AD

It’s not clear whether the meeting yielded any breakthroughs, or indeed, how far the entire project has come along. Participants have kept that information close. They are set this week to provide an update of sorts, since they likely won’t be getting back together before September.

AD

But even the status of the status report became the subject of crossed signals throughout the day Wednesday, with the administration attempting to lower expectations for the readout by denying there would even be one. On the way out of the hour-long session in Ryan’s office Wednesday evening, only Brady would acknowledge the group intends to produce a statement of principles before the weekend. Maybe needless to say, it’s not going to get very specific (though it is likely to make clear that negotiators are no longer considering a border adjustment tax, the proposal that formed the spine of Ryan and Brady’s preferred approach).

Such is the state of the tax overhaul — the keystone of the GOP’s economic agenda — six months into the Trump presidency. Just two weeks ago, White House legislative affairs director Marc Short said the administration aimed to have a framework in place by the end of this week, so tax-writers could accelerate the process when they return in September. But fundamental questions remain: Will the package be fully paid for? How will it be paid for? Which deductions will be zeroed out? What will the new corporate and personal rates be?

The White House is already examining its Plan B options if the sweeping overhaul Mnuchin and Cohn are trying to forge with congressional Republicans fails to come together. My colleague Damian Paletta has the details:

AD

AD

The top advocates for the targeted tax cut have been Larry Kudlow and Steve Moore, who were both top economic advisers during Trump’s campaign and remain in frequent contact with officials in the West Wing. Kudlow met with top White House officials, including cabinet members, two weeks ago and also had a private meeting with Trump, in which he urged them to consider pursuing tax cuts this year if they are unable to marshal agreement on a broader change to the tax code. Kudlow and Moore have been pitching a plan they call “Three Easy Pieces,” which would — for 10 years — cut the corporate tax rate from 35 percent to 15 percent, double the standardized deduction that millions of Americans claim in their taxes, and allow companies to bring money back from overseas without a significant tax penalty. Moore said in an interview that these changes would probably cost between $2 trillion and $3 trillion over 10 years, but he said it would give a jolt to economic growth and allow White House and congressional Republicans to take more time to look at a broader revamp of the tax code.

Meanwhile, according to a report by The Intercept, White House chief strategist Stephen K. Bannon continues to push for a hike in the top marginal rate paid by the highest-income earners. He wants to add a new bracket for those pulling down more than $5 million a year, taxing their earnings above that mark at 44 percent — up from the 39.6 percent top marginal rate under the current code.

It’s hard to imagine Bannon’s gambit joining up with the effort that Mnuchin and Cohn have been captaining on the administration’s behalf. The Big Six talks assume a GOP-only approach to the overhaul, and Bannon’s soak-the-rich proposal might appeal to Democrats, but it’s sure to alienate Republicans.

Then again, Trump on Tuesday told the Wall Street Journal about a recent dinner he had with New England Patriots owner Bob Kraft. “And as he left, he said, ‘Donald, don’t worry about the rich people. Tax the rich people. You got to take care of the people in the country.’ It was a very interesting statement,” Trump said. “I feel the same way.”

AD

AD

MARKET MOVERS

— The Fed wrapped up its two-day meeting in Washington by leaving interest rates untouched and announcing it would begin unwinding its $4.5 trillion balance sheet "relatively soon." The Post's Ana Swanson: "In carefully worded statement that was nearly identical to the one released in June, the Fed suggested that it is keeping an eye on persistently low inflation and indicated that it would soon introduce its balance sheet plan. The Fed also said that it would maintain its existing policy of reinvesting the money it receives when the debt and securities it holds mature into new assets 'for the time being.' The central bank probably wants to begin this process before it could face a major leadership shake-up as Janet L. Yellen's position as chair expires early next year, said Scott Anderson, chief economist at Bank of the West."

— Mnuchin told Congress on Wednesday that the hot-stepping required of Treasury to avoid a default is costing taxpayers, as much as $2.5 billion, according to one senator. The federal government hit its borrowing limit back in March and has been relying on "extraordinary measures" since to meet its obligations to creditors. The Wall Street Journal's Kate Davidson: "'Right now effectively, as opposed to borrowing in the market at lower rates, we’re borrowing and making our trust funds whole at slightly higher rates,' Mr. Mnuchin said. 'There is a real cost to doing that.' He said the implied cost of uncertainty in financial markets will also continue to grow the longer Congress waits to raise the limit. He once again urged lawmakers to raise the debt ceiling before they leave for their August recess, but House and Senate leaders have announced no plans to tackle the issue before they return in September."

AD

AD

TRUMP TRACKER

THE MOOCH VS. REINCE TAKES AN OVERNIGHT TURN:

-- Here's what seems to have gone down. Last night, new White House communications director Anthony Scaramucci accused longtime rival and W.H. Chief of Staff Reince Priebus of leaking his financial disclosure forms to the press.

The New Yorker's Ryan Lizza, however, confirmed that Scaramucci meant to call out Priebus:

But Scaramucci tweeted this afterwards:

This morning, Lizza called in to CNN's "New Day" to talk through his reporting on the matter:

And was interrupted on-air by Scaramucci himself, who called in to give his version of the events. Watch/listen here (preview: Scaramucci refers to his relationship with Reince as like "Cain and Abel):"

-- All of this concerns Politico's reporting on Scaramucci's financial disclosure forms, which they got via public records, so there seems to have been no leak to begin with.

