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–Judge says banks can give Trump financial records to House Democrats: A federal judge in New York on Wednesday ruled that Deutsche Bank and Capital One may provide President Trump’s financial records to House Democratic lawmakers after the administration attempted to block the move.
U.S. District Judge Edgardo Ramos, an Obama appointee, made the ruling in a New York courthouse Wednesday afternoon after hearing arguments from both parties in the case.{mosads}
This is the second setback for the president this week in his fight to stop lawmakers from gaining access to his financial records as part of their sweeping probes into him, his administration, his private businesses and his family. The Hill’s Jacqueline Thomsen has more on the ruling here.
Trump, his businesses and family members had argued for the federal court in New York to issue a preliminary injunction to block the subpoenas for documents.
The first blow: The ruling comes two days after a district judge cleared a similar subpoena for Trump’s records from an accounting firm.
In that case Judge Amit Mehta, an Obama appointee, found that the House Oversight and Reform Committee had valid reasons for requesting the president’s financial records from the accounting firm Mazars.
Democrats on attack: House Democrats seized on that ruling as a positive sign for their separate bid for Trump’s tax returns.
- “It’s certainly encouraging,” said Rep. Dan Kildee (D-Mich.), a member of the House Ways and Means Committee. “The fact that the courts are willing to uphold what is a legitimate request … it’s a message that the White House ought to pay attention to.”
- Rep. Bill Pascrell (D-N.J.), another Ways and Means Committee member who has been active on the tax return issue, said the ruling makes the president’s lawyers’ reasoning for rebuking congressional committees “look silly.”
The court battle over Trump’s tax returns is on the horizon now that Treasury Secretary Steven Mnuchin has rejected a subpoena from Ways and Means Committee Chairman Richard Neal (D-Mass.) for six years of Trump’s tax filings, from 2013 to 2018. And Mehta’s recent ruling may offer some clues as to how that fight will play out.
- Mehta cited decades of judicial precedent that favors Congress’s ability to investigate and says courts do not have to determine if there is a political motivation behind congressional actions.
- He also sided with the Oversight and Reform panel’s argument that the requested financial records will help the committee as it considers strengthening ethics and disclosure laws and monitors Trump’s compliance with the Constitution’s Emoluments Clause.
A draft memo from an IRS lawyer may also highlight a pathway for Democrats to get Trump’s tax returns. The memo, revealed by The Washington Post on Wednesday, found that the agency has to provide tax returns sought by Congress’s tax committees unless the president invokes executive privilege.
Treasury Secretary Steven Mnuchin told House lawmakers Wednesday that the department is trying to find out who wrote the memo, but that he hasn’t thoroughly reviewed the document.
“I looked at it literally on the way up here,” Mnuchin said. “Someone handed me the printed copy of it. I would not describe that as I’ve reviewed it.”
LEADING THE DAY
Mnuchin pegs debt ceiling deadline as ‘late summer,’ earlier than expected: Treasury Secretary Steven Mnuchin on Wednesday said that the debt ceiling will need to be lifted by “late summer,” earlier than some analysts had predicted.
“I haven’t been given an exact date, but I would say it’s late summer, and I share your concern and I urge Congress to raise the debt ceiling as soon as possible,” Mnuchin said at a House Financial Services Committee hearing.
- The debt ceiling, which limits how much Treasury can borrow to pay off the government’s bills, was technically reached in March, but the Treasury Department has embarked on a series of “extraordinary measures” that allow it to borrow internally to keep paying bills.
- If those measures run out before Congress passes and the president signs an increase to the limit, or suspends it altogether, the government would default on its bills, which could set off a global financial crisis.
Why this matters: A study released earlier this month by the Bipartisan Policy Center estimated that the debt ceiling wouldn’t need to be lifted until October or even early November.
But the earlier deadline to raise the debt ceiling could boost pressure on lawmakers and the president to reach a deal on spending caps before the debt limit runs out.
Democrats familiar with meetings about the issue held Tuesday said that the White House had originally hoped to delay striking a deal until closer to the deadline, anticipating that they could wring more concessions from Democrats. An earlier debt ceiling deadline could have interfered with that strategy.
Mnuchin also made some news on the trade front today: The secretary said he was speaking with the chief executives of major U.S. retailers about exemptions from a new round of proposed tariffs on Chinese goods.
Mnuchin told House lawmakers during a Wednesday hearing that he’s spoken with the leaders of several companies, including the chief financial officer of Walmart, about preventing price increases for a swath of consumer goods imported from China.
“There may be a small number of items where the cost of the tariffs may be passed on and those are the things that would be subject to exceptions,” Mnuchin told the House Financial Services Committee.
- Walmart, Nike and Adidas are among several U.S. retailers that announced they will be forced to raise prices if President Trump follows through on a threat to tariff roughly $300 billion in Chinese goods.
- The proposed tariffs would cover hundreds of food items, agricultural products, articles of clothing, shoes and other consumer goods imported from China with a 25 percent tax.
- “We are monitoring carefully,” Mnuchin said. “There will be some exceptions.”
New tariffs? Mnuchin said a decision from Trump on whether to impose new tariffs on China won’t come for another 30 to 45 days. He also downplayed the potential economic harm of the new tariffs.
“My expectation is a lot of this business will be moved from China to other places in the region so that there will not be a cost,” Mnuchin said. He added that China’s declining currency would allow U.S. importers to buy at lower prices and predicted narrowing margins for Chinese businesses.
More from Mnuchin’s testimony: New Harriet Tubman $20 bill delayed until 2028
House rebukes Mulvaney’s efforts to rein in consumer bureau: The House voted Wednesday to undo the Trump administration’s reining in of the Consumer Financial Protection Bureau (CFPB) and prevent future directors from replicating those efforts.
The bill from Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, passed the chamber along party lines in a vote of 231 to 191, with no Republicans supporting the measure.
Called the Consumers First Act, the bill aims to reverse actions taken by former CFPB Acting Director Mick Mulvaney to loosen the bureau’s oversight of financial firms, rollback agency regulations, reorganize key departments and rebrand the polarizing watchdog.
The Hill’s Juliegrace Brufke and I explain what the bill would do here.
GOOD TO KNOW
- President Trump on Wednesday threatened to halt work with Democrats on legislation unless they stop investigating his administration, underscoring his barely concealed rage over efforts by his political opponents to dig into special counsel Robert Mueller’s report.
- The New York state legislature has advanced legislation that would allow Congress to obtain President Trump’s state tax returns, sending the measure to Gov. Andrew Cuomo’s (D) desk.
- Democrats on Wednesday released a $24.3 billion agriculture spending bill, rejecting President Trump’s request to slash the budget at the Department of Agriculture by nearly 15 percent.
ODDS AND ENDS
- A number of oil-and-gas giants are encouraging lawmakers to pass a national carbon tax, splitting with industry trade groups.
- Op-Ed: Daniel Runde, senior vice president at the Center for Strategic and International Studies, argues for reforming the Export-Import Bank before reauthorizing it.