Overnight Finance: House to consider another short-term spending bill | Treasury, IRS release guidance on tax withholding | Banks rack up big wins under Trump | WH defends Trump trip to Davos

House to consider another short-term spending bill: The House will consider another stopgap spending bill next week in order to avoid a government shutdown, Majority Leader Kevin McCarthy (R-Calif.) announced Thursday. 

That would be the fourth temporary spending patch, or continuing resolution (CR), to come up for a vote since September. Current government funding runs out Jan. 19 at midnight.

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“We’ve been in discussions to try to get a budget agreement. I hope that we can have that done this time. If we’re able to get that budget agreement, we’ll need some time for the appropriators to do their work,” McCarthy said while announcing the House floor schedule.

Republican leadership has not yet decided how long the funding in the short-term spending measure will last, according to Republican lawmakers leaving a GOP conference meeting Thursday morning. The Hill’s Melanie Zanona reports: http://bit.ly/2EADCpL.

 

Treasury and IRS release new guidance on tax withholding: The IRS and Treasury Department on Thursday issued new guidance on tax withholding from employees’ paychecks, a key step in implementation of the new tax law that President Trump signed last month.

The new guidance will allow many taxpayers to start seeing bigger paychecks due to the new law. The IRS is instructing employers to implement the new withholding tables by Feb. 15.

“We estimate that 90 percent of wage earners will experience an increase in their take-home pay,” Treasury Secretary Steven Mnuchin said in a news release. 

The new withholding guidance takes into account a number of changes made by the new law, including the larger standard deduction, the elimination of personal exemptions and the new tax rates.

The guidance will work with the existing W-4 forms that employees have filled out. Mnuchin said the White House press briefing that Treasury and the IRS will release new W-4 forms for 2019 later in the year. The Hill’s Naomi Jagoda explains: http://bit.ly/2EAFBdH

 

Banks rack up big wins in Trump’s Washington: Banks are ascendant in Washington, scoring major wins and enjoying the support of a friendly White House a decade after the financial crisis.

The banks are reeling in record profits, thanks to the growing economy and the booming stock market, the just-passed Republican tax-overhaul bill has slashed their tax rate and to top it all off, a bipartisan Senate coalition is fighting to loosen the post-crisis rules meant to curb risky behavior in the financial industry.

Critics of the banking sector say the shift is the result of Wall Street seizing control of the government; they compare President Trump’s appointments to a Wall Street occupation of the federal government.

But banks and their lobbyists say the changing tides prove that the strict Dodd-Frank Act rules passed after the financial crisis went too far. They say the pendulum of regulation that swung hard to the left after the collapse needs to come back toward the center.

“We’ve had enough time to assess what works and what doesn’t work,” said James Ballentine, executive vice president of government affairs for the American Bankers Association (ABA), the country’s biggest lobbying group for banks. I report here: http://bit.ly/2Ey6TRN.

 

Senate Banking Committee to hold bitcoin hearing: The Senate Banking Committee will hold a hearing with top financial regulators in early February examining the implications of bitcoin.

Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo and Securities and Exchange Commission (SEC) Chairman Jay Clayton will testify before the committee at the hearing, a source with knowledge of the matter confirmed to The Hill.

Reuters first reported the news Thursday morning.

Both agencies have largely avoided taking firm regulatory action on bitcoin or other cryptocurrencies over the past several months, but have issued warnings to investors about digital currencies.

Over the past year, bitcoin and other cryptocurrencies have exploded in value. Bitcoin hit an all-time high of over $19,000 within the past month. At the start of 2017, it was trading below $1,000.

Last month, the CFTC approved bitcoin futures being offered by financial organizations CBOE and CME Group. Here’s more from The Hill’s Ali Breland and me: http://bit.ly/2EA3aD8.

 

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.

 

Mnuchin: GOP tax law’s ‘whole purpose’ was giving companies more money to compete: Treasury Secretary Steven Mnuchin said Thursday that the “whole purpose” of the GOP tax bill was to “put more money” in the U.S. business sector to allow companies to be more competitive internationally.

