A look at the growing role of the U.S. Federal Reserve — one of the most important economic stories in the world.
Apr. 18, 2021 09:01PM EST
Senate Democrats settling on 25% corporate tax rate
The universe of Democratic senators concerned about raising the corporate tax rate to 28% is broader than Sen. Joe Manchin, and the rate will likely land at 25%, parties close to the discussion tell Axios.
Why it matters: While increasing the rate from 21% to 25% would raise about $600 billion over 15 years, it would leave President Biden well short of paying for his proposed $2.25 trillion, eight-year infrastructure package.
<ul class="ee-ul"><li>Biden’s plan to increase the rate U.S. multinationals pay on their foreign earnings from 10.5% to 21% is less controversial and stands a better chance of remaining intact in the final legislation. That would raise an additional $700 billion.</li><li>But corporate lobbying groups are preparing for a long-term battle over both rates.</li><li>The Business Roundtable launched an advertising campaign last week and <a href="https://www.axios.com/biden-tax-hike-business-roundtable-38c1e5c2-04f1-496a-8d0c-1d7a2b47e832.html" target="_blank">released a survey</a> of 178 CEOs discussing how the proposed changes would affect their company’s competitiveness.</li></ul><p><strong>The big picture:</strong> The White House hasn’t publicly backed away from the president's proposed 28% rate but indicated it’s willing to find a compromise to pay for his spending plans.</p><ul class="ee-ul"><li>Democrats close to the White House expect Biden will accept 25% and pocket it as a political win.</li><li>President Trump lowered the rate from 35% to 21%.</li></ul><p><strong>Driving the news:</strong> A collection of 10 senators from both parties — the so-called Group of 20 — is working to find a compromise on what to include in an initial infrastructure package and how to pay for it.</p><ul class="ee-ul"><li>“If we come together in a bipartisan way to pass that $800 billion hard infrastructure bill that you were talking about, that I've been urging, then we show our people that we can solve their problems,” Sen. Chris Coons (D-Del.) said on "Fox News Sunday."</li><li>Sen. Susan Collins (R-Maine) has crystalized the G-20’s challenge by breaking it down into three issues: scope, size and pay-fors.</li><li>“It is much easier to come up with appropriate pay-fors and bipartisan agreement if we're talking about a more focused package that truly is centered on infrastructure,” she said last Thursday.</li></ul><p><strong>Between the lines:</strong> While Manchin (D-W.Va.) has made clear his preference for a 25% rate, he’s far from alone.</p><ul class="ee-ul"><li>Democrats who've privately hinted they may be uncomfortable with going to 28% include Sens. Tim Kaine and Mark Warner of Virginia, Kyrsten Sinema of Arizona and Jon Tester of Montana.</li><li>The Democratic dynamic is similar to the one about increasing the minimum wage to $15 an hour, which was ultimately rejected by eight Senate Democrats.</li><li>Some of them talked about something closer to $11.</li></ul><p><strong>Go deeper:</strong> There’s similar sentiment in the House, where moderates also are opposed to increasing taxes too much, <a href="https://www.axios.com/scoop-moderate-democrats-buck-biden-tax-hikes-4a0cacb8-4417-40ae-86f6-07e71763344f.html" target="_blank">Axios had reported</a>.</p><ul class="ee-ul"><li>"I think that 25% is fine," Rep. Scott Peters (D-Calif.) said.</li></ul><p><strong>Be smart</strong>: Democrats view the debate about the corporate rate as a litmus test for Republican interest in bipartisanship during the Biden era.</p><ul class="ee-ul"><li>If they can find a middle ground, they hope to work on other issues.</li><li>Many are skeptical, though, even as Republicans say infrastructure spending is badly needed.</li><li>A failure to reach consensus here would only fuel calls to use budget reconciliation to ram through other spending plans.</li></ul></div>
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Apr. 18, 2021 09:01PM EST
Republican leaders raked in sizable donations from grassroots supporters
Republican leaders turned to grassroots supporters and raked in sizable donations after corporations cut them off post-Jan. 6.
Why it matters: If those companies hoped to push the GOP toward the center, they may have done just the opposite by turning Republican lawmakers toward their most committed — and ideologically driven — supporters.
