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Netanyahu is out if new government survives confidence vote on Sunday
The incoming Israeli government will be sworn in on Sunday if it survives a confidence vote, outgoing parliamentary speaker Yariv Levin said in a statement on Tuesday.
Why it matters: Prime Minister Benjamin Netanyahu and his allies, including Levin, are trying to thwart the formation of the new government, which would see right-winger Naftali Bennett replace Netanyahu as prime minister in an alliance with Yair Lapid, the centrist opposition leader.
Between the lines: Bennett and Lapid need to submit their final coalition agreement 24 hours before a vote in Israel's parliament, the Knesset. But they can't do so on a Saturday, as Levin was well aware, meaning they'll have to submit the agreement two days before the vote.
- That gives Netanyahu's Likud party more time to scrutinize and criticize the agreement in hopes of convincing right-wing members of the new coalition to abandon it.
- Levin was caught on a hot mic on Monday saying he would schedule the vote when it would best suit the Likud rather than hold it as soon as possible, as is the tradition.
The big picture: Bennett, a former tech executive and Netanyahu protege, would initially become prime minister under the deal despite leading a small party, because it would have been impossible for either Netanyahu or Lapid to reach a majority without him. Lapid would then rotate into the job after two years.
The state of play: Bennett and Lapid appear to currently have the narrowest possible majority, with six out of the seven members from Bennett's party expected to vote in favor.
- Netanyahu has been dialing up the pressure on members of Bennett's party, who are much closer to him ideologically than to their new coalition partners. Netanyahu's supporters have demonstrated in front of their houses, and some of Bennett's allies have received death threats.
- The director of Israel's Shin Bet domestic security service warned on Saturday that the “serious radicalization in incitement and discourse on social media" could lead to a Jan. 6-style attack in Israel to prevent a peaceful transition of power.
What’s next: Lapid and Bennett now have until Friday to smooth out any remaining differences over their coalition agreement. Netanyahu has until Sunday to sabotage it.
- If he can't, Israel will have a new prime minister for the first time in 12 years.
Go deeper: Netanyahu claims Bennett won't stand up to Biden.
Biden proposed tax increases on the rich to pay for more than $1 trillion in new spending
President Biden will present his third $1 trillion spending package to Congress since taking office, asking for $1.8 trillion in new spending to expand the American education system, provide more help for childcare and create millions more jobs.
The big picture: Biden is also proposing a series of tax hikes on the rich, which his administration vows will not hit Americans who make less than $400,000 and households with less than $1 million in capital gains.
- Administration officials insist that Biden’s American Families Plan — with $1 trillion in new spending and $800 billion in tax breaks — will be entirely offset by new revenue.
- Most of the $1.8 trillion cost will be covered by increasing personal taxes on individuals, but officials will also need to draw some revenue from the corporate tax increases that Biden proposed earlier this month.
- The White House is calculating additional revenue over 15 years, while the spending proposals mostly cover eight years, an accounting method questioned by Republican lawmakers — and privately, by some Democrats.
Driving the news: The bulk of Biden’s proposals have been telegraphed for several days and largely reflect the promises he made during the campaign. Those "Build Back Better" proposals sought to use the COVID-19 crisis to reimagine the American economy.
- But several campaign promises are missing from this proposal, including efforts to lower the cost of prescription drugs and expand Medicare eligibility — omissions that will aggravate his party's progressive base.
- Biden didn’t include a campaign promise to increase the estate tax rate from 40% to 45% and lower the exemption from $11 million to $3.5 million in this package.
- Wednesday's proposal comes after the $2.25 trillion American Jobs Plan the president proposed earlier this month. That focuses on physical infrastructure, like bridges and broadband, and what White House officials call human infrastructure, like caregivers and health care.
Go Deeper: A centerpiece of this latest proposal is $310 billion to offer four more years of free education for all Americans, with two years of universal preschool and two years of free community college, regardless of income levels.
- Biden is also building on a popular feature of the $1.9 trillion relief package he signed last month by proposing to extend child tax credits by up to $3,600 a year through 2025.
- And Biden wants $225 billion to improve childcare and ensure that low and middle-income families don’t spend more than 7% of their income on childcare.
- Biden also wants to make permanent tax credits for health insurance in Obamacare exchanges that were passed in last month's American Rescue Plan.
Between the lines: To pay for his plans, Biden is essentially relying on five new lines of revenue.
- Raise the top marginal tax rate from 37% to 39.6% for Americans who make more than $400,000.
- Treat capital gains as regular income, and tax it at the highest rate plus a 3.8% Obamacare surcharge for a total of 43.4% on households with more than $1 million in investment income.
- Tax capital gains at death and eliminate the so-called “stepped-up” basis that allows estates to revalue assets after their original owner dies.
- Inject some $80 billion into the IRS to audit high-income earners and collect an additional $700 billion by increased tax compliance over 10 years.
- Draw on any leftover revenue from increasing the corporate tax rate, as Biden previously proposed in the American Jobs Plan, including a global minimum tax and raising the rate from 21% to 28%.
What we are asking: Will the proposed tax increases, especially on capital gains, be retroactive and capture all the massive equities’ gains in 2021?
- Is the cutoff for married couples, filing as one household, $800,000 or $400,000?
The bottom line: After rushing a $1.9 trillion stimulus package through Congress on partisan lines, Biden is now signaling he wants to work with Republicans and Democrats to spend an additional $4 trillion on specific programs.
- His speech Wednesday night will be an opening bid, but officials suspect that any final legislation, if there is a final legislation, will look different.
Collins, Romney to vote "no" on Biden budget nominee Neera Tanden
Sens. Susan Collins (R-Maine) and Mitt Romney (R-Utah) announced Monday they will not vote to confirm President Biden's nominee to lead the Office of Management and Budget, Neera Tanden.
Why it matters: The moderate Republicans were viewed as possible saviors to Tanden's nomination, after Sen. Joe Manchin (D-W.Va.) became the first Democratic senator to oppose one of Biden's nominees last week. Sen. Lisa Murkowski (R-Alaska) has not yet announced how she intends to vote.
- Tanden has faced scrutiny for her social media activity during the Trump presidency, during which she frequently attacked Republicans.
- Tanden, who once called Collins "the worst" on Twitter, apologized for her tweets during her confirmation hearings.
What they're saying:
A Romney spokesperson said in a statement: "Senator Romney has been critical of extreme rhetoric from prior nominees, and this is consistent with that position. He believes it’s hard to return to comity and respect with a nominee who has issued a thousand mean tweets."
What to watch: White House press secretary Jen Psaki said in a statement Monday that Biden stands by the nomination.
- "Neera Tanden is an accomplished policy expert who would be an excellent Budget Director and we look forward to the committee votes this week and to continuing to work toward her confirmation through engagement with both parties," Psaki said.
Go deeper: Collins, Manchin "no" votes on Tanden a sign of Biden's peril
Supreme Court sides with Trump administration on abortion pill rule
The Supreme Court granted a Trump administration appeal on Tuesday and reinstated a federal requirement obligating women seeking an abortion pill to obtain the drug from a hospital or medical center in person.
Why it matters: It's the court's first ruling on abortion since the arrival of the conservative Trump-appointed Justice Amy Coney Barrett. The justices voted 6-3 in favor of the ruling, with the court's liberals dissenting.
Of note via AP: "The new administration could put the in-person requirement on hold after Joe Biden takes office on Jan. 20."
Editor's note: This a breaking news story. Please check back for updates.



