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The Finance 202: Trump’s agenda imperiled — by him – Washington Post

THE TICKER

President Trump’s legislative agenda is balanced on a knife’s edge.

His promise to gut Obamacare — and thereby make good on seven years of GOP promises — now teeters on the verge of collapse, with one more Senate Republican defection sufficient to seal its fate. If the health-care effort sinks, it could take a tax code overhaul down with it. And even the basic blocking and tackling required of congressional Republicans to keep the government functioning — passing a budget, raising the debt limit, and funding its operations — all loom as points of intraparty tension. 

You wouldn’t know that from observing Trump’s lackadaisical approach to wrangling members of his own party on Capitol Hill. As my colleagues Abby Phillip and Bob Costa report this morning, Trump is proving to be a notably disengaged manager of his own program. “The president,” they write, “has treated health care and a host of other legislative agenda items, from taxes to infrastructure, as issues to be hammered out by lawmakers with often-scant direction from the executive branch – and with decidedly mixed signals from Trump himself.”

The attitude applies both to his direct engagement with Republican lawmakers and the softer forms of salesmanship available to a president, from his Twitter feed to his travel schedule. Republicans on the Hill struggling to get some, any, points on the board are griping that the lack of support from the other end of Pennsylvania Avenue is compounding their challenge. And when Trump does weigh in — as he did recently tweeting an endorsement of a straight repeal (and not an immediately replacement) of the Affordable Care Act — his involvement has only complicated the task. Indeed, in June, only 7 percent of Trump’s 163 tweets were on message, a Post analysis found

Others want more support on the ground. “Several Republicans staffers said privately this week that they wish Trump would hold more rallies and other events aimed at bolstering Republican leaders in passing health-care legislation and other key agenda items,” Abby and Bob write. 

Trump has only traveled west of the Mississippi once as president, despite keeping a constant schedule of weekend visits to his golf properties, including in Florida and New Jersey. White House director of legislative affairs Marc Short acknowledged that the president’s travel hasn’t lived up to expectations. “There’s been conversations about potential travel and for whatever reason or another there have been other priorities or crises that have occurred,” he tells my colleagues, in an unusually frank assessment that still manages to understate the case. 

Nonetheless, Trump tweeted his support for the new Senate GOP health-care bill, revealed yesterday, from Paris, where he attended a Bastille Day parade with President Emmanuel Macron of France: 

Back in Washington, Republicans on the Hill could use help bridging rifts over some fundamentals of a tax rewrite that continue to dog that effort. “No one has more at stake in delivering tax reform for the American people than President Trump,” House Ways and Means Committee Chairman Kevin Brady said late last month. “Without presidential leadership, tax reform just doesn’t happen. We know that from history.”

So far, Trump has proven as unhelpful in providing clarity about the administration’s priorities in a tax overhaul as he has been in the health-care debate. In remarks he made on the flight to France on Wednesday that the White House made public Thursday, Trump appeared once again to endorse the concept of a border adjustment tax, a proposal that House Speaker Paul D. Ryan (R-Wis.) and Brady favor but his own economic aides have publicly dismissed. Here’s Trump

“To me, the word reciprocal is a beautiful word. Because people can say, we don’t like a border tax or we don’t like this or we don’t like that. But what they can’t say is that, if you’re selling a motorcycle and they’re coming into your country and not paying tax, and they’re going into another country and paying 100 percent tax, people understand that’s not fair. So we say we make it reciprocal.”

Compare that to Ryan’s argument for the idea during a CNN town hall event back in January: 

Let’s take Harley Davidson, something we’re really proud of in Milwaukee and Wisconsin. We make a hog in Milwaukee, we send it to China, it’s taxed in Milwaukee, in America; and then China taxes it as it goes into the country. If – you know, they make a hog in China, it’s taxed once and not twice, like ours. If Toyota or Honda sends a motorcycle from Tokyo into China, they take the tax off of it, it goes and it’s taxed once.

