March Washington D.C. Update

March 4, 2019

 

 

QUICK FIX

- Border emergency backlash: Congress this month is set to rebuke President Donald Trump's use of a national emergency declaration to build a border wall. At least four Senate Republicans have said they'll join Democrats to vote for a House-passed resolution, H.J. Res. 46 , to terminate the emergency, while others dislike the declaration but haven't decided how they'll vote. Trump has threatened to veto the measure, and Congress lacks the votes to override it. The emergency declaration also has triggered several lawsuits, so courts could put it on hold regardless of congressional action. In the meantime, the Pentagon is deploying an additional 1,000 troops to the southern border, boosting the number to about 6,000 - a move likely to draw more scrutiny from Democrats.

- Clock is ticking: The shutdown threat finally has subsided for the current fiscal year, so Congress and the Trump administration are turning their attention to fiscal 2020 - now just seven months away. The first step is Trump's budget request, which is expected to be released in two parts on March 11 and 18.

- Green new dealings: Now that battles lines have been drawn over the Green New Deal resolution, S. Res. 59 (116) , both chambers of Congress will proceed with efforts to shape climate change policy. In the Senate, Majority Leader Mitch McConnell has pledged the chamber will go on record soon about the Green New Deal - a strategy designed to see if Democrats will back the measure conservatives label a "socialist fantasy" - while Democrats are pressing Republicans to offer their own plan to address the crisis. In the House, lawmakers will continue to hold hearings on climate change topics and develop legislation.

 

 

TRADE

China talks on track: Trump could sit down with Chinese President Xi Jinping for a signing summit at the end of March if the two sides wrap up a wide-ranging trade agreement. To that end, a team of Chinese negotiators will travel to Washington for additional trade talks , Trump said in late February, although no dates have been announced. The U.S. trade representative's office said last week it would indefinitely postpone any tariff increase on hundreds of billions of dollars' worth of Chinese goods.

Up next: U.S. Trade Representative Robert Lighthizer has said he wants to begin wide-ranging trade talks in Tokyo this month. His office is also scheduled to release its annual National Trade Estimate report, an analysis that details foreign barriers to U.S. exports, by the end of the month, but that could be delayed because of the partial government shutdown earlier this year. - Megan Cassella

 

 

TAX

Zombie tax breaks: Senate Finance Committee leaders will continue their efforts to renew the large and diverse bloc of tax breaks known as extenders, after they introduced legislation, S. 617 (116) , in late February to revive them retroactively for 2018 and through 2019. The ones that have expired include a slew of benefits for renewable energy and alternative-fuel vehicles, as well as credits for railroad maintenance, entertainment productions, energy-efficient home building and business development in economically struggling areas. On the non-business side, the extenders include a tax break on mortgage insurance.

Finance Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden(D-Ore.) are leading the effort, with an eye toward the April 15 tax filing deadline, but building momentum in the House has proven difficult. Advocates also will continue making their case on Capitol Hill in the weeks ahead.

Tax season update: House tax writers will delve into the tax-filing season with a pair of hearings this month. National Taxpayer Advocate Nina Olson is scheduled to give her take on how it's going so far to the House Ways and Means Oversight Subcommittee on March 7. Treasury Secretary Steven Mnuchin is expected to testify to the full committee sometime early this month. Though a committee spokesperson described it as a "customary budget hearing," it will be Mnuchin's first appearance before the panel since Democrats took control of the House. They'll be eager to quiz him on refunds, income tax withholding tables and, just maybe, the president's tax returns.

Tax law glitches: Some GOP lawmakers will continue their attempt to fix mistakes written into the 2017 tax overhaul, HR 1 (115), including a capital investment write-off period for retailers and restaurants that was inadvertently lengthened. But as with extenders, a quick solution has proven elusive, with Democrats in no mood to help mend a law they voted against en masse - unless they see some of their tax priorities advanced as a tradeoff. - Aaron Lorenzo

 

 

FINANCIAL SERVICES

Waters wields the gavel: House Financial Services Chairwoman Maxine Waters (D-Calif.) this month will deliver on her promise of a packed scheduleof oversight hearings. First up is the Consumer Financial Protection Bureau at a March 7 hearing, the first for the agency under new director Kathy Kraninger. Waters says oversight of the powerful Obama-era agency is a top priority and recently wrote a letter to bureau employees urging them to report any efforts to undermine their work under Trump administration leadership. Kraninger has kept a low profile since taking the helm, but her predecessor, Mick Mulvaney, spent a year reining in the agency over the protests of Democrats.

Wells, Waters face off: Wells Fargo CEO Tim Sloan will testify at a March 12 hearing on the scandals that have rocked the big bank. Waters has been one of Wells Fargo's fiercest critics, calling for the lender to be broken up following revelations in 2016 that it opened millions of fake customer accounts. Others have called for Sloan's removal. His appearance will serve as a preview of the reception he and other major bank CEOs will receive at a follow-up hearing on April 10.

Whose best interest?: On March 14, a panel subcommittee will scrutinize one of the SEC's most important initiatives, the "best interest" proposal, which sets stricter restraints on potential conflicts for those offering investment advice. Some consumer advocates have criticized the rule, saying it is more industry-friendly than an Obama-era regulation thrown out last year by the courts.

Fannie-Freddie frontman: The Senate could take up the nomination of Mark Calabria to lead the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, the two companies at the heart of the nation's mortgage finance market. The Banking Committee last month voted to approve Calabria - Vice President Mike Pence's chief economist - on a party-line vote. Calabria would assume the post at a critical time, as the Trump administration looks at ways to end the government's decade-long control over Fannie and Freddie.

Fed's crystal ball: The Federal Reserve's interest rate-setting committee will meet March 19 and 20, and though it's not expected to raise interest rates, central bank officials will release their projections for future rate moves for the first time since the Fed signaled it was pausing its rate hike campaign. - Mark McQuillan