Pelosi Says Dems Will Sue to Stop Trump’s Border Wall Plan

Plus, a new Democratic plan for retirement

Pelosi Says Dems Will Sue to Stop Trump’s Border Wall Plan

Speaker Nancy Pelosi (D-CA) announced Thursday that the House of Representatives intends to sue to stop President Trump from transferring already appropriated funds to build the border wall with Mexico.

The president declared a national emergency in February as part of an attempt to redirect as much as $6.6 billion toward border wall construction. Congress voted to block Trump’s emergency declaration, but Trump vetoed the resolution of disapproval.

Pelosi said that the Bipartisan Legal Advisory Group, a congressional committee that directs the House Office of General Counsel, has voted to authorize a lawsuit challenging Trump’s “decision to transfer funds from appropriated accounts for his border wall” on the grounds that the move violates the Constitution.

“The President’s action clearly violates the Appropriations Clause by stealing from appropriated funds, an action that was not authorized by constitutional or statutory authority,” Pelosi said in a statement.

House Majority Leader Steny Hoyer (D-MD) also cited fundamental constitutional issues on the matter. “As a member of the House's Bipartisan Legal Advisory Committee, I voted today to direct the House General Counsel to initiate a lawsuit against the Trump Administration for illegally moving appropriated funds from other priorities to pay for his border wall, which Congress has not authorized,” Hoyer said in a statement. “The House will take all actions necessary to uphold the rule of law and our Constitutional system of separation of powers."

Dems Unveil Bill to Force Companies to Contribute to Worker Retirement Savings

A new bill introduced by Sens. Chris Coons (D-DE) and presidential candidate Amy Klobuchar (D-MN) aims to address America’s retirement savings crisis by requiring businesses to pay at least 50 cents into an employee savings plan for every hour worked.

The senators point to research that says that a third of workers have no retirement savings and 40 percent of U.S. adults don’t have enough cash saved up to cover a $400 emergency expense.

“That’s a crisis, and it’s proof that while parts of our economy are strong, many Americans are still being left behind,” Coons said. “By establishing a minimum savings contribution for the American worker, we can ensure that Americans working hard to pay their bills have savings in place to eventually retire and to deal with emergency expenses along the way.”

Here’s some more detail on the proposal, called The Saving for the Future Act:

  • It would apply to companies with 10 or more workers.

     
  • The minimum contribution would rise to 60 cents after two years and then be indexed to wage growth. The senators say that the vast majority of workers would get at least $1,000 a year in employer savings contributions.

     
  • Workers would be automatically enrolled to contribute 4 percent of their own earnings, but could opt out or choose to contribute a different amount.

     
  • To help defray the added cost, businesses would receive tax credits for their contributions for up to 30 employees, with a 50 percent credit for the first 15 workers and 25 percent credit for the next 15.

     
  • The senators estimate that the tax credits would cost the government $200 billion to $250 billion over 10 years. To pay for them, they propose raising the corporate tax rate by 2 percentage points, from 21 percent to 23 percent, and raising the top income tax rate back from 37 percent to 39.6 percent, where it was before the 2017 GOP tax law.

The legislation is being supported by the AARP, the Service Employees International Union and the National Urban League, among other groups.

Chart of the Day: The Mountain of US Debt

Global debt grew by “only” $3.3 trillion last year, raising the total to more than $243 trillion, according to a report released this week by the Institute of International Finance.

Total U.S. debt, including corporate debt, households and the government, grew by $2.9 trillion, the largest annual growth since 2007. Increased government borrowing represented more than 40 percent of the rise. Total U.S. debt reached more than $68 trillion. “However, borrowing has still risen at a slower pace than overall economic growth, pushing total debt-to-GDP ratio (326%) to its lowest level since 2005,” the report says.

It adds that “while general government debt/GDP has been stable near 100% since 2015, it is over 30 percentage points above its pre-crisis peak and is set to rise sharply given projections of higher federal budget deficits and slowing economic activity.”

-->

It's almost Friday! Send your tips and feedback to yrosenberg@thefiscaltimes.com. Connect with us on Twitter, too: @yuvalrosenberg, @mdrainey and @TheFiscalTimes.



And please share this email with your friends, or tell them to sign up here to get their own copy.

-->

Number of the Day: JPMorgan’s $3.7 Billion Tax Cut Windfall

JPMorgan Chase CEO Jamie Dimon told investors Thursday that the GOP tax cuts increased his bank’s profits by $3.7 billion last year.

In his annual letter to shareholders, Dimon said that JPMorgan Chase generated “record revenue and net income” in 2018 — and would have done so even without tax reform. The tax overhaul also contributed to profits the prior year. (See the chart below, with net income in blue.)

“The new tax code establishes a business tax rate that will make the United States competitive around the world and frees US companies to bring back profits earned overseas,” Dimon said. “The cumulative effect of capital retained and reinvested over many years in the United States will help cultivate strong businesses and ultimately create jobs and increase wages.”

Dimon said that the bank used some of its windfall “to massively increase our investments in technology, new branches and bankers, salaries (we now pay a minimum of $31,000 a year for full time entry-level jobs in the United States), philanthropy and lending (specifically in lower income neighborhoods).” In the long run, however, he expected “that some or eventually most of that increase will be erased as companies compete for customers on products, capabilities and prices.”

On a darker note, Dimon warned that while he sees capitalism as "the most successful economic system the world has ever seen," the American Dream is “fraying” for many citizens. He called for a “Marshall Plan for America” to address persistent policy failures in the U.S. on issues including education, health care, infrastructure and immigration, and argued that CEOs and businesses need to play a role in fixing the country’s problems.

Critics of the GOP tax cuts were quick to declare that the bank’s windfall was more of a problem than a triumph. Michael Linden of the progressive Hub Project tweeted, “Donald Trump, champion of working people, gave a tax cut worth $3.7 billion to one of the largest Wall Street banks in the country.” And in response to Dimon’s discussion of the economic struggles many Americans are experiencing, Sen. Elizabeth Warren (D-MA) wrote, “Great point, Jamie! How about we start with you giving back the $3.7 billion J.P. Morgan made this year off the #GOPTaxScam that you lobbied for?”

News

Views and Analysis