Happy Tuesday and welcome back to On The Money, where we can’t stop looking at this incredible picture of Mitch McConnell and Jon Stewart. 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–Trump sues lawmakers, NY officials to thwart potential release of state tax returns: President Trump on Tuesday sued the Democratic-controlled House Ways and Means Committee, the New York state attorney general and a New York state tax official to try to block any potential efforts by lawmakers to obtain his state tax returns.
The president filed the lawsuit in federal court in Washington, D.C., alleging that House Ways and Means Committee Chairman Richard Neal (D-Mass.) is considering using a recently passed New York state law to try to get Trump’s state tax returns.{mosads}
“Because the Committee’s jurisdiction is limited to federal taxes, no legislation could possibly result from a request for the President’s state tax returns. The Committee thus lacks a legitimate legislative purpose for using the TRUST Act,” the lawsuit states.
The law: Under the state law — signed by New York Gov. Andrew Cuomo (D) earlier this month — the chairmen of the House Ways and Means Committee, as well as the leaders of the Senate Finance Committee and the Joint Committee on Taxation, can request officials’ tax returns from the commissioner of the New York Department of Taxation and Finance.
- While Neal has led the charge to get Trump’s federal tax returns, he has indicated that he’s less willing to get the state documents, saying that they’re not as relevant to his committee’s efforts as the federal documents.
- This lawsuit comes on the heels of a separate complaint filed by the Ways and Means Committee seeking Trump’s federal tax returns
- His committee is investigating whether current IRS procedures for auditing presidents meet a high enough standard and has said that lawmakers are also examining whether they should pass legislation on this topic.
The Hill’s Jaqueline Thomsen and Naomi Jagoda explain the showdown here.
LEADING THE DAY
Conservatives erupt in outrage against budget deal: Conservatives are incensed about the $320 billion budget deal President Trump announced Monday, and they are not holding back.
- Rep. Mark Walker (R-N.C.), a member of House leadership, tweeted out a gif of the Joker burning a giant pile of cash when the announcement came out. “Our credit card is maxed out,” he wrote in a follow-up Tweet
- Rep. Chip Roy (R-Texas), a member of the House Freedom Caucus, on Monday penned a letter to Trump opposing the agreement and has since said he is “on board” with energizing conservatives to defeat the bill.
- “President Trump will have set the record for the largest increases in federal spending in the history of our country, surpassing George W. Bush’s Republican record,” said one member of the conservative Freedom Caucus.
Their issue: Since Trump took office, the debt has grown from just under $20 trillion to over $22 trillion. While mandatory spending remains the largest driver of deficits, the 2017 GOP tax law was projected to add $1.9 trillion to the deficit over a decade, and bipartisan deals to increase defense and domestic spending have added billions more.
White House plays defense: Top Trump administration officials spent the morning selling the agreement announced on Monday night after weeks of negotiations between Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin.
- “I think it’s a deal that will get through,” National Economic Council Director Larry Kudlow told reporters. “I think people are signing on — Democrats and Republicans. It isn’t everything we hoped for, but it got through the debt ceiling. That’s so important.”
- Kudlow argued the deal benefited the White House and its allies by keeping out poison-pill legislative riders that could be used to thwart the president’s agenda.
- He also downplayed concern that the deal will further balloon the deficit, saying the agreement contains “very modest” spending increases and suggested Trump would focus more intensely on trimming deficits if he’s elected for a second term.
Still, Kudlow and acting Office of Management and Budget Director Russell Vought acknowledged that the need to increase the debt limit forced some concessions that will frustrate some of Trump’s congressional allies.
Winners and losers: So, who won out in the negotiations, and who got left behind?
Winners:
- Speaker Nancy Pelosi (D-Calif.), who maneuvered deftly through the negotiations to secure a deal that won Democrats one of their top priorities, a significant increase in domestic spending.
- Treasury Secretary Steven Mnuchin, who led a successful negotiation to avert a debt ceiling disaster, secured a significant increase in defense spending, paved the way for a smooth appropriations process and reduced the chance of another government shutdown going into the 2020 elections.
- The Pentagon: When Trump was voted into office, military spending stood at roughly $611 billion a year. In 2020, it will be $738 billion.
Losers:
- Fiscal hawks, who will have to stomach increases in discretionary spending under Trump on pace to average 4 percent a year.
- Acting White House Chief of Staff Mick Mulvaney, who was sidelined in the budget negotiations after calling for deep cuts to nondefense spending.
- Whoever will have to deal with the debt burden, already on track to hit 92 percent of gross domestic product in 10 years, which will now be on track to hit 97 percent in the same time period.
GOOD TO KNOW
- Advocates for a bill to give financial firms legal cover to serve cannabis companies urged senators Tuesday to put aside skepticism of the drug to help secure and regulate its expanding market.
- Two lawmakers on Tuesday introduced legislation that would withhold federal funds for the 2026 World Cup until the U.S. women’s national team is paid comparable wages to the men’s team.
- Sen. Elizabeth Warren (D-Mass.) introduced a bill that would wipe out nearly all U.S. student loan debt.
- The U.S. on Monday announced it would sanction a Chinese firm that allegedly bought Iranian oil despite U.S. sanctions.
ODDS AND ENDS
- Senate Finance Committee Chairman Chuck Grassley (R-Iowa) is pushing forward with a bipartisan deal to lower drug prices this week despite objections from some members of his own party and a tough road ahead.