Overnight Finance: House passes highway bill that renews Ex-Im

WELCOME TO OVERNIGHT FINANCE — It’s hard to believe that this time last week I was sipping a cold brew and watching Thanksgiving football. Good times.

But no time to waste on this Thursday with plenty of work getting done on Capitol Hill.

First things first … let’s look ahead to Friday and the November jobs report. 

{mosads}FUN JOBS FRIDAY: At 8:30 a.m. sharp on Friday we’ll get a look at the job market and whether a tightening labor market is resulting in better pay for workers. Everyone needs some extra Christmas cash, right?

Jobs are forecast to come in around 200,000 for November, which would be a slower pace than the 271,000 in October. But we’ve been surprised in the past — on the down and up sides. The unemployment rate is hovering around 5 percent as the labor market steams toward full employment, which is expected by next summer.

Federal Reserve Chairwoman Janet Yellen, who is optimistic that the central bank will raise a key short-term interest rate later this month for the first time since December 2008, is feeling pretty good about the state of the labor market.

Yellen said the November report probably wouldn’t push the Fed off course.

She noted during a hearing Thursday on Capitol Hill that the economy needs to add “under 100,000 jobs per month” to get those just entering the market a job.

While she doesn’t expect much movement in labor-force participation over time, she said that as long as it remains stable while baby boomers retire that “I think we would be absorbing people who were perhaps discouraged.”

Adding about 200,000 jobs a month would probably be enough to get discouraged workers back into the job market and would keep that indicator steady, she said. 

Now onto the hot news of the day … 

DRIVING IT HOME: From The Hill’s Keith Laing and Cristina Marcos: “The House overwhelmingly approved a five-year, $305 billion highway bill Thursday, advancing the first long-term national transportation spending package in a decade and cementing an early legislative achievement in the Speaker Paul Ryan era.”

The 359-65 vote comes a day before federal infrastructure funding runs out, and sets up a likely Senate vote to pass the measure before Friday’s deadline. 

The White House has said that President Obama is planning to sign the bill.

“If passed, this legislation would be a real step forward for our transportation infrastructure after years of short-term patches,” White House press secretary Josh Earnest told reporters during a press briefing on Wednesday. http://bit.ly/1Q40roU

Meanwhile, Transportation Secretary Anthony Foxx applauded House lawmakers for passing the bill. http://bit.ly/1lzSxGF

KEY VOTES: Conservative groups Club for Growth and Heritage Action for America on Thursday urged lawmakers to oppose the long-term transportation bill that reauthorizes the Export-Import Bank.

Meanwhile business groups like the National Association of Manufacturers (NAM) and U.S. Chamber of Commerce urged lawmakers to support the bill. And they did. http://bit.ly/1OB6W0V

BACK TO LIFE, ALMOST: From yours truly: “The House on Thursday took a step toward reviving the Export-Import Bank, by voting to renew the embattled institution’s funding as part of a five-year federal transportation spending measure.

“The resurrection of the bank’s charter, which expired at the end of June, represents a rare collaboration between House Democrats and Republicans on economic policy that had sharply divided the GOP.” http://bit.ly/1LRjGu6

THE NEXT BIG THING: From our own Mike Lillis: We’re all waiting and watching for a final spending bill that will keep the government up and running beyond the Dec. 11 deadline.

House Minority Leader Nancy Pelosi (D-Calif.) teed off Thursday on the Republicans’ omnibus spending bill, saying the GOP’s initial offer for funding the government constitutes a “Tea Party policy wish list” that “literally takes your breath away.”

“This is not an appropriations bill with a few policy riders,” Pelosi told reporters in the Capitol. “This is a Tea Party policy wish list with an appropriations bill as an addendum to it. 

“This is not the way you … fulfill a budget that fulfills the needs of the American people.”

Pelosi and the Democrats wasted no time this week rejecting the Republicans’ initial package to fund the government through September, citing more than 30 “poison pill” policy attachments the Democrats deem unacceptable. http://bit.ly/1N6wEWA

MORE TRADE, PLEASE: From me, again: More trade sounds good but it’s uncertain whether the Trans-Pacific Partnership (TPP) is the way to go. 

