Overnight Finance: House adopts Senate budget, taking step to tax reform | GOP worries Trump feuds will endanger tax plan | Trump talks NAFTA withdrawal with senators | Treasury calls for looser oversight of insurers

House adopts Senate budget, takes step toward tax reform: House Republicans on Thursday narrowly adopted the Senate’s version of the 2018 budget resolution, overcoming a key hurdle for the party’s tax-reform plan.

The budget will allow Republicans to pass a tax overhaul that adds up to $1.5 trillion to the deficit through a process known as reconciliation, which only requires 51 votes to pass in the Senate.

Twenty Republicans voted against the budget in the 216-212 vote, more than the 18 who voted against the original House version earlier this month.

Most of the 20 defectors were centrists hailing from populous states that could stand to lose from eliminating the state and local tax deduction. The Hill’s Niv Elis and Cristina Marcos take us there: http://bit.ly/2zRSizj.

 

Brady announces tax bill markup for Nov. 6: The House Ways and Means Committee will begin debating the Republican tax bill on Nov. 6, Chairman Kevin Brady (R-Texas) announced Thursday.

The tax-writing committee will hold a markup for the GOP tax plan a week after Republicans release the bill on Nov. 1.

{mosads}

Brady announced the hearing moments after the House passed the Senate’s budget resolution by a two-vote margin, allowing them to fast-track efforts to reform the nation’s tax code.

“Today is a historic day — and we are ready to deliver tax relief that improves the lives of middle-income Americans and struggling families who have been left behind in our slow-growing economy,” Brady said in a statement.

“By passing this budget today, we can send a clear message to the American people: real tax reform is on the way: http://bit.ly/2zSilWK.

 

But… Trump feuds endangering tax reform: Republicans are warning that a growing war of words between President Trump and key GOP senators is threatening to undercut the party’s efforts to pass tax reform and move its agenda.

While many GOP senators have offered supportive public words for Sens. Bob Corker (R-Tenn.) and Jeff Flake (R-Ariz.), who are both retiring amid feuds with Trump, they are also feeling fatigued by all the infighting and say it is time to move on.

“I think most people are tired of the back-and-forth,” said Sen. Lindsey Graham (R-S.C.), who has feuded on and off with Trump but has had a more cooperative relationship with the White House in recent months.

While saying he liked Flake, he also said pointedly that “the election is over” and Republicans need to work with the White House to get results.

“The president did a good job at the lunch yesterday laying out his success. [But] I told the president, you kick every barking dog in Washington and you’ll wind up spending all your time [on] barking dogs,” he said. http://bit.ly/2xpUv3b.

 

Happy Thursday and welcome back to Overnight Finance. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@digital-release.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

 

Trump talks NAFTA withdrawal with GOP senators: President Trump is holding fast to his threats to withdraw from the North American Free Trade Agreement (NAFTA) to gain leverage in the contentious negotiations. 

Trump repeated his threat, which he presented as a negotiating strategy, during his private lunch with Republican senators on Tuesday.

He told the senators that the United States may need to start the six-month withdrawal process to reach a better agreement with Canada and Mexico. Trump has previously suggested that this threat of withdrawal could lead to concessions by the trading partners.

Several senators expressed concerns about the strategy after the meeting, particularly those with significant agricultural interests in their states.

In response, Trump asked senators to stay with him as he works toward getting a better agreement. The Hill’s Vicki Needham and Alexander Bolton report: http://bit.ly/2zR5aph.

 

Treasury calls for looser federal oversight of insurance companies: The Treasury Department on Thursday called for fundamental changes to the way federal agencies regulate insurance companies under the Dodd-Frank Act financial rules.

In a report released Thursday night, Treasury said regulators should move away from regulating insurance companies based on size, and instead focus on risky activities conducted by such firms. The move could require Congress to amend Dodd-Frank, which created strict rules meant to limit dangerous activity in banks and financial firms.

“Treasury’s position is that entity-based systemic risk evaluations of insurance companies are generally not the best approach for mitigating risks arising from insurance,” the report reads, calling on more federal collaboration with state regulators.

“Instead, insurance regulators should focus on potential risks arising from insurance products and activities, and on implementing regulations that strengthen the insurance industry as a whole.”

