Overnight Finance: House approves motion to go to tax conference — with drama | GOP leaders to consider Dec. 30 spending bill | Justices skeptical of ban on sports betting | Mulvaney won’t fire official who sued him

by Sylvan Lane - 12/04/17 5:18 PM ET

House approves motion to go to tax conference: The House on Monday in a 222-192 vote on Monday voted to approve a motion to go to conference with the Senate on tax legislation — though the vote was filled with drama after several House Freedom Caucus members protested leadership’s plans for a two-week stopgap spending bill.

At one point, the vote was tied as members of the hard-line Freedom Caucus huddled with leadership over the continuing resolution. The measure passed when caucus members got assurances that leadership would consider a CR to Dec. 30 instead of to Dec. 22.

In the end, seven Republicans voted against the tax motion, and Rep. Justin Amash (R-Mich.) was the only Freedom Caucus member to do so. The other Republicans who voted against the motion also voted against the House’s tax bill in November.

The Freedom Caucus’s holdup on the tax motion to gain leverage on the CR did not go over well with other Republicans.

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“Trying to take out going to conference on tax reform, I don’t think that’s the best route,” said Rep. Mark Walker (R-N.C.), chairman of another conservative group, the Republican Study Committee.

Republicans are highly motivated to produce their first major legislative victory of Donald Trump’s presidency, meaning a bill is likely to be sent to the White House by Christmas. The Senate will vote this week on naming its own conferees.

At the same time, there are some significant differences between the two bills that have to be ironed out. Naomi Jagoda has the details here: http://bit.ly/2Bzxxbl

For more on GOP leaders agreeing to consider a Dec. 30 spending bill, click here: http://bit.ly/2jdqDly

Ryan picks his negotiating team on tax bill: Speaker Paul Ryan (R-Wis.) is expected to name nine Republicans from relevant committees to serve on the House-Senate conference committee on tax-cut legislation, according to GOP sources.

The conference will be led by House Ways and Means Committee Chairman Kevin Brady (R-Texas) and include four other GOP members of the tax-writing panel: Reps. Devin Nunes (Calif.), Peter Roskam (Ill.), Diane Black (Tenn.) and Kristi Noem (S.D.).

Nunes is a senior member of the panel, Roskam is chairman of the Ways and Means tax-policy subcommittee and Black is chairwoman of the House Budget Committee. Noem has been prominently featured at events promoting the tax efforts, particularly on efforts to repeal the estate tax. Both Black and Noem are running for governor. The Hill’s Naomi Jagoda and Scott Wong break down the full team here: http://bit.ly/2iiT00P

Happy Monday 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-stage.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

On tap tomorrow

Senate Banking Committee: Executive Session to consider the nomination of The Honorable Jerome H. Powell and S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, 10 a.m. http://bit.ly/2iwNH1I.

McConnell: Senate will take up stopgap government funding bill: Senate Majority Leader Mitch McConnell (R-Ky.) is backing the passage of a short-term stopgap bill aimed at preventing a government shutdown ahead of Friday’s deadline.

“As we wait for the House to take the next steps, I encourage my colleagues on the Senate to review the legislation. We’ll pass it before the end of the week,” McConnell said Monday.

“This bill, one without any controversial policy riders, will continue government funding and give the House and Senate time to complete their work on a long-term solution,” he added.

Republicans will need the support of Democrats to get the bill through the Senate and potentially the House, where conservatives are worried that an end-of-the-year bill will get loaded down with Democratic priorities. The Hill’s Jordain Carney explains: http://bit.ly/2ALyv7H.

Schumer, Pelosi to meet with Trump on year-end agenda: Senate Minority Leader Charles Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) will head to the White House on Thursday for end-of-the-year negotiations with President Trump.

“We’re glad the White House has reached out and asked for a second meeting. We hope the President will go into this meeting with an open mind, rather than deciding that an agreement can’t be reached beforehand,” the two Democratic leaders said in a joint statement.

They added that they “are hopeful the President will be open to an agreement to address the urgent needs of the American people and keep government open.”

Schumer and Pelosi pulled out of a meeting scheduled for last week with Trump after the president tweeted that he was sitting down with “Chuck and Nancy” but that he didn’t “see a deal.” http://bit.ly/2AKZIHV.

Mulvaney says he won’t fire consumer bureau deputy director who sued him: The acting chief of the Consumer Financial Protection Bureau (CFPB) said Monday he won’t fire his deputy director despite the lawsuit she filed against him for control of the agency.

“It’s always a challenge when you’re in a workplace with someone who’s suing you, and I’m a named defendant,” said Mick Mulvaney, the acting chief of the CFPB and director of the Office of Management and Budget.

Mulvaney responded with a “no” to a direct question about whether he’d fire Leandra English, the CFPB’s deputy director.

Mulvaney said his only contact with English since taking responsibility for the bureau on Nov. 27 has been through emails telling her to stop claiming to be the acting director and asking her to fulfill her specific duties as deputy director.

He said English has been splitting time between the CFPB’s downtown Washington headquarters and the bureau’s former temporary offices near Capitol Hill.

