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On The Money: Pelosi, Trump tout deal on new NAFTA | McConnell says no trade vote until impeachment trial wraps up | Lawmakers push spending deadline to Thursday

On The Money: Pelosi, Trump tout deal on new NAFTA | McConnell says no trade vote until impeachment trial wraps up | Lawmakers push spending deadline to Thursday
© Greg Nash

Happy Tuesday and welcome back to On The Money, the "biggest and best" financial newsletter in the "history of the world." 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--Pelosi announces support for new Trump NAFTA deal: House Democrats on Tuesday announced an agreement with President TrumpDonald Trump Pence said he's 'proud' Congress certified Biden's win on Jan. 6 Americans put the most trust in their doctor for COVID-19 information: poll OVERNIGHT DEFENSE: Biden administration to evacuate Afghans who helped US l Serious differences remain between US and Iran on nuclear talks l US, Turkish officials meet to discuss security plans for Afghan airport MORE on a historic deal revamping the North American Free Trade Agreement (NAFTA) with Canada and Mexico, setting up a full vote as early as next week.

"This is a day we've all been working to and working for on the path to yes," Speaker Nancy PelosiNancy PelosiEquilibrium/Sustainability — Presented by NextEra Energy — Set millions of tires on fire, pay less than ,000 On The Money: Biden announces bipartisan deal on infrastructure, but Democratic leaders hold out for more Democrats seek to calm nervous left MORE (D-Calif.) said at a news conference to tout the deal that was held just an hour after she appeared before the cameras to announce two articles of impeachment against Trump.

The Hill's Niv Elis and I tell you more about the road ahead here.

Why Trump wants it: Passage of the trade deal would provide a significant legislative win for Trump that might only be topped by his tax-cut bill, which was approved by a GOP-held House in 2017.

  • Trump's opposition to NAFTA was key to his 2016 victories in Ohio, Michigan, Wisconsin, and Pennsylvania--four industrial states where the deal cost thousands of manufacturing jobs.
  • Successfully revising NAFTA could boost Trump's standing in those states as the president attempts to reassemble his winning coalition in 2020. 

 

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Why Pelosi wants it:  Pelosi is also casting the trade pact as a political win that shows her caucus can legislate even as they move toward just the third impeachment of a U.S. president in history. 

  • Republicans have sought to make the case that Democrats are obsessed only with impeachment, and they have frequently brought up the trade deal in that context.
  • The Speaker also was careful to highlight changes to the originally negotiated text that helped win an endorsement from the AFL-CIO, and that underscored her argument that it was a win for progressives.

 

Reactions: 

 

What comes next: Trump is eager to pass USMCA before the end of the year, and House leaders are mulling ways to expedite the deal amid pending votes on impeachment and government funding. 

They are still deliberating whether to use a fast-track process known as trade promotion authority (TPA), which has additional requirements, and whether to mark up the bill in committee. 

But McConnell's hesitance to take up USMCA until after impeachment could set up a fight with the White House, which insists on passing the deal before the end of the year.

 

Read more: 

 

ON TAP TOMORROW:

 

LEADING THE DAY

Lawmakers push spending deadline to Thursday: Lawmakers broke up their meeting on Tuesday with no deal to fund the government as the clock ticked toward a Dec. 20 deadline.

Appropriators face a long series of obstacles to reach a deal and prevent either having to pass a short-term spending measure to keep the government open, or seeing federal agencies shut down.

House Appropriations Chairwoman Nita LoweyNita Sue LoweyLobbying world Progressives fight for leverage amid ever-slimming majority Biden needs to tear down bureaucratic walls and refocus Middle East programs MORE (D-N.Y.) and Senate Appropriations Chairman Richard ShelbyRichard Craig ShelbyOn The Money: Sanders: Democrats considering trillion spending package | Weekly jobless claims rise for first time since April Shelby signals GOP can accept Biden's .5T with more for defense Senate confirms Biden pick for No. 2 role at Interior MORE (R-Ala.) had hoped to button up a deal by Sunday, and kept working into the week on a slew of tough issues that include President Trump's proposed border wall, immigration enforcement, abortion-related issues, and Trump's use of emergency powers to reprogram money toward the wall.

Niv Elis tells us more about what happened at the meeting here.

 

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House panel to consider temporarily repealing SALT deduction cap: The House Ways and Means Committee is scheduled on Wednesday to consider legislation that would temporarily repeal a portion of Republicans' 2017 tax-cut law, which is disliked by politicians in Democratic-leaning high-tax states.

The bill -- offered by Reps. Tom Suozzi (D-N.Y.), Mike ThompsonCharles (Mike) Michael ThompsonHouse Democrats introduce bill to close existing gun loopholes and prevent mass shootings Giffords group unveils gun violence memorial on National Mall Democrats urge Biden to take executive action on assault-style firearms MORE (D-Calif.) and Bill Pascrell (D-N.J.) -- would repeal the $10,000 cap on the state and local tax (SALT) deduction for 2020 and 2021. It also would raise the cap to $20,000 for married couples in 2019.

  • To offset the costs of the changes to the SALT deduction cap, the bill would raise the top individual income tax rate from 37 percent to its pre-GOP tax law level of 39.6 percent, and it would also lower the income threshold for where that top bracket starts. 
  • The proposed changes would be in effect from 2020 through 2025, after which time the individual tax changes in the 2017 law, including the SALT deduction cap, expire.

The Hill's Naomi Jagoda has more here.

 

GOOD TO KNOW

  • The New York Times: "A U.S. offensive against the World Trade Organization will effectively shutter the group's system for settling disputes, at a time it's most needed."
  • Progressive leaders in the House said Tuesday they are hoping to avoid a standoff with Democratic leaders following a meeting with Speaker Nancy Pelosi (D-Calif.) on her sweeping bill to lower drug prices.