Dodd-Frank subjects banks and certain financial firms with more than $50 billion in assets to tighter rules and closer federal scrutiny. Federal regulators analyze those firms, called “systemically important financial institutions,” (SIFI) to ensure their stability. More here: http://bit.ly/2i975xd

 

Dems yearn for days of GOP deficit hawks: House Democratic leaders are wondering if the Republican deficit hawk has gone extinct. When former President Obama was in office, GOP leaders skewered the Democrats for what they deemed profligate spending, depicting soaring post-recession deficits as a grave threat to the nation’s economy and riding a public backlash that helped them win the House in a 2010 landslide. 

But this week, Republicans in both chambers passed a budget bill that sets the stage for tax reforms allowing $1.5 trillion to be added to the debt over the next decade. The Republicans’ fiscal flip-flop has not been overlooked by Democrats, who contend the GOP has lost its moral authority to protest deficit spending moving forward.

“I never want to hear Republicans complain about deficits ever again,” Rep. Linda Sánchez, vice chairman of the House Democratic Caucus, said Thursday after the House passed the budget bill by a slim 216-212 margin. The Hill’s Mike Lillis has more: http://bit.ly/2zRwOCs.

 

House votes to impose non-nuclear sanctions on Iran: The House passed legislation on Thursday to expand sanctions on Iran for its ballistic missile development and support for Hezbollah, weeks after President Trump declined to certify that Tehran is complying with an international accord to curb its nuclear program.

The four measures targeting Iran’s ballistic missile program and Hezbollah support all passed easily with bipartisan backing.

For now, GOP lawmakers aren’t moving to impose nuclear sanctions that were lifted as part of the Iran nuclear deal. Congress has 60 days to reimpose those sanctions since Trump’s announcement that he would not recertify the pact.

A bill authored by House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) authorizes sanctions against Iranian government agencies involved in ballistic missile development, as well as any other foreign entities or individuals that provide resources for it. It passed 423-2.

“Iran has no business developing or acquiring intercontinental ballistic missiles,” Royce said during House floor debate. http://bit.ly/2xqsjgA.

 

DOJ settles Tea Party groups’ lawsuits over IRS scrutiny: The Department of Justice announced Thursday that it has reached settlements with conservative groups over lawsuits relating to the IRS’s scrutiny over the groups’ applications for tax-exempt status.

The settlements pertain to two cases, one with 41 plaintiffs and another with 428 plaintiffs. The agreements await approval from federal district court judges.

In 2013, the Treasury Inspector General for Tax Administration released a report finding that the IRS had subjected Tea Party groups’ applications for tax-exempt status to extra scrutiny and delays. The revelations prompted the lawsuits as well as congressional investigations. 

In one of the settlement documents, the IRS says that its treatment of the plaintiffs was “wrong” and that the agency offered a “sincere apology.” The agency said that it is committed to “avoiding any selection and/or further review of tax-exempt applicants or entities that is based solely on the name or policy positions of such entity.” http://bit.ly/2zRKQnG.

 

Warren op-ed: Don’t surrender oversight of big banks: Sen. Elizabeth Warren (D-Mass.) wants to see big banks remain under strict scrutiny from the Federal Reserve, writing in a Thursday op-ed that loosening oversight could lead to another financial crisis.

The 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act directed the Fed to apply stricter oversight and regulation to banks with more than $50 billion in assets, something it has done a good job of implementing, Warren said. She warned Congress against loosening the stress-testing requirements for such institutions.

Lobbyists have urged Congress to replace the $50 billion threshold to $250 billion, or replace it with a multi-factor test, Warren said in the Bloomberg opinion piece.

“Both approaches are dangerous to the economy because they substantially reduce oversight of the biggest and riskiest banks,” Warren wrote, saying the Fed had a responsibility to monitor big banks before the 2008 financial crisis and failed. http://bit.ly/2zSnLRV.

 

Mulvaney: Tax plan is 45 percent Cohn, 45 percent Mnuchin, 10 percent me: White House Budget Director Mick Mulvaney discussed President Trump’s tax-reform plan Wednesday, describing it as 45 percent National Economic Council Director Gary Cohn, 45 percent Treasury Secretary Steven Mnuchin and 10 percent himself.

“Gary Cohn and Secretary Mnuchin, the Treasury secretary, and I were the three members of the troika, and what we did, earlier in the year, was said ‘I’m going to focus on budget and those two guys will take taxes.’ So they’ve really been driving the discussion on the Hill from the administration’s perspective over taxes,” Mulvaney said at Georgetown University’s Institute of Politics and Public Service.

