Happy Thursday 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.
See something I missed? Let me know at email@example.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: firstname.lastname@example.org, email@example.com and firstname.lastname@example.org. Follow us on Twitter: @SylvanLane, @NJagoda and @NivElis.
THE BIG DEAL—Trump delays increase in China tariffs until Oct. 15: President TrumpDonald John TrumpMexico says it disagrees with ‘astonishing’ Supreme Court decision allowing Trump asylum rule The Afghan negotiations — echoes from the past Democrats grill Army, Air Force nominees on military funding for border wall MORE said Wednesday that the U.S. will delay an upcoming increase in tariffs on $250 billion worth of goods from China as the two nations attempt to reboot trade talks.
Trump tweeted that he would push back tariffs set to go into effect Oct. 1 to Oct. 15 at the request of Chinese Vice Premier Liu He because the People’s Republic of China will celebrate its 70th anniversary on Oct. 1.
“At the request of the Vice Premier of China, Liu He, and due to the fact that the People’s Republic of China will be celebrating their 70th Anniversary on October 1st, we have agreed, as a gesture of good will, to move the increased Tariffs on 250 Billion Dollars worth of goods (25% to 30%), from October 1st to October 15th,” Trump wrote in a pair of tweets.
The move came after Beijing said earlier Wednesday it would lift tariffs on some American-made goods, but not major agricultural products like soybeans or pork that are already targeted by import taxes.
The good news: Like we said last week, a deal can’t happen unless the U.S. and China are talking, and past attempts to revive negotiations are often preceded by some type of tariff truce or delay.
The bad news: Trump and China appear to be stuck in a stalemate, and the concessions made Wednesday—if you can call them that—are nowhere close to what’s needed for a breakthrough. There is still a long, arduous path toward any potential deal, and it only gets harder with each passing day.
LEADING THE DAY
Treasury says US deficit topped $1 trillion in 11 months: The U.S. government deficit surpassed $1 trillion in the first 11 months of the current fiscal year, over $100 billion more than the same period last year, according to official Treasury figures released Thursday.
Last week, data from the Congressional Budget Office (CBO) found that the 11-month deficit had surpassed $1 trillion, but it was expected to fall back under that threshold after an expected spike in tax payments in September.
The Treasury data, however, offered no such assurances, estimating that the fiscal year would close $69 billion above the $1 trillion mark.
Red flags: The growing deficit, which adds to the nation’s debt burden, raises concerns about the nation’s fiscal health. Interest on the debt has cost the U.S. $379 billion this year, more than spending on veterans benefits, education and transportation.
The CBO has called the nation’s fiscal path “unsustainable,” warning that it may make it more difficult to combat future recessions and could potentially set up a financial crisis down the road.
How this is happening: The main drivers of the deficit are mandatory spending programs such as Social Security, Medicare and Medicaid, though recent tax cuts and increases to discretionary spending have also widened the spending gap.
Defense spending bill advances despite Democratic wall objections: The Senate Appropriations Committee on Thursday approved its annual defense spending bill on a 16-15 party-line vote, despite Democratic objections over President Trump’s border wall.
“Funding an ineffective, failed campaign promise, which the president promised Mexico would pay for, is not a priority of the American people and should not be the priority of this committee,” said Vice Chairman Patrick LeahyPatrick Joseph LeahyDefense spending bill advances over Democratic wall objections Democrats threaten to withhold defense votes over wall Is the Senate ready to protect American interests in space? MORE (D-Vt.).
Why it matters: The split vote raises questions for the Senate’s ability to pass spending legislation — which must also clear the Democratic-controlled House — ahead of a Sept. 30 funding deadline. The Hill’s Niv Elis explains why here.
White House: Trump isn’t planning to reduce capital gains taxes ‘at this time’ President Trump is not planning to take executive action to reduce capital gains taxes, the White House said Wednesday.
“President Trump was thoroughly briefed on the complex economic, legal and regulatory issues, and concluded that at this time he does not feel enough of the benefits will go to the middle class,” White House spokesman Judd Deere said.
The background: The White House’s comment comes after Trump met with his economic advisers to discuss the issue of whether to unilaterally index capital gains to inflation, therefore reducing the amount of investment gains subject to tax.
Trump had given mixed messages on the topic in recent weeks.
- At one point last month, he said he was thinking about indexing capital gains, but then the following day said that doing so would be perceived as “somewhat elitist.”
- Then the next week he retweeted tweets that supported indexing capital gains.
GOOD TO KNOW
- Sen. Elizabeth WarrenElizabeth Ann WarrenThe Hill’s 12:30 Report: House panel approves impeachment powers Cruz: Texas will be ‘hotly contested’ in 2020 Senate Democrats want answers on ‘dangerous’ Amazon delivery system MORE (D-Mass.) released a plan to bolster Social Security on Thursday that would raise benefits by $200 a month for current and future beneficiaries of the program.
- The Trump administration is releasing $250 million in military aid after lawmakers raised concerns over its delay, members of the Senate Appropriations Committee announced Thursday.
- The number of Americans submitting applications for unemployment benefits fell to a five-month low last week, the Labor Department announced Thursday.
- Inflation as measured by the core consumer price index rose at the highest rate in a year last month.
- A key Senate Democrat on Thursday rolled out a proposal aimed at increasing the amount of taxes paid by the rich, as politicians in the party and left-leaning experts debate how best to get the wealthy to pay more in taxes.
- Tariffs imposed or threatened by the U.S. and China could shave 0.8 percent off global economic output in 2020, the International Monetary Fund said on Thursday.
ODDS AND ENDS
- Three Senate Democrats are asking Amazon to respond to reports that it is skirting regulations and creating a dangerous environment for employees and the public with its delivery system.
- Op-Ed: David Reiss, a professor at Brooklyn Law School, argues why “There is hope of housing finance reform that works for Americans.”