<p><strong>By the numbers: </strong>Senate Minority Leader Mitch McConnell’s campaign committee didn’t get a single corporate PAC donation during the first quarter of the year, new reports show.</p><ul class="ee-ul"><li>Compare that to Q1 2019, when the McConnell Senate Committee received $625,000 from 157 corporate PACs and trade associations.</li><li>Yet McConnell’s total haul this year was about $100,000 <em>larger</em> than the same period last cycle. The Kentuckian brought in more than $1.9 million — all from individual donors.</li><li>That included more than $700,000 from “unitemized” donations, or those under $200, compared to less than $200,000 in that classification during Q1 2019.</li></ul><p><strong>The same pattern is evident</strong> for House Minority Leader Kevin McCarthy. His campaign received nearly $2.2 million in contributions from January through March, compared with under $1.7 million during the first quarter of 2019.</p><ul class="ee-ul"><li>Like McConnell, McCarthy did it with next to no corporate support. The Californian got more than $300,000 from 66 companies and trade groups in Q1 2019.</li><li>This year, just two PACs — the National Federation of Independent Businesses and a trade group representing California beet growers — gave him a total of $2,800.</li><li>Small-dollar donations to McCarthy also spiked: he received nearly $1.4 million in unitemized donations, compared with under $190,000 during Q1 2019.</li></ul><p><strong>The big picture: </strong>January’s Capitol insurrection and subsequent fights over voting rights laws drove a wedge between corporate America and their traditional Republican allies.</p><ul class="ee-ul"><li>Many businesses stopped giving while they reviewed their policies and lawmaker behavior, forcing lawmakers to look elsewhere.</li><li>While McConnell raked in individual donations, he also became the face of the GOP’s feud with corporate America. He warned of “serious consequences” for companies that use financial and political muscle to advance policy goals at odds with the GOP.</li><li>His fundraising appeals, meanwhile, plugged issues sure to resonate with the party’s grassroots, such as <a href="https://politicalemails.org/messages/376247" target="_blank">voter fraud</a>, <a href="https://politicalemails.org/messages/367254" target="_blank">media bias</a> and “<a href="https://politicalemails.org/messages/368517" target="_blank">cancel culture</a>.”</li></ul><p><strong>Between the lines: </strong>It’s those sorts of issues — as well as public fealty to former President Donald Trump — that have produced some of the GOP’s biggest fundraising successes of late. </p><ul class="ee-ul"><li>Sens. Josh Hawley of Missouri and Ted Cruz of Texas — who drew corporate America’s ire for leading efforts to block certification of President Biden’s victory — both posted mammoth first-quarter fundraising numbers, despite bringing in a combined total of just $4,400 in corporate PAC money.</li><li>Far-right freshman Rep. Marjorie Taylor Greene of Georgia, who was stripped of her committee assignments in February, received more than $3.2 million in Q1, more than any other non-leadership House member of either party. More than three quarters of it came from small-dollar donations.</li><li>In Arkansas, former Trump press secretary Sarah Huckabee Sanders’ gubernatorial campaign shattered state fundraising records, bringing in over $4.8 million in the first quarter.</li></ul><p><strong>Yes, but: </strong>Some GOP members of Congress who voted to impeach Trump also posted <a href="https://www.wsj.com/articles/house-republicans-who-voted-to-impeach-trump-see-fundraising-boost-11618664400" target="_blank">impressive</a> first-quarter fundraising numbers.</p><ul class="ee-ul"><li>Rep. Liz Cheney of Wyoming, the House GOP conference chair and one of Trump's most high-profile Republican critics, raised about $1.5 million. Rep. Adam Kinzinger (R-Ill.) brought in more than $1.1 million.</li><li>Many of those members have also attracted GOP primary challengers and drawn Trump's personal ire. Their opponents likely will be strong grassroots fundraisers going forward.</li></ul></div>
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Apr. 18, 2021 08:35PM EST
CDC: Half of US adults have received one COVID-19 vaccine dose
Data: CDC; Chart: Axios Visuals
Half of US adults have received at least one dose of the COVID-19 vaccine and about a third are fully vaccinated, according to new data from the Centers for Disease Control and Prevention.
Why it matters: COVID-19 cases and hospitalizations are still on the rise, CDC director Rochelle Walensky said during Friday's White House COVID-19 briefing. With cases in many states being driven by variants, public health officials have emphasized the need to ramp up vaccinations.
