On The Money: Deficit hits six-year high of $779 billion | Yellen says Trump attacks threaten Fed | Affordable housing set for spotlight in 2020 race

View in your browser     Happy Monday 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--America's fiscal mess--Deficit hits six-year high of $779 billion: The federal government spent $779 billion more than it took in during the 2018 fiscal year, the highest deficit since 2012, according to Treasury Department data released Monday. The deficit rose 17 percent from the previous year, fueled by the 2017 GOP tax cuts and a bipartisan agreement to increase spending. Treasury projected that the deficit will surpass $1 trillion in fiscal 2019, which began Oct. 1. Overall receipts were similar to the previous year, up 0.5 percent despite a booming economy and a low unemployment rate. Outlays, however, rose six times faster, surpassing $4.1 trillion. Earlier this month, the nonpartisan Congressional Budget Office issued a similar deficit figure of $782 billion. The Hill's Niv Elis breaks it down here. Promises, promises: The fiscal performance is at odds with what President Trump promised on the campaign trail, when he said he would eliminate the debt over two terms. Fiscal 2018 was the first full fiscal year under Trump's watch, and debt has risen from $20 trillion to around $21.5 trillion since he took office. What the administration is saying: Treasury Secretary Steven Mnuchin and White House budget chief Mick Mulvaney issued a joint statement that blamed Congress for the increasing deficits, arguing that the president had requested far-reaching spending cuts in his budget proposals. Dems respond: House Minority Leader Nancy Pelosi (D-Calif.) laid the blame for the rising deficits on the GOP tax law. "The bitter reality of the Republicans' tax scam dishonesty is laid bare by the Trump Administration's own report," Pelosi said Monday. "Republicans passed a tax scam for the rich that is adding $2 trillion to the deficit in order to give massive tax breaks to Big Pharma, big banks, big corporations shipping jobs overseas and the wealthiest 1 percent." The CBO estimated that the 2017 tax law would add $1.9 trillion to deficits over a decade.   LEADING THE DAY Yellen: Trump's Fed attacks threaten central bank, financial stability: Former Federal Reserve Chair Janet Yellen said Monday that President Trump's recent attacks on the central bank could harm the Fed and endanger the global financial system. Yellen, who led the Fed from 2014 through February 2018, said Trump's criticism of recent Fed interest rate hikes are "essentially damaging to the Fed and to financial stability," according to multiple reports. "I really think it is not a desirable thing for a president to comment so explicitly on Fed policy," Yellen said at the Mortgage Bankers Association convention in Washington. "Obviously, presidents can speak out if they choose to and give their opinions about policy. There's no law against that, but I don't think it's wise." Yellen, who raised rates four times between 2015 and 2018, also said she feared the economy could overheat if the Fed doesn't bring rates back toward historically neural levels. "Growth needs to slow to stop the unemployment rate from falling ever further, which I believe will eventually create inflationary pressures,' Yellen said. Trump last week escalated his criticism of the Fed by blaming the central bank for a steep two-day stock market slide and saying its leaders had gone "crazy" and were "making a mistake" with its "ridiculous" rate hikes. The president's comments raised eyebrows in Washington and on Wall Street, but had no apparent impact on U.S. markets. Republicans on Capitol Hill said that while they may disagree with the substance of Trump's remarks, they support his right to break with decades of White House precedent by publicly criticizing the Fed, an entity that fiercely guards its independence from politics. Sen. Mike Rounds (R-S.D.), a member of the Senate Banking Committee, said Trump is just expressing his opinion. "I have no objection to him sharing his thoughts on it just like all of us like to share our thoughts on it," Rounds said. "I don't think it will pose a challenge to the Fed's independence." Sen. Sherrod Brown (Ohio), the top Democrat on the Senate Banking Committee who's up for reelection this year in a state Trump won in 2016, said Trump's attacks on the Fed are a symptom of his governing style. "People are so used to this president commenting on everything and being critical of everybody else and pointing fingers -- it's always somebody else's fault -- of course he's going to do it," he said. Disasters become big chunk of U.S. deficit: As Congress moves to prepare another emergency funding bill to help people hit by Hurricane Michael, budget watchers are crying foul.  The level of funding needed to cover disasters each year, they say, is largely predictable, but Congress only includes a fraction of that funding in its annual appropriations. The rest of the money provided nearly every year to pay for the nation's natural disasters just adds to the deficit, regardless of what promises or commitments the government has made to keep its spending down. "Disasters aren't anomalies -- they are unfortunately a sure thing, and they are getting more costly every year," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. She says funding to pay for the disasters should be part of a regular budget process, or the nation will unsustainably add to its debt. Niv Elis explains here.   FINANCE IN FOCUS--2020 edition: Affordable housing is poised to become a more prominent issue in the 2020 presidential race, with several potential Democratic candidates releasing proposals on the topic in recent months. Housing hasn't been a top issue in past presidential elections, but Democratic strategists and housing experts say it could be a bigger part of the debate in the coming years as concern grows about how housing costs have increased faster than wages. Three Democratic senators who many expect to run for president in 2020 -- Kamala Harris (Calif.), Cory Booker (N.J.) and Elizabeth Warren (Mass.) -- have all introduced bills aimed at reducing housing burdens. The senators also represent states with some of the highest housing costs. The Hill's Naomi Jagoda briefs us here.    GOOD TO KNOW The number of federal employees who filed for retirement increased by 24 percent in fiscal 2018, according to the Office of Personnel Management. The Consumer Financial Protection Bureau is planning a rulemaking to define what types of practices qualify as "abusive" to provide more clarity to the industry about the controversial standard, the agency's interim chief said Monday. The Chinese ambassador to the United States said Sunday that China "never wanted to have a trade war" and has defended itself against attacks from the U.S. From bicycles to audio equipment, companies that brought production back to the U.S. say tariffs on Chinese imports are hurting them, according to the Wall Street Journal.  A bipartisan pair of senators are urging Canadian Prime Minister Justin Trudeau not to incorporate Chinese telecommunications company Huawei in its ongoing 5G network development, warning that doing so could have national security implications for Canada, the U.S. and other allies.   ODDS AND ENDS Sears Holdings announced Monday that it has filed for bankruptcy. Drug companies would be required to list prices in advertisements under a Trump administration proposal released Monday.           Did a friend forward you this email? Sign up for Finance Newsletters     Forward Finance Newsletters       Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters   The Hill 1625 K Street, NW 9th Floor, Washington DC 20006 ©2018 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.

