CNN/Deirdre Walsh, Lauren Fox & Ashley Killough/12-21-17
As House Republicans spilled out of a closed-door meeting Wednesday night, it was clear that things hadn’t gone well. Members gave wildly varying accounts of the proposal that’s being cobbled together to keep the government open ahead of Friday’s shutdown deadline.
Most importantly: Do they have the votes to pass a bill?
“I don’t know,” said Rep. Ryan Costello, R-Pennsylvania. “I don’t think anyone knows.”
Dow Jones, via FoxBusiness/12-20-17
President Donald Trump may wait until next year to sign the tax bill Congress is likely to approve Wednesday if lawmakers don’t separately pass a provision to waive certain budget rules that trigger automatic spending cuts.
At issue are so-called “pay as you go,” or “pay-go,” budget rules that could be triggered by deficits in the tax bill. Congressional Republicans are preparing a separate fix to waive the rules after they finish the tax bill, but if they don’t do it before Congress adjourns for its year-end recess, one way to delay the automatic cuts would be to sign the bill in January.
Reuter/David Morgan & Amanda Becker/12-20-17
The Republican-controlled U.S. House of Representatives on Wednesday was expected to give final approval to a sweeping tax bill and send it to President Donald Trump to sign into law, sealing his first major legislative victory in office.
In the largest overhaul of the U.S. tax code in 30 years, Republicans in mere weeks steamrolled over the opposition of Democrats to slash taxes for corporations and the wealthy, while offering mixed, temporary tax relief to working American individuals and families.
The big question in Washington: Will the tax bill have the votes? From NBC’s Benjy Sarlin: “Just days before an expected vote, the sweeping Republican tax bill’s fate was up in the air Thursday, with few details confirmed and key senators withholding support unless changes were made.
The Hill/Alexander Bolton and Naomi Jagoda/12-11-17
Republican lawmakers are concerned about how their tax bill is being viewed by the public and say they need to do a better job of selling it to middle-class and low-income voters.
A CBS News poll conducted last week found that 53 percent of people nationwide disapprove of the GOP tax bill and only 35 percent approve.
Former national security adviser Michael Flynn is expected to testify that President Trump instructed him to contact Russian officials during the 2016 campaign, ABC News reports.
Trump “directed him to make contact with the Russians,” ABC’s Brian Ross said Friday, just moments after Flynn entered a guilty plea for lying about his contact with Russians during the presidential transition period.
PG View: This is potentially a real momentum killer for tax reform and the broader Trump agenda as well. Stocks have dropped and gold jumped on the swing in risk appetite.
AP, via Chicago Tribune/Eric Tucker & Chad Day/12-01-17
Former national security adviser Michael Flynn pleaded guilty Friday to making false statements to the FBI, the first Trump White House official to make a guilty plea so far in a wide-ranging investigation led by special counsel Robert Mueller.
…Flynn has been under investigation for a wide range of allegations, including lobbying work on behalf of Turkey, but the fact that he was charged only with a single count of false statements suggests he is cooperating with Mueller’s investigation in exchange for leniency. He was present for consequential moments in the campaign, the transition period and the early days of Trump’s presidency, campaign, making him a valuable potential tool for prosecutors and agents.
PG View: Speculation is that Flynn will testify that he was directed in 2016 by then candidate Trump to make contact with the Russians.
Bloomberg/Erik Wasson & Anna Edgerton/11-30-17
House Republican leaders plan to seek a two-week spending bill to fund the government until Dec. 22 and avoid a shutdown next week, giving more time for negotiations with Democrats on a longer-term funding plan, two senior House GOP aides said Thursday.
The plan hasn’t been finalized and current funding is set to run out after Dec. 8.
PG View: You had to know another attempt to kick the can was coming . . .
Washington Post/Amber Phillips/11-28-17
Sometime in the next month, Congress could come to the brink of shutting down the government.
Congress has to pass some sort of spending bill by Dec. 8 to keep the lights on, but they may just kick the can down the road until Christmas.
…There are just too many things that could go wrong: a contentious tax debate; intractable policy fights over immigration, health care and spending; and an unpredictable president who, on Tuesday morning, signaled he’s not willing to compromise with Democrats. Democratic leaders returned fire by canceling their negotiating visit to the White House at the last minute.
Washington Post/Damian Paletta/11-28-17
Government funding negotiations between President Trump and congressional leaders fell apart before the parties could even get in the same room on Tuesday, moving the federal government a step closer to a partial shutdown and setting up the growing economy for a potential shock in the final weeks of 2017.
Democratic leaders pulled out of a meeting scheduled with President Trump on Tuesday after the president tweeted that he didn’t see any possibility of striking a deal with them on immigration or other issues.
“Given that the President doesn’t see a deal between Democrats and the White House, we believe the best path forward is to continue negotiating with our Republican counterparts in Congress instead,” House Minority Leader Nancy Pelosi of California and Senate Minority Leader Chuck Schumer said in a statement.
