On The Money: Trump banks on Fed, China to fuel 2020 economy | Judge orders parties to try to reach deal in lawsuit over Trump tax returns | Warren targets corporate power with plan to overhaul trade policy

On The Money: Trump banks on Fed, China to fuel 2020 economy | Judge orders parties to try to reach deal in lawsuit over Trump tax returns | Warren targets corporate power with plan to overhaul trade policy
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Happy Monday and welcome back to On The Money, where we're bidding farewell to the postcard-sized tax filing form. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.


Write us with tips, suggestions and news: slane@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @NJagoda and @NivElis.


THE BIG DEAL--Trump banks on Federal Reserve and China to fuel 2020 economy: President TrumpDonald John TrumpMulvaney: 'We've overreacted a little bit' to coronavirus Former CBS News president: Most major cable news outlets 'unrelentingly liberal' in 'fear and loathing' of Trump An old man like me should be made more vulnerable to death by COVID-19 MORE is counting on the Federal Reserve and renewed trade talks with China to help power the U.S. through an economic obstacle course that could impede his path to reelection.

Trump's campaign for a second term hinges in large part on the strength of the U.S. economy and his ability to claim credit for it.

That mission became more challenging on Friday when the Commerce Department issued new numbers showing gross domestic product (GDP) slowed from a 3.1 percent pace in the first quarter to 2.1 percent the following three months.


With global risks rising and U.S. businesses beginning to brace for potential economic pitfalls, China and the Fed could have stark implications for the economy heading into a crucial election year.

  • The Fed is slated to hold its next monthly policy meeting on Tuesday and Wednesday, and policymakers are almost certain to cut interest rates. 
  • Around that same time, top U.S. and Chinese officials will meet in Shanghai to revive talks aimed at ending the yearlong trade war between the world's two largest economies.

I break down the potential implications for the economy and the election here.


The risks: Trump pledged throughout his 2016 presidential campaign that the U.S. economy under his watch would grow 3 to 4 percent each year. 

But economists across the political spectrum raised doubts that the economy could maintain that rate of expansion, and they were vindicated Friday when revised government figures showed GDP expanded 2.5 percent in 2018. Why?

  • The 2017 tax cuts and federal spending increases helped last year's growth, but the $1.5 trillion GOP tax cut has not led to the level of business investment predicted by many of Trump's allies.
  • A souring global economic forecast and mounting damage from Trump's trade wars have also taken their toll on American businesses.
  • Fed Chairman Jerome Powell and his colleagues have expressed concern with fading business spending and potential deeper losses triggered by the trade trouble with Europe and China.


The broader picture: A Fed rate cut this week may provide a short-term boost to wary American businesses, but it will be up to Trump to sooth the trade tensions sparking much of their anxiety.

While Washington and Beijing have agreed to hold off on further tariffs while trade talks resume, it's unclear whether both nations will reach a deal.



  • Trump administration officials meet with Chinese counterparts in Shanghai to discuss a potential trade agreement.
  • The Federal Reserve's Federal Open Markets Committee (FOMC) begins its two-day July meeting.



Judge order parties to reach a deal on Trump tax returns: A federal judge on Monday ordered the parties in a lawsuit over President Trump's state tax returns to see if they can reach an agreement to prevent the case from becoming moot.

U.S. District Court for the District of Columbia Judge Carl Nichols, a Trump appointee, ordered Trump, the House Ways and Means Committee and New York officials to confer and file a status report by 6 p.m. Tuesday that either outlines an agreement or lays out the parties' positions if there's no agreement.


How we got here: Nichols issued the order after Trump filed an emergency motion last week. The motion asked the court to enjoin the Ways and Means Committee from requesting Trump's state tax returns under a new New York law, until the president has an opportunity for judicial review.

The Ways and Means Committee argued that the court lacks jurisdiction to bar it from requesting Trump's state tax returns. The Committee argued that its decision about whether to utilize the New York law is protected against a legal challenge under the Constitution's speech or debate clause.

Nichols said that there seems to be a risk that without Trump receiving some sort of relief, the Ways and Means Committee could quickly request and receive Trump's tax returns, making the case quickly ripe and then moot.

At the same time, Nichols said that it seems inappropriate to enjoin the committee from requesting Trump's state tax returns because Trump wouldn't be harmed by the request itself.

The Hill's Naomi Jagoda with the latest developments and what's next.


