President Trump’s budget previews the economic pitch he will be making to voters: more deficit spending to compensate for extended tax cuts and pay for everything from his border wall to boosted NASA funding. All while avoiding painful cuts to Social Security and Medicare benefits. 

The document, out today, abandons Trump’s 2016 campaign pledge to eliminate the national debt by the end of a second term — as well as the less-ambitious plan in his first budget to close the gap between federal revenue and spending by 2028.

The blueprint instead proposes to zero out the deficit by 2035, a goal whose math deficit hawks already are questioning. “I have no idea how he can live up to his campaign promises to reduce the deficit, not address entitlement programs, and at the same time cut taxes,” Bill Hoagland, a former top Republican budget staffer, tells my colleagues Jeff Stein and Erica Werner.

The Trump administration justifies its projections in part by relying on estimates of economic growth that are significantly sunnier than consensus forecasts —and lower interest rates on its borrowing. Mostly, though, the budget reflects the administration’s political judgment that neither GOP lawmakers nor voters will punish the president for pushing federal coffers further into the red.

Indeed, the plan closes a door Trump appeared to crack open last month to considering cuts to Medicare benefits, a third rail for elderly voters who rely on the government health-care program. “We’re going to look,” he said of that possibility in an interview with CNBC at the World Economic Forum in Davos.

Trump’s budget is expected to seek significant savings from Medicare but by targeting “what officials believe is waste in the program,” per the New York Times’s Jim Tankersley, Alan Rappeport, Zolan Kanno-Youngs and Margot Sanger-Katz. “Many of the suggested tweaks are identical to proposals from the Obama administration’s budgets for the program. Taken together, the changes would represent around half a trillion dollars in reduced Medicare spending but do not include any major reductions to benefits or eligibility, like those proposed in House budgets when Republicans controlled that chamber.”

Democratic strategist James Carville lambasted his party's leaders for not seizing on Trump's Davos comments. “We’ve got Trump at Davos talking about cutting Medicare and no one in the party has the sense to plaster a picture of him up there sucking up to the global elites, talking about cutting taxes for them while he’s talking about cutting Medicare back home,” Carville told Vox’s Sean Illing. 

Yet Trump, in his first tweet about his new spending plan, declared he has no intention to touch the program, or Social Security:

Notably absent from that guarantee was the promise he made as a candidate to protect Medicaid, the health program for the poor, as Jeff and Erica point out:

Per the Times, the blueprint includes "new work requirements for Medicaid, federal housing assistance and food stamp recipients, which are estimated to cut nearly $300 billion in spending from the programs." 

At the same time, Trump is proposing to extend for a decade his cuts to individual tax rates after they are set to expire in 2025, at a cost of $1.4 trillion. House Budget Committee Chairman John Yarmuth (D-Ky.) called the plan "destructive and irrational" and criticized it for taking aim at “programs that help Americans make ends meet—all while extending his tax cuts for millionaires and wealthy corporations," the Wall Street Journal's Kate Davidson and Andrew Restuccia report

Trump is requesting $2 billion for construction of his Mexican border wall — not a huge sum in the scheme of his overall budget but an acknowledgment that Mexico won't be paying for the project, despite his 2016 campaign promises.

Trump broadcast his indifference about the tide of new spending he has unleashed at a dinner with donors at Mar-a-Lago last month. “Who the hell cares about the budget? We’re going to have a country,” the president said, according to leaked audio from the event, per Jeff and Erica.

Meanwhile, Democrats seem less focused on Trump than they are on each other. Pete Buttigieg, likely the early delegate leader in the Democratic primary, is “portraying himself as the biggest fiscal hawk in the presidential field and taking a shot at chief New Hampshire rival Bernie Sanders for being too spendthrift,” NBC News’s Sahil Kapur writes. The former South Bend, Ind., mayor pledged at a New Hampshire town hall to focus on the debt though it is “not fashionable in progressive circles.”


Global markets waver. WSJ's Anna Isaac: "Global stocks drifted lower Monday as investors parsed public-health authorities’ efforts to contain the deadly coronavirus outbreak, and signs of their impact on the economy. Futures tied to the Dow Jones Industrial Average wavered between gains and losses, following a week in which U.S. stocks posted their biggest weekly gains in months. The Stoxx Europe 600 index dropped 0.1%, while Japan’s Nikkei 225 index closed down 0.6%.