Ryan has been using that example of Harley Davidson, a company from his home state, to explain the proposal since he started talking it up in his district ahead of his August primary last year.  

Meanwhile, the administration’s agenda was dealt another setback Thursday with the release of a Congressional Budget Office review of the White House budget, as Damian Paletta, Ana Swanson and Max Ehrenfreund report. It found the administration’s spending blueprint would achieve only 1.9 percent growth, rather than the 3 percent that Trump officials have projected. And the CBO refuted administration claims that deep cuts to safety-net programs would yield a surplus over a decade, projecting a $720 billion deficit instead.

As Damian and company write, “Trump’s combination of setbacks and delays on key policy initiatives highlight how the president is struggling to advance a populist vision of governing in a Republican Party that historically has not been receptive to such an approach.”

On top of everything else, the president’s disengagement only complicates the task. 
 

YELLEN TESTIMONY FLY-AROUND, DAY 2: 

Janet L. Yellen spent two hours before the Senate Banking Committee on Thursday mostly arguing for the Fed’s approach to post-crisis financial rules. That her testimony centered on regulation, rather than the state of the economy and monetary policy, suggests a consensus that the jobs and growth pictures are looking okay, per the New York Times. ““I don’t see anything inherent in the nature of the expansion that suggests it will come to an end anytime soon,” Yellen told the committee.

The Wall Street Journal’s Nick Timiraos noticed, too: 

But she also expressed skepticism that the economy can achieve 3 percent growth, despite the Trump administration’s claims that such a performance is within reach. 

From Business Insider’s Pedro da Costa: 

In the face of Republican probing about where and how far Dodd-Frank restrictions can be peeled back, Yellen defended the balance that the central bank has struck while also allowing there are some rules now ripe for tweaking. She supported, for example, a call from Chairman Mike Crapo (R-Idaho) for raising the threshold on banks subject to tougher regulations from those with $50 billion in assets. But she declined to suggest a new one. 

And after making some waves in a recent appearance in London for saying she doesn’t believe we’ll see another financial crisis “in our lifetimes,” Yellen walked it back slightly on Thursday:

 

Yellen also addressed the persistence of low inflation, a factor that some have pointed to in arguing the Fed should pursue a less aggressive schedule of interest rate hikes. She chalked up the weak growth in consumer prices to mostly short-term factors — including low-cost cellphone plans and cheaper drug prices — and what she framed as the last bits of slack in the labor force. Part of the decline in labor force participation, she said in response to questioning from Sen. Joe Donnelly (D-Ind.), owes to the ravages of the opioid epidemic, a phenomenon Goldman Sachs addressed in a recent report. She called it a “very serious and heartbreaking problem.” 

Sen. Donnelly tweeted about the exchange:

Yellen said the Fed plans to continue on a “gradual path” of rate increases while keeping an eye on conditions, preserving some wiggle room to change course if inflation looks likely to stay below the central bank’s 2 percent target: 

Sen. Elizabeth Warren (D-Mass.) used her time to press Yellen on the Fed’s look into the Wells Fargo scandal involving the creation of 2 million unauthorized credit card and checking accounts on behalf of customers. The bank is nearing an agreement to pay out $142 million to consumers who were affected. But Warren says fines aren’t sufficient to change bad behavior, and wants the Fed to use its authority to fire the bank’s board of directors. Yellen called the bank’s practices “egregious and unacceptable” and said the Fed is “certainly prepared to take enforcement actions if those prove to be appropriate.” 

Some noted her conditional phrasing. From Matt Stoller, fellow at the Open Markets Program at New America:

Here’s the exchange:

— The appearance marked Yellen’s second in as many days on Capitol Hill. She spent three hours on Wednesday before the House Financial Services Committee. And it could be her final turn before the panels: Her term is up in early February, and it’s not clear that Trump will reappoint her (economists surveyed by the Wall Street Journal placed the odds at 20.8 percent). She fielded repeated questions both days about whether she’d be willing to continue to serve but she sidestepped them.

