Happy Monday 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– Sanders unveils student debt plan amid rivalry with Warren: Democratic presidential candidate Bernie Sanders on Monday unveiled an ambitious proposal to cancel student-loan debt, seeking to reinforce his progressive credentials days before the first debate.
For Sanders, an independent senator from Vermont, the student-debt plan is an opportunity to reestablish himself as the Democratic primary field’s progressive leader on the issue of college affordability. {mosads}
The plan comes as the Vermont senator finds himself facing an ascendant progressive rival in Sen. Elizabeth Warren (D-Mass.), who has set herself apart by releasing a steady stream of sweeping policy proposals.
Warren, who poses perhaps the most significant challenge to Sanders on the left, unveiled a plan earlier this year that would cancel up to $50,000 in student loan debt for those earning less than $100,000 a year and eliminate tuition at public colleges.
“It’s smart on his part. It’s an extension on the 2016 campaign when he called for free college tuition in public universities,” said Mark Longabaugh, a top adviser to Sanders’s 2016 presidential campaign.
“So I think this is just taking it a step further. Both the Warren and the Bernie plans are not only good public policy – good progressive policy – but good politics.” The Hill’s Naomi Jagoda and Max Greenwood have more here.
The big numbers: The plan calls for eliminating $1.6 trillion in U.S. student debt. It would clear away the student debt of 45 million Americans entirely. Sanders would pay for the bill with a Wall Street tax that would reportedly raise $2 trillion over 10 years.
The political dynamic: The proposal comes at a crucial time for Sanders’s campaign. The first Democratic presidential primary debates are this week, and recent polls show Warren gaining momentum in the primary contest.
While Warren still trails Sanders and former Vice President Joe Biden in most national surveys, she has significantly narrowed the gap, with some polls even showing her pulling ahead of Sanders.
ON TAP TOMORROW
- The Senate Banking Committee holds a hearing on whether Fannie Mae and Freddie Mac should be designated as systemically important financial institutions, 10 a.m.
- A House Financial Services subcommittee holds a hearing entitled “Diverse Asset Managers: Challenges, Solutions and Opportunities for Inclusion,” 10 a.m.
- A House Ways and Means subcommittee holds a hearing on the state and local tax (SALT) deduction, 10 a.m.
- The House Financial Services Committee’s Task Force on Financial Technology holds a hearing entitled “Overseeing the Fintech Revolution: Domestic and International Perspectives on Fintech Regulation,” 2 p.m.
- A House Ways and Means subcommittee holds a hearing on Mexico’s labor reform laws as they relate to the U.S.-Mexico-Canada Agreement (USMCA). 2 p.m.
LEADING THE DAY
Treasury inspector general to probe delay of Harriet Tubman $20 bills: The Treasury Department’s inspector general will review the Trump administration’s decision to delay production of a new $20 bill featuring Harriet Tubman.
Rich Delmar, the department’s acting IG, said in a letter to Senate Minority Leader Charles Schumer (D-N.Y.) that the office would include Schumer’s request for an investigation into a broader audit on currency design that is already underway.
“It will specifically include review of the process with respect to the $20 bill. If, in the course of our audit work, we discover indications of employee misconduct or other matters that warrant a referral to our Office of Investigations, we will do so expeditiously,” Delmar wrote in the letter to Schumer, which was released on Monday.
The background: Schumer requested an investigation last week into the delay of the redesign, including whether “political considerations” had spilled over into the process.
Schumer said on Monday that he was “pleased” the Treasury Department IG would review the delay, saying it hadn’t been “credibly explained.”
Trump says ‘stubborn child’ Fed ‘blew it’ by not cutting rates: President Trump on Monday said the Federal Reserve “blew it” by not cutting interest rates during its policy meeting last week, arguing the central bank “doesn’t know what it is doing.”
In a pair of Monday morning tweets, Trump touted the strength of the U.S. economy while bashing the Fed for not providing more stimulus for economic growth.
