicans remain almost entirely on defense, and Democrats have expanded their offensive opportunities,” she said. Read more from Steven T. Dennis, Laura Litvan and Emily Wilkins.

  • Barrett will begin a series of one-on-one meetings with senators today, as Trump and GOP leaders begin to execute their plan to elevate her to the Supreme Court by Election Day with only Republican support. Barrett will meet a handful of Republican senators, including Senate Majority Leader Mitch McConnell (R-Ky.) and Judiciary Committee Chairman Lindsey Graham (R-S.C.). Two senior members of the panel that will consider her nomination — Chuck Grassley (R-Iowa) and Mike Lee (R-Utah) — also announced they will have customary meetings to discuss her legal views and philosophy. Read more from Laura Litvan.

Bill Takes Aim at FAA’s Delegation to Boeing: House lawmakers introduced a bipartisan measure to reform aircraft manufacturing in the wake of the Boeing 737 Max disasters, an effort that seeks to partially undo efforts over decades to streamline aviation-industry approvals. The measure released yesterday would tighten the Federal Aviation Administration’s control of programs at Boeing and other companies that allow employees to sign off on aircraft designs and would also require an expert panel to review Boeing’s safety culture. Levin has more.

Kodak Probed for Documents Relating to U.S. Loan: Three House Democrats sent a letter to the outside directors of Eastman Kodak, seeking documents tied to the Trump administration’s $765 million government loan to the former film company to produce ingredients for generic drugs, including those to help treat Covid-19. The letter was sent by House Select Subcommittee on the Coronavirus Crisis Chairman James Clyburn (S.C.), Financial Services Chairwoman Maxine Waters (Calif.), and Oversight Chairwoman Carolyn Maloney (N.Y.), Jarrell Dillard reports.

Elections & Politics

Biden Set to Carve Tough-on-China Policy:Joe Biden is preparing to face tough questions in tonight’s debate on how he would approach China if he wins the White House this November. His team is privately acknowledging they expect the issue to be a focus during the first debate in Cleveland, according to a person familiar with their planning. Over the past week, Biden’s advisers have honed in on questions about the world’s second largest economy—anticipating attacks from Trump on the former vice president’s record of dealing with China. Read more from Jenny Leonard and Michelle Jamrisko.

Census Judge ‘Disturbed’ by Rush to Finish: An announcement yesterday that Secretary of Commerce Wilbur Ross is aiming to end U.S. Census data collection by Oct. 5 took a federal judge by surprise just days after she ordered operations to continue through Oct. 31 to get an accurate population count. It’s “breaking news,” a lawyer for the Commerce Department told U.S. District Judge Lucy Koh as a hearing was under way on a lawsuit by civil rights groups claiming that the Trump administration’s move to compress the timeline for the Census will result in an undercount of minority groups. Read more from Joel Rosenblatt.

Houston-Area GOP Sues to Limit Ballot Drop Off, Early Voting: The Harris County GOP and a pair of Republican candidates yesterday asked the state Supreme Court to curtail absentee and in-person options for Houston-area voters during the Covid-19 pandemic. The multiple drop-off locations and extending early voting are an overreach by Harris County Clerk Chris Collins and must be struck down, according to the 93-page petition that includes as plaintiffs local Republican candidate for Congress Wendell Champion and the local GOP chair. Read more from Paul Stinson.

What Else to Know Today

Trump’s Jobs Record Fell Short of Promises: When Trump ran for president, he boasted he would be the “greatest jobs president that God ever created.” Four years later, Trump heads into the November election on track to be the first U.S. leader since World War II to oversee a net loss of jobs during a four-year term. The pandemic upended the nation’s record-long expansion and triggered the sharpest recession since at least the 1940s. As a result, since Trump’s inauguration, the nation has shed a net 4.7 million positions as of August and more than 13 million people are unemployed, the rough equivalent of the combined populations of New York City, Chicago and Houston.

But even before Covid-19, Trump’s job gains were nearly keeping up with the pace during former President Barack Obama’s second term. And he was falling short of his 2016 campaign pledge to create 25 million jobs over the next decade. Read more from Reade Pickert and Catarina Saraiva.

Trump Deploys Rapid Tests in Reopening Push: Trump warned Americans to expect more coronavirus cases in the weeks ahead, as the U.S. deploys tens of millions of new, rapid tests that don’t require laboratory equipment to analyze. “As younger and healthier people return to work, and as we massively increase testing capacity, we will identify more cases in asymptomatic individuals in low-risk cases. This should not cause undue alarm,” Trump said at the White House yesterday. Kristen Brown and Justin Sink have more.

Global Deaths Reach 1 Million: Global confirmed deaths topped 1 million as major developed and emerging economies endeavor to suppress the coronavirus almost 10 months after it first emerged. The pandemic is still at its peak and unlikely to be contained in the near future, according to China’s chief epidemiologist. Read the latest developments on the virus.

Trump’s Fed Woes Worsened After Economist Rebuffed Coveted Role: In 2019, Trump had a pair of vacancies to fill on the Federal Reserve’s Board of Governors, and Marc Sumerlin, a former aide to President George W. Bush, was a candidate for one of them. For the other seat, the White House had a much more controversial choice in mind: Judy Shelton, a libertarian who had in the past promoted a return to the gold standard and questioned whether the central bank has too much power.

Sumerlin was invited to meet the president, but with a condition: he had to be prepared to accept Trump’s nomination. He declined, according to people familiar with the matter. Sumerlin told at least one administration official that he did not want to be paired with Shelton, whose nomination has since been stuck in the Senate for 15 months. Read more from Saleha Mohsin and Jennifer Jacobs.

U.S.-Led Indo-Pacific Bloc to Convene: Japan will host a meeting next week of the foreign ministers of four of the Indo-Pacific region’s biggest democracies, in the so-called Quad group seen as a counter to China’s influence in the region. The Oct. 6 forum in Tokyo will bring together Secretary of State Michael Pompeo, Japanese Foreign Minister Toshimitsu Motegi, Australian Foreign Minister Marise Payne and India’s Subrahmanyam Jaishankar to discuss issues including the coronavirus pandemic and the regional situation, Motegi told a news conference today. Read more from Isabel Reynolds and Jon Herskovitz.

No Consensus Over Land Agency Director’s Fate After Court Ruling: A federal court ruling to remove self-described “sagebrush rebel” William Perry Pendley as acting Bureau of Land Management chief is receiving mixed reviews from legal scholars. The scholars said the decision could be far-reaching, but at least one of them warned it may also be too broad. The ruling is expected to jeopardize many of the decisions Pendley made as acting bureau director, particularly including land use plans governing oil and gas development in Montana, but it’s unclear how many will be tossed out.

The U.S. District Court for the District of Montana ruled Sept. 25 that Pendley illegally served as acting land bureau director for 424 days since July 2019, violating the Federal Vacancies Reform Act. Montana Gov. Steve Bullock (D) brought the case. Read more from Bobby Magill.

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