“Speaker Paul Ryan (R-Wis.) called for boosting U.S. exports but fell short of endorsing an expansive Pacific Rim trade deal that could go before Congress next year.

“Ryan, who as chairman of the House Ways and Means Committee was one of the leaders who guided trade promotion authority through the House, will play a critical role in whether the 12-nation Trans-Pacific Partnership (TPP) earns enough support to clear Congress.

“If we want to create good jobs, we need to make more things in America and sell them overseas, because 96 percent of the world’s people — they don’t live in the United States,” Ryan said Thursday during his first major policy address as speaker, delivered at the Library of Congress. http://bit.ly/1TCDVCg

HE SHOOTS: By The Hill’s Mario Trujillo: “Billionaire investor and reality TV star Mark Cuban is calling on Congress to pass an email privacy bill without carve-outs for the Securities and Exchange Commission (SEC).

“Cuban, who was outraged when the SEC tried to prosecute him for insider trading in 2013, is urging lawmakers not to grant the agency any exemptions as Congress considers a widely supported bill that would force the government to obtain a warrant when obtaining customer emails from an Internet company.

“As the target of an SEC investigation, I know that the SEC has a broad array of tools at their disposal to obtain information directly from targets. There is no evidence to suggest that these tools are insufficient,” Cuban wrote in a letter to leaders of the House and Senate Judiciary committees. http://bit.ly/1QiMe6a

TAX EXTENDERS: By our own Naomi Jagoda: “Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah Cummings (D-Md.) called on Congress Thursday to make a set of benefits for low-income families permanent as part of a massive package of year-end tax breaks currently in the works.

“The liberal stalwarts are looking to cement the Earned Income Tax Credit and the Child Tax Credit, as Democrats and Republicans are negotiating a deal on temporary tax provisions known as “extenders.” 

A deal would appeal to Democrats by making permanent the EITC and CTC expansions and appeal to Republicans by solidifying business tax breaks that expired at the end of 2014.” http://bit.ly/1LRjZ8m

NOT HAPPY: From me: “Federal Reserve Chairwoman Janet Yellen said Thursday that she is opposed to a congressional plan to pay for a federal highway spending bill by dipping into the central bank’s surplus account.

“Yellen was reiterating her long-held concern with Congress’s proposal to shift funding from the Federal Reserve’s capital account to help pay for a five-year $305 billion highway bill, which easily passed the House on Thursday.

“This concerns me,” she told the Joint Economic Committee during a hearing on Capitol Hill. http://bit.ly/1OB8NmC

YELLEN TAKEAWAYS: Yellen told the Joint Economic Committee on Thursday that “the economy has come a long way toward” the central bank’s “objectives of maximum employment and price stability.” 

She said that when the Fed “begins to normalize the stance of policy, doing so will be a testament to how far our economy has come in recovering from the effects of the financial crisis and the Great Recession. In that sense, it is a day that I expect we all are looking forward to” — a key interest rate increase this month. 

Lawmakers whole-heartedly agreed on that front. 

• Sen. Dan Coats (R-Ind.), the JEC’s chairman, asked Yellen about whether terrorism and other coordinated attacks, like what happened on Wednesday in San Bernardino, Calif. and Nov. 13 in Paris, could put a dent in the nation’s economic growth.

Yellen said those sorts of shocks, which can weigh on the minds of consumers, “have the potential to have a significant economic effect” and she keeps a close eye on anything that can ripple through the economy. 

“I would not say that I see a significant effect at this point, although certainly in the aftermath of the financial crisis, we’ve seen rather cautious behavior on the part of households and firms,” she said.

• While she said she didn’t want to provide any advice to Congress on fiscal policy she offered up that a more stimulative fiscal policy would enable the Fed “on average to have a higher level of rates and more scope to respond to any shocks to the economy.”

“If the economy is hit by negative shocks we do have tools that we can use,” she added. 

She said rate increases, which are expected to launch this month, will be gradual and will probably be lower than the historical norm. 

• Rep. Erik Paulsen (R-Minn.) asked Yellen about whether she is concerned about the regulatory environment and its effects on the economy.

“My assessment would be the most important impact it’s had is to make the banking system and the financial system more broadly far safer and sounder and less crisis prone than it was prior to the financial crisis.”

 

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