On The Money — Presented by Job Creators Network — Dems formally ask for Trump tax returns | Trump’s reaction: ‘Is that all?’ | CEOs urge Trump to keep border open | House panel votes to boost spending $133B over two years

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–Dems formally request Trump’s tax returns: House Democrats have formally requested copies of President Trump’s tax returns, taking action on one of their top oversight priorities.

Ways and Means Committee Chairman Richard Neal (D-Mass.) sent a letter Wednesday to IRS Commissioner Charles Rettig requesting six years of Trump’s personal and business tax returns, from 2013-2018, by April 10.

“The IRS has a policy of auditing the tax returns of all sitting presidents and vice-presidents, yet little is known about the effectiveness of this program,” Neal said in a statement. “On behalf of the American people, the Ways and Means Committee must determine if that policy is being followed, and, if so, whether these audits are conducted fully and appropriately.

“In order to fairly make that determination, we must obtain President Trump’s tax returns and review whether the IRS is carrying out its responsibilities,” he added. “The Committee has a duty to examine whether Congressional action may be needed to require such audits, and to oversee that they are conducted properly.”

More from The Hill’s Naomi Jagoda here.

 

The request marks a new front in Democrats’ efforts to investigate Trump and his administration: Democrats have long had an interest in examining Trump’s tax returns to learn about any conflicts of interest he may have involving foreign governments, as well as to see how he has been affected by the tax-cut law he signed in 2017.

Trump is the first president in decades to not make any of his tax returns public. He has cited an audit, but the IRS has said that audits don’t prevent people from releasing their own tax information.

 

Trump reacts: President Trump on Wednesday downplayed a move by House Democrats to secure six years of his personal and business tax returns, the latest escalation in the party’s efforts to probe the president’s administration, campaign and business.

“Is that all?” Trump responded when notified Democrats had asked for six years of returns. “Usually it’s 10 so I guess they’re giving up.”

The president told reporters in the Cabinet Room that he would not voluntarily release his tax returns, insisting that he remains under audit.

“We’re under audit despite what people said, and we’re working that out,” Trump said. “I’m always under audit it seems. But I’ve been under audit for many years because the numbers are big, and I guess when you have a name you’re audited.”

 

What’s next? A provision in the federal tax code gives the chairmen of Congress’s tax committees the power to ask for any tax returns and return information and examine them in a closed session. After reviewing the documents privately, a committee could vote to send a report to the full House or Senate, which could make some or all of the tax returns public.

The statute says that the Treasury secretary “shall furnish” the documents, provided that they are reviewed in a closed session. But it’s unclear how quickly the IRS will respond and if they will provide Neal with the documents.

Treasury Secretary Steven Mnuchin said at a hearing in March that he will consult with Treasury’s lawyers and follow the law.

Many lawmakers and tax experts have said they expect the tax-returns issue to result in a lengthy court case, and those expectations prompted Neal to take his time before requesting the documents.

 

 

The Hill’s Newsmaker Series: Tax Cuts and Small Business

Join us on Thursday, April 11th for The Hill’s Newsmaker Series: Tax Cuts and Small Business. The Hill’s Editor-in-Chief Bob Cusack will sit down with Larry Kudlow, assistant to the President and director of the National Economic Council, to discuss the impact of the new tax law and examine policies the administration has put in place to help small business. RSVP here. 

 

LEADING THE DAY

Trump pulls back from border closure threats, saying Mexico is cooperating: President Trump on Tuesday evening pulled back from his threats to close the southern border, claiming that Mexico is now cooperating in apprehending migrants.

For the “first time in decades,” Trump said, Mexico had “apprehended over a thousand people” at its southern border and returned them to their home countries.

“I really wanted to close it. But now Mexico is saying, ‘No, no, no.’ First time in decades. ‘We will not let anybody get through.’ And they’ve apprehended over a thousand people at the southern border, their southern border. And they’re bringing them back to their countries,” Trump said during remarks at the National Republican Congressional Committee’s annual spring dinner.

Halting movement and trade between the U.S. and Mexico could prevent produce from reaching American stores, cause prices for other goods to skyrocket, and derail supply chains that cross the southern border.

 

New warnings: A slew of business groups have joined politicians in both parties to condemn Trump’s proposal, warning about the economic chaos it could cause.

The Business Roundtable, a trade group representing major Americans businesses, was the latest to chime in, urging administration officials to back off on Trump’s proposal to halt movement between the U.S and Mexico to stop migrants from crossing the southern border.

“Shutting down the U.S-Mexico border or slowing cross-border trade would severely damage the operations of American businesses and hurt American workers,” wrote Business Roundtable president Joshua Bolten in a Wednesday letter.

“Closing the border would back up thousands of trucks, impact billions of dollars of goods each day, cripple supply chains and stall U.S. manufacturing and business activity.”

The U.S. Chamber of Commerce, the National Association of Manufacturers and several other business groups have also joined politicians in both parties to condemn Trump’s proposal.

 

Meanwhile, Trump remains undecided: National Economic Council Director Larry Kudlow told reporters Wednesday that while Trump is deciding whether to close the border, the White House is exploring ways to mitigate the economic harm it could cause.

