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Letter from Washington

Political Insider

President Trump’s schedule (EDT):

1:00 PM:  Visits Lake Okeechobee and Herbert Hoover Dike, Canal Point, FL.

  2:35 PM:  Arrives back at Mar-a-Lago.

“Kudlow Says U.S. Ready to Extend China Talks by Weeks or Months.”  Yesterday’s Bloomberg article led with:

The Trump administration is prepared to keep negotiating with China for weeks or even months to reach a trade deal that will ensure the world’s second-largest economy improves market access and intellectual-property policies for U.S. companies, a senior American official said.

“This is not time-dependent. This is policy- and enforcement-dependent,” White House economic adviser Larry Kudlow said in a speech in Washington on Thursday. “If it takes a few more weeks, or if it takes months, so be it. We have to get a great deal, as the president says, that works for the United States. That’s our principal interest.”

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin met with Chinese negotiators in Beijing for a working dinner on Thursday. Mnuchin called the meeting “very productive” before heading out for a full day of talks on Friday. …

… The key areas where the U.S. is demanding better terms include China improving treatment of U.S. intellectual property, opening up market access for American companies and agreeing on an enforcement mechanism for the trade deal, Kudlow said. The U.S. has proposed regular meetings to assess whether China is living up to promises of reform in the pact, he said. The Trump administration wants to be able to impose tariffs on China — with no threat of counter-retaliation — if China fails to hold up its ends of the bargain, he said.

“Disaster Relief Bill at an Impasse Over Puerto Rico Aid.”  Yesterday’s New York Times article led with:

WASHINGTON — Senate Democrats next week may block legislation proposed by their Republican counterparts that would allocate billions of dollars for disaster recovery across the country, citing opposition from House Democrats and a push to add more aid to Puerto Rico’s slow efforts to recover from a pair of devastating hurricanes more than a year ago.

Democrats in the Senate have said they would support companion disaster aid legislation passed by House Democrats this year, but on Thursday lawmakers left Washington for the weekend with the issue of money for Puerto Rico still unresolved.

The impasse ahead of votes early next week has revived both a renewed legislative push to grant the island statehood — lawmakers introduced a measure on Thursday that would make Puerto Rico the 51st state — and criticism over President Trump’s stingy approach to the island’s recovery efforts.

“I’ve taken better care of Puerto Rico than any man ever,” Mr. Trump told reporters on Thursday.

Mr. Trump has offered his support for the Senate disaster relief package in individual conversations with senators, Republican aides say, but he has long castigated the island and its officials for their handling of the recovery efforts.

Senate Majority Leader Mitch McConnell (R-KY) has scheduled a cloture vote on Senator Shelby’s (R-AL) substitute amendment for H.R.268 for 5:30 PM next Monday.

Budget Resolution Reported By The Senate Budget Committee.  Yesterday, on a party-line 11-9 vote, the Committee reported its FY2020 resolution.

Tax Refunds Continue At Last Year’s Pace.  Yesterday, in its weekly filing season report, the IRS said it has paid refunds of $191.894 b. so far on 65.836 m. returns, as compared to $197.698 b. on 67.599 m. returns last year.  The average refund of $2,915 per return is very similar to last year’s $2,295.

“The Taxman Is (Not) Coming After You.”  I usually avoid citing editorials, but I’m making an exception for this one from this morning’s New York Times:

According to federal prosecutors, the California lawyer Michael Avenatti has not filed a federal income tax return since 2010, and he has not paid federal income taxes since 2008.

This may seem astonishing to the millions of Americans who dutifully file tax returns each year, under the assumption that the government would notice if they didn’t.

But it should not come as a surprise. Congressional Republicans led the charge to sharply reduce funding for the Internal Revenue Service over the past decade, and the agency has warned repeatedly that it has been deprived of the resources necessary to catch tax cheats.

The government has been operating on the honor system — and hoping that no one noticed.

At a congressional hearing in 2015, Representative Mike Kelly, a Pennsylvania Republican, scolded the head of the I.R.S. for talking publicly about the agency’s lack of resources.

Political Insider

About Pete Davis

Pete Davis

Pete Davis advises Wall Street money managers on Washington, DC policy developments that affect the financial markets. Visit his website here daviscapitalinvestmentideas.yolasite.com.

Articles by Pete Davis

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