Tax Bill Fiasco: Senate Considering 1 Year Corporate Tax Cut Delay; Dollar Slides

Suddenly Republican tax reform is looking deader than a doornail.

According to the Washington Post, which cites " four people familiar with a draft of the legislation " not only is there little to no compromise on the way forward, but the only thing Senate Republicans leaders can agree on is to punt the centerpiece of the GOP tax plan by at least a year, and are considering a one-year delay in the implementation of a major corporate tax cut. This change would lower the corporate tax rate from 35 percent to 20 percent in 2019, not 2018 as currently constructed by a House GOP bill. And while the delay would save $100 billion in much needed funds, it would be met with resistance from Trump, who wants the tax cuts implemented immediately.

In any case, to ensure that companies don’t postpone major investment decisions and wait for the lower rate in 2019, Senate Republicans are considering allowing companies to immediately deduct capital investments in 2018 from their taxable income, the WaPo sources said.

The news comes amid the expected growing opposition in the Senate to the current bill. One day after Trump nemesis John McCain said tax reform is "dead on arrival", on Tuesday, Sen. Ted Cruz said that the House tax bill could end up raising taxes on some middle-class Americans, and he pushed for assurances that the Senate bill would lower everyone’s taxes. Meanwhile, senators Marco Rubio and Mike Lee are pushing for an expansion of the child tax credit beyond what was introduced in the House. They have called for raising the child tax credit from $1,000 to $2,000. The House bill would raised the credit to $1,600.

Furthermore, the WaPo adds, that significant differences are also expected on the individual income-tax provisions.

Senate negotiators are planning to eliminate the state and local tax deductions that families take, going further than the House bill. They are also expected to retain roughly seven income tax brackets, rather than the four the House has proposed.

 

Details could change ahead of a formal release of a bill this Thursday by the Senate Finance Committee.

There will be a number of other changes to the taxes that certain businesses pay and the way companies are taxed on overseas earnings. Senate negotiators aren’t planning to include a temporary $300 “family flexibility credit” contained in the House bill. It’s this credit, which would expire after five years, that has fueled criticism that the House bill would eventually lead to higher taxes for some middle class families.

Separately, Bloomberg reports that on Tuesday afternoon President Trump called into a meeting between Senate Democrats, National Economic Council Director Gary Cohn and White House Legislative Affairs Director Marc Short, Democratic Sen. Jon Tester tells reporters. Tester said that Trump spoke (maybe screamed would be a better description) for about 15 minutes by phone from Asia and insisted the rich will be hurt by the tax bill.

During the same meeting, Dem. Senator Sherrod Brown gave Cohn copies of two bills he wants in the tax package, including one that would boost income of those making $20k-$70k. Brown added that Trump said over the phone he liked the ideas in the bills Brown presented; “I don’t know if McConnell is not hearing what the president is saying or if McConnell is not paying attention," Brown says.

Or maybe Trump just hasn"t heard yet that Senate Republicans, after failing to repeal Obamacare not too long, now plans to concede on the most important aspect of Trump"s proposed tax plan.

In any case, a decision on delaying the implementation of the corporate rate has not been made, the WaPol said. House Ways and Means Committee Chairman Kevin Brady (R-Texas), in writing his legislation, was considering having the corporate tax rate cut phase out after eight years but made a change the night before the bill was introduced to effectively make it permanent.

With the news of the potential delay hitting the market, the dollar in general, and the USD/JPY in particular was the first casualty and the pair was sold by leveraged accounts in Tokyo.

Jared Kushner Reportedly Used Private Email For White House Business

As if the flow of news on this warm September weekend wasn’t hectic enough thanks to President Trump’s decision to pick a fight with professional sports, Politico is out with the latest bombshell report alleging some nefarious act was committed by one of Trump’s closest advisors, his son-in-law, Jared Kushner.

Politico reports that, in an ironic twist, Kushner continued to use a private email account that had been set up during the transition to communicate with fellow administration officials during Trump’s first nine months in office, even as Trump continued to bash his former rival’s mishandling of classified information on a private server during her time at the State Department.

While Politico places the implication of wrongdoing front and center in its story, it waits until lower down to provide a key piece of context from the White House communications department: "Kushner sent less than 100 emails from this account, and those that were sent consisted mostly of quips about news items and minor commentary."

