“U.S. Trade Negotiators Heading to Beijing Next Week.”  Last night’s Wall Street Journal article led with:

WASHINGTON—The U.S. is dispatching its chief trade negotiator, Robert Lighthizer, and Treasury Secretary Steven Mnuchin to Beijing early next week to continue trade talks as a March 1 deadline to reach an accord nears, a senior Trump administration official said Tuesday.

The senior official also said President Trump hasn’t yet committed to meeting Chinese President Xi Jinping—a shift from Mr. Trump’s comments last week. “I’ll be meeting with President Xi, maybe once and maybe twice,” the president said during an Oval Office meeting Thursday with China’s top trade negotiator, Vice Premier Liu He.

A meeting between the two presidents would signal that the talks were nearly finished, according to trade experts, with the two presidents ready to make the final compromises ready for a deal.

The U.S. official emphasized that the lack of commitment to a Trump-Xi meeting wasn’t a sign negotiations had stalled, but simply reflected how much needed to be accomplished before the two sides could make a deal. “The vibe was good,” the official said of last week’s talks.

In my opinion, President Trump desperately needs a trade deal “win,” so I expect an end to higher tariffs before March 2nd and a phased tariff reduction subject to promises by China to abide by WTO rules and respect intellectual property rights.

“Chamber CEO and DeFazio Team Up to Push Infrastructure Package.”  Last night’s CQ Roll Call article led with:

The CEO of one of Washington’s most influential business organizations and the new Democratic chairman of the House Transportation and Infrastructure Committee said Tuesday they will work together this year to boost spending on transportation, and the gasoline taxes to pay for it.

The chamber’s Thomas J. Donohue and Chairman Peter A. DeFazio, D-Ore., said President Donald Trump needs to get his fellow Republicans on board, and he should start with his State of the Union speech Tuesday night.

“We’re looking for a strong statement on the importance of getting infrastructure deals done this year, followed by the necessary resources to get the job started in the forthcoming White House budget,” Donohue told an infrastructure conference organized by the chamber.

Trump promised during his 2016 campaign to boost the economy and the job market by rebuilding infrastructure, and called on Congress to send him a package in last year’s State of the Union. A proposal that followed in his budget, however, focused more on using tax incentives and competitive grants to get states and the private sector to boost spending, rather than increasing outlays from the federal government. It was rejected by both Democrats and Republicans.

DeFazio said he had some discussions with the White House before the partial government shutdown on Dec. 22, but got no commitment to support higher taxes.

“I expect to re-engage in those discussions very shortly and it would be great if the president was able to put down a marker on revenues,” DeFazio said at a joint news conference with Donohue. “Maybe he doesn’t even have to specify where they come from, but, you know, we’re going to need his help on that.”

I expect a $1 tr. infrastructure bill to be enacted by summer.  The main hangup will be how to pay for it.

President Trump’s schedule (EST):

1:30 PM:  Announces the United States candidate to be the next President of the World Bank;

3:00 PM:  Speaks to the Ministers of the Global Coalition to Defeat ISIS at the State Department; and

6:30 PM:  Dinner with the National Prayer Breakfast host committee and pastors at the White House.

C-SPAN Transcripts and Video: State of the Union; Democratic Response.

“Trump likely to attend NATO summit in London in December.”  This morning’s CNN article led with:

London (CNN) – Leaders of the NATO allies will gather in London for the alliance’s 70th anniversary summit in December, Secretary General Jens Stoltenberg announced Wednesday.

As head of the United States government, Donald Trump will be invited, Downing Street told CNN immediately after the announcement. The UK Prime Minister’s office said it had no confirmation about whether he would attend.

NATO headquarters in Brussels said it was “highly likely” Trump would attend the heads of state and government meeting. A spokesperson there said no date or venue had been set. The White House has yet to confirm if the President will attend.

The US President was highly critical of the bloc at its annual summit in Brussels in July and has repeatedly called on NATO allies to spend more on defense.

“How Trump’s Latest Plan to Cut Drug Prices Will Affect You.”  Yesterday’s New York Times article led with:

The Trump administration has made lowering drug prices one of its top priorities, and last week it unveiled a proposal that could vastly rewrite the way drugs are sold in the United States.

The proposal takes aim at the secret deals that drug companies strike with pharmacy benefit managers, the industry intermediaries that negotiate the price of drugs for insurers and large employers.

These after-the-fact discounts, called rebates, have come under harsh criticism and are blamed for helping to push up the list price of drugs, which consumers are increasingly responsible for paying.

Under the proposed rule, released on Thursday, pharmacy benefit managers would lose the legal protections that allow them to accept rebates from drug companies for brand-name drugs covered under the Medicaid and Medicare government programs. Any such discounts would instead have to be credited at the pharmacy counter when patients fill a prescription.

The Trump administration says this could result in significant savings for people 65 and older, who increasingly have been forced to pay out-of-pocket costs based on the rising list prices of drugs. People who are covered by Medicaid, the health care program for low-income Americans, generally pay little to nothing out-of-pocket.

If carried out, the plan is likely to upend the overall market for prescription drugs. Drugs paid for through Medicare accounted for 30 percent of the nation’s retail drug spending in 2017, according to the Kaiser Family Foundation.

But whether the rule will ultimately be adopted is still unclear. It faces an intense lobbying battle — and perhaps a legal one — from the pharmacy benefit managers, and the politics will also be tricky.

“U.S. Banks Win $21 Billion Trump Tax Windfall Then Cut Staff, Loaned Less.”  This morning’s Bloomberg article stated:

While banks vowed to use a portion of their savings to reward employees, help needy communities and support small businesses, the magnitude of their break and how the money was divvied is likely to fuel debate over whether the law was an effective way to stoke the economy. The 23 firms boosted dividends and stock buybacks 23 percent, and they eliminated almost 4,300 jobs. A few have signaled plans to cut thousands more. 

The size of the tax savings is especially striking amid the heated debate in Washington over the national budget. The amount saved by banks is greater than NASA’s request for fiscal 2019, which would cover deep space exploration, orbital operations and other research. It’s more than double what the Federal Bureau of Investigation expects to spend fighting crime.

To estimate tax savings, Bloomberg applied tax rates that banks paid in 2016 to their pretax earnings last year. That’s because their rates in 2017 were skewed by billions of dollars in accounting adjustments as the new law took effect. Some banks fined-tuned the adjustments last year, potentially shifting the $21 billion figure by hundreds of millions of dollars.