‘I’m not ranting and raving.’ Trump on defensive in first solo news conference

WASHINGTON (Reuters) – The first gripe came three minutes into President Donald Trump’s first solo news conference on Thursday, when he accused reporters of ignoring a poll showing him with a 55 percent approval rating – a figure at odds with most other surveys.

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Bernie Sanders Unveils Social Security Expansion Bill On The Day Millionaires Stop Paying

Sen. Bernie Sanders (I-Vt.) and Rep. Peter DeFazio (D-Ore.) introduced a bill on Thursday to expand Social Security benefits by lifting the cap on earnings subject to payroll taxes.

The progressive lawmakers presented their proposal on the day that Americans with wages of $1 million or more stop paying into Social Security for the year.

Workers now contribute to Social Security based on the first $127,200 they earn every year. The new legislation would apply the 6.2-percent payroll tax to ordinary earnings of $250,000 or more, as well as to unearned income, like capital gains and dividends, above that threshold.

Rather than increase benefits for those high-earning workers based on their additional contributions, the bill would use the revenue to extend Social Security’s solvency until 2078, and to boost benefits across the board with a disproportionate impact on low earners.

“We can expand benefits, we can extend the life of Social Security, if we have the guts to tell the millionaires and billionaires, yes, they are going to have to pay a bit more in taxes,” Sanders said at a press conference on Capitol Hill.

Sanders was joined by DeFazio; Democratic Sens. Ron Wyden (Ore.) and Elizabeth Warren (Mass.); Democratic Reps. Jan Schakowsky (Ill.) and Paul Tonko (N.Y.); and representatives of progressive organizations like Social Security Works, the National Committee to Preserve Social Security and Medicare, and the Alliance for Retired Americans.

There has been a cap, or taxable maximum, on the amount of pay subject to the payroll taxes that fund Social Security since the government began collecting the tax in 1937. 

The cap rises with the average wage index. The share of the country’s ordinary earnings covered by the cap, however, has declined to just under 83 percent in 2014 from 90 percent in 1983.

This drop is the result of the disproportionate wage growth of those with earnings above the cap, and stagnant pay growth for the vast majority of workers, according to an analysis by the Center for American Progress released Thursday. An accompanying study published by the Center for Economic and Policy Research found that just 1.6 percent of American workers make $250,000 a year or more, suggesting that Sanders’ bill would affect relatively few people.

There is virtually no chance of the legislation advancing in the Republican-controlled Congress. 

Instead, the release of the bill was another opportunity for Democrats to hammer President Donald Trump for going soft on campaign promises not to cut Social Security and Medicare. Trump has not discussed his plans for the two programs since the election, but his proposals to invest in infrastructure, increase defense spending and reduce taxes will put him under enormous pressure to find savings elsewhere.

Warren said at Thursday’s press conference that Trump’s appointment of Rep. Mick Mulvaney (R-S.C.) as director of the White House Office of Management and Budget shows that Trump “has already turned his back on his promise to protect Social Security.” The Senate confirmed Mulvaney on Thursday morning in a 51-49 vote.

In his confirmation hearing last month, Mulvaney refused to disavow a previous claim that Social Security is a “Ponzi scheme,” and reaffirmed his support for benefit cuts, such as an increase in the retirement age. Warren noted those positions in her comments.

“That’s who Donald Trump put in charge of delivering a budget to the American Congress,” Warren said, referring to Mulvaney. “Well, I’m here to say, those budgets that cut Social Security will go down in flames. We will fight back.”

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Sun Life Financial Inc disappoints in fourth quarter, but CEO Dean Connor sees bright side

It’s too soon to say whether corporate tax rates will fall in the United States, but if Donald Trump’s election promise of tax reform comes to fruition during his administration, it will be good news for Toronto-based insurer Sun Life Financial Inc.

“We do pay a lot of corporate tax in the U.S. … If those rates move down, there’ll be a real benefit,” Sun Life chief executive Dean Connor told the Financial Post on Thursday. “If it happens, when it happens, it’ll be positive.”

Higher interest rates and a more buoyant economy would also help the life insurer, as low rates put pressure on meeting long-term obligations and can depress profitability.

Another small positive in the offing for Sun Life under the Trump presidency is the potential scrapping of a plan to significantly expand circumstances in which broker-dealers and investment advisers are deemed fiduciaries to their clients. This designation would affect the types of financial products the clients could be offered.

“They’d be less inclined to change their investment (product) lineup” if their designation does not change, Connor said, adding that the impact on Sun Life would be positive but very small, akin to a “rounding error.”

Sun Life’s shares declined by more than four per cent in mid-day trading Thursday, to just over $50 on the Toronto Stock Exchange, after the insurer reported fourth quarter financial results that fell short of analyst expectations.

“A miss against expectations is a bit of a surprise for Sun Life as investors have become accustomed to strong results in recent quarters,” John Aiken, an analyst at Barclays Capital, said in a note to clients.

He noted that Sun Life’s asset management operations, particularly global asset manager MFS, continued to struggle with redemptions in a trend facing the broader industry.

“Admittedly, expectations were high heading into the quarter based on Sun’s recent track record and exceptional third quarter results,” Aiken wrote, adding that the were some positives, notably sales levels and the value of new business.

Sun Life, which has insurance and wealth management operations in Canada, the U.S., and Asia, posted core earnings of $560 million (91 cent a share) in the fourth quarter, which ended Dec. 31. This was below the consensus analyst estimate of 97 cents a share, according to Aiken.

Sun Life reported core earnings of $646 million ($1.05) in the corresponding period a year ago.

In an interview, Connor said investments Sun Life has made over the past few years, organically and to fund acquisitions, should pay off in the coming months and years.

“We run the company thinking for the medium to long-term,” he said. “We feel very good about our prospects.”

On a conference call Thursday, Sun Life executives told analysts they are still analyzing the impact of a new risk-based capital measurement regime for life insurers that comes into effect at the beginning of 2018.

The Life Insurance Capital Adequacy Test (LICAT), developed by the federal Office of the Superintendent of Financial Institutions (OSFI), is intended to capture risks that weren’t adequately reflected in capital measures under the existing guidelines.

Financial Post