PROGRAMMING NOTE: Morning Money will not publish on Monday Jan. 15. Our next Morning Money newsletter will publish on Tues. Jan. 16.

BIG NEWS ON THE GOP AGENDA — We’ve expressed serious skepticism that the GOP, already facing a pretty brutal 2018 landscape, would proceed this year with efforts to reform welfare or trim entitlement spending. Now it appears they may officially punt on doing anything on a purely partisan basis by giving up on passing a unified budget, according to reporting by POLITICO’s Rachel Bade and Sarah Ferris.

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Without a joint House-Senate budget, Republicans won’t have a reconciliation vehicle to pass something through the Senate with just 51 votes, which means anything they do will need to have some Democratic support. That would mean House Speaker Paul Ryan can forget about welfare/entitlement reform.

And the GOP will only be able to push through an infrastructure plan that spends enough federal money to satisfy Democrats. No easy feat especially when adding anything more to the deficit — even the $200 billion envisioned by the White House — will run into serious opposition from the dwindling number of GOP fiscal conservatives. Starting to look like 2018 will be a Seinfeld session of Congress: A year about nothing.

From the story: “Republican leaders are considering skipping passage of a GOP budget … White House and Hill GOP leaders discussed the possibility of foregoing the painful budget process during last weekend’s Camp David legislative summit, according to four sources familiar with the talks.

“Senate Majority Leader Mitch McConnell has argued that he cannot pass controversial deficit-reduction legislation using powerful budget procedures with his new 51-vote majority — and wasn’t even sure he could find the votes for a fiscal blueprint in the first place.”

AND HERE’S WHY PUNTING MAKES SENSE — More Republicans keep announcing they won’t run again in 2018, perhaps sensing an incoming wave. The latest: vulnerable California Reps. Darrell Issa and Ed Royce, who are among the many in blue states likely to face blowback from reductions in the state and local tax deduction.

And there are more to come, according to POLITICO’s Elena Schneider and John Bresnahan: “A flurry of Republican retirements in recent weeks has further weakened the party’s hold on the House heading into the midterms — and the exodus probably isn’t over.

“Issa and … Royce both bailed on their reelection campaigns in the past 48 hours, bringing the total of Republican-held open seats to a staggering 29 districts, a figure that includes lawmakers seeking higher offices. The Issa and Royce retirements open up seats that Hillary Clinton carried in the 2016 presidential race and will be more difficult — and expensive — for Republicans to defend, particularly if the party is swept under a Democratic wave” Read more.

MOODY’S ON THE TAX BILL— Not a lot of love from bond rating agency Moody’s in a presentation to clients on the potential impact of the GOP tax plan: “Any boost to economic growth from the new US tax law will be modest and depend on how businesses and individuals deploy tax savings; growth unlikely to offset negative impact on government deficits.”

TRUMP WINS ON CFPB — AP’s Ken Sweet: “A federal judge … ruled in favor of President Donald Trump and the White House over the control of [the CFPB] … Judge Timothy Kelly … issued an order denying Leandra English, the deputy director of the CFPB, a restraining order that would have stopped Mick Mulvaney, Trump’s budget director, from taking on a second role as acting director of the agency.”” Read more.

REACT— Americans for Limited Government’s Rick Manning: “Now that Judge Kelly has ruled twice that President Trump is the only person allowed to name the new head of CFPB, it is time for the President’s political opponents to stop their legal shenanigans.

TWEET DU JOUR— Via WH press sec Sarah Huckabee Sanders: “66% of voters say the economy is “good” or “excellent” – the highest since 2001 – according to new Quinnipiac poll. America has turned a corner under the President’s strong leadership.”

FROM THE SAME POLL— “49 percent of voters say former President Barack Obama is more responsible for the state of the economy, while 40 percent say Trump is more responsible.” Full poll.

GOOD THURSDAY MORNING — Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver.

DRIVING THE DAY — SIFMA is hosting a look ahead to the rest of the year in the economy featuring remarks from New York Fed president Bill Dudley at 3:30 p.m.. MM is then hosting a panel at 4:00 featuring some smart economists. Check it out here. … Producer prices at 8:30 a.m. expected to rise 0.2 percent headline and core …

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES — Colin Wilhelm on Puerto Rico Gov. Ricardo Rosselló’s statements that the hurricane that battered the commonwealth last year could boost the odds of the territory gaining U.S. statehood. To get Morning Money every day before 6 a.m., please contact Pro Services at (703) 341-4600 or info@politicopro.com.

JPMORGAN ADDS LOBBYISTS — POLITICO’s Zachary Warmbrodt: “JPMorgan Chase has hired two new lobbyists as the bank fills out its Washington office, sources familiar with the matter said. The additions are John Van Etten, who was previously with HSBC, and Michelle Mesack, who is leaving her post as senior counsel on the Senate Banking Committee.

“They’re joining the bank after the departure of lobbyists Pierce Scranton and Brendan Reilly. Jason Rosenberg is now head of JPMorgan’s Washington office. Last year, the company named Tim Berry, the former chief of staff to House Majority Leader Kevin McCarthy, as its head of global government relations.”

IRS NEEDS HALF A BILLION TO IMPLEMENT TAX LAW — POLITICO’s Bernie Becker: “The IRS has initially estimated that implementing the new tax law will require an extra $495 million in funding for 2018 and 2019, the agency’s in-house watchdog said in her annual report to Congress on Wednesday.

“Implementing the new GOP tax cut, H.R. 1 (115), will be a major challenge for the IRS, but the agency shouldn’t be too quick to blame funding problems if it struggles with that task, National Taxpayer Advocate Nina Olson said. … Years of funding cuts have already eroded the IRS’ ability to help taxpayers, Olson said, but the agency too frequently points to its budget when it runs into problems” Read more.

PLENTY OF BONUSES … BUT WHAT ABOUT RAISES? — AP’s Christopher Rugaber and Josh Boad: “American Airlines is handing out $1,000 bonuses to its employees. So are AT&T, Bank of America and Nationwide Insurance. The same for Comcast, JetBlue Airways and US Bancorp. Such announcements, coming from dozens of companies, have followed the passage of the Republican tax plan …

“The bonuses are one-time payouts, not the permanent pay raises that Trump and congressional Republicans have said will eventually result from the corporate tax cuts. Over time, bonuses are far less valuable to employees than wage increases. So far, most companies haven’t said whether any permanent pay increases are in the works. Economists caution that the corporate income tax cut’s effect on average pay, if any, might not become apparent for several years.” Read more.

IRS PAID $20M TO COLLECT $6.7M — NYT’s Patricia Cohen: “When Treasury Secretary Steven Mnuchin was asked at his confirmation hearing what he thought about using private companies to collect money owed to the government, he replied that it ‘seems like a very obvious thing to do.’ It may have been obvious, but it certainly was not economical.

“Private debt collectors cost the Internal Revenue Service $20 million in the last fiscal year, but brought in only $6.7 million in back taxes, the agency’s taxpayer advocate reported Wednesday. That was less than 1 percent of the amount assigned for collection.” Read more.

FOR NEW FED CHIEF, STOCK BOOM MAY BRING BUBBLE DÉJÀ VU— WSJ’s Greg Ip: “Any central banker watching the stock market today should get a queasy sense of déjà vu. A housing boom preceded the last recession. A tech stock bubble ushered in its forerunner. Today, stock and property prices are once again setting records, in absolute terms and relative to household incomes.

“That may leave the Federal Reserve and Jerome Powell, nominated to succeed Janet Yellen as Fed chair next month, confronting some agonizing trade-offs in the next year or two: What if low inflation calls for low interest rates but those low interest rates make an eventual, destructive asset bust more likely? Should he lean against an incipient bubble by raising rates faster now, or plan to mop up the mess if assets collapse later?” Read more.

STOCKS FALL FROM RECORDS, YEN STRENGTHENS — Bloomberg’s Adam Haigh: “The stellar run for equities that ushered in the new year showed signs of waning in Asia on Thursday as the yen strengthened to a six-week high and traders dialed back their appetite for risky assets amid a jump in government bond yields.

“The yen held gains against all its G-10 peers, dragging down shares in Tokyo. Equities in Seoul and Sydney also fell after the S&P 500 Index slipped overnight. The Canadian dollar and Mexican peso maintained losses triggered by a report that Canadian officials see rising odds the Trump administration will leave Nafta.” Read more.

FED DELIVERED $80.2B IN PROFITS TO TREASURY IN 2017 — NYT’s Binyamin Appelbaum: “The Federal Reserve’s economic stimulus campaign continued to generate large profits in 2017, helping to reduce the federal deficit, but the windfall is showing signs of tapering.

“The Fed, which remits its profits to the Treasury Department, disclosed on Wednesday that its payments last year totaled $80.2 billion — about 12 percent less than the $91.5 billion in 2016. The decline in profits reflects the Fed’s efforts, as the economy gains strength, to conclude the economic stimulus campaign it waged in the wake of the 2008 financial crisis.” Read more.

