By Jeffry Bartash, MarketWatch
President Trump and House Speaker Nancy Pelosi engaged in an extraordinary clash over his plans to give his State of the Union next week despite the partial government shutdown, which Trump’s top economic adviser says could lead to zero U.S. growth in the first quarter. The White House also backed the opposition in a dispute over the legitimate government of Venezuela.
STATE OF THE UNION SHOWDOWN
House Speaker Nancy Pelosi told President Trump he was not welcome to give the traditional State of the Union speech in the House next week because of the government shutdown, an unprecedented disinvitation that could intensify partisan strife in a deeply divided Washington.
In a letter to Pelosi , Trump earlier on Wednesday said he planned to give his speech as planned on Jan. 29 in the chambers of the House. The president said “it would be so very sad for our Country, if the State of the Union were not delivered on time, on schedule, and very importantly, on location!”
Hours later, Pelosi sent responded with a letter of her own saying the House would not authorize the speech in the House until the government was fully reopened.
SHUTDOWN DAMAGE TO ECONOMY
The president’s top economic adviser said the U.S. economy might not grow at all in the first three months of 2019 if the partial government shutdown goes on much longer.
Gross domestic product could be “very close to zero,” Kevin Hassett said in an interview with CNN. Hassett is chairman of the White House Council of Economic Advisers.
Roughly 800,000 federal workers are missing their second paycheck since the 33-day shutdown began on Dec. 22. Trump wants money for a border wall or fencing along the Mexican border, but Democrats are opposed.
In yet another effort to pressure Democrats, Trump unveiled a new slogan.
TRUMP TAKES SIDES IN VENEZUELA
The Trump White House said it recognizes opposition leader Juan Guaido as the interim president of Venezuela amid a wave of violent protests against President Nicolas Maduro.
Venezuela has become an economic basket case over the past decade and many blame the policies of Maduro and his predecessor, Hugo Chavez. Vice President Mike Pence on Tuesday called Maduro a “dictator” and said he had no legitimate claim to power.
Maduro responded by ordering Americans to leave the country and putting the military on high alert.
econ jobless claims 012419DOWNSIDE TO CHINA STRATEGY
President Trump has a new China problem. Every time he suggests tough U.S. trade policies are hurting China, Wall Street gets nervous and stocks fall.
The White House has to walk a fine line between pressuring China in an effort to win trade concessions, but not scaring off investors in the process. Many investors are growing worried about slower Chinese growth and how it could hurt the rest of the world.
The U.S. would not be immune if the Chinese economy stumbled.