On The Money — Presented by Job Creators Network — GOP senators urge Trump not to nominate Cain | Treasury expected to miss Dem deadline on Trump tax returns | Party divisions force Dems to scrap budget vote | House passes IRS reform bill

Happy Tuesday 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– GOP senators urge Trump not to pick Cain for Fed: A number of Republican senators are speaking out against President Trump’s plan nominate Herman Cain to the Federal Reserve Board, questioning his character and qualifications to serve on the independent central bank.

Trump said last week that he intends to nominate Cain for the Fed board, but senators on Tuesday publicly raised concerns, citing the accusations of sexual harassment that derailed Cain’s 2012 presidential campaign and his leadership of a super PAC supporting Trump’s reelection.

• “I think it’s important that the board be comprised of people who are academics, economists, and not people who are highly partisan,” said Sen. Mitt Romney (R-Utah) on Tuesday. “We can’t turn the Federal Reserve into a more partisan entity,” Romney added. “That would be the wrong course.“
• Asked about Cain’s expected nomination, Sen. Lisa Murkowski (R-Alaska) said, “I’m going to do my due diligence, but I’m not so favorably inclined right now,” explaining that she had “some concerns about some of the things that relate to Mr. Cain.”

 

The dynamic: Cain was accused of sexual harassment in 2011 by four women, two of whom had previously settled with the National Restaurant Association, a Washington, D.C., trade group Cain led from 1996 to 1999. Cain has denied all the allegations.

Democrats would likely vote unanimously against Cain, and his confirmation could be blocked if four of the 53 Republican senators oppose him. That path became more difficult Tuesday after new resistance among Republicans.

• Sen. John Thune (R-S.D.) told Politico on Tuesday that Republican senators have voiced their objections to the White House. “They’re probably going to hear from a number of our members about concerns that they have,” said Thune, the Senate Republican whip. “Whether or not that gets them to make a course change or not, I don’t know.”

 

Even those who touted Cain’s experience said they had questions about his character.

• Sen. Kevin Cramer (R-N.D.), a member of the Banking Committee, said Cain’s political support for Trump would play no role in his decision but that the sexual harassment allegations will be “certainly part of it.”
• Sen. Tim Scott (R-S.C.), another Banking Committee member, said Cain was “obviously qualified” given his time at the Kansas City Fed but added that the “question is what is his entire portfolio of his activities and interests and challenges.”

 

 

ON TAP TOMORROW

• The House Financial Services Committee holds a hearing on systemically important banks with the chief executives of the largest U.S. banks, 9 a.m.

• IRS Commissioner Charles Rettig testifies before the Senate Finance Committee on the 2019 tax filing season and IRS modernization, 10:15 a.m.

• The Senate Small Business Committee holds a hearing on reauthorization of the Small Business Administration’s international trade programs, 2:30 p.m.

 

LEADING THE DAY

Treasury expected to miss Dem deadline on Trump tax returns: The Trump administration is expected to miss the Wednesday deadline set by Democrats to hand over President Trump’s tax returns, raising the odds that the battle will turn into a lengthy court fight.

Treasury Secretary Steven Mnuchin testified to two congressional committees on Tuesday, telling lawmakers the White House had discussed the tax-return issue with Treasury’s legal department before Democrats asked for the documents. Mnuchin said he personally had not spoken to Trump over the tax returns.

Trump has said he cannot make the records public because of an audit, and his acting chief of staff on Sunday publicly said the administration will never hand them over to Democrats.

Mnuchin was much more reserved in his remarks, telling reporters that it would be a “good guess” that the administration would reply to Democrats by Wednesday in some form.

“I think it would be premature at this point to make any specific comments other than, as I’ve been consistent before in saying, it is being reviewed by the legal departments and we look forward to responding to the letter,” he said at a House Appropriations subcommittee hearing.

The Hill’s Naomi Jagoda has more here on Mnuchin’s testimony.

And click here for more on the deadline.

• House Ways and Means Committee Chairman Richard Neal (D-Mass.) last week sent a letter to IRS Commissioner Charles Rettig requesting six years of Trump’s personal and business tax returns. He asked for the documents by April 10, which is one day away.
• Mnuchin is viewed as a key figure to watch in the administration’s response to the request, since the IRS is part of the Treasury Department. Democrats argue that the law doesn’t give the IRS any wiggle room to deny their request, but Mnuchin could try to signal loyalty toward Trump by fighting it. The hearing was the first time Mnuchin commented on Neal’s request since it was made.
• Trump allies have been arguing that Democrats shouldn’t receive the returns because their request doesn’t have a legitimate legislative purpose, while Democrats argue they do have such a purpose and that the law is clear they should receive them.

 

Left-center divide forces Dems to scrap budget vote: Democrats on Tuesday pulled the plug on an expected vote to set the budget for spending this year after objections from their own caucus to the top-line numbers.

The plan to schedule a vote on the numbers for Wednesday was scrapped after it became clear that the measure would fail.

“I don’t think we’d have the votes if we went to the floor right now,” said Budget Committee Chairman John Yarmuth (D-Ky.) “It’s not going to happen.”

The bill would have increased defense spending in 2020 by $17 billion and nondefense spending by $34 billion, bringing the total to $664 billion for defense and $631 billion for nondefense spending. The Hill’s Niv Elis tells us why Democrats had to scrap the vote here.

• Progressives were pushing for an amendment to raise nondefense spending by an additional $33 billion, which would put it on par with defense spending. Without the amendment, many progressives threatened to vote against the legislation.
• The 27-member Blue Dog Democrats, in the meantime, applied pressure from the other side, raising alarms about increased spending. Most of that group’s members were willing to back the deal, but a dozen of them threatened to oppose it unless spending was cut further, according to a Democratic aide.

 

GOOD TO KNOW

• Rep. Maxine Waters (D-Calif.), the chairwoman of the House Financial Services Committee feuded Tuesday with Treasury Secretary Steve Mnuchin over the length of his testimony before the committee.
• The House on Tuesday passed legislation aimed at modernizing the IRS, the latest step forward for a bill that has bipartisan support from lawmakers in both chambers of Congress.
• Senate Republicans say negotiations over a stalled disaster aid bill have largely broken down over a fight on additional funding for Puerto Rico, which has emerged as a sticking point for President Trump and Democrats.
• The International Monetary Fund (IMF) on Tuesday projected that global growth will slow to 3.3 percent this year, matching the level from the financial crisis of 2009.
• Bank of America will raise the minimum wage for its employees to $20 an hour in the next two years, beginning with a pay hike next month.
• President Trump in an early morning tweet on Tuesday touted his administration’s tariffs on $11 billion of European Union products in the wake of a World Trade Organization (WTO) ruling.

 

ODDS AND ENDS

• President Trump’s resorts in South Florida have reportedly begun shifting away from hiring and keeping undocumented immigrants on staff as the Trump Organization faces growing scrutiny.