"The death toll for the new virus climbed to over 900 in mainland China, exceeding that of the severe acute respiratory syndrome, or SARS. The growth of new cases could accelerate further, the World Health Organization warned, even as officials across the world tried to quarantine people to contain the spread."

Defensive stocks may not provide much haven. Bloomberg News's Eric Lam: "Investors looking to hide out in defensive stocks may need another plan as companies across Asia squeezed by disruptions from the virus outbreak eye their dividends. Supply-chain interruptions, evaporating sales and other rippling effects from the spread of the novel coronavirus in China and across the region may spur companies to cut their dividend payouts in a bid to preserve their working capital, said Sean Darby, global equity strategist with Jefferies Financial Group Inc."

CEOs aren't cashing out: “The stock market is surging, but few chief executives are selling,” the WSJ's Thomas Gryta reports.

“The S&P 500 jumped 30 percent and set record highs in 2019, but only 80 CEOs in the index reduced personal holdings in the businesses they led during the year, according to a Wall Street Journal analysis. Insiders generally want to avoid sending negative signals about their companies by cashing out. Of the corporate chieftains who pared their stakes, the majority — 67 of them — did so while their companies were repurchasing shares in the market.”

Fed Chairman Jerome Powell, who is about to testify before Congress, has held around 140 meetings with lawmakers since becoming the central-bank chief two years ago.

2020 WATCH:

— Sanders, Buttigieg duke it out: "The two top finishers in last week's Iowa caucuses, 40 years apart in age and representing opposite ends of the Democratic Party's ideological spectrum, are heading for a showdown in Tuesday's primary here — each taking increasingly aggressive swipes at the other," our colleagues Sean Sullivan and Chelsea Janes report from Manchester, N.H.

"The senator from Vermont and former mayor of South Bend, Ind., are not fighting to win over the same pool of New Hampshire voters, though many likely to vote here remain undecided. Rather, according to strategists in both campaigns, each is trying to energize his supporters by vowing to block the other from winning the Democratic nomination — with Sanders, the democratic socialist, portraying Buttigieg as a captive to his billionaire donors, and the more centrist Buttigieg railing against Sanders as a 'my way or the highway' leftist.

— Warren and Biden possible bad finishes could spell trouble: "With Bernie Sanders and Pete Buttigieg battling to win Tuesday's primary here and seize the momentum in a highly unpredictable race, another drama is playing out with serious implications for the other high-profile candidates in the Democrats' once-sprawling field," my colleagues Cleve R. Wootson Jr., Matt Viser and Felicia Sonmez report from New Hampshire.

"Sen. Elizabeth Warren is facing the prospect of losing badly in a state neighboring her home of Massachusetts, while Joe Biden’s campaign is bracing for another potentially humiliating defeat and, as a result, a new round of anxiety among its top donors and questions about the viability of a former vice president once seen as the Democrats’ best hope to defeat [Trump]. The grim question facing Warren and Biden is not whether they can win New Hampshire, according to strategists, but how low they will finish — and what that result would mean for their candidacies."



— Trade war reshapes global commerce: “The two-year trade war between the U.S. and China upended commerce world-wide, slamming the brakes on global trade growth — but also delivering modest benefits to a handful of industries and countries that saw gains as the giants tussled,” the Wall Street Journal's Josh Zumbrun, Feliz Solomon and Jeffrey Lewis report.

“Growth in global trade sank to a meager 1 percent last year, down from 4 percent in 2018 and 6 percent in 2017. It was the fourth worst showing in 40 years, and the worst ever outside a period of recession, according to International Monetary Fund data.”

Energy secretary looking for help to export coal: “U.S. Energy Secretary Dan Brouillette said on Friday that Canada and Mexico could help export U.S. coal to Asia to get around the blocking of shipments by West Coast states concerned about the impact of the fuel on climate change,” Reuters's Timothy Gardner reports.

“Brouillette said he expects the two U.S. neighbors will offer opportunities to export coal in talks that could be facilitated by the new North American trade agreement, the United States-Mexico-Canada Agreement, or USMCA, that [Trump] signed last month. Behind the slump were falling U.S. sales to China of agriculture products, aircraft and machinery, while China’s sales of electronics and industrial supplies to the U.S. dropped. In some cases foreign suppliers were unable to fill the void, so many measures of factory activity and demand slid.”

