Former President Donald J. Trump’s lawyers denied on Tuesday that he incited the deadly assault on the Capitol and argued that the Senate had no power to try a former president, as House prosecutors made their case that Mr. Trump was “singularly responsible” for the Jan. 6 rampage and must be convicted and barred from holding any future office.
The dueling filings provided the clearest preview yet of a politically fraught impeachment trial — the second in just a year — scheduled to begin in earnest next Tuesday. Both sides indicated they were ready for a debate over the constitutionality of trying a former president. They were also lining up diametrically opposed interpretations of a set of events witnessed on live television across the nation.
In his first formal answer to the “incitement of insurrection” charge against him, Mr. Trump’s lawyers denied that he was responsible for the Capitol riot or that he intended to interfere with Congress’s formalizing of President Biden’s election win. They said his words to supporters, some who later stormed the building — “if you don’t fight like hell, you’re not going to have a country anymore” — were protected by his First Amendment right of free speech. They said they were not meant as a reference to violent action, but “about the need to fight for election security in general.”
“It is denied that President Trump incited the crowd to engage in destructive behavior,” the lawyers, Bruce L. Castor Jr. and David Schoen, wrote in the 14-page filing.
Notably, the document avoided repeating or attempting to defend Mr. Trump’s bogus claims that the November election had been “stolen” from him by widespread fraud, which the former president had wanted to be the central feature of his defense. But his lawyers in effect argued that Mr. Trump believed he won, and therefore was within his rights to “express his belief that the election results were suspect.” His claims could not be disproved, they added, because there was “insufficient evidence.” (Judges rejected more than 60 lawsuits by Mr. Trump and his allies claiming varying degrees of fraud or irregularities.)
Above all, the former president’s lawyers said the Constitution did not permit the Senate to try a former president after he had left office — despite the fact that the Senate has tried a former official in the past.
The response arrived two hours after the nine House Democrats preparing to prosecute the case argued in their own 80-page pretrial brief that Mr. Trump was directly to blame for the violent attack on Jan. 6 and a broader attack on democracy that showed he would do anything to “reassert his grip on power” if he were allowed to seek election again.
“President Trump has demonstrated beyond doubt that he will resort to any method to maintain or reassert his grip on power,” wrote the managers, led by Representative Jamie Raskin of Maryland. “A president who violently attacks the democratic process has no right to participate in it.”
The House prosecutors also refuted Mr. Trump’s constitutional challenge to the case, asserting that history and even conservative constitutional theory supported the Senate’s right to try a former president.
“There is no ‘January exception’ to impeachment or any other provision of the Constitution,” the managers wrote. “A president must answer comprehensively for his conduct in office from his first day in office through his last.”
They likewise insisted that Mr. Trump’s First Amendment right to free speech did not shield him from responsibility for inciting violence that would seek to do harm to the Constitution, undermining all the rights enshrined there, including free speech.
Mr. Trump’s response took an unusual form, addressing the House’s article of impeachment point by point. It also appeared to be somewhat hastily assembled after Mr. Trump shook up his legal team just 48 hours before the brief was due; the response was addressed to the “Unites States Senate.”
Democrats took the first step on Tuesday to push through President Biden’s $1.9 trillion stimulus plan, using a budgetary maneuver that could eventually allow the measure to become law without Republican support.
“We are not going to dilute, dither or delay,” Senator Chuck Schumer, Democrat of New York and the majority leader, said on the Senate floor. “There’s nothing about the process itself that prevents bipartisanship.”
Still, the move set the stage for Democrats to advance Mr. Biden’s plan through budget reconciliation, which would allow it to pass with a simple majority vote, bypassing the need for Republican support. It came the day after 10 Republican senators met at the White House with Mr. Biden seeking a smaller, $618 billion package they said could win bipartisan backing.
Shortly after Mr. Schumer announced the action, which would allow for passage of a budget resolution as soon as Friday, a key Democratic swing vote announced he would support it.