“It’s a hard thing. Issues about individuals and groups getting to work, I understand how hard that is. Tourism, I understand that,” Kudlow said.

“The trucking lanes and the freight lanes and all the supply chain stuff is really the key,” he added.

Kudlow also insisted that securing the border was in the country’s economic interest as well, rejecting Trump’s notion that the U.S. must choose between prosperity and safety.

“I don’t think it’s one or the other,” Kudlow said. “In an important way the problems of border security in addition to the humanitarian problems, the drug trafficking problems, they’re economic issues, too.”

 

More Kudlow… Adviser says Trump ‘fully behind’ Fed pick Stephen Moore despite scrutiny: President Trump’s top economic adviser said Wednesday that the White House is fully supportive of Stephen Moore despite controversy surrounding the Federal Reserve Board nominee.

“I spoke to the president yesterday. He completely supports Steve. I certainly do,” Larry Kudlow, the chairman of the National Economic Council, told reporters at a Christian Science Monitor event.

“People are being awful hard on him,” he continued. “This town is a toxic town in some respects. So we are fully behind him. He’s a smart guy and I think he will be a breath of fresh air in the Fed. So far it’s all systems go.”

Trump announced late last month that he was nominating Moore, a conservative economist and informal adviser to the president, for one of two vacant seats on the Federal Reserve Board.

Moore’s nomination, which has not yet formally been submitted, will require Senate confirmation. His candidacy has garnered some initial support, but he has come under scrutiny amid concerns over some of his economic views, as well as personal finances. Here’s more on the nomination from The Hill’s Brett Samuels.

 

House panel votes to boost spending by $133 billion over two years:

Democrats on the House Budget Committee overcame differences within their ranks to approve legislation Wednesday that would boost spending by $133 billion over two years, but warring factions threaten to derail the bill when it’s on the House floor next week.

Lawmakers voted 19-17 to advance a measure that would raise 2020 caps on nondefense spending by $34 billion, to $631 billion, and increase defense spending by $17 billion, to $664 billion. The nondefense cap would climb to $646 billion in 2021 and the defense cap would rise to $680 billion.

Why it matters: The bill’s advancement through the committee marks a successful turnaround of sorts for Democrats, who had to tamp down objections from members of the Congressional Progressive Caucus (CPC) in the hours leading up to the vote. Fifteen of the committee’s 22 Democrats, including Budget Committee Chairman John Yarmuth (D-Ky.), are CPC members.

The Hill’s Niv Elis crunches the numbers here.

 

Private sector hiring falls to slowest pace in 18 months: Private sector employment rose by 129,000 workers in March, according to data released Wednesday, increasing at its slowest pace in 18 months.

The ADP National Employment Report, a closely watched gauge of monthly job gains conducted with Moody’s Analytics, showed a significant slowdown in hiring across several industries.

“The job market is weakening, with employment gains slowing significantly across most industries and company sizes,” said Mark Zandi, chief economist at Moody’s Analytics.

“Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening.”

Zandi also warned, “If employment growth weakens much further, unemployment will begin to rise.”

The lag in hiring is the latest sign the U.S. economy could be losing strength after more than a decade of consistent growth following the 2008 recession. I explain why here.

 

Senators urge IRS to investigate those involved in college admissions scandal: Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) are urging the IRS to enforce any tax laws that have been violated by individuals and organizations involved in the college admissions scandal.

In a letter to IRS Commissioner Charles Rettig dated Wednesday, the lawmakers said they “expect the IRS to be vigorous in enforcing the applicable tax laws.”

• Federal prosecutors have charged dozens for their roles in a scheme in which parents allegedly paid for fraudulent test scores and bribed college administrators and coaches to get their children into selective colleges. Among those charged are actresses Felicity Huffman and Lori Loughlin.

• Grassley and Wyden said that the group involved in the process said on recent tax forms that it hopes to help underprivileged students get an education. However, the organization instead “apparently acted simply as a conduit for high-net-worth parents to pay bribes to college administrators for bogus college admissions,” the senators added.

 

GOOD TO KNOW

• The progressive group Tax March on Wednesday announced the launch of a seven-figure campaign to push for increasing taxes on wealthy individuals and corporations, as a number of prominent Democratic lawmakers have been offering proposals aimed at making the rich pay more in taxes.
• Sen. Elizabeth Warren (D-Mass.) introduced legislation Wednesday making it easier to jail executives if they or their corporations break the law or commit civil violations.
• The pending U.S.-China trade deal would give Beijing until 2025 to meet commitments on commodity purchases and “allow American companies to wholly own enterprises in the Asian nation,” according to Bloomberg.
• Cybersecurity researchers on Wednesday said they found hundreds of millions of Facebook user records exposed publicly online.
• The BBC will move some of its broadcast licenses to the Netherlands in an effort to keep transmitting across the European Union if a deal can’t be struck on Brexit, according to a Wednesday report.
• President Trump reportedly considered replacing Federal Reserve Chairman Jerome Powell with former Fed Governor Kevin Warsh late last year.

 

ODDS AND ENDS

• Outdoor retailer Patagonia will no longer sell its corporate logo vests to companies that are viewed to be “ecologically damaging,” a move that comes as part of the corporation’s push to work with organizations that prioritize environmental protection.