Happy Wednesday 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.
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THE BIG DEAL–Treasury misses Dem deadline on Trump tax returns: Treasury Secretary Steven Mnuchin said Wednesday that the department will not be able to finish its review of Democrats’ request for President Trump’s tax returns by Wednesday — the deadline that Democrats had given the IRS to provide the documents.
“The [House Ways and Means] Committee requests the materials by April 10, but the Treasury Department will not be able to complete its review of your request by that date,” Mnuchin said in a letter to the committee’s chairman, Rep. Richard Neal (D-Mass.).
- Mnuchin said Treasury has started to discuss the issue with the Justice Department “to ensure that our response is fully consistent with the law and the Constitution.”
- He added that he would supervise Treasury’s review of the request “to ensure that taxpayer protections and applicable laws are scrupulously observed, consistent with my statutory responsibilities.”
Takeaway: The announcement that Treasury will miss Democrats’ deadline signals what could be a prolonged fight between Democrats and Trump over the president’s tax returns.
The Hill’s Naomi Jagoda has more on the missed deadline here.
Trump and his allies spent the day pushing back on the Dem demand.
Trump rejects giving Dems tax returns, citing audit: President Trump said Wednesday that he won’t release his tax returns while he’s under audit, setting the stage for a standoff among the White House, the Treasury Department and House Democrats.
“I would love to give them, but I’m not going to do it while I’m under audit,” Trump told reporters as he departed the White House for a trip to Texas.
Trump has long insisted he will not voluntarily give up his returns, citing an ongoing audit, the same reason he gave when he broke with years of precedent and declined to release his returns during the 2016 presidential campaign. The Hill’s Brett Samuels has more here.
While Trump dug in, Senate Democrats pushed IRS Commissioner Charles Rettig to fork over the documents. Rettig wouldn’t say Wednesday that he alone would determine how to respond to Democrats’ request for Trump’s tax returns, disappointing Democrats who think that the Treasury Department should not be involved.
“Remember that we’re a bureau of the Treasury. We are supervised by the Treasury,” Rettig said at a Senate Finance Committee hearing. The Hill’s Naomi Jagoda takes us there.
- The tax-code provision that Neal made the request under references the Treasury Secretary, but Neal sent the letter to Rettig because Treasury has delegated tax-administration responsibilities to the IRS.
- “I think it’s unfortunate that you’re just not saying, ‘it’s my job and my job alone,'” said Senate Finance Committee ranking member Ron Wyden (D-Ore.).
- “I’m aware of the delegation order, as is Treasury, but you must be aware that we’re a bureau of Treasury and the Treasury supervises us,” Rettig replied.
Treasury Secretary Steven Mnuchin also said Wednesday that it is “appropriate” for department lawyers to discuss the request for Trump’s tax returns with the White House counsel, and that Treasury will also consult with the Justice Department on the topic.
“This isn’t just about the president’s return,” Mnuchin said on CNBC. “This is really about the issue of protecting American taxpayers and make sure that we enforce the laws correctly.”
“As I’ve said, we will follow the law,” he added. “But this is a very important issue. This isn’t just about the president and congressional oversight.” Naomi breaks it down here.
LEADING THE DAY
Senate GOP opposition to Cain grows: A growing number of Senate Republicans are warning they will oppose Herman Cain for the Federal Reserve Board, leaving President Trump with no room for error if he moves forward with the nomination.
Three GOP senators have told reporters that they would not support Cain if Trump formally sends the nomination to the Senate: Sens. Lisa Murkowski (R-Alaska), Cory Gardner (R-Colo.) and Mitt Romney (R-Utah).
- Romney told reporters that he could not support naming Cain to the central bank, while a spokeswoman for Murkowski confirmed to The Hill that the moderate GOP senator would oppose his nomination.
- “Senator Murkowski said that she would not support his nomination,” a spokeswoman said when asked about Cain.
- Gardner, a senator running for reelection in a state won in 2016 by Democratic presidential candidate Hillary Clinton, also told CNN that he would oppose Cain. “It’s not about his past. It’s about who I think should be on the board,” Gardner said. “So that’s that.”
Nomination in peril: Cain is walking on incredibly thin ice. If all Democrats vote against him, Cain can’t afford to lose support from another Republican, and there are a few more GOP senators that seem poised to oppose him too.
- Asked about Cain this week, Sen. John Cornyn (R-Texas), a member of GOP leadership, warned that the Fed board needed to remain independent from politics.
- Sen. John Kennedy (R-La.) said he wouldn’t make a decision on Cain until he saw the results of his background check, but warned “I will vote against a nominee that I think has been sent there with a closed mind just to vote in a particular way without considering all the evidence.”
- GOP Sen. Susan Collins (Maine), who has opposed other high-profile Trump nominees, said she hadn’t focused on his potential nomination but expected that if he’s nominated the sexual harassment allegations that derailed Cain’s 2012 presidential campaign would be “thoroughly explored.” Cain denied wrongdoing.
Mnuchin comes to Cain’s defense: While the Senate GOP revolt gained momentum, Treasury Secretary Steven Mnuchin called for Cain’s confirmation should Trump go through with the nomination.
“I don’t know Cain very well, but I have every reason to believe the president supports him and feels strongly, so yes, I would think he should be confirmed,” Mnuchin said during a Wednesday interview with CNBC.
Mnuchin also dismissed concerns that Cain would politicize the central bank, saying “I don’t think there’s any reason whatsoever to be concerned about the independence of the Fed.”
“If and when these people are confirmed, I’m sure that they will have the responsibilities on the Fed board as do all the other Fed board members to uphold the mandate of the Fed,” Mnuchin said of Cain and Stephen Moore, a former Trump campaign adviser whom the president has also said he will nominate to the central bank.
Trump told reporters Wednesday that Cain is a “wonderful man,” but expressed doubts about the viability of his nomination.
“He’s been a supporter of mine for a long time,” Trump said of Cain. “As to how he’s doing in the process, that I don’t know. You go through a process. But Herman is a great guy, and I hope he does well.”
What comes next: If one more GOP senator comes out publicly against Cain, that will likely be enough to end his chance at confirmation. The senators who’ve expressed concerns about him will be under close scrutiny as we get closer to a formal nomination.
Dems challenge bank CEOs on post-crisis reforms: House Democrats sparred with the most powerful bankers in the U.S. on Wednesday as the chief executives of the country’s largest financial firms defended their industry’s reforms since the 2007 financial crisis.
The CEOs of seven of the nation’s largest banks appeared before Congress on Wednesday as a group for the first time since 2009, testifying before the House Financial Services Committee.
The bankers insisted that their firms have become safer, smaller and better corporate citizens in the decade since taxpayers bailed out the crumbling financial system, due in part to strict post-crisis regulations and capital standards enacted by former President Obama.
But Democrats were reluctant to allow the Wall Street titans to turn the page on the financial crisis.
“I’m concerned that several of these institutions are simply too big to manage their own operations, too big to serve their communities and too big to care about the harm they have caused,” said Rep. Maxine Waters (D-Calif.), chairwoman of the Financial Services panel.
I’ll take you to the hearing here.
More from the hearing:
- Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Wednesday questioned the CEOs on whether more industry figures should have gone to prison over the 2007 financial crisis.
- The CEOs said they do not believe their successor will be a woman or person of color.
GOOD TO KNOW
- Democratic senators on Wednesday introduced legislation to expand tax credits for workers and families, saying the measure would act as a counterweight to President Trump’s 2017 tax-cut law.
- The federal deficit in the first six months of the 2019 fiscal year reached $691 billion, according to new federal data, eclipsing the full-year deficits from 2015-2017.
- Hurricanes and other storm-related flooding are likely to cause $54 billion in economic damage annually, according to a new report from the nonpartisan Congressional Budget Office (CBO).
- Sen. Elizabeth Warren (D-Mass.) released her 2018 tax return on Thursday, becoming the latest 2020 presidential candidate to make details about their personal finances public.
- Treasury Secretary Steven Mnuchin announced Wednesday that the U.S. and China have agreed on an enforcement mechanism for an eventual trade deal during “productive” trade talks.
ODDS AND ENDS
- The House on Wednesday voted to reinstate Obama-era net neutrality rules prohibiting internet service providers from interfering with web traffic.
- About three times as many Americans could benefit from tax credits for electric vehicles under legislation introduced Wednesday by a bipartisan group of senators.