 Happy Tuesday and welcome back to On The Money. 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--Amazon officially picks New York, Northern Virginia for new offices: Amazon on Tuesday officially announced that it would split its "second headquarters" between New York City and Arlington, Va., after a search that took over a year. The announcement comes after dozens of cities tried to woo the online retail giant during the process with promises of tax breaks and other gifts. Between the two cities and the addition of a smaller office in Nashville, Tenn., Amazon will reap about $2 billion in subsidies from taxpayers. "These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come," Amazon CEO Jeff Bezos said in a statement. "The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities." The move gives the Seattle-based tech giant a foothold in two major East Coast power centers. Bezos has already adopted Washington, D.C., as a second home; in recent years he has bought The Washington Post and a $23 million mansion in the Northwest D.C. neighborhood of Kalorama. The Hill's Harper Neidig tells you everything you need to know about the move here. The breakdown: - The company will be collecting more than $1.5 billion in incentives from New York and up to $550 million from Virginia, in exchange for promising at least 25,000 jobs at each of the two new offices.
- The New York City office will be located in the Queens neighborhood of Long Island City. Under one tax break that New York is offering Amazon, the state will be paying $48,000 for each of the 25,000 jobs that the company is offering. Amazon's Virginia office will be fewer than five miles from D.C. in the Arlington district of Crystal City.
- The company also announced it would be opening a smaller office in Nashville, promising 5,000 jobs there in exchange for $102 million in incentives.
What does it mean for D.C.? The arrival of 25,000 highly skilled tech workers and millions of dollars in planned investments is likely to accelerate the steady development of the gentrifying capital area. While Virginia and D.C. officials tout Amazon's arrival as an economic boon to Greater Washington, an influx of expensive labor could pose steep costs for the area's most vulnerable residents. From housing prices to political pressure, here are five ways Amazon's new headquarters could affect the D.C. area. - House prices and rents in D.C. are among the highest in the nation, and Amazon's arrival is likely to increase the pressure.
- A rush of high-skill tech workers threatens to rip open the gap between Washington's wealthiest and poorest, forcing the region's most vulnerable to spend a greater share of income on housing and spend longer times commuting, both of which hinder long-term economic health.
- A massive expansion of Northern Virginia's business sector is certain to put pressure on the region's crumbling infrastructure and maddening traffic gridlock, and might push officials to make major investment.
- Amazon's political footprint will expand to the local governments of D.C. and Arlington as the company flexes its economic and political muscle.
- Massive tax breaks for Amazon will support tens of thousands of new jobs in Queens and Arlington, two areas where economies are booming. But they will be paid, in part, by taxpayers in upstate New York or in Virginia's coal country, economically struggling areas that are unlikely to feel the benefits of HQ2.
Reactions: - "New Yorkers will get tens of thousands of new, good-paying jobs, and Amazon will get the best talent anywhere in the world." -- New York City Mayor Bill de Blasio (D)
- "Amazon is a billion-dollar company. The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here." -- Rep.-elect Alexandria Ocasio-Cortez (D-N.Y.)
- "I'm proud Amazon recognizes the tremendous assets the Commonwealth has to offer and plans to deepen its roots here." -- Virginia Gov. Ralph Northam (D)
- "The public has a right to know what state and city officials gave away -- in exchange for an empty promise." -- Barry Lynn, executive director of the Open Markets Institute
ON TAP TOMORROW - Federal Reserve Vice Chairman of Supervision Randal Quarles testifies on financial regulation before the House Financial Services Committee, 10 a.m.
LEADING THE DAY Dems find easy target in Trump commerce chief: A Democratic House will pose a new headache for Commerce Secretary Wilbur Ross, one of the most vulnerable Trump administration officials heading into 2019. Ross faces a slew of ethics complaints over conflicts of interest between his extensive financial holdings and his role overseeing much of the U.S. economy. The new scrutiny from Democrats also comes at an already difficult time for the secretary, who has also grown estranged from President Trump despite implementing and fiercely defending his controversial tariffs. Trump is reportedly considering replacing Ross as he shakes up his Cabinet ahead of his reelection bid. And Democrats, eager to expose any misconduct by administration officials, could soon haul in Ross for embarrassing hearings that could harm his standing with the president. That leaves Ross, an early Trump adviser and ally, on thin ice. I explain why here. - Estrangement from Trump: Ross, 80, fit neatly in Trump's Cabinet and earned high praise from his fellow New Yorker. But the president has soured on Ross amid growing backlash to his trade agenda and a lack of progress toward reaching a new trade deal with China. After months of mocking Ross's age and energy, Trump is reportedly considering replacing him with Small Business Administration chief Linda McMahon or Overseas Private Investment Council President Ray Washburne.
- Ethics scandals: Democrats and ethics watchdogs have filed a number of complaints against Ross regarding questionable financial transactions he has made while in office, inaccurate ethics disclosures and meetings with executives from companies in which he has invested.
Earmarks look to be making a comeback: House Democrats are hinting that they may bring back earmarks when they take back control of the lower chamber next year. Rep. Nita Lowey (D-N.Y.), the incoming chairwoman of the powerful Appropriations Committee, wrote her Democratic colleagues and hinted that earmarks -- or "congressionally directed spending" -- would be making a comeback next year with Democrats in power. The Democratic Caucus should "review procedures and work with the Senate to determine the most effective way to carry out our constitutional responsibilities through congressionally-directed spending," Lowey wrote in her letter seeking the Appropriations gavel. Republicans banned earmarks after they took back the majority in 2010, but some are now rallying to overturn the eight-year ban on a practice critics have derided as "pork-barrel spending." The Hill's Scott Wong tells us why here. Trade talks resume between US, China: Trade discussions have resumed between the U.S. and China as Treasury Secretary Steven Mnuchin and his Chinese counterpart, Vice Premier Liu He, seek to ease friction between the two countries caused by the escalating trade war. Mnuchin and He on Friday spoke over the phone about a possible future trade deal, The Wall Street Journal reported on Monday. The two did not come to a conclusion, but the discussions are ongoing. The U.S. Treasury secretary during the call reportedly pushed China to offer a formal agreement before the countries can begin negotiations, the Journal reported. GOOD TO KNOW - Outgoing House Ways and Means Committee Chairman Kevin Brady (R-Texas) on Tuesday outlined several pieces of tax legislation he'd like to see enacted in the lame-duck session, though he said it was unclear how many of the items would be taken up in the remaining weeks of the year.
- New IRS Commissioner Charles Rettig spoke Tuesday about his desire to modernize the agency's technology in his first public presentation since starting the job last month.
- A trio of Democratic senators is pushing for the Federal Trade Commission to probe manipulative advertising practices on phone apps aimed at children.
- Nearly a year after the tax cut, economic growth has accelerated, wage growth has not, companies are buying back stock and business investment is a mixed bag, the New York Times reports.
ODDS AND ENDS |
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