Liberals like to talk about the concept of false equivalence, especially in the context of how the media covered the Clinton email scandal vs. coverage of Trump’s more controversial pronouncements and business arrangements. That"s what this Kushner story appears to be. Judging by the description, it’s clear that Kushner didn’t rely on his private account to conduct public business, and only used it to send a handful of messages. More to the point, while he may have violated public-information guidelines, he did not improperly handle classified information.

“Mr. Kushner uses his White House email address to conduct White House business,” Abbe Lowell, a lawyer for Kushner, said in a statement Sunday. “Fewer than 100 emails from January through August were either sent to or returned by Mr. Kushner to colleagues in the White House from his personal email account. These usually forwarded news articles or political commentary and most often occurred when someone initiated the exchange by sending an email to his personal rather than his White House address.”

Politico also noted that Kushner’s use of a private email account was part of a larger pattern of Trump administration aides using personal email accounts for government business. Kushner allegedly used the private account to communicate with Steve Bannon, Reince Priebus, Gary Cohn and Josh Raffel.

Aides who have exchanged emails with Kushner on his private account since President Donald Trump took office in January include former chief of staff Reince Priebus, former chief strategist Steve Bannon, National Economic Council director Gary Cohn, and spokesman Josh Raffel, according to emails described to or shown to POLITICO. In some cases, those White House officials have emailed Kushner’s account first, said people familiar with the messages.

…and then there’s this, six paragraphs in.

There is no indication that Kushner has shared any sensitive or classified material on his private account, or that he relies on his private email account more than his official White House account to conduct government business. Aides say he prefers to call or text over using email.

And that"s not even the most glaring example of Politico"s tendency to leave key details that detract from the impression of wrongdoing until much later in the story.

Even further down, Politico admits that Kushner’s conduct may not violate the Presidential Records Act...

Private email traffic among White House aides — some of it sent between personal email accounts rather than to or from government addresses — could skirt the requirements of the Presidential Records Act, which requires all documents related to the president’s personal and political activities to be archived. Trump himself is not known to use email but occasionally has email messages to his assistant printed and presented to him.

…And, furthermore, that it couldn’t verify whether Kushner forwarded all work-related emails to his work account, which would render his behavior 100% legitimate. The White House is insisting he remained in compliance, and Politico hasn’t uncovered any evidence to discredit this claim.

Lowell said Kushner has adhered to government record-keeping requirements by forwarding all the emails to his account, though POLITICO could not verify that.

Other White House officials have also sometimes used personal accounts to correspond with Kushner and with each other, according to emails seen by POLITICO and people familiar with Kushner’s correspondence. They have also used encrypted apps like Signal and Confide that automatically delete messages, prompting former press secretary Sean Spicer in February to issue a warning to communications staffers that using such apps could violate the Presidential Records Act.

Politico then adds that private-email use in the Trump administration has been “somewhat common” despite Trump’s attacks on Clinton.

The use of personal email accounts in the Trump White House has been somewhat common, even though the president has been a harsh critic of Clinton’s private email habits, frequently leading “lock her up” chants as he traveled across the country on the campaign trail.

Politico also says Kushner and Ivanka Trump set up their private family domain late last year before moving to Washington from New York, according to people with knowledge of events as well as publicly available internet registration records. At the time, Kushner, who served as a senior campaign adviser, was expected to be named to a White House role, while Ivanka Trump was publicly saying she didn’t plan to work in her father’s administration, though she ended up taking an unpaid role with an office in the West Wing. People familiar with the account say it was primarily set up for personal use, but that Kushner has used it to communicate with acquaintances outside the White House about matters relating to Trump and the administration, according to people who have received messages.

Ivanka has an email account on the same domain, but there’s no indication she used her account for work purposes.

So is Kushner"s sending of work-related notes from his private email account a major violation on par with Hillary Clinton’s mishandling of classified information? Or just another mainstream attack on Kushner, meant to dilute the Hillary Clinton email narrative?

Tillerson Out? "Frustrated" Trump "Fed Up" With Secretary Of State: Axios

After North Korea launched three more short-range ballistic missiles into the East Sea early on Saturday morning, local time, political observers were eagerly looking forward to Trump"s response, especially since the president had managed to get boxed in by Kim Jong Un: on one hand, do nothing and be mocked and ridiculed not only by the North Korean press, but by the rest of the developed world, whose view of Trump"s diplomatic skills could hardly be any worse; or on the other hand, launch a military campaign, either surgical or broad, and risk a retaliation against South Korea and millions of US allies dying.

