The daily business briefing: May 23, 2017

1. Trump to release budget with deep cuts to social programs

President Trump on Tuesday will propose a budget calling for slashing federal spending by $3.6 trillion over 10 years. More than $1 trillion in cuts over a decade would come from spending on safety-net programs for low-income Americans, including Medicaid, food assistance, and other anti-poverty programs. Democrats immediately began expressing anger over the proposal as details began circulating Monday night. Senate Minority Leader Chuck Schumer (D-N.Y.) said Trump was trying to "pull the rug out from so many Americans who need help" and giving massive tax cuts to the rich. White House budget director Mick Mulvaney said the spending plan, titled A New Foundation for American Greatness, would promote more responsible use of taxpayer money by cutting ineffective programs that discourage people from working. "If you are on food stamps and you are able-bodied, we need you to go to work," he said.

The Washington Post

2. Industrial stocks lead gains after announcement of Saudi deals

U.S. stocks made gains on Monday as a wave of deals announced during President Trump's visit to Saudi Arabia lifted industrial stocks, especially defense contractors. The S&P 500 Index rose for the third straight day, pushing its gains above 1.5 percent. Boeing was one of the stocks that led the way thanks to its multi-billion-dollar deal to sell commercial and military aircraft to Saudi Arabia. Trump is nearing the mid-point on a foreign tour that has helped to shift attention from the broadening crisis back home centering around the investigation of the Russia ties of some of Trump's associates, and Trump's firing of former FBI Director James Comey, who was supervising the Russia investigation. U.S. stock futures edged higher early Tuesday, signaling a likely higher open.

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Bloomberg MarketWatch

3. Iraq gets behind extension of oil output cuts

Iraq on Monday backed the plan to extend a deal to cut oil production, removing one of the last obstacles to the agreement ahead of a meeting of 24 nations in Vienna on Thursday. Representatives of the countries, members of the Organization of Petroleum Exporting Countries and other major oil producers, will be asked to ratify a proposal to renew the deal to trim output for another nine months — until March 2018 — to ease oversupply that has dragged down oil prices. The cuts of up to 1.8 million barrels a day were meant to last six months, but they didn't reduce fuel stockpiles as much as expected. Saudi Arabia, Russia, and other influential nations have gotten behind the plan to extend the cuts, although some smaller producers are still resisting.

Bloomberg

4. Ford chairman says CEO shake-up will speed up decision-making

Ford Motor Co. Chairman Bill Ford Jr. said Monday that the company had named James Hackett as chief in a bid to speed up its decision-making and cut costs to better compete with longtime rivals and tech companies in a suddenly fast-changing industry. "The clock speed at which our competitors are working ... requires us to make decisions at a faster pace," said Ford Jr., who, along with other descendants of company founder Henry Ford, maintains effective control over the No. 2 U.S. automaker. Hackett, a former office furniture executive, is known as a turnaround expert. He has run the Ford unit developing self-driving cars and related projects for the past year. He replaces Mark Fields, a longtime Ford executive who presided as CEO for less than three years, and faced growing anxiety among shareholders over the company's tumbling stock price.

Reuters

5. Citigroup agrees to settlement over suspicious transfers to Mexico

Citigroup on Monday agreed to pay a $97.4 million settlement over accusations that the bank failed to alert federal regulators that millions of dollars its Banamex USA unit was moving to Mexico might be suspicious. The Justice Department said that under the agreement Banamex "admitted to criminal violations by willfully failing to maintain an effective anti-money-laundering" compliance program. Banamex is a dominant relayer of remittances from the U.S. to Mexico, but prosecutors said it failed to put into place controls to weed out drug money and other illegal funds. Banamex USA noted 18,000 internal alerts about suspicious transactions from 2007 to 2012 — out of 30 million Mexico remittances — but conducted fewer than 10 investigations and only alerted regulators about six cases.

The New York Times