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In today’s Principals, a national sales tax is splitting Republicans and George Santos’ story takes ͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
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January 18, 2023


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Steve Clemons
Steve Clemons

In Davos as in Washington, the conversation is very much about Ukraine — and as Open Society Foundation Board Chair Alexander Soros told me today, what surprises and impresses him is that Ukraine is still above the fold news in America and that the fatigue crowd has not yet prevailed. But he’s also wary of “single sentence answers” that promise a decisive end to global problems like Russia’s war.

As Morgan Chalfant reports, UK Foreign Secretary James Cleverly was in DC suggesting that the West amp up supplies to help Ukraine win a speedy victory. Those who know Russia and Putin are quietly lurking on the edges of some Davos parties and think that kind of “get it over quick” thinking will play right into Putin’s hands as he’s willing to play the long game while voters tire of war in democracies. We’ll see.

On other fronts, Joseph Zeballos-Roig finds anti-tax conservatives at odds over a national “fair tax” proposed by Rep. Buddy Carter, R-Ga. that’s been kicking around the right for decades.

And it wouldn’t be a new day it seems without another incredible George Santos story — this one on allegations that he scammed money from donors for a veteran’s dying service dog. Benjy Sarlin and Kadia Goba have more.

PLUS: Davos maven and economist Ken Rogoff gives us all a lesson on the debt limit debate and succinctness in One Good Text to Ben Smith.

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White House: The White House tried to turn the attention back to Kevin McCarthy by demanding he release information about “secret” deals brokered with conservative Republicans to get the speaker’s gavel, as White House aides faced an eighth straight day of questions about Biden’s handling of classified documents.

Chuck Schumer: The Senate majority leader sent a warning to Republicans who want to use the debt limit to force spending cuts. “There should be no political brinkmanship with the debt limit,” Schumer said in a statement, adding that a default on the nation’s debt would “lead to higher costs.”

Mitch McConnell: The Senate minority leader said he approved of Attorney General Merrick Garland’s decision to tap a special counsel to investigate Biden’s documents, telling local Kentucky radio the current president and former President Trump should be treated “exactly the same way.”

Kevin McCarthy: The hard right is ready for its close-up. Several members of the House Freedom Caucus were added to the high-profile House Oversight Committee, including Marjorie Taylor Greene and Paul Gosar as well as Reps. Lauren Boebert and Scott Perry. Greene also got a spot on the House Homeland Security Committee, which would likely play a role in any effort by House Republicans to impeach Homeland Security Secretary Alejandro Mayorkas.

Hakeem Jeffries: The Minority Leader will be watching his state legislature today as they hold a hearing on a controversial judicial nominee Jeffries has said deserves to be treated with the same “dignity, decency and respect” as any other candidate before the New York state body.

Need to Know
George Santos
REUTERS/Jonathan Ernst

George Santos denied to Semafor an allegation that he promised a disabled veteran to raise $3,000 for a dog’s tumor surgery with a fake charity and then disappeared with the money. Patch.com published allegations late Tuesday, which contained screenshotted Facebook posts and text messages between the veteran Richard Osthoff and Anthony Devolder, another name that Santos went by. A 2016 Twitter post promoting the fundraiser to help “sapphire the Veteran rescue dog” held “by Anthony Devolder” was still online as of last night. “Fake,” Santos said. “No clue who he is.”

Santos also received his committee assignment from House leadership on Wednesday. He will serve on the Small Business Committee and Space, Science and Technology Committee. Much of the New York Republican delegation has called on Santos to resign, a push McCarthy has not supported, and it’s unclear if the latest news will affect leadership’s thinking. McCarthy has previously declared a member of his caucus persona non grata — former Iowa Rep. Steve King — but has not done so in this case.

Kyrsten Sinema, I-Ariz. and Joe Manchin, D-W.V. appeared on a panel at Davos where they high-fived each other for preventing Democrats from eliminating the filibuster.

Ronna McDaniel told Semafor she has “well enough support to win” a fourth and final term as head of the Republican National Committee, which elects its chair later this month. But challenger Harmeet Dhillon thinks grassroots pressure will deliver her an upset. Check out our story about the state of the race, including interviews with both candidates and the RNC members backing them.

Morgan Chalfant

Beltway Newsletters

Punchbowl News: House Oversight Committee Chairman James Comer, R-Ky. is demanding documents from the University of Pennsylvania, including visitor logs of individuals who met with Biden at the Penn Biden Center and a list of any Chinese donors to the center or UPenn beginning in 2017.

Playbook: How will Democrats and Republicans reach a deal on the debt ceiling when Democrats refuse to concede there’s even a negotiation to have on the issue? Get ready for one intense game of chicken.

Axios: Treasury Secretary Janet Yellen is planning to make a trip to China soon. She just met with her Chinese counterpart in Zurich earlier today.

Joseph Zeballos-Roig

Republicans worry a national sales tax bill is a ‘political gift’ for Democrats

REUTERS/Elizabeth Frantz


As part of his deal to become House speaker, Kevin McCarthy reportedly promised his party’s conservative hardliners a vote on legislation that would scrap the entire American tax code and replace it with a jumbo-sized national sales tax.

