OVERNIGHT FINANCE: Budget breakdown
So the budget dropped…
TOMORROW STARTS TONIGHT: OBAMA’S ‘GO-BIG’ BUDGET LANDS WITH THUD. Rebecca Shabad with the primer for The Hill: “President Obama on Monday sent Congress a nearly $4 trillion budget blueprint for 2016 that would raise taxes on the wealthy and businesses while boosting spending on infrastructure and education… The proposal busts through the spending limits that were introduced under a 2011 budget deal, requesting $74 billion more in spending for domestic programs and the Pentagon than the caps would allow.” http://bit.ly/1zwNXNI Read the budget: http://bit.ly/1D6O8Ai
Three takeaways…
1.) Biggest loser: big banks… and centrists (a la Hillary Clinton)? Big businesses don’t like the budget. It’d impose a 19 percent tax on U.S.-based multinational companies’ foreign earnings. It’d nix tax breaks for oil companies. Are you a big bank? Obama wants to charge you fees when you borrow money. While this budget is sure to appease the Elizabeth Warren-wing of the Democratic Party, it could provide headaches for Hillary Clinton, who will surely be asked about her stance on those proposals as she gears up for a 2016 White House run.
{mosads}– ROBERT SHAPIRO, former economic adviser to President Clinton, tells OVERNIGHT: “The tax proposal to raise taxes on the wealthy goes nowhere, nor does the tax on foreign source profits of U.S. multinationals. I don’t think he could get that through all of the Democratic caucus — so that’s not happening. That’s not a good proposal economically, anyway. There are certain things both sides agree on, like infrastructure spending and both sides want to bring down the corporate tax rate.”
— THIRD WAY’s GABRIEL HORWITZ, director of the center-left think tank’s economic program, tells OVERNIGHT: “It trades too lightly on mandatory spending… [Obama] did not go far enough, particularly on reducing waste in the health care system… He missed the opportunity to demonstrate to all Democrats that in order to fund the priorities we all hold dear, we also need to shore up areas that need reform. In sum, the budget is a step forward on investments, but a step sideways on entitlements.”
2.) More good news for corporate tax reform? President Obama’s budget would decrease the top corporate tax rate from 35 percent to 28 percent. It’s an admission from that the White House that the corporate tax rate needs to decline and could open the door to talks with Republicans.
— RYAN ELLIS, tax policy director at the conservative Americans for Tax Reform, tells OVERNIGHT: “It keeps the chances at status quo for corporate tax reform… It’s not a sign that they want their policy proposal made… They decline the rate, but they don’t bring it down nearly enough.”
— DOUG HOLTZ-EAKIN, conservative economist and former adviser to GOP presidential candidates, to WSJ: “The good news seems to be that the administration has agreed that lockout [of overseas profits] is an important phenomenon… But let’s face it, it is an opening bid, not a result.” http://on.wsj.com/1D6Mf6Q
3.) This is the first jab ahead of October’s sequester showdown. Kristina Peterson for The Wall Street Journal: “Marking each party’s initial negotiating stance, the dueling budgets will draw little praise from the opposing side. Still, lawmakers and the president have an incentive to compromise later this year, when Congress will pass spending bills needed to keep the government running beyond September. In October, a new round of spending curbs established in a 2011 budget deal known as the sequester will kick in unless lawmakers and Mr. Obama reach an agreement to set spending higher.” http://on.wsj.com/1vphlpe
THIS IS OVERNIGHT FINANCE. That was the most depressing Super Bowl ever. From the ads to the Pats’ win. Tweet: @kevcirilli; email: kcirilli@digital-staging.thehill.com; and subscribe: http://digital-staging.thehill.com/signup/48. Happy Monday, folks. Keep it moving…
As the budget dust settles…
WORTH NOTING: CONSUMER SPENDING LOWEST LEVEL SINCE ’09. Lucia Mutikani for Reuters: “U.S. consumer spending recorded its biggest decline since late 2009 in December, with households appearing to save the extra cash from cheaper gasoline, which could support future consumption. Other data on Monday showed factory activity slowed in January, suggesting economic growth continued to cool early in the first quarter.
“The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, fell 0.3 percent after a 0.5 percent gain in November. It was the largest drop since September 2009 and reflected big declines in spending on both durable and nondurable goods.” http://reut.rs/1LEqDT3
HOW THE BUDGET PLAYED: Bloomberg, “Obama’s Aspirational, Unpassable, $4 Trillion Budget.” …CNN, “White House budget pitch: Higher taxes on wealthy, lift up middle class.” …NPR, “Obama’s Budget Proposal Lifts 2013 Caps, Adds Billions In Spending.” …Reuters, “Obama proposes $3.99 trillion budget, sets up battle with Republicans.” …Fox News, “Obama sends Congress $4T budget replete with new spending, taxes.”
BAD NEWS: SIX MORE WEEKS OF WINTER. PUNXSUTAWNEY, Pa. (AP) — The handlers of Pennsylvania’s most famous groundhog, Punxsutawney Phil, said Monday the furry rodent has forecast six more weeks of winter. http://bit.ly/1voZ1MX
ABOUT LAST NIGHT: NATIONWIDE DEFENDS ‘DEAD BOY’ COMMERCIAL, via a company statement: “The sole purpose of this message was to start a conversation, not sell insurance. We want to build awareness of an issue that is near and dear to all of us — the safety and well-being of our children.” Matthew Diebel for USA Today has more: http://usat.ly/1HNcbZl
— RT @ABC7Rebecca, Rebecca Cooper Dupin: “WSJ experts love Nationwide’s kid ad. Others hate it. Best response?@FuchuBH:’Here’s the thing, people.The kid isn’t really dead. Calm down.'”
HILSENRATH: FED WILL BEAT RAND PAUL. From this morning’s Wall Street Journal: “The Fed sees GAO reviews of its monetary policy decisions as a congressional intrusion into its independent decision-making. Former Fed Chairman Ben Bernanke strongly and successfully resisted ‘Audit the Fed’ proposals and Chairwoman Janet Yellen is sure to do the same. In a December news conference, Ms. Yellen said she would be ‘very concerned’ about such a bill and would ‘forcefully make the case’ against it.
“The Fed demonstrated its savvy in dealing with Congress during Dodd-Frank debates in 2010. Efforts to impose congressional inspections of monetary policy and to reduce the Fed’s bank regulatory powers failed. It emerged from those debates in most respects with more power than it had before.
“Ms. Yellen will have President Obama on her side again if the bill gets new life. She will also have the central bank’s 12 regional bank presidents, an influential but little seen force in Congress with strong connections in the deep-pocketed business and banking communities around the country. It remains hard to see the Fed losing this battle.” http://on.wsj.com/16anU2A
KEATING BLASTS ‘TRICKLE-DOWN REGULATIONS.’ Frank Keating, for GOP governor of Oklahoma, in an op-ed for The Hill: “It’s frustrating when the government tells you to do things that the law doesn’t require you to do. But while these scenarios are imaginary, bankers live with these frustrations every day. I constantly hear from hometown bankers that their examiners — the government officials who visit their banks every year to make sure they make safe loans and follow the rules — are recommending actions suited for banks many times their size. They call it ‘trickle-down regulation.'” The CEO of the American Bankers Association’s op-ed: http://bit.ly/1Dp96s0
QUOTABLE, Senate Majority Leader Mitch McConnell (R-Ky.), on the budget: “Unfortunately, what we saw this morning was another top-down, backward-looking document that caters to powerful political bosses on the left and never balances — ever.” Shabad has more GOP criticism: http://bit.ly/1F0ljEX
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