“The whole purpose of the tax cut act was to put more money in companies so they could compete competitively with international companies,” Mnuchin told reporters at a White House press briefing. “I think you know we had one of the highest tax rates in the world. We taxed on worldwide income [and] we changed that.”

“This is really a revolutionary process,” he continued. “We thought it would be great for the economy, and we’re thrilled with already the number of companies that we see reacting accordingly.”

Mnuchin was responding to a question about Walmart following its announcement that it would raise the starting minimum wage for new employees to $11 an hour and expand parental leave.

The Treasury Department chief praised the move, saying the administration “appreciates what Walmart is doing.” http://bit.ly/2Ez3NNs.

 

Walmart to lay off thousands of employees: Walmart has announced that it will lay off thousands of workers across the country as it closes dozens of Sam’s Club locations.

The announcement comes on the same day the retail giant announced it was raising its starting minimum wage for new employees to $11 an hour.

The company told Business Insider that 63 Sam’s Club stores will close. Some locations reportedly stopped business suddenly on Thursday without giving advance warning to employees.

The Sam’s Club locations slated to close that did not do so on Thursday are reportedly expected to shutter within the next few weeks.

“After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy,” the company said on Twitter. “Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.” http://bit.ly/2ExMaxA.

 

White House defends Trump’s trip to Davos economic forum: The White House on Thursday defended President Trump’s planned trip to the World Economic Forum in Davos, Switzerland, against criticism from reporters that he’s going to “rub elbows” with “globalists.”

CBS News White House correspondent Major Garrett pressed Treasury Secretary Steven Mnuchin during the White House daily briefing on why the president would attend the forum, which he described as a “hangout for globalists.”

“I don’t think it’s a hangout for globalists,” Mnuchin responded. “The idea is that the economic team is going to go over and talk about the ‘America first’ economic strategy. We are thrilled that the president is coming. And I think what we know is that the economy that is good for the U.S. is good for the rest of the world.”

The U.S. typically sends a high-ranking delegation to the meeting of government and business leaders. Trump will be only the second sitting president to attend the Davos conference, after former President Clinton. This year’s forum is scheduled to run Jan. 23-26. http://bit.ly/2EybMu7.

 

NYT: Treasury watchdog finds no political pressure on tax analysis: The Treasury Department’s independent watchdog has cleared staffers of exerting any improper political influence on the analysis of the Republican tax overhaul, according to The New York Times.

The department’s inspector general launched the investigation after Treasury Secretary Steven Mnuchin faced intense criticism over the scoring of the GOP tax plan.

Mnuchin and Republican leaders insisted their bill to slash corporate and personal income taxes would boost economic growth enough to pay down the federal debt. The secretary promised an extensive Treasury analysis of the bill that would prove its benefits before Congress voted on the plan.

Economists across the political spectrum, including those who supported the plan, said those predictions were too optimistic: http://bit.ly/2Ez6ej4.

 

Minnesota Republican named new chairman of Joint Economic Committee: Speaker Paul Ryan (R-Wis.) announced Thursday that he is appointing Rep. Erik Paulsen (R-Minn.) to be the chairman of the Joint Economic Committee (JEC) — a new job for a lawmaker who is being targeted by Democrats in the midterm elections.

“As Congress works to write laws that boost our nation’s economy, Erik’s vast experience working on tax and economic matters will serve the committee and the Congress well,” Ryan said in a statement.

The JEC is tasked with analyzing economic conditions and making recommendations about how to improve the economy. The panel consists of lawmakers from both the House and the Senate, and chairmanship of the panel alternates between the two chambers.

Paulsen said that in the position he will work to boost job creation and growth in workers’ salaries.

“The JEC has a long history of bringing together the best ideas from both parties and both chambers to advise Congress on how to grow our economy and promote trade, innovation, entrepreneurship and economic opportunity for all Americans, and I look forward to leading these discussions in my new role,” he said: http://bit.ly/2EAAmdJ.

 

Equifax subject of most consumer bureau complaints in all but one state: analysis: Equifax was the subject of more consumer bureau complaints than any other financial services company in all but one state in 2017, according to an analysis of agency data published Thursday.