More...What to know about the fight over Trump's tax returns: The fight over President Trump's tax returns has moved to the courts.

In recent weeks, the Democratic-led House Ways and Means Committee has filed a lawsuit in an effort to obtain Trump's federal tax returns, and Trump has filed a lawsuit to prevent the committee from getting his New York state tax returns.

The court cases are sure to be closely watched. Democrats view obtaining Trump's tax returns as a key oversight priority. Trump is the first president in decades who refused to voluntarily release any of his tax returns, and he is determined to keep them private.

The Hill's Naomi Jagoda lays out everything you need to know about the lawsuits over Trump's tax returns, the judges presiding over them, and the potential stakes of each outcome.


Warren targets corporate power with plan to overhaul trade policy: Sen. Elizabeth WarrenElizabeth WarrenPentagon charts its own course on COVID-19, risking Trump's ire Warren to host high-dollar fundraiser for Biden It's as if a Trump operative infiltrated the Democratic primary process MORE (D-Mass.) on Monday released a plan to use trade policy as a tool to create stronger safeguards for labor, the environment and regions of the country harmed by globalization.

Warren's plan would overhaul the process by which the U.S. proposes, writes, finalizes and enforces trade deals while imposing strict standards for any nation seeking or currently in a free trade deal with the U.S.

In a Medium post outlining the extensive trade proposal, Warren said her approach to trade is centered on using the United States' immense leverage to protect domestic industries and workers.

Warren argued U.S trade policy has ceded too much power to international corporations, squandering the country's ability to defend its manufacturers, farmers and laborers. 

"As President, I won't hand America's leverage to big corporations to use for their own narrow purposes," Warren wrote. "We will engage in international trade -- but on our terms and only when it benefits American families." I break down the plan here.


The political context: Warren's plan is among the most comprehensive proposals to replace President Trump's tariff-based trade policy with a holistic protectionist agenda. 

  • Trump has imposed more than $250 billion in tariffs on Chinese goods, foreign steel and aluminum, solar panels, and washing machines since taking office in 2017. The president has used import taxes as leverage in trade talks and inducement for companies to produce goods in the U.S., but manufacturing job gains and activity have faded throughout the year.
  • U.S. farmers and ranchers have also lost billions of dollars in foreign sales due to retaliatory tariffs imposed on American agricultural goods.

Warren acknowledged that while tariffs "are an important tool, they are not by themselves a long-term solution to our failed trade agenda and must be part of a broader strategy that this Administration clearly lacks."


Lawmakers point to entitlements when asked about deficits: Lawmakers are deflecting from concerns about the budget-busting spending deal that passed the House on Thursday by shifting attention to the rising cost of Medicare, Social Security and other entitlement programs they say is really driving the deficit.

This discretionary spending in the new deal adds up to $1.3 trillion, less than a third of the roughly $4.4 trillion the Congressional Budget Office projects the government will spend in 2019. 

The bulk of the total spending is known as mandatory spending, and consists of automatic programs such as Social Security, Medicare, Medicaid and means-tested anti-poverty programs.

"What's going to increase the deficit is the failure to deal with entitlement spending. That's what's driving it," said Rep. Tom ColeThomas (Tom) Jeffrey ColeHouse GOP lawmaker breaks with party to back proxy voting House conservatives voice concerns over minority rights during remote hearings House Rules Committee approves remote voting during pandemic MORE (R-Okla.), an appropriator. "I just think we have to have an honest discussion about the entire budget, and most of the budget is on automatic pilot, over 70 percent." The Hill's Niv Elis explains here.



  • Public opinion toward technology companies has soured in recent years amid growing concerns about privacy and misinformation, according to a new poll.
  • The Associated Press: "U.S. business economists expect economic growth to slow this year, and a rising proportion of them think corporate sales and profits will decline."
  • The Washington Post: "A former top Trump administration appointee at the Consumer Financial Protection Bureau 'may have abused his authority' and 'misused his position for private gain' in an attempt to defuse an article from The Washington Post about online posts in which he questioned whether the n-word was racist, according to an inspector general's report."



  • French Finance Minister Bruno Le Maire on Saturday urged President Trump to refrain from imposing tariffs on his country's wine exports in response to a new French tax law targeting technology giants such as Amazon and Google.
  • Op-Ed: Desmond Lachman, resident fellow at the American Enterprise Institute, argues against "Trump's bad idea of dollar intervention."