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Obama hits campaign trail ahead of gubernatorial elections in Virginia, New Jersey

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(VIRGINIA) -- With just over a week to go until the last day of voting in Virginia and New Jersey, former President Barack Obama is joining each state's Democratic nominee for governor on the campaign trail Saturday, hoping to motivate the party's base to turn out in their state's off-year general elections.


Always held the year after a presidential election, the statewide and legislative races in both states are seen as bellwethers for the nation's political landscape going into the midterms. A strong showing by Democrats could assuage party fears about 2022, but if Republicans make gains, it will serve as a warning shot for Democrats as they try to connect with voters in the post-Trump era.


Obama isn't the first top surrogate to hit the trail with New Jersey Gov. Phil Murphy and former Gov. Terry McAuliffe, who is hoping to secure Virginia's top executive post for a second time after leaving office in 2018. First lady Jill Biden stumped with both Democrats last week, and Georgia's Stacey Abrams and Vice President Kamala Harris campaigned with McAuliffe Sunday and Thursday, respectively.


"Let's be clear about who this man is. He has the life experience, the professional experience, the experience in this state. … he walks his talk, he is a fighter," Harris said of McAuliffe. "When you elect somebody or governor, you want to make sure you really know who they are. Well, we know who Terry is."


Acknowledging how close the race is between McAuliffe and Republican Glenn Youngkin, she added, "We got to make it clear that we're not taking anything for granted. You know, four years ago, there was a lot of folks who said, 'Oh, if I don't vote, everything will be alright. It wasn't alright."


McAuliffe also has an event planned with President Joe Biden in deep blue Arlington on Tuesday. While Biden and McAuliffe have been friends for over 40 years, the president hasn't stumped with him since late July. Earlier this month, McAuliffe acknowledged Biden's approval rating has taken a hit since then.
"We are facing a lot of headwinds from Washington, as you know. The president is unpopular today unfortunately here in Virginia, so we have got to plow through," he said at a virtual rally.


Those headwinds appear to be hampering McAuliffe more than Murphy, according to public polling.
A September poll from Monmouth University showed Murphy with a 13-point lead over his Republican opponent, former Assemblyman Jack Ciattarelli, among New Jersey registered voters. Ciattarelli has taken aim at Murphy's handling of the COVID19 pandemic, arguing the Democrat's policies have been too restrictive and the state's economy has suffered for it. But according to Monmouth's poll, half of registered voters have more trust in Murphy to handle the pandemic.

On the economy and taxes, issues that have been front and center in Ciattarelli's campaign, the Republican fares better against Murphy.


In Virginia, however, the gubernatorial race is neck and neck. A Monmouth poll out Wednesday showed McAuliffe and Youngkin, a former private equity executive, tied among registered voters, and for the first time in the university's polling of this race, Youngkin leads in one probabilistic likely electorate model.

Copyright © 2021, ABC Audio. All rights reserved.


Former Giuliani associate Lev Parnas found guilty of unlawful campaign donations

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(NEW YORK) -- Soviet-born businessman Lev Parnas, a former associate of Rudy Giuliani, was found guilty Friday of making unlawful campaign donations totaling more than $350,000 to two pro-Trump super PACs and a GOP congressman in 2018, acting as a straw donor for a wealthy Russian who wanted to enter the burgeoning marijuana market in the United States.

Co-defendant Andrey Kukushkin was also convicted in the case, which was tried in a Manhattan federal court.

The illegal donations overlapped with Giuliani's quest in Ukraine to unearth information that could damage then-presidential candidate Joe Biden, an effort in which Parnas allegedly positioned himself as a middleman.

"In order to gain influence with American politicians and candidates, they illegally funneled foreign money into the 2018 midterm elections with an eye toward making huge profits in the cannabis business," U.S. Attorney Damian Williams said of Parnas and Kukushkin. "Campaign finance laws are designed to protect the integrity of our free and fair elections -- unencumbered by foreign interests or influence -- and safeguarding those laws is essential to preserving the freedoms that Americans hold sacred."

As he left court, Parnas was heard saying "I'm upset, but i want to get back to my wife and my kids. We put up an incredible fight."

Parnas was also convicted of using a shell company, as well as money belonging to his associate Igor Fruman, to funnel hundreds of thousands of dollars into Republican and pro-Trump political action committees. Fruman previously pleaded guilty in that case.

The defense portrayed Parnas as "in over his head" but not someone who willfully violated any laws.

Parnas was arrested two years ago at Dulles Airport holding a one-way ticket to Vienna. He now faces up to 45 years in prison.

Copyright © 2021, ABC Audio. All rights reserved.


Supreme Court to take up Texas abortion law but declines to block it

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(WASHINGTON) -- The Supreme Court will take up the Texas abortion law on the merits next month in a rare highly-expedited case that could definitively resolve the fate of its six-week ban and unprecedented enforcement mechanism.

SB8 will remain in effect for the near future until the court issues its decision, which wouldn't typically be expected for weeks to months after a case is argued.

The justices granted the request of Texas abortion providers and civil rights groups to hear the case before lower courts ruled on the law, meaning the law will remain in effect for now.

They also said they would also examine the question of whether the U.S. government, in a separate case, could even seek an injunction against a state law like the one in Texas.

"In addition, the application is treated as a petition for a writ of certiorari before judgment, and the petition is granted limited to the following question: May the United States bring suit in federal court and obtain injunctive or declaratory relief against the State, state court judges, state court clerks, other state officials, or all private partiesto prohibit S.B. 8 from being enforced," the court said.

Oral arguments are set for Nov. 1 -- one month before the court is already set to hear a milestone abortion rights case out of Mississippi.

The court said it deferred a decision on the Justice Department's emergency request for the court to put SB8 back on hold and that it would wait for oral arguments before taking action. Justice Sonia Sotomayor dissented.

"I cannot capture the totality of this harm in these pages. But as these excerpts illustrate, the State (empowered by this Court's inaction) has so thoroughly chilled the exercise of the right recognized in Roe as to nearly suspend it within its borders and strain access to it in other States. The State's gambit has worked. The impact is catastrophic," she said in her dissent.

Advocates and providers wanted to see the court lift the abortion ban while it took up the case.

"Texans deserved better than this," said Amy Hagstrom Miller, founder and CEO of Whole Woman's Health and Whole Woman's Health Alliance that operates four clinics in Texas.

"The legal limbo is excruciating for both patients and our clinic staff. Lack of access to safe abortion care is harming our families and communities and will have lasting effects on Texas for decades to come. We've had to turn hundreds of patients away since this ban took effect, and this ruling means we'll have to keep denying patients the abortion care that they need and deserve," she said in a statement.

Planned Parenthood Federation of America shared the sentiment.

Alexis McGill Johnson, president and CEO of Planned Parenthood, called SB8 a "heinous and blatantly unconstitutional abortion ban that never should have been allowed to take effect—and it's devastating that it remains in place."

"Every day S.B. 8 is in place is one more day of cruelty, and it cannot stand. We look forward to our patients and providers finally having their day in court on November 1, when the Supreme Court will hear the cases. And we are hopeful the Court will step in and block S.B. 8 from continuing to wreak havoc," she said in a statement.

The law bans physicians from providing abortions once they detect a so-called fetal heartbeat, which can be seen on an ultrasound as early as six weeks into a pregnancy.

Under SB8, private citizens -- including those who live outside of Texas -- can sue a person they "reasonably believed" provided an illegal abortion or assisted someone in getting it in the state, up to four years after the act. Government officials are expressly prohibited from enforcing the law.

At least one anti-abortion organization praised the court for maintaining the law while it determines whether it is constitutional.

