Overnight Finance: GAO wants transparency on bank ‘living wills’; Big week for IRS

GAO: REGULATORS SHOULD MAKE ‘LIVING WILLS’ CRITERIA PUBLIC: A government watchdog wants to see bank regulators be more transparent about how they are determining the “too big to fail” status of large institutions.

The Government Accountability Office warned Tuesday that a lack of information made public by regulators about how large financial institutions could be broken up during tough times could “undermine public and market confidence” in those plans.

{mosads}One of the significant new powers handed to regulators under the Dodd-Frank financial reform law directs them to assess “living wills” drawn up by the nation’s largest financial institutions.

Under those plans, banks would detail how they could be taken apart in an orderly manner should they face collapse, so as to ensure no broader harm to the financial system or need for a bailout. The Hill’s Peter Schroeder explains: http://bit.ly/1TPIrQs.

DEUTSCHE BANK PUTS N.C. EXPANSION ON HOLD: Deutsche Bank is putting its North Carolina expansion plans on hold because of a new state law that eliminates existing protections for lesbian, gay, bisexual and transgender people.

The German bank said it is freezing plans to add 250 jobs at its Cary, N.C., location, where 900 people work at its software application development center. Its move is the latest corporate protest over the law.

“We take our commitment to building inclusive work environments seriously,” said John Cryan, co-chief executive of Deutsche Bank, in a news release on the bank’s website: http://bit.ly/1Se1OmN.

SENATE DROPS ENERGY TAX CREDITS IN FAA BILL: The Senate is dropping plans to include energy tax breaks in legislation reauthorizing the Federal Aviation Administration after lawmakers were unable to reach a final deal.

Sen. John Thune (R-S.D.), chairman of the Commerce, Science and Transportation Committee, told reporters on Tuesday that the FAA measure will now only contain standard revenue provisions.

“It just got too complicated and it was taking too long,” Thune said. “A decision was made to go with a clean finance title, the way we’ve always handled FAA reauthorizations in the past.”

Democrats had been pressing leadership to attach renewable energy tax breaks they claim were unintentionally left out of a tax extenders package Congress passed in December. They said last week they had a general agreement to add the energy tax breaks to the FAA bill, but had yet to unveil final details. The Hill’s Melanie Zanona reports: http://bit.ly/1UZqcJy.

HAPPY TUESDAY and welcome to Overnight Finance, where we’re eager to get our hands on that long-awaited Puerto Rico bill. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight’s highlights include a new economic outlook from the International Monetary Fund, IRS cybersecurity concerns and a boon for fossil fuel research.

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://www.digital-release.thehill.com/signup/48.

ON TAP TOMORROW:

• Senate Environment and Public Works Committee: Hearing to examine the role of environmental policies on access to energy and economic opportunity, 9:30 a.m.
• Senate Judiciary Committee: Hearing to examine EB-5 targeted employment areas, 10 a.m.
• Senate Budget Committee: Hearing to examine budgeting for outcomes to maximize taxpayer value, 10:30 a.m.
• Senate Agriculture Committee: Hearing on “Energy and the Rural Economy: The Impacts of Oil and Gas Production,” 10 a.m.
• House Natural Resources Committee: Day 1 of markup of the Puerto Rico Oversight, Management, and Economic Stability Act, time changed to 5 pm. The bill is scheduled to be released tomorrow morning.
• House Ways and Means: Markup of four bills focused on IRS accountability, 10 a.m.
• House Ways and Means: Hearing on representatives’ tax reform proposals, 3:30 p.m.
• House Small Business Committee: Hearing entitled “Keep It Simple: Small Business Tax Simplification and Reform, Main Street Speaks,” 11 a.m. and hearing entitled “Keep It Simple: Small Business Tax Simplification and Reform, the Commissioner Responds, 2:30 p.m.

HOYER SAYS NO DEAL YET ON PUERTO RICO, BUT PROGRESS: House Minority Whip Steny Hoyer (D-Md.) said today that there’s no bipartisan agreement on the Puerto Rico debt bill, but lawmakers are getting there.

“I think it accurate to say that there is not at this point in time a bipartisan agreement on exactly how the bill ought to be structured,” he said. “But I will tell you, there has been some very positive working over the last 2 weeks, well intentioned and honest motivation. There are differences, and we’ll continue to work on that, including after it’s introduced.”