“We typically don’t chat,” Mulvaney said: http://bit.ly/2iRftWC.

Ban on sports betting teeters at the Supreme Court: The Supreme Court on Monday appeared skeptical that a federal law can force New Jersey and the majority of states to ban sports betting.

The case stems from a lawsuit that the NCAA and pro sports leagues brought against New Jersey after it passed a law in 2012 to legalize and create a licensing system for sports gambling.

Two years after a lower court struck down the law as a violation of the Professional and Amateur Sports Protection Act (PASPA), New Jersey partially repealed the state’s prohibition on sports wagering, but only for racetracks and casinos in the state.

PASPA can stop states from passing laws to legalize sports betting, but New Jersey argued that law can’t require states to keep banning it. The state said the law violates the court’s interpretation of the 10th Amendment as barring Congress from controlling how states regulate private parties.

But the NCAA, along with the NBA, the NFL, the NHL and the Office of the Commissioner of Baseball, argue the state’s partial repeal is a creative way to circumvent the law.

Justice Anthony Kennedy, who is often the court’s swing vote, appeared to side with New Jersey. He argued PASPA leaves in place a state ban on sports betting that New Jersey no longer wants on its books.

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Catching up on the GOP tax overhaul plan: Senate Republicans passed their tax overhaul bill early Saturday morning in a 51-49 vote.

Republicans had to kick work on the tax plan into Friday when deficit hawks led by Sen. Bob Corker (R-Tenn.) threatened to kill the bill during an unexpected floor showdown on Thursday evening.

But on Friday, McConnell won the support of two key holdouts, Sens. Ron Johnson (R-Wis.) and Steve Daines (R-Mont.). The senators said they were “yes” votes after changes to provide more favorable treatment to smaller businesses and so-called pass-through entities.

Corker was the lone Republican to vote against the bill.

How four GOP senators guided a tax-bill victory behind the scenes: Senate Republicans breathed a collective sigh of relief early Saturday morning when a $1.4 trillion tax bill that had teetered on the brink of failure passed with only one GOP defection.

Senate Republican Whip John Cornyn (R-Texas) and Senate GOP Conference Chairman John Thune (R-S.D.) played key roles in helping Senate Majority Leader Mitch McConnell (R-Ky.) salvage the bill, according to lawmakers and aides familiar with the process.

So did two other Senate Finance Committee members — Sens. Pat Toomey (R-Pa.) and Rob Portman (R-Ohio), two of McConnell’s advisers on tax issues.

Cornyn negotiated the deal that secured the votes of Sens. Ron Johnson (R-Wis.) and Steve Daines (R-Mont.), who gave leaders the 50 votes they needed to pass the legislation. The Hill’s Alexander Bolton tells us how: http://bit.ly/2AOkXIQ.

Ryan, GOP leaders discussed ousting Appropriations chairman after tax vote: House Speaker Paul Ryan (R-Wis.) discussed removing Rep. Rodney Frelinghuysen (R) as chairman of the House Appropriations Committee after the New Jersey lawmaker split from the party line and voted against the GOP tax bill.

A Republican leadership aide confirmed to The Hill that Ryan talked with GOP leaders about taking Frelinghuysen’s Appropriations gavel in response to his no vote.

Ryan talked with House Majority Leader Kevin McCarthy (R-Calif.) and Majority Whip Steve Scalise (R-La.) about challenging his chairmanship by requesting a roll call through the Republican steering committee, Politico first reported Monday, citing three sources familiar with the matter.

Scalise stewed over Frelinghuysen’s defection from the party line and strongly supported putting his leadership role up to a vote before his Republican colleagues, according to the report.

“Committee chairmen are expected to support the team,” one senior GOP leadership aide told Politico. The Hill’s Scott Wong and Olivia Beavers have more: http://bit.ly/2AMDs06.

Dow soars after Senate passes tax reform: The Dow climbed more than 200 points at the start of trading on Monday morning, the first time traders took the floor since the Senate passed a sweeping tax-reform bill.

The bill would lower tax rates for individuals through 2025 and permanently cut the corporate tax rate from 35 percent to 20 percent. The bill’s tax cuts for individuals are temporary in order to comply with budget rules that the measure can’t add to the deficit after 10 years.

Republican senators will now move to reconcile their legislation with the House’s proposal, which passed in mid-November.
As of shortly before 10 a.m. Monday, the Dow Jones industrial average sat at 24,742.68, up about 240 points. It closed the day at 24,290.05, up 58.46 points.

The Monday morning spike represented a sharp contrast to the Dow’s drop on Friday that followed news that former national security adviser Michael Flynn pleaded guilty to lying to the FBI: http://bit.ly/2iPlwuI.

Mulvaney dodges on number of tax rates: ‘We favor whatever can pass’ White House budget chief Mick Mulvaney said Monday that the administration supports “whatever” number of tax rates can pass through Congress.

“We favor whatever can pass,” Mulvaney told “CBS This Morning” when asked how many rates Trump would prefer in the tax overhaul.

“We like a simpler code, keeping in mind that the number of rates doesn’t really change the simplicity of the code for ordinary folks. They’re just simply going to turn to the booklet in the back of the tax book and fill out their taxes,” Mulvaney added.