Why? The Fed announced last week that it would hold interest rates for the time being but stood ready to cut rates if the economy slows, trade tensions rise and inflation remains low.
The independent central bank had been under immense pressure from Trump to cut rates. The president has often accused the Fed of hindering growth through its four rate hikes last year.
- Trump on Monday tweeted that the U.S. economy is “on course to have one of the best Months of June in US history,” but could have been even better if the Fed added stimulus through lower borrowing costs.
- He added that the Fed should match efforts by foreign central banks to boost their economies, likely referencing pending moves from the European Union and China.
- “Think of what it could have been if the Fed had gotten it right. Thousands of points higher on the Dow, and GDP in the 4’s or even 5’s,” Trump tweeted. “Now they stick, like a stubborn child, when we need rates cuts, & easing, to make up for what other countries are doing against us. Blew it!”
Democrats give Trump trade chief high marks: In a Democratic House at war with the Trump administration, one official has managed to forge warm ties across the aisle: U.S. Trade Representative Robert Lighthizer.
Lighthizer has fostered a strong relationship with the House lawmakers who will decide the fate of President Trump’s signature achievement on trade: the United States Canada Mexico Agreement (USMCA).
The deal faces deep opposition from House Democrats in its current form, and a short timeline for passage with the 2020 election nearing. But Democrats have praised Lighthizer for his transparency and candor amid tense negotiations, even as they battle Trump on multiple fronts.
- “He’s very forthcoming, and he’s very good on the politics, he’s accessible, he’s loquacious,” said Rep. Brian Higgins (D-N.Y.), a member of the House Ways and Means Committee, which oversees trade.
- “He can give you an answer that you’re not necessarily mad about, because he appears to be forthright and honest,” he added, calling Lighthizer “user-friendly.”
Some veteran Democratic lawmakers have even compared Lighthizer favorably against former President Obama trade chief Michael Froman, who negotiated the defunct Trans-Pacific Partnership (TPP).
The stakes: For Trump, passage of the USMCA, an update to the North American Free Trade Agreement (NAFTA), is a central legislative goal. Trump has sparked trade wars with partners such as the European Union and adversaries such as China, but critics say he has little to show for it.
- Speaker Nancy Pelosi (D-Calif.) will have the final say over whether and when legislation codifying the agreement will be put to a vote. Pelosi has complained that the deal needs better enforcement measures, needs stronger environmental and labor protections and provisions on pharmaceuticals.
- But despite her issues with the deal and the tough negotiations with the administration, Pelosi has praised Lighthizer for regularly meeting with Democrats and working to address their concerns.
GOOD TO KNOW
- Businesses are pulling out all the stops to counter President Trump’s tariffs as the U.S. trade war with China intensifies.
- The chairwoman of the House Financial Services Committee announced Monday that the panel will hold a hearing next month on Facebook’s plan to develop a cryptocurrency-based payments platform.
- Democratic lawmakers and presidential candidates are offering a slew of proposals to expand tax credits benefiting workers and families, as a way to counter President Trump’s 2017 tax-cut law.
- Repeal of the GOP tax law’s cap on the state and local tax (SALT) deduction would almost exclusively benefit those with incomes of at least $100,000, and much of the benefit would go to those with incomes of at least $1 million, according to Congress’s tax scorekeeper.
- Senate Republicans, eager to avert a government shutdown or automatic spending cuts, want acting White House chief of staff Mick Mulvaney pushed to the sidelines in budget negotiations with Democrats.
- The New York Times explains how President Trump has fallen short on his promise to bring back manufacturing jobs.
ODDS AND ENDS
- A group of 18 wealthy Americans on Monday released a letter asking for all 2020 presidential hopefuls to support a “moderate wealth tax” on the richest one-tenth of the richest 1 percent of U.S. taxpayers.
- A bipartisan pair of senators on Monday introduced a bill that would force social media companies to disclose the value of the data they collect from users, an attempt to shed light on how much the companies gain from monetizing their customers.