US trade deal with China is nearly done, Mnuchin reassures. Treasury Secretary Steven Mnuchin said yesterday that the two countries are “about 90 percent of the way” to an agreement. He said the two countries were close to a deal last month too, before talks fell apart. President Trump and China’s President Xi Jinping are expected to meet during this weekend’s G-20 summit in Japan.
Border budget battles continue in Washington. Yesterday, the Senate passed its version of a $4.6 billion spending bill for humanitarian assistance and security on the US-Mexico border. The House passed a similar bill on Tuesday. Senate Republican leaders want the House to pass the Senate bill, which was approved with bipartisan support. House Democrats want to work out differences in a conference committee. Even though President Trump insists money is needed urgently for humanitarian assistance, he says he’d veto the House bill because it includes too many limits on how to spend the money. Congress is due to leave for its Fourth of July break in about a week.
Sen. Chris Van Hollen would raise estate taxes to shore up Social Security. The Maryland Democrat unveiled the “Strengthen Social Security by Taxing Dynastic Wealthy Act” yesterday. He’d lower the estate tax exemption for individuals from $11.4 million to $3.5 million and from $22.8 million to $7 million for married couples and raise the top estate and gift tax rates from 40 percent to 45 percent.. TPC’s Robert McClelland proposed raising estate tax exemption levels to pre-Tax Cuts and Jobs Act level as a way to improve the TCJA in this March post.
Infrastructure. Remember infrastructure? Not long ago, President Trump and congressional Democrats were talking up a $2 trillion infrastructure bill and the president was going to describe how he’d pay for it. Politico reports that when Transportation Secretary Elaine Chao was asked at a Heritage Foundation event if the White House is considering a gas tax hike to fund new roads and the like, she’d only say, “That has certainly been a topic of discussion.” Don’t get your shovels out yet.
About that unprecedented growth in the federal debt… TPC’s Howard Gleckman takes a closer look at the latest CBO long-term budget outlook. The strong economy, he concludes, is starting to slow. “With interest rates persistently low, the Federal Reserve has few of its traditional tools to simulate the economy. With federal debt projected to rise so much, Congress would similarly have little running room to boost the economy through fiscal policy.” Worse, “Congress has shown no interest in taking the difficult steps to address fiscal imbalances.”
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