Biden to propose hike in capital gains taxes to pay for more child care: sources

By Jarrett Renshaw and Trevor Hunnicutt

WASHINGTON (Reuters) – U.S. President Joe Biden next week will propose raising taxes on the wealthy to fund about $1 trillion in investments in child care, universal pre-kindergarten education and paid leave for workers, sources familiar with the plan said.

Biden’s proposal calls for increasing the marginal income tax rate to 39.6% from 37%, and nearly doubling taxes on capital gains to 39.6% for people earning more than $1 million, according to the sources.

White House Press Secretary Jen Psaki said the president would discuss his “American Families Plan” during an address to Congress next week, but declined to comment on any details. Sources said details would be released next week before the address.

She said the administration had not yet finalized funding plans and underscored the president’s determination to increase investment in child care, early childhood education and making U.S. workers more competitive.

“His view is that that should be on the backs — that can be on the backs of the wealthiest Americans who can afford it and corporations and businesses who can afford it,” Psaki said.

Asked if the proposals would discourage investment in the United States, Psaki said Biden and his economic team did not believe the measures would have a negative impact.

But she noted that Congress, which is deeply divided, must approve the tax measures included in the plan, and other options could still be proposed.

The proposal, which has been in preparation for weeks, triggered sharp declines on Wall Street, with the benchmark S&P 500 index down 1% in early afternoon, its steepest drop in more than a month, after Bloomberg published a report.

Yields on Treasuries, which move in the opposite direction to their price, fell to the day’s low.

Biden’s new plan, likely to cost about $1 trillion, comes after a $2.3 trillion jobs and infrastructure proposal that has already run into stiff opposition from Republicans. They generally support funding infrastructure projects but oppose Biden’s inclusion of priorities like expanding elder care and asking corporate America to pay the tab.

Tax hikes on the wealthy could harden Republicans’ resistance against Biden’s latest “human” infrastructure plan, forcing Democrats to consider pushing it – or least some of the measures – through Congress using a party-line budget vote known as reconciliation.

U.S. Senator Joe Manchin, a Democrat from West Virginia who wields outsize power due to the party’s slim majority, has recently said he is wary of expanding the use of reconciliation.

Wealthy Americans could face an overall capital gains tax rate of 43.4% including the 3.8% net investment tax on individuals with income of $200,000 or more ($250,000 married filing jointly). The latter helps fund the Affordable Care Act.

Currently, those earning more than $200,000 pay an overall rate of about 23.8% including the Obamacare net investment tax instituted as part of the Affordable Care Act. Still, market observers said there was no small amount of doubt whether the capital gains tax proposal would make it through Congress. “If it had a chance of passing, we’d be down 2,000 points,” said Thomas Hayes, chairman and managing member at hedge fund Great Hill Capital LLC, referring to stock market indexes.

(Reporting by Jarrett Renshaw, Trevor Hunnicutt; additional reporting by Andrea Shalal, David Lawder, Dan Burns and Herbert Lash; Editing by Chizu Nomiyama and Cynthia Osterman)

Biden White House in talks with airlines on vaccine passports; will issue guidance

By David Shepardson

WASHINGTON (Reuters) – The Biden administration is in extended discussions with U.S. airlines and other travel industry groups to provide technical guidance for vaccine passports that could be used to ramp up international air travel safely, industry officials said.

The administration has repeatedly made clear it will not require any businesses or Americans to use a digital COVID-19 health credential, however. It will also publish guidelines for the public.

The key question, airline and travel industry officials say, is whether the U.S. government will set standards or guidelines to assure foreign governments that data in U.S. traveler digital passports is accurate. There are thousands of different U.S. entities giving COVID-19 vaccines, including drugstores, hospitals and mass vaccination sites.

Airline officials say privately that even if the United States does not mandate a COVID-19 digital record, other countries may require it or require all air passengers to be vaccinated.

White House press secretary Jen Psaki told reporters on Tuesday that the administration would provide guidance “that provides important answers to questions that Americans have, in particular around concerns about privacy, security, or discrimination, soon.”

On March 22, major U.S. airlines and other travel groups urged the White House to “develop uniform Federal principles for COVID-19 health credentials” that would ensure they can “securely validate both test results and vaccination history, protect personal data, comply with applicable privacy laws, and operate across local, state and international jurisdictions.”

Singapore on Monday said it will start accepting visitors who use a mobile travel pass containing digital certificates for COVID-19 tests and vaccines, while Iceland said last month it is opening its borders to all visitors who have been vaccinated against COVID-19 without mandatory testing or quarantine.

Psaki said on Tuesday that the U.S government will not require Americans to carry a credential. “There will be no federal vaccinations database and no federal mandate requiring everyone to obtain a single vaccination credential,” she said.

Psaki noted that there is a push “in the private sector to identify ways that they can return to events where there are large swaths of people safely in soccer stadiums or theaters.”

She added “that’s where the idea originated, and we expect that’s where it will be concluded.”

(Reporting by David Shephardson and Heather Timmons; editing by Jonathan Oatis)

Biden does not intend to meet with North Korea’s Kim

WASHINGTON (Reuters) – U.S. President Joe Biden does not intend to meet with North Korean leader Kim Jong Un, the White House said on Monday.

Asked if Biden’s diplomatic approach to North Korea would include “sitting with President Kim Jong Un” as former President Donald Trump had done, White House press secretary Jen Psaki said, “I think his approach would be quite different and that is not his intention,” she said.

North Korea launched a new type of tactical short-range ballistic missile last week, prompting Washington to request a gathering of the U.N. Security Council’s (UNSC) sanctions committee, which then criticized the test.

Biden on Thursday said the United States remained open to diplomacy with North Korea despite the tests, but warned there would be responses if North Korea escalates matters.

North Korea on Saturday said the Biden administration had taken a wrong first step and revealed “deep-seated hostility” by criticizing what it called a self-defensive missile test.

Trump had three high-profile meetings with Kim, and exchanged a series of letters, but relations later grew frosty, and the nuclear-armed state said it would not engage further unless the United States dropped its hostile policies.

(Reporting by Jeff Mason; writing by Andrea Shalal; editing by Chris Reese and Marguerita Choy)

Biden sends envoys to Mexico, Guatemala asking help on migrant flow

WASHINGTON/MEXICO CITY (Reuters) – U.S. officials will ask authorities in Mexico and Guatemala to help stem migrant traffic, White House press secretary Jen Psaki said on Monday, as the Biden administration struggles to contain a burgeoning humanitarian challenge along the U.S. border with Mexico.

President Joe Biden dispatched U.S. envoys, including White House border coordinator Roberta Jacobson, to the two countries on Monday for talks on how to manage the increase in the number of migrants heading for the U.S.-Mexican border.

When asked if the U.S. delegation would seek support from local officials, Psaki told a news briefing:

“Absolutely, part of our objective as Roberta Jacobson,…conveyed when she was in here just a few weeks ago, was that we need to work in partnership with these countries to address the root causes in their countries to convey clearly and systematically that this is not the time to travel.”

Jacobson was joined by Juan Gonzalez, the National Security Council’s senior director for the Western Hemisphere, and Honduran-born diplomat Ricardo Zuniga, just appointed by the State Department as the Northern Triangle special envoy.

Gonzalez will continue to Guatemala to meet Guatemalan officials, as well as representatives from civil society and non-governmental organizations.

Biden’s promise to end former President Donald Trump’s hardline immigration policies has been complicated by a recent spike in the number of migrants crossing the border illegally.

The increase in the number of migrants fleeing violence, natural disasters and economic hardship in Central America is testing Biden’s commitment to a more humane immigration policy.

White House spokeswoman Emily Horne said Jacobson’s goal in Mexico is developing “an effective and humane plan of action to manage migration.”

The visit was also announced by Mexico’s foreign ministry, which said the talks would take place on Tuesday.

Gonzalez’ aim in Guatemala is to “address root causes of migration in the region and build a more hopeful future in the region,” Horne said.

U.S. officials are struggling to house and process an increasing number of unaccompanied children, many of whom have been stuck in jail-like border stations for days while they await placement in overwhelmed government-run shelters.

Biden has resisted calling the border drama a crisis despite Republicans’ insistence that it fits the description.

“Children presenting at our border, who are fleeing violence, who are fleeing prosecution, who are fleeing terrible situations, is not a crisis,” Psaki told reporters.

Biden and his team had a mixed message at the outset of the border woes, saying the border was closed but that unaccompanied children would be given care.