Texas Right to Life, in a tweet, called the move a "great victory for the Pro-Life movement."

Copyright © 2021, ABC Audio. All rights reserved.


In push to get deal, Biden pulls back curtain on spending negotiations with Democrats

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(WASHINGTON) -- For reporters in Washington, it’s a frequent refrain from President Joe Biden on the status of negotiations with lawmakers on his domestic agenda: "I won’t negotiate in the press."

But Thursday evening marked a shift from the strategy of playing his cards close to his chest. The president was unusually candid at a CNN town hall, laying his cards out publicly, and unafraid to call out moderate Sens. Joe Manchin and Kyrsten Sinema on the roadblocks they’ve created in the talks.

The decision was perhaps a calculated one, as the White House counts down the days before Biden departs for a major climate summit in Europe, at which the president hopes to have real domestic progress in hand to encourage other nations to adopt similar measures.

Early Friday morning, Biden hosted House Speaker Nancy Pelosi at the White House for breakfast, with Senate Majority Leader Chuck Schumer joining remotely, the three leaders already back at the bargaining table.

Pelosi later told reporters Friday that Democrats are nearing a deal on their two major agenda packages.

“We have a couple of outstanding issues that just need a decision," she said, describing a deal as within reach. "I think it’s very possible,” she added.

Biden's town hall capped off what has been the most momentous week of negotiation in months, with the president acquiescing to losing some key programs from his initial $3.5 trillion wish list, in order to meet those moderates calling for less government spending. The acknowledgement of the concessions could send a signal to Democrats that a deal on the package, which has been whittled from Biden’s $3.5 trillion wish list to just under $2 trillion, is imminent.

“I do think I’ll get a deal,” Biden said, in summary of the movement in recent days.

That deal has not been easy in coming. Biden admitted some painful cuts to his programs at the town hall, but the lifelong politician, who campaigned on his ability to reach bipartisan deals, said some losses were inevitable.

“Hey look, it’s all about compromise. You know, it’s – 'compromise' has become a dirty word. But it’s bipartisanship and compromise still has to be possible," Biden said Thursday.

One of those compromises – losing the corporate tax rate hike Biden has long pushed for.

"I don't think we're going to be able to get the vote," Biden said. He was blunt in pinning the blame on a lone hold-out in his caucus.

"Senator Sinema is opposed to any tax rate hikes for corporations and for high earners," Biden said, offering an unusual amount of insight into his talks with the moderate Democrat.

Later Thursday, a White House official clarified that Biden meant it would be challenging to get enough votes to raise the corporate tax rate, but that other proposals, such as a tax increase on stock buybacks, or instituting a tax on billionaires’ stock holdings, could make up the difference, ensuring the package, which will likely to top out just under $2 trillion, would not add to the federal deficit.

Biden also wasn’t shy in pulling back the curtain on his conversations with moderate Manchin. Admitting that the plan to expand Medicare to cover dental, hearing and vision "a reach" at this point in the talks, Biden revealed Manchin’s thinking, and said he could settle for $800 vouchers to cover dental work.

"He says he doesn't want to further burden Medicare so that -- because it will run out of its ability to maintain itself in the next number of years. There's ways to fix that, but he's not interested in that part, either. But, look, Joe -- Joe's not a bad guy. I mean, he's a friend. And he's always, at the end of the day, come around and voted for it," Biden said.

Biden also for the first time admitted that his proposal to guarantee 12 weeks of paid family leave will be cut significantly.

"It is down to 4 weeks," Biden said, in a frank assessment. "And the reason it's down to 4 weeks is because I can't get 12 weeks."

Biden also confirmed that two years of free community college is falling victim to the downsizing. He offered an increase to Pell grants instead, and vowed to continue to fight for the program.

"I promise you, I guarantee you, we're going to get free community college in the next several years, across the board," he said, adding jokingly that his first lady Jill Biden, a community college professor, would insist on it.

ABC News' Benjamin Siegel contributed to this report.

Copyright © 2021, ABC Audio. All rights reserved.


DOJ adds two top prosecutors to Matt Gaetz investigation, sources say

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(WASHINGTON) -- Two top prosecutors in the Justice Department were added several months ago to the ongoing federal probe examining sex trafficking allegations against Rep. Matt Gaetz, two sources familiar with the matter confirmed to ABC News.

The Washington-based prosecutors, one with expertise in child exploitation crimes and the other a top official in the DOJ's Public Integrity Section, have been on the Florida-based case since at least July. In recent months, they joined a team in Florida that's been looking into whether Gaetz violated federal law by providing goods or payments to a 17-year-old girl in exchange for sex, sources confirmed to ABC News. The news of the new prosecutors was first reported by The New York Times.

Gaetz has not been charged with a crime and has denied any wrongdoing. In a statement to ABC News on Thursday, a spokesperson for Gaetz said, "Congressman Gaetz is innocent. The former DOJ official who tried to extort him is guilty. No number of political operative prosecutors at a politically weaponized DOJ will change this."

The news comes just days after a federal judge in Central Florida granted a request from attorneys representing former Seminole County tax collector Joel Greenberg, Gaetz's one-time self-described "wingman," to delay Greenberg's sentencing while he continues to provide prosecutors with information about his activities in connection with the ongoing federal probe.

Greenberg in May pleaded guilty to multiple federal crimes, including sex trafficking of a minor and introducing her to other "adult men" who also had sex with her when she was underage, and agreed to provide "substantial assistance" to prosecutors as part of their ongoing investigation.

"This is obviously not a normal situation," U.S. attorney Roger Handberg told the judge earlier this week in requesting a delay in Greenberg's scenting. "Mr. Greenberg is a prolific criminal."

"Mr. Greenberg was not alone," Handberg added. "This is an unusual situation with a number of lines of investigation we are pursuing."

ABC News previously reported that Gaetz's former associate had been steadily providing information and handing over troves of potential evidence in the sprawling probe, including years of Venmo and Cash App transactions and thousands of photos and videos, as well as access to personal social media accounts, sources said.

Private messages first reported by ABC News potentially shed light on how Greenberg allegedly met women online who were paid for sex, and allegedly introduced them to the Florida congressman and other associates. The messages, first reported by ABC News in August, appear to show Greenberg texting with a woman he met online in September 2018 and discussing payment options. Greenberg also appears to ask the woman, who was of legal age, if she would take drugs; he then sets up a get-together with himself, Gaetz, the woman, and one of her friends, the messages appear to show.

Amid the ongoing investigation, Gaetz has remained active in Congress and has forcibly pushed back against the DOJ and the media. During Thursday's House Judiciary hearing, Gaetz questioned Attorney General Merrick Garland on whether there are prohibitions against DOJ officials who have been "partisan committee staff" members working on criminal investigations. Todd Gee, one of the two new prosecutors added to the Gaetz investigation, previously worked as a House Homeland Committee staffer for Democrats during the Bush Administration.

Greenberg's sentencing is now scheduled for March 2022, a date the judge said would be a "deadline we have to meet."

Copyright © 2021, ABC Audio. All rights reserved.


Why can't congressional Democrats deliver more on their promises? It's complicated.

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(NEW YORK) — In January, when President Joe Biden took office and Democrats secured both chambers of Congress, millions of Americans had high hopes that the laundry list of causes touted on the campaign trail would become reality.

They had promised action on voting, elections and policing reform, on immigration and infrastructure. They touted sweeping programs now in Democrats' social spending bills, addressing issues they said Americans care about most, from child care to climate change.

