Hey Influence Traders,
I hope that everyone had a good weekend.
The ink is still wet on the COVID relief bill and DC is already talking about more #PowerMoves.
Fun Stat of the Week
As of this writing, Bitcoin (Ticker: BTC) was at $56,300 per coin.
At that level, BTC is now more expensive than 1,000 grams — an entire kilo — of gold, which will run you $55,875.
More on BTC and other cryptos in a later issue.
Another Member of the Cabinet Approved
The Senate voted 51-40 on Monday to confirm Deb Haaland as Interior Secretary, making her the country’s first Native American cabinet secretary.
Haaland is a former environmental activist who has backed progressive approaches to climate change, including opposing fracking and drilling on public lands.
The department manages roughly 500 million acres of public lands and coastal waters, and Haaland will play a key role in advocating for Biden’s climate agenda.
Despite her prior activism, Haaland stated before the Senate Energy and Natural Resources Committee that she would respect the significance of fossil-fuel production while pledging to address issues surrounding climate change.
Launching an Infrastructure Bill
On Friday, House Speaker Nancy Pelosi directed key Democratic lawmakers to start working on drafting the much-anticipated infrastructure package.
Pelosi has asked for a “big, bold, and transformational” piece of legislation.
House Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Ore.) confirmed that the infrastructure bill “is going to be green and it is going to be big.”
Despite the partisan nature of the Covid relief, Pelosi has also asked Democrats to work with Republicans to draft a bipartisan bill to bring to the public.
“Building our transportation system has long been bipartisan,” Pelosi said in a recent statement. “It is our hope that spirit will prevail as we address other critical needs in energy and broadband, education and housing, water systems and other priorities.”
Democrats need to get Republicans on board to avoid taking the drastic step of removing the filibuster that would require 60 votes to pass an infrastructure bill.
That’s known as the “nuclear option.”
Some key Democrats, such as Joe Manchin of West Virginia, oppose scuttling the filibuster.
The question being raised by Republicans, of course, is how to pay for another large spending bill, which could run $2-$4 trillion.
Ensuring We Have the Materials
Energy Secretary Jennifer Granholm admitted that the U.S. needs to boost domestic production of the minerals used to make electric vehicles.
The past two administrations have recognized that the country’s reliance on China for EV and other supply chains is not sustainable.
Regardless, the US leans on China for lithium, rare earths and other EV minerals, a situation that Biden and Granholm have called untenable.
Granholm has recognized that the US has the materials, but that we need to transition from fossil fuel extraction to EV material extraction and production.
Paying for It
President Biden is planning the first major federal tax hike since 1993 to help pay for his long-term economic program.
He does not want to rely on government debt financing for infrastructure as with the $1.9 trillion COVID stimulus.
Treasury Secretary Janet Yellen confirmed that higher rates will be required to pay for part of the next bill.
Rep. John Garamendi (D-Calif.) on the Hill opined that Biden is considering raising taxes as a way to pay for the infrastructure plan, including an excise tax on fuel, some form of a user fee for electric vehicles on highways, and a carbon tax. He admitted, however, hat there is “no price tag right now, because we’re going at this from the bottom up.”
The Biden administration has argued that raising rates is an opportunity not just to fund key initiatives like infrastructure, climate and expanded help for poorer Americans, but to address inequities in the tax system itself.
And while the White House has rejected the wealth tax proposed by Senator Elizabeth Warren, Yellen has stated it’s not off the table.
The following are among proposals currently planned or under consideration:
- Raising the corporate tax rate to 28% from 21%
- Reducing preferences for pass-through businesses, like LLCs and partnerships
- Raising the income tax rate on individuals earning more than $400,000
- Expanding the estate tax’s reach
- A higher capital-gains tax rate for individuals earning at least $1 million annually
The Tax Policy Center has estimated that Biden’s plans would raise $2.1 trillion over a decade.
The US has made considerable #Power Moves … but it’s not done.
Cutting Through the Noise for You,