White House warns states of potentially dire effects if government defaults

September 20, 2021

The White House is warning states that a default caused by failing to raise the federal debt limit could result in drastic cutbacks to disaster relief, Medicaid reimbursement, school funding, and other programs, reports CNN.

“If the US defaults and can no longer pay its obligations, billions of dollars in state aid and state-run but federal funded programs could be halted,” the White House warns in a fact sheet for local and state officials.

Preident Joe Biden has demanded that Republicans join Democrats in raising the debt ceiling, but so far, GOP lawmakers have resisted. The memo comes as Democratic leaders are seriously considering adding a debt limit increase to the stopgap funding bill.

A final decision on whether to make that move must come by Monday, September 20, when the House Rules Committee is slated to take up the short-term continuing resolution, or CR, to keep the government open past September 30. If Democrats add the debt limit hike to the CR, it will set up a showdown vote days before the shutdown deadline, since Senate Republicans are vowing to block it.

According to CNN, the U.S. Treasury has said extraordinary measures to avoid default will run out by October.

The memo outlines several key programs that would be halted if Congress fails to the Children’s Health Insurance Program, infrastructure funding, education, public healthcare, and child nutrition.

The memo also warned that “hitting the debt ceiling could cause a recession,” suggesting, “Economic growth would falter, unemployment would rise, and the labor market could lose millions of jobs.”

“If the U.S. defaults on its debt, cities and states could experience a double-whammy: falling revenues and no federal aid as long as Congress refuses to raise or suspend the debt limit. This means critical state services will be at risk for budget cuts, from education to healthcare to pensions,” the White House said.

It also warns that capital market volatility “could affect state assets,” which could impact state pension payout obligations.

The White House expressed confidence the matter would be resolved, but declined to say how.

“We have seen this done in a bipartisan way consistently. And the best way to do this is without a lot of drama, without a lot of self-inflicted harm to the economy and to our country. And that’s what we’re going to do, you know, there’s a lot of posturing on this issue, but we’re confident at the end of the day we’ll get this done,” National Economic Council Director Brian Deese said Friday, September 17, on MSNBC.

Research contact: @CNN

Gavin Newsom wins in a walk; Elder tanks in recall

September 16, 2021

With about 70% of the projected vote counted, 63.9% of Californians voted against recalling Democratic Governor Gavin Newsom (D), while 36.1% voted for it—almost identical to Joe Biden’s 63%-34% win in the state in 2020, NBC News reports.

So how did Newsom do it, especially compared with the successful gubernatorial recall from 2003?

One, California is much more Democratic—and less Republican—than it was 18 years ago, when voters ousted Democratic Governor Gray Davis (D) and replaced him with Arnold Schwarzenegger (R).

In 2003, California had 15 million registered voters. Of those, 6.7 million of them were registered Democrats (43.7%) and 5.4 million were registered Republicans (35.3%), with the rest Independent or other.

Now, California has 22 million registered voters, with 10.3 million of them Democrats (46.5%) and 5.3 million of them Republican (24.0%).

That’s right: Today there are 7 million more registered voters in California than there were back in 2003, but the number of Republicans has declined since then.

The second big reason that Newsom won has been the change inside the Republican Party over the last 18 years, in which Donald Trump is certainly no Ronald Reagan and in which Larry Elder is no Arnold Schwarzenegger.

Per the NBC News exit poll of last night’s race, 34% of all voters said they had a favorable view of Elder, versus 50% who said they had a negative view. (That’s compared with 55% in the exit poll who said they approved of Newsom’s job, versus 43% who disapproved.)

Over the last 30 years, successful and competitive GOP candidates (think Schwarzenegger, Pete Wilson, even Meg Whitman) supported abortion rights and came (more or less) from the moderate wing of the GOP.

That doesn’t describe Elder, who opposes abortion rights and comes from the conservative wing of the party.

Outside of those two macro-trends in California, there’s a tactical reason why Newsom won so easily.He and his allies leaned heavily into masks and vaccines—especially as a way to motivate Democratic voters.

Per the exit poll, 63% of voters in the recall said getting the COVID vaccine is a public health responsibility, versus 34%, who said it’s a personal choice—which almost exactly matches the No-Yes margin on Tuesday night, September 14.

And on masks, 70% of voters said they supported California requiring children to wear masks in school, and they voted against the recall by an 80%-to-20% margin, according to the exit poll.

