Happy Wednesday and welcome back to On The Money, where we can’t wait to go to sleep. 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–Trump says he will refuse to release tax returns as long as they are under audit: President Trump on Wednesday said he won’t turn over his tax returns as long as they are under audit, setting up a potential fight with Democrats who are expected to demand the documents once they assume the majority in the House.
At a press conference at the White House, Trump was asked if he would comply with expected Democratic requests for his tax returns.
“They’re under audit. They have been for a long time,” Trump said, claiming that the documents are “extremely complex” and that people “wouldn’t understand” them.
“If I were finished with the audit, I would have an open mind to it,” Trump added. “When that happens, if that happens, I would certainly have an open mind to it.”
The background:
- The president broke with decades of precedent when he opted not to release his tax returns during the 2016 presidential campaign.
- He has repeatedly claimed they are under audit, and therefore cannot be released, though the IRS has said that audits don’t preclude people from releasing their own tax information.
The power play: Democrats are expected to demand Trump’s tax returns at the start of the next session of Congress after winning back the House majority in Tuesday’s midterms.
Under federal tax law, the chairmen of congressional tax committees can request tax returns from the Treasury Department and review them in a closed session before voting to make all or parts of the returns public.
Rep. Richard Neal (D-Mass.), who’s expected to become chairman of the House Ways and Means Committee in January, said Wednesday that he expects the panel to request President Trump’s tax returns.
What comes next: The decision on whether to release Trump’s tax returns would fall to Treasury Secretary Steven Mnuchin.
Mnuchin told The New York Times earlier this month that he would work with the department’s general counsel and the general counsel for the IRS to address any requests should Democrats win the House.
If the Trump administration refuses to provide Democrats with the tax returns, or stalls in providing them, the matter could end up in court.
LEADING THE DAY
Many authors of GOP tax law will not be returning to Congress: Many of the House Republicans who were on the powerful Ways and Means Committee when the GOP passed its tax-cut law last year will not be returning to Congress in 2019.
Half of the 24 Republicans who served in 2017 on the Ways and Means panel — which has jurisdiction over health and trade issues in addition to taxes — will not be back in the House next year, according to election results as of 10 a.m. Wednesday
Four GOP members of the committee are projected to lose their races: Reps. Peter Roskam (Ill.), Erik Paulsen (Minn.), Carlos Curbelo (Fla.) and Mike Bishop (Mich.). Roskam, Paulsen and Curbelo represent districts that Hillary Clinton won in 2016, while Bishop’s district went for President Trump by single digits. The Hill’s Naomi Jagoda breaks it down here.
Stocks open with solid gains after Dems win House: U.S. stocks rose Wednesday as trading opened for the first time since Democrats clinched control of the House in Tuesday’s midterm elections.
The Dow Jones Industrial average opened roughly 200 points higher, while the Standard and Poor’s 500 and Nasdaq composite started Wednesday with gains of 0.88 percent and 0.82 percent each.
The Dow closed with a gain of 545 points (Up 2.13 percent), the S&P closed 58 points higher (2.12 percent) and the Nasdaq finished up 195 points (2.64 percent).
Voters in two red states approve minimum wage hikes: Voters in two red states — Arkansas and Missouri — approved ballot measures to raise the minimum wage.
Together the ballot measures will lead to raises for more than 1 million workers. The Arkansas measure will incrementally raise the minimum wage from the current level of $8.50 to $11 by 2021. In Missouri, the wage will rise in stages from $7.85 to $12 by 2023. The Hill’s Niv Elis tells us more here.
SEC hits Citibank with $38.7 million fine: Citibank is agreeing to pay $38.7 million to settle SEC charges it improperly handled what are known as “pre-released” American Depositary Receipts (ADRs).
“ADRs – U.S. securities that represent foreign shares of a foreign company – require a corresponding number of foreign shares to be held in custody at a depositary bank,” according to the agency.
But the SEC alleged that Citibank had given brokers ADRs even when the brokers and their customers did not have the required number of foreign shares.
“Our charges against Citibank are the latest in our ongoing investigative effort to hold accountable Wall Street institutions that participated in an industry-wide fraud,” Sanjay Wadhwa, senior associate director of the SEC office in New York, said in a release. “Our investigation into these practices has revealed that banks and brokerage firms profited while ADR holders were unaware of how the market was being abused.”
Citibank did not admit or deny the SEC’s charges but will pay the $38.7 million settlement, which includes $13.5 million in penalties.
GOOD TO KNOW
- The federal deficit increased $35 billion in October compared to the same month last year, the Congressional Budget Office (CBO) said Wednesday.
- Sen. Chuck Grassley (R-Iowa) plans to make a decision about which committee chairmanship he wants next year after discussing the matter with his Senate colleagues next week, a spokesman for the senator said Wednesday. Grassley is currently the chairman of the Senate Judiciary Committee. But with the retirement of Sen. Orrin Hatch (R-Utah), the Finance Committee chairmanship is open and Grassley has seniority on the panel.
- An ex-J.P. Morgan Chase trader has admitted to manipulating the U.S. markets of an array of precious metals for about seven years — and he has implicated his supervisors at the bank, CNBC reports.
- Wall Street traders are having trouble figuring out how to understand Fed Chair Jerome Powell’s plainspokeness, according to Bloomberg News.
- The difference between the number of open jobs and total U.S. unemployed reached 1 million in September, according to data released by the Bureau of Labor Statistics (BLS) on Tuesday.
ODDS AND ENDS
- Technology supplier Foxconn denied reports Tuesday that it is considering staffing its planned Wisconsin facility with Chinese workers due to the tight labor market in the state.
- San Francisco voters approved a measure to help the city’s homeless population by taxing large corporations.