If confusion can rebuild moldering roads and bridges, we’re all in luck. President Trump injected a trademark heaping of it into the debate over a major infrastructure package on Wednesday when he told lawmakers he’d back a gas tax to pay for it.

The curveball came two days after the administration rolled out a long-awaited public works proposal that called for $200 billion in federal spending without specifying a source. It aims to unleash $1.5 trillion for the projects but hands most of that to state and local governments and private investment sources. 

The budget submitted Monday called for cutting $178 billion in transportation programs over the next decade. “Mr. Trump’s budget, if enacted, would slash existing infrastructure programs, potentially imperiling major projects whose sponsors intended to tap them for construction funds in the coming months,” The Wall Street Journal’s Tedd Mann wrote. “For instance, the administration proposes to save more than $1.4 billion by eliminating the Federal Transit Administration’s New Starts program, though it would permit projects that already have signed agreements to be funded through those grants to proceed.”

Then again, the administration’s spending blueprint was overtaken before its debut by the sweeping spending deal Trump signed last week. And that law calls for $10 billion in new infrastructure funding over each of the next two years — half the level the infrastructure plan itself proposes. 

The 25-cent increase in the gas tax Trump endorsed Wednesday would raise $394 billion, according to an estimate from U.S. Chamber of Commerce, which also backs the idea. But it divides Republican lawmakers and party allies alike. House Transportation and Infrastructure Committee Chairman Bill Shuster (R-Pa.), for example, wants it considered. Senate Environment and Public Works Committee Chairman Sen. John Barrasso (R-Wyo.), on the other hand, calls it a nonstarter. Ditto Senate Majority Leader Mitch McConnell (R-Ky.), according to Sen. Chuck Grassley (R-Iowa), and Sen. John Cornyn (R-Tex.), the No. 2 Republican in the Senate. 

Among the outside forces shaping the debate, the American Trucking Associations is lining up with the chamber, and oil interests are divided. But the Koch network — a leading mover last year in defeating the border adjustment tax that House Republicans favored to generate some $1.5 trillion for the tax code overhaul — is mobilizing against the idea. 

“Increasing the gas tax is the wrong approach to addressing our nation’s infrastructure needs,” Americans for Prosperity chief government affairs officer Brent Gardner said in a statement Wednesday. “The American people are just beginning to feel the benefits of the recently passed tax cuts bill. Instead of undermining the relief taxpayers just received, the president and Congress should focus on smarter spending and breaking through the regulatory gridlock that delays projects and drives up costs.”

So the path forward is as clear as a cloverleaf exchange, at rush hour, during an earthquake. 

— The latest on the Florida shooting: At least 17 people were killed when a 19-year-old gunman opened fire Wednesday on the South Florida high school from which he was expelled. Nikolas Cruz had been kicked out for “disciplinary reasons,” and was captured following a manhunt in the aftermath of the shooting, The Post’s Moriah Balingit, William Wan, Mark Berman and Lori Rozsa report. Cruz was booked into Broward County Jail early Thursday and charged with 17 counts of premeditated murder, per the Associated Press. Officials said another 14 people have been treated at hospitals, per the AP. 

The terror unfolded at Marjory Stoneman Douglas High, a 3,000-student school named after an icon of the South Florida environmental movement and located in an affluent suburb northwest of Fort Lauderdale. It was the 18th school shooting in the nation just 45 days into the year, according to pro-gun control group Everytown for Gun Safety. President Trump has tweeted three times about the shooting, expressing his “prayers and condolences” to victims’ families. “So many signs that the Florida shooter was mentally disturbed, even expelled from school for bad and erratic behavior,” the president tweeted Thursday morning. “Neighbors and classmates knew he was a big problem. Must always report such instances to authorities, again and again!”

Sen. Chris Murphy (D-Conn.) took to the Senate floor on Wednesday to call out Congress for not doing enough to address gun violence. "This epidemic of mass slaughter, this scourge of school shooting after school shooting," Murphy said. “It only happens here not because of coincidence, not because of bad luck, but as a consequence of our inaction. We are responsible for a level of mass atrocity that happens in this country with zero parallel anywhere else."