Senator Joe Manchin III, Democrat of West Virginia, said he would vote to move forward with the budget process “because we must address the urgency of the Covid-19 crisis.”
“But let me be clear — and these are words I shared with President Biden — our focus must be targeted on the Covid-19 crisis and Americans who have been most impacted by this pandemic,” Mr. Manchin said in a statement. “I will only support proposals that will get us through and end the pain of this pandemic.”
The budget resolution would instruct congressional committees to draft legislation that could include Mr. Biden’s stimulus proposal, which includes $1,400 direct payments for many Americans, funding for vaccine distribution, reopening schools and other measures. The committees would work on finalizing the plan at the same time as the Senate is scheduled to hold an impeachment trial of former President Donald J. Trump on charges that he incited the mob attack on the Capitol.
But even though Mr. Schumer said Democrats “want this important work to be bipartisan,” Republicans balked at his move, saying it reflected an unwillingness to compromise.
“It’s not a good signal that he’s adopting a take-it-or-leave-it approach right after his president delivers an inaugural address based on unity,” said Senator Todd Young, Republican of Indiana and one of the senators who spent two hours on Monday meeting with Mr. Biden.
Senator Mitch McConnell, of Kentucky and the minority leader, said the group of 10 who met with the president came away from the White House believing Mr. Biden was more interested in compromise than his staff or Mr. Schumer.
“They’ve chosen a totally partisan path,” Mr. McConnell said of Senate Democrats.
More than 100 Democratic lawmakers are also urging Speaker Nancy Pelosi of California and Mr. Schumer to repeal a business tax break as part of the economic aid package. The tax cuts in question — which center on so-called net operating losses — were included in a rescue bill Congress passed in March 2020, as the pandemic spread and the nation was in the midst of a recession.
On Tuesday, an influential business group that had welcomed Mr. Biden’s initial proposal urged him to work with Republicans on a compromise — and to scale back his plans, including providing less aid for the unemployed and scrapping a call for an increase in the federal minimum wage to $15 an hour.
In a four-page letter to Mr. Biden and congressional leaders, the U.S. Chamber of Commerce said lawmakers should prioritize money for vaccine distribution, school reopening and child care facilities in their economic aid package. It urged them to tie additional months of assistance for the long-term unemployed to economic conditions in states, cutting off aid when the economy improves, and to provide less aid to unemployed workers than Mr. Biden has proposed.
The Chamber also pushed Mr. Biden to reduce the number of Americans eligible to receive direct payments, as the Republican group has proposed.
The Senate confirmed Alejandro N. Mayorkas on Tuesday as secretary of homeland security, making him the first Latino and the first immigrant to hold that job.
Mr. Mayorkas — a former deputy secretary of homeland security as well as a former director of the department’s legal immigration agency, Citizenship and Immigration Services — was confirmed to President Biden’s cabinet by a vote of 56 to 43 in the Senate. He is the first Senate-confirmed leader of the Homeland Security Department in roughly 21 months.
Six Republicans voted with all the Democrats to confirm Mr. Mayorkas: Senators Lisa Murkowski and Dan Sullivan of Alaska, Susan Collins of Maine, Rob Portman of Ohio, Mitt Romney of Utah and Shelley Moore Capito of West Virginia.
Born in Cuba to parents who later fled Fidel Castro’s revolution, Mr. Mayorkas is known for helping develop the Obama-era Deferred Action for Childhood Arrivals program, or DACA, which deferred deportation for hundreds of thousands of young immigrants who were brought to the United States illegally as children. The Trump administration tried to end the program but was stymied by the Supreme Court, and President Biden has promised to preserve it.
In a Senate hearing last month, Mr. Mayorkas said that if confirmed, he would make it a priority to combat domestic terrorism, a longtime problem that has become more pressing after right-wing extremists stormed the Capitol on Jan. 6.
