Adam S. Olsen- Washington, D.C.
April 23, 2021

The House and Senate are both out today.  The Senate will reconvene on Monday, however the House will be in committee work weeks the next two weeks and will reconvene for votes on Tuesday, May 11th.

After President Joe Biden kicked off the first day of his climate change summit yesterday by declaring that the United States would cut its global warming emissions at least in half by the end of the decade, day two of the virtual gathering on Friday is focusing on how the United States and other nations can meet their targets and ramp up renewable energy development to keep pace with other nations.  This morning, Benjamin Netanyahu, the prime minister of Israel, announced that his country would end the use of coal domestically. On Thursday, South Korea said that it would stop overseas finance for any coal development, and China vowed to “strictly limit” coal as it aims to peak emissions by 2030.    A report published by the Biden administration on Friday made the case that a failure to adopt clean energy technologies and reduce carbon emissions will contribute to rising economic costs, and warns that the United States has fallen behind in its efforts to develop strategies to combat the effects of climate change.  The report, published by President Biden’s Council of Economic Advisers, comes as his administration made a promise to cut emissions in half by the end of the decade. It compares the investments the United States made in technological innovations to the amount of money the government spent to send astronauts to the moon in the 1960s — 0.6 percent of gross domestic product was dedicated to research in 2017, compared with 1.9 percent during the buildup to the moon landing in 1964.  The United States, the report said, has also fallen behind its biggest global competitors in efforts to develop technologies that could reduce the effects of climate change. Citing data from Bloomberg, the report lays out a few bleak comparisons: China has dominated market share across clean technology sectors, from battery cell manufacturing to wind turbines. The effect, the report said, could “mean growing dependence upon more intrepid countries.”

FACT SHEET: President Biden’s Leaders Summit on Climate

FACT SHEET: Biden Administration Outlines Key Resources to Invest in Coal and Power Plant Community Economic Revitalization

Leaders’ Summit on Climate: Schedule

Next week, the president will lay out the full proposal of the American Family Plan.  President Biden will seek new taxes on the rich, including a near doubling of the capital gains tax for people earning more than $1 million a year, to pay for the next phase in his $4 trillion plan to reshape the American economy.  Mr. Biden will also propose raising the top marginal income tax rate to 39.6 percent from 37 percent, the level it was cut to by President Donald J. Trump’s tax overhaul in 2017. The proposals are in line with Mr. Biden’s campaign promises to raise taxes on the wealthy but not on households earning less than $400,000.  Although the capital gains tax rate for those earning $1 million or more, will rise to 39.6%, only about 0.32% of American taxpayers reported adjusted gross income of more than $1 million and capital gains or losses on their returns, according to Internal Revenue Service tax return data from 2018.  Of note, those earning $1 million or more, the new top rate, coupled with an existing surtax on investment income, means that federal tax rates for wealthy investors could be as high as 43.4%. The new marginal 39.6% rate would be an increase from the current base rate of 20%,

The plan will set up a clash with Republicans and test how far Democrats in Congress want to go to rebalance an economy that has disproportionately benefited high-income Americans.  Mr. Biden’s advisers are eyeing a wide range of possibilities for how to move the president’s economic agenda through Congress. They are holding out hope of reaching bipartisan agreement on at least some provisions, while preparing to bypass a Republican filibuster and pass much of the tax and spending agenda on a party-line vote using the parliamentary process known as budget reconciliation.

Adam S. Olsen, Washington, D.C.