In the end the US appears to have chosen the former and on Sunday, Secretary of State Rex Tillerson said the firing of three ballistic missiles by North Korea this week was a provocative act but that the United States will continue to seek a peaceful resolution. The de-escalating tone took place just days after Tillerson credited the North with showing some restraint by not launching a missile since the ICBM test in July, and he had expressed hope that the easing of tension could lead to dialogue. That was not meant to be, although in it appears that what happened next is North Korea called the US bluff, and the US folded.

“We do view it as a provocative act against the United States and our allies,” Tillerson said in an interview on Fox News Sunday. “We’re going to continue our peaceful pressure campaign as I have described it, working with allies, working with China as well to see if we can bring the regime in Pyongyang to the negotiating table.”

As the NYT also reported, North Korea used multiple-rocket launchers off its east coast on Saturday to fire three short-range missiles that could strike United States military bases deep in South Korea, officials in Seoul said. The launches were the North’s first rocket tests since two intercontinental ballistic missile, or ICBM, were fired last month.

By resuming the tests, North Korea defied repeated urgings from the United States and South Korea to stop weapons trials and other provocations to pave the way for dialogue. The United States Pacific Command said that one of the three ballistic missiles had blown up immediately after blastoff, but that two others had traveled about 155 miles before splashing down. That would be far enough to reach major South Korean and American military bases, including those near the city of Pyeongtaek, about 60 miles south of Seoul. The range would also be sufficient to reach Seongju, a South Korean town where the United States has begun installing an advanced missile-defense system known as Thaad.

Kim Dong-yub, a defense analyst at the Institute for Far Eastern Studies at Kyungnam University in Seoul, said the tests on Saturday appeared to be aimed at expanding the strike range.

Nevertheless, the nature of the tests prompted some relief in the region.

The missiles flew to the northeast, not toward Guam, home to major United States Air Force and Navy bases. North Korea threatened to launch ballistic missiles in a “ring of fire” around Guam after President Trump threatened to hit the North with “fire and fury” if it persisted with its development of ICBMs.

Surprisingly, South Korea did not issue its usual condemnatory statement against the tests. In Tokyo, the chief cabinet secretary, Yoshihide Suga, said the missiles did not fall in Japanese waters or pose a threat to his nation’s safety. White House officials said that Mr. Trump had been briefed on the tests but did not immediately have any further comment.

And while North Korea was certainly on Tillerson"s agenda, what the media was focused on was Tillerson"s reported distancing from Trump’s remarks after the deadly Virginia protests, saying the president "speaks for himself.” Tillerson"s comment on “Fox News Sunday" follows Gary Cohn, the president’s chief economic adviser and the director of the National Economic Council, saying in a Financial Times interview published last week that the administration “can and must do better” in condemning hate groups.

In the exchange below, Chris Wallace asked Tillerson about Trump"s response to the racist carnage in Charlottesville. Tillerson replied: "I don"t believe anyone doubts the American people"s values or the commitment of the American government, or the government"s agencies to advancing those values and defending those values."

Wallace asked the obvious follow-up question: "And the president"s values?"

"The president speaks for himself," Tillerson said, leaving Wallace with a surprised look on his face.

Must-watch. Wallace asks Tillerson if Trump speaks for American values: "The President speaks for himself." (Note Wallace"s reaction.) pic.twitter.com/fHEk6qjwPd

— Kyle Griffin (@kylegriffin1) August 27, 2017

So, in response moments ago Axios reported that Tillerson appears to be the next top administration in Trump"s proverbial board room, who may soon here the trademarked Trump phrase: "You"re Fired!" According to Axios, "there"s a ticking problem with Rex Tillerson, and it"s growing louder by the day, citing officials inside and close to the White House."

President Trump has been growing increasingly frustrated with his Secretary of State. One time recently, after Trump had returned from a meeting on Afghanistan, a source recalled Trump saying, "Rex just doesn"t get it, he"s totally establishment in his thinking."

As Axios adds, "Trump is getting more and more fed up with Tillerson, who has still yet to staff his agency."

So is Tillerson the next top administration official to get kicked out by Trump? Unfortunately, the firings at the White House have been so fast and furious in recent weeks, the online political prediction marketplace PredictIt.com hasn"t had the time to put together a contract tracking the odds of Tillerson"s imminent survival, or lack thereof.

Bannon Breaks Silence: Slams "Far-Right Clowns", Vows "Economic War With China"

After weeks of speculation about his future, Trump White House Chief Strategist Steve Bannon has broken free of his self-imposed exile, unloading a torrent of Scaramucci-esque comments to none other than Robert Kuttner - the editor of The American Prospect, a progressive publication (the cover lines on whose first two issues after Trump’s election were “Resisting Trump” and “Containing Trump."

