Will Trump Play the Grinch This Christmas?

Plus, why GM pays almost no federal income tax By Yuval Rosenberg and Michael Rainey Shutdown Watch: Will Trump Play the Grinch This Christmas? Lawmakers agreed on Monday to a two-week extension of government funding, pushing off the deadline for a partial government shutdown and an ongoing fight over money for President Trump’s proposed border wall until December 21. The stopgap measure, expected to be passed via a unanimous consent agreement later this week, buys both sides more time to negotiate in what [Time]( calls a “trillion-dollar game of chicken.” But it would only take only one lawmaker to throw things back into chaos — and even assuming the extension is passed, the parties still don’t have a clear path to a deal that would avoid parts of the government shutting down just before Christmas. That timing, though, provides some added incentive to cement a deal so that everyone can head home for the holidays. The biggest sticking point: “The vast majority of dealmaking is already done, with six out of the seven outstanding appropriations bills essentially finished,” says [Politico](. “But spending leaders can’t tie things up until Trump and Democrats can agree on border wall funding.” Trump wants $5 billion in funding for his wall. Democrats have balked at that sum, even if split over two years. Senate Minority Leader Chuck Schumer said last week Democrats still support the $1.6 billion in border security funding included in an earlier Senate bill. Waiting for Trump, Schumer and Pelosi: With both sides dug in for now, and with Washington occupied with former President George H.W. Bush’s funeral on Wednesday, the next steps will depend on talks between Trump and the top two Democrats, Schumer and House Minority Leader Nancy Pelosi. Senate Majority Leader Mitch McConnell [said as much]( on Monday night, while still predicting that lawmakers will avoid any shutdown. “It's now up to three people to strike an agreement to keep the government open,” CNN’s Phil Mattingly says. “Whether and how they'll get there remains a very open question.” Schumer and Pelosi had been scheduled to go to the White House today, but that meeting was postponed because of Bush’s death. It’s expected to take place next Tuesday. GOP lawmakers don’t want a shutdown: “Republicans acknowledge that the chances of reaching a significant agreement on border security and immigration are dropping with each passing day,” write [The Hill’s Alexander Bolton and Niv Ellis](. “At this point, they are scrambling to find a way for Trump to declare victory on border security and avoid a shutdown they fear would inflict political damage on their party heading into the 2020 election cycle.” The bottom line: All signs point to a shutdown being [highly unlikely]( … unless for some reason Trump decides to play the Grinch and figures he can score political points against Democrats both now and later for failing to fund his wall. [Slate’s Jim Newell]( outlines a more likely endgame: “Trump accepts the $1.6 billion with an immaterial tweak or two ahead of the Dec. 21 deadline, says that’s what he wanted in the first place and that he’ll come back for more in the new year, perhaps through an immigration deal with Democrats (that never happens). Everyone goes off and enjoys the holidays, and by the time the new Congress convenes in January, nobody remembers any of this. And Trump, without enough money for his precious wall, still gets to run on building it.” [Share this story →]( Quote of the Day "The president could solve all of his problems if he just showed his wife the tweet before he punches the send button." – Sen. Chuck Grassley (R-IA), joking at a Tuesday event, as reported by [The Hill](. Sen. Dick Durbin (D-IL) responded, Couldn't we all." Why GM Pays Almost No Federal Income Tax General Motors has earned billions of dollars in the decade since its bankruptcy and bailout, but thanks to a provision in the tax code called "net operating loss carryforward," it has paid very little by way of federal income tax during that time — and probably won’t for years to come, CNN [reports](. GM posted losses of more than $100 billion from 2005 to 2009, giving it a huge cushion to use in the following years to reduce or eliminate federal income tax obligations. At the end of 2017, the auto giant still had more than $8 billion in losses to use, CNN said, and those tax breaks could be in play for five more years. Overall, the carryover losses are expected to be worth about $11 billion to GM. That’s more than the $10.6 billion loss the federal government took on its $49.5 bailout of the company in 2008. And it’s far more than any subsidies GM receives from the federal government, which President Trump has vowed to eliminate in retaliation for the company’s recent layoffs and closure of multiple plants in the U.S. While the tax breaks have been immensely valuable to GM, they had a depressing effect on earnings last year due to the GOP tax bill. GM reported a loss in 2017 for the first time since its bankruptcy in 2009, caused by the decline in value of the future tax breaks it’s still carrying on its books, and the tax bill, which slashed the corporate tax rate, reduced the value of any carryforward tax breaks as well. [Share this story →]( 4 Lessons from the GOP Tax Bill The Wall Street Journal’s Theo Francis says that while the Republican tax bill signed by President Trump a year ago has produced some obvious effects for U.S. businesses, including a solid boost to earnings and a big jump in share buybacks, there are still plenty of things that corporations are trying to figure out in the wake of the changes. “[T]he new tax landscape is an attractive one for big companies,” Fracis writes, “but it still leaves a lot up in the air.” Here are four lessons Francis cites from the tax overhaul: 1. The tax cuts are being treated as a one-time windfall rather than a fundamental change in the way to do business. 2. Offshore profits may take years to shift back to the U.S. 3. Companies still need more guidance from the government on the new rules governing international operations. 4. Trump’s tariffs could erode gains from the tax law. [For more details, read the full analysis at the Journal]( (paywall). Number of the Day: $300 Million Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, [wants]( the agency to be known as the Bureau of Consumer Financial Protection, the name under which it was established by [Title X]( of the 2010 Dodd-Frank Wall Street reform law. Mulvaney even had new signage put up in the lobby of the bureau. But the rebranding could cost the banks and other financial businesses regulated by the bureau more than $300 million, according to an internal agency analysis reported by [The Hill’s Sylvan Lane](. The costs would arise from having to update internal databases, regulatory filings and disclosure forms with the new name. The rebranding would cost the agency itself between $9 million and $19 million, the analysis estimated. Lane adds that it’s not clear whether Kathy Kraninger, President Trump’s nominee to serve as the bureau’s full-time director, would follow through on Mulvaney’s name change once she is confirmed by the Senate. Ahead of Wednesday's eulogies for President George H.W. Bush, [here's a good read]( remembering his humorous side. Send your tips and feedback to yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And tell your friends they can [sign up here]( to get their own copy of this newsletter. 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