Happy Tuesday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Senate GOP faces post-Trump spending brawl: Republicans are bracing for a fierce fight over spending as the party tries to figure out its post-Trump identity.
GOP senators this week will wade into two major sources of division in the conference: whether to nix an earmark ban, one of the few remaining vestiges of the Tea Party years, and whether to adopt a caucus rule that endorses offsetting any increase in the debt ceiling with spending cuts.
- The looming standoff comes after Republicans embraced big budgets under former President Trump, who supported getting rid of the debt ceiling, and urged GOP lawmakers to go bigger in the final round of coronavirus relief passed while he was in office.
- Senate Republicans have also become increasingly marginalized on spending with Democrats poised to revive earmarks and House Republicans, in a surprise move, lifting their own ban this year.
Sen. John Thune (S.D.), the No. 2 Senate Republican, said he had “no clue” how this week’s debate will play out given the divided caucus. The Hill’s Jordain Carney breaks it down here.
The fault lines: The Senate GOP fight is politically complicated, and the result could signal where the party and the caucus are going, particularly if they win back one or both chambers next year.
- On one side is a cadre of the party’s 2024 White House contenders, such as Republican Sens. Ted Cruz (Texas), Josh Hawley (Mo.), Rand Paul (Ky.) and Marco Rubio (Fla.), who are all opposed to lifting the earmark ban. Another potential White House contender, Sen. Ben Sasse (R-Neb.), led the charge in 2019 to get the permanent ban included in the caucus rules.
- On the other is some of the most senior members of the caucus: Republicans on the powerful Appropriations Committee and perhaps Trump himself.
LEADING THE DAY
Senate confirms SEC chief Gensler to full five-year term: The Senate on Tuesday voted to approve Securities and Exchange Commission (SEC) Chairman Gary Gensler for a full five-year term after confirming him to the Wall Street watchdog last week.
- Senators voted 54 to 45 for Gensler to serve as a commissioner and chairman of the SEC through June 5, 2026.
- The Senate last week confirmed Gensler to serve the remaining two months of former SEC Chairman Jay Clayton’s term by a nearly identical margin.
Gensler, who was sworn in to the SEC on Sunday, was a professor at the MIT Sloan School of Management before joining the commission. He was also the chairman of the Commodity Futures Trading Commission (CFTC) during the Obama administration, a Treasury Department undersecretary during the Clinton administration and a partner at Goldman Sachs for almost two decades.
Left-leaning group: SALT cap repeal would worsen racial income disparities: Repealing the cap on the state and local tax (SALT) deduction would exacerbate racial income and wealth disparities, according to an analysis released Tuesday from the left-leaning Institute on Taxation and Economic Policy (ITEP).
The think tank’s report comes as a growing number of Democratic lawmakers are pushing for the SALT cap to be repealed in forthcoming infrastructure legislation.
The background:
- Republicans’ 2017 tax law capped the SALT deduction at $10,000 in an effort to help offset the cost of tax cuts in the measure.
- A number of lawmakers on both sides of the aisle from high-tax states such as New York, New Jersey, California and Illinois oppose the cap, arguing that it hurts their residents and their states.
“Repealing the SALT cap would worsen the racial income and wealth divides by primarily benefiting wealthy white households,” ITEP wrote in its report. “It would also likely crowd out other, much more progressive policies and programs from the upcoming infrastructure package while doing comparatively little to encourage progressive revenue raising at the state and local levels.”
The Hill’s Naomi Jagoda explains here.
ON TAP TOMORROW: The Senate Commerce Committee holds a hearing on the nomination of Lina Khan to serve as a commissioner of the Federal Trade Commission at 10 a.m.
GOOD TO KNOW
- Entertainment industry leaders are calling on Congress and President Biden to broaden the definition of infrastructure to include the arts.
- The House passed a bill on Monday that would allow banks and financial institutions to work with cannabis businesses.
- Republicans say President Biden’s $2.3 trillion infrastructure package will have a tough time getting through the Senate intact because of several key provisions that will open the legislation up to parliamentary challenges under the arcane Byrd Rule.
ODDS AND ENDS
- A Geico data breach that lasted over a month earlier this year exposed customers’ driver’s license numbers to hackers, according to a notice filed with California’s attorney general earlier this month.
- Lobbyists had a strong start to the new year with a new Congress and new administration, following a year of major growth lobbying for relief during the coronavirus pandemic.