Kuttner sets the surprising scene...

Trump’s embattled strategist phones me, unbidden, to opine on China, Korea, and his enemies in the administration...

Needless to say, I was a little stunned to get an email from Bannon’s assistant midday Tuesday, just as all hell was breaking loose once again about Charlottesville, saying that Bannon wished to meet with me.

But unload Bannon did:

He began with China...

“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path.”

Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.

“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we"re five years away, I think, ten years at the most, of hitting an inflection point from which we"ll never be able to recover.”

Contrary to Trump’s threat of fire and fury, Bannon said of Korea:

"On Korea, [China"s] just tapping us along. It’s just a sideshow."

“There’s no military solution [to North Korea’s nuclear threats], forget it.

Until somebody solves the part of the equation that shows me that ten million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about, there’s no military solution here, they got us.”

Bannon went on to describe his battle inside the administration to take a harder line on China trade, and not to fall into a trap of wishful thinking in which complaints against China’s trade practices now had to take a backseat to the hope that China, as honest broker, would help restrain Kim.

Bannon’s plan of attack includes: a complaint under Section 301 of the 1974 Trade Act against Chinese coercion of technology transfers from American corporations doing business there, and follow-up complaints against steel and aluminum dumping.

“We’re going to run the tables on these guys. We’ve come to the conclusion that they’re in an economic war and they’re crushing us.”

With regard his internal adversaries, at the departments of State and Defense, who think the United States can enlist Beijing’s aid on the North Korean standoff, and at Treasury and the National Economic Council who don’t want to mess with the trading system, Bannon was ever harsher...

“Oh, they’re wetting themselves,” he said, explaining that the Section 301 complaint, which was put on hold when the war of threats with North Korea broke out, was shelved only temporarily, and will be revived in three weeks. As for other cabinet departments, Bannon has big plans to marginalize their influence.

“That’s a fight I fight every day here,” he said. “We’re still fighting. There’s Treasury and [National Economic Council chair] Gary Cohn and Goldman Sachs lobbying.”

“We gotta do this. The president’s default position is to do it, but the apparatus is going crazy. Don’t get me wrong. It’s like, every day.”

Bannon dismissed the far-right as irrelevant:

“Ethno-nationalism—it"s losers. It"s a fringe element. I think the media plays it up too much, and we gotta help crush it, you know, uh, help crush it more.”

“These guys are a collection of clowns,” he added.

And finally, Bannon scoffed at The Democrats...

“...the longer they talk about identity politics, I got ’em. I want them to talk about racism every day. If the left is focused on race and identity, and we go with economic nationalism, we can crush the Democrats.”

Read more here...

Bannon going down with a fight or a massive effort to distract from the carnage of the last few days? You decide.

Gary Cohn Reportedly "Disgusted & Deeply Upset" At Trump's Last Few Days

Former Goldman Sachs President and current National Economic Council chair - who is also Jewish - is said to be "disgusted" and "deeply upset" by President Trump"s comments on white nationalists according to The New York Times.

Axios also reports: "we"re told Cohn - who was standing next to Trump in anticipation of questions about infrastructure legislation - was somewhere between appalled and furious."

NYT reporters cite thre people who are familiar withe the matter...

Gary Cohn, NEC chair -- who is Jewish -- was "disgusted" and "upset" by Trump"s comments on white nationalists, per 3 ppl with knowledge

— Glenn Thrush (@GlennThrush) August 16, 2017

Gary Cohn said to be deeply upset by last few days, per multiple sources. Not leaving admin but not happy

— Maggie Haberman (@maggieNYT) August 16, 2017

Presumably this corners Cohn to either publicly deny the story or pressures him to resign if this is truly how he feels.

With CEOs dropping like flies from his various councils, President Trump would be in grater trouble if a close aide were to resign, the floodgates could open.

Spicer Resigns As White House Press Secretary, Replaced By Anthony Scaramucci

It"s official: moments ago the much anticipated departure of (now former) White House press secretary and communications director, Sean Spicer took place, when according to the NYT, Spicer resigned on Friday morning, "telling President Trump he vehemently disagreed with the appointment of New York financier Anthony Scaramucci as communications director."

Mr. Trump offered Mr. Scaramucci the job at 10 a.m. The president requested that Mr. Spicer stay on, but Mr. Spicer told Mr. Trump that he believed the appointment was a major mistake, according to person with direct knowledge of the exchange.

News of Spicer"s resignation was promptly greeted with trolling by many...

R.I.P. Sean Spicer as White House Press Secretary, 2017 - 2017 pic.twitter.com/y7QmJAroYH

— The Daily Show (@TheDailyShow) July 21, 2017

... including Maxine Waters:

Congratulations Sean Spicer. You"ve got more guts than Jeff Sessions!

— Maxine Waters (@MaxineWaters) July 21, 2017

To all those who bought the "No" contract: congratulations: it"s payout time:

Meanwhile, as noted above, Trump appointed former SkyBridge Capital founder Anthony Scaramucci as White House Communications Director.

JUST IN: President Trump has offered Anthony Scaramucci the job of White House Communications Dir.; Scaramucci has accepted. - @JTSantucci

— ABC News (@ABC) July 21, 2017

Scaramucci has been a vocal supporter of the president, having served in a top financial advisory role on Trump’s campaign. He has been an ardent defender of the president in television interviews.

.@DonaldJTrumpJr is a virtuous and honorable man. Virtue means the courage to act with integrity. Don does that everyday. #stopwitchunt

— Anthony Scaramucci (@Scaramucci) July 9, 2017

He was also the subject of the recent hit piece from CNN that the network was forced to retract and apologize to him for, a piece that inaccurately accused him of being under multiple investigations—he is not under any—for “meetings” that never happened with Russian bankers. Three senior CNN editorial officials resigned over the story, amounting to what is still developing into one of the biggest scandals in journalistic history.

While news of Scaramucci"s appointment first broke on Thursday night, White House chief of staff Reince Priebus tried to scuttle the appointment of Scaramucci due to a reported long-running feud with him, according to Breitbart, which adds that Steve Bannon, the ex-Executive Chairman of Breitbart News now the White House chief strategist, also objected to the Scaramucci appointment.

Bannon and Priebus have an alliance inside the White House where they are frequently at loggerheads with the “West Wing Democrats” like National Security Adviser H.R. McMaster, National Economic Council director Gary Cohn, Jared Kusher, Ivanka Trump, and others.

Those opposed to the Scaramucci appointment did not succeed.

Reince and Bannon fought hard to stop Scaramucci going in. But the President made up his own mind.

— Jonathan Swan (@jonathanvswan) July 21, 2017

Scaramucci is a done deal, I"m told. Bannon lost.

— Jonathan Swan (@jonathanvswan) July 21, 2017

Gary Cohn's Parting Gift From Goldman: An Accelerated $124 Million

Leaving Goldman Sachs to work for the government has always been a lucrative career move: eight years ago, it allowed former Treasury Secretary Hank Paulson to sell $500 million in Goldman stock tax free, and now its the turn of Gary Cohn, Goldman"s former COO and president, who is leaving to join Trump"s cabinet, who is departing with an "accelerated" gift.

According to Bloomberg, Goldman Sachs lifted restrictions or accelerated delivery on about $123.7 million in stock and cash awards previously awarded to Gary Cohn, 56, who left last month to become President Donald Trump’s top economic adviser. Cohn was given $20 million in pay for 2016, including $18.15 million in variable compensation and a $1.85 million salary, the New York-based bank said in a regulatory filing Tuesday.

That wasn"t all: also on Monday, the bank handed over 96,572 restricted shares that were outstanding from earlier stock awards scheduled to be delivered over time. It also lifted selling restrictions on 99,909 shares that Cohn had already earned but was unable to sell. Combined, they were worth $45.9 million based on Tuesday’s closing price of $233.68 a share. About $12.8 million in additional restricted stock was included in his 2016 compensation. Cohn didn’t receive all of the restricted stock because Goldman Sachs withheld an unspecified portion of it for taxes, according to the filing.

That"s not all:

He also got $47 million to settle outstanding awards he received each year since 2011 under the bank’s long-term incentive program. He also received an $18 million cash payment in exchange for outstanding performance shares, according to the filing.

Cohn left Goldman Sachs last month after agreeing to join the Trump administration as head of the National Economic Council. He started at Goldman Sachs in 1990, becoming co-president in 2006, and then sole president. He was long seen as the heir apparent to Chief Executive Officer Lloyd Blankfein.

And since Cohn will likely vacate the post within a year or two, it means that the former COO gets to liquidate his stock holdings at a price near all time highs, without having to wait for it to vest like any other mere mortal Goldmanites. It is still unclear if he will have to pay any tax on the proceeds.