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House, Senate pass Inflation Reduction Act

We often say that Congress has two speeds: molasses-slow and lightning-fast. The Senate voted along party lines, 51-50, to approve the Inflation Reduction Act, a reconciliation package that includes major changes to federal laws governing health care spending, energy security, climate change, and the taxation of corporations and the wealthiest Americans. The House returned from its August recess and approved the bill by a vote of 220 to 207, also along party lines. President Biden, who had urged the House to pass the Senate’s bill “as soon as possible,” has said he looks forward to signing it into law.

So what does this bill do?

It makes major changes in tax policy:

  • Imposes a 15% corporate minimum tax on the wealthiest corporations, aligning U.S. tax policy with the OECD’s global minimum standard. The minimum would apply to corporations whose annual income averages more than $1 billion over a three-year period.
  • Levies a 1% excise tax on stock buybacks
  • Appropriates almost $80 billion to support IRS operations, enforcement, and technology modernization, which the Congressional Budget Office estimates will produce about $203.7 billion in additional taxes collected

It makes massive investments in energy efficiency and other initiatives to fight climate change:

Invests approximately $370 billion in programs to address climate change, with the goal of reducing carbon emissions by roughly 40% by 2030. These programs include:

o Consumer home energy rebates and tax credits for improvements to energy efficiency

o Tax credits to lower/middle-income drivers to buy used and new clean vehicles

o $60 billion in incentives for clean energy manufacturing

o Loans and loan guarantees for energy infrastructure

o $3 billion in Environmental and Climate Justice Block Grants to help communities disproportionately harmed by pollution and climate change

o $3 billion in Neighborhood Access and Equity Grants to support equity, safety, and affordable transportation access for communities divided by infrastructure barriers

o $3 billion for grants to support the purchase and installation of zero-emission equipment and technology at ports

o Clean energy tax credits

o $2.6 billion for grants to conserve and restore coastal habitats

o Consumer home energy rebates and tax credits for improvements to energy efficiency

o Tax credits to lower/middle-income drivers to buy used and new clean vehicles

o $60 billion in incentives for clean energy manufacturing

o Loans and loan guarantees for energy infrastructure

o $3 billion in Environmental and Climate Justice Block Grants to help communities disproportionately harmed by pollution and climate change

o $3 billion in Neighborhood Access and Equity Grants to support equity, safety, and affordable transportation access for communities divided by infrastructure barriers

o $3 billion for grants to support the purchase and installation of zero-emission equipment and technology at ports

o Clean energy tax credits

o $2.6 billion for grants to conserve and restore coastal habitats

In a , Secretary of the Treasury Janet Yellen specified that the IRS’s new funding should not be used to increase audit rates for small businesses or households earning less than $400,000 a year. “Instead, enforcement resources will focus on high-end noncompliance.”

CFTC, SEC jointly propose amendments to private fund reporting

Last week the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) jointly proposed , the confidential reporting form for certain investment advisers to private funds. The proposed amendments would require additional basic information about advisers and the private funds they advise, additional information from large hedge fund advisers about a wide range of risk exposures, and additional information from hedge funds about their investment strategies and counterparty exposures. The proposal will be open for comment for 60 days.

CFPB issues interpretive rule for digital marketers

The Consumer Financial Protection Bureau (CFPB) considers digital marketing providers for financial firms to be “service providers” for the purposes of federal consumer financial protection law and issued an to clarify how those laws apply. The rule says that digital marketers are not simply providing ad space and time to their financial firm clients but “are typically materially involved in the development of content strategy when they identify or select prospective customers or select or place content.” Therefore, the CFPB, states, and other consumer protection enforcers can sue these businesses for unfair, deceptive, or abusive acts or practices. The rule is effective immediately upon its publication in the Federal Register.

OCC announces virtual Innovation Office Hours

On September 28 and 29, The Office of the Comptroller of the Currency (OCC)’s Office of Innovation will host virtual meetings with interested parties to talk about financial technology, new products and services, partnering with banks and fintech companies, and other matters “related to responsible innovations in financial services.” Each meeting will last no longer than an hour, and anyone interested should by August 26. The OCC says it will hold at least one more of these virtual Office Hours events before the end of the year.

Treasury, White House encourage use of SLFRF money for affordable housing

In , the Treasury Department said that the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) offered state, local, and tribal governments “a once in a generation opportunity . . . to boost the supply of affordable housing.” A White House webinar this week provided additional encouragement and guidance, affirming that affordable housing is an eligible use of these funds under the authorized category of “Public Health and Economic Response.” States and localities are layering SLFRF with other funding programs, including LIHTC projects, FHA multi-family mortgage units, HOME and Housing Trust Fund projects, HOME-ARP, project-based vouchers (PBVs), HUD’s Rental Assistance Demonstration projects, Community Development Block Grants, and the Section 108 Loan Guarantee program. Treasury recently published a set of answers to about the SLFRF final rule, which took effect on April 1.


Confirmations, Nominations, Departures


The Securities and Exchange Commission (SEC) named Lori H. Price as Director of its Office of Credit Ratings. She has held the position on an acting basis since February.


The Week Ahead in Washington


Both the Senate and the House are in recess for the rest of the month. The Senate will reconvene on September 6, while the House is scheduled to return to Washington on September 13. The Golden Applewill take a break, too, and will return on September 9.


The Ellis Insight
Jim Ellis on Political News


Primary Results

Connecticut: Former Trump ambassadorial appointee Leora Levy, though she failed to win Senate confirmation, easily won the Republican Senate nomination in Connecticut. Ms. Levy defeated former state House Minority Leader Themis Klarides by a significant 51-40% share of the statewide vote. She now advances to challenge Sen. Richard Blumenthal (D) who is seeking a third term.

Minnesota: Minnesota former state Rep. Brad Finstad (R) appears to have won the open 1st District special congressional election left vacant when Rep. Jim Hagedorn (R) passed away in mid-February. Mr. Finstad defeated former Hormel corporation CEO Jeffrey Ettinger (D) 51-47% with all counties reporting and 99% of the expected vote tabulated.

Mr. Finstad’s vote margin was 4,774 votes. The currently recorded turnout of 118,018 votes is high for a special election. Mr. Finstad carried 16 of the district’s 21 southern Minnesota counties.

Mr. Finstad also easily won the regular Republican primary in the 1st District after state Rep. Jeremy Munson (R-Crystal Lake) made a run at the nomination despite losing the special election primary back in late May. Following suit on the Democratic side, Mr. Ettinger was a big winner in the regular primary, so the two will again do battle in the regular term for a House seat that has been trending more Republican in recent years.

In the 5th District, suggestions that former Minneapolis City Councilman Don Samuels could give two-term controversial Rep. Ilhan Omar (D-Minneapolis) a highly competitive battle proved correct. Rep. Omar was renominated in a 50-48% squeaker over Mr. Samuels, thus guaranteeing her another term in the November election.

Vermont: Vermont Gov. Phil Scott was a 69% winner in his state’s Republican primary. As expected, the Vermont Democratic open Senate primary resulted in a landslide 87%+ victory for at-large Congressman Peter Welch (D-Norwich). He automatically becomes a prohibitive favorite against the new Republican nominee Gerald Malloy, a retired Army officer.

With Rep. Welch running for the state’s open Senate seat, now in strong position to succeed the retiring Sen. Patrick Leahy (D), the open al-large House seat will go to the Democratic primary winner, state Senate President Pro Tempore Becca Balint (D-Burlington). Her 60%+ primary win puts her in position to score a landslide general election victory in November.

Wisconsin: Wisconsin Democratic voters confirmed that Lt. Gov. Mandela Barnes will be their candidate to oppose Sen. Ron Johnson (R). With his three major opponents dropping out of the race within the past two weeks and all endorsing Mr. Barnes as a show of party unity, the Lt. Governor captured 77%+ of the Democratic primary vote. Sen. Johnson topped 83% in the Republican primary.

Finally, the lone competitive Wisconsin House primary also resulted as expected. State Sen. Brad Pfaff (D-La Crosse) recorded a 39% plurality victory over three opponents to win his party’s nomination for the open 3rd District House seat of retiring Rep. Ron Kind (D-La Crosse). Sen. Pfaff earned Rep. Kind’s pre-primary endorsement as his successor.

Republican Derrick Van Orden, a retired Navy SEAL who held Rep. Kind to a tight 51-49% re-election win in 2020, returns in another attempt to capture the seat. Mr. Van Orden was unopposed in last Tuesday’s election. Winning this seat in November becomes a must for Republican House majority prospects in the Autumn.


Florida: Rep. Val Demings (D-Orlando) is brandishing a new poll that finds she and Sen. Marco Rubio (R) tied at 45% apiece. This is only the second poll of the ten released this year that does not project the Senator as the race leader. The Clarity Campaigns survey (7/26-31) conducted an online survey of 2,244 registered voters from a pre-selected panel. Since 2016, pollsters have typically underestimated Republican strength in Florida, so it is reasonable to add a couple of percentage points for the Republican candidate in a typical Sunshine State poll.

North Carolina: Blueprint Polling released a new North Carolina US Senate poll (8/4-6; 656 NC registered voters; live interview) that projects former state Supreme Court Chief Justice Cheri Beasley (D) to be holding a 46-42% edge over US Rep. Ted Budd (R-Advance). A Republican being down in a North Carolina poll is nothing new, however. In 2020, GOP Sen. Thom Tillis found himself outside the lead in 26 of 28 October public polls but won the race by two percentage points.

Ohio: Riding a major campaign spending wave, thus taking advantage of his abundant campaign war chest, US Rep. Tim Ryan (D-Warren/Youngstown) again sees a developing lead in his race against Republican nominee and author J.D. Vance. The just released Impact Research survey (7/21-28; 800 OH likely general election voters) projects Mr. Ryan as holding a 48-45% edge in the race for the open Ohio Senate seat. Last month, the same firm also found Mr. Ryan holding an almost identical lead at 48-45%.