The Wall Street Journal noted how the partisan attitudes toward Yellen have shifted with Republicans now in power: “Ms. Yellen’s appearance before the House panel was less contentious than prior hearings, in which Republicans unsparingly challenged the central-bank leader over everything from institutional accountability to economic forecasts. Democrats, meanwhile, appeared less willing to offer unconditional support for the Fed’s stance toward gradually providing less support to the economy, though many extolled Ms. Yellen’s leadership of the central bank.”

Congressional Republican negotiators are making progress on a measure to slap new sanctions on Russia, Reuters reports. The measure passed the Senate, 98-2, but has hung up in the House. Republicans on the Hill are hoping to send a strong signal to the White House that they favor a get-tough approach to Russia. 

Potential trouble for Scott Garrett, the former House Republican from New Jersey whom Trump tapped to lead the Export-Import Bank: On Thursday, Sen. Lindsay Graham (R-S.C.) said he wants the administration to send the Senate a different nominee. Watch: 

Boeing, a heavy user of the Ex-Im bank’s loan guarantees, is a major presence in Graham’s state. And Garrett as a lawmaker was an outspoken opponent of the bank’s mission, a fact that’s sown suspicion of his nomination among Republicans who support the bank. 

My colleague James Hohmann reported yesterday on a new analysis of Trump’s surprising political durability with his own base — and the record he’s compiled in office so far. The analysis, by Republican lobbyist Bruce Mehlman, shows one category of performance that should cheer up business interests. The Trump administration so far has issued a tiny fraction of the big regulations that his predecessors produced:

Whether it’s by design or neglect is another question. As Mehlman notes, the Trump team has installed an exceedingly meager number of its own picks in the executive branch. Over half of the Cabinet agencies have only one Senate-confirmed leader in place: 

First Son-in-Law and White House senior adviser Jared Kushner has been pressing other administration officials to more forcefully defend the meeting he attended last summer  — and which Donald Trump, Jr., set up — with a Kremlin-linked lawyer offering dirt on Hillary Clinton on behalf of the Russian government, Politico reports. Other White House officials have resisted, arguing it’s a job for the outside lawyers. But the fact of the push-and-pull points to escalating tension within the West Wing over Kushner’s role in the widening Russia scandal and how to attempt to contain a story far too big for the administration to control. 

And in today’s bombshell news (so far) NBC News is reporting there was another guest at that infamous meeting — a former Soviet counter-intelligence officer who is suspected of ongoing ties to Russian intelligence.

Meanwhile, The Post this morning has an investigation into Ivanka Trump’s business empire, and “how her business practices collide with some of the key principles she and her father have championed in the White House.” While the president has criticized companies that ship jobs overseas, the investigation reveals “the extent to which Ivanka Trump’s company relies exclusively on foreign factories in countries such as Bangladesh, Indonesia and China, where low-wage laborers have limited ability to advocate for themselves.”

 

Today

  • The House Financial Services Subcommittee on Capital Markets, Securities and Investment will hold a hearing on “A Review of Fixed Income Market Structure” 

Coming Up

  • The Peterson Institute for International Economics will hold an event with the Centre for International Governance Innovation and the Center for Strategic and International Studies on “A Positive NAFTA Renegotiation on July 17.

From The Post’s Tom Toles: Is France a Donald Trump dream destination? 

Why did two GOP senators just introduce a competing health-care plan?

President Trump tells French President Emmanuel Macron’s wife: “You’re in such great shape:”

A look at the conservative response to Donald Trump Jr.’s emails: 

How a Trump steel tariff may affect your sweet desserts:

And Stephen Colbert recreates White House counselor Kellyanne Conway’s “fun with words”: 

The Finance 202: Trump’s agenda imperiled — by him – Washington Post}

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