On The Money: Trump, in reversal, says he's not looking at tax cuts | Trump calls himself 'chosen one' to fight China on trade | CBO finds spending deal to add $1.7T to deficit
On The Money: Mnuchin says debt ceiling deal 'close' | GOP scrambling for backup plan | Facebook crypto chief vows to clear up regulatory concerns | Dems mull bill to block cryptocurrency project | Unions back protests targeting Amazon 'Prime Day'
Happy Monday 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.
THE BIG DEAL--Mnuchin says debt ceiling deal 'close' Treasury Secretary Steven Mnuchin on Monday expressed optimism that Congress will agree to a deal that includes raising the debt ceiling in the coming weeks.
Mnuchin addressed reporters from the White House briefing room, where he said he's had "productive talks" with Speaker Nancy Pelosi (D-Calif.) and that Democrats, Republicans and the White House are all in agreement that packaging a budget deal and a debt ceiling increase "is the first choice."
"I think we're very close to a deal. But as you know these deals are complicated," Mnuchin said.
If lawmakers are unable to come to an agreement before the start of August recess, Mnuchin said he would expect them to either "stick around or raise the debt ceiling" as part of a standalone measure.
Growing pressure, few backups: Mnuchin's renewed optimism comes after week of anxiety for Senate Republicans, who are in the dark about their party's backup plan for raising the debt ceiling.
Leadership wants to attach an increase in the nation's borrowing limit to a budget deal, which would let them consolidate two tough political votes. But while Congress has until January to avoid deep budget cuts, it appears increasingly likely it will have to vote to raise the debt ceiling before leaving for the August recess.
Voting on the debt ceiling before the August recess would give lawmakers two weeks to cobble together a strategy. The House is set to leave town on July 26; the Senate is scheduled to be in session through Aug. 2. The Hill's Jordain Carney tells us how that might play out here.
ON TAP TOMORROW
- The Senate Banking Committee holds a hearing on Facebook's Project Libra cryptocurrency payments system, 10 a.m.
- The House Financial Services Committee holds a markup of pending legislation, 10 a.m.
LEADING THE DAY
Facebook says it will launch cryptocurrency after regulatory concerns 'cleared up' The head of Facebook's cryptocurrency project is expected to tell Congress this week that the company will launch its digital coin after related regulatory concerns are "cleared up."
David Marcus, in advance testimony released Monday, said the launch of Facebook's digital coin known as Libra would be preceded by the "broadest, most extensive and most careful pre-launch oversight by regulators and central banks in [financial technology's] history."
Marcus made the remarks in his written testimony posted to the Senate Banking Committee's website ahead of Tuesday's hearing, when he is set to testify about Facebook's cryptocurrency and data privacy plans.
Facebook has said Libra will be launched by next year. But its announcement last month spurred a backlash, particularly on Capitol Hill, and has financial regulators raising their eyebrows.
House Dems go in for the kill: Democrats on the House Financial Services Committee are considering a bill that would ban major social media and technology companies from providing financial services and offering digital currencies.
The measure, outlined in a discussion draft obtained Monday by The Hill, appears to target Facebook's Project Libra.
- Called the Keep Big Tech Out of Finance Act, the bill would apply to any company with at least $25 billion in annual revenue that offers "an online marketplace, an exchange, or a platform for connecting third parties."
- Covered firms would be banned from creating and operating digital currencies, a provision clearly targeted at Facebook's Project Libra. But the measure's broad parameters could also effectively outlaw financial products offered by other major tech firms.
- Companies subject to the bill -- which appear to include Facebook, Google and Amazon -- would also be banned from offering a slew of financial services such as banking, investment management, securities exchanges, financial advice and money transmission.
Mnuchin voices 'serious concerns' about Facebook cryptocurrency project: And just in case skepticism from all four congressional financial policy leaders, the Fed chairman and President Trump wasn't enough, Treasury Secretary Steve Mnuchin on Monday said he has "very serious concerns" about Libra.
"The Treasury Department has expressed very serious concerns that Libra could be misused by money launderers and terrorist financiers," Mnuchin said during a press conference on cryptocurrency.
"We will not allow digital asset service providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities," he warned.
He said Facebook has "a long way to go" to convince regulators that it is prepared to launch the controversial project.
The Hill's Emily Birnbaum tells us more about his concerns here.
Labor unions back strikes, boycotts targeting Amazon 'Prime Day' Major U.S. labor unions called on consumers to boycott Amazon during its annual "Prime Day" sale Monday and expressed solidarity with striking workers at a suburban Minnesota warehouse for the online retailer.
Labor leaders and activists urged online shoppers not to buy from Amazon or its affiliates as the company offers discounts of up to 70 percent on thousands of products to members of its Prime services on Monday and Tuesday.
The AFL-CIO, the United Food and Commercial Workers International Union (UFCW), and the Communications Workers of America (CWA) have asked would-be Amazon customers to stand with warehouse workers and delivery drivers in calling for safer working conditions.
"Before you rush out and start shopping and filling that cart, I hope you'll take a minute to think about the working people who are working behind the scenes to make those deliveries happen today," said AFL-CIO Secretary-Treasurer Liz Shuler in a Monday video.
"Show Amazon that Prime Day is not just for shopping, it's for respecting the rights of work."
I've got more on the boycott and the reasons behind it here.
White House projects $1T deficit for 2019
The White House projects that the federal deficit will surpass $1 trillion this year, the only time in the nation's history the deficit has exceeded that level, excluding the four-year period following the Great Recession.
"The 2019 deficit has been revised to a projected $1.0 trillion," the White House Office of Management and Budget (OMB) wrote in its midyear review.
What's going on: Republicans cast aside projections that their 2017 tax reform law would add $1.9 trillion to the deficit over a decade. Larry Kudlow, the top White House economic adviser, claimed just last week that the tax cuts were on track to pay for themselves.
Spending has also shot up as a result of bipartisan budget deals, in which Republicans sought massive increases in defense expenditures and Democrats sought equal increases on domestic priorities such as health care and education.
As a candidate, President Trump promised to wipe out not only the deficit but the entire federal debt, which has surpassed $22 trillion.
Niv Elis has more of the details here.
GOOD TO KNOW
- President Trump on Monday touted the success of his tariffs on Chinese goods, saying that the taxes are having a "major effect" on the nation's economy.
- Former Vice President Joe Biden on Monday released a health care plan that his presidential campaign says would be paid for by raising taxes on the wealthy.
- President Trump is putting his hopes for reshaping the Federal Reserve on a controversial conservative economist who is a fierce advocate for his economic agenda -- and who has adjusted her views on monetary policy to fit the commander-in-chief's.
- Democratic presidential candidates are calling for increasing taxes on capital gains, a move they argue would make the tax code more fair and help to reduce income inequality.
- Chinese telecommunications giant Huawei is planning to lay off hundreds of employees in the U.S., the Wall Street Journal reported Sunday.
ODDS AND ENDS
- Washington has seen a flurry of activity and bipartisan interest in passing drug pricing legislation this year, but with the August recess approaching and the 2020 elections ahead, advocates for reform worry time is running short.
- Op-Ed: Laurence Kotlikoff, a Boston University economist, argues in defense of "The narrow way to a better banking system."