New York Times: “Next year, for the first time since 1982, the program must start drawing down its assets in order to pay retirees all of the benefits they have been promised, according to the latest government projections.”

“Unless a political solution is reached, Social Security’s so-called trust funds are expected to be depleted within about 15 years. Then, something that has been unimaginable for decades would be required under current law: Benefit checks for retirees would be cut by about 20 percent across the board.”

Rep. Kevin Brady (R-TX), a lead architect of the GOP tax bill, suggested the tax cuts may not fully pay for themselves, contradicting a promise Republicans made repeatedly while pushing the law in late 2017, the Washington Post reports.

Pressed about what portion of the tax cuts were fully paid for, Brady said it was “hard to know.”

“The federal government’s deficit typically shrinks during strong economic times, but the deficit is up nearly 40 percent so far this fiscal year, according to the latest Congressional Budget Office report released Friday.”

“A federal judge in D.C. has rejected an effort by House Democrats to block President Trump’s use of emergency powers to reprogram military funds for his border wall,” Axios reports.

Said Judge Trevor McFadden: “This is a case about whether one chamber of Congress has the ‘constitutional means’ to conscript the Judiciary in a political turf war with the President over the implementation of legislation… While the Constitution bestows upon Members of the House many powers, it does not grant them standing to hale the Executive Branch into court claiming a dilution of Congress’s legislative authority. The Court therefore lacks jurisdiction to hear the House’s claims and will deny its motion.”

McFadden was appointed to the federal bench by Trump.

“If Trump’s 5% tariff on Mexican goods takes effect later this month, the president’s trade policies would constitute a bigger tax hike than Bill Clinton’s in 1993,” Axios reports.

“Tariffs already in place against Mexico will increase revenues by $69 billion, the Tax Foundation estimates — or about 0.32% of GDP. Add in the threatened 5% tax on Mexican imports, and that rises to about 0.40% of GDP.”

“That’s more than Clinton’s tax bill in 1993, which brought in revenues of about 0.36% of GDP after the first year, and just shy of George H.W. Bush’s increase in 1990, which amounted to 0.41% of GDP after year 1.”

Politico: “Congressional leaders and the Trump administration finished a round of breakneck budget talks on Tuesday with no resolution but a commitment to keep negotiating and try to clinch a debt and spending agreement that would avoid fiscal catastrophe.”

Politico: “The four top party leaders will meet on Tuesday morning to begin talks on a potential deal to raise the budget caps, as well as a possible boost to the debt ceiling, according to multiple sources, although any agreement will be hard to reach.”

“Acting White House Chief of Staff Mick Mulvaney, Acting Office of Management and Budget Director Russ Vought, and Treasury Secretary Steven Mnuchin will take the lead for the Trump administration in the negotiations.”

“The Internal Revenue Service audited just 0.59% of individual tax returns last year, marking the seventh consecutive annual decline as the tax agency copes with smaller budgets and fewer workers,” the Wall Street Journal reports.

“Audits of the highest-income households dropped sharply, to their lowest levels since the IRS began reporting that data in 2008. In fiscal 2018, the IRS audited 6.66% of returns of filers with more than $10 million in adjusted gross income, down from 14.52% in 2017. Among households with income between $1 million and $5 million, the audit rate dropped from 3.52% to 2.21%.”

“The White House is reassuring conservative leaders that it has no plans to hike the gas tax to help fund a massive infrastructure package that President Trump hopes to negotiate with Congress,” Politico reports.

“Both acting White House chief of staff Mick Mulvaney and Russ Vought, Trump’s budget director, have repeatedly downplayed the possibility in private meetings with fiscal conservatives who are expressing alarm that Trump might embrace a massive tax increase. Concerns have specifically centered around a potential gas tax boost, an idea that Trump has flirted with during his presidency.”

“President Trump left a meeting with Senate Majority Leader Mitch McConnell on Tuesday morning seemingly open to a deal with Democrats to raise the budget caps that will cause strict spending cuts in the fall,” Politico reports.

“While Trump did not commit to anything, the president is notably warmer than some of his staff on the possibility of avoiding blunt budget cuts in the fall that will hit if there’s no new fiscal deal, the sources said. McConnell (R-KY) laid out the need to do a caps deal and the president seemed receptive.”

Playbook: “Will Democrats cut deals with Republicans this fall if the president continues to stonewall all of their investigations?”

Jonathan Swan: “Senior administration officials — including acting Office of Management and Budget director Russ Vought and fiscally conservative chief Mick Mulvaney — have told Republicans that the president doesn’t want Congress to strike a spending deal in September when current funding runs out. Instead, Team Trump wants a short-term solution to preserve the ability to fight for massive spending cuts in the fifth year of a Trump presidency.”

“The White House thinks the most likely scenario this year is that the president signs a one-year ‘continuing resolution’ (a continuation of 2019 spending levels through 2020), followed by another short-term extension next September to get past the November election.”

“Some senior administration officials envision a newly re-elected Trump liberated to slash spending. They view 2021 as the year to have that fight — the final year in which the president can threaten hundreds of billions of dollars’ worth of automatic spending cuts known as the sequester. (These automatic cuts, which attack both defense and domestic spending, expire in 2021.)”

Sen. Michael Bennet (D-CO) told CBS News that President Trump was the most fiscally reckless president in decades.

Said Bennet: “Donald Trump has shown himself to be the most fiscally irresponsible president we have had in generations. Here’s a guy who’s managed to rack up a $2 trillion deficit at a moment of full employment in the country, it’s almost impossible to do that.”

CNN: “As lawmakers trade fire over contempt votes and impeachment, there’s been no progress toward reaching a budget agreement or extending the federal government’s ability to borrow before September, when the money runs out. That’s raising the ugly prospect of more than $100 billion in mandatory cuts as well as an unprecedented default on US debt — a situation that could trigger a worldwide economic catastrophe.”

“It’s a mess everyone knows is coming, and yet no one seems to have a plan — at least at the moment — for averting disaster.”

“Alarm bells are starting to go off on Capitol Hill over a looming fight to fund the government and prevent a shutdown later this year,” The Hill reports.

“Though Congress has until the end of September to pass legislation preventing another funding lapse, lawmakers are sending up warning signs to their colleagues and the White House that they are heading toward a fall train wreck, with deadlines for raising the debt ceiling and preventing across-the-board budget cuts and the second shutdown of the year all in the same month.”

“Negotiations on a multibillion-dollar disaster aid bill in the Senate have grown more complicated in recent days with a push by the Trump administration to add emergency spending for the U.S.-Mexico border to the bill,” the Washington Post reports.

“The talks over the disaster aid bill were already fraught because of a fight between President Trump and congressional Democrats over spending for Puerto Rico. Trump has yet to agree to a deal offering more than $600 million for the U.S. island territory’s food stamp program, while Democrats say much more is required for needs on many fronts as Puerto Rico recovers slowly from the devastations of Hurricane Maria. Senate Republicans have been prepared to offer more — though perhaps not enough to satisfy Democrats — but it has been unclear whether the White House would support their plans.”