Overnight Finance: White House says corporate tax cut will boost worker wages | Trump adviser sees deal near on easing bank regs | GOP senator’s absence puts budget vote on knife’s edge
White House paper: Corporate tax cut would boost wages: The White House on Monday is rolling out a paper arguing that the GOP’s plan to slash the corporate tax rate from 35 percent to 20 percent would “very conservatively” increase average household income by $4,000 per year.
“By inducing higher capital investment, reductions in corporate tax rates increase the demand for workers and heighten their productivity,” the White House Council of Economic Advisers (CEA) said in the paper.
The paper had been expected after President Trump, citing the CEA, touted the $4,000 figure in a speech on taxes last week in Pennsylvania.
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“About a $4,000 amount of money additional for the American family to spend,” Trump said. “That’s very exciting.”
CEA Chairman Kevin Hassett said on a call with reporters on Sunday that the main reason why cutting the corporate tax rate would boost wages is because doing so would make it less expensive for companies to invest in capital assets such as machines. The Hill’s Naomi Jagoda breaks it down: http://bit.ly/2gJm5SM.
Schumer blasts WH paper on corporate tax cuts: Senate Minority Leader Charles Schumer (D-N.Y.) on Monday blasted a White House report predicting a boost to wages from a corporate tax rate cut, arguing that the study uses “fake math.”
“President Trump complains about fake news — this fake math is as bad as any of the so-called fake news he has complained about,” Schumer said in a statement. “This deliberate manipulation of numbers and facts could lead to messing up the good economy the president inherited from President Obama and hurting the middle class.”
The paper from Trump’s Council of Economic Advisers (CEA) argues that a proposal in the GOP tax framework to cut the corporate rate from 35 percent to 20 percent would, estimating “very conservatively,” result in an increase in average household income of $4,000 per year.
Schumer said that “history shows tax cuts like these benefit the wealthy and the powerful to the exclusion of the middle class.” http://bit.ly/2iglCLk.
GOP senator’s absence puts budget, tax reform on knife’s edge: Sen. Thad Cochran’s (R-Miss.) health problems are keeping him from returning to the Senate this week — and have put the GOP budget on a knife’s edge.
The budget resolution, which would unlock the White House’s tax reform plan, needs a simple majority to pass the Senate.
With Cochran out for the time being, however, Republicans may have just 50 votes in favor of the budget. Sen. Rand Paul (R-Ky.) is expected to vote against the resolution.
That would still give the budget a 50-49 margin, but the GOP would not be able to afford another defection. The Hill’s Niv Elis tells us what to expect: http://bit.ly/2iixSex.
Senate GOP expecting budget vote this week despite senator’s absence: Senate Republicans, though, expect to push ahead with the fiscal year 2018 budget that’s key to tax reform this week despite GOP Sen. Thad Cochran’s absence.
Cochran’s office announced the senator won’t return this week, as was previously expected, due to health concerns. The statement didn’t specify when the Mississippi senator would be back, throwing into question leadership’s plan to move forward with the budget this week.
But a budget committee aide indicated on Monday that floor action on the fiscal year 2018 budget, which is being used to pave the way for tax reform, would move forward as expected.
“Full speed ahead!” the GOP staffer said, when asked if the budget would still be brought up with Cochran’s absence. http://bit.ly/2ifNLCf.
Cohn: Congress nearing deal to ease bank regulations: Top White House economic adviser Gary Cohn said Monday that Congress could act to exempt major United States banks from tight Dodd-Frank Act banking rules by the end of 2017.
Cohn, speaking to a banking industry conference in Chicago, said the White House and lawmakers from both parties are nearing an agreement to raise the threshold at which a bank is considered a “systemically important financial institution” (SIFI). Such banks are subject to stricter federal oversight and higher stability standards.
Cohn said that the new SIFI threshold be raised to at least $200 billion from its current level of $50 billion.
“We need to move those capital levels back to more rational levels,” Cohn, director of the White House’s National Economic Council, told the American Banking Association conference on Monday. I’ve got more here: http://bit.ly/2igIcDJ.
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
The Senate Banking Committee holds a hearing on “Consumer Data Security and the Credit Bureaus.”
The Senate Health Committee holds a hearing on the cost of prescription drugs, specifically “How the Drug Delivery System Affects What Patients Pay.”