Stocks rebound.NYT's Prashant Rao: "Stocks on Wall Street finished higher on Wednesday, as a report of higher-than-expected inflation was tempered by data showing weaker retail sales. Wall Street indexes hit all-time highs in January, driven in large part by a bevy of positive economic data, a new tax law that would drastically cut the overall corporate tax rate, and years of easy access to money as a result of central bank policies... Stocks initially dropped on Wednesday, reflecting the January inflation data that was released before the market opened. Prices rose 0.5 percent last month and 2.1 percent over the past 12 months, beating analysts’ expectations. The yield on the United States Treasury’s 10-year note rose sharply through the day, reaching 2.90 percent."

Inflation rises. AP's Christopher Rugaber: "U.S. consumer prices, excluding the volatile food and energy categories, rose 0.3 percent last month. That was the biggest climb in a year and has intensified inflation fears in financial markets. Overall consumer prices rose 0.5 percent in January, the most in four months, the Labor Department said Wednesday. Inflation rose 2.1 percent from a year earlier and core prices increased 1.8 percent. The increases were led by much higher clothing costs and more expensive car insurance."

Spotlight on the Fed. Reuters's Lucia Mutikani: "The report from the Labor Department on Wednesday... likely overstates the inflation picture given that some of the price gains, especially for apparel and motor vehicle insurance, are seen by economists as unsustainable.Inflation, which could get a further boost from a tightening labor market and increased government spending, might force the Fed to be more aggressive in raising interest rates this year than currently anticipated. That would slow economic growth.

Dollar skids on deficit fears. Reuters's Jemima Kelly: "The dollar tumbled across the board on Thursday, hitting a 15-month low against the yen as worries over twin deficits in the United States mounted amid a government spending splurge and large corporate tax cuts. The greenback briefly jumped on Wednesday after data showed U.S. inflation was stronger than expected in January, bolstering expectations that the Federal Reserve could increase interest rates as many as four times this year. But it quickly turned lower, eventually posting its worst daily performance in three weeks against a basket of major rivals. The dollar added to those losses on Thursday, with the index hitting a two-week low of 88.585."

For almost two decades, whenever the stock market went wild, banks went a little wilder. But not this time.
Interest rates are on the rise, but that hasn’t curbed Americans’ appetite for consumer debt as people borrow more than they have in years on credit cards or through auto loans, and lenders seeking growth are happy to oblige them.

Dems on defense as tax cuts turn popular. CNBC's Ylan Mui: "America is warming up to the Republican tax cuts — and Democrats are starting to get worried. Recent surveys have found growing support for the GOP overhaul of the tax code amid relentless messaging from Republicans and a barrage of businesses announcing bonuses and pay increases. The momentum is increasingly leaving Democrats on the defensive on the kitchen-table economics they believe will be critical to victory in November's midterm elections. In an open memo this week, Democratic super PAC Priorities USA said the party's message has gotten drowned out in the debate over the tax plan. 'While Republican gains have not been enough to counter the extraordinary political environment for Democrats, it is imperative that Democrats return to focusing on the economic message and counter the narrative being pushed by the White House, Republicans in Congress and their special interest backers,' the group said."

Hensarling rips Fannie. Washington Examiner's Joseph Lawler: "House Financial Services Chairman Jeb Hensarling on Wednesday called for the termination of Fannie Mae's government-sponsored enterprise charter, after the mortgage giant asked for a $3.7 billion loan from the government. 'Today’s announcement that Fannie Mae has once again run out of money to pay its own bills is the latest example of why we need to repeal the GSEs’ government charters once and for all,' the Texas Republican said in a statement... Fannie's request, prompted by accounting losses relating to the new tax law, is to draw on its line of credit at the Treasury, which was created when it was originally bailed out in 2008. Since 2012, all of the company's profits have been sent to the Treasury. Drawing on the Treasury for $3.7 billion doesn't fundamentally affect the financial relationship between Fannie and the government."

