Overnight Finance: Senate advances changes to Dodd-Frank rollback | Trump blocks Broadcom deal | Trump trade adviser’s influence grows | Ryan tries to keep tax cuts in spotlight | Rumors swirl over Cohn replacement

by Sylvan Lane - 03/12/18 6:26 PM ET

Happy Monday and welcome back to Overnight Finance, where we’re wondering what this Iowa state senator was thinking. 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.

THE BIG DEAL: The Senate just voted to end debate and advance a slew of changes to bill that would rollback Dodd-Frank Act banking rules. The bill is now on track to pass this week.

The bipartisan coalition backing the bill, led by Senate Banking Committee Chairman Mike Crapo (R-Idaho), last week released a substitute amendment meant to undercut liberal criticisms of the bill and win over more support from House conservatives.

The Senate voted 66 to 30 to approve the changes late Monday.

The underlying bill is expected to pass sometime this week, with enough Democrats backing the measure to block a filibuster from liberal colleagues.

Last week’s failed negotiations over other amendments to the bill delayed votes to this Monday.

The bill includes the most sweeping changes to Dodd–Frank with bipartisan support. Here’s a quick rundown of how the amendment changed the bill today:

It clarifies that foreign banks with U.S. holdings less than $250 billion but above that level in foreign assets would still be subject to closer oversight.

It says that only custodial banks, not consumer and investment firms, would benefit from a new calculation of the supplemental leverage ratio.

It adds measures to protect military veterans from fraud and creates new student loan backstops. It also mandates studies on various risks to the financial system.

It requires credit reporting companies to offer free services to victims of hacks, but blocks lawsuits against them over the monitoring services.

It includes eight uncontroversial bills from the House Financial Services Committee, most of which seek to help business owners raise capital by easing securities laws.

Reactions:

“It’s a bunch of fig leafs designed to let supporters of the bill act like they’ve addressed these legitimate criticisms.” – Sen. Elizabeth Warren (D-Mass.)

“[The bill] keeps consumer protections in place and increases protections for those who fall on hard times or become victims of fraud.” Senate Banking Committee Chairman Mike Crapo (R-Idaho).

What comes next: Senate Majority Leader Mitch McConnell filed cloture on the underlying bill last week, and a vote on that is one of the last stops before final passage. Party leaders still need to work out a deal on a package of amendment votes and sort through the more than 100 changes filed by senators. A much smaller portion of those will get votes before the Senate goes forward with a vote on final passage.

Then, we get to the House. Here’s more on why getting it through the House will be tricky.

On tap tomorrow

House Rules Committee: Hearing on three financial services bills, 5 p.m.

LEADING THE DAY

Trump on Monday blocked what would have been the biggest tech deal in history. The Hill’s Harper Neidig writes. Trump said Singapore-based Broadcom’s efforts at a hostile takeover of Qualcomm posed a threat to national security.

The announcement came just hours after Broadcom CEO Hock Tan met with officials from the Committee on Foreign Investment in the United States. (CFIUS) to make his case for the deal, according to a source familiar with the meeting.

CFIUS had launched an investigation into the national security implications of the deal last week over concerns that it would hamper U.S. efforts to develop 5G wireless networks and other emerging technologies. CFIUS on Monday recommended that the president veto the deal.

In an order released Monday night, Trump said he’d been presented with “credible evidence” by CFIUS that the transaction could threaten U.S. security.

Harper has more here.

Trump’s top trade hawk is flying higher than ever, writes The Hill’s Niv Elis: “One must only watch a few minutes of Peter Navarro’s economic hypernationalist film “Death By China” to understand why President Trump has an affinity for the man.

In the movie’s opening scenes, a flag-painted cutout of the United States tumbles to the ground and is brutally stabbed with a knife.

As the map gushes blood, the knife’s handle is revealed to resemble Chinese currency, and its blade is labeled “Made in China.”

Later, animation portrays China as attacking American factories with artillery labeled “currency manipulation” and bombs labeled “illegal tax subsidies.”

The term “American carnage” comes to mind as the factories explode, leaving smoldering craters in their wake.

Navarro, now the 68-year-old director of the White House National Trade Council, sees eye to eye with Trump on the need for tough, protective tariffs to insulate American jobs and swat down the meddling tentacles of China’s aggressive economic policy.

He scored a major victory this week, as Trump ignored large swaths of his own party and his other advisers and unfurled steep, broad-based tariffs on steel and aluminum.

Increasingly, Navarro has the president’s ear.” Niv explains why.