Research contact: @NBCNews

Obama, Bush, and Clinton join forces with new organization helping Afghan evacuees

September 15, 2021

Three of the nation’s four most recent former presidents are coming together to offer their support to a new organization that aims to assist Afghan evacuees who are resettling in the United States after fleeing Taliban-controlled Afghanistan, reports the Forbes Alert.

Former Presidents Bill Clinton, George W. Bush, and Barack Obama, as well as former First Ladies Hillary Clinton, Laura Bush, and Michelle Obama, are joining Welcome.US as honorary co-chairs “to lift up everyone else involved and remind us that this is our opportunity, in a time of all too much division, for common purpose,” the group’s website states.

The organization, which launched on Tuesday, September 14, also boasts a Welcome Council comprising former and current government officials from both parties, military and business leaders, and activists. It brings together a coalition of organizations helping Afghan allies as they arrive in the U.S. and businesses making financial or in-kind contributions to resettlement efforts.

On its home page, Welcome.US says, “Across party, faith, geography, age, background, and beyond, Americans are uniting for newcomers. More than 280 front-line organizations, leaders, and businesses have already joined the Welcome.US community—not to stand up an organization, but to inspire all Americans to also make the choice to serve. Write to partners@welcome.us if you, too, want to get involved. This is only day one.”

 Indeed, Welcome.US bills itself as a “first of its kind national organization that will engage Americans and mobilize support across sectors for Afghan refugees” and said in a press release it will provide a “single point of entry for Americans who want to get involved” with helping Afghans who have fled the country.

After the Taliban’s rapid takeover of Afghanistan, the Biden administration launched the largest military evacuation in U.S. history—airlifting more than 122,000 people from the main airport in Kabul, including roughly 5,500 Americans, before President Joe  Biden’s August 31 deadline for withdrawing the final U.S. troops from Afghanistan.

According to Forbes, the Administration now is tasked with resettling more than 50,000 Afghan evacuees, overwhelming the U.S. refugee resettlement system. Since mid-August, the U.S. has admitted roughly 24,000 of the Afghans it relocated from Kabul, and most are being temporarily housed at eight military installations, where they are undergoing medical screenings and additional processing. Another approximately 39,000 have remained at military bases in Europe and the Middle East.

After the Afghan evacuees complete their processing at the military bases, they are connected with resettlement agencies, which help them to find affordable housing and jobs. But the volume of refugees arriving in the U.S. has strained resettlement agency resources, prompting the groups to secure short-term lodging through hotel chains and Airbnb rentals.

Welcome.US is stepping up, with the help of the former presidents and Welcome Council, to become a nationwide “welcome wagon.”

Research contact: @Forbes

House Democrats outline tax increases for wealthy businesses and individuals

Sseptember 14, 2021

Senior House Democrats are coalescing around a draft proposal that could raise as much as $2.9 trillion to pay for most of President Joe Biden’s sweeping expansion of the social safety net by increasing taxes on the wealthiest corporations and individuals, The New York Times reports.

The preliminary proposal, which circulated on and off Capitol Hill on Sunday, September 12, would raise the corporate tax rate to 26.5 percent for the richest businesses and impose an additional surtax on individuals who make more than $5 million.

The plan could be a critical step for advancing the $3.5 trillion package, which is expected to include federally funded paid family leave, address climate change and expand public education.

But the revenue provisions outlined in a document obtained by The New York Times and reported earlier by The Washington Post fall short of fully financing the entire package Democrats are cobbling together, despite promises by Biden and Democratic leaders that it would be fully paid for in order to assuage concerns from moderates in their caucus.

Still, White House spokesperson Andrew Bates was cheerful about its prospects— commenting that the outline “makes significant progress toward ensuring our economy rewards work and not just wealth by cutting taxes for middle-class families, reforming the tax code to prevent the offshoring of American jobs and making sure the wealthiest Americans and big corporations pay their fair share.”

Specifically, the proposal would raise the corporate tax rate to 26.5% from 21% for businesses that report more than $5 million in income. The corporate tax rate would be lowered to 18% for small businesses that make less than $400,000; and would remain at 2% for all other businesses. The president originally had proposed raising the corporate tax rate to 28%, a larger increase that both corporations and moderate Democrats have resisted.

To help raise what the draft’s authors estimate could be $900 billion in taxes on corporations, Democrats suggest additional changes to the tax code that are intended to bolster a global push to set minimum taxes for corporate income and crack down on multinational companies shifting profits to tax havens, a process that the administration is championing abroad.

