| Happy Monday and welcome back to On The Money, where we would very much like to have too much money in cash. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N. Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis. THE BIG DEAL--Trump digs in on shutdown threat over border wall, rebuking Congress: President Trump on Monday doubled down on his threat to shut down the government to secure enhanced border security measures. "If we don't get border security after many, many years of talk within the United States, I would have no problem doing a shutdown," Trump said during a joint press conference with Italy's prime minister. But Trump would not say if he would veto a spending bill in September unless it included "full" funding for a border wall, saying, "I'll always leave room for negotiation." "I have no red line, unlike President Obama," he added. "I just want great border security." After praising Italian Prime Minister Giuseppe Conte for his hardline stance on immigration, Trump blasted U.S. immigration laws, calling them a "laughingstock" and the "worst" in the world. He put the onus on Congress to change them, saying he would "certainly be willing to close it down to get it done." Lawmakers face a Sept. 30 deadline to pass a funding bill and Trump's comments could inflame tensions with GOP leaders, who say they would rather address money for a border wall after the funding deadline passes. House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) met with Trump at the White House last week to discuss those issues and appeared to come away assured that they would be able to avoid a shutdown. "The president's willing to be patient to make sure that we get what we need so we can get that done," Ryan said of the border wall funding last Thursday. McConnell said Monday that he doesn't think a government shutdown will happen despite Trump's threats, saying "I'm optimistic we can avoid a government shutdown." McConnell said Friday the battle over border wall funding would "probably" be delayed until after the midterm elections. The Hill's Jordain Carney has more on the brewing showdown here. Remember: Republicans want the strong economy to be front and center during the midterm elections. While the GOP tax cut hasn't resonate with voters quite like Republicans intended, they're betting that record low unemployment and abundant consumer confidence will sell voters on their policies. A shutdown over Trump's border wall close to election would pull the focus away from the economy and onto the White House's polarizing immigration policies. That works fine for Republicans from safe red seats, but could be a political death sentence for vulnerable GOP lawmakers in less conservative, more diverse areas. LEADING THE DAY U.S. Chamber analysis shows helping all sectors hit by tariffs would cost $39 billion: A new U.S. Chamber of Commerce analysis found that providing similar aid to all sectors affected by President Trump's tariffs would cost U.S. taxpayers $39 billion. The Trump administration last week announced a $12 billion emergency aid package for the nation's farmers who are taking a hard hit from retaliatory tariffs unloaded by China, Mexico, Canada and other trading partners because of the president's imposition of tariffs. The Chamber's analysis shows that on top of the $12 billion that could be doled out to farmers as early as this fall, another $27.2 billion would be needed to help other sectors such as fishermen, cotton and fabric manufacturers and makers of steel and aluminum. "While America's agricultural industry has been hit extremely hard by escalating tariffs, it's not alone," said Neil Bradley, the Chamber's executive vice president and chief policy officer. The Hill's Vicki Needham breaks it down here. GOP frets Trump tariffs will hit midterm prospects: Republicans have bet their congressional majorities on the booming economy ahead of the midterm elections, but face growing political threats from President Trump's trade policy. U.S unemployment has sunk to record lows and economic growth has accelerated during Trump's first term in office. Consumer and business confidence in the economy has steadily climbed since 2017, which GOP lawmakers attribute to their $1.5 trillion tax cut and repeal of dozens of Obama-era regulations. Republicans will spend the next three months claiming credit for the strong economy as they try to protect their vulnerable House majority. But that pitch has been complicated by the rising costs of trade tensions spurred by Trump's tariffs, which have threatened the livelihoods of farmers and manufacturers in areas critical to GOP support. - Tariffs imposed on U.S. agricultural exports in response to Trump's levies on imported steel, aluminum and Chinese goods have cost American farmers and manufacturers billions of dollars in canceled sales and rising overhead costs.
- Some U.S. businesses have also delayed or canceled planned expansions, according to Federal Reserve officials.
- Industry and agriculture anchor the economies of states that handed Trump the White House in 2016, and a protracted trade war could cost the president and his party come November.
"I'm hoping the administration and the president are really careful on these things," said Rep. Randy Hultgren (R-Ill.), whose district includes many soybean farmers. "I hope something happens pretty soon because there's a lot of pain that a lot of our farmers are already feeling." I've got more on that difficult dynamic here.
The latest from the frontlines of the trade war:
- Caterpillar to raise prices due to Trump tariffs on aluminum and steel
- BMW raising prices in China on SUVs made in US
- Poll: Majority of Americans approve of Trump aid to farmers
- The Washington Post: Layoffs from Trump tariffs are piling up. So are calls for more bailouts.
- CNBC: Jamie Dimon says he's hoping Trump's trade methods work but fears negative outcomes
- The Washington Post: How futures contracts and derivatives are shielding some farmers from trade damage--for now
NYT: Trump eyes big tax cut for the rich: The Trump administration is considering acting unilaterally to institute a $100 billion tax cut that will largely benefit the wealthy, according to a report in The New York Times. The Times reported that Treasury Secretary Steven Mnuchin at a recent G-20 meeting in Argentina said if the tax cut can't be done through Congress, the administration will "look at what tools" are necessary to consider the move. "If it can't get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we'll consider that," Mnuchin said. "We are studying that internally, and we are also studying the economic costs and the impact on growth." What's at issue: It's long been a conservative priority to reduce the amount that people pay in capital gains taxes by indexing capital gains to inflation. Conservatives argue that Treasury has the authority to index capital gains. On the other side: Democrats oppose indexing capital gains because it would add to the deficit and largely benefit the wealthy and they disagree that Treasury has the powers to do that by executive action. MARKET CHECK: CNBC: "The tech-heavy Nasdaq Composite dropped 1.4 percent to 7,630. Shares of Facebook and Netflix fell 2.2 percent and 5.7 percent, respectively. Amazon declined 2.1 percent while Google-parent Alphabet fell 1.8 percent. The Nasdaq also notched a three-day drop of 3.86 percent, its biggest since late March, when it lost 5.12 percent over three sessions. "The S&P 500 declined 0.6 percent to 2,802.60 as the tech sector dropped 1.8 percent. The Dow Jones Industrial Average fell 144.23 points to close at 25,306.83 as Visa and American Express lagged." GOOD TO KNOW - The Treasury Department predicted the U.S. government's borrowing needs in the second half of this year will jump to the most since the financial crisis as the nation's fiscal health deteriorates despite a strong economy, Bloomberg reports.
- American Express' foreign-exchange unit recruited business clients with offers of low currency-conversion rates before quietly raising their prices, according to The Wall Street Journal.
- American Banker explores the ways the financial crisis still influences U.S. politics ten years after it landed.
- Some of the biggest winners from the GOP tax law are corporate executives who have reaped gains as their companies buy back a record amount of stock, according to Politico.
- The SEC's new crypto czar wants the coin industry to step out of the shadows, according to Bloomberg.
- The Treasury Department and IRS on Monday announced that they plan to issue regulations about changes made to education savings plans under the tax law President Trump signed in December.
ODDS AND ENDS
- President Trump's campaign chairman, Paul Manafort, earned more than $60 million working for Russia-backed Ukraine politicians, special counsel Robert Mueller said in a new court filing Monday.
- The Daily Beast has the insane story of how an ex-cop rigged McDonald's Monopoly game and stole millions.
- Op-Ed: Barbara C. Matthews, an Atlantic Council nonresident senior fellow and former Treasury Department attaché to the European Union, writes why the Trump-EU olive branch is a "laudable first step in a long process."
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