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U.S. Treasury Secretary Steve Mnuchin. Photo: Alex Brandon / AP

The Treasury Department says that it will hold off on revoking Obama-era rules meant to discourage corporate inversions, which were invalidated late last month by a Texas district court.

Bottom line: This isn't so much a statement of principle or plan to appeal, so much as a Trump Administration argument that U.S. companies would no longer pursue such transactions if the GOP tax plan passes.

  • What are inversions? When a U.S.-based company merges with an overseas company in order to relocate its headquarters for tax purposes One of the most notable attempts was Pfizer trying to merge with Ireland-based Allergan — even though —even though both company CEOs work out of New York -- which prompted Treasury rules discouraging such behavior.
  • Statement: "Treasury believes that proposing to revoke the existing distribution regulations before the enactment of fundamental tax reform, could make existing problems worse. If legislation does not entirely eliminate the need for the distribution regulations, Treasury will reassess the distribution rules and Treasury and the IRS may then propose more streamlined and targeted regulations."
  • But... If you were among those optimistic that the GOP tax plan would become law in 2017, this past weekend's insult-a-thon between President Trump and Sen. Bob Corker should give you serious pause. Welcome to the Tax Plan Skeptics Party. We've got plenty of punch.
  • Plus: Given that Treasury has not filed notice to appeal the Texas court ruling, it is unclear why a company would necessarily need to abide by the rule in the interim.
  • More: The inversion note was included in a a 200-page report that outlines proposed financial markets reforms, including ones that would roll back pieces of Dodd Frank (including cuts to Volcker Rule implementation) and expand the JOBS Act of 2012 to encourage more IPOs (including by loosening the definition of "emerging growth company").

Go deeper

3 hours ago - Health

Fauci: Omicron variant will "inevitably" be found in U.S.

Photo: Chip Somodevilla/Getty Images

Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, cautioned on Sunday that the COVID-19 Omicron variant will "inevitably" be found in the United States.

Driving the news: Fauci, Biden's chief medical adviser, told ABC's George Stephanopoulos on "This Week" that U.S. officials will meet with colleagues from South Africa later on Sunday to try to determine the severity of the cases, as countries scramble to learn more about the variant.

Updated 4 hours ago - Politics & Policy

Dems fear supply-chain blame

Illustration: Aïda Amer/Axios

As supply-chain kinks drive up prices and disrupt holiday shopping, Democrats are scrambling to show action and deflect blame.

Why it matters: With their party controlling both the White House and Capitol, vulnerable Democrats worry supply-chain snafus will hurt them in next year's midterms.

4 hours ago - World

Scoop: Germany urges Congress not to sanction Putin’s pipeline

Photo: Mikhail Svetlov/Getty Images

The German government has urged members of Congress not to sanction the Nord Stream 2 pipeline, arguing that doing so will "weaken" U.S. credibility and "ultimately damage transatlantic unity," according to documents obtained by Axios.

Why it matters: At a time when roughly 100,000 Russian troops are massing at its border, Ukraine views Nord Stream 2 as an existential threat to its security. The pipeline would circumvent Ukrainian transit infrastructure and deliver Russian gas directly to Germany, eliminating one of the last deterrents Ukraine has against an invasion.