Dems seek check on Wall Street, Trump in midterms

Dems seek check on Wall Street, Trump in midterms
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Wall Street has a lot riding on Tuesday's midterm elections.

If Democrats take control of one or both chambers of Congress, they will be in a position to reexert tough oversight on the Trump administration’s economic policies, from taxation to financial regulation.

Rep. Maxine WatersMaxine Moore WatersHouse Democrat agenda, led by minimum wage, threatens economic prosperity Community banks a bipartisan touchstone for new Congress Dem women rally behind Pelosi MORE (D-Calif.) would take the helm of the House Financial Services Committee and lead the House’s scrutiny of the banking industry.

While Waters has pledged to focus on affordable housing and consumer protection legislation, she’s expected to lead a slew of investigations into a series of sales scandals at Wells Fargo and probes into Trump’s personal finances.

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Waters and panel Democrats have sought information about Trump and his business empire’s relationship with Deutsche Bank and potential financial connections to Russia. If Democrats seize the House, Waters would be armed with subpoena power to secure sensitive documents.

Democrats also plan to pursue one of their longtime political goals: obtaining Trump’s tax returns.

Trump is the first president in decades to refuse to release his tax returns. Under federal tax law, the chairmen of Congress’s tax committees can request tax returns from the Treasury Department and review them in a closed session. From there, the tax committees could vote to make some or all of the documents public.

Democrats say they want to obtain Trump’s tax returns to see if he is avoiding taxes, to examine how he personally benefits from the 2017 tax law and to see if he has any conflicts of interests involving foreign governments. If the Trump administration stalls or refuses to provide lawmakers with the returns, expect the issue to end up in court.

Republicans have blasted Democrats’ attempts to request Trump’s tax returns, with House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyKoch groups: Congress shouldn't renew expired tax breaks GOP lawmaker pushes back on Trump drug pricing proposal Tax law failed to save GOP majority MORE (R-Texas) tweeting in September that obtaining the returns would be “an abuse of power.”

But Democrats have plans beyond oversight should they take the House.

Here's what is at stake for finance and the economy in Tuesday's midterms.

 

Control of a powerful budget tool.

If Democrats take over either chamber of Congress, one of the most important powers they’ll regain is control of the budget committee. That’s not because of the work the committee does on the budget, but because of reconciliation, the budgetary tool that can help a party sidestep a Senate filibuster.

In recent years, parties that have controlled both chambers and the White House have used it to defang the minority party on major policies. It’s what Democrats used to pass part of ObamaCare, and what Republicans used to try and repeal it. Republicans also successfully used reconciliation to pass their signature tax law.

If Republicans keep control of both chambers, they’ll be able to use budget reconciliation to try once again try and repeal Obamacare or pass further tax cuts. If Republicans gain in the Senate, they could even succeed on the health front. But if Democrats control just one of the chambers, that option will be off the table.

 

The future of tax cuts.

The 2017 tax-cut law was Republicans’ signature legislative accomplishment of President TrumpDonald John TrumpPaul Ryan defends Navy admiral after Trump's criticism Trump discussing visit overseas to troops following criticism: report Retired Army General: Trump is ‘acting like an 8th grader’ in attacking ex-Navy SEAL who led bin Laden operation MORE’s first two years in office. If Republicans keep both chambers of Congress after the midterms, they will try to pursue additional tax-cut legislation.

Last month, Trump said he was planning another middle-class tax cut, a comment that took many in Washington by surprise. In a joint statement on Wednesday, Trump and Brady, the top Republican tax-writer, said they are committed to an additional 10-percent tax cut for the middle class and “intend to take swift action on this legislation at the start of the 116th Congress."

Democrats all voted against the 2017 tax law, arguing that it would largely benefit the wealthy and add to deficits.

Many Democrats have expressed interest in rolling back parts of the legislation that predominantly help the wealthy and corporations, but if they win control of one or even both chambers of Congress in the midterms, they would likely be unable to do so because Trump could veto their legislation.

Still, Democrats would be expected to offer proposals and hold hearings on the 2017 tax law. They have complained about the fact that there weren’t hearings on the bill before it passed.

 

Trump's trade agenda.

If Democrats control either chamber of Congress, they’ll be in a position to frustrate Trump on one of his signature issues: trade.

Trump has already concluded a deal updating the North American Free Trade Agreement (NAFTA), but it will need Congressional approval and legislation to enter force. Democrats could seek to deny Trump a win on that front, or use the issue as a bargaining chip. The same is true for future deals that Trump is hoping to cinch with the European Union, Japan and China.

Democrats could also pass legislation limiting Trump’s controversial use of “Section 232” tariffs, which can only be imposed for reasons of national security justification. Trump used the security justification to impose steep steel and aluminum tariffs on close American allies, side-stepping trade laws that otherwise forbid such tariffs.