But this week's failure by Senate Democrats' latest effort to even start debate on a voting rights bill, their first piece of legislation to pass the House, is just the latest blow to Biden's campaign agenda and the vow Democrats made to preserve Americans' most fundamental right in the wake of the 2020 election's "Big Lie."

Many Democrats who expected more are frustrated.

"You've got real Americans that have spent time and energy in promoting supporting these plans," said Domini Bryant, a social worker in Houston told ABC News. "I don't have time to deal with the political rhetoric that is happening in our world right now because all that is happening is real people -- real working people -- are getting dumped on.”

"We're still allowing 'Big Lie' rhetoric to reign supreme when you have real issues happening out here, like the fact that there have been millions of dollars put towards this pandemic recovery yet you still have thousands of people homeless right now," she added.

It's no secret Biden and congressional Democrats are having trouble with their own self-imposed deadlines -- such as missing policing reform by the anniversary of the death of George Floyd in May, although a majority of Americans say major changes are needed to policing.

Since Democrats control both Congress and the White House -- why haven't they been able to achieve their legislative priorities? With Biden's approval rating sinking, and congressional midterms nearly one year away, experts ABC News spoke with are predicting Democrats could pay a high price for their perceived inaction.

"Most Americans believe that government should be helping solve our problems and that compromise is better than obstruction," said Jennifer Lawless, a political science professor at the University of Virginia. "But the incentives for our elected leaders to do compromise has dissipated, creating a vicious cycle where we're seeing less action on what the average American wants. By the same token, there's also a very, very little incentive for the elected leaders to deliver moderation, because there'll be primary, and they'll lose.”

Frances Lee, a political scientist and professor at Princeton University, said that although this Congress is deadlocked on high-profile legislation, it has been productive in responding to coronavirus crisis, pointing to the American Rescue Plan passing in March -- although it did so without any Republican support.

"It's a tale of two cities," she told ABC News. "On the one hand, this Congress has impressive crisis response, and on the other, a stalemate on issues that aren't necessarily connected to that crisis."

GOP's strategy of obstruction

Shortly after Barack Obama was elected in 2008, Senate Minority Leader Mitch McConnell said the "single most important thing" for Republicans was to make him a one-term president. McConnell would go on to do everything possible to prevent Obama from achieving major legislative wins.

"And that's basically been the strategy that the Republicans have employed for the last 12 years," said Lawless.

"It doesn't matter if the Republicans could also claim credit for something that will be good for the American people or advance the economic interests of their state or their district. Republicans are now viewing any Democratic victory as separate and apart from their own interests," she said. "This has now become a sort of permissible way to govern, whereas prior to that point, I think most legislators would not have wanted the American people to know that they were more interested in obstructing than they were in governing."

That kind of strategy makes bipartisanship and cooperation exceedingly rare, experts said, and in many cases, not even pursued, which has heightened internal strife in the parties.

"Thirty years ago, forty years ago, if you had two members of your own party who weren't in love with a bill, you'd cross party lines and you'd see if you could find some allies there, but that's just not a viable strategy anymore," she added.

She said the current stalemate over raising the debt ceiling provides the perfect example of McConnell's strategy.

Republicans for months have said that Democrats would need to act on their own to raise the debt limit because they have total political control of Washington and are planning to pass a multi-trillion social and economic package with zero input from Republicans.

"They've made the case to their constituents and to Republican voters across the country that doing nothing is better than governing from the 'socialist left,'" Lawless said.

Democrats, meanwhile, have argued raising the debt limit is a bipartisan responsibility, in part, because it covers spending that already took place under the Trump administration with unified GOP support.

"Republicans just have to let us do our job," Biden said in a speech last month on the nation's debt limit. "Just get out of the way. If you don't want to help save the country, get out of the way so you don't destroy it.”

A recent poll from Politico/Morning Consult suggested that public opinion may not push either party to change direction. Overall, 31% of registered voters said they would mostly blame Democrats if the country defaults on its debt, while 20% said they would primarily blame Republicans. Thirty-nine percent said they would blame both parties equally.

"We expect our elected officials to deal with complicated issues like that," said Jeremy Gelman, who wrote the book, "Losing to Win: Why Congressional Majorities Play Politics Instead of Make Laws." "But making it seem like your opponents don't have it together, that's good politics."

Loyalty to the filibuster

With a majority in the House of Representatives and Vice President Kamala Harris holding the tie-breaking vote in the Senate, Democrats could, in theory, pass their legislative priorities without Republican support.

But not while the Senate filibuster rule stands in their way.

While legislation dealing with the budget can go through the reconciliation process and pass without GOP support, as was done with the American Rescue Plan in March, the Senate requires 60 votes for "cloture" -- to end debate on a piece of legislation so it can proceed to a final vote, which then, in most cases, requires a simple majority to pass.

In short, without 60 Senate votes, a piece of legislation doesn't even have a chance of being voted upon.

"That means that unless there is complete unity among Democrats in the Senate, the bill is already a non-starter. Every single member can hold a package hostage for their litmus tests," Lawless said. "And on bills that can't go through the reconciliation process, without 10 Republican votes, they're dead on arrival."

For four months under Obama, Democrats did have 60 votes in the Senate and, therefore, total control of Congress. It was during that slim window that Obamacare passed in the Senate with all 60 Democratic votes.

Progressives in 2021 argue Democratic Sens. Joe Manchin and Kyrsten Sinema, who call themselves moderates and have staunchly opposed ending the filibuster, should help carve out an exception to push over the line key reforms, especially on the fundamental issue of voting rights, that they and fellow Democrats were elected to pursue. But Manchin and Sinema have refused to budge, arguing making an exception could backfire if Republicans take back control of the Senate.

"They've certainly articulated legitimate reasons why they are reluctant to make these exceptions," Lawless said. "But in this political climate, it seems tone-deaf not to do it."

Democratic infighting

While Americans might expect that unified government -- as Democrats have now with the White House and Congress -- Lee said that it's more normal for parties with total control to face hurdles delivering on their agendas.

As evident by Democrats' current stalemate on the social spending package, Lee argued parties are not as unified on many issues as they might claim to be with voters.

"It's the reality we're seeing now," said Lee. "They get elected in these separate states and districts, and they differ in their political priorities and coloration, so it's very hard for them to get on the same page."

House progressives have vowed to vote against a bipartisan infrastructure bill -- which received 19 GOP votes in the Senate -- unless a deal is reached with Senate Democrats and the White House on a larger spending package involving social policies which they plan to pass through budget reconciliation.

"We make these promises to people, and they're expecting us to deliver on them," Jayapal told CNN this month.

Every unified government since the Clinton administration has failed on at least one of its top priorities due to internal dissent, not due to the filibuster, Lee said.

Gelman added that party leaders will pursue policies they know will fail -- as Senate Democrats did on voting rights -- in order to make a political statement.

"They also know that those are popular policies with their voters. They need to have solutions that they can offer in the future, and they think it's probably politically valuable to show off the Republicans as being obstructionists," he said.

Razor-thin margins

What makes it especially difficult to govern in the current Congress are the razor-thin margins in both chambers. Comparing this Congress to the previous ones with the unified government, Lee said the current political climate is more difficult than most because there are "no votes to spare."

Democrats and Republicans currently have 50 seats each in the Senate, with Harris serving as the tie-breaker vote. The margins are tight in the House too, where most legislation needs a simple majority, with 220 Democrats and 212 Republicans.

"Parties have trouble advancing bold legislation even when conditions are more favorable -- and they're just not very favorable for either party right now," she said.

She compared the current margins to those under former President Bill Clinton when tried to reform health care in 1994, but without 60 votes to end a GOP filibuster, the effort failed.