Psaki said the Biden administration has placed 17,118 radio ads in Spanish, Portuguese and 6 indigenous languages to discourage U.S.-bound migration from Central America and Brazil. She said 589 digital ads have also been placed.

Mexico has beefed up law enforcement at its southern border to stem a sharp increase in migrants entering the country to head for the United States.

“The main issue to discuss will be cooperation for development in Central America and the south of Mexico, as well as the joint efforts for safe, orderly and regular migration,” Roberto Velasco, the top official at the Mexican foreign ministry for North America, said on Twitter.

Representatives of the Economic Commission for Latin America and the Caribbean will also attend the meeting, Velasco said.

(Reporting by Daina Beth Solomon and Steve Holland; Additional reporting by Matt Spetalnick; Editing by Frank Jack Daniel and Alistair Bell)

U.S. to give Americans COVID-19 vaccines before discussing sharing with Mexico: White House

By Steve Holland and Dave Graham

WASHINGTON/MEXICO CITY (Reuters) – The Biden administration on Monday downplayed the prospect of sharing coronavirus vaccines with Mexico, saying it is focused first on getting its own population protected against a pandemic that has killed more than 500,000 Americans.

The remarks by White House press secretary Jen Psaki came hours before Mexican President Andres Manuel Lopez Obrador is expected to ask U.S. President Joe Biden to consider sharing some of its COVID-19 vaccine supply.

“The administration’s focus is on ensuring that every American is vaccinated. And once we accomplish that objective we’re happy to discuss further steps,” Psaki said at a White House news conference.

The two leaders are due to hold a virtual meeting later on Monday that is also likely to encompass immigration and trade.

Biden has predicted the United States will have enough supply by late July to inoculate all Americans. U.S. authorities have administered 76.9 million doses to date, according to the U.S. Centers for Disease Control and Prevention, enough for 23% of the population to get the two doses recommended for full protection under the vaccines that have been deployed so far.

Mexico has vaccinated roughly 2.5 million doses so far, enough for about 1% of the population, according to data compiled by Reuters. Officials have been frustrated by bottlenecks in supply and raised concerns that wealthy countries are hoarding vaccines.

According to Reuters reporting, Mexico would aim to pay back Washington once pharmaceutical companies have delivered on their orders.

Mexican magazine Proceso said Lopez Obrador had asked Biden for help on vaccines in January.

“We’d like to get an answer on a request that we’ve already made … about the vaccines,” Lopez Obrador told a regular news conference on Monday. “Provided he’s of the view the matter should be addressed. We must be respectful.”

IMMIGRATION AND ENERGY

Immigration, security, climate change and the United States-Mexico-Canada Agreement (USMCA) trade deal were also likely to feature in talks, said Lopez Obrador, a left-wing nationalist.

Mindful of pressure to curb unlawful immigration, Lopez Obrador said on Saturday he wants Biden to help secure U.S. work permits for Mexicans and Central Americans, saying the United States needed another 600,000-800,000 workers.

On Monday, Lopez Obrador said he wanted to broker an agreement that covered all kinds of workers, including “professionals.”

The two leaders could also discuss Lopez Obrador’s efforts to strengthen a state-run electricity utility, the Comision Federal de Electricidad (CFE).

The Mexican president has cast the legislation as a matter of national sovereignty, arguing that past governments skewed the electricity market in favor of private operators.

Business groups have condemned the bill, saying it risks violating the USMCA and endangers Mexico’s renewable energy targets because it puts wind and solar generators at a disadvantage against the CFE, a heavy user of fossil fuels.

(Reporting by Dave Graham, Steve Holland and Alexandra Alper; Additional reporting by Nandita Bose and David Alire Garcia; Writing by Andy Sullivan; Editing by Giles Elgood and Aurora Ellis)

White House says no intention to require COVID-19 testing on domestic flights

By David Shepardson and Steve Holland

WASHINGTON (Reuters) – The White House said on Friday it was not currently planning to require people to take COVID-19 tests before domestic airline flights after the prospects of new rules raised serious concerns among U.S. airlines, unions and some lawmakers.

White House spokeswoman Jen Psaki said at a briefing on Friday that “reports that there is an intention to put in place new requirements, such as testing, are not accurate.”