“So if I had to say, it was Mnuchin 45 percent, Cohn 45 percent, me 10,” he added, describing how the plan was created. http://bit.ly/2zRROca.

 

New Treasury sanctions target North Korean military, labor camps: The Treasury Department on Thursday targeted ten North Korean nationals and firms with ties to the country’s military and forced labor camps.

The department’s Office of Foreign Assets Control (OFAC), which administers sanctions, targeted seven North Korean nationals and three firms through executive orders meant to curb the regime’s military and civil rights abuses.

The sanctioned officials, emissaries and companies are blocked from the U.S. financial system and can no longer access any U.S.-based assets they might have.

“Today’s sanctions target the North Korean military and regime officials engaged in flagrant abuses of human rights,” Treasury Secretary Steven Mnuchin said.

“We also are targeting North Korean financial facilitators who attempt to keep the regime afloat with foreign currency earned through forced labor operations.” I break them down here: http://bit.ly/2zTnTjV.

 

GOP chairman: No appetite for gas tax hike now in House: The head of the House Transportation and Infrastructure Committee said on Thursday that there is little appetite in the lower chamber right now for a hike in the federal gasoline tax.

The administration is considering a 7-cent gas tax increase to pay for President Trump’s long-stalled infrastructure plan, which would be the first federal hike in the fuel tax in more than two decades.

Rep. Bill Shuster (R-Pa.) reportedly said that though there is little enthusiasm at present, members could get on board with the idea if the White House gets publicly involved on the issue and actively advocates for an increase. He emphasized that the president needs to take the lead on the infrastructure package.

“There’s no sense in me going out there and putting something out and all of a sudden the president beats it down,” Shuster told reporters, according to CQ Roll Call. http://bit.ly/2zSlnKC.

 

House Judiciary to hold hearing on net neutrality, antitrust issues: The House Judiciary Committee has scheduled a hearing on net neutrality and the role of antitrust for Nov. 1.

The Subcommittee on Regulatory Reform, Commercial and Antitrust Law, which will hold the hearing, has not released details, but the event is likely to address concerns that internet service providers stifle competition.

Democratic senators like Edward Markey (Mass.) say consumers often have limited or no options when picking their broadband providers, a claim corroborated by research.

The hearing also comes as Republicans in the Federal Communications Commission (FCC) put their finishing touches on a plan to scrap net neutrality. The agency has not released a timeline for when it will release and vote on the final version of Chairman Ajit Pai’s proposal to roll back the rules, but telecommunication insiders speculate that a vote could come as soon as December. http://bit.ly/2zSxpnl.

 

Cornyn: Senate could work Thanksgiving to pass tax plan: Sen. John Cornyn (R-Texas) indicated Thursday that the Senate could work through its weeklong Thanksgiving recess to pass the GOP tax plan.

Asked if Majority Leader Mitch McConnell (R-Ky.) is pushing for lawmakers to stay in town to pass their bill, Cornyn, the No. 2 Senate Republican, said, “Yes, and he’s serious.”

“Yes, we need to get the tax bill out of the Senate before Thanksgiving,” Cornyn added when asked if he thought lawmakers would work during the weeklong break.

Republicans are trying to stay on track with their ambitious plan to get a bill to President Trump’s desk by the end of the year.

If the House and Senate are both able to pass legislation by the end of November, that would allow negotiators to use the end of the year to work out a compromise on the plan instead of kicking a final vote into 2018: http://bit.ly/2zRJUjb.

 

Reuters: CEOs suggest Trump tax cut may lift investors more than jobs: “President Donald Trump is selling tax reform to Americans on the promise it will create extra income for companies to invest in their businesses and create jobs. Some of the biggest companies have very different plans.

“U.S. corporations are saying they would use a tax reform windfall to buy back shares, retire debt and other shareholder-friendly moves, in recent post-earnings calls with investors and securities analysts.” http://reut.rs/2zQ1Kmx.

 

From The Hill’s opinion pages:

Op-ed: Online lenders can get needed credit to small businesses

Op-ed: Mnuchin’s right: China’s not manipulating its currency

 

Write us with tips, suggestions and news: slane@digital-release.thehill.com, vneedham@digital-release.thehill.com, njagoda@digital-release.thehill.com and nelis@digital-release.thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill, @NJagoda and @NivElis