Lee said it's the norm for "about half of all a party's agenda items to fail," so Americans should actually expect those failures to be higher in a Congress with super narrow majorities as is the case now.

With critics saying Republicans are playing a game of chicken on the debt ceiling, experts say Democrats are also playing a dangerous game with their political future.

"If with unified control the Democrats are unable to push forward Biden's agenda, then it's hard to imagine that they'll get anything that they want between 2022 and 2024," Lawless said.

Unprecedented polarization?

It's also a time in Washington of arguably unprecedented polarization, in the wake of the 2020 election and Jan. 6 attack on the Capitol.

With the influence of cable news, and social media, lawmakers can get stuck in an echo chamber with their own supporters instead of trying to appeal to a broader cross-section of the country.

"We've reached a point in time where our political communication is so partisan and so polarized, that it's hard even to blame the average American for not knowing the alternative viewpoint," Lawless said. "They're not exposed to it."

Despite the division, experts said compromise remains the most effective way to pass changes in the world's greatest deliberative body.

"We're constantly sort of bombarded by messages from the politicians themselves that everything's so divisive," Gelman said. "But the reality is, legislating in this system of government requires bipartisanship."

Greg Lee, a technology consultant in Columbus, Ohio, who used to identify as a Republican but is now votes Democratic, said the American people are left to suffer while lawmakers on both sides take things to political extremes.

"They’re not doing a good job of balancing their constituents needs with their desire to be reelected," he said. "Congress should be a collaborative body, not a win at all costs game."

Copyright © 2021, ABC Audio. All rights reserved.


House votes to hold Steve Bannon in criminal contempt

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(WASHINGTON) — The House of Representatives voted to hold Trump administration adviser Steve Bannon in contempt of Congress on Thursday for defying a congressional subpoena by the Jan. 6 select committee investigating the attack on the Capitol.

The vote fell largely along party lines: 229-202, with nine Republicans voting with Democrats.

Select committee Chair Bennie Thompson, D-Miss., said in debate ahead of the vote that allowing Bannon to ignore their subpoena would set a dangerous precedent.

"To my colleagues who choose to vote against enforcing the subpoena, you are saying to all future men and women who are called before this body that they can ignore a subpoena from Congress without consequence," he said. "The consequences of that vote won't be limited to this investigation and this subpoena alone. Your vote will be given serious long-lasting damage to Congress. And that, in turn, will do serious damage to our country which we all love dearly."

House Speaker Nancy Pelosi signed the resolution shortly after the House vote and tweeted out a photo.

Her office told ABC News the referral has now been formally transmitted to the office of the U.S. Attorney for the District of Columbia. The Justice Department will now decide whether to prosecute Bannon.

The select committee, a nine-member panel, voted unanimously Tuesday evening to send a report recommending contempt charges to the full House.

GOP Reps. Liz Cheney, R-Wyo., and Adam Kinzinger, R-Ill, the two Republicans who sit on the committee, voted with all Democrats to advance to debate on Thursday. House GOP leaders had whipped their members to vote "no."

But Democrats argued on the House floor that lawmakers have a Constitutional responsibility of oversight.

"Mr. Bannon's willful disregard for the select committee's subpoena demonstrates his utter contempt for the American people's right to know how the attacks on January 6 came about," Kinzinger said. "His own words strongly suggest that the actions of the mob that stormed the Capitol and invaded this very chamber came as no surprise to him. He and a few others, were by all accounts, involved in planning that day's events and encouraged by those who attacked the Capitol, our officers and our democracy."

"I have no doubt that Mr. Bannon's scorn for our subpoena is real. But no one, and I repeat, no one is above the law," Kinzinger said. "And we need to hear from him."

Cheney, also speaking with Democrats in favor of the bill, said Bannon's statements on his podcast on Jan. 5, the day before the attack, were "shocking and indefensible."

"He said all hell is going to break loose. He said, 'We are coming in right over the target,'" she said. "There are people in this chamber right now who were evacuated with me and the rest of us that day and during the attack. People who seem to have forgotten the danger of the moment. The assault on our Constitution, the assault on our Congress. People who you will hear argue that there is simply no legislative purpose for this committee, this legislation and this subpoena," she said.

"There is no doubt that Mr. Bannon knows far more than what he said," she continued. "There is no doubt that all hell did broke loose. Just ask the scores of brave police officers who were injured that day protecting us. The American people deserve to hear his testimony."

Including Cheney and Kinzinger, nine Republicans voted with Democrats to hold Bannon in contempt: Reps. Anthony Gonzalez, Peter Meijer, Fred Upton, Nancy Mace, John Katko, Brian Fitzpatrick and Jaime Herrera Beutler. Rep. Mike Simpson had voted "yes" but changed it to "no."

Two of the nine Republicans who voted with Democrats -- Fitzpatrick and Mace -- did not vote to impeach former President Donald Trump earlier this year. And several Republicans who did vote to impeach Trump did not back the effort to hold Bannon in contempt.

Mace, who spoke to reporters outside the Capitol after her vote, said she wanted to uphold the subpoena power of Congress, given that Republicans could retake the chamber next year.

House Minority Leader Kevin McCarthy, R-Calif., earlier Thursday argued that the Jan. 6 select committee's subpoena for Bannon's testimony was "invalid" because Republicans aren't serving on the panel and claimed Democrats are using the panel to target their political opponents.

However, Republicans decided not to sit on the panel after House Speaker Nancy Pelosi refused to seat two of five members recommended by McCarthy for making baseless claims about the validity of 2020 election. That came after Republicans killed an effort in May to establish an independent commission of members selected by both parties to investigate the Jan. 6 attack.

"Issuing an invalid subpoena weakens our power, not voting against it," McCarthy said, defending Republicans' plans to overwhelmingly vote against holding Bannon in contempt of Congress this evening. "[Bannon] has a right to go to court to see if he has executive privilege or not. I don't know if he has it or not, but neither does the committee."

His message follows a memo circulated to Republican lawmakers on Wednesday, in which House GOP leaders argued that the Jan. 6 select committee that subpoenaed Bannon for records and testimony is "pursuing a partisan agenda to politicize the Jan. 6 attack" instead of "conducting a good faith investigation."

Asked about the importance of GOP support on the effort, Pelosi said at her weekly press conference that it's Republicans' duty to vote to hold Bannon in contempt.

"Because they take an oath to protect and defend the Constitution of the United States," Pelosi told reporters.

"The genius of our Constitution and our founders was the separation of powers checks and balances, if in fact you went to negate the ability of one check of another branch of government over another, then you are undermining the constitution," she said.

"This goes beyond Bannon in terms of its importance. And you would think that if they take an oath to protect and defend the Constitution, they would vote for the system of checks and balances," she said.

It's been 38 years since the Justice Department pursued contempt of Congress charges: Environmental Protection Agency official Rita Lavelle was indicted in 1983. A jury eventually found Lavelle not guilty.

The Democrat-led House held former Attorney General Bill Barr and Commerce Secretary Wilbur Ross in contempt of Congress in 2019 for defying subpoenas for records, but the Trump Justice Department did not take up the case.

Bannon could face up to a year in prison and up to a $100,000 fine if the Justic Department charges him and he is eventually found guilty.

ABC News' Sarah Donaldson contributed to this report.

Copyright © 2021, ABC Audio. All rights reserved.


GOP senator seeks to block controversial proposed bank account monitoring

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(WASHINGTON) — In the wake of a controversial proposal by the Treasury Department and Senate Democrats to direct collection of additional data on Americans' bank accounts, Senate Republicans -- led by South Carolina’s Tim Scott -- introduced a bill Thursday to prevent the Internal Revenue Service from implementing any such policy change.

