REPORT: White House Pushing for $2T Stimulus Prior to Election

WASHINGTON — White House officials are pressing congressional leaders to approve a fourth Coronavirus-related stimulus package totaling much as $2 trillion in direct aid to Americans prior to the election, Fox Business is reporting.

Citing unidentified sources within the Trump administration, Fox claims the plan could include payroll tax cuts, which have been heavily pushed for by White House economic adviser Larry Kudlow and Treasury Secretary Steven Mnuchin, and aid to Democrat-controlled states such as California, Illinois and New York.

Additional perks of the package would reportedly include infrastructure spending, an extension of unemployment benefits to Americans impacted by the first wave of Coronavirus and additional liability protections for businesses as they attempt to reopen should a possible “second wave” of infections from the Coronavirus occur.

According to Fox, administration officials believe the timing is key and that such a package would drive the unemployment rate to below 10%, boosting President Donald Trump’s odds of a landslide reelection. Last week the economy reported a 2.5 million increase in new jobs and unemployment for May fell to 13.3 percent from 14.7 percent in April, when the shutdown was at it’s max. On Tuesday, another key economic improvement was reported as retail sales showed an 18 percent increase in May.

When reached for statement, both White House officials and representatives for House Speaker Nancy Pelosi had no comment.

TRUMP EFFECT: General Motors’ shares fall after Trump threatens to cut its subsidies in retaliation for layoffs

WASHINGTON — General Motors’ stock fell more than 3 percent on Tuesday after President Donald Trump tweeted that he would consider pulling General Motors’ subsidies in response to the company’s announcement that it plans to reduce production at several facilities and lay off more than 14,000 people.

“Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan, and Maryland. Nothing being closed in Mexico & China,” the president tweeted Tuesday. “The U.S. saved General Motors, and this is the THANKS we get!”

“We are now looking at cutting all @GM subsidies, including for electric cars,” Trump continued. “General Motors made a big China bet years ago when they built plants there (and in Mexico) – don’t think that bet is going to pay off. I am here to protect America’s Workers!”

The drop in the automaker’s shares represented the company’s worst financial day in more than a month.

In a statement released by it’s corporate office, General Motors said it is “committed to maintaining a strong manufacturing presence in the U.S.” and added that “many of the U.S. workers impacted by [plant closures] will have the opportunity to shift to other GM plants.”

“We appreciate the actions this administration has taken on behalf of the industry to improve the overall competitiveness of U.S. manufacturing,” the company said, without addressing the president’s comments directly.

In an interview with the Wall Street Journal on Monday, Trump pressured the company to keep the Ohio, Michigan, and Maryland facilities open and warned it against moving operations overseas.

“They better damn well open a new plant [in Ohio] very quickly,” Trump told the Journal. He said he told the company that “you’re playing around with the wrong person.”

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GREAT AGAIN: Stocks surge on earnings and economic data; Dow climbs 500

NEW YORK (AP) — World stock markets are rallying Tuesday, and U.S. stocks are on track for their second-largest gain in 2018 following strong earnings reports from major U.S. companies in finance and health care. Technology companies are also rising after their recent slump. The Dow Jones Industrial Average rose as much as 502 points.

Even with the big gains, major indexes are still broadly lower for the month following a two-day rout last week that erased nearly 1,400 points from the Dow.

Investors were encouraged by some good news on the economy. The Federal Reserve said output by U.S. factories, mines and utilities climbed in September despite the effects of Hurricane Florence, and the Labor Department said U.S. employers posted the most jobs in two decades in August while hiring continued to increase.

KEEPING SCORE: The S&P 500 index jumped 54 points, or 2 percent, to 2,805 as of 2:45 p.m. Eastern time. The Dow gained 494 points, or 2 percent, to 25,745.

The Nasdaq composite climbed 192 points, or 2.6 percent, to 7,623 as technology companies reversed some of their outsize losses from the last few days. The Russell 2000 index of smaller-company stocks rose 39 points, or 2.6 percent, to 1,592.

Earnings for U.S. companies climbed about 20 percent in each of the first two quarters of 2018 as economic growth picked up and corporate taxes were slashed. Analysts expect similar results in the current period.

Stocks have gyrated over the last three days following a six-day losing streak that included some of their biggest declines of the year. The S&P 500 fell 6.9 percent from its record high on Sept. 20 to its recent low on Thursday. It remains 4.3 percent below that record level.

HEALTHY…: UnitedHealth, the largest U.S. health insurer and provider of privately-run Medicare Advantage plans, once again topped Wall Street forecasts and raised its projections for the year. The stock climbed 4.1 percent to $270.95. Other health insurers also rose. Cigna advanced 3.8 percent to $211.70 and Humana rose 3.4 percent to $327.90. Medicaid service company Molina Healthcare jumped 4.1 percent to $144.26.

Health care products giant Johnson & Johnson added 1.4 percent to $135.89 after it said prescription sales jumped. Its results, too, were stronger than analysts expected.

…AND WEALTHY: Morgan Stanley rose 5.7 percent to $45.94 and Goldman Sachs added 2.4 percent to $220.38 after the two investment banks did better than expected in the third quarter, helped by strong performance in their trading operations and better-than-expected revenue from stock underwriting. Morgan Stanley’s stock has fallen 12 percent this year and Goldman has lost almost 14 percent.

TECH UPDATE: Technology companies rose. Microsoft jumped 2.8 percent to $110.65 and Adobe rallied 8.6 percent to $258.36 after it backed its fourth-quarter profit and revenue forecasts. The stock has jumped 47 percent this year, but had slumped in recent days. Internet companies also advanced. Alphabet, Google’s parent company, rose 2.4 percent to $1,128.80.

Email delivery company Sendgrid climbed 14.8 percent to $35.50 after cloud communications platform company Twilio agreed to buy it for $36.92 per share in stock, or $1.7 billion. Twilio fell 3.4 percent to $73.56.

SUSPENSE FOR NETFLIX: Netflix rose 2.7 percent to $342.04 ahead of its third-quarter report Tuesday afternoon. The streaming video company has struggled over the past three months and has fallen almost 20 percent since its second-quarter report, when it posted disappointing subscriber totals and gave a weaker forecast than analysts expected.

It’s still up 78 percent this year, the third-best of any S&P 500 stock.

O CANNABIS: On Wednesday Canada will legalize marijuana nationwide. While cannabis companies mostly traded lower Tuesday, the stocks have made huge gains this year in highly volatile trading. Tilray fell 5.7 percent to $156.27 while Canopy Growth shed 7.1 percent to $52.87.

On Tuesday Benchmark Capital analyst Mike Hickey started coverage of Tilray with a $200 price target, saying its supply deals with pharmacies and a partnership with drugmaker Novartis will help make it an early leader in the market. Hickey valued the Canadian cannabis market at about $3.2 billion in 2019 and said it will climb to $8.1 billion by 2023.

Tilray’s market value stands at $14.5 billion, up ninefold since it went public in mid-July, and Canopy Growth has more than doubled in value to $12 billion. Canopy announced a $4 billion investment from Corona beer maker Constellation Brands in August. The huge gains reflect investors’ view that that other countries will legalize marijuana in the years to come.

ENERGY: U.S. benchmark crude oil added 0.2 percent to $71.92 per barrel in New York. Brent crude, the international standard, rose 0.4 percent to $81.14 per barrel in London.

Wholesale gasoline rose 1.7 percent to $1.98 a gallon and heating oil picked up 0.6 percent to $2.34 a gallon. Natural gas lost 0.1 percent to $3.24 per 1,000 cubic feet.

BONDS: Bond prices edged lower. The yield on the 10-year Treasury note rose to 3.17 percent from 3.16 percent.

METALS: Gold rose 0.1 percent to $1,231 an ounce. Silver lost 0.2 percent to $14.70 an ounce. Copper slipped 0.3 percent to $2.78 a pound.

CURRENCIES: The dollar rose to 112.27 yen from 111.88 yen. The euro fell to $1.1577 from $1.1584.

OVERSEAS: France’s CAC 40 added 1.5 percent while the DAX in Germany jumped 1.4 percent. Britain’s FTSE 100 rose 0.4 percent. Italy’s FTSE MIB jumped 2.2 percent after the government avoided last-minute delays in presenting a budget plan.

Japan’s benchmark Nikkei 225 rallied 1.2 percent and the Kospi in South Korea was little changed. Hong Kong’s Hang Seng index finished 0.1 percent higher.

___

Marley Jay of The Associated Press contributed to the contents of this article.

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WHITE HOUSE: ‘Economy Firing on All Cylinders’

WHITE HOUSE

Council of Economic Advisers

July 30, 2018

The rate of growth of the economy, also known as Gross Domestic Product or GDP, is one of the most important indicators of the health of our country’s economy. Today’s news did not disappoint; over the past year (4 quarters), our average annual growth rate has been a healthy 2.8 percent.

Thus far in 2018, real GDP is on track for growth of 3.1 percent over the calendar year, which would be the first calendar year of growth over 3 percent since 2005. This is exactly in line with the Administration’s own forecast of 3.1 percent, and well above the Obama Administration’s forecast of 2.3 percent. It is also a growth rate many claimed was impossible.

To put this achievement in perspective, during the entire period from 2001-2016, the annualized rate of real GDP growth in the first half of the year averaged just 1.9 percent.

President Trump believed we could get away from the Obama-era theories of “secular stagnation” – being doomed to slow growth – by changing the policies that caused that sluggishness. The Tax Cuts and Jobs Act, deregulation, and other business-friendly Administration policies are making higher growth possible.

As a result, over the first 6 full quarters of the Trump Administration, growth has averaged 2.7 percent. In contrast, during the first 6 full quarters of Presidents Obama’s second term, growth averaged just 2.4 percent, when the economic expansion should have been in full swing and demographic pressures were less of a weight. Overall, during their respective 8 years in office, growth under Presidents Bush and Obama averaged just 1.8 and 1.9 percent, respectively.

With growth in 2016 still only 1.9 percent, the Obama Administration projected this “new normal” to continue. Instead, growth edged up to 2.5 percent in 2017, exactly in line the Trump Administration’s forecast, and surpassing the Obama Administration’s forecast of 2.4 percent.

Driving this acceleration is increased private business investment, thanks to the Tax Cuts and Jobs Act (TCJA) and deregulation, raising after-tax rates of return.

In the 6.5 years between the start of the recovery in 2009:Q3 and 2015, growth in real private nonresidential fixed investment (commercial real estate, tools, machinery, and factories) averaged 5.4 percent, and had slowed to just 1.8 percent in 2016. Since then, growth jumped to 6.3 percent in 2017, and over the first two quarters of 2018, grew at an annualized rate of 9.4 percent.

Since September 2017, growth of equipment investment was a robust 7.4 percent at an annual rate, thanks largely to TCJA’s allowance for full expensing of equipment investment retroactively to 2017:Q4. Meanwhile, business investment in structures and intellectual property has also surged—up 13.6 percent for structures and 11.1 percent for intellectual property, respectively, in the first half of 2018.

Planned capital expenditure indices from Morgan Stanley and Goldman Sachs have accordingly reached record or near-record highs. As of July 2018, CEA has tallied a total of over $217 billion in new corporate investment announcements directly attributed to TCJA.

Americans also have more to spend as a result of the strong economy. During the Obama recovery, people didn’t feel better off and they didn’t have much to show for their labor. In the 6.5 years between the start of the recovery in 2009 and 2015, growth in real disposable personal income – money people have to spend – averaged just 2.2 percent, and had slowed to 1.6 percent in 2016, over seven years after the recession had officially ended. Under President Trump, growth ticked up to 2.8 percent in 2017, and spiked to 3.5 percent in the first half of 2018.

