President Trump’s schedule (EDT):
11:45 AM: Daily intelligence briefing;
2:45 PM: Meets with Secretary of State Pompeo;
4:00 PM: Departs the White House en route Joint Base Andrews;
5:55 PM: Arrives at Gerald R. Ford International Airport, Grand Rapids, MI;
7:00 PM: Holds a “Make America Great Again” rally at the Van Andel Arena;
8:30 PM: Departs Michigan; and
11:30 PM: Arrives at Mar-a-Lago in West Palm Beach, FL.
“HUD charges Facebook with housing discrimination over its targeted advertising platform.” This morning’s Washington Post article leads with:
The U.S. Department of Housing and Urban Development said Thursday it is alleging that Facebook’s targeted advertising platform violates the Fair Housing Act by “encouraging, enabling, and causing” unlawful discrimination by restricting who can view housing ads.
“Trump orders Treasury, HUD to develop new plan for how home sales are financed.” Last night’s Washington Post article led with:
President Trump ordered federal regulators on Wednesday to develop plans to change the way the country finances the majority of its home purchases.
The plan could upend decades of housing policy while finally reckoning with a major piece of unfinished business from the financial crisis — the fates of Fannie Mae and Freddie Mac, the housing finance giants that back more than half the mortgages written in the United States.
The two companies, which buy mortgages from lenders, then package them into securities to sell to investors, have been under government conservatorship for 10 years after receiving billions in taxpayer bailouts. Lawmakers have been wary of tinkering with their structure, fearful a wrong move could disrupt the housing market and the availability of 30-year mortgages, the most popular way home purchases are financed in the United States.
Trump signed a presidential memorandum Wednesday directing the Treasury Department to develop a plan that would end Fannie’s and Freddie’s government conservatorships and improve oversight of the companies, which have trillions in assets. Trump also instructed the Department of Housing and Urban Development to submit a plan to change the operations of other parts of the housing system, including the Federal Housing Administration, which helps low-income and first-time buyers.
“The lack of comprehensive housing finance reform since the financial crisis of 2008 has left taxpayers potentially exposed to future bailouts,” the proclamation says. “The housing finance system of the United States is in urgent need of reform.”
Trump’s directive comes amid growing expectations within the housing industry that the Trump administration would unilaterally release the companies from government control if Congress doesn’t act. Treasury Department officials have been meeting with industry and consumer groups over the last few weeks to identify potential sticking points to any reform effort, according to several people familiar with the meetings.
Disrupting the housing market in time for the 2020 election is a very risky strategy for Republicans, even if they are correct that Fannie and Freddie helped cause the 2008 Great Recession. They were bailed out, but have since more than repaid what they received from Treasury. There’s little chance, in my opinion, of getting a GSE reform bill through Congress before 2021.
Syndicated Conservation Easements Under Investigation By The Senate Finance Committee. Yesterday’s press release led with:
WASHINGTON – Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) today launched an investigation into the potential abuse of syndicated conservation easement transactions, which may have allowed some taxpayers to profit from gaming the tax code and deprived the federal government of billions of dollars in revenue. For several years now, the IRS has been investigating these transactions. They appear to involve promoters selling interests in tracts of land to taxpayers looking for large tax deductions. In such an arrangement, the taxpayers then get inflated appraisals of those tracts of land and grant conservation easements on that land. The resulting inflated charitable deductions are then split among the taxpayers.
Auto Tariffs: “Republicans warn Trump to back off economy-wrecking tariffs.” Last night’s Politico article led with:
Republicans are trying to head off their next potentially explosive conflict with President Donald Trump.
In a series of private meetings and conversations with Trump over the past few months, Senate Republicans have pleaded with him not to impose a new round of tariffs on foreign automakers — fearing they could debilitate Trump-backed states and cast the economy into a recession ahead of the 2020 election.
But Trump isn’t heeding the warnings so far.
Behind closed doors, GOP senators push back on Trump consistently when he brings up existing tariffs on steel and aluminum or potential tariffs on automakers, according to Republican senators. But Trump doesn’t back down from his position: He says the threat of tariffs gets the attention of trading partners — like China — who need to permit more imports of American products.
“The president likes tariffs as a threat. I hope he understands that the auto tariffs damage the autoworkers” in Midwest and southeastern states. “And I know he cares a lot about them. So I’m hopeful that he won’t do that,” said Sen. Lamar Alexander of Tennessee, where Nissan and Volkswagen have plants. But, he added: “If I were Japan and Europe, I wouldn’t relax.”
Whether GOP senators can head off another round of tariffs ultimately lies with the whims of the president. Administration officials have tried to reassure worried Republicans that the president has hit pause as he considers a trade report that would allow him to declare tariffs on the basis of national security.
“Trump pressures wary Republicans to produce replacement for health-care law.” Last night’s Washington Post article led with:
President Trump is pressuring Republicans to produce a replacement for the Affordable Care Act, a request the GOP considers unrealistic in a divided Congress and politically perilous ahead of the 2020 elections.
Hours after meeting with Senate Republicans at the Capitol on Tuesday, Trump spoke on the phone with a handful of senators, urging them to write a new law — even though the party failed to coalesce around a plan when it controlled the House and Senate for two years.
The White House has no proposal in the works, according to administration officials, but Trump wants Republicans to pass a bill before his reelection effort that would do what Obamacare does — provide coverage to millions of Americans.
Trump spoke with Sen. David Perdue (R-Ga.) on Tuesday evening and listed his priorities in a phone call with Sen. John Barrasso (R-Wyo.) on Wednesday morning.
“He wants to preserve people being able to get their insurance through work . . . and focused on people with preexisting conditions,” Barrasso said. “He is 100 percent committed to ensuring that people with preexisting conditions get covered, and I understand that . . . and the president is also focused on lowering the cost of drugs.”
Trump’s push comes after his Justice Department, in a filing Monday in the U.S. Court of Appeals for the 5th Circuit, argued that the ACA should be thrown out in its entirety, including provisions protecting those with preexisting health conditions and allowing young adults to stay on their parents’ health-care plans.
If the case reaches the Supreme Court, it’s unclear how it would fare: Five justices who preserved the ACA during a previous case are still on the court.
But if the law is struck down, Republicans fret that the party will be blamed for more than 20 million people losing their health insurance — and they fear that crafting an alternative would prove unwieldy in a deeply divided Congress.
There’s an old saying on Capitol Hill that “You can fight something with nothing.” Over the last 9 years, since the advent of ObamaCare, Republicans have tried and failed several times to come up with an ObamaCare alternative that can pass Congress, usually an expanded version of Medicare Advantage. They’ve failed every time. Many Republicans blame the health care issue for losing the House in the 2018 election, and they’re hoping to do better in 2020, but President Trump, at the urging of Acting Chief of Staff Mulvaney, has thrown them back into the briar patch.
“Ways and Means Will Mark Up IRS, Retirement Bills Next Week.” Yesterday afternoon’s CQ Roll Call article led with:
The House Ways and Means Committee will hold its first legislative markup of the 116th Congress next week, though the committee’s heavy lifting on more controversial issues will be put off until later.
This first markup will feature legislation that has bipartisan support, including a bill to reorganize the IRS and a pair of bills to encourage savings for retirement, Chairman Richard E. Neal told reporters Wednesday. The bills have yet to be introduced.
“Our plan here is to move legislation and we’re going to start doing that next week,” he said.
Neal, D-Mass., indicated that negotiations with the Senate would have to occur before a later markup involving other tax issues, including a tax extender package, can take place. Neal said he would like a tax package to include changes in the Earned Income Tax Credit to benefit individual filers, and “what may be a longer reach” to expand the refundability of the Child Tax Credit to make it more generous for households with little income tax liability to apply the credits against.
Earlier Wednesday, Senate Finance Chairman Charles E. Grassley told reporters that he hoped Neal would move a package of 29 tax extenders — 26 tax breaks that expired at the end of 2017 and three that expired at the end of 2018. Grassley noted that he and Neal had met around six weeks ago and seemed to be in general agreement on the extenders.
“He wants to pursue with me a bilateral approach” on tax extender legislation, Grassley said. The Iowa Republican introduced an extender bill (S 617) with Finance ranking member Ron Wyden, D-Ore., last month which also contains tax breaks for victims of recent natural disasters.
Neal agreed that he wants to pursue tax extenders together with Grassley, but said the tax breaks would have to wait for now.
It will be an uphill fight to get extenders done. I’d put 40% odds on enactment at this point. They have a way of coming back to live after looking dead for quite a while.
“Enzi: Bicameral Spending Caps Talks Underway.” Last night’s CQ Roll Call article led with:
The gears are beginning to turn in a way that could launch formal bicameral talks to raise discretionary spending caps for the next two fiscal years.
At the start of the fiscal 2020 budget resolution markup Wednesday, Senate Budget Chairman Michael B. Enzi said the House Democratic leadership reached out to him a day earlier to discuss legislation to increase the caps.
A Democratic aide said Enzi and House Majority Leader Steny H. Hoyer, D-Md., saw each other in passing at an event and discussed getting a caps deal, but the aide said the conversation was not “substantive.”
House Democrats are wrestling with their own internal spending caps discussions, and still need to round up votes to pass a bill in that chamber that can bring together the moderate and liberal wings of the party. If party leaders are seen as already negotiating with Senate Republicans, it could cause problems with the rank-and-file among House Democrats.
Enzi, R-Wyo., said he suggested also dealing with the statutory debt limit, which needs to be lifted by late September or early October, and budget process changes in any package that would raise the spending caps for fiscal 2020 and 2021. Enzi said such provisions “could be done in one package and have some chance of passing.”
“I think that they were serious,” Enzi said about his conversation with Democrats.
House Budget Chairman John Yarmuth has been formulating proposed increases in the defense and nondefense caps that could win majority support in the committee and on the floor, most likely in the form of a regular bill to raise the caps.
“What we’re trying to do is two things,” the Kentucky Democrat said Wednesday. “One is provide some numbers so the appropriators can do their work, and then simultaneously establish our negotiating starting point as we move toward the Senate corner.”
Yarmuth said he is leaning against marking up a budget resolution because “the odds of our being able to pass a budget resolution on the floor are not as great as other options.”
“Lawmakers Rough Up Pompeo Over Proposed State Department Cuts.” Yesterday’s New York Times article led with:
WASHINGTON — Lawmakers from both parties on Wednesday denounced the Trump administration’s proposal to cut the budgets of the State Department and the United States Agency for International Development by more than 23 percent, telling the secretary of state that the drastic drop would threaten national security and that it showed “contempt for diplomacy.”
Appearing before two House committees, Secretary of State Mike Pompeo sought to justify the administration’s smaller budget request and foreign policy strategy on a range of global issues, including North Korea, Russia and Venezuela. It was Mr. Pompeo’s first testimony in his current job in front of Democrat-controlled committees, and neither party was particularly receptive.
Usually an administration will work with its own party in Congress in the preparation of its budget if it’s serious about certain budget cuts. This Administration barely consults its own departments let alone its allies on Capitol Hill. So everything is about messaging, and deficit reductions that might pass Congress are left on the sidelines.