Warren vs Wells. WSJ's Gretchen Morgenson: "Wells Fargo’s botched efforts to repay customers hurt by improper fees on car loans and home mortgages are coming under congressional scrutiny. In a Feb. 13 letter to Timothy Sloan, Wells Fargo’s chief executive, Elizabeth Warren, a Democratic Senator from Massachusetts, posed almost a dozen questions about the bank’s troubled customer-remediation programs, reported by The Wall Street Journal. She asked Mr. Sloan to answer the questions by Feb. 28, and to make good on his pledge to take care of the bank’s customers in the wake of widespread abuses, according to a copy of the letter reviewed by the Journal."


Mnuchin: IRS will close hedge fund loophole. Bloomberg's Miles Weiss: "Mnuchin told the Senate Finance Committee that a Bloomberg News story Wednesday, which detailed how hedge funds created scores of shell companies to work around the new carried-profit rules, prompted him to instruct administration officials to issue guidance on the subject within two weeks. 'I’ve already met with the IRS and our Office of Tax Policy this morning as a result of that article,' Mnuchin told the committee. 'Taxpayers will not be able to get that loophole.' The new guidance would effectively kill hedge fund managers’ plans to create numerous shell companies in Delaware -- corporate America’s favorite tax jurisdiction -- to get around the tax law’s requirement that assets must be held for three years instead of one year to qualify for a lower tax rate."

West Wing death match. Vanity Fair's Gabriel Sherman: "With the Rob Porter scandal into its eighth day and showing few signs of abating, Donald Trump is seriously mulling replacing his chief of staff, John Kelly, three sources close to the White House said. In recent days, Trump has floated names like White House Budget Director Mick Mulvaney and longtime friend Tom Barrack, a real-estate developer. Meanwhile, factions inside and outside the White House are lobbying Trump to go with other potential choices. The battle to decide who could replace Kelly has reopened the deep fissures in Trump’s divided West Wing. One adviser to the White House referred to the current atmosphere inside the administration as a “death match.” With Kelly’s truthfulness about the former White House secretary widely questioned, few believe he can survive, but he may twist for a while. 

The situation remains fluid. Last night, for instance, three Republicans told me that Trump had offered the job to Gary Cohn. But in a conversation with Sean Hannity yesterday, Trump said he had not chosen Cohn, a person close to Hannity told me. Another source said Republicans have warned Trump that choosing Cohn, a New York Democrat, would cause a backlash in the party."

Parade could cost $30 million. NYT's Alan Rappeport: "President Trump’s military parade will not come cheap. Mick Mulvaney, the White House budget director, estimated on Wednesday that the public display of America’s military might that Mr. Trump has called for could cost between $10 million and $30 million, and said the government would have to come up with a way to cover the cost. Funding for the parade was not included in the White House’s 2019 budget request, which was released on Monday, because it was a relatively new idea, Mr. Mulvaney said at a House Budget Committee hearing on Wednesday. He explained that the final cost would be determined by the size, scope and length of the parade."

About 90 million low-income Americans rely on Medicaid, housing subsidies or food stamps.
Caitlin Dewey and Tracy Jan

The case for a crypto regulator. NYT's Peter Henning: "Cryptocurrencies like Bitcoin and Ether have seeped into the public consciousness... The mania has also gotten the attention of regulators at the Securities and Exchange Commission and the Commodity Futures Trading Commission. But both can only look on — perhaps in horror — at what is happening. Laws adopted decades ago give the two regulators have little authority to engage in oversight of the burgeoning market in cryptocurrencies. That may change if Congress can muster the political will to extend the oversight responsibilities of two agencies it has been rather hostile to in recent years. A better way may be to create a new agency — one that does not carry the baggage that the S.E.C. and C.F.T.C. do on Capitol Hill and that does not try to put the square peg of cryptocurrencies in the round holes of securities and commodities trading."