People feel better about the economy right now. In May 2018, the National Federation of Independent Businesses (NFIB) Index of Small Business Optimism rose to 107.8, its second highest level in its 45-year history. Reports of compensation increases hit a 45-year record high, with views of expansion and reports of positive earnings trends also the highest in the survey’s history. Since December 2017, the Index has averaged an unprecedented 106.5, above its 45-year average of 98 and close to the all-time high of 108.0 in July 1983. In March 2018, consumer sentiment in the United States reached its highest level since January 2004, while for the first 5 months of 2018, consumer sentiment was the highest it has been since 2000.

Money is also coming back to the US, where it belongs. Thanks to our outmoded and perverse tax code of the past, American firms were essentially incentivized to offshore jobs to other countries and kept foreign investment away from our shores. But the Tax Cuts and Jobs Act brought reason back to the tax system, and we are seeing immediate results.

In the first quarter of 2018, U.S. companies brought home (repatriated) a record $306 billion, or $1.2 trillion at a seasonally adjusted annual rate. If the pace of repatriation continues through the remainder of 2018, it would generate an additional $98 to $189 billion in tax revenue for the Federal government, exceeding expectations.

It is good for the economy to have past corporate earnings working their way through U.S. capital markets from the repatriation as a result of the TCJA, with cash-rich firms distributing those earnings to shareholders for reinvestment in other firms that can productively use cash infusions.

Overall, the economy is strong as are the economic fundamentals: 3.7 million jobs have been created since Election Day 2016, and African American, Hispanic, and Asian unemployment rates have recently reached their lowest levels in recorded history. The women’s unemployment rate recently achieved a nearly 65-year low. Under President Trump the veterans’ unemployment rate has fallen to the lowest level in over 15 years. Meanwhile, consumer, business, and manufacturing confidence have recently reached multi-decade and even all-time highs. We look forward to continued prosperity for the American people.

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ART OF THE DEAL: EU Commission commits to Trump on trade

WASHINGTON, D.C. (AP) — European Union Commission President Jean-Claude Juncker (zhahn-KLOHD’ YUN’-kur) says he has made a deal with President Donald Trump to try to ease trade tensions.

Juncker says during a joint Rose Garden appearance with Trump that he “had the intention to make a deal today and we made a deal today.”

Juncker says after a lengthy meeting with Trump that the EU has decided to increase imports of American soybeans and liquefied natural gas.

He says, “it will be done.”

He also says as long as negotiations are ongoing, “We will hold off further tariffs” and reassess existing tariffs on steel and aluminum.

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‘TOO HIGH!’ : Trump slams Feds over interest rate hike

WASHINGTON, D.C. (AP) — President Donald Trump on Thursday cast aside concerns about the Federal Reserve’s independence, saying he was “not happy” with the Fed’s recent interest rate increases.

Trump told CNBC in an interview: “I don’t like all of this work that we’re putting into the economy and then I see rates going up.”

Last month, the Fed raised its benchmark rate for a second time this year and projected two more increases in 2018. Its rate hikes are meant to prevent the economy from overheating and igniting high inflation. But rate increases also make borrowing costlier for households and companies and can weaken the pace of growth. In particular, the Fed’s most recent rate hikes could dilute some of the benefit of the tax cuts Trump signed into law last year.

The president acknowledged that his comments about the Fed would likely raise concerns. The central bank has long been seen as needing to operate free of political pressure from the White House or elsewhere to properly manage interest rate policy.

The Fed’s dual mandate is to maximize employment and stabilize prices. By maintaining its independence, the central bank can make politically contentious decisions to combat economic challenges, like the huge bond purchases it made after the 2008 financial crisis to help drive down long-term rates to support the economy. That policy drew rebukes from many Republican lawmakers.

In February, Jerome Powell, Trump’s hand-picked choice, became Fed chairman. Last week, Powell said in an interview with the radio program Marketplace that he didn’t expect to face pressure from the White House.