China steps up defense of Huawei: The Chinese Embassy in Paris “urged the French government not to discriminate against Huawei as it selects suppliers for its 5G mobile network, saying it feared the company would face more constraints than rivals,” Reuters's Sarah White, Mathieu Rosemain and Elizabeth Pineau report.

“China’s Huawei, a global giant in telecoms network equipment, is the center of an international political storm as the United States seeks to convince countries to ban the company from their mobile networks. Washington says its technology could allow 'back doors' for Chinese spying — an allegation denied by Huawei and Beijing.”

  • It's also happening in the U.K.: Senior members of Prime Minister Boris Johnson’s Conservatives who have demanded Chinese telecoms giant Huawei must not have a role in Britain’s 5G mobile network are conducting 'a kind of witch-hunt,' China’s ambassador to London said,” Reuters's Kylie MacLellan reports. “Last month the government said 'high-risk vendors' such as Huawei would be allowed into the non-sensitive parts of the 5G network, although their involvement will be capped at 35 percent.”
Vice President Mike Pence on Friday and the top White House economic adviser dismissed an unusual suggestion from U.S. Attorney General William Barr that the United States consider taking control of two major foreign rivals of China-based Huawei Technologies Co Ltd.


Mattel closes factories: “Mattel Inc. said it has closed two factories in Asia and plans to close one in Canada, as the toy company reduces its sprawling manufacturing footprint to cut costs,” the WSJ's Paul Ziobro reports. “The maker of Barbie dolls and Hot Wheels cars shut manufacturing sites in China and Indonesia last year, and it said it would close a facility in Montreal sometime this year. Mattel had previously announced plans to close and sell a factory in Mexico.”

“The manufacturing overhaul is part of Chief Executive Ynon Kreiz’s plan to turn around and stabilize Mattel, one of the world’s largest toy companies, which has struggled in recent years, from both weak sales in large divisions such as Fisher-Price preschool toys and American Girl dolls and the industry upheaval caused by the liquidation of Toys 'R' Us.”

Smallest firms struggle to find workers: “The number of people working at small companies essentially didn’t budge last year, even as larger businesses continued to expand their payrolls for a record 10th straight year,” the WSJ's Ruth Simon reports.

“Head count at businesses with fewer than 20 employees was essentially unchanged in 2019, according to an analysis of ADP payroll data by Moody’s Analytics. Companies with 500 or more employees, by contrast, increased their workforces by 2.3 percent. January showed the same patterns, according to data released Wednesday. The sluggishness in small-business hiring is particularly striking because it is the first time small companies haven’t added to their payrolls since 2010, when businesses of all sizes were recovering from the financial crisis. More than 5.3 million businesses have fewer than 20 employees, based on the latest data available from the Small Business Administration.”


Mike Bloomberg's ad spending surge continues, via CNN's Brian Stelter: 



  • The White House releases its FY 2021 budget
  • DaVita, Lowes and Callaway Golf are among the notable companies reporting their earnings, per Kiplinger.


  • Fed Chair Jerome Powell testifies in front of the House Financial Services Committee
  • Lyft, Goodyear Tire, Under Armour, Hasbro, Hilton and Dominion Energy are among the notable companies to report their earnings.
  • The House Ways and Means Committee holds a hearing entitled “the disappearing corporate income tax.”


  • Powell testifies in front of the Senate Banking Committee
  • CVS Health, TripAdvisor, Teva Pharmaceutical, MGM Resorts, Molson Coors Brewing, CenturyLink and Shopify are among the notable companies to report their earnings.
  • The Financial Services Subcommittee on Diversity and Inclusion holds a hearing on diversity at America’s biggest banks


  • The Banking Committee holds a confirmation hearing, mostly notably on Fed nominees Judy Shelton and Christopher Waller
  • The Labor Department releases the latest CPI
  • PepsiCo, Kraft Heinz, Yeti Holdings, AIG, Roku and Nvidia are among the notable companies to report their earnings.
  • HHS Secretary Alex Azar testifies in front of the Senate Finance Committee about Trump’s budget


  • The Commerce Department releases the latest data on retail sales


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