But Republicans in the hearing focused their questions largely on immigration and border security, which will require a balancing act for the new secretary of homeland security. After the hearing, Senator Josh Hawley of Missouri vowed to block a quick confirmation because, he said, “Mr. Mayorkas has not adequately explained how he will enforce federal law and secure the southern border.”
Mr. Mayorkas faces the challenge of following through on the Biden administration’s pledge to roll back the Trump administration’s restrictive immigration policies, which largely blocked people from seeking asylum in the United States. He will also lead a new task force to identify families separated at the border and issue recommendations on how to reunite them.
During his confirmation hearing, Mr. Mayorkas faced some criticism over an investigation completed in 2015, which found that he had intervened to speed up consideration of visas for foreign investors with ties to Democrats. The investigators said at the time that Mr. Mayorkas had created “an appearance of favoritism and special access,” but they did not find any illegal behavior.
Senator Mitch McConnell of Kentucky, the Republican minority leader, said on Tuesday that he would not vote for Mr. Mayorkas, arguing that he had turned Citizenship and Immigration Services into an “unethical favor factory for the Democratic Party royalty.”
Mr. Mayorkas said during his confirmation hearing that he had felt obligated to involve himself in a system “plagued by problems.” He said he had received requests from both Democrats and Republicans to assist with the cases.
Luke Broadwater contributed reporting.
The new head of the legal team defending former President Donald J. Trump in the Senate impeachment proceedings said on Tuesday that Mr. Trump had never pressured him to base his legal arguments on baseless allegations of widespread voter fraud.
In a brief phone interview with The New York Times, the lawyer, David Schoen, said he believed that Mr. Trump’s comments at the Jan. 6 rally of his supporters, many of whom then took part in a riot at the Capitol, were protected speech under the Constitution.
Butch Bowers, the first head of Mr. Trump’s legal team in the impeachment proceedings, along with four other lawyers, parted ways with Mr. Trump over the weekend. People close to the former legal team and close to Mr. Trump said he had wanted the legal team to focus on his false claims that an election victory was stolen from him. Mr. Schoen disputed that was the case.
“You know the president believes what he believes. He’s never forced that, in front of me,” on the lawyers representing him, Mr. Schoen said. “It’s not my experience.”
Mr. Schoen, who described himself as a “First Amendment absolutist,” said that he believed that Mr. Trump’s comments at a Jan. 6 rally that preceded the riot at the Capitol were protected speech under the Constitution. He added that he believed that a conviction of Mr. Trump by the Senate risked “chilling the rights on any passionate speakers.”
“We can’t control the reaction of the audience,” he said.
House prosecutors plan to argue that Mr. Trump was “singularly responsible” for the Jan. 6 rampage and must be convicted and barred from holding any future office.
Mr. Schoen pointed to another potential argument that could help Mr. Trump, one not related to free speech: that at least some of the Trump supporters who stormed the Capitol planned their attack in advance, suggesting that Mr. Trump was not the inciting force.
“I have no reason to believe anyone involved with Trump was in the know,” he said of the violence that unfolded at the Capitol.
Mr. Trump announced on Monday that Mr. Schoen and Bruce L. Castor Jr. would replace Mr. Bowers and the other lawyers who had initially represented Mr. Trump in the proceedings.
Mr. Schoen said that he had talked to Mr. Trump 10 to 20 times in recent days, and that he had been involved in the team discussions even when Mr. Bowers was still involved.
Democrats laid out their argument for convicting Mr. Trump in a lengthy filing on Tuesday. Mr. Schoen, who acknowledged he was still coming up to speed on the case, laid out how he expected the Democrats to make their argument at the trial.
“They’re going to put on reams and reams of video and riots and people being hurt and interviews with Capitol Police and people saying they did this for Trump,” Mr. Schoen said. “We’re going to be arguing it’s not a constitutional proceeding and I think there are some very important First Amendment issues involved — I think that’s pretty obvious.”