<p><strong>Details: </strong>For Americans over 18 years of age, 50.4% have received at least one COVID-19 vaccine dose, and 32.5% are fully vaccinated.</p><ul class="ee-ul"><li>Among seniors 65 and older, 81% have received at least one dose and 65.9% are fully vaccinated. </li></ul><p><strong>At Friday's briefing</strong> White House COVID-19 Response Coordinator Jeff Zients noted that in the past week the U.S. vaccinated roughly 3.3 million people per day, an increase on the seven-day average from the previous week. </p><ul class="ee-ul"><li>He also added that the U.S. is on track to "meet or beat" President Biden's goal of administering <a href="https://www.axios.com/biden-vaccine-goal-200-million-0acc635d-5a3b-4c53-bf5c-187b73e90b0b.html" target="_blank">200 million vaccine doses</a> in the first 100 days in office. </li></ul></div>
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Apr. 18, 2021 07:06PM EST
Israeli intel agencies believe Vienna talks will lead to U.S. return to Iran nuclear deal
Israeli military intelligence and senior officials in the Mossad briefed a meeting of the nation's security cabinet that talks in Vienna between Iran and other world powers will lead to the U.S. returning to the 2015 nuclear deal, two officials who attended the meeting told me.
Why it matters: The Israeli government is very concerned about a U.S. return to the nuclear deal and is trying to convince the Biden administration not to take the pressure off the Iranian regime.
<p><strong>Driving the news:</strong> The Mossad mainly briefed the cabinet meeting on the status of the Iranian nuclear program. Military intelligence officials discussed Iranian actions in the region at the meeting.</p><ul class="ee-ul"><li>The two intelligence agencies gave similar assessments on where the Vienna talks stand.</li></ul><p><strong>What they are saying:</strong> “We are not very optimistic to say the least," a senior Israeli official who attended the meeting told me. "We will not be surprised if within weeks the U.S. and other world powers sign a deal with Iran.”</p><ul class="ee-ul"><li>National Security Advisor Jake Sullivan told "Fox News Sunday" that the Vienna talks with Iran were "constructive" and that there is a real effort to get back to mutual compliance of the 2015 nuclear deal. </li><li>Sullivan added that the U.S. won’t lift sanctions unless it has "clarity and confidence" that Iran will fully return to compliance of all its obligations under the 2015 agreement.</li></ul><p><strong>What’s next:</strong> Israeli officials told me there were no new policy decisions made during today’s cabinet meeting, and Israel will continue the dialogue with the Biden administration on the negotiations with Iran.</p><ul class="ee-ul"><li>In the coming two weeks the Israeli national security adviser Meir Ben Shabbatt, IDF chief of staff Aviv Kochavi, head of Israeli military intelligence Tamir Hayman and Mossad director Yossi Cohen will visit Washington for talks with their counterparts on Iran, officials tell me.</li></ul></div>
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Apr. 18, 2021 06:33PM EST
"It hurts": Latino community of 13-year-old killed by police in Chicago reels after shooting
Residents of Little Village, a well-known and predominantly Latino neighborhood in Chicago, are grieving the death of Adam Toledo, a 13-year-old Mexican American boy from the neighborhood who was shot and killed by a police officer on March 29, NBC News reports.
Why it matters: Adam Toledo's killing shines a spotlight on police shootings of Latinos, who are killed by law enforcement at the second-highest rate after Black Americans, according to data from the Washington Post.
<p><strong>Residents have placed </strong>flowers and votive candles at in the street that Toledo was killed alongside a makeshift altar bearing his name. On Friday a local artist unveiled a <a href="https://www.fox32chicago.com/news/chicago-artist-creates-mural-of-adam-toledo-in-little-village" target="_blank">mural</a> of Toledo in the alleyway where he was shot. </p><p><strong>Many residents have</strong> expressed how painful it was to see the police body camera footage of Toledo's shooting. </p><ul class="ee-ul"><li>"It hurts, because he is a little kid," Toledo's aunt Theresa Chavarria told <a href="https://www.nbcchicago.com/news/local/little-village-residents-vow-to-fight-violence-after-toledo-shooting-video-release/2488573/" target="_blank">NBC news</a>. </li><li>“He didn’t have nothing in his hands when the cop shot at him. As a matter of fact, he had his hands up and they still killed him,” local resident Jesus Hernández told the <a href="https://www.chicagotribune.com/news/breaking/ct-chicago-adam-toledo-video-protests-20210416-hxjxgrtuh5fhzg6w74zbjdhhpi-story.html" target="_blank">Chicago Tribune</a>. “After watching it, I feel like I have to worry about my own safety because we don’t know how the cops are going to react,” he said.</li></ul><p><strong>While city authorities</strong> braced for protests after the release of the body camera footage Thursday, community gatherings have remained peaceful, per the Tribune. </p><ul class="ee-ul"><li>A few dozen people gathered in protest outside local police headquarters to call for Mayor Lori Lightfoot's resignation, criticizing the mayor's call for calm.</li><li>Several peaceful marches took place in Chicago Thursday night, with residents calling for the police to be held accountable, per the Chicago Tribune.</li></ul><p><strong>Go deeper:</strong> <a href="https://www.axios.com/adam-toledo-police-shooting-administrative-leave-c0347fb3-37f3-4bc8-804b-0936eee01553.html" target="_blank">Prosecutor on leave for failing to "fully present the facts" after shooting of 13-year-old boy</a></p></div>
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Apr. 18, 2021 02:20PM EST
Biden adviser warns "there will be consequences" for Russia if Navalny dies

The Biden administration warned the Russian government "that there will be consequences" if jailed Russian opposition leader Alexei Navalny dies, National Security Adviser Jake Sullivan told CNN on Sunday.