Elsewhere in the West Wing, rumors are swirling over who replace Gary Cohn as director of the National Economic Council. CNBC’s Jim Cramer reported Monday that his old buddy Larry Kudlow is the leading candidate to replace Gary Cohn as President Trump’s top economic adviser.

Cramer, who partnered with Kudlow at the network on the show “Kudlow and Cramer,” reported that Kudlow has not been formally offered the job, but is the leading choice among the president and some of his advisers.

Kudlow declined to comment to CNBC, where he works as a senior contributor.

Stephen Moore, a Heritage Foundation economist who worked with Kudlow on Trump’s campaign tax plan, told The Hill that Kudlow is “definitely one of the top three” candidates to become the next director of the National Economic Council, but Trump has yet to make a decision.

Moore praised Kudlow, saying that he played a “huge role in getting the tax bill through.”

“Larry’s a great communicator,” Moore said. “He’s one of the best economic voices out there for free-enterprise economics.”

Former Microsoft and GM executive Chris Liddell is also reportedly in the running for the job, as is Shahira Knight, the deputy NEC director.

More on tariffs… Sen. Jeff Flake on Monday introduced legislation that would nullify Trump’s tariffs. “If we enter a trade war, we risk reversing those gains we have made. We in Congress simply can’t be complicit as this administration courts economic disaster in this fashion,” Flake said.

Flake — a frequent Trump critic who is retiring after 2018 — made a wide-reaching pitch to his colleagues from the Senate floor, saying if they are concerned about the tariffs, support free trade or want to continue the recent economic gains then they should support his legislation.

“You can be pro-growth; you can be pro-tariff, but you can’t be both. … I would urge my colleagues to join me in exercising our constitutional oversight and to invalidate these irresponsible tariffs,” he said.

Jordain Carney has more on the tariff fight within the GOP.

Speaker Paul Ryan (R-Wis.) is fighting an uphill battle to keep the focus on the GOP’s tax cuts and the economy in the face of a news cycle dominated by President Trump’s White House, according to The Hill’s Naomi Jagoda:
“Ryan has aggressively talked up the benefits of the tax cuts, promoting the law last week in a conference call with a group backed by GOP donors Charles and David Koch and in a visit to Home Depot’s Store Support Center in Atlanta.

But it can be a challenge for Ryan to win the spotlight given competition in the news cycle — from Trump’s decision to meet with North Korean leader Kim Jong Un, to Trump’s decision to defy his party and impose steep tariffs on steel and aluminum, to the news about his alleged affair with porn star Stormy Daniels.

“You know I must say, it’s great to see all the media interest in the success of tax reform,” Ryan joked at the start of his comments at House Republican leadership’s press conference on Tuesday. He then fielded questions exclusively about the tariffs, which were made official on Thursday.”

China warns against trade war: China’s commerce minister warned against a trade war with the U.S. as a result of President Trump’s tariffs on Sunday, saying it would bring disaster to the global community.

“There are no winners in a trade war,” Zhong Shan said, according to Reuters. “It will only bring disaster to China and the United States and the world.”

“Nobody wants to fight a trade war, and everyone knows fighting one harms others and does not benefit oneself,” he continued.

MARKET CHECK: Anxious. U.S. stocks finished mixed Monday, with the Dow Jones industrial index closing with a 150-point loss. The Dow ended the day down 0.6 percent, largely based on fears of how President Trump’s tariffs could hinder global growth. The Standard and Poor’s 500 also ended the day down 0.13 percent, while the Nasdaq enjoyed a 0.36 percent spike thanks to increases in Apple and Amazon stock prices.

GOOD TO KNOW

Ten years ago today: Wall Street titan Bear Stearns nearly collapses before being sold four days later to J.P. Morgan.

Rep. Charlie Dent (R-Pa.), a retiring House appropriator, wants the next House funding bill to include a provision that would let the Export-Import Bank approve deals of $10 million or more without a quorum. Rep, Kristi Noem (R-S.D.) is also pushing for the bill to include a measure to expand the authority of states to collect sales taxes on internet purchases.

The AP explains how Trump’s tariffs “could trigger a chain of tit-for-tat retaliation by America’s trading partners that could erupt into a full-blown trade war and possibly threaten the global economy.”

The Wall Street Journal explores how rising geopolitical tensions are weighing on global investment markets and an uncertain economic future.

Congress and the Treasury Department have plenty of work to do cleaning up mistakes and unintended consequences from the GOP tax-cut bill, reports the New York Times.

140 House Dems are urging Trump to impose Russia sanctions

GOING DEEPER

Politico tours a town occupied by Bitcoin miners.
The New York Times looks at the fascinating populist political battles happening in Ohio as Dems and the GOP battle for the state’s future.

ODDS AND ENDS