The Senate on Tuesday confirmed Pete Buttigieg, the former mayor of South Bend, Ind., and a 2020 Democratic presidential candidate, to be transportation secretary, putting in place a key emissary to President Biden as his administration seeks an ambitious overhaul of the nation’s infrastructure.
The confirmation, by a vote of 86 to 13, makes Mr. Buttigieg, 39, the first openly gay cabinet secretary to be confirmed by the Senate, as well as Mr. Biden’s youngest cabinet member.
Mr. Buttigieg’s bipartisan confirmation underscored the support he has received from lawmakers in both parties as he charted a vision for infrastructure reform that aligned with Mr. Biden’s goals on climate change, racial justice, job creation and economic recovery.
As transportation secretary, Mr. Buttigieg will oversee an agency that employs 55,000 people and controls around $87 billion in funding at a time when the country’s public transit systems are reeling from the pandemic. He is expected to play a key role in shepherding efforts by the Biden administration to push a $2 trillion infrastructure plan through Congress.
At his confirmation hearing last month, Mr. Buttigieg spoke of a “generational opportunity” to transform infrastructure. He pledged to work with state, local and tribal leaders on transportation concerns, while trying to mitigate the effect that transportation policies have historically had on poor and minority communities.
“I believe good transportation policy can play no less a role than making possible the American dream,” Mr. Buttigieg said. “But I also recognize that at their worst, misguided policies and missed opportunities in transportation can reinforce racial and economic inequality.”
Mr. Buttigieg’s confirmation was described by a number of human rights groups as a symbolic moment for the L.G.B.T.Q. community.
“This confirmation breaks through a barrier that has existed for too long; where LGBTQ identity served as an impediment to nomination or confirmation at the highest level of government,” Alphonso David, president of Human Rights Campaign, a group dedicated to advancing the interests of the L.G.B.T.Q. community, said in a statement. “Let this important moment for our movement serve as a reminder to every L.G.B.T.Q. young person: you too can serve your country in any capacity you earn the qualifications to hold.”
President Biden plans to sign three executive orders on Tuesday aimed at further rolling back his predecessor’s assault on immigration.
In one order, the president will direct the secretary of homeland security to lead a task force that will try to reunite several hundred families that remain separated under former President Donald J. Trump’s “zero tolerance” policy, which sought to discourage migration across the country’s southern border. More than 5,000 families were separated.
When asked if the administration’s early actions to reverse the Trump-era crackdown on immigration would encourage migrants to travel toward the U.S. border with Mexico, Jen Psaki, the White House press secretary said, “It remains a dangerous trip — this is not the time to come to the United States.”
She also said the administration needs time to establish a new protocol to replace what she called Mr. Trump’s “immoral” family separation policies, but brushed aside requests to offer specifics — including whether the president plans to revise the previous administration’s asylum restrictions.
Under Mr. Biden’s order, the federal government will seek to either bring parents to the United States or return children to parents who are living abroad, depending on the wishes of the families and the specifics of immigration law.
In two other orders, Mr. Biden will authorize a review of Mr. Trump’s immigration policies that limited asylum, stopped funding to foreign countries, made it more difficult to get green cards or be naturalized, and slowed down legal immigration into the United States
Mr. Biden is to formally announce the three orders on Tuesday afternoon at the White House. He will appear on the same day that the Senate confirmed his nominee to run the Homeland Security Department, Alejandro N. Mayorkas. The orders help satisfy some of his campaign promises but underscore the difficulty the new president faces in unraveling scores of individual policies and regulations.
Newly reported comments and conspiracy theories espoused by Marjorie Taylor Greene, a freshman House Republican of Georgia, have ruffled members of her party in her home state, as elected officials oscillated between condemning her, ignoring her, and offering broad words of displeasure carefully chosen not to offend her supporters.