The Ryan campaign has spent over $6.5 million on the airwaves since the end of May according to the Politico news publication, with virtually no counter media push from the Vance forces. Though Rep. Ryan has had the field virtually to himself in the early going, he still does not expand beyond the polling margin of error. When Vance does counter, we are likely to see a Republican rebound here.


NY-12: Emerson College tested the upcoming Democratic paired incumbent primary between Reps. Carolyn Maloney (D-Manhattan) and Jerrold Nadler (D-Manhattan). The survey (8/1-2; 1,000 NY-12 likely Democratic primary voters; live interview, text & interactive voice response system) finds Rep. Nadler, largely with the overwhelming support of men, leading Rep. Maloney 40-31%, with the third candidate, businessman and former congressional candidate Suraj Patel attracting 11% support.

The Patel outside support forces countered with a Slingshot Strategies survey that posted Rep. Nadler to only a 29-27-20% edge over Rep. Maloney and Mr. Patel. The New York congressional primary is scheduled for August 23rd.

California: RGM Research conducted polls in House districts throughout the country including three in northern California contested districts. All three are in close competition at this point. All of the polls consisted of 400 respondents in each district. The CA-9 poll was conducted during the July 19-26 period.

In the Stockton anchored district, Rep. Josh Harder (D-Turlock) and San Joaquin County Supervisor Tom Patti (R) are tied at 38%. In the new open 13th CD that stretches from Sacramento to Fresno, the survey was conducted during the July 26 – August 2nd period, rancher John Duarte (R) and state Assemblyman Adam Gray (D-Merced) are tied at 37%.

In Rep. David Valadao’s (R-Hanford) 22nd CD, the poll (7/30-8/5) sees state Assemblyman Rudy Salas (D-Bakersfield) leading the Congressman, 39-34%.

IN-2: Gov. Eric Holcomb (R), as expected, announced that the special election to replace the late Rep. Jackie Walorski (R-Elkhart) will be held concurrently with the November 8th general election. Republicans will gather in a precinct committee convention on August 20th to choose a nominee for the special election, and a replacement for Ms. Walorski, who won the May Republican primary, in the regular election. Democrats are expected to nominate the party’s regular election nominee, educator Paul Steury.

WY-AL: The University of Wyoming Survey & Analysis Center conducted a poll of Tuesday’s Republican congressional primary (7/25-8/6; 562 WY-AL likely Republican primary voters; live interview) and sees GOP attorney Harriet Hageman leading US Rep. Liz Cheney (R-Wilson/ Jackson) by a whopping 57-28% count as the candidates wrap up their final campaign activities.

Remembering that Wyoming has an open primary where Democrats and Independents can vote in a Republican primary (and vice-versa), Ms. Cheney’s numbers among self-identified Republican voters are even worse, 68-15%, in favor of Ms. Hageman. Rep. Cheney gets 98% of the crossover Democratic vote, however, while the Independents are split about evenly with the incumbent leading 43-40% within this voter segment.

Incumbents: The RMG Research firm is polling around the country and found an additional four races where the incumbent House member is trailing. This, in addition to Rep. David Valadao (R-CA) falling behind in his Fresno/Bakersfield seat as covered in the California section above.

In Iowa, state Sen. Zach Nunn (R-Bondurant) holds a substantial 49-41% advantage over Rep. Cindy Axne (D-Des Moines) according to 400 respondents on the RMG survey conducted over the July 29 – Aug 5 period. Former New Jersey state Senator and 2020 Republican congressional nominee Tom Kean, Jr. leads Rep. Tom Malinowski (D-Rocky Hill) 46-38% on the 400-person sample RMG Research survey conducted in the Garden State’s 7th CD (7/23-28).

Moving to the Kansas City, KS area, challenger Amanda Adkins, the 2020 Republican congressional nominee holds a 46-45% edge over Rep. Sharice Davids (D-Roeland Park). This RMG poll also surveyed 400 likely voters but over the period of July 21-28. Finally, in the Las Vegas area, the RMG poll for Nevada’s 3rd District (7/23-29; 400 NV-3 likely general election voters) finds challenger April Becker (R) holding a 44-41% lead over two-term Rep. Susie Lee (D-Las Vegas).


Oklahoma: The Democratic online polling firm Change Research released their latest Oklahoma Governor’s survey (7/22-26; 2,079 OK likely general election voters; online) and sees Gov. Kevin Stitt (R) in a tighter battle than expected against OK Superintendent of Public Instruction Joy Hofmeister (D). The ballot test projects the Governor to be holding only a 42-34% advantage.

The main reason for Stitt’s downturn apparently relates to his falling job approval rating. According to the Change numbers, the Governor’s favorability index has slid to 42:56% favorable to unfavorable. It is probable, however, that the Governor will be able to rebound and score a convincing win in November. It is difficult to predict a deep red state like Oklahoma going Democratic in what appears to be at least a relatively strong Republican election year.