Happy Tuesday and welcome back to On The Money, where we hope you’re as happy in 2020 as Elon Musk was today. 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–Senate panel advances Trump’s new NAFTA despite GOP gripes: A Senate panel on Tuesday advanced President Trump’s revamp of the North American Free Trade Agreement (NAFTA) almost unanimously despite grumbling from conservative lawmakers.
The Senate Finance Committee voted 25-3 to send to the full chamber a bill implementing Trump’s proposed U.S.-Mexico-Canada Agreement (USMCA). Sens. Pat Toomey (R-Pa.), Bill Cassidy (R-La.) and Sheldon Whitehouse (D-R.I.) opposed the measure, which passed the House last month with broad bipartisan support.
- The GOP-controlled Senate is expected to finalize the USMCA within weeks, cementing Trump’s most substantial victory on trade policy.
- But Senate leaders could be forced to delay a floor vote until after Trump’s impeachment trial if Speaker Nancy Pelosi (D-Calif.) sends House-passed articles of impeachment to the upper chamber in the coming days.
I explain here why some Republicans are so deflated about what Trump sees as a massive victory.
- Most Senate Republicans are eager to hand Trump a win on one of his top priorities ahead of the 2020 elections, despite their preferences for looser trade restrictions.
- Trump was able to secure the support of Democrats and some labor unions after agreeing to several major concessions. Changes that won over progressives included tougher labor law enforcement, stricter environmental standards and stripping protections for certain high-cost pharmaceuticals.
But several GOP senators complained Tuesday about being taken for granted.
- “We’ve slapped on all of these provisions designed to restrict trade and investment, we’ll get no economic growth out of this. And we, the Senate and the Senate Finance Committee, are allowing ourselves to be marginalized.” — Sen. Pat Toomey (R-Pa.).
- “The House got a lot of stuff because the House actually had the ability to say, ‘We’re not going to do this unless we get our demands met.’ We’ve not had that ability.” – Sen. Bill Cassidy (R-La.).
- “Sen. Toomey made a bunch of important comments that I agree with as well,” said Sen. Ben Sasse (R-Neb.). “And yet we need to, given the political realities, get this agreement across the finish line.”
Also: Sen. Chuck Grassley (R-Iowa) is urging Senate Majority Leader Mitch McConnell (R-Ky.) to take quick action on USMCA before an impeachment trial begins in the upper chamber.
LEADING THE DAY
Trade deficit falls to three-year low of $43.1 billion: The U.S. trade deficit, a longtime irritant to President Trump, fell to a three-year low of $43.1 billion in November, according to new Commerce Department data released Tuesday.
The 8.2 percent decline in the trade deficit followed a $2.5 billion drop in imports, paired with a $1.4 billion increase in exports from October.
The latest figures suggest an overall deficit drop in 2019, which saw a slight $0.1 billion drop in exports in the first 11 months while imports dropped $3.9 billion as compared to the same period in 2018.
- The drop will be welcome news to President Trump, who has railed against the trade deficit as a sign of American weakness.
- While deficits are subtracted from calculations of gross domestic product, economists say they are not inherently good or bad for the economy’s well-being.
- Some worry that the decrease in imports could indicate softness in domestic demand, a key driver of growth.
The Hill’s Niv Elis breaks down the data here.
Senate confirms Trump pick for small business chief: The Senate on Tuesday confirmed Jovita Carranza to head President Trump’s Small Business Administration (SBA).
Carranza, a Treasury Department official who served as deputy SBA administrator during George W. Bush’s presidency, was confirmed in a broad bipartisan 88-5 vote and has widespread support from the business community.
Democratic Sens. Kirsten Gillibrand (N.Y.), Kamala Harris (Calif.), Ed Markey (Mass.), Jeff Merkley (Ore.) and Ron Wyden (Ore.) voted against Carranza.
Among those not voting were Sens. Cory Booker (D-N.J.), Amy Klobuchar (D-Minn.), Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), all 2020 Democratic presidential candidates.
Carranza will become the highest-ranking Latina official in Trump’s Cabinet, and the vote gives the close ally of Treasury Secretary Steven Mnuchin a prominent role in defending the administration’s economic policies in the election year. Here’s more from The Hill’s Naomi Jagoda.
GOOD TO KNOW
- Sen. Elizabeth Warren (D-Mass.) rolled out a plan Tuesday to repeal parts of a 2005 bankruptcy law, rekindling a feud with former Vice President Joe Biden as they battle for the 2020 Democratic presidential nomination.
- Juicy tax breaks intended to lure in companies and boost local economies may not be worth it, according to a new working paper published by the National Bureau of Economic Research.
- Boeing has settled with American Airlines in a confidential agreement to compensate the carrier for losses suffered after it was forced to ground the 737 Max last year.