According to the Times, House Democrats also are considering an increase to the top marginal income tax rate to 39.6% from 37% for households that report taxable income over $450,000 and for unmarried individuals who report more than $400,000. For people who make more than $5 million, the proposal would impose a 3% surtax, which is expected to raise $127 billion.

It also increases the top tax rate for capital gains—the proceeds from selling an asset like a boat or stocks to 25% from 20%. Biden essentially had proposed doubling that tax rate. The proposal also would provide $80 billion over the next ten years for the Internal Revenue Service to beef up tax enforcement, a provision that budget scorekeepers estimate would raise $200 billion.

And while Bates, the White House spokesperson, said that the draft outline adhered to Biden’s pledge to avoid raising taxes on Americans who make less than $400,000, the document suggests increasing the tax rate for tobacco products and imposing a tax on other products that use nicotine, such as e-cigarettes. That provision is expected to raise $96 billion.

The document also outlines the possible inclusion of drug pricing provisions and changes in tax rules to “treat cryptocurrency the same as other financial instruments.”

The full House tax-writing committee still needs to release and advance text of the legislation, and it is unclear if a sufficient number of Democrats will embrace the package in the House and the Senate. In order to protect the economic package from a Republican filibuster and pass it with a simple majority, Democrats can spare only three votes in the House and must remain united in the Senate.

Research contact: @nytimes

DOJ sues Texas over abortion law

September 13, 2021

On Thursday, September 9, the Biden Administration sued the State of Texas over its highly restrictive abortion law, which the Supreme Court allowed to take effect earlier this month, reports Politico.

“The act is clearly unconstitutional under longstanding Supreme Court precedent,” Attorney General Merrick Garland said in a news conference. “This kind of scheme to nullify the Constitution of the United States is one that all Americans, whatever their politics or party, should fear.”

The Texas law, SB8, effectively bans most abortions by prohibiting the procedure after six weeks from conception—a period that is before when many people become aware they are pregnant. Additionally, it sets up a novel enforcement mechanism that authorizes private citizens to file lawsuits against those who are believed to perform or aid in an abortion outside of that window.

Garland took direct aim at that aspect of the law, saying it empowered “bounty hunters” to enforce it for the guarantee of a minimum of $10,000 payment if the suit succeeds. He also warned that the Texas law could become a model not only for other states but also for people looking to undermine other constitutional rights, which he did not specify.

“If it prevails, it may become a model for action in other areas in other states,” the attorney general told reporters at Justice Department headquarters.

Politico and other outlets reported on Wednesday, September 8, that the Department of Justice was preparing to sue Texas over the new law, which has outraged Democrats and abortion rights supporters in the aftermath of the 5-4 Supreme Court ruling refusing an emergency stay against the statute.. The new lawsuit was filed Thursday afternoon in federal court in the state capital, Austin, and was assigned to Judge Lee Yeakel, an appointee of former President George W. Bush. The Justice Department is seeking an injunction to halt enforcement of Texas’ law and is claiming that the law “irreparably injures” the federal government.

According to Politico, President Joe Biden has faced intense pressure to respond to Texas’ abortion restrictions—nd to early moves in other conservative-led states to craft similar laws. Biden has decried the law, calling it “un-American” and saying it “blatantly violates” the landmark Roe v. Wade precedent. The complaint makes a similar argument and claims Texas lawmakers enacted the statute “in open defiance of the Constitution.”

“It takes little imagination to discern Texas’s goal — to make it too risky for an abortion clinic to operate in the State, thereby preventing women throughout Texas from exercising their constitutional rights, while simultaneously thwarting judicial review,” it states.

Thursday’s announcement makes good on Biden’s promise to take on Texas and attempt to block enforcement of the abortion law—setting up a high-stakes fight with Gov. Greg Abbott and Attorney General Ken Paxton, who are both Republicans up for reelection next year and have vowed to defend the law.

Garland said that, in addition to violating the rights of women, Texas’ law interfered with the work of several federal agencies—including the Departments of Labor, Heath and Human Services, and Defense—in violation of the U.S. Constitution.

Despite the White House’s evident desire to combat the Texas law, Garland insisted that the Justice Department had not responded to pressure to file the suit.

“The Department of Justice does not file lawsuits based on pressure,” the attorney general declared, without elaborating on what role the White House played in preparations for the suit. “We carefully evaluated the law and the facts.”

While federal government lawsuits seeking to invalidate state laws are unusual, they are far from unprecedented. Under former President George W. Bush, the Justice Department sued Arizona over a state law seeking to crack down on undocumented immigrants. And under former President Donald Trump, the Justice Department sued California over state laws impacting immigration enforcement, the use of private prisons and efforts to develop federal land.