Join us Wednesday, Oct. 25, as The Hill goes one-on-one with Dr. Ben Carson, Secretary of Housing and Urban Development, for a Newsmaker Series exclusive. We will discuss his agency’s relief efforts in hurricane-affected areas, his priorities for the department and the growing need for affordable housing. RSVP Here
Trump repeats false claim US is world’s highest taxed country: President Trump on Monday again claimed in a press conference that the United States is the “highest taxed country in the world.”
“We don’t have a vote from the Democrats. As an example — massive tax cuts,” Trump said in an impromptu press conference in the White House Rose Garden. “We may not get any Democrat votes. Now, we also may get three or four but we may get no [Democrats] — for massive tax cuts.”
“We’re the highest taxed country in the world, and yet we may get no Democrat support,” Trump continued.
Trump has continually repeated the claim, which has been proven false by several independent analyses.
A 2015 analysis by the Organization for Economic Cooperation and Development shows the U.S. behind countries such as the United Kingdom, Germany and France in regards to taxes: http://bit.ly/2ifbx18.
Pence joining NY rep to pitch tax reform: Vice President Mike Pence will travel Tuesday to Buffalo, N.Y., to make the case for tax reform alongside Rep. Chris Collins (R-N.Y.) as the White House’s plan to repeal the state and local tax deduction receives pushback from lawmakers in the Empire State.
Pence and Collins will discuss the importance of overhauling the tax code with business leaders, community leaders and local families, according to the White House. The event is one of a number of occasions where Pence and President Trump have traveled across the country to sell the GOP’s tax plan.
Last week, the Office of Congressional Ethics alleged that Collins may have violated federal law by sharing nonpublic information in the purchase of stocks in an Australian pharmaceutical company. Collins has said that he did nothing wrong. http://bit.ly/2igI9I3.
Ryan projects House will pass tax bill by early November: Speaker Paul Ryan (R-Wis.) offered an ambitious timeline on Monday for when Congress will enact tax reform this year, starting with House passage of a bill in the next month.
Ryan predicted in an interview with Milwaukee radio station WTMJ that tax overhaul legislation would pass in the House by “early November” and make it through the Senate to President Trump’s desk by the end of December.
Formal legislation to reform the tax code has not yet been released.
The House adopted a budget resolution earlier this month to unlock budgetary rules known as reconciliation so that Republicans can pass tax reform and circumvent a Democratic filibuster in the Senate.
Ryan expressed optimism that Republicans would have more success with tax reform than with their failed efforts to repeal and replace the 2010 health-care law. http://bit.ly/2ih5Kbm.
Trump: Dems ‘only want to increase taxes and obstruct’ President Trump on Monday described Democrats as obstructionists, saying the party only wants “to increase taxes.”
“Art Laffer just said that he doesn’t know how a Democrat could vote against the big tax cut/reform bill and live with themselves! @FoxNews” Trump wrote on Twitter, referring to the economist.
The remark from the president comes as Trump and congressional Republicans push a new tax framework that cuts the number of individual tax rates and business taxes.
While the plan has received praise from conservative groups and Republican lawmakers, Democrats have criticized the overhaul as a tax cut for the wealthy: http://bit.ly/2iej3t9.
Top economic aide: Trump will be ‘very flexible’ on tax reform details: White House National Economic Council Director Gary Cohn said Monday that President Trump will be “flexible” on the details of the tax reform bill.
Cohn told a meeting of the American Bankers Association in Chicago that Trump wants a 20 percent target rate for corporate taxes and cuts for the middle class.
The president will be “very flexible on everything else, cause he knows the importance of getting tax reform done,” Cohn said.
He added that the White House will be “more than flexible in working with the Senate and the House.”
He called the goal to get tax reform passed this year “really ambitious” but added he thinks it’s “really possible, and it’s really essential.” http://bit.ly/2gJUOPQ.
Hensarling praises DeVos decision to end partnership with consumer bureau: The chairman of the House Financial Services Committee is praising Education Secretary Betsy DeVos for scaling back her department’s work with the Consumer Financial Protection Bureau (CFPB).
Rep. Jeb Hensarling (R-Texas) in a letter to DeVos on Sunday hailed her for ending agreements with the CFPB to assist the department in its crackdown on predatory student lenders. Hensarling, one of the CFPB’s top critics, called DeVos’s decision “necessary and appropriate” to curb the consumer bureau’s “overreach into the education field.”
