President Trump’s schedule (EDT):

11:30 AM:  Daily intelligence briefing;

  1:45 PM:  Briefing on the “drug trafficking on the southern border;”

  3:00 PM:  Meets with Republican members of the Senate on trade; and

  5:00 PM:  Photo opportunity with the 2019 Spring White House Internship Class.

I’ll be watching to see if GOP senators say anything new about the trade talks as they emerge from the White House this afternoon.

“U.S.-China Trade Deal Is Getting Closer, Lighthizer Says.”  Yesterday afternoon’s Wall Street Journal article led with:

WASHINGTON—Negotiations to settle the trade battle between the U.S. and China are intensifying, U.S. Trade Representative Robert Lighthizer told a Senate panel Tuesday, with both sides holding frequent talks aiming to clear the last stumbling blocks.

“Our hope is we are in the final weeks of an agreement,” Mr. Lighthizer told the Senate Finance Committee.

Both sides are seeking to resolve remaining issues before Chinese President Xi Jinping completes a European trip, which starts around March 21 and is set to include meetings in Italy, France and other countries, according to people close to the talks. That would allow Mr. Xi to tack on a stop at President Trump’s Mar-a-Lago estate in Florida in late March or early April to sign a trade pact, the people said.

Prospects for a deal have waxed and waned. About 10 days ago, the U.S. and China appeared to be in the final stages of a deal as the two sides worked on currency and enforcement provisions. But after Mr. Trump’s failed summit with North Korean leader Kim Jong Un, the Chinese appeared to balk, fearing that Mr. Trump would use a Florida meeting to add last-minute take-it-or-leave-it provisions.

Chinese negotiators began to insist that a deal be finalized before a Mar-a-Lago meeting, which would act mainly as signing ceremony.

Mr. Lighthizer told senators Tuesday that he spoke with Chinese officials Monday and planned to do again so Wednesday. He didn’t identify any Chinese counterparts, but Chinese media have reported that Mr. Lighthizer and Treasury Secretary Steven Mnuchin have been talking to Beijing’s top envoy, Vice Premier Liu He.

Chinese officials say negotiators from both countries have been in daily contact by videoconference in recent weeks. One of these people said timing for a summit between Mr. Xi and Mr. Trump—seen as critical to sealing the deal—is still under discussion.

Mr. Lighthizer didn’t provide many new details on the pact Tuesday and cautioned a potential deal could fall apart. He said the U.S. wants China to provide better enforcement of intellectual property; end forced technology transfer, where companies must provide strategic know-how to a Chinese entity to enter the market; reduce subsidies for state-owned firms; and open markets in China to U.S. agriculture and services.

Lifting of steel and aluminum tariffs on Canadian and Mexican products near.  CQ Roll Call reported:

U.S. Trade Representative Robert Lighthizer told members of the New Democrat Coalition that he will meet with Canadian and Mexican officials this week to continue discussions on their push to lift U.S. steel and aluminum tariffs on their products. 

Tax Extenders:  Late yesterday afternoon, CQ Roll Call reported:

House Ways and Means Select Revenue Measures Subcommittee Chairman Mike Thompson said he wants to “move as quickly as possible” in putting together a package of tax provisions that could include some tax “extenders.” The bill could include other tax provisions, but they all would have to meet House pay-as-you-go rules, he said.

It remains an up hill fight to restore tax extenders retroactively for 2018 and for 2019, but I’ve seen too many instances where some or all slip through at the last minute.  The vehicle would have to be a tax bill originating in the House, e.g. the debt limit.

E15 waiver proposed by EPA.  Yesterday’s press release stated:

WASHINGTON — Today, the U.S. Environmental Protection Agency (EPA) proposed regulatory changes to allow gasoline blended with up to 15 percent ethanol (E15) to take advantage of the 1-psi Reid Vapor Pressure (RVP) waiver for the summer months that has historically been applied only to E10. EPA is also proposing regulatory changes to modify elements of the renewable identification number (RIN) compliance system under the Renewable Fuel Standard (RFS) program to enhance transparency in the market and deter price manipulation.

“Consistent with President Trump’s direction, EPA is working to propose and finalize these changes by the summer driving season,” said Administrator Andrew Wheeler. “We will be holding a public hearing at the end of this month to gather important feedback.”

Under the proposed expansion, E15 would be allowed to be sold year-round without additional RVP control, rather than just eight months of the year.

Proposed reforms to RIN markets include:

• Prohibiting certain parties from being able to purchase separated RINs;
• Requiring public disclosure when RIN holdings exceed specified thresholds;
• Limiting the length of time a non-obligated party can hold RINs; and
• Increasing the compliance frequency of the program from once annually to quarterly.

EPA welcomes public comment on the proposal and intends to hold a public hearing on March 29. Additional details on the comment period and public hearing will be available shortly.

“Trump vowed to eliminate the debt in 8 years. He’s on track to leave it at least 50 percent higher.”  Yesterday’s Washington Post article by Heather Long led with:

In March 2016, then-candidate Donald Trump told The Washington Post he could eliminate the entire U.S. debt in eight years. Now that he’s president, Trump is doing the exact opposite.

Trump’s budget — his own budget — projects debt held by the public will hit $22.8 trillion by 2025, more than 50 percent higher than the year he took office. (Debt held by the public was $14.7 trillion in 2017.)

That’s the rosy forecast. Trump’s budget relies on “gimmicks” to keep the debt rising by “only” that much, experts across the political spectrum say. Trump predicts the economy will grow at a home-run pace with no recessions for the next decade, and he proposes massive cuts to education, health care and other nondefense parts of the budget that will not be enacted.

“The president makes heroic assumptions about economic growth and deep cuts to domestic discretionary spending and health care, and yet he still can’t balance the budget,” said Brian Riedl, a senior fellow at the Manhattan Institute and former chief economist for Sen. Rob Portman (R-Ohio).

The president’s budget forecasts about 3 percent growth every year for the next decade, while most other experts, including the nonpartisan Congressional Budget Office, predict growth will be just under 2 percent a year. That extra percent of growth saves Trump more than $3 trillion, according to Riedl’s calculations.

To put it another way, if the economy does not have an awe-inspiring ride in the next decade and instead performs more like what CBO anticipates, Trump would be on track to add close to $10 trillion to debt held by the public by 2025 — more than the $7 trillion added under former president Barack Obama.

This when President Trump enjoys a strong economy.  President Obama boosted deficits to fight the Great Recession.

“How Do Transfers and Progressive Taxes Affect the Distribution of Income?”  Yesterday’s Tax Foundation analysis of the federal income tax concluded:

As policymakers debate ways to raise taxes on the rich, they should keep in mind the extent to which the federal government already transfers income between income groups and remember that America already has a progressive tax system. This context is essential for productive conversations on how to improve the tax code, rather than weaken it.