In every state but North Dakota, more residents complained to the Consumer Financial Protection Bureau (CFPB) about the credit reporting company than any other firm.

The analysis is according to LendEDU, a financial resources website, which compiled the most frequently appearing companies in the CFPB’s Consumer Complaint Database. The database tracks and — to the ire of the finance industry — publishes every complaint received by the CFPB about a bank or financial services company.

Equifax revealed in September that hackers accessed the personal information of more than 140 million people. The data accessed in the July breach included Social Security numbers and other sensitive information that could be used in identity theft.

The credit reporting agency is under federal investigation, and former CEO Richard Smith was excoriated by lawmakers in two tense October congressional hearings. Credit card companies and credit unions expressed outrage and concern over the data breach affecting millions of their customers: http://bit.ly/2ExYHkE.

 

Canada challenges US tariff system: Canada is challenging the Trump administration’s system of levying penalties on imports in a complaint at the World Trade Organization, a move likely to heat up simmering tensions between the two trading partners.

The wide-ranging trade dispute, which was filed with the WTO in December and released publicly on Wednesday, is mostly in response to the steep anti-dumping and countervailing duties that the United States has recently slapped on Canada’s softwood lumber industry.

“This WTO action is part of our broader litigation to defend the hundreds of thousands of good, middle class forestry jobs across our country,” said Chrystia Freeland, Canada’s minister of foreign affairs, in a statement.

“We continue to engage our American counterparts to encourage them to come to a durable negotiated agreement on softwood lumber,” she added.

But the complaint, while centered on the forestry and softwood lumber industries, is bigger than that, encompassing the future of North American supply chains and the long-term growth of the integrated economies, a Canadian official said. Vicki Needham has more: http://bit.ly/2EygWpV.

 

Senators eye Puerto Rico Medicaid funding for disaster bill: Senators are floating a temporary fix for Puerto Rico’s dwindling Medicaid funds as part of the chamber’s disaster aid package for the island.

According to sources familiar with the discussions, the legislation would include a provision to temporarily lift restrictions on how much money the federal government can spend on Puerto Rico’s Medicaid program.

Under the potential deal, the government would completely fund Puerto Rico’s Medicaid program for two years. The legislation could also include an infusion of $6 billion to help out the cash-strapped program.  

Puerto Rico has grappled with funding shortfalls even before Hurricane Maria decimated the territory’s health-care system. Before the storm, the territory had enough Medicaid money to last until April 2018.

Now, experts predict that unless Congress acts, funding will be exhausted by March, if not earlier. If Puerto Rico’s federal Medicaid funding is exhausted, up to 900,000 people would likely be cut from Medicaid — more than half of total enrollment, according to estimates.

Puerto Rican Medicaid is subject to a hard federal cap of about $300 million a year. If the Puerto Rican government spends more than that amount, it must cover the rest of the cost on its own. Experts say the formula has contributed to the island’s debt crisis.  

None of the federal disaster relief money to date has been earmarked for Puerto Rico’s Medicaid program: http://bit.ly/2EA6CxL.

 

Judge denies CFPB official’s injunction against Mulvaney: A U.S. district judge on Wednesday denied an injunction filed against acting Consumer Financial Protection Bureau Director Mick Mulvaney, effectively ruling that Mulvaney may remain the acting head of the agency.

U.S. District Judge Timothy Kelly denied the request for an injunction, arguing Leandra English “has not demonstrated a likelihood of success on the merits or shown that she will suffer irreparable injury absent injunctive relief,” according to a court document.

English filed the lawsuit in November after President Trump had appointed Mulvaney to serve as the CFPB’s temporary director. Mulvaney’s appointment came after former Director Richard Cordray stepped down to launch a gubernatorial bid in Ohio.

Cordray had appointed English, the CFPB’s deputy director, to take his position, setting up a battle between the agency and the Trump White House.

In the lawsuit, English argued that the president supplanted the agency’s line of succession outlined by the Dodd-Frank Act. 

The court, however, found that the Federal Vacancies Reform Act of 1998 (FVRA) provides the president with the authority to appoint an acting head of the agency: http://bit.ly/2EwwjiP.