On The Money: GOP raises concerns about White House plan to avoid shutdown | Trump pushes Fed to weaken dollar | Trade deficit spikes | Dow, S&P, Nasdaq set record highs

On The Money: GOP raises concerns about White House plan to avoid shutdown | Trump pushes Fed to weaken dollar | Trade deficit spikes | Dow, S&P, Nasdaq set record highs
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Happy Wednesday and welcome back to On The Money, where we’re wishing you a happy Independence Day. 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— Senate GOP raises concerns about White House stopgap plan to avoid shutdown: Senate Republicans raised concerns about a White House offer to use a one-year stopgap funding bill to avoid a government shutdown starting in October if negotiators fail to reach a larger budget deal. 

Sen. David Perdue (R-Ga.) spearheaded a letter from 16 Republican senators Wednesday warning that a one-year continuing resolution (CR) would include "draconian conditions" for the military. 


"As the world continues to become more dangerous, the American people rightfully expect their representatives in Washington to put aside political differences and do their jobs. Simply put, our adversaries do not handcuff their militaries with funding gimmicks like continuing resolutions—nor should we," the senators wrote.  

The letter was sent to Treasury Secretary Steven MnuchinSteven Terner MnuchinMnuchin knocks Greta Thunberg's activism: Study economics and then 'come back' to us Key House committee chairman to meet with Mnuchin on infrastructure next week The Hill's Morning Report - Trump trial begins with clashes, concessions MORE, acting chief of staff Mick MulvaneyJohn (Mick) Michael MulvaneyWhat to watch for on Day 3 of Senate impeachment trial Biden says he would not engage in witness swap in impeachment trial Schumer blasts GOP votes over witnesses, documents at trial MORE and acting Office of Management and Budget Director Russell Vought, who have led the budget talks for the White House. The Hill’s Jordain Carney tells us why it matters


The snag: Negotiators hope to reach a deal to raise the caps for defense and nondefense spending. As a Plan B, Mnuchin has offered linking a debt ceiling increase to a one-year CR, which would freeze spending at fiscal 2019 levels.  

But Republican senators wrote in the letter that scenario "must be avoided" because it would leave the Defense Department "incapable of increasing readiness, recapitalizing our force, or rationalizing funding to align with the National Defense Strategy." 

The letter is the latest sign of division about what the party's back up plan should be as budget negotiations drag on. 

  • Perdue told The Hill on Friday that he had discussed funding the government with Trump, who he characterized as "concerned about it as well." Perdue said that he plans to speak again to the president to outline his concerns about a one-year CR.



Trump blames China, EU for currency manipulation, tells US to match: President TrumpDonald John TrumpMnuchin knocks Greta Thunberg's activism: Study economics and then 'come back' to us The Hill's Morning Report - House prosecutes Trump as 'lawless,' 'corrupt' What to watch for on Day 3 of Senate impeachment trial MORE on Wednesday accused China and the European Union of manipulating their currencies and appeared to ask the Federal Reserve to follow suit by weakening the value of the U.S dollar. 

In a Wednesday tweet, Trump ripped China and the European Union for “playing big currency manipulation game” and said that the U.S. should match as the president pressures both to increase their purchases of U.S. goods. 

Trump did not explicitly mention the Fed, which is responsible for controlling U.S. monetary policy, but the president has frequently bashed the central bank for refusing to aid his trade talks. I (try to) explain Trump’s frustration here.

The conflict: Trump insists that the European and Chinese central banks have cut interest rates to undercut U.S. exporters and has called on the Fed to do the same. He has blasted the Fed throughout 2018 for raising interest rates, which tends to strengthen the value of the dollar. 

(Despite Trump’s claims, the Treasury Department has declined to label either China or the European Union as manipulators in each of its annual reports on foreign currency policy issued since 2017.)

Trump instead wants the Fed to weaken it through rate cuts and monetary stimulus, since a weaker dollar makes U.S. products relatively cheaper to foreign buyers. But the Fed is legally mandated to target only inflation and unemployment, not exchange rates, through monetary policy.


The background: Trump’s tweet came hours after the Commerce Department released data showing a massive jump in the U.S. trade deficit in May, which the president has struggled to narrow.

The president has also expressed frustration for weeks with European Central Bank President Mario Draghi, who announced last month that the bank may cut rates if the EU economy continues to slow.


Dow, S&P and Nasdaq set record highs: Three major U.S. stock indexes closed with record highs Wednesday, extending another stretch of rampant gains for Wall Street despite a dimming global outlook.

The Dow Jones Industrial Average, S&P 500 and the Nasdaq composite all set new highs in a shortened trading session ahead of Independence Day.

The Dow closed with a 179-point gain, rising 0.67 percent to a record high of 26,966 points. The S&P rose 0.77 percent, gaining almost 23 points to close at a record 2,996 points. And the Nasdaq rose 0.75 percent to gain 61 points, closing with a record 8,170 points.

U.S. stocks have blown through records in the second quarter of 2019 despite the growing costs of global trade tensions, the volatile U.S.-China trade war and several geopolitical risks with economic implications, including Brexit. Wall Street has also rallied as the Federal Reserve moves closer to cutting interest rates.

I've got more here.



  • Democratic lawmakers and environmental activists are criticizing plans by the Trump administration to reportedly use $2.5 million in National Park Service (NPS) maintenance funds to help cover the cost of President Trump’s “Salute to America” event on Independence Day.
  • A senior Commerce Department official reportedly told agency staff this week to continue treating Chinese telecommunications giant Huawei as blacklisted, after President Trump said he would allow U.S. companies to sell products to the company.
  • David Marcus, the head of Facebook's cryptocurrency project Libra, in a blog post on Wednesday vowed to work closely with regulators, lawmakers and banks as the company seeks to unveil its controversial digital currency.
  • A federal appeals court on Wednesday ruled online retail giant Amazon can be held liable for the products sold by third-party sellers on its platform.



  • The mayor of an Arizona city said Tuesday that  it will follow through with financial help promised to Nike as the company faces backlash from conservatives — including Arizona Gov. Doug Ducey (R) — for pulling a sneaker featuring a Betsy Ross flag.