AD

AD

-- Here's the deal: The Mooch stands to profit from SkyBridge Capital, the hedge fund he cofounded in 2005 and is in the process of selling. Lorraine Woellert had this report: "The SkyBridge website continues to advertise Scaramucci as the firm's managing director, despite the fact that he has been a government employee for more than a month. A SkyBridge spokeswoman said Scaramucci stepped down from the executive post Jan. 17, when the company’s sale was announced. He remained an employee of the firm, collecting a salary, until starting at Ex-Im last month. The investment firm, which Scaramucci founded in 2005, is in the process of being sold to RON Transatlantic and Chinese conglomerate HNA Group. The sale, set in motion in January when Scaramucci was shedding his holdings in anticipation of landing an administration job, has drawn the scrutiny of regulators and is taking longer than expected to close."

(The New York Times — which has been looking into one of SkyBridge's buyers, HNA Group, a shadowy Chinese conglomerate — has this report on the questions surrounding HNA's $18 billion donation to a New York-based private foundation.)

— The Mooch's fight with Priebus isn't even the ugliest public row featuring two members of the administration. That honor belongs to Trump's ongoing feud with Attorney General Jeff Sessions. Paul Kane reports that Trump's ties to Senate Republicans could fray further if he follows through with feints toward firing Sessions. There are still other flashpoints within the Trump operation: Politico's Nancy Cook reports that Shahira Knight, Gary Cohn's top tax staffer, has been clashing with Mnuchin and other Treasury officials over the direction of the tax revamp. And David Apol, the new head of the Office of Government Ethics, has bumped heads with others in his office over his seemingly loose interpretation of ethics rules, Eric Lipton of the New York Times reports.

AD

AD

One early test for Apol: How he handles a request from Scaramucci for a tax break on the sale of his SkyBridge stake. Here's the Times: "Mr. Scaramucci seeks a tax break that will help him save tens of millions of dollars when he sells his stake in the investment firm SkyBridge Capital. So-called certificates of divestiture are offered to incoming federal employees as a way to make it easier for the wealthy to take government jobs without major tax consequences. But Mr. Shaub has questioned if Mr. Scaramucci is entitled to such a benefit because he had entered into a deal to sell his stake in SkyBridge before he was hired for the White House communications job. Mr. Apol said he had not yet decided if Mr. Scaramucci should get the tax benefit."

— Congressional leaders have struck a deal on a package slapping new sanctions on Russia, Iran and North Korea. The measure forces the president to notify Congress if he wants to ease Russian sanctions, then gives lawmakers 30 days to cancel his proposed changes. The Post's Karoun Demirjian has this startling paragraph about the implications: "That level of congressional review is unprecedented in sanctions bills but was roundly popular in Congress, where many lawmakers have been uneasy about President Trump’s apparent coziness with Russian President Vladi­mir Putin. Despite the administration’s considerable efforts to get lawmakers to abandon the congressional review, members and senators endorsed the approach, both for the Russia sanctions in the pending legislation and as a model for future sanctions bills — a reflection of lawmakers’ continuing distrust of the president’s conduct in foreign affairs."

AD

AD

MONEY ON THE HILL

— House Republicans will vote on a budget — but not until September. Politico's Sarah Ferris reports: "Republican Study Committee Chairman Mark Walker says he has struck a deal with House Speaker Paul D. Ryan to revive the fiscal blueprint, in exchange for dropping demands for a full GOP omnibus this week. The legislation, which is crucial to unlocking the Republican plans for a tax overhaul this fall, has been stalled for months amid Republican infighting. But in a one-on-one conversation with Walker, Ryan committed Tuesday to allowing a vote on the budget the first week the House returns from August recess, according to a senior congressional aide."

AD

AD

THE REGULATORS

— Randy Quarles, Trump's pick to serve as the Fed vice chair for supervision, takes his first step toward confirmation today when he testifies before the Senate Banking Committee. In prepared remarks, Quarles is set to say that banking regulations are rip for "some refinement." Also appearing today: Joseph Otting, Trump's nominee for Comptroller of the Currency. Bloomberg's Elizabeth Dexheimer and Jesse Hamilton report: "If confirmed by the Senate, Quarles and Otting will be the two most powerful U.S. banking regulators, setting them up to play leading roles in the Trump administration’s efforts to roll back financial rules. The two would have extensive influence over bank capital and liquidity, and the enforcement of regulations such as the Volcker Rule, which restricts lenders from investing with their own money."

— The rumor mill hit full tilt midday with whispers that Richard Cordray, the director of the Consumer Financial Protection Bureau, had submitted his resignation to the White House. The CFPB shot it down:

Politico's Lorraine Woellert on the buzz:

But Cordray, an Ohio Democrat, is widely expected to exit soon in order to jump into the 2018 gubernatorial contest back in his home state.

POCKET CHANGE

— A judge is recommending a former Goldman Sachs managing director be banned from the industry for passing around leaked Federal Reserve materials internally. Reuters' Nate Raymond reports: "The ruling in the case of Joseph Jiampietro, the ex-managing director, followed investigations of how one of his subordinates at Goldman obtained leaked documents from a friend who worked at the Federal Reserve Bank of New York... [The judge] ruled that Jiampietro recklessly engaged in unsafe and unsound practices and breached the duties he owed to Goldman by ignoring "red flags" and failing to determine the confidential nature of documents that originated with the Fed."

CHART TOPPER

DAYBOOK

Today

The Senate Appropriations Committee will hold a markup hearing on legislative branch appropriation bills.

Steven Mnuchin. The House Financial Services Committee will hold a hearing on the state of the International Financial System with Treasury Secretary

THE FUNNIES

BULL SESSION

U.S. indicts alleged Bitcoin laundering "mastermind:"

Here's a fact check on President Trump's flip-flop on African-American youth unemployment: