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Trumponomics Daily—Thursday, March 2

The Trump administration is doubling down on its dubiously optimistic schedule for tax reform. Treasury Secretary Steven Mnuchin, in a Fox Business interview Wednesday, said the president will sign an overhaul by the August recess. “That’s a very aggressive timetable but realistic and something that the President and I are very committed to doing,” he said. It is indeed aggressive: There are five months until that recess, and the House only has 68 legislative working days in that window. Before the tax-writing committees can focus on the project, they have to complete the messy and potentially unconquerable task of replacing Obamacare — or decide to set it aside. Those panels have yet to draft tax reform bills; there have been no hearings; and Republicans are still arguing among themselves over the basic contours of an agreement. On one key point, though, the White House could be moving toward the House GOP’s preferred approach: Larry Kudlow, an informal Trump adviser, announced that within the administration, the so-called border adjustment tax, which would raise $1 trillion in new revenue by taxing imports, is “winning.”

Meanwhile, the president’s in-house economic brain trust is getting an infusion of GOP establishment insiders. Gary Cohn, the former Goldman Sachs president now chairing Trump’s National Economic Council, earlier this week announced 13 senior staff appointments, eight of whom served in George W. Bush’s administration. They’ve also got extensive corporate and Congressional experience among them. Personnel isn’t destiny, but having a fully-formed team that knows the levers of government should give Cohn and his corporate-friendly approach a lift. The Wall Streeter is trying to carve out a fiefdom inside a West Wing that’s so far been dominated by chief strategist Steve Bannon and his economic nationalist vision.

And in an (encouragingly productive) exchange yesterday, a reader challenged my criticism of Trump’s address to Congress for lacking policy specifics. “Speeches to Congress are historically vague because they offer grand visions rather than nuts and bolts,” he wrote. That prompted me to dig up Ronald Reagan’s first such speech, delivered on Feb. 18, 1981. It’s worth a look, as a point of comparison. Note both how that new president didn’t shy from delivering tough medicine Trump avoided — and the eye-glazing detail Reagan engaged to describe his proposed budget cuts, beginning by “asking that you join me in reducing direct Federal spending by $41.4 billion in fiscal year 1982, and this goes along with another $7.7 billion in user fees and off-budget savings for a total of $49.1 billion.” Reagan went on to enumerate, and justify, cuts to everything from the Export-Import Bank’s loan authority to Postal Service subsidies. It didn’t make for electric oratory, but nobody could come away from that speech and claim the president hadn’t offered Congress a clear direction.

Tory Newmyer

Must Reads

Jeff Sessions Spoke with Russia’s Ambassador During the 2016 Election [Fortune]

The attorney general met twice last fall with the Russian ambassador — a man considered by U.S. intelligence to be a top Russian spy and spy recruiter — though he denied any contact with Russian officials in his confirmation hearings. The revelation has prompted calls from some Democrats for him to resign.

White House Said to Kick Off Infrastructure Planning Thursday [Bloomberg]

Gary Cohn, Trump’s top economist, will lead a meeting of at least 15 federal agencies today to begin forging the new administration’s proposal for a $1 trillion infrastructure initiative.

Donald Trump’s Economic Plan Has a Trillion Dollar Problem [Fortune]

Trump in his Congressional address decried Obama’s contribution to the federal debt, but his own economic plan calls for raising the nation’s debt-to-GDP ratio by double digits, an even more perilous move considering the burden the government is already servicing.

Here’s What Wall Street Has to Say About Donald Trump’s Speech to Congress [Fortune]

The president’s Tuesday night speech revived the “Trump rally” on Wall Street — and a bunch of financial analysts offer theories why share prices are still finding room to grow.

Number of the day

$724 billion

The dollar value of the stock market rally Wednesday following President Trump’s well-received address to a joint session of Congress. The single-day, 1.37% jump was also powered by a pair of regional Fed governors suggesting that a March rate hike is unlikely.

Loose change

Trump’s First Speech to Congress Had Nearly 10 Million Fewer Viewers Than Obama’s [Fortune]

Trump’s Address Was More Measured But Actions Speak Louder Than Words [Fortune]

How the United States Looked Before the EPA [Fortune]

American Industries See Two Sides of Trump [Bloomberg]

White House lawyer twice briefed Conway on ethics rules following Ivanka product pitch [Politico]