The big picture: Sullivan also defended President Biden for not mentionining Navalny in a Thursday speech about Russia or in a Tuesday call with Russian President Vladimir Putin,saying the White House aims to deal with the issue "privately and through diplomatic channels."
<ul class="ee-ul"><li>Biden denounced Navalny's arrest as "totally, totally unfair" and "totally inappropriate" on Saturday, <a href="https://www.politico.com/news/2021/04/17/biden-denounces-russia-over-navalny-482670" target="_blank">according to a pool report</a>.</li></ul><p><strong>Where it stands: </strong>Navalny — Putin's fiercest and most organized domestic political critic, who previously attempted a run for president in 2018 — faces possible kidney failure as he continues his multi-week <a href="https://www.axios.com/alexei-navalny-hunger-strike-prison-putin-8fb7f024-a4e1-4445-a304-f5d51bb15466.html" target="_self">hunger strike</a>. </p><ul class="ee-ul"><li>Prison authorities said they offered Navalny treatment, but he refused, arguing he should be seen by a doctor of his choice. That request was denied.</li><li>"People usually avoid the word 'dying'. But now Alexey is dying. In his condition, it is a matter of days," <a href="https://twitter.com/Kira_Yarmysh/status/1383421026910949381" target="_blank">tweeted the opposition leader's</a> press secretary Kira Yarmysh on Saturday.</li></ul><p><strong>What he's saying: </strong>Sullivan did not specify what actions the U.S. would take against the Kremlin over Navalny's potential death, saying: "We are looking at a variety of different costs that we would impose ... but we have communicated that there will be consequences if Mr. Navalny dies." </p><ul class="ee-ul"><li><strong>When asked why Biden didn't mention Navalny</strong> in his speech or a recent call with Putin,Sullivan said:"We have judged, rather than just make general statements publicly, the best way to deal with this issue is privately and through diplomatic channels direct to the upper-most levels of the Russian government." </li><li><strong>He also noted that the Biden administration</strong> joined the European Union in imposing sanctions "for what the Russian government has done to Navalny, for the use of a chemical weapon against him, which in contravention of international law."</li><li><strong>"We have communicated to the Russian government</strong> that what happens to Mr. Navalny in their custody is their responsibility and they will be held accountable by the international community."</li></ul></div>
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Apr. 18, 2021 12:58PM EST
Prosecutor on leave for failing to "fully present the facts" after shooting of 13-year-old boy
Cook County prosecutor James Murphy was placed on administrative leave Friday after he implied in court that 13-year-old Adam Toledo, who was shot and killed by a police officer in March, was armed when he was shot, the Chicago Tribune and Chicago Sun-Times report.
Why it matters: Videos of the shooting show that Toledo dropped what appears to be a weapon and put his hands in the air a moment before before he was fatally shot. A lawyer for the Toledo family said Thursday that if the teen "had a gun, he tossed it."
