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Today’s Big Deal: Democrats are not united on how to fight runaway inflation. We will also consider a proposal to scrap the tax credit for US companies operating in Russia and Fed officials planning higher rates.
Democrats divided on how to handle inflation
Democrats’ efforts to fight inflation are stalled due to internal divisions over a series of proposals to cut the cost of gas, health care and child care.
The latest idea that some Democrats are buying into is a proposed windfall tax on big oil companies that would raise about $45 billion to return to consumers in the form of energy rebates.
Senate Majority Leader Charles SchumerChuck SchumerMovement underway to ban lawmakers from trading stocks in office Biden signs $0.5 trillion government funding bill with help from Ukraine (DN.Y.) highlighted oil company earnings in the Senate on Thursday and announced that oil and gas company executives will be called to testify about why they are buying back shares instead of keeping prices lower. for average Americans.
“It’s just repugnant for oil companies to tout really sky-high profit margins, while drenching American families with these sky-high prices,” Schumer said.
Another proposal to blunt the impact of rising gasoline prices — suspending the federal gasoline tax of 18.4 cents per gallon until next January — has also divided Democratic senators. And lawmakers didn’t rally President BidenJoe BidenRepublican senators introduce bill to ban Russian uranium importsThe Build Back Better program, which the White House says would help fight inflation by reducing costs for families.
Alexander Bolton explains the situation here.
NOT AT THIS PACE
Top Senate Democrats mull bill to scrap credits for companies that pay Russian taxes
Two senior Senate Democrats are mulling legislation to cut credits that US companies currently get to pay taxes in Russia, after Koch Industries said it would continue operations in the country.
The background: The announcement came after Dave Robertson, president and chief operating officer of Koch Industries, released a statement on Wednesday explaining the company’s decision to remain in Russia and its business ties there while noting that it would also comply with applicable sanctions.
- Koch owns a company called Guardian Industries which will continue operations in Russia as it employs 600 people at two glass manufacturing plants. Apart from this company, Koch Industries employs 15 other people in Russia.
- Robertson said the multinational had denounced “the horrific and heinous aggression against Ukraine”, but that it would “not walk away from our employees there or hand over these manufacturing facilities to the Russian government so that it can function and benefit from it”.
Jordan Carney has more here.
Burgers can stay
The president of the company that owns Burger King said on Thursday that a Russian franchisee was refusing to close stores in Russia despite pressure to close operations.
David Shear, president of Restaurant Brands International, wrote in a press release that the owner of Russia’s Burger Kings had pushed back on calls for it to close, putting the business in a precarious position as it has limited power to force it out. make.
“Do we want to suspend all Burger King operations in Russia immediately? Yes. Are we in a position to impose a suspension of operations today? No,” Shear wrote in the statement.
- Shear said the contracts between the corporate entity and the franchisees involve “significant long-term investment commitments,” resulting in a “complicated legal process” to shut down any franchisee-owned businesses.
- Restaurant Brands International entered the Russian market 10 years ago and now has about 800 Burger Kings in the country controlled by a local businessman named Alexander Kolobov.
Hill’s Brad dress has more here.
Fed governor calls for half-point rate hikes
Federal Reserve Governor Christopher Waller said Friday that the central bank should raise interest rates at a more aggressive pace to deal with rising inflation.
- In an interview with CNBC’s “Squawk Box” on Friday morning, Waller said he favored raising the Fed’s base interest rate range by 0.5 percentage points “during one or more several meetings in the near future”.
- “I’m really supportive of the anticipation of our rate hikes, that we need to do more hosting withdrawals now if we’re going to have an impact on inflation later this year and next year,” Waller said. .
Waller was among eight of nine members of the Federal Open Market Committee — the Fed’s panel responsible for setting monetary policy — that voted for a 0.25 percentage point rate hike on Wednesday, the first hike since 2018. The Fed’s base interest rate range had been set between 0 and 0.25% since March 2020, when the bank cut rates and began buying billions of dollars of bonds each month to boost the economy.
Sylvan explains here.
Good to know
Sen. John BarrassoJohn Anthony BarrassoRepublican senators introduce bill banning Russian uranium imports. (R-Wyo.) and several other Republican senators on Thursday introduced legislation that would ban Russian uranium imports as a further way to economically isolate Russia following its invasion of Ukraine.
The legislation would reinforce steps already taken by the United States to ban imports of Russian energy after President Biden last week announced a ban on imports of oil, natural gas and coal from the country.
Here’s what else we’ve got our eyes on:
- India’s state-owned oil company bought 3 million barrels of Russian crude this week as many other countries ban such imports due to Moscow’s invasion of Ukraine, The Associated Press reported on Friday.
- California authorities on Friday announced a reduction in the state’s water allocation, reducing the distribution from 15% to 5% as the Golden State enters its third year of severe drought.
- Toyota and other companies using semiconductors are suspending operations in Japan after a strong earthquake hit the country this week.
- American Airlines confirmed on Friday that it is preparing to resume sales of alcoholic beverages on flights in its domestic coach cabins nearly two years after it first halted service.
That’s all for today. Thanks for reading and check out The Hill’s Finances page for the latest news and coverage. We’ll see you on Monday.