Saturday Morning Post: The Weekly View from Washington
Big business lobbyists can celebrate their come-from-behind victory in the trade fight this past week — a major win by any measure. But summer break on K Street will end almost as soon as it started. A potentially more consequential smash-up looms just beyond the July 4th Congressional recess. With the highway trust fund running on fumes, Congress will need to find revenue to replenish it by the end of next month. The deadline could finally force action in the long-simmering debate over corporate tax reform, since lawmakers are eyeing the roughly $2 trillion in profits that multinationals have stashed overseas as their best source of new money.
No decisions have been made about the way forward. And there’s a healthy likelihood that Congress resorts to its favorite move in a pinch by finding a short-term patch that punts consideration to the end of the year. But tax-writers in both chambers are circling a plan that would force foreign profits home by revoking their deferral and subjecting them to a discounted rate. And they’d sweeten the deal for the tech and pharmaceutical companies most impacted by carving out a new break for domestic innovation. Pairing repatriation with infrastructure investment holds bipartisan appeal on Capitol Hill. It could, however, wreak havoc among business interests, splintering the united front that has demanded a comprehensive approach to rewriting the tax code. “This has nothing to do with good government, the American flag, or Valley Forge,” says one leading lobbyist in the fray. “It has to do with a simple question: Do my taxes go up or down?” Which is to say the details, so far scarce, will drive the outcome. Get ready for a hot July.
| Tory Newmyer | |
| @torynewmyer | |
| tory_newmyer@fortune.com |
Top News
• Greece sets a vote on its EU future
Greeks will end five months of suspense about their future in the Eurozone when they convene in a week to render a verdict-by-referendum. News of the vote came in a post-midnight announcement Friday by Greek prime minister Alexis Tsipras, after his government decided in an emergency meeting it would not accept its creditors’ terms for an extension of the troubled country’s bailout. The decision could presage a Tuesday default on a €1.5 billion debt repayment due to the International Monetary Fund. Tsipras has asked German and French leaders for a one-week extension to carry Greece through the vote, and it isn’t yet clear whether they’ll grant the request. Fortune
• Supremes affirm gay marriage rights but employment protections lag
The Supreme Court shook the nation Friday by handing down a 5-4 decision enshrining same-sex marriage as a Constitutional right. “No longer may this liberty be denied,” Justice Anthony Kennedy wrote in the majority’s decision. The ruling represents the culmination of a long-fought battle for equal treatment that has accelerated markedly in recent years, marked by rapidly-shifting public attitudes and a meaningful if late-breaking embrace by corporate leaders. Employment guarantees, however, remain a patchwork, with 28 states continuing to expose gay and lesbian workers to firing on the basis of their sexual orientation. Fortune
• After a winning week, Obama channels emotion in Charleston
Obama just wrapped a triumphant week in his presidency. His push for fast track authority to finalize negotiations on the 12-nation Trans Pacific Partnership cleared Congress after a handful of near-death brushes in Congress. And Obamacare survived a legal challenge meant to exploit a legislative drafting error to gut the federal subsidies that prop up his landmark domestic achievement. It promised to end on a dour note nonetheless when the president traveled to Charleston to deliver the eulogy for a South Carolina community leader gunned down in last week’s massacre. Instead, Obama turned in an emotional, galvanizing address that demonstrated a leadership style increasingly unburdened by shorter-term calculus. Fortune
Around the Water Cooler
• Feds should study the Sony hack
Feds scrambling to contain the damage from a hack of millions of government personnel files have their work cut out. In the immediate term, a better understanding of the most devastating corporate breach in history might offer some clues about the way forward. Fortune’s Peter Elkind provides a groundbreaking account of how the Sony disaster unfolded in our new issue, now available online with a lot of extras. Fortune