Psaki spoke after the chief executives of major U.S. airlines, including American Airlines, Southwest Airlines and United Airlines, met virtually with White House COVID-19 response coordinator Jeff Zients.

The Centers for Disease Control and Prevention (CDC) said last month the agency was “actively looking” at expanding mandatory COVID-19 testing to U.S. domestic flights.

The CDC on Jan. 26 began requiring negative COVID-19 tests or evidence of recovery from the disease from nearly all U.S.-bound international passengers aged 2 and older.

Any CDC order would first need to be drafted and then reviewed by other federal agencies in the Biden administration, including the White House.

The White House and officials told Reuters this week that no formal order had been circulated and that officials were not expected to endorse requiring negative COVID-19 tests before domestic flights, but added that decision could change at a later date.

“We had a very positive, constructive conversation focused on our shared commitment to science-based policies as we work together to end the pandemic, restore air travel and lead our nation toward recovery,” Nick Calio, chief executive of the Airlines for America industry group, said in a statement after the meeting on Friday.

The White House has a separate interagency meeting scheduled for later Friday to discuss coronavirus issues.

The meeting of airline CEOs, Zients and other administration officials involved in COVID-19 issues came after the industry strongly objected to the possibility of requiring COVID-19 testing before domestic flights.

Southwest Airlines warned such a requirement could put jobs at risk and a major aviation union said it could lead to airline bankruptcies.

One idea that has been under serious consideration is for the CDC to issue recommendations advising against travel to specific areas of the United States with high COVID-19 caseloads, although those travel recommendations would not be binding, officials said.

The CDC currently has a broad recommendation discouraging all non-essential air travel.

(Reporting by David Shepardson; editing by Jonathan Oatis; Editing by Chizu Nomiyama, Jonathan Oatis and Sonya Hepinstall)

White House confirms Biden signing new South Africa travel restrictions

WASHINGTON (Reuters) – The White House confirmed President Joe Biden is signing an order on Monday imposing a ban on most non-U.S. citizens entering the country who have recently been in South Africa starting Saturday.

White House spokeswoman Jen Psaki also confirmed Biden will re-impose an entry ban on nearly all non-U.S. travelers who have been in Brazil, the United Kingdom, Ireland and 26 countries in Europe that allow travel across open borders that was set to expire Tuesday.

“With the pandemic worsening and more contagious variants spreading, this isn’t the time to be lifting restrictions on international travel,” Psaki said at a news briefing.

(Reporting by David Shepardson; Editing by Chris Reese)

Biden seeks five-year extension of New START arms treaty with Russia

WASHINGTON (Reuters) – U.S. President Joe Biden will seek a five-year extension to the New START arms control treaty with Russia, the White House said on Thursday, in one of the first major foreign policy decisions of the new administration ahead of the treaty’s expiration in early February.

“The President has long been clear that the New START treaty is in the national security interests of the United States. And this extension makes even more sense when the relationship with Russia is adversarial as it is at this time,” White House press secretary Jen Psaki said in a briefing.

She also said Biden had “tasked” the U.S. intelligence community for its full assessment of the Solar Winds cyber breach, Russian interference in the 2020 election, Russia’s use of chemical weapons against opposition leader Alexei Navalny and alleged bounties on U.S. soldiers in Afghanistan.

“Even as we work with Russia to advance U.S. interests, so too we work to hold Russia to account for its reckless and adversarial actions,” Psaki said.

The arms control treaty, which is due to expire on Feb. 5, limits the United States and Russia to deploying no more than 1,550 strategic nuclear warheads each.

In addition to restricting the number of deployed strategic nuclear weapons to its lowest level in decades, New START also limits the land- and submarine-based missiles and bombers that deliver them.

The treaty’s lapse would end all restraints on deployments of U.S. and Russian strategic nuclear warheads and the delivery systems that carry them, potentially fueling a new arms race, policy experts have said.

Earlier, a source familiar with the decision told Reuters that U.S. lawmakers have been briefed on Biden’s decision on the New START treaty.

The Kremlin said on Wednesday it remained committed to extending New START and would welcome efforts promised by the Biden administration to reach agreement.

(Reporting by Arshad Mohammed and Jeff Mason; Writing by Humeyra Pamuk and Susan Heavey; Editing by Doina Chiacu and Bill Berkrot)