Overnight Regulation: Fight erupts over gun export rules | WH meets advocates on prison reform | Officials move to allow Medicaid work requirements | New IRS guidance on taxes

Welcome to Overnight Regulations, your daily rundown of news from the federal agencies, Capitol Hill and the courts. It’s Thursday evening here in Washington where senators say they are on the verge of a bipartisan deal to protect young immigrants known as Dreamers. Read about that here. 

 

THE BIG STORIES 

The Trump administration’s expected plan to transfer the licensing of gun exports from the State Department to the Commerce Department has Democratic lawmakers and foreign policy advocates readying for a fight.

The proposal under review by the White House Office of Information and Regulatory Affairs (OIRA) has yet to be made public, but experts fear it will lead to less oversight of commercial sales of assault weapons like submachine guns and flame throwers to foreign buyers.

The State Department said the goal of the change is to reduce regulatory burdens on manufacturers, small gunsmiths, and exporters. One major change is that exporters and manufacturers, including small gunsmiths, would no longer have to register with the State Department’s Directorate