"The Democrats’ plan to allow the IRS to spy on the bank accounts of nearly every person in this country, even those below the poverty line, should be deeply concerning to anyone who values privacy and economic inclusion," Scott said in a statement provided exclusively to ABC News.

The Biden administration on Tuesday backed down on a controversial proposal that would have directed the IRS to collect additional data on every bank account that sees more than $600 in annual transactions, after widespread criticism from Republican lawmakers and banking industry representatives, who said the tax enforcement strategy represented a breach of privacy by the federal government.

Instead, the administration and Senate Democrats are proposing to raise the threshold to accounts with more than $10,000 in annual transactions, and any income received through a paycheck from which federal taxes are automatically deducted will not be subject to the reporting. Recipients of federal benefits like unemployment and Social Security would also be exempt.

According to the new GOP bill, called the Prohibiting IRS Financial Surveillance Act, "The Secretary of the Treasury (including any delegate of the Secretary) may not require any financial institution to report the inflows or outflows of any account maintained by such institution, or any balances, transactions, transfers, or similar information with respect to any such account, except to the extent that such reporting is required under any program, or other provision of law, as in effect on the date of the enactment of this Act."

"Every American should be wary of giving the IRS more power and more tentacles into private financial transactions," Sen. Mike Crapo, R-Idaho, said in a statement. "The IRS bank reporting proposal is one of the biggest expansions of the agency’s authority we’ve ever seen, and is fundamentally flawed. I’m proud to support Senator Scott’s legislation to stop this proposal in its tracks and protect Americans’ personal, private financial information."

The GOP bill is sponsored by every member of Republican leadership and nearly the entire conference, a clear indication, according to a source familiar with the matter, that the party sees "this move and the unified support from leadership … as a clear indication of where we’ll focus our energies in the coming reconciliation fight.”

The changes made by Democrats -- a clear indication of how politically volatile the issue is -- would exempt millions of Americans from the reporting requirement, and help the IRS target wealthier Americans, they say, especially those who earn money from investments, real estate, and other transactions that are more difficult for the IRS to track.

"Under the current system, American workers pay virtually all their tax bills while many top earners avoid paying billions in the taxes they owe by exploiting the system. At the core of the problem is a discrepancy in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance. This two-tiered tax system is unfair and deprives the country of resources to fund core priorities," Treasury Secretary Janet Yellen said in a statement Tuesday.

"Today’s new proposal reflects the Administration’s strong belief that we should zero in on those at the top of the income scale who don’t pay the taxes they owe, while protecting American workers by setting the bank account threshold at $10,000 and providing an exemption for wage earners like teachers and firefighters," Yellen said.

A Treasury fact sheet says, "Imagine a taxpayer who reports $10,000 of income; but has $10 million of flows in and out of their bank account. Having this summary information will help flag for the IRS when high-income people under-report their income (and under-pay their tax obligations). This will help the IRS target its enforcement activities on those who are actually evading their tax obligations—decreasing costly and burdensome audits for the vast majority of taxpayers who pay what they owe."

The proposal is a long way from being enacted. It's currently included in a multi-trillion dollar social spending package lawmakers and the White House have been negotiating for months. If that package is passed and signed into law, the requirement wouldn't begin until December 2022.

Senate Finance Committee Chairman Ron Wyden, D-Ore., who spearheaded the effort to revise the proposal, disputed Republican claims that the goal is to snoop on Americans' financial transactions.

"The bottom line is, wealthy tax cheats are ripping off the American people to the tune of billions and billions of dollars per year. Tax cheats thrive when the reporting rules that apply to them are loose and murky. Democrats want to fix this broken approach and crack down on the cheating at the top," Wyden said in a press conference on the announcement Tuesday.

Wyden made clear that even Americans who might make a large purchase over $10,000 wouldn't be subject to the additional reporting.

"If you don’t have $10,000 above your paycheck, Social Security income, or the like coming in or going out, there’s no additional reporting. We’ve also addressed the scenario where an individual spends a significant amount of savings for a major purchase. There will be no additional reporting in this scenario, as long as the amount of money coming into the account does not exceed wages +$10,000," Wyden said.

Still, Republicans insisted millions of Americans will be affected and voiced concern that the IRS would be given far too much power.

"The Biden administration’s plan to allow the IRS to monitor Americans' bank accounts is a dangerous idea that will only prove to be worse over time,” said Senator Pat Toomey, R-Pa. “Today the administration wants to know your annual account inflows and outflows. What will they demand access to tomorrow?"

ABC News' Sarah Kolinovsky contributed to this report

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Garland: DOJ will follow 'facts and the law' in Bannon contempt referral

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(WASHINGTON) — Attorney General Merrick Garland told lawmakers on Thursday that the Justice Department will follow "the facts and the law" if the House of Representatives votes to refer former President Donald Trump's ally Steve Bannon for criminal prosecution for defying a congressional subpoena.

"I will say what a spokesperson for the U.S. Attorney's Office in the District of Columbia said I think yesterday or a day before," Garland said in response to a question on Congress' potential contempt referral for Bannon. "If the House of Representatives votes for a referral of a contempt charge -- then the Department of Justice will do what it always does in such circumstances, we will apply the facts and the law and make a decision consistent with the principles of prosecution.”

Garland's first appearance in front of the House Judiciary Committee came on the same day that the House is set to vote on whether to hold Bannon, who formerly served as a White House advisor to Trump, in contempt of Congress.

Historically such prosecutions are rare and politically fraught -- but Garland's potential decision on the referral would have significant ramifications for the House committee investigating the Jan. 6 assault on the U.S. Capitol as it seeks to compel cooperation from individuals who allegedly had communications with Trump around that day.

The matter was further complicated over the weekend when President Joe Biden told reporters he hoped the department would move forward with prosecutions of those, like Bannon, who defy the select committee's subpoenas. A DOJ spokesperson swiftly released a statement following Biden's remarks restating the department's independence, and White House press secretary Jen Psaki clarified afterward that the president was in no way giving direction to Garland on the issue.

"The Department of Justice will make its own independent decisions in all prosecutions based solely on the facts and the law. Period. Full stop," spokesperson Anthony Coley said.

In the hearing, Garland also defended the Justice Department's handling of its sprawling investigation into the Jan. 6 insurrection. He testified Thursday that more than 650 people across the country have been charged in the more than nine months since the attack.

"The violence we witnessed that day was an intolerable assault, not only on the Capitol and the brave law enforcement personnel who sought to protect it, but also on a fundamental element of our democracy: the peaceful transfer of power," Garland said.

Republicans on the panel expressed concern about the treatment of some of the rioters being detained ahead of trial, after judges ruled they either presented a threat to the general public or a risk of flight and obstruction of justice.

Last week, a federal judge overseeing one case of a rioter being held in detention pending trial did make a referral to Garland to investigate whether jailed rioters are having their rights violated based on their status as Capitol riot defendants. Garland confirmed in Thursday's hearing that the U.S. Marshals Service subsequently conducted an inspection of their conditions and the Civil Rights Division is reviewing the findings.

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Clinton shares first update on recovery following hospitalization: 'I’m really glad to be back home'

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(NEW YORK) -- Former President Bill Clinton spoke out for the first time following his hospitalization.

In a video posted on Twitter Wednesday night, Clinton, 75, said he's feeling better, and is "on the road to recovery."

"Hi everyone, I was so touched by the outpouring of support I received during my stay in the hospital. Thanks so much. I’d also like to thank the doctors and nurses at UC Irvine Medical Center for the absolutely wonderful care that they gave me over the last seven days," he said.

