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Growing Republican confidence in the Senate tax reform plan was undermined by a new snag on Wednesday as disagreements broke out among lawmakers about how to limit its impact on the US budget deficit. The tax cut could lead to about $1.5tn of lost revenue over a decade.

As members of his party strive to give President Donald Trump a legislative win, which they see as vital to midterm elections next year, deficit hawks persuaded leaders to agree in principle to a mechanism that would automatically reverse some tax cuts if they fail to generate sufficient economic growth.

In a congressional testimony on Wednesday, Fed chair Janet Yellen warned lawmakers that America’s surging public debt outlook should be keeping people awake at night and that lawmakers should be thinking of ways to ensure the deficit is contained over the long term. (FT)

In the news

Trump tweets
US president Donald Trump sparked outrage in the UK and raised new questions about his white nationalist affinities after retweeting a series of anti-Muslim posts from the leader of an ultranationalist British group. Downing Street has made the rare move of directly criticising Mr Trump for the posts. (FT)

Siemens division IPO
Siemens plans to list its €40bn medical solutions division in Frankfurt, which will be Germany’s largest IPO in more than two decades. Europe’s largest industrial conglomerate chose Frankfurt over New York for the listing of Healthineers, its imaging and diagnostics business. (FT)

Oil cuts
The fragile alliance between the world’s two largest crude oil producers faces its first big test as Russia drags its feet on its commitment with Saudi Arabia to extend output cuts through 2018. The two oil superpowers came together last year to reverse tumbling oil prices but seem unable to finalise a deal in the run-up to Opec’s meeting on Thursday. (FT)

North Korea missile
North Korea on Wednesday claimed that the successful launch of a new advanced ballistic missile puts all of the US in range. In a televised announcement following the launch, the regime referred to the rocket as a Hwasong 15 and called it “the most advanced missile so far”. (FT, NAR)

Bitcoin boom
As Bitcoin surges past $11,000, the rapidly increasing prices of cryptocurrencies are prompting volatility-starved investors to examine was to join the biggest speculative boom since the dotcom fever. (FT)

The day ahead

Opec meeting
Oil ministers from the Organization of Petroleum Exporting Countries and its partners, including Russia, will gather in Vienna on Thursday. The meeting comes one year after Opec agreed to reduce production by 1.2m barrels a day to stabilise oil prices. 

Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.

What we’re reading

Uber’s cloak and dagger schemes
Encrypted texts, untraceable phones, late-night secret meetings and self-deleting messages are ordinarily the stuff of spy novels, but a former Uber employee’s allegations that a unit of the ride-hailing company routinely employed such tactics has riveted a California courtroom this week. Mounting litigation costs and tough global competition have pushed up Uber’s losses. (FT)

Person of the year
The FT’s Ed Luce argues that US secretary of defence Jim Mattis deserves to be “person of the year”. A “model for sublimating ego to a larger cause”, we would all be sleeping even less soundly without Mr Mattis around, Luce says. (FT)

No family is safe
As a US admiral and former vice-chairman of the joint chiefs of staff, James Winnefeld, helped run the most powerful military on Earth, but he was unable to save his own son from the scourge of opioid addiction. (The Atlantic)

Putin ally in DC
One of the most expensive mansions to sell in the history of DC has been revealed to be tied to one of Russia’s richest men and a member of Russian president Vladimir Putin’s inner circle. (WaPo)

Offshore reward
Over the past few decades, some of the largest US companies have wagered that they could slash their taxes by stashing hundreds of billions of dollars offshore. If the Republican tax reform passes, this strategy could pay off for the companies in a big way. (NYT)

Video of the day

UK bows to EU Brexit bill demands Britain has agreed to fully honour its financial commitments as identified by Brussels, removing one of the biggest obstacles to a Brexit divorce settlement.

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