News Alert: Warren reinvigorates Trump fight while taking some criticism on DNA test

View in your browser     Warren reinvigorates Trump fight while taking some criticism on DNA test Sen. Elizabeth Warren’s release of DNA test results on Monday showing that she has Native American ancestry reinvigorated a fight between the Massachusetts Democrat and President Trump, who has repeatedly mocked her as “Pocahontas.” Warren’s decision is the clearest sign yet that she is readying a campaign for president in 2020 and is seeking to go toe-to-toe with Trump. It also suggested she is looking to move beyond the talk of her American Indian roots, something that has repeatedly been raised by Trump and other GOP critics who have described her as a fraud for her statements of Native American heritage. Read the full story here           Did a friend forward you this email? Sign up for News Alerts     Forward News Alerts     You Might Like       Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters   The Hill 1625 K Street, NW 9th Floor, Washington DC 20006 ©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.

Overnight Energy: Trump administration doubles down on climate skepticism | Suspended EPA health official hits back | Military bases could host coal, gas exports

View in Browser     TRUMP, KUDLOW DIG IN ON CLIMATE SKEPTICISM: The Trump administration is doubling down on its questioning of whether climate change is man-made and its belief that scientists who think otherwise may have a political agenda. President Trump in an interview with "60 Minutes" that aired late Sunday said he believes "something" is happening with global warming, but added that he thinks it's likely the trend will revert or "go back." "I think something's happening. Something's changing and it'll change back again. I don't think it's a hoax, I think there's probably a difference. But I don't know that it's man-made," Trump said. Trump also said he didn't believe that Hurricane Michael -- which hit Florida's Gulf Coast as a Category 4 last week -- was linked to climate change, despite scientists connecting warming waters to stronger storms. "I'm not denying climate change. But it could very well go back. You know, we're talking about over a millions of years. They say that we had hurricanes that were far worse than what we just had with Michael," Trump said. Speaking on a series of shows earlier Sunday, White House National Economic Council Director Larry Kudlow echoed similar sentiments that the cause of climate change is not known. "I'm not denying any climate change issues," Kudlow told ABC's "This Week." "I'm just saying do we know precisely, and I mean worth modeling, how much of it is man-made, how much of it is solar, how much of it is oceanic, how much of it is rainforest and other issues. I think we're still exploring all of that." Read more. Trump in Florida: President Trump on Monday traveled to Florida to tour damage wrought by Hurricane Michael. Trump arrived in the morning at Eglin Air Force Base in the Florida Panhandle, which had borne the brunt of Michael's devastation. He heaped praise on Florida Gov. Rick Scott (R), saying the governor "is doing an incredible job" with the storm response. "He gets it done. So Rick Scott, thank you," Trump told Scott on the tarmac. Scott is one of Trump's close political allies and is currently running for Senate. The president said the government's top priority is providing food, water, power and safety to people who have lost their homes. He marveled at the widespread damage the hurricane caused, with many homes and buildings having been flattened or taken off their foundations. “You wouldn’t even know they had homes,” he said. More from The Hill's Jordan Fabian here.   Happy Monday! Welcome to Overnight Energy, The Hill's roundup of the latest energy and environment news. Please send tips and comments to Timothy Cama, tcama@thehill.com, and Miranda Green, mgreen@thehill.com. Follow us on Twitter: @Timothy_Cama, @mirandacgreen, @thehill. CLICK HERE to subscribe to our newsletter.   SUSPENDED CHILDREN'S HEALTH OFFICIAL SLAMS EPA: The suspended Environmental Protection Agency (EPA) official for children's health says the Trump administration's actions show it doesn't care for children. Ruth Etzel, the director of the Office of Children's Health Protection who was suspended last month, told CBS News that she still doesn't know why disciplinary action was taken against her. "Our message is no longer welcome," she told CBS. "The message that children are not little adults and they need special protections is not welcome." Etzel said that before her suspension she used to have monthly meetings with the administrator -- previously Scott Pruitt and now acting head Andrew Wheeler -- but those stopped. She also said one of the Trump administration's landmark priorities for children's health -- reducing lead content in water -- has stalled and that an official told her the administration would never allow a new EPA