<ul class="ee-ul"><li>"The officer said, ‘Show me your hands.’ He complied. He turned around," the attorney added.</li></ul><p><strong>Details: </strong>At an April 10 bond hearing, Murphy told Judge Susana Ortiz that Toledo did not drop the gun until after he was shot, per the Sun-Times.</p><ul class="ee-ul"><li>“The officer tells [Adam] to drop it as [Adam] turns towards the officer. [Adam] has a gun in his right hand,” Murphy said. “The officer fires one shot at [Adam], striking him in the chest. The gun that [Adam] was holding landed against the fence a few feet away.”</li></ul><p><strong>What they're saying: </strong>“In court last week, an attorney in our office failed to fully present the facts surrounding the death of a 13-year-old boy,” Foxx spokeswoman Sarah Sinovic said in a statement, per the Sun-Times. </p><ul class="ee-ul"><li>“We have put that individual on leave and are conducting an internal investigation into the matter.”</li><li>“For many of you it may have been jarring to see our statement regarding this matter,” State’s Attorney Kim Foxx reportedly wrote in a <a href="https://chicago.suntimes.com/crime/2021/4/17/22389186/toledo-shooting-proffer-kim-foxx-james-murphy-gun-in-hand-leave" target="_blank">letter to prosecutors on Friday night</a>. “It is indeed a rarity to see the Office make such a public statement related to the actions of an [assistant state’s attorney]. It was not done lightly.”</li></ul><p><strong>The big picture: </strong>Amid former Minneapolis police officer Derek Chauvin's trial — which advocates have described as one of the <a href="https://www.axios.com/derek-chauvin-testify-trial-d370babe-f832-4e68-8fe4-400b258efba6.html" target="_blank">most crucial civil rights cases in decades</a> after Chauvin was charged with murder in the death of George Floyd — killings of Black people by police have continued to fuel nationwide protest.</p><ul class="ee-ul"><li>Protests continued after Kim Potter, the former police officer charged with second-degree manslaughter in the fatal shooting of Daunte Wright, was <a href="https://www.axios.com/kim-potter-daunte-wright-charges-315c1eb1-7e32-46d5-a901-3c5aace733b7.html" target="_blank">released on a $100,000 bond</a> on Wednesday.</li></ul></div>
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Apr. 18, 2021 12:02PM EST
Biden's blinking red lights: Taiwan, Ukraine and Iran
Russia is menacing Ukraine’s borders, China is sending increasingly ominous signals over Taiwan and Iran is accelerating its uranium enrichment to unprecedented levels.
The big picture: Ukraine, Taiwan and Iran’s nuclear program always loomed large on the menu of potential crises President Biden could face. But over the last several days, the lights have been blinking red on all three fronts all at once.
<p><strong>Driving the news:</strong> Within 24 hours beginning last Sunday, an explosion rocked Iran’s underground nuclear site at Natanz, 25 Chinese warplanes entered Taiwan’s air defense zone, and Ukraine announced that the number of Russian troops massing in Crimea and on its eastern border had risen to 80,000.</p><p><strong>Russia has now assembled enough troops</strong> for a “limited military incursion,” CIA director Bill Burns warned Wednesday. </p><ul class="ee-ul"><li>Moscow has avoided such overt intervention in Eastern Ukraine since the war there began in 2014, but could strike now in an attempt to push further into Ukrainian territory or secure a source of much-needed water for occupied Crimea.</li><li>After a flurry of phone calls from Washington to Kyiv to signal support for Ukraine, Biden called Vladimir Putin on Tuesday and proposed a summit to discuss Ukraine and other issues. </li><li><strong>The state of play:</strong> U.S. European Command commander Gen. Tod Wolters <a href="https://www.reuters.com/world/europe/low-to-medium-risk-russian-invasion-ukraine-next-few-weeks-us-general-2021-04-15/" target="_blank">said Thursday</a> that there was a “low to medium” risk of a Russian invasion in the next few weeks.</li></ul><p><strong>The threat of a Chinese invasion of Taiwan</strong> is less urgent, but carries a far greater risk of plunging the U.S. into a direct military confrontation.</p><ul class="ee-ul"><li>Beijing has repeatedly threatened to take control of the self-governing island by force. Biden, meanwhile, has continued the longstanding policy of “strategic ambiguity,” with the U.S. signaling that it’s prepared to defend Taiwan without explicitly pledging to do so.</li><li>After Monday’s air incursion, the largest to date, Biden dispatched three former senior U.S. officials to Taiwan, a move Beijing described as “playing with fire.” China reacts furiously to any gesture that treats Taiwan — a flourishing democracy and global tech hub — as an independent country.</li><li><strong>The state of play: </strong>Admiral Philip Davidson, the commander of U.S. Indo-Pacific Command, has said there’s a real and rising risk that China will invade in the next several years, but that the more worrying short-term scenario is an “accident or a miscalculation” that leads to escalation.</li></ul><p><strong>After the apparent act of Israeli sabotage at Natanz, </strong>Iran announced it would begin enriching uranium to 60%, approaching the levels required for a nuclear weapon.</p><ul class="ee-ul"><li>Both the attack and the Iranian response have threatened to derail the negotiations aimed at salvaging the 2015 nuclear deal.</li><li><strong>The state of play:</strong> The talks resumed on Thursday in Vienna, but back in Tehran Supreme Leader Ali Khamenei <a href="https://twitter.com/khamenei_ir/status/1382364621282115584" target="_blank">implied</a> that Iran might soon walk away from the table. If the talks falter and Iran continues to accelerate its enrichment, further flash points are likely.</li></ul><p><strong>What to watch:</strong> Just about all that’s missing from this cocktail of crises is another North Korean missile test. </p></div>
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