Gov. Brian Kemp of Georgia largely sidestepped the controversy at a news conference on Monday, saying it was up to voters in her district in northwest Georgia to decide whether they found the comments unbecoming of an elected official. Ms. Greene has posted several debunked conspiracy theories on social media and encouraged calls for violence against Democratic politicians, including Speaker Nancy Pelosi. In other unearthed videos, she has shouted at a survivor of the mass shooting at a high school in Parkland, Fla., and blamed wildfires on a space laser controlled by Jews, a conspiracy theory with anti-Semitic roots.
“It’s my understanding that a lot of the things are being referenced with Representative Greene are things that happened before the election,” Mr. Kemp said. “If the voters don’t like what they’re doing or how she’s representing them, we have an election cycle that’s quickly coming upon us.”
In new statements to The New York Times, other Georgia Republicans went further than Mr. Kemp, who stands to face a tough re-election contest in 2022 after incurring the wrath of former President Donald J. Trump in the aftermath of the presidential election.
Brad Raffensperger, Georgia’s Republican secretary of state who pushed back on Mr. Trump’s attempts to depict the presidential election as fraudulent, said “The future of the Republican Party is not Congresswoman Marjorie Taylor Greene.”
He then quoted a Bible verse that says, “Don’t respond to the stupidity of a fool; you’ll only look foolish yourself.”
Mr. Raffensperger added, “I would encourage every person elected to the great halls of our Congress, before you speak words that inflame, to ask yourself, ‘Would our Founders condone or condemn your tone?’”
The statements come as Ms. Greene has faced pushback from the highest echelons of the Republican Party in recent days — but has also been embraced by Mr. Trump.
Senator Mitch McConnell of Kentucky, the Republican leader in the Senate, said on Monday that the “loony lies and conspiracy theories” embraced by Ms. Greene amounted to a “cancer” on the Republican Party.
“Somebody who’s suggested that perhaps no airplane hit the Pentagon on 9/11, that horrifying school shootings were pre-staged, and that the Clintons crashed J.F.K. Jr.’s airplane is not living in reality,” Mr. McConnell said. “This has nothing to do with the challenges facing American families or the robust debates on substance that can strengthen our party.”
Mr. McConnell’s comments intensified pressure on Representative Kevin McCarthy of California, the minority leader, who is to meet with Ms. Greene this week amid calls from outside Republican groups and some members of his own party to revoke Ms. Greene’s committee assignments.
Ms. Greene offered her own retort in response to Mr. McConnell on Twitter, saying “the real cancer” on the party was “weak Republicans who only know how to lose gracefully.”
As Republicans splinter over how to deal with Ms. Greene, Democrats are seizing on the infighting to make her the avatar for an array of G.O.P. lawmakers.
The Democratic Congressional Campaign Committee on Tuesday began a $500,000 advertising campaign on television and online tying eight House Republicans, including Mr. McCarthy to Ms. Greene and the QAnon conspiracy theory that she has endorsed in the past.
“Congressman Don Bacon,” an ominous-sounding voice intones in the ad targeting the Nebraska Republican, “he stood with Q, not you.”
Catie Edmondson and Reid Epstein contributed from Washington.
Virginia Thomas, a conservative legal activist and the wife of Justice Clarence Thomas, has expressed regret over her role in discord among Justice Thomas’s former law clerks because of her support for President Donald J. Trump and the Jan. 6 rally that preceded the storming of the Capitol.
She made her apology after the mob attack on the Capitol on a private email list called Thomas Clerk World. Her comments were first reported by The Washington Post and confirmed by a former clerk to the justice.
The list has largely been devoted to updates about families and careers, along with domestic matters like dog rearing and pie baking, the clerk said. But in recent weeks heated political debates had unfolded on the list among the former clerks, almost all of whom are conservative.
The former clerks, like many Republicans, were deeply split over whether Mr. Trump’s efforts to overturn the election were legitimate. Some said they believed the election had likely been stolen, while others condemned what they called an insurrection.
Ms. Thomas, known as Ginni, has been an enthusiastic proponent of Mr. Trump and expressed support for the Jan. 6 rally in the days leading up to it. She has expressed no public views supporting Mr. Trump’s false claims that the election was stolen.
“I owe you all an apology,” she wrote to the former clerks. “I have likely imposed on you my lifetime passions.”
“My passions and beliefs are likely shared with the bulk of you, but certainly not all,” she added. “And sometimes the smallest matters can divide loved ones for too long. Let’s pledge to not let politics divide THIS family, and learn to speak more gently and knowingly across the divide.”
Justice Thomas does not participate in the email list, the former clerk said.
In a recent email, Ms. Thomas called for reconciliation. “I would ask those of you on the contrary side to have grace and mercy on those on my side of the polarized world, and feel free to call and talk to me individually about where I failed you as a friend here,” she wrote. “I probably need more tutoring.”
Nearly a dozen people who the authorities said made politically motivated threats by social media or phone have been charged with federal crimes — most of them were nowhere near Washington on the day of the Jan. 6 riot.
In recent weeks, law enforcement has arrested a Proud Boys supporter in New York accused of posting violent threats on the social media network Parler; a Colorado man charged with sending a text about “putting a bullet” in Speaker Nancy Pelosi; and a man near Chicago implicated in a voice mail message about killing Democrats on Inauguration Day.
Even though they were not physically present during the Jan. 6 attack on the Capitol, they have become part of its sprawling fallout, as investigators scour the country to track down hundreds of rioters and examine whether right-wing extremist groups were involved in organizing the attack.
Law enforcement agencies have long struggled to decipher whether online statements could lead to real danger, wary of bringing cases hinged largely on speech that could be protected by the First Amendment. But the volume of tips about threats has skyrocketed since the Capitol assault, compelling some officials to decide not to wait to see if violent language developed into action.
When law enforcement officials are concerned about a violent social media threat that has not led to any real-world action, that person will often get a knock on the door from the F.B.I. with a warning. But former officials have called the Capitol riot a “9/11 moment” for domestic violent extremism, a catalyzing event that has pushed local and federal resources around the country to focus on one top priority, with a much lower tolerance to wait and see if threats materialize.
Former President Donald J. Trump lost ground with every age group in the 2020 election compared to his performance in 2016, but he had his “greatest erosion with white voters, particularly white men,” according to an analysis by one of his campaign pollsters.
The 27-page report, by the Trump pollster Tony Fabrizio, focused on what he called 10 key target states. Five of them — Arizona, Georgia, Michigan, Pennsylvania, and Wisconsin — all flipped to President Biden after supporting Mr. Trump in 2016. Another five — Florida, Iowa, North Carolina, Ohio, and Texas — were held by Mr. Trump in both 2020 and 2016.
Mr. Fabrizio, who analyzed National Election Pool and Associated Press exit polls, also found that the bulk of independent voters broke for Mr. Biden. The analysis was first reported by Politico.
Mr. Trump’s handling of the coronavirus played a key role in why voters did not back him, Mr. Fabrizio found. The pollster and Mr. Trump’s former campaign manager, Brad Parscale, had urged Mr. Trump to take the virus more seriously earlier in 2020, and Mr. Fabrizio had pushed Mr. Trump to support some form of a national mask mandate. But Mr. Trump rejected the idea.
Mr. Fabrizio noted that Dr. Anthony S. Fauci, the infectious disease expert who Mr. Trump repeatedly attacked during the campaign, had a markedly higher job approval than Mr. Trump. Some 72 percent of voters who flipped their votes away from Mr. Trump supported the job that Dr. Fauci did on the coronavirus.
And very few late-breaking voters cast ballots for Mr. Trump. Most had settled on their candidate before October, the analysis found, meaning decisions made by the Trump campaign on how to allocate resources, including the president’s time, were of minor impact.
The analysis found that Mr. Trump gained support with Latino voters compared to 2016 while his support among Black voters was essentially unchanged.
It was not clear on Tuesday if Mr. Trump has read Mr. Fabrizio’s report.
Gun sales increased dramatically in the two months after Joseph R. Biden Jr. was elected president — with firearms dealers reporting four million applications for background checks for sales in January, a 60 percent increase over the same month in 2020, according to new data released by the F.B.I.
The rush to buy new weapons, driven by fears that Mr. Biden and a Democratically controlled Congress will crack down on gun sales and stoked by former President Donald J. Trump’s false claim that Democrats will repeal the Second Amendment, resulted in the largest increases in firearms applications per month in December and January.
The pandemic drove sales even before the election, as bouts of civil unrest erupted around the country and people started to fear for their personal safety. Americans applied to buy about 40 million new guns in 2020, an increase of 11 million from the year before. A research firm, IbisWorld, called the increase over the past year “unprecedented.”
The National Shooting Sports Foundation, a firearm industry trade association, has encouraged its members to exercise their rights to buy weapons, warning that Mr. Biden’s administration was preparing to move on several gun control proposals.
Mr. Biden has promised to tighten gun controls by reinstituting limits on assault weapons and high-capacity magazines, and adopting several measures, including a voluntary national buyback program for some weapons and a limit on the number of guns a person can buy in a single month.
Before 2020 and 2021, the biggest increase in gun buying came in the month after President Barack Obama won re-election in 2013, with a 900,000 jump in sales from December 2012, according to the F.B.I.
More than 100 Democratic lawmakers are urging Speaker Nancy Pelosi of California and Senator Chuck Schumer of New York, the majority leader, to repeal a business tax break as part of the economic aid package that Democrats hope to send to President Biden in the coming weeks.
The lawmakers, led by Representative Lloyd Doggett of Texas and Senator Sheldon Whitehouse of Rhode Island, say the move — and a related change that would effectively raise taxes on some businesses in the years to come — could reduce federal borrowing for the aid package by as much as $250 billion.
Mr. Biden has proposed a $1.9 trillion plan, all financed with borrowed money. Many Republicans have objected to the price tag, saying it is more than what the economy needs and will further bloat the federal deficit.
On Monday, 10 Senate Republicans countered with a $618 billion plan. But those Republican lawmakers will almost certainly reject any increase in business taxes as a means of bridging the two sides’ gap on borrowing for the bill.
The tax cuts in question — which center on so-called net operating losses — were included in a rescue bill Congress passed in March 2020, as the pandemic spread and the nation was in the midst of a recession. They were temporary rollbacks of a limitation placed on business deductions by the 2017 tax law that Republicans passed and former President Donald J. Trump signed. In effect, the March provision allowed some companies that suffered large losses in recent years to reduce their tax bills to the federal government, by applying those losses to offset taxes on profits from the previous five years.
Proponents of those tax breaks — including congressional Republicans and business groups — said the move would provide a cash infusion to companies struggling amid the pandemic.
In their letter to Ms. Pelosi and Mr. Schumer, the Democratic lawmakers say the cuts “benefit a narrow set of high-income taxpayers, including hedge funds, real estate developers, and likely the Trump family.”
“The best place to start for Republicans urging more narrowly-targeted relief is eliminating the $250 billion bonanza for hedge fund managers and real estate speculators they previously tucked into the CARES Act,” Mr. Doggett and Mr. Whitehouse said in a written statement. “With 120 Democratic lawmakers, we urge negotiators to halt the windfall to the least needy and reinvest in the most needy.”
The lawmakers propose repealing the change, which applied to losses incurred from 2018 to 2020, and making permanent the Trump-era limitation on the carrying back of net operating losses.
Together those changes would raise federal revenues by an estimated $250 billion over a decade, the lawmakers said, citing estimates from the congressional Joint Committee on Taxation. Some of that money would come from the government “clawing back” tax refunds sent to companies that have already filed their taxes and made use of the expanded loss provision.