The Justice Department designated its new suit as related to a previous one filed by abortion providers and abortion-rights advocates in July over the Texas law. The designation puts the case before Judge Robert Pitman, an appointee of President Barack Obama, but lawyers for Texas could try to challenge the designation.

Research contact: @politico

Biden to deliver six-step plan on COVID

September 10, 2021

On Thursday, September 9, President Joe Biden was expected to outline new approaches to control the COVID-19 pandemic in the United States, which rages on despite the wide availability of vaccines, reports Thomson Reuters Foundation News.

In his speech, Biden planned to focus on six areas—among them, new plans to get more people vaccinated, enhancing protection for those who already have had shots, and keeping schools open, according to a White House official.

In addition, the official said, the president would discuss increasing testing and mask-wearing, protecting an economic recovery from the pandemic-induced recession, and improving healthcare for people infected with the disease.

“We know that increasing vaccinations will stop the spread of the pandemic, will get the pandemic under control, will return people to normal life,” White House Press Secretary Jen Psaki told reporters on Wednesday. “We have more work to do, and we are still at war with the virus.”

Increasing infections have raised concerns as children head back to school, while also rattling investors and upending company return-to-office plans.

Just over 53% of Americans are fully vaccinated, including almost two-thirds of the adult population, according to CDC data. The disease has killed more than 649,000 Americans.

With many Americans still skeptical of the shots, the White House already has announced plans to give those who are fully vaccinated booster shots for more additional protection.

In doing so, they have rejected arguments from the World Health Organization and other advocates that rich countries should hold off on booster shots before more people worldwide have been inoculated.

Research contact: @thomsonreuters

Pelosi says lawmakers will get security briefing on ‘Justice for J6’ rally

September 9, 2021

House Speaker Nancy Pelosi (D-California) said on Wednesday, September 8,  that lawmakers will be briefed in the coming days about security plans for the Capitol during a rally later this month in support of people charged with crimes related to the January 6 insurrection—and maintained that “we intend to have the integrity of the Capitol be intact,” reports The Hill.

Pelosi said that “there are some briefings going on at the appropriate level” with the House Administration Committee, which will be followed by additional ones for other members of Congress ahead of the September 18 “Justice for J6” rally, when people demonstrating against those arrested for invading the Capitol are set to gather.

When asked if there are plans to reinstall a fence around the Capitol complex, which came down this spring, Pelosi told the press pool: “Not necessarily.”

“What happened on January 6 was such an assault on this beautiful Capitol,” Pelosi told reporters in the Capitol. “And now these people are coming back to praise the people who were out to kill. Out to kill members of Congress, successfully causing the deaths—successfully is not the word, but that’s the word, because it’s what they set out to do—of our law enforcement.”

Capitol Police Officer Brian Sicknick died a day after engaging with the violent mob of former President Donald Trump‘s supporters, while four other police officers from the Capitol Police and the Metropolitan Police Department died of suicide in the weeks after the attack. More than 140 police officers between the two departments were injured.

The Hill reported on Tuesday that the Capitol Police are planning to present a security plan this week to the Capitol Police Board, which oversees its activities. The Metropolitan Police Department is also planning an “increased presence around the city,” according to a spokesperson.

The September 18 rally in support of the more than 570 people charged with crimes related to the attack on the Capitol is being organized by a group called Look Ahead America, which is led by a former Trump campaign official. The event is not expected to draw as many people as the rally on January 6, but some members of the same right-wing extremist groups that were at the Capitol on the day of the insurrection also may be in attendance on September 18.

Matt Braynard, the executive director of the group organizing the September 18 rally, has urged attendees to “be respectful and kind to all law enforcement officers” and advised only bringing signs or clothing focused on “demanding justice for these political prisoners.”

Neither chamber of Congress is scheduled to be in session on September18, which falls on a Saturday. The House isn’t expected to return from its summer recess until two days later.

Research contact: @thehill

Ex-FBI official says law enforcement needs to take Sept. 18 right-wing rally in DC ‘very seriously’

September 8, 2021

Former FBI Deputy Director Andrew McCabe said on Monday evening, September 6,  that law enforcement needs to take the upcoming right-wing rally in support of jailed January 6 rioters “very seriously” as concerns mount about more potential violence on Capitol Hill, CNN reports.

“I think they should take it very seriously. In fact, they should take it more seriously than they took the same sort of intelligence that they likely saw on January 5,” McCabe, now a CNN contributor, told CNN’s Poppy Harlow on “Erin Burnett OutFront.”

Law enforcement members in Washington are steeling themselves against possible unrest at the “Justice for J6″ rally—planned for September 18—which aims to support the insurrectionists charged in the riot.

The event, organized by a former Trump campaign staffer, has prompted security concerns on Capitol Hill, and some precautionary measures will be in place. However, it’s unclear how many protesters plan to attend. The rally is also taking place on a Saturday, when the House will be on recess, so far fewer lawmakers or staff will be around.

A law enforcement source previously told CNN that the Metropolitan Police Department will be fully activated, which includes canceling days off for sworn officers and putting Civil Disturbance Units on standby. The source said the department will monitor open source information—like online chatter and travel —to gauge the potential crowds.

Homeland Security Intelligence Chief John Cohen told CNN last month that online extremist rhetoric is strikingly similar to the buildup to the January 6 attack, with increasing calls for violence linked to conspiracy theories and false narratives.

The security preparations for September 18 underscore the tense environment on Capitol Hill following the January 6 attack. In August, a man critical of Democrats was arrested after an hours-long standoff near the Capitol during which he claimed to have an explosive device; the event ended without incident but still sent a chill through Capitol Hill and provided law enforcement with yet another example of the risks of a toxic political climate. In April, a Capitol Police officer was killed after a man rammed a vehicle into a police barricade.

The charged environment has led lawmakers to invest in body armor and security systems, while the U.S. Capitol Police is opening field offices in cities around the country.

Still, McCabe—who served as the FBI’s deputy director from 2016 to 2018, including a period as acting director—said Monday that law enforcement has “a few factors leaning in their favor” this time. “You don’t have a sitting President actively fanning the flames and trying to get people to attend the rally,” he said.

McCabe continued: “And on the other hand, it looks like, from all indications, our law enforcement partners are well prepared for this one. They seem to be taking the intelligence very seriously, which raises a question as to whether or not they did on January 6, but that’s another issue.”

Research contact: @CNN

How SCOTUS quietly undercut Roe v. Wade

September 6, 2021

In an extraordinary use of the so-called shadow docket, the U.S. Supreme Court has refused to block a law effectively banning abortion, The New York Times reports.

According to the American Bar Association, the “shadow docket” is a mechanism that defies the court’s “normal procedural regularity.” Instead, it is a method by which the court can hand down decisions quickly—without hearing oral arguments, receiving amici curiae filings, or having to write out lengthy philosophical tracts explaining the jurisprudence underpinning their decision.

At 1 a.m. Eastern time on Wednesday, September 1,without a single word, the Supreme Court let the State of Texas effectively ban abortion—for the first time in nearly 50 years, the Times notes.

But it was not the first time the court had used the shadow docket so aggressively. It was not even the first time in the past week: Indeed, on Thursday, August 27, the court blocked an extension of the federal emergency ban on evictions—gutting a 1944 law that gave the CDC the authority to implement such measures to curb disease, and endangering the eight million American households that are behind on rent – and which may now, without federal eviction protection, face homelessness.

As the night of September 1 became day, and became night again, abortion providers across Texas turned away patients seeking what was, according to the court’s own precedent, a constitutional right, still the justices said nothing. When they broke their silence 23 hours later, refusing to block a law that unambiguously violates Roe v. Wade, the five-justice majority took only 400 words to describe its reasoning.

Because the shadow docket involves so little deliberation and transparency, the court historically hasn’t used it to enable major policy changes or to reverse precedents, and the rulings themselves haven’t been treated as precedents. But that restraint is a norm, not a requirement, and the court has increasingly been breaking it: using the shadow docket more often, on more consequential matters, and with more precedential weight. Last year, it issued several orders on the shadow docket concerning coronavirus restrictions and went on to cite some of them in rulings on the regular docket.

“That’s really not typical, nor is it supposed to be typical,” said Melissa Murray, a professor of law at New York University and an expert on reproductive rights.

I think it’s a reasonable question, whatever one thinks of the answers the court is reaching in these cases, whether we actually think it’s healthy for so many major questions affecting so many people to be resolved in this highly compressed, circumscribed, truncated review process,” said Stephen I. Vladeck, a professor at the University of Texas School of Law and an expert on federal courts.

The court’s increasingly assertive use of the shadow docket has angered some of its members, like Justice Elena Kagan, who wrote in her dissent from the order on Texas’ law, “The majority’s decision is emblematic of too much of this court’s shadow-docket decision making—which every day becomes more unreasoned, inconsistent and impossible to defend.”

Chief Justice John G. Roberts Jr., the only conservative who dissented, criticized the process less forcefully, writing that the structure of the new abortion law was “not only unusual, but unprecedented,” and that while Texas’ legal arguments “may be correct,” the questions involved were too weighty to resolve in such a rushed way.

 Texas’ law, called S.B. 8, prohibits abortion once cardiac activity is detectable in the embryo — around six weeks’ gestation, before many people know they are pregnant. (Pregnancies are dated from the last menstrual period, so “six weeks” generally means four or less after fertilization, and two or less after a missed period.) Planned Parenthood v. Casey, the 1992 case that affirmed Roe, protects a right to abortion until the fetus can survive outside the uterus, around 23 weeks’ gestation.

What distinguishes the Texas law from bans that courts have blocked everywhere else is that, instead of making abortion a crime prosecutable by the government, it lets any citizen sue anyone whom he or she accuses of “aiding or abetting” an abortion after the cutoff point—phrasing that includes not only abortion providers but also anyone who, for instance, pays for a procedure or drives a patient to a clinic. Successful plaintiffs will get $10,000 and reimbursement of their legal fees. Defendants who prevail will not be reimbursed.

“It is quite striking and quite galling that the Supreme Court would allow a state to essentially destroy Roe under cover of night with no decision,” Leah Litman, a professor of law at the University of Michigan, said Wednesday afternoon, before the court had spoken. “I think it’s pretty cowardly, I think it’s an affront to the rule of law, and it is quite troubling about what it suggests about the enforcement of our constitutional rights going forward.”

If by outsourcing enforcement to citizens, a state can enact a law that would otherwise be blocked as unconstitutional, “there’s nothing that stops other states from enacting similar laws to undermine other constitutional rights,” Professor Litman said. “Religious liberty, Second Amendment protections, property rights, right to bodily autonomy — there’s just no limitation.”

Research contact: @nytimes

Two Trump Organization employees are called to testify before Manhattan grand jury

September 3, 2021

Two Trump Organization employees—a senior finance official and a director of security—are expected to testify before a grand jury early this month, as Manhattan prosecutors seek to advance their criminal investigation into former President Donald Trump’s business affairs, according to people familiar with the matter, The Wall Street Journal reports.

Matthew Calamari Jr., the Trump Organization’s corporate director of security—and the son of the company’s COO—was served a subpoena for his testimony this week, the sources said. Prosecutors have examined an apartment Calamari received from the Trump Organization and how he reported that apartment on his taxes, according to those same sources.

Jeffrey McConney, a senior finance official at the Trump Organization, also is expected to go before the grand jury again very shortly.

Citing people with knowledge of the matter, The New York Times reported that the order for McConney—the long-standing Trump Organization controller and one of a small group of officials supervising the company’s fiscal matters—to testify before a state grand jury relating to the office’s ongoing probe into top Trump Organization CFO Allen Weisselberg.

McConney, who previously testified before the grand jury prior to the indictments of the Trump Organization and its chief financial officer earlier this summer, prepared the personal tax returns of Matthew Calamari Sr. , people familiar with the matter said.

Calamari Jr.’s testimony before the grand jury would grant him immunity on the subjects about which he testified—signaling that prosecutors don’t plan to indict him. Prosecutors continue to investigate whether the elder Calamari received tax-free fringe benefits and to determine whether his cooperation would be helpful to them, according to people familiar with the matter.

Nicholas Gravante Jr., the Calamaris’ lawyer, denied wrongdoing by his clients and said: “If either of my clients [is] subpoenaed to testify before the grand jury, they have no choice but to do so, and will appear and testify truthfully.”

A lawyer for McConney didn’t respond to a request for comment.

In July, the Manhattan district attorney’s office announced indictments—charging the Trump Organization and Chief Financial Officer Allen Weisselberg with tax fraud. Prosecutors accused Weisselberg and the company of a 15-year-long tax-fraud scheme involving off-the-books payments and perks like cars and apartments to employees at the company. Prosecutors from the New York attorney general’s office are working with the district attorney’s office on the case.

According to the Journal, Weisselberg and lawyers for the Trump Organization have pleaded not guilty. Alan Futerfas, a lawyer for the Trump Organization, said that the case was brought because of the Trump name and that compensation cases are resolved by civil tax authorities.

Since then, prosecutors have fought with the Trump Organization over documents the district attorney’s office subpoenaed.

A second sealed court appearance over that dispute took place last week, according to people familiar with the matter.

Research contact: @WSJ