“We have a long tradition here of conducting policy in a particular way, and that way is independent of all political concerns,” Powell said. “We do our work in a strictly nonpolitical way, based on detailed analysis, which we put on the record transparently.”

He added, “No one in the administration has said anything to me that really gives me concern on this front.”

The reaction to Trump’s remarks in the financial markets was muted. The U.S. dollar fell to 112.46 yen from 112.84 yen earlier, and yields on Treasurys dipped slightly.

After Trump’s interview with CNBC was made public, Lindsay Walters, a White House spokeswoman, said the president “respects the independence of the Fed.”

“The president’s views on interest rates are well-known, and his comments today are a reiteration of those long held positions, and public comments,” Walters said.

Speaking about Fed policy in his interview with CNBC, Trump said he is “letting them do what they feel is best.”

But his comments raised alarms, including with some former Fed officials who saw in his remarks a possible effort to apply public pressure on the central bank.

“I am not pleased,” said Carl Tannenbaum, a former Chicago Fed official and chief economist at Northern Trust. “The remarks certainly aren’t an immediate threat to Fed independence, but they break with the tradition of respectful distance.”

Randall Kroszner, a former Fed governor, said the central bank has withstood political pressure before and will continue to do so under Powell’s leadership.

“The Fed has often faced political pressures — from Congress, presidents, Treasury secretaries and innumerable outside groups,” said Kroszner, an economics professor at the University of Chicago. “My experience at the Fed is consistent with what Jay Powell recently said — being non-political is deep in the Fed’s DNA — and I believe that Jay will keep it that way.”

During the 2016 presidential campaign, Trump was highly critical of the Fed and accused its policymakers of keeping rates at ultra-low levels to favor Democrats. But he also told CNBC during the campaign that he is a “low interest-rate-person.”

Past efforts to apply political pressure on the Fed have sometimes hurt the economy. President Richard Nixon encouraged Arthur Burns, the Fed chairman at the time, to help boost economic growth ahead of Nixon’s 1972 landslide re-election. That episode ultimately triggered runaway inflation that took a decade to tame and required raising the Fed’s policy rate above 15 percent — more than eight times the rate’s current average.

George H.W. Bush’s administration complained that he felt the Fed’s failure to cut rates more quickly in 1992 contributed to his re-election defeat that year.

When Robert Rubin led President Bill Clinton’s National Economic Council, he adopted a rule of never commenting on the Fed’s actions — a policy that was subsequently followed by the George W. Bush and Obama administrations.

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TRUMP EFFECT: 14 states hit record low unemployment

WASHINGTON, D.C.– Fourteen states have set new records for low unemployment levels in the last year, according to a recent report issued by the Bureau of Labor Statistics.

As reported by The Hill, eight states saw new record lows in March, including Hawaii (2.1 percent), Idaho (2.9 percent), Kentucky (4 percent), Maine (2.7 percent), Mississippi (4.5 percent), Oregon (4.1 percent) and Wisconsin (2.9 percent).

California also set record lows with the Golden State’s unemployment rate dropping to 4.1 percent, as did Colorado which saw an unemployment rate of just 2.6 percent.

In addition to record low unemployment levels, wages have also increased in recent months. According to the BLS report, average hourly earnings of nonfarm employees averaged $26.82 in March, up from March 2017’s average of $26.11.

The growing American economy and passage of a Republican tax overhaul appear benefitting President Trump as well.  According to a newly released poll by The Associated Press-NORC Center for Public Affairs Research, the president’s approval rating continues to climb in response to America’s booming economic numbers.

As documented in the report, nearly half of Americans surveyed — 47 percent — say they approve of how Trump is handling the economy, his highest rating thus far on any one particular issue. When it comes to tax policy, 46 percent of Americans back Trump’s moves and say they have benefitted personally from the president’s tax reform act.

Heather Dilios, a 46-year-old social worker from Topsham, Maine, told The Washington Times she’s now taking home between $100 to $200 more per paycheck as a result of the new tax law, more than she expected when Trump signed the legislation.