LEADING DEM SENATORS MEET WITH LEW ON INVERSIONS: Democratic Sens. Sherrod Brown (Ohio), Elizabeth Warren (Mass.) and Dick Durbin (Ill.) today met with Treasury Secretary Jack Lew. The four discussed Treasury’s recent rules on tax inversions, in which an American company merges with a foreign company and reincorporates abroad to avoid US corporate taxes.

IMF LOWERS GLOBAL ECONOMIC FORECAST: The International Monetary Fund (IMF) lowered its global economic expectations Monday and urged policymakers to take immediate steps to boost growth.

In a new report, the IMF predicted the global economy would grow just 3.2 percent in 2016, down 0.2 percent from its January prediction. It now expects the U.S. economy to grow 2.4 percent this year, down 0.1 percent from its January estimate.

The economy is still growing across the globe, if at a consistently slower pace. But lower growth also means the economy is more susceptible to risks, driving up the danger of another recession, the organization warned. Peter Schroeder tells us what it means: http://bit.ly/1Se1JzE.

IRS CHIEF CALLS FOR RENEWED STREAMLINED HIRING POWER: Internal Revenue Service Commissioner John Koskinen on Tuesday called for Congress to renew “streamlined critical pay authority” that makes it easier for the agency to recruit and retain top information technology employees.

Without a renewal, key employees will leave the IRS, and “our ability to replace them is very questionable,” Koskinen said at a Senate Finance Committee hearing.

The authority was initially established in 1998 and allows the IRS to hire top employees without the candidates having to go through the typical government hiring process, which can take three to six months. However, the authority expired at the end of fiscal 2013, and the terms of any remaining employees working under the authority will expire by 2017. The Hill’s Naomi Jagoda tells us more: http://bit.ly/1Wqp01a.

DEM BLAMES CONGRESS FOR IRS CYBER WOES: A top Senate Democrat is pointing the finger at his colleagues for forcing the Internal Revenue Service (IRS) to compromise on digital security.
Over the last year, the IRS has been roundly bashed on Capitol Hill for allowing hackers to pilfer hundreds of thousands of taxpayers’ data.

But at a Senate Finance Committee hearing Tuesday with IRS Commissioner John Koskinen, Sen. Tom Carper (D-Del.) called out his fellow lawmakers for failing to give the agency proper funds to improve its cybersecurity.  

“When it comes to protecting American taxpayers’ sensitive information online, Congress continues to ask the IRS to do more with less by enacting deep and damaging cuts to the agency’s budget,” Carper said. The Hill’s Cory Bennett explains: http://bit.ly/1TPKfJ1.

NEW DATES FOR ATLANTIC TRADE DEAL TALKS: The Office of the U.S. Trade Representative said Tuesday that U.S. and European Union officials will meet for the next round of Transatlantic Trade and Investment Partnership Negotiations talks in New York from April 25-29.

AND SPEAKING OF TRADE DEALS: Rep. Kevin Brady (R-Texas) said he would like Congress to consider an expansive Pacific Rim trade deal if lingering issues can be resolved.

The chairman of the powerful House Ways and Means Committee said there are several problems with the Trans-Pacific Partnership (TPP) that the White House must settle to get the agreement through Capitol Hill before President Obama leaves office.

“If the White House can solve the problems, and there’s about four or five key ones left — if they can solve those problems and build support, I’d like to see this move sooner rather than later,” Brady said Tuesday on CNBC.com’s “Speakeasy with John Harwood.”

The trade deal won’t likely move until after the November elections, and Ohio Gov. John Kasich (R) is the only remaining presidential candidate who supports TPP: http://bit.ly/1UZoxUc.

HOUSE SPENDING BILL BOOSTS FOSSIL FUEL RESEARCH: House Republicans are targeting a key part of President Obama’s environmental agenda with a bill to give more money to federal fossil fuel research and less to renewables.

The shift in priorities is part of a $37.4 billion appropriations bill proposed Tuesday by the House GOP to fund programs in the Department of Energy and water infrastructure needs in the Army Corps of Engineers.

Research and development related to coal, natural gas, oil and other fossil fuels would get $645 million in fiscal 2017 under the bill, a $13 million increase from the 2016 level. The Hill’s Timothy Cama breaks it down: http://bit.ly/1WqoUXj.

NIGHTCAP: Find out how many tax returns the IRS is expecting and what the average refund will be.

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