The assurance got relatively little attention at the time, drowned out by the many other concessions McCarthy made to win his gavel. But with Democrats already attacking the proposal, some conservatives see it as a political headache in the making.

“This is a political gift to Biden and the Democrats,” Grover Norquist, the dean of D.C. anti-tax activists, said in an interview. “I think that this is the first significant problem created for the Republican Party by the 20 people who thought that there was no downside to the approach they took.”

The idea of a “fair tax” that would replace our current IRS code with a single sales tax was popularized on conservative talk radio in the late 1990s. It has kicked around Washington ever since, popping up in the occasional presidential platform, but never received a vote.

Its current champion in Congress is Georgia Rep. Earl “Buddy” Carter, whose Fair Tax Act would swap out the income, payroll, estate, and corporate levies for a 30% national sales tax. It would also send out “prebate” checks to soften the blow on lower income families, all while abolishing the Internal Revenue Service.

“Nobody likes to pay taxes, or at least, I don’t know anybody who does,” Carter said in a recent office interview. “But if they are going to pay a tax, I think they would much rather pay a consumption tax as opposed to an income tax.”

Proponents argue the system is superior because it doesn’t punish people for making more money and rewards them for thrift, if they so choose.

“If you don’t want to pay a tax, don’t buy it. It’s as simple as that,” the Georgia Republican said.


Carter told Semafor he didn’t want to subject his colleagues to a painful vote. My guess is he won’t have to any time soon: Expect Republicans to bottle up this bill as long as possible.

Outside the deepest trenches of conservatism, a 30 percent sales tax is mostly seen as an obvious political loser. Democrats, for their part, can hardly seem to believe their luck that their opponents might attach themselves to it.

“Great idea,” Biden deadpanned during a speech Monday. “It would raise taxes on the middle class by taxing thousands of everyday items from groceries to gas, while cutting taxes for the wealthiest Americans.”

It’s still unclear how many Republicans actually support the Fair Tax Act, or even want it to get a vote. Carter said the bill’s debut on the House floor was secured as part of negotiations among 20 conservative holdouts that eventually gave Speaker McCarthy the gavel by a slim margin. But he was uncertain when it would be put to the floor, however, and said he wasn’t “privy” to those talks.

Critically, Ways and Means GOP members already appear opposed to the plan, at least in its current form. None are co-sponsoring the plan.

“I would almost expect it to be in [Carter’s] interest to pull that bill rather than have a vote on it in committee,” a tax lobbyist in touch with House Ways and Means Republicans told Semafor. “I don’t think there’s any favorable people on the committee with an opinion in support of the Fair Tax.”

The bill does enjoy a number of co-sponsors within the hardline House Freedom Caucus. But even some archconservatives aren’t on board.

“I’ve got concerns,” Rep. Chip Roy, R-Texas., told Semafor, referring to the amendment authorizing income taxes. “I will not support creating a new tax without repealing the 16th amendment.”


Some top Republicans are saying there’s at least a possibility the bill will get a vote. “A lot of people wanted to vote on that for quite a number of years so this might be the Congress when it happens,” Rep. Patrick McHenry, R-N.C., a top McCarthy ally, told Semafor last week.

Foreign Influence
German tanks delivered to Slovakia as part of an exchange program with Ukraine.
REUTERS/Radovan Stoklasa

U.K. Foreign Secretary James Cleverly made the rounds in Washington on Tuesday to talk Ukraine, meeting with Secretary of State Antony Blinken, giving remarks at Center for Strategic and International Studies, and even appearing on MSNBC’s “Morning Joe.

In a briefing with reporters Tuesday afternoon, Cleverly argued that the U.K. and its allies should take steps to speed up a Ukrainian victory over Russia in order to avoid a “first World War type attritional stalemate.”

“Anything we can do to end this quickly has got to be something that we must consider seriously,” he said. “The sooner we bring that about, the fewer people lose their lives, the less damage they’ll be to Ukraine, the fewer Russian losses there will be.”

Cleverly’s appearance came days after Britain agreed to supply Ukraine with tanks, and as the U.S. and Germany consider doing the same. Cleverly wouldn’t offer much of a window into private deliberations, saying only that support for Ukraine looks different from country to country. He also said it would ultimately fall to Ukraine to decide what winning the war looks like, but emphasized that however the conflict ends, Kyiv must “prevail.”

“There is a broad understanding that we cannot allow the message to be perceived around the world that this kind of violence and this kind of aggression is rewarded,” Cleverly said of Russia.

Morgan Chalfant


One Good Text ... with Ken Rogoff


Stories that are being shared less widely across left-leaning or right-leaning outlets, according to data from our partners at Ground News.

WHAT THE LEFT ISN’T READING: Walter Shaub, who was appointed by then-President Obama to serve as director of the Office of Government Ethics, accused Biden of “an inexcusable neglect of the most basic security protocols” after Obama-era classified documents were found at his home and former office.

WHAT THE RIGHT ISN’T READING: GOP Reps. Marjorie Taylor Greene and Lauren Boebert reportedly got into a fight in the bathroom.

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Steve Clemons