“It’s more about being able to keep what is rightfully mine rather than giving it to the government,” said Dilios.

March’s numbers follow February’s job boom, during which 313,000 new jobs were created in the U.S.

“Job growth was the strongest since President Trump’s election, with 313,000 jobs created in the month of February,” the U.S. Department of Commerce reported March 9. “The non-stop job creation since the election has yielded 2.9 million jobs. For the fifth month in a row, the unemployment rate remained at 4.1%, a 17-year low. Goods-producing industries such as manufacturing, mining and logging, and construction collectively had the highest month-to-month growth since 1998. These were among many sectors experiencing significant growth.”

“President Trump’s tax reform continues to boost economic confidence with more than 400 companies handing out bonuses, raises, or other benefits to more than 4 million Americans,” the report continued. “Today’s report shows that average hourly earnings significantly increased in February and have increased by 2.6% over the last year. We saw positive movement in the labor force participation rate, and we would like to see that continue over the coming months.”

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MAKING AMERICA GREAT AGAIN: Jobless claims fall to 49 year low

WASHINGTON, D.C. — U.S. jobless claims have fallen to the lowest level since 1969, according to a report published Thursday by Marketwatch (https://tinyurl.com/yd9gfxt5).

The new numbers bypassed the expectations of economists surveyed by Marketwatch and Reuters who had expected the claims to total 226,000. The actual four-week average fell by 5,000 to 220,000, states the report.

“The latest decline in weekly claims shows a tight labor market is increasingly pushing employers to hold on to existing staff amid a persistent shortage of qualified workers,” reports Bloomberg (https://tinyurl.com/y97ra5o5). “Applications for jobless benefits are well below the 300,000 tally that’s typically considered consistent with a healthy labor market.”

The Labor Department also revised the number of unemployment claims reported for the previous week, saying that it was 2,000 lower than had been erroneously reported.

The numbers prompted President Donald Trump to take to Twitter, where he praised the economy.

“Unemployment filings are at their lowest level in over 48 years. Great news for workers and JOBS, JOBS, JOBS! #MAGA,” the president tweeted (https://tinyurl.com/y8qlshns).

When running for president, Trump vowed to be the “best job creating president of all time”. Many economists say the president has not only met, but exceeded that goal.

“Economists surveyed by The Wall Street Journal say President Donald Trump has had generally positive effects on U.S. economic growth, hiring and the performance of the stock market during his first year in office,” Town Hall reported in January (https://tinyurl.com/yd73d5vv).”The professional forecasters also predicted 2018 would see solid growth and a continued decline in the jobless rate. One factor: the tax cuts signed into law by Mr. Trump in December, which most economists say will boost the economy for several years at least.”

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‘ITS TIME TO START INVESTING IN OUR COUNTRY’: Trump unveils long-awaited $1.5 Trillion infrastructure plan

WASHINGTON, D.C. — President Donald Trump on Monday unveailed a massive infrastructure plan that aims to rehabilitate the nation’s roads, bridges, tunnels, and airports (https://tinyurl.com/y9442k9f).

If passed, the plan would generate $1.5 trillion toward the improvement of roads, bridges, waterways, electrical grids and other projects.

The plan does not disclose exactly where the funds would come from, but the White House said the monies would be pulled from “existing government spending,” extracted from the federal budget. The remainder, says the White House, would be left accountable to the states.

Trump’s plan is contradictory to typical spending on infrastructure, as, up until now, the federal government has typically covered the bulk of such costs. If implemented, local governments would now take on 80% or more of the costs of funding such projects.

“It could be anything,” an administration official said of the non-federal funding sources. “What we’re saying to states is, we would like you to increase your investment in infrastructure.”

Another major concentration of Trump’s infrastructure plan is the expediting of the approval process for bigger projects, specifically the cutting down of regulatory red tape. The White House says part of its stated goal is to streamline approval of such projects from the current five to 10 years, down to two. The plan calls for one agency to make the final approvals on such permitting — which the White House refers to as the “one agency, one decision” approach.