The Education Department cancelled agreements with the CFPB in August, claiming the bureau “unilaterally expand[ed] its oversight role to include the Department’s contracted federal loan servicers.” The department called CFPB’s actions “characteristic of an overreaching and unaccountable agency.”
The CFPB pushed back on DeVos’s claims and said the Education Department hadn’t expressed concerns before canceling the partnership. CFPB Director Richard Cordray defended his agency’s work in a lengthy response to DeVos, asking her to reconsider the decision: http://bit.ly/2ifSG62.
Five things to know about Trump and NAFTA: Talk is growing that President Trump could really pull the United States out of the North American Free Trade Agreement (NAFTA) with Canada and Mexico.
A fourth round of talks is taking place this week in Washington, and the negotiations seem surrounded by angst and gloom for those with the most invested in the pact’s future.
Canadian Prime Minister Justin Trudeau said his country would not walk away from the talks despite opposition to U.S. proposals, while in Mexico the value of the peso fell amid speculation that Trump might actually do the once unthinkable and remove the U.S. from the 23-year-old deal he routinely describes as a disaster.
U.S. business groups that normally align with the Trump administration — and are in fact working with the White House on tax reform — have been in a public fight with the Office of the U.S. Trade Representative over the talks, while lawmakers in Congress are generally holding their fire.
Here are five things to know about what’s happening from The Hill’s Vicki Needham: http://bit.ly/2iegzer.
Driverless car investments top $80 billion: At least $80 billion has been funneled into driverless car technology over the past three years, according to a new report, underscoring how the pace of development has accelerated in recent years.
The Brookings Institution published research on Monday that tallied all the investments and transactions associated with self-driving cars and technologies from August 2014 to June 2017.
The report found that the total price tag for 160 separate deals, investments, partnerships and acquisitions associated with autonomous vehicles topped $80 billion during that three-year period
The researchers acknowledged that there were several limitations to their data collection, however, so “it is reasonable to presume that total global investment in autonomous vehicles is significantly more than this.”
While it’s unclear when driverless cars will be available to the masses, Congress is already taking steps to create the first federal laws governing their testing and deployment. The House passed autonomous vehicle legislation earlier this month, while a similar bill is making its way through the Senate: http://bit.ly/2gKKHKN.
Trump: Welfare reform big for this administration: President Trump said Monday he’s adding another item to his jam-packed agenda: welfare reform.
“Some people are really taking advantage of our system,” Trump said during a Cabinet meeting. “And we are going to be looking very, very strongly therefore at welfare reform.”
Trump indicated the effort would be directed toward people he believes are receiving public benefits but shouldn’t be.
“People are taking advantage of the system and then other people aren’t receiving what they really need to live,” he said. “And we think it’s very unfair to them.”
The president did not reveal any details of a welfare overhaul, but said his Cabinet would discuss recommendations and reveal them “very shortly.” http://bit.ly/2gL5HBl.
Equifax gets a John Oliver roasting: Comedian John Oliver on his HBO show “Last Week Tonight” lambasted Equifax and its response to a massive cybersecurity breach in which the personal data of 145.5 million Americans was compromised.
Oliver underscored the magnitude of the attack both in its volume and the extent it can affect consumers, whose identities could be stolen at any point for the rest of their lives.
The late-night host also took aim at three Equifax executives — John Gamble, Joseph Loughran and Rodolfo Ploder — who unloaded almost $2 million worth of Equifax stock and options in the days following the company’s realization of the breach.
Skeptics immediately questioned the three for insider trading, a claim that the Department of Justice is currently investigating.
Equifax says that Gamble, Loughran and Ploder were not notified of the breach when they sold their stocks.
“Wow selling stock before the public knows there’s a problem is one of those things that looks suspicious whether or not you’re actually doing something wrong,” Oliver said. “It’s like walking into a petting zoo with a bib on. What exactly are you planning on messily devouring in there?” http://bit.ly/2gK7h6f.
Op-Eds from The Hill’s opinion pages:
“The truth about the arbitration rule is it protects American consumers,” by Consumer Financial Protection Bureau Director Richard Cordray http://bit.ly/2gLn84K.
“A vote on this week’s budget resolution will be a vote for or against tax reform,” by Americans for Tax Reform’s Alex Hendrie http://bit.ly/2gJBgvg.
Write us with tips, suggestions and news: slane@digital-stage.thehill.com, vneedham@digital-stage.thehill.com, njagoda@digital-stage.thehill.com and nelis@digital-stage.thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill, @NJagoda and @NivElis
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