A U.S. Senate Republican tax bill strongly backed by President Donald Trump faced potential opposition on Monday from two Republican lawmakers who could prevent the sweeping legislation from reaching the Senate floor.
Senators Ron Johnson and Bob Corker, both members of the Senate Budget Committee, said they could vote against the tax package at a Tuesday hearing that Republican leaders hoped would send the legislation to a full Senate vote as early as Thursday. Each senator is seeking different changes to the legislation.
The Hill/Rebecca Savransky/11-28-17
President Trump on Tuesday cast down on Washington’s ability to avoid a government shutdown, writing on Twitter that he didn’t believe a deal could be reached with Democrats.
…A current funding bill, brokered in a September surprise deal between Trump and Democrats that caught Republicans off-guard, expires on Dec. 8.
Trump’s tweet suggests he may be less interested in a deal this time.
CNN/Judith Vonberg, Ben Westcott & Jonny Hallam/11-20-17
Germany was plunged into political uncertainty Monday after talks to form the country’s next government collapsed overnight, dealing a blow to Angela Merkel and raising questions about the future of the longtime Chancellor.
Merkel’s party had spent weeks trying to cobble together a ruling coalition with three other parties, but the plan fell apart when the liberal Free Democratic Party (FDP) walked out of talks shortly before midnight on Sunday over disagreements on issues ranging from energy policy to migration.
The dollar fell Friday, as investors continued to weigh whether Republicans can pass a historic tax overhaul.
…GOP lawmakers in the House of Representatives on Thursday passed a bill that would lower corporate taxes to their lowest level since 1939 and cut individual taxes for most households in 2018. The legislation may face a tougher fight in the Senate, however, where at least one Republican has opposed the deal.
Investors might have also turned cautious on the dollar after The Wall Street Journal reported that special counsel Robert Mueller’s team in mid-October issued a subpoena to President Donald Trump’s campaign requesting Russia-related documents.
Real Investment Advice/Lance Roberts/11-10-17
Don’t be bamboozled by the idea that tax cuts and reforms will lead to sustained economic growth. There is simply NO evidence that such is the case over the long-term.
However, there is plenty of evidence to suggest that further costly reforms and run-away budgets will lead to an increase of the current national debt and the ongoing low-growth economy that has plagued the U.S. since the turn of the century.
In other words….“it’s the debt, stupid.”
You can’t solve a debt problem, by issuing more debt.
Senate Republicans unveiled a proposal to overhaul the U.S. tax code Thursday that breaks in significant ways with a comparable House tax plan, including the level of top individual tax rates, the number of individual tax brackets, the timing of a corporate tax-rate cut and the particulars of estate tax changes.
The Senate bill, according to Senate Finance Committee aides, would delay a corporate tax rate cut until 2019. It would also double the estate tax exemption to a maximum of about $11 million per person, but it would leave the 40% tax itself in place for estates above that exemption level.
…The contrasts in the competing bills point to the challenge the GOP faces advancing the overhaul through Congress, which they aim to do by year-end.
PG View: If the GOP fails to get a bill to the president by year-end, they risk losing one or both majorities next year, which may well spell the end of the Trump administrations pro-business agenda. And as I suggested in today’s DMR, if that’s the way things shake out, stocks are “waaaaay overvalued.”
Republicans in Congress are so focused on passing a massive tax overhaul this year that they’re saying little publicly about another December deadline — the day the government would shut down if the GOP can’t reach a deal with Democrats on spending and other hot-button issues.
Current funding expires Dec. 8, and as hard as it is for Republicans and Democrats to agree on spending, they’ve made the situation worse by punting other difficult issues to December.
The Hill/Niv Elis/11-07-17
The Senate tax plan is likely to have significant differences from the House version, including delaying the introduction of a lower corporate tax rate by a year, according to a Washington Post report.
The report, which cites four unnamed sources familiar with the plan, said the delay was an effort to reduce the bill’s cost by $100 billion during the first decade. President Trump, however, has insisted that the plan go into effect right away.
The bill would also reportedly maintain seven income tax brackets and scrap all state and local deductions, both key differences from the House plan.
NYT/Jim Tankersley, Thomas Kaplan & Alan Rappeport/11-02-17
Republican lawmakers unveiled the most sweeping rewrite of the tax code in decades, outlining a $1.51 trillion plan to cut taxes for corporations, reduce them for some middle-class families and tilt the United States closer, but not entirely, toward the kind of tax system long championed by businesses, according to talking points circulated on Thursday.
The House plan, released after weeks of internal debate, conflict and delay, is far from final and will ignite a legislative and lobbying fight as Democrats, business groups and other special interests tear into the text ahead of a Republican sprint to get the legislation passed and to President Trump’s desk by Christmas.
Almost two-thirds say this is the lowest point in U.S. history—and it’s keeping a lot of them up at night.
For those lying awake at night worried about health care, the economy, and an overall feeling of divide between you and your neighbors, there’s at least one source of comfort: Your neighbors might very well be lying awake, too.
PG View: A more meaningful source of comfort might be found in gold. It may help you sleep a little easier, knowing at least a portion of your wealth is protected.
The House of Representatives narrowly passed a budget resolution Thursday that clears the path for Congress to fast-track tax reform legislation.
The vote was 216-212, with 20 Republicans joining Democrats in opposing the measure.
Republicans passed the bill despite some opposition within the party over a plan to eliminate the popular State And Local Tax deduction in the tax reform framework.
The Trump administration and Republican Congressional leadership want to go big on tax reform. They have proposed a broad set of changes to the corporate and personal income tax codes, including tax cuts and revenue raisers.
While the proposal is light on many important details, taken in total, it would not add significantly to economic growth, but it would add significantly to future budget deficits and the nation’s debt load.
Catalan authorities will not follow orders from the Spanish government if Madrid moves to reassert control over the region, a senior official says.
Foreign affairs spokesman Raul Romeva told the BBC the central government was acting against the will of Catalans.
Spain’s Prime Minister Mariano Rajoy has announced plans to sack the region’s government and curtail some of the freedoms of its parliament.
The Catalan parliament will meet on Thursday to decide on its response.
Prime Minister Shinzo Abe of Japan won a commanding majority for his party in parliamentary elections on Sunday, reported NHK, the public broadcaster, fueling his hopes of revising the nation’s pacifist Constitution.
NHK said that Mr. Abe’s governing Liberal Democratic Party and its allies had overcome challenges from upstart rivals to capture two-thirds of the seats in the lower house of Parliament. Final results will be delayed until later on Monday because a typhoon that battered Japan on Sunday prevented votes from being counted in 12 precincts. But with the majority of votes counted, the Liberal Democrats and their coalition partner had won enough seats to reach the two-thirds mark.
PG View: USD-JPY gapped higher to 3-month highs above 114.00, but has since moderated somewhat intraday.
The Hill/Jordain Carney & Niv Elis/10-19-17
Senate Republicans took the first step Thursday evening toward passing a tax plan and fulfilling a long-held campaign pledge.
Senators narrowly voted 51-49 to pass the fiscal 2018 budget after a grueling hours-long marathon on the Senate floor. Sen. Rand Paul (R-Ky.) joined with every Democrat and independent to vote against the bill.
…The budget would allow the Senate GOP’s tax plan to add up to $1.5 trillion to the deficit over a decade, a proposal that has raised concerns with fiscal hawks in the GOP. Its instructions call for the Senate Finance Committee to report a tax bill by Nov. 13.
PG View: There’s not much in the way of spending cuts in this budget, so there’s probably a whole lot more debt in our future.
Gary Cohn, the top economic advisor to the White House, said Monday that tax reform has to get done this year.
“The opportunity is now,” he said in a question and answer session at the annual meeting of the American Bankers Association.
…The House and the Senate haven’t been in session at the same time recently, something that frustrates efforts, Cohn said at the ABA meeting. “Unfortunately we keep losing days” when lawmakers could meet to work on the plan, he said.
PG View: It seems to me, a great deal of optimism was ascribed to a 9-page outline proffered by the administration. Now the question becomes, can Congress actually come up with a plan that will make it to the President’s desk before year-end?
Spain’s prime minister has put Catalonia on notice that it could impose direct rule on the region.
Mariano Rajoy said his government had asked the regional government to clarify whether or not it had declared independence.
The move is the first step towards suspending Catalonia’s autonomy under the constitution.
CNN/Euan McKirdy, Hilary Clarke & Angela Dewan/10-10-17
Catalonia’s leader is due to address a specially convened session of the region’s parliament Tuesday, as he comes under growing pressure to stop short of declaring independence from Spain.
…Spanish Prime Minister Mariano Rajoy said he was determined to prevent a breakaway by the northeastern province in the wake of the October 1 vote.
“Spain will not be divided, and the national unity will be preserved. To this end we will employ all the means we have within the law. It is up to the government to make decisions, and to do so at the right moment,” Rajoy said in an interview with German newspaper Die Welt on Monday.
PG View: Bloomberg is reporting that Spanish authorities are reportedly ready to arrest Catalan President Carles Puigdemont
Gold rose on Wednesday after marking a seven-week low the previous session, as the dollar dipped on talk that a dovish Federal Reserve chair would be appointed next year.
The greenback eased against a currency basket after a Politico report said Fed Governor Jerome Powell was favoured by U.S. Treasury Secretary Steven Mnuchin over former governor Kevin Warsh. Janet Yellen’s term as chair expires in February.
Powell is seen as more dovish than Warsh, who has criticised the Fed’s bond-buying programme in the past.
PG View: And thanks to Jeff Gundlach, über-dove Neel Kashkari has been forced into the mix as well.