Despite the mutually agreed upon need for improvement to the nation’s infrastructure, the 53-page is already proving to be a tough sell to Democrats.

“This is not a real infrastructure plan — it’s simply another scam, an attempt by this administration to privatize critical government functions, and create windfalls for their buddies on Wall Street,” Rep. Peter DeFazio, a Democrat who serves on the House Transportation Committee said Sunday.

“This fake proposal will not address the serious infrastructure needs facing this country, so our potholed roads will get worse, our bridges and transit systems will become more dangerous, and our tolls will become higher. And Wall Street? They’ll throw another party,” DeFazio added.

“I think [the budget deal] does hurt the chances for an infrastructure package to get done, unless you use the money we’re just now spending,” House Freedom Caucus chair Rep. Mark Meadows of North Carolina told Axios. “I think there’s not going to be the appetite to continue to add additional monies without real offsets.”

Despite the pushback, President Trump says an overhaul traditional infrastructure programs is long overdue.

“The current system is fundamentally broken and it’s broken in two different ways,” a senior administration official told reporters on Saturday. “We are underinvesting in our infrastructure, and we have a permitting process that takes so long that even when funds are adequate, it can take a decade to build critical infrastructure.”

“For too long, lawmakers have invested in infrastructure inefficiently, ignored critical needs, and allowed it to deteriorate,” the president said in a note to Congress introducing the plan. “It is time to give Americans the working, modern infrastructure they deserve.”

In a briefing on the matter, the White House said the plan would require both actions by Congress and regulatory changes that could be accomplished under executive order.

“This will be a big week for Infrastructure,” Trump tweeted Monday morning ahead of the plan’s release (https://tinyurl.com/yby6d7xh). “After so stupidly spending $7 trillion in the Middle East, it is now time to start investing in OUR Country!”

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WHITE HOUSE ISSUES STATEMENT ON PROPOSED TAX BILL

The White House
Office of the Press Secretary
For Immediate Release

Alfredo Ortiz: “Tax Bill Is Christmas Present Americans Have Been Waiting For”

“Good for ordinary Americans. Good for small businesses. Good for local economies. This tax bill is the Christmas gift they’ve been waiting for.”

Tax Bill Is Christmas Present Americans Have Been Waiting For

By Alfredo Ortiz

December 13, 2017

Pending tax cut legislation will eliminate the federal income tax burden on the average American family earning $59,000 a year. It will halve the tax bill for the average family earning $75,000. And it will allow the overwhelming majority of small businesses to protect nearly one-quarter of their income from taxes.

That’s the bottom line of the tax bill that needs to be said up front.

Given the critical media coverage of the bill, these benefits have largely gone overlooked. Rather than reporting on its provisions to double the standard deduction, double the child tax credit, and eliminate the 15 percent tax bracket in favor of a vastly expanded 12 percent rate, media coverage has claimed the bill is a gift to the rich. Rather than reporting on the new 23 percent tax deduction for small businesses earning less than $500,000 a year, media coverage has claimed the bill is a budget buster.

That’s a shame because these benefits would bring long overdue relief to hardworking taxpayers who have borne the brunt of the slow growth Obama economy from which the country is finally emerging. Median wages were essentially flat between 2009 and 2016, while economic growth sputtered along at roughly 2 percent – both of which the tax bill would also meaningfully address.

Ordinary employees will not only see an immediate raise in their paycheck due to less federal tax withholding, but many will also receive raises or new job opportunities because small businesses will have more funds at their disposal.

Just as tax cuts would increase paychecks, they’d also jump-start the country’s local economies, which have largely been passed over by the economic recovery. More money on Main Street and less sent off to Washington, D.C., would stimulate local investment, consumption, and job creation.

Good for ordinary Americans. Good for small businesses. Good for local economies. This tax bill is the Christmas gift they’ve been waiting for. Legislators must pass it now.

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