regulation on lead. "My sense is that the government has absolutely no intention of taking any action toward seriously changing lead in children's environments," she said. "It basically means that our kids will continue to be poisoned. It basically means that kids are disposable, they don't matter." EPA expands on why Etzel was put on leave: The EPA has been tight-lipped about why Etzel was suspended, citing personnel rules. Wheeler previously said she was kicked out so EPA could "investigate some allegations" about her. An EPA spokesman on Monday expanded on Wheeler's remarks, saying Etzel was put on leave "because of serious reports made against her by staff regarding her leadership" of the children's health office. "It's unfortunate that she has decided to go to the press in what appears to be an attempt to distract from these allegations," the spokesman said. "The agency believes Dr. Etzel's characterizations misrepresent the situation; this is about allegations of a person's actions, not the office." Read more.   ADMINISTRATION COULD USE MILITARY BASES TO EXPORT COAL, GAS: The Trump administration is considering using military bases to accommodate export facilities for coal or natural gas, Interior Secretary Ryan Zinke has told The Associated Press. Zinke said the strategy is being considered as a way to thwart opposition by California, Oregon and Washington leaders to allowing export terminals in their states to sell coal or gas to Asia. "I respect the state of Washington and Oregon and California," Zinke told AP. "But also, it's in our interest for national security and our allies to make sure that they have access to affordable energy commodities." Zinke said that may involve using "some of our naval facilities, some of our federal facilities on the West Coast." In his AP interview, Zinke only mentioned one possible facility for natural gas exports: the Adak Naval Air Facility in Alaska's Aleutian Islands, which closed in 1997. Read more. Dem governor calls plan 'reckless': Washington Gov. Jay Inslee (D), a potential 2020 presidential contender, slammed the idea in a statement Monday. "This reckless, hair-brained proposal undermines national security instead of increasing it, and it undermines states' rights to enforce necessary health, safety and environmental protections in their communities. The men and women who serve at our military bases are there to keep our country safe, not to service an export facility for private fossil fuel companies," he said. Under Inslee, Washington has fought a proposed coal export terminal on the Columbia River that had the support of inland coal-producing states.   ON TAP TUESDAY: The American Wind Energy Association will open its Offshore Windpower conference. Keynote speakers include Sens. Ed Markey (D-Mass.) and Tom Carper (D-Del.).   FROM THE HILL'S OPINION SECTION: Garrett Blad, executive coordinator at SustainUS, argues for a "massive overhaul of the global economy" to phase out fossil fuels. Ellen R. Wald, author of "Saudi, Inc.: The Arabian Kingdom's Pursuit of Profit and Power," blames oil industry decisions in the past for high prices today.   OUTSIDE THE BELTWAY: The first fracking in seven years started in the United Kingdom this weekend amid an attempted blockade by protesters, the Evening Standard reports. Coal company Mission Coal filed for chapter 11 bankruptcy protection, saying it couldn't maximize the value of its operations, S&P Global Platts reports. The PFAS water contamination, caused by a firefighting foam, is getting worse near a closed Michigan Air Force base, the Detroit Free Press reports.   IN CASE YOU MISSED IT: Check out stories from Monday and the weekend ... - Sean Astin 'pretty ticked' only 90 followers liked tweet about pro-climate candidate - Suspended EPA health official: Administration's actions mean 'kids are disposable' - Climate change could cripple world's beer supply: study - Trump administration doubles down on climate skepticism - Trump administration could use military bases to export coal, gas - California utility cuts power as wildfire precaution - Idaho Fish and Game commissioner criticized for photos from African hunting trip - Senators concerned as Trump official disputes UN climate change warning - Senate Dem: Republicans 'don't want to hear the information' on climate change - Bernie Sanders: Kudlow's comments on UN climate change report 'so irresponsible' - Flake: Republicans should be at the forefront of combating climate change - Kudlow pushes back on UN warning: Climate change modeling has not been successful - Costs from hurricane damage to rise alongside frequency, intensity         Did a friend forward you this email? Sign up for Energy Newsletters     Forward Energy Newsletters       Privacy Policy  |  Manage Subscriptions  |  Unsubscribe  |  Email to a friend  |  Sign Up for Other Newsletters   The Hill 1625 K Street, NW 9th Floor, Washington DC 20006 ©2016 Capitol Hill Publishing Corp., a subsidiary of News Communications, Inc.