CFTC urges industry to self-regulate: Reuters's Pete Schroeder: "Brian Quintenz, a Republican commissioner with the Commodity Futures Trading Commission, said the industry should consider adopting self-regulatory standards and industry-wide best practices while the government mulls its best approach in policing the new technology-driven space."

Prudential seeks relief. The Hill's Sylvan Lane: "The sole insurance company subject to stricter federal oversight under the Dodd-Frank Act is pushing Washington to set it loose. Prudential Financial is asking an interagency group of regulators to strip its designation as a “systemically important” nonbank financial institution. The insurance company insists it should have never been grouped in with the banks and financial firms that helped tank the economy in 2008, and says its business has only grown safer and stronger. Prudential has enlisted a team of Washington lobbyists to push the company’s case as the Trump administration takes aim at the rules the company is fighting."

The House voted Wednesday to ensure the U.S. Securities and Exchange Commission would continue to have to seek a subpoena before accessing proprietary source code from high-frequency traders, the secret sauce that fuels profits.
Charlie Munger, the longtime business partner of fellow billionaire Warren Buffett, said on Wednesday it is time for regulators to "let up" on Wells Fargo & Co , which will end up "better off" as it corrects a series of mistakes in how it treated banking customers.
Citing a history of predatory real estate practices in Baltimore, two Maryland lawmakers called on the Trump administration Wednesday to abandon plans to strip a division of the Consumer Financial Protection Bureau of its enforcement powers.
Baltimore Sun
The Switch
During a confirmation hearing before the Senate Commerce Committee, Joseph Simons, a corporate antitrust lawyer and the president's choice to lead the Federal Trade Commission, said he would prioritize consumer protection issues “where harm is the greatest,” that would garner the “biggest bang for taxpayer dollar.”
Hamza Shaban

Puerto Rican creditors cry foul. Reuters's Daniel Bases: "A large group of Puerto Rico’s creditors united on Wednesday in condemning the U.S. commonwealth’s revised fiscal plan, calling it a step backwards in rebuilding from years of mismanagement and the devastation caused by Hurricanes Irma and Maria. Unveiled by Governor Ricardo Rosselló on Tuesday, the plan highlighted the use of $18 billion in additional money from the U.S. federal budget to turn a deficit into a surplus of $3.4 billion within six years. 'The Plan fails to provide a credible basis on which to restructure the island’s debt, while completely lacking a foundation for revitalizing the local economy and restoring access to the capital markets,' the creditors said in a joint news release."

Warren Buffett is just about done with International Business Machines Corp.
Billionaire David Tepper’s Appaloosa Management more than tripled its stake in Apple Inc. and almost doubled its holding of Facebook Inc. in the final three months of last year.
On behalf of those only reached by chock-full employment, do not conflate heating with overheating.
Jared Bernstein
Hoping for 3% or more is folly. The fundamentals—people and productivity—seem unlikely to provide it.
Jason Furman via WSJ
Regulators and investors' attorneys sift through the collateral damage of a VIX-linked product.
Stephen Gandel via Bloomberg

— In the last quarter, Marketplace reports auto loans spiked $8 billion, credit card debt went up $26 billion and student loans increased $21 billion. Here's a look at the changes in non-mortgage debts in the last decade and a half: 



  • CFTC chairman J. Christopher Giancarlo testifies before the Senate Agriculture, Nutrition and Forestry Committee.
  • The Senate Finance Committee holds a hearing on the proposed 2019 fiscal year budget.
  • The Economic Policy Institute holds a panel discussion on black women and the economy.

From The Post's Tom Toles: 


Trump called for finding "common ground" on infrastructure:

Sen. Chris Murphy (D-Conn.) told his fellow lawmakers Wednesday's shooting at a South Florida high school is the “consequence of our inaction:"

Former FBI agent Philip Mudd breaks down while talking about Wednesday's school shooting:

The White House's claims surrounding the domestic violence allegations against Rob Porter were challenged by FBI Director Christopher A. Wray: