Happy Wednesday and welcome back to On The Money, even faster and more exciting than the Daytona 500. 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–Deficit spikes 25 percent through January: The federal deficit through January climbed to $389 billion, a 25 percent spike from the same period last year, according to Treasury Department data released Wednesday.
- The Treasury estimates the deficit will surpass $1 trillion this year for the first time since 2012.
- Overall receipts were down since last year by $68 billion, largely due to a drop in individual and corporate taxes. Spending rose $147 billion as outlays spiked on defense, health, veterans affairs and Social Security.
The new data comes three days after President Trump called for deep cuts to domestic programs and limitations on mandatory spending in his 2021 budget proposal, and a day after Federal Reserve Chairman Jerome Powell called on Congress to reduce the U.S. federal budget deficit to ensure the central bank could adequately respond to a financial crisis or recession.
The Hill’s Niv Elis explains how we got here.
Read more: A House Budget Committee hearing turned heated Wednesday as Democrats excoriated President Trump’s proposed cuts to entitlement programs and domestic spending and Republicans ripped their Democratic colleagues for failing to offer their own budget.
Committee Chairman John Yarmuth (D-Ky.) called it a “destructive and irrational” proposal, while Rep. Rosa DeLauro (D-Conn.) called it “an Orwellian presentation that showcases doublespeak.”
“Your infrastructure program is weak and pathetic,” said Rep. Brian Higgins (D-N.Y.).
ON TAP TOMORROW
- The Senate Banking Committee holds a confirmation hearing for Judy Shelton and Christopher Waller’s nominations to the Federal Reserve board of governors, 10 a.m.
Building the Dream: Charlotte
The Hill will be in Charlotte, N.C. on Thursday, February 20th. Our editors will sit down with Charlotte Mayor Vi Lyles, Rep. Alma Adams (D-N.C.), state Sen. Paul Newton (R) and others to discuss financial hurdles to homeownership. Join us live in Charlotte or join the livestream.
LEADING THE DAY
Mnuchin declines to say why Trump pulled Treasury nominee who oversaw Roger Stone case: Treasury Secretary Steven Mnuchin declined to explain Wednesday why President Trump pulled the Treasury nomination of a former U.S. attorney who had supervised the prosecution of several of the president’s campaign advisers.
In an appearance before the Senate Finance Committee, Mnuchin refused to say why Trump withdrew the nomination of Jessie Liu to serve as Treasury undersecretary for terrorism and financial crimes Tuesday night.
“I think you know nominations are at the president’s direction and we don’t comment … as a matter of policy when nominations are withdrawn, which happens for a variety of different reasons at different times,” Mnuchin said under questioning from Sen. Sherrod Brown (D-Ohio)
- The decision came just two days before Liu’s confirmation hearing and shortly after Trump dismissed two government officials who testified during his impeachment before the House.
- Liu, the former U.S. attorney for the District of Columbia, oversaw the federal government’s cases against several top Trump campaign aides, including Roger Stone.
- Four career Department of Justice (DOJ) prosecutors resigned from Stone’s case Tuesday after the department overrode their suggested sentencing recommendation of seven to nine years in prison, telling the judge in the case that Stone should get “far less.”
Brown, the top Democrat on the Banking panel, replied: “I would hope you would give an explanation that’s counter to the one everyone assumes, which is that she’s part of the president’s personal retribution tour.”
Brown also condemned Trump’s withdrawal of Liu’s nomination and alleged retaliation against impeachment witnesses during a Banking Committee hearing Wednesday morning.
More from Mnuchin’s hearing:
- Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, grew testy with Mnuchin on Wednesday during an exchange over the department’s response to information requests, regarding Trump’s tax returns and an investigation into Hunter Biden.
- Mnuchin also defended his department’s regulations implementing provisions of President Trump’s tax cut law, which Democrats argue have been overly beneficial for corporations.
GOOD TO KNOW
- The nation’s biggest banks lack diversity in their top ranks, and the industry as a whole is falling short when it comes to disclosing workplace data, according to a report released Wednesday by House Democrats.
- Senators pressed Federal Reserve Chairman Jerome Powell on Wednesday to consider novel ways to spread the benefits of a record stretch of U.S. growth to Americans and communities still struggling to make ends meet.
ODDS AND ENDS
- The Distilled Spirits Council of the United States (DISCUS) announced that American whiskey exports to the European Union decreased by 27 percent in 2019 due to retaliatory tariffs.
- The Education Department has launched a probe into Harvard and Yale, after it claims to have discovered that the universities failed to report billions of dollars in funding from foreign countries such as China.