MNUCHIN’S TREASURY TESTED BY CHINA’S BOND POLICY SIGNALS — Bloomberg’s Saleha Mohsin: “China’s hints that it may slow purchases of U.S. government debt gave Treasury Secretary Steve Mnuchin and his team a test-run on debt market shocks. The episode, prompted by a Bloomberg News report that sent 10-year Treasury yields to their highest level in 10 months before recovering, highlights a staffing gap in the Office of Domestic Finance that pre-dates Mnuchin. That’s the arm of the department that would deal with a disruption in debt markets that a major shift in Chinese policy could precipitate.

“The incident also raises questions about Mnuchin’s engagement with the U.S.’s largest creditor. He’s met with Chinese counterparts in Washington and during G-20 meetings in Europe, but hasn’t traveled to meet them on their home turf. His last three predecessors visited China within the first months of their tenures as Treasury secretary.” Read more.

BERKSHIRE PROMOTES TWO — WSJ’s Nicole Friedman: “It is now officially a two-man race to succeed Warren Buffett as chief executive of a conglomerate that owns everything from auto insurer Geico to fast-food chain Dairy Queen. Berkshire Hathaway Inc. on Wednesday promoted Ajit Jain, head of the company’s reinsurance operations, and Greg Abel, chief executive of its utility business, to newly created spots on its board of directors and new jobs overseeing Berkshire’s day-to-day operations.

“’They are the two key figures at Berkshire’ in terms of succession, Mr. Buffett said Wednesday on CNBC. ‘I know that if I were in the position of those two fellows … I would like to get some experience with supervising a whole group of businesses before I eventually took over.’” Read more.

CORPORATE AMERICA WARNS TRUMP OVER IMMIGRATION — FT’s Barney Jopson: “Corporate America has fired a warning shot at President Donald Trump on immigration, telling the White House that moves threatening the legal status of 1M U.S. immigrants are a danger to economic growth.

“The message from Tom Donohue, head of the U.S. Chamber of Commerce, underscored how business has quickly moved on from celebrations over tax reform and is preparing to step up its role as a voice of opposition to key parts of the Trump agenda. Mr. Donohue also doubled down on previous warnings to Mr. Trump about trade, saying it would be a ‘grave mistake’ to withdraw from the North American Free Trade Agreement and urging the U.S. to pursue new trade deals rather than undo old ones.” Read more.

GOVERNMENT BOND SELL-OFF TRIGGERS WARNINGS — FT’s Eric Platt and Robin Wigglesworth: “The U.S. bond market has suffered a fierce sell-off as investors fret that central banks will move more aggressively than anticipated to end their crisis-era economic stimulus programs, with some high-profile debt investors declaring a new era for fixed income.

“The yield of 10-year Treasuries on Wednesday approached levels not seen since the ‘Trumpflation’ retreat nearly a year ago, hitting a nine-month high of nearly 2.6 percent on expectations cash freed up by the recent US tax cut will finally help spark higher inflation driven by stronger economic growth.” Read more.

BITCOIN COULD USE MORE POWER THAN ELECTRIC CARS — Bloomberg’s Tim Loh and Frederic Tomesco: “The global power needed to create cryptocurrencies this year could rival the entire electricity consumption of Argentina and be a growth driver for renewable energy producers from the U.S. to China.

“Miners of bitcoin and other cryptocurrencies could require up to 140 terawatt-hours of electricity in 2018, about 0.6 percent of the global total, Morgan Stanley analysts led by Nicholas Ashworth wrote in a note Wednesday. That’s more than expected power demand from electric vehicles in 2025.” Read more.

WATERS PRESSES ON TRUMP CONFLICTS— Per release from House Financial Services ranking member Maxine Waters (D-Calif.) and other Democrats: “[The members] sent a letter to Treasury Secretary Steven Mnuchin, pressing for the Treasury Department to provide information relating to potential money laundering violations by Russian persons and the Trump Organization.” Full letter.

NEW AT CITADEL— Via POLITICO’s Daniel Lippman: Rob Saliterman has joined Citadel as a director on the investment firm’s corporate communications team, based in New York. He’s an alum of the Bush White House and Treasury Department, Google, and most recently was at Snapchat.

PROMOTED AT CARLYLE — Among the new partners at the Carlyle Group: Bryan Corbett, an alum of Bush 43 Treasury and the NEC and counsel on the Banking Committee under Sen. Shelby.





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