Happy Wednesday and welcome back to On The Money, I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Broad coalition unites against Trump tariffs: A diverse group of businesses from farmers to retailers are ramping up their fight against President Trump’s tariffs, which they warn are hurting businesses and the broader economy.
Nearly 100 major trade associations on Wednesday launched a multimillion-dollar nationwide campaign that will lobby Capitol Hill and organize events around the country to push back on Trump’s trade policies.
{mosads}Since Trump started imposing billions of tariffs earlier this year on everything from washing machines to steel and aluminum, business groups have been outspoken in their opposition, arguing it would cost jobs and stall the booming economy.
Trump has largely ignored that pressure, arguing that U.S. consumers and businesses will have to bear some short-term pain for long-term benefits.
But the new beefed-up coalition aims to step up its efforts two months ahead of the midterm elections. The Hill’s Vicki Needham tells us what to expect here.
- The group, Americans for Free Trade, will kick off its initiative next week with events in Chicago, Nashville, Tenn., Pennsylvania and Ohio to highlight the importance of global trade to the U.S. economy.
- Adding to its firepower, the coalition is teaming up with Farmers for Free Trade, a coalition of the nation’s largest agriculture trade groups.
- The campaign intends to highlight how businesses, farmers and workers are harmed by tariffs with town-hall style events, grass-roots outreach to Congress and the Trump administration, social media, and digital advertising.
ON TAP TOMORROW
- House Financial Services Committee: Markup of 13 financial regulatory bills, 9 a.m.
- House Foreign Affairs Committee: Hearing entitled “Oversight of U.S. Sanctions Policy,” 10 a.m.
- Senate Budget Committee: Hearing on transparency at the Congressional Budget Office, 10:30 a.m.
LEADING THE DAY
Senate confirms new IRS chief: The Senate on Wednesday confirmed President Trump’s nominee to lead the IRS, as the agency works to implement the tax cut law the president signed last year.
The chamber voted 64-33 to confirm Charles Rettig to be IRS commissioner for the remainder of a five-year term ending in November 2022. Fifteen Democrats voted in favor of Rettig, including several Democrats up for reelection in states Trump won and several who voted against Rettig’s nomination in the Finance committee.
The confirmation vote comes as the IRS faces a host of challenges. In addition to the work it needs to do to implement the 2017 tax law, the agency is also dealing with a shrunken workforce, outdated technology and threats from cyber criminals. The Hill’s Naomi Jagoda has more on the vote and what’s next for Rettig.
Median household income rose for third straight year in 2017: Median U.S. household income rose in 2017, according to U.S. Census Bureau data released Wednesday, a sign of the nation’s continued recovery since the 2008 recession.
The Census Bureau’s report on income and poverty in the U.S. showed median household income rising 1.8 percent to an inflation-adjusted $61,372 in 2017, increasing for the third consecutive year.
The 2017 figure is the highest level reported by the Census Bureau, but the agency changed the methodology it uses in 2013, complicating comparisons to prior years.
The bureau also reported a decrease in the poverty rate and increase in earnings for all workers as the unemployment rate sunk throughout 2017. I break down the numbers here.
The downside: While the report showed rising household incomes and lower share of the population in poverty, it also highlighted the limits of the strengthening economy.
- Real median earnings of all male workers increased 3.0 percent in 2017 while the earnings of female counterparts stayed stagnant. Inflation-adjusted earnings for male and female full-time workers also dropped 1.1 percent each in 2017.
- The poverty rate also dropped a meager 0.4 percent between 2016 and 2017, while the number of Americans without health insurance stayed stagnant despite 2.4 million more people finding full-time jobs.
Jamie Dimon’s brief battle with Trump: JPMorgan Chase CEO Jamie Dimon on Wednesday taunted President Trump, saying he could beat the president in an election because he’s “smarter.”
“I think I could beat Trump … because I’m as tough as he is, I’m smarter than he is,” Dimon said, according to CNBC.
“I can’t beat the liberal side of the Democratic Party,” he added.
Dimon, speaking at an event where JPMorgan was detailing a $500 million investment to boost economic growth around the world, also told the crowd that he “actually earned [my] money.”
“It wasn’t a gift from daddy,” Dimon said.
Within an hour of blasting Trump, Dimon walked back his comments.
“I should not have said it,” Dimon said in a statement. “I’m not running for president. Proves I wouldn’t make a good politician. I get frustrated because I want all sides to come together to help solve big problems.”
If Dimon were to run, he could have trouble gaining traction among liberal Democrats essential to winning the primary. Chase took $25 billion in federal bailout money during the 2008 financial crisis, and the party’s liberal base is incredibly critical of the banking industry. He would also be likely to face off with several financial sector skeptics, including Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.).
“Those voters also see that Wall Street’s influence is part of the corruption of Washington. That’s why the American people want candidates to talk about increased Wall Street regulation as a part of their jobs and economic agenda,” said Dennis Kelleher, president and CEO of Better Markets, a non-profit advocating for tougher financial rules.
The Big Three reflect ten years later: Former Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke, and New York Fed President Timothy Geithner spoke on a panel hosted by the Brookings Institute today, reflecting on their roles in shepherding the US financial system through the 2008 crisis. Here are their answers to some of the most pressing questions from that trying time.
- What was the strategy behind their response? Geithner: “To try to act earlier, a little more preemptively and to recognize that what makes sense in a normal messy recession with respect to some individual banks failure’s doesn’t work in a panic when the risk of a collapse is great.”
- Why didn’t they prosecute some of the titans behind the crisis? Paulson: “The fact is people don’t like banks, and during a financial crisis they really don’t like banks, and yet if you’re too tough on the banking system, then you make it very hard on the general public.” “[Americans] wanted to be tough on bankers. They didn’t want to reward the arsonists. But we were trying to protect the public.”
- How much does the legacy of the crisis affect our current politics? Bernanke: “There are a whole gamut of things feeding into the popular mood. The financial crisis exacerbated that, but I don’t think it’s the main driver of the politics we have today.”
- Why was Lehman Brothers allowed to fail while other banks found lifelines? Geithner: “It failed because Lehman was much weaker and the system was much more fragile, so the universe of plausible buyers was limited.”
Blue-state Republicans SALTy over tax cuts 2.0: Four blue-state Republicans say they will be “forced to oppose” a second round of tax cuts if the legislation includes a provision permanently extending the $10,000 cap on the state and local tax (SALT) deduction.
The House Ways and Means Committee is scheduled to consider legislation on Thursday that makes permanent the individual tax changes in President Trump’s 2017 tax law, including the SALT deduction cap. The measure is expected to receive a vote on the House floor later this month.
GOP Reps. Dan Donovan (N.Y.), Pete King (N.Y.), Frank LoBiondo (N.J.) and Chris Smith (N.J.) all voted against last year’s tax-cut legislation because of the SALT deduction cap and are urging House GOP leaders to avoid cementing the provision with the new legislation. The Hill’s Naomi Jagoda has more here.
FINANCE IN FOCUS: The financial industry coalition that helped roll back the Dodd-Frank Wall Street reforms is fracturing.
Lobbyists for banks and credit unions are turning on each other, rekindling fights that have long divided them. It’s a swift turn after years that saw financial services trade groups largely united in pushing for regulatory relief.
That effort culminated in May when President Trump enacted the most sweeping changes to Dodd-Frank since then-President Obama signed the law in 2010. Now the powerful Washington advocates who helped push the rollback bill through Congress have shifted their focus to battles that pit banks against credit unions and financial titans against smaller firms. I tell you why here.
GOOD TO KNOW
- St. Louis Federal Reserve Bank President James Bullard said Wednesday that President Trump and the GOP have “definitely” had a positive influence on the economy.
- The New York Times explores why the policymakers in charge of the U.S. government’s response to the financial crisis and their decisions are deeply unpopular to this day.
- The U.S. budget deficit is reaching levels that are abnormally high for a robust economy, and lawmakers from both parties are proposing ideas that would make the deficit swell even further, according to The Washington Post.
- Karen and Basil Petrou of Federal Financial Analytics argue why subprime loans weren’t the main driver of the 2008 financial crisis in a new paper.
- Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, said Wednesday he’s worried about the impact that rising student loan debt could have on the United States, citing a potential moral hazard of forgiving the loans.
- The top Democrat on the House Intelligence Committee says he plans to not only reignite a full-blown Russia probe if the House flips in November, but he will also prioritize investigating the Trump Organization’s ties to Russia.
ODDS AND ENDS
- The Federal Communications Commission (FCC) wants more time to review the proposed T-Mobile–Sprint merger, announcing Tuesday that it would pause its informal 180-day “shot clock” to review the transaction in order to give its staff more time to review recent filings from the two companies.