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A warning sign for the economy?

The momentous news Tuesday came from the House of Representatives special committee investigating the Jan. 6 attack on the Capitol. Cassidy Hutchinson, who served as assistant to former White House Chief of Staff Mark Meadows, testified that President Donald Trump knew the crowd gathered that day was armed, but demanded that magnetometers be removed and said something in the Kind of, “You know, I don’t give a damn that they have guns. You are not here to hurt me.”

Hutchinson also said Trump tried to join the march on the Capitol and got angry when Secret Service prevented him from doing so, even lunging for an agent and attempting to grab the steering wheel of the presidential limousine.

Hutchinson also revealed details about Trump’s outbursts of anger, concerns from Meadows and others that the planned rally on April 6. Read more about the chilling testimony from the key witness
here
or
here.

A warning sign for the economy of government tax revenues

State sales tax revenue could be a warning sign for the economy: According to a report by the Urban-Brookings Tax Policy Center, inflation-adjusted sales tax revenue in 26 states fell in April 2022 compared to April 2021. Total state sales tax revenue, adjusted for inflation, fell 1, 2% back.

The coffers are still well-stocked, with total tax revenues up 13% for the first 10 months of the fiscal year, including a 14.9% increase in personal income taxes and a 32.6% increase in corporate income taxes. Of 46 states for which preliminary data were available, 45 reported year-on-year growth in total tax revenue, with 15 states reporting growth of more than 15%.

Still, the report warns that the recent surge in revenue could be coming to an end: “Strong growth in government tax revenue is unlikely to continue, and evidence is mounting that strong revenue growth is likely to moderate or even reverse this fiscal year .” It adds that sales tax receipts are expected to weaken as inflation affects consumer behavior and shoppers return to pre-pandemic spending patterns: “Over time, particularly when wages and income fail to keep pace with inflation, we expect that consumers will continue to adjust spending patterns that will negatively impact state sales tax revenues.”

Many states are preparing for a fiscal downturn, according to Bloomberg’s Donna Borak
reports. “Thirty-seven states plan to maintain or increase their rainy day balances in 2023 as they brace for a slowdown the latest quarterly household survey by the National Association of State Budget Officers, published June 16.”

But the changing economic landscape can still throw some states into trouble. “Unfortunately, many states have only been thinking short-term and enacting tax cuts, mainly for income taxes, and now the impact of the tax cuts combined with the new reality and the end of federal aid will put the states in a really difficult position,” said Lucy Dadayan, Senior Research Associate at the Urban-Brookings Tax Policy Center and author of the state tax report, told Bloomberg “They’re going to have to look for other alternatives to increase their revenue.”

$8 billion in budget spending in 2023, and more to come

Not long ago, earmarking was viewed with suspicion by many lawmakers, particularly on the Republican side of the aisle, and in an effort led by Tea Party activists some 10 years ago, earmarking was banned in Congress. However, earmarking — now sometimes referred to as “member-driven spending” — has been revived, and the fiscal year 2022 omnibus spending package passed by Congress included more than 4,000 of them, worth about $9 billion.

Lawmakers are currently trying to sort out their 2023 spending plans, and Roll Call’s Peter Cohn and Herb Jackson
report Tuesday that members of the House of Representatives included 4,386 earmarkings worth $8.2 billion in their budget bills.

Republicans have led the way into 2023, claiming eight of the top 10 totals. Topping the list is a Republican from Texas, Rep. Randy Weber, who has secured $287.5 million in “community project funding” — by far the highest of any Rep but still just short of the $547 million US dollars that he originally applied for. The money will be divided among 10 projects, most of which are related to the energy infrastructure in his district near Houston.

In second place is another Republican, Rep. Michael Waltz of Florida, who secured $169 million, with more than half of the funds going to a communications center at Patrick Space Force Base in Brevard County.

Members may request earmarking on multiple subcommittee bills. The Transportation HUD bill has the most earmarkings: 1,827 of them, valued at $3.7 billion. In second place is the Labor HHS Education Bill with 1,310 projects worth $1.4 billion.

What’s next: More ear tags. Senators have yet to make their earmarking requests, and if 2022 is any guidance, there will be plenty of them. “[S]Enators’ appetites for earmarking are typically greater than their House counterparts, and of the $9 billion passed for this year, $5 billion were Senate-only requests,” write Cohn and Jackson. “And House lawmakers are limited to 15 separate project filings, a limitation their Senate peers don’t face.

Number of the day: 0

NBC News’ Shannon Pettypiece
highlights a somewhat overwhelming d from this year’s Group of Seven Summit, the gathering of the leaders of the seven major advanced democracies that just ended in Germany:

“There have been no announcements of new efforts to fight the coronavirus or expand access to vaccines or treatments, no masks have been worn in public by world leaders, and there have been no vaccination or testing requirements for those attending the summit to travel. President Joe Biden said no mention of the virus in any of his remarks,” Pettyppiece writes. “The fading of Covid from the conversation reflects broader fatigue with the pandemic in wealthier countries, where vaccines are now widely available and mortality rates have been falling for several months consistently low, public health experts said, but in lower-income countries the threat of Covid still looms large, with just over 15% of the population in those countries having received a single dose of a vaccine.”

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