Mulvaney’s comments come after the Senate early Saturday passed a tax-reform bill that has seven tax brackets. The House bill, however, has four tax brackets.

Mulvaney in an interview Sunday and again on Monday expressed the White House’s willingness to negotiate over particular elements of the legislation in conference. http://bit.ly/2iRpz9X.

Grassley: Estate tax comments misinterpreted: Sen. Chuck Grassley (R-Iowa) on Monday said his comments that the estate tax rewards those who don’t spend “every darn penny” on “booze or women or movies” were taken out of context, saying he meant that the government shouldn’t punish investment.

“My point regarding the estate tax, which has been taken out of context, is that the government shouldn’t seize the fruits of someone’s lifetime of labor after they die,” Grassley said in a statement.

“The question is one of basic fairness, and working to create a tax code that doesn’t penalize frugality, saving and investment,” he said.

The estate tax, often derided as the “death tax,” is a 40-percent tax on estates deemed to be worth around $10 million or more.

Grassley was quoted in The Des Moines Register over the weekend saying that abolishing the estate tax “recognizes the people that are investing, as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

The comments quickly gained traction on social media.

The future of the estate tax is one of the key differences between the House and Senate tax-reform bills that will need to be reconciled in a joint committee. The Hill’s Brett Samuels has more: http://bit.ly/2AuYRbt

Tuesday preview: The Senate Banking Committee will also take two major steps toward reshaping federal financial regulatory and economic policy on Tuesday. The panel is expected to approve the nomination of Jerome Powell to be Federal Reserve chairman, then mark up a bipartisan bill to exempt small and mid-size banks from portions of the Dodd-Frank Act.

The bill from Chairman Mike Crapo (R-Idaho) would raise the threshold at which a bank holding company is considered a “systemically important financial institution” (SIFI) from $50 billion to $250 billion.

SIFIs are subjected to stricter risk mitigation requirements, federal stress tests and oversight under the 2010 Dodd-Frank Act, enacted in the wake of the 2007-2008 financial crisis.

The deal would also exempt all banks with less than $100 billion in assets from federal oversight immediately.

The bill is sponsored by eight other Republican senators, seven of whom are on the Banking Committee, as well as nine Democrats. Read more here.

Goldman Sachs: GOP tax bill’s boost to economy ‘minimal’ after 2020: Analysts on Goldman Sachs’s U.S. economic analysis team said the Senate GOP tax bill’s impact on the economy beyond 2020 would be “minimal” at best.

“We have increased our estimate of the growth effects of the legislation slightly, to around 0.3 [percentage points] in 2018 and 2019,” Alec Phillips and Blake Taylor wrote in a note to clients on Monday, according to Business Insider.

“This reflects the slightly larger amount of tax cuts in the Senate plan following revisions, and our expectations regarding the eventual compromise.”

“We note that the effect in 2020 and beyond looks minimal and could actually be slightly negative,” the note added. http://bit.ly/2iPJx4T.

SEC’s Cyber Unit files first charges against digital coin scam: The Securities and Exchange Commission’s (SEC) new Cyber Unit on Monday filed its first charges against a digital currency fraud that had raised $15 million from investors.

The SEC took action against Dominic Lacroix and his company PlexCorps, who were issuing digital tokens as a part of an Initial Coin Offering (ICO) scheme, according to the agency. Lacroix promised investments in his digital currency would yield an explosive 1,354 percent profit in just under a month.

The SEC found the claim false and immediately shut down his operation, which was running since August.

“This first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing,” said Robert Cohen, chief of the Cyber Unit “We acted quickly to protect retail investors from this initial coin offering’s false promises.” http://bit.ly/2iOczlw.

Apple reportedly reaches deal with Ireland over $15B tax ruling: Apple and Ireland have reached a deal for the company to pay billions of dollars in back taxes it owes the country, Ireland’s finance minister said on Monday.

“We have now reached agreement with Apple in relation to the principles and operation of the escrow fund,” Finance Minister Paschal Donohoe told reporters before a meeting with European Competition Commissioner Margrethe Vestager, according to Reuters.

“We expect the money will begin to be transmitted into the account from Apple across the first quarter of next year.”

The agreement comes one year after the European Union ruled that Apple owed the country more than $15 billion in back taxes after establishing what Brussels considered unfair arrangements letting the company underpay its taxes.

The tax arrangements, set up in 1991 and 2007, let Apple pay 0.005 percent and 1 percent tax rates on its European profits.

Apple launched an appeal of the decision after the ruling, which it says it’s still pursuing: http://bit.ly/2Bz7bGJ

In case you missed it

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Economist Larry Summers: 10,000 people will die annually from GOP tax bill

Funding bill could provide short-term relief to children’s health program

EU, UK regulators look to crackdown on bitcoin

Alabama businesses fear Moore victory would hurt state economy: report

McConnell: ‘Impossible’ to promise every member of middle class gets a tax cut

Defense hawks warn spending fix could hobble military

Tax bill could fuel push for Medicare, Social Security cuts

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