The former president -- who has battled a number of health issues, including heart problems, over the past two decades -- was taken to the hospital last Tuesday to be treated for an infection not related to COVID-19, his spokesperson said.

"I’m really glad to be back home," Clinton said in the video Wednesday. "I’m doing great, enjoying this beautiful fall weather. I’m on the road to recovery but I want to remind everyone out there: Take the time to listen to your bodies and care for yourselves. We all have work to do and each of us has an important role to play in life and in the immediate future. I, for one, am going to do my best to be around, to keep doing the most good I can for a lot longer."

Last week, an aide said Clinton was diagnosed with a urological infection that transformed into a broader infection, but the prognosis was "good."

He was released from the hospital Sunday.

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Pete Buttigieg defends paternity leave, says supply chain issues have 'no easy fix'

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(WASHINGTON) -- U.S. Secretary of Transportation Pete Buttigieg spoke on "The View" about the criticism he's been met with over his paternity leave amid Congress' pending approval of the Biden administration's infrastructure bill.

Buttigieg and husband Chasten welcomed twins Joseph August and Penelope Rose in August. On Wednesday, he told the co-hosts about his growing family.

"It's such an incredible blessing," he said, adding that he has a "whole new appreciation" for parenting now that he's living it.

"Every time I look in their eyes, I just realize that the most important thing that Chasten and I will do in our lives is be dads to these incredible, beautiful, little children, our boy and our girl," he continued.

When Buttigieg went on paid paternity leave after their twins were born, Congress was discussing the Biden administration's Build Back Better Act. If the $3.5 trillion human infrastructure package is passed, it would give all workers up to 12 weeks of paid family and medical leave.

Under current U.S. policy, the Family and Medical Leave Act, employees who qualify can take time off to care for a newborn or loved one or recover from illness without losing their job -- but leave is unpaid in most cases.

Buttigieg faced criticism from media figures such as Tucker Carlson about taking his paternity leave amid a pending infrastructure bill and supply chain crisis, and he said "maybe some good came out of" the attacks.

"It's helped us have a conversation about parental leave," he said. "Every American ought to be able to get paid parental leave. That's something that the president believes in and has proposed. It's something I believe."

But, he continued, "When parents take that parental leave, they need to be supported in making that choice."

Buttigieg acknowledged the negative impact parental leave stigmas can have on women who "find their ability to get ahead in their careers influenced by these judgments," and he shared his perspective on why men should use it.

"If there's this idea that maybe men have access to paternity leave but it's frowned on if they actually use it, then obviously that doesn't work for a marriage like mine, but also for a man who's married to a woman," Buttigieg said. "That carries with it the assumption that the woman's going to do all the work. That just makes no sense in the 21st century."

"There's still this cultural idea, I think, out there in some places, that this is vacation," he said.

"My work day as a secretary of transportation starts at a relatively normal hour," he continued. "My workday as a dad starts at about 3 in the morning when Chasten finally hits the sack and it's my turn to start that first feeding."

The infrastructure bill currently being debated in Congress includes paid family leave -- and potential solutions to existing supply chains disruptions.

"There's no easy fix. There's no magic wand, but there are a lot of things we can do," Buttigieg said about the supply chain crisis on "The View." "We're relying on infrastructure that was built decades ago, sometimes a century ago."

Buttigieg said "supply, demand and the pandemic" are the main forces behind the supply chain bottlenecks being seen around the world, which caused record shortages of household goods to electronics to automobiles for American consumers.

"Americans have more money in their pockets compared to a year ago," Buttigieg said. "Where they used to maybe spend it on going to shows or travel, they've been more likely to spend it on things, which is why actually we have a record number of goods coming through our ports."

"Retail sales are through the roof, that's part of why we have this challenge, but it is creating a lot of pressure on businesses, especially small businesses that can't exactly charter their own ship or create their own supply chain when they have a challenge," he said.

He argued the infrastructure bill would not only address long-term issues, but also short-term issues, such as "working with the ports to get them open 24/7" and "make it easier for truck drivers to get commercial driver's licenses."

"All of those steps are going to make a difference. But again, the biggest difference of all, the thing that would really help with all of the disruptions, all of the shocks that we're seeing is to put this pandemic behind us," Buttigieg said.

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Senate Republicans once again block voting rights reform bill

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(WASHINGTON) -- Senate Republicans have stopped -- for the second time this year -- a Democratic measure aimed at enacting sweeping federal election law changes, a move that is certain to increase pressure on the majority to change the chamber's filibuster rule.

Every Senate Republican opposed the vote to start debate on the voting rights bill.

"This bill is a compromise, but a good one. It's a bill that every Senate Democrat is united behind enthusiastically," said Senate Majority Leader Chuck Schumer before the vote. Schumer had worked to get moderate Democrat Joe Manchin behind the proposal known as the Freedom to Vote Act.

The legislation is a product of Democrats' concerns about the wave of stricter new voting laws in red states following the false claims by former President Donald Trump that the 2020 election was stolen.

Manchin, D-W.Va., refused to endorse a more comprehensive reform effort by his caucus in June, saying it lacked bipartisan input and encroached too far on state's rights to run elections. But after months of trying to corral GOP support, Manchin has found none.

The vote on Wednesday was to start debate on the measure, a move that required 10 Republicans to vote with all Democrats. But no Republicans supported the revised bill.

"There are areas where we could perhaps work together, but the legislation that's been crafted (by Democrats) is not what I'll support," said Sen. Mitt Romney, R-Utah, a consensus-minded Republican whom Manchin approached. "Federalizing election law is something which I think is not a good idea."

Sen. Angus King, D-Maine, a lead sponsor of the legislation and member of that working group, pleaded with colleagues to support the bill, saying U.S. democracy is "fragile" and at stake in the wake of Trump's false claims about the 2020 election despite no widespread fraud found in multiple, nonpartisan investigations.

"The problem with this goes well beyond the wave of voter suppression legislation sweeping the country; the deeper problem is the massive and unprecedented erosion of trust in the electoral system itself, the beating heart of our democracy," said King. "Of all the depredations of Donald Trump, this is by far the worst. In relentlessly pursuing his narrow self-interest, he has grievously wounded democracy itself. And by the way, I mean 'narrow self-interest' quite literally; he doesn't give the slightest damn about any of us -- any of you -- and will cast any or all of us aside whenever it suits his needs of the moment."

But Republicans for months have said they see the efforts to counter red state laws as nothing more than "a partisan power grab."

"The only thing this proposal would have done for the people…would be to help make sure that the outcome of virtually every future election meant that Democrats win and Republicans lose. Thus, Republicans would be relegated to a permanent minority status. That was the goal," Sen. John Cornyn, R-Texas, charged in a Tuesday floor speech. "If this bill weren't so dangerous, it would have been laughable."

King told reporters on a conference call that the only option after the vote Wednesday is to alter the Senate's filibuster rule that requires 60 votes to pass most legislation but also imposes no requirement on the 41 senators who are in opposition other than his or her stated opposition to legislation that is up for a vote.

"I've been very, very reluctant on (changing the filibuster), but on the other hand, it strikes me that this is a very special case, because it goes to the very fundamentals of how our democracy works," King told reporters, adding that the debate among Democrats "can't go on forever, because as you know redistricting has already started in states…It's got to happen, I would say, in this calendar year."

King said Democrats are looking at a number of possible changes, from requiring those supporting a filibuster to appear on the floor and hold the chamber with speeches -- the so-called "talking filibuster" -- to modifying the rules to end filibusters on motions to start debate -- which is what will happen Wednesday -- to ending the filibuster altogether.

Changing the filibuster would require all Democrats to be united, but that is not the case currently. Manchin and his fellow moderate, Kyrsten Sinema of Arizona, have steadfastly refused to change the chamber's rules citing a fear of permanently damaging the institution.

Outside groups pushed back Tuesday and called on Biden to do more.

"The president must get in the game. Say into a microphone, 'You've got to get rid of the filibuster," said Meagan Hatcher-Mays of the progressive group Indivisible.

"The filibuster is paralyzing the Senate. It's preventing it from doing the very basics, such as debating bills," said Adam Jentleson, a one-time deputy chief of staff to former Senate Majority Leader Harry Reid, D-Nev., and founder of the Battle Born Collective, a progressive interest group.

White House press secretary Jen Psaki demurred Tuesday when asked about support for the filibuster.

"It's a discussion that we would have with leaders and members in Congress," said Psaki, who added that the White House was focused on the Wednesday vote. "Republicans still have an opportunity to do the right thing to protect people's fundamental right to vote."

The Democrats' new bill still encompassed sweeping election law changes, including voter ID requirements, expanded early voting, making Election Day a national holiday, banning partisan gerrymandering, and implementing election security and campaign finance measures.

Among the provisions dropped or changed since June were the automatic mailing of ballots. Under the new measure, any voter could request a mail-in ballot but they are not sent out automatically. The legislation would have continued to allow voter roll purges but required changes to be "done on the basis of reliable and objective evidence" and prohibited the use of returned mail sent by third parties to remove voters.

The bill would have also no longer implemented public financing of presidential and congressional elections. Still, there were a number of election security provisions, including mandatory, nationwide use of machines that deliver paper ballots.

ABC News' Allie Pecorin contributed to this report.

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Jan. 6 committee recommends holding Bannon in contempt

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(WASHINGTON) -- The House select committee investigating the Jan. 6 Capitol riot on Tuesday moved to punish Trump adviser Steve Bannon, recommending the full House hold him in contempt of Congress for refusing to cooperate with a subpoena for records and testimony.

The nine-member panel voted unanimously Tuesday evening to send a report recommending contempt charges to the full House. If approved by the full chamber as soon as this week, the matter would then be referred to the Justice Department to decide whether to pursue criminal charges.

"Our goal is simple: we want Mr. Bannon to answer our questions," Chairman Bennie Thompson, D-Miss., said in the meeting. "We want him to turn over whatever records he possesses that are relevant to the select committee’s investigation. The issue in front of us today is our ability to do our job."

The Justice Department has declined to comment on how it might act on a criminal referral for Bannon or others who may be held in contempt.

After President Joe Biden said recently that the Justice Department should prosecute Bannon, White House press secretary Jen Psaki attempted to distance the White House from that action, telling reporters on Monday that Biden "believes it's an independent decision that should be made by the Department of Justice."

The matter could take months, if not years, to litigate, and could result in a fine of up to $100,000 and up to one year in prison.

Robert Costello, Bannon's attorney, told committee members that his client would not cooperate with the probe given Trump's executive privilege concerns, or without a court order to do so.

"Though the Select Committee welcomes good-faith engagement with witnesses seeking to cooperate with our investigation, we will not allow any witness to defy a lawful subpoena or attempt to run out the clock, and we will swiftly consider advancing a criminal contempt of Congress referral," Thompson and Vice Chair Liz Cheney, R-Wyo., said in a statement earlier this month.

Thompson said Bannon "stands alone in his complete defiance" of the committee.

"We have reached out to dozens of witnesses. We are taking in thousands of pages of records. We are conducting interviews on a steady basis," he said.

The committee's report argues that the committee's efforts to seek information from Bannon are justified because he "had specific knowledge about the events planned for January 6th before they occurred."

"Mr. Bannon was a private citizen during the relevant time period and the testimony and documents the Select Committee is demanding do not concern discussion of official government matters with the President and his immediate advisors," the panel wrote in the report, in response to Trump's claims of privilege.

Cheney, one of two Republicans on the committee, said that Bannon and Trump's claims of privilege "suggest that President Trump was personally involved in the planning and execution of January 6th."

She also warned Republicans that Trump's continued lies about widespread election fraud are "a prescription for national self-destruction."

"You know that there is no evidence of widespread election fraud sufficient to overturn the election; you know that the Dominion voting machines were not corrupted by a foreign power. You know those claims are false. Yet President Trump repeats them almost daily," she said.

"The American people must know what happened. They must know the truth. All of us who are elected officials must do our duty to prevent the dismantling of the rule of law, and to ensure nothing like that dark day in January ever happens again," Cheney said.

Several other former Trump aides and associates, including former White House chief of staff Mark Meadows and Kashyap Patel, who served as a senior Pentagon official, continue to negotiate with the committee over cooperation after receiving subpoenas.

It's not clear if Dan Scavino, one of Trump's longest-serving aides, will cooperate with the panel's investigation.

On Monday, the former president announced he was suing the committee, as well as the National Archives, to block lawmakers from receiving Trump White House records.

The Biden administration had refuted Trump's of claim executive privilege, saying that the invocation "is not in the best interests of the United States," White House counsel Dana Remus wrote in a letter to the National Archives.

As a result, the National Archives notified Trump's attorney last week that it planned to turn over dozens of records to the committee on Nov. 12, "absent any intervening court order."

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White House defends Rahm Emanuel's ambassadorial nomination against liberal backlash

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(WASHINGTON) -- Amid a fresh wave of criticism from liberal activists and lawmakers, the White House on Tuesday defended President Joe Biden's decision to nominate Rahm Emanuel for U.S. ambassador to Japan.

The former congressman and chief of staff to President Barack Obama has faced questions over how, as mayor of Chicago, he handled the fatal police shooting of 17-year-old Laquan McDonald in 2014.

Emanuel faces his Senate confirmation hearing Wednesday, which is also the seventh anniversary of McDonald's killing -- prompting renewed outcry this week.

He's one of dozens of Biden ambassadorial nominees still stuck in the confirmation process. Biden has seen a single-digit handful of his ambassadorial nominees confirmed by the Senate, leaving key vacancies in foreign capitals and at the highest ranks of the State Department that some analysts warn pose a national security threat.

Republican senators, especially Ted Cruz of Texas and Josh Hawley of Missouri, have put holds on dozens of nominees over Biden's refusal to sanction the German company behind Russia's pipeline, Nord Stream 2. But the chair of the Senate Foreign Relations Committee, Sen. Bob Menendez, D-N.J., secured confirmation for 33 nominees on Tuesday, sending them to the Senate floor for a final vote.

White House press secretary Jen Psaki pushed back against new calls for Biden to withdraw Emanuel's nomination on Tuesday.

"The president nominated Rahm Emanuel to serve as ambassador to Japan because he's somebody who has a record of public service, both in Congress, serving as a public official in the White House, and certainly also as the mayor of Chicago, and he felt he was somebody who could best represent the United States in Japan," she told reporters.

No Democratic senators have spoken out against Emanuel's nomination. Instead, powerful Democratic senators like Dick Durbin, the Senate Majority Whip and a fellow Illinois Democrat, have backed him. Durbin tweeted back in August that Emanuel "has a lifetime of public service preparing him to speak for America. ... I will do all I can to help Rahm become America's voice in Japan."

Some House Democrats, however, have urged the White House to reverse course, although they do not vote to confirm nominees.

"This nomination is deeply shameful. ... That the Biden administration seeks to reward Emanuel with an ambassadorship is an embarrassment and betrayal of the values we seek to uphold both within our nation and around the world. I urge the Senate to vote NO on his confirmation," Rep. Alexandria Ocasio-Cortez, D-N.Y., said in a statement last month.

This week, Kina Collins, a Democrat running for Congress in Emanuel's home state of Illinois, has been leading advocacy against him.

"We can't say Black Lives Matter and plan to build back better by appointing the man who covered up a police murder to a cushy job as an ambassador -- a job the man is completely unqualified to hold," tweeted the community organizer and activist, running again against Democratic lawmaker Danny Davis, who has held the Chicago district's seat for over two decades.

At issue is the accusation that Emanuel, a longtime Democratic power player, helped cover up the 2014 killing of McDonald, a black teenager shot 16 times by Jason Van Dyke, a white policer officer.

Chicago police had said McDonald ignored warnings and approached the officers, but video, released 13 months later by a judge's order, showed McDonald veering away from Van Dyke before the officer shot him.

The city reached a settlement with McDonald's family, and in October 2018, Van Dyke was found guilty of second-degree murder and 16 counts of aggravated battery with a firearm.

Emanuel had said the city could not release the video because of a Justice Department investigation, said he did not see the video until shortly before its release, and has denied any wrongdoing. The video was released in Nov. 2015, seven months after Emanuel won reelection as mayor.

Asked whether Biden and Emanuel have spoken, including about the McDonald case, Psaki told reporters, "I don't have any record of him speaking with him necessarily through the process. ... Obviously, he's somebody who he was familiar with. He knew his record of long standing prior to the nomination. And the president has made his own comments about that case, which I would point everyone to."

Emanuel, a former ABC News contributor, was reportedly under consideration for a Cabinet secretary position during the transition last winter, but ultimately, he was not nominated for a role. The White House announced his nomination for ambassador to Japan on Aug. 20 after months of speculation.

To date, only nine Biden ambassador picks have been confirmed by the Senate, with dozens of others held up by Cruz, Hawley, and others over foreign policy disagreements with the White House, especially on Nord Stream 2.

"There have been unprecedented delays, obstruction, holds on qualified individuals from Republicans in the Senate," Psaki said Monday. "The blame is clear. It is frustrating. It is something that we wish would move forward more quickly."

After months of battle, however, there was a breakthrough Tuesday, with the Senate Foreign Relations Committee voting to send 33 nominations to the Senate floor for a vote.

"As the United States faces an unprecedented confluence of challenges on the world stage, our security, interests, and ability to advance our values and assert global leadership should not be imperiled by the obstructionism of those infatuated with playing politics with our entire national security infrastructure," Menendez said Tuesday.

Among those approved by the committee are Cindy McCain, John McCain's widow, for U.S. envoy to the United Nations agencies in Rome; former Republican Sen. Jeff Flake, an outspoken Trump critic, as ambassador to Turkey; famed pilot Chesley Burnett "Sully" Sullenberger as U.S. envoy to the International Civil Aviation Organization; and former Delaware Democratic Gov. Jack Markell as U.S. envoy to the Organization for Economic Cooperation and Development in Paris.

ABC News's Sarah Donaldson contributed to this report from the White House.

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Biden admin backs down on tracking bank accounts with over $600 annual transactions

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(WASHINGTON) -- The Biden administration on Tuesday backed down on a controversial proposal to direct the IRS to collect additional data on every bank account that sees more than $600 in annual transactions, after widespread criticism from Republican lawmakers and banking industry representatives, who said the tax enforcement strategy represented a breach of privacy by the federal government.

Instead, the administration and Senate Democrats are proposing to raise the threshold to accounts with more than $10,000 in annual transactions, and any income received through a paycheck from which federal taxes are automatically deducted will not be subject to the reporting. Recipients of federal benefits like unemployment and Social Security would also be exempt.

The IRS would collect the total sum of deposits and withdrawals from bank accounts with more than $10,000 in non-payroll income. Information on individual transactions would not be collected.

The changes were announced Tuesday by the Treasury Department.

"In response to considerations about scope, it [Congress] has crafted a new approach to include an exemption for wage and salary earners and federal program beneficiaries. Under this revised approach, such earners can be completely carved out of the reporting structure. This is a well-reasoned modification: for American workers and retirees, the IRS already has information on wage and salary income and the federal benefits they receive," a Treasury Department fact sheet on the changes said.

The changes would exempt millions of Americans from the reporting requirement, and help the IRS target wealthier Americans, especially those who earn money from investments, real estate, and other transactions that are more difficult for the IRS to track.

"Under the current system, American workers pay virtually all their tax bills while many top earners avoid paying billions in the taxes they owe by exploiting the system. At the core of the problem is a discrepancy in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance. This two-tiered tax system is unfair and deprives the country of resources to fund core priorities," Treasury Secretary Janet Yellen said in a statement.

"Today’s new proposal reflects the Administration’s strong belief that we should zero in on those at the top of the income scale who don’t pay the taxes they owe, while protecting American workers by setting the bank account threshold at $10,000 and providing an exemption for wage earners like teachers and firefighters," Yellen said.

The fact sheet says, "Imagine a taxpayer who reports $10,000 of income; but has $10 million of flows in and out of their bank account. Having this summary information will help flag for the IRS when high-income people under-report their income (and under-pay their tax obligations). This will help the IRS target its enforcement activities on those who are actually evading their tax obligations—decreasing costly and burdensome audits for the vast majority of taxpayers who pay what they owe."

The proposal is a long way from being enacted. It's currently included in a multi-trillion dollar social spending package lawmakers and the White House have been negotiating for months. If that package is passed into law, this requirement wouldn't begin until December 2022.

Senate Finance Committee Chairman Ron Wyden D-Ore., who spearheaded the effort to revise the proposal, dispute Republican claims that the goal is to snoop on Americans' financial transactions.

"The bottom line is, wealthy tax cheats are ripping off the American people to the tune of billions and billions of dollars per year. Tax cheats thrive when the reporting rules that apply to them are loose and murky. Democrats want to fix this broken approach and crack down on the cheating at the top," Wyden said in a press conference on the announcement Tuesday.

Wyden made clear that even Americans who might make a large purchase over $10,000 wouldn't be subject to the additional reporting.

"If you don’t have $10,000 above your paycheck, Social Security income, or the like coming in or going out, there’s no additional reporting. We’ve also addressed the scenario where an individual spends a significant amount of savings for a major purchase. There will be no additional reporting in this scenario, as long as the amount of money coming into the account does not exceed wages +$10,000," Wyden said.

The administration did not specify if the changes will impact the additional tax revenue they might be able to collect through enforcement. The administration has estimated improved tax enforcement could net up to $600 billion in additional tax revenue over the next decade.

The initial proposal, which would have affected nearly every non-dormant bank account in the U.S., raised the ire of Republican lawmakers, who called it a breach of privacy and an example of government overreach. Even with the revisions to the proposal, Republicans in the Senate remained critical.

"So how long is it gonna take for them to say, 'Well you know we need a little bit more information because we really can't make much of this.' Then they're going to want individual transactions and who knows what," Sen. John Thune, R-S.D., told reporters.

Sen. Mike Crapo, R-Idaho, cited President Biden's commitment not to raise taxes on any American making less than $400,000, suggesting that threshold ought to be applied to IRS reporting.

“Why don't they just put a ban in there that bans the IRS from snooping in the accounts of people who make less than $400,000? That's the question I think that should be asked with the sponsors of this approach," Crapo said.

Crapo was hard-pressed to give an example of an alternative way to close the tax gap other than to say mention “closing loopholes.”

Banking industry representatives remain skeptical of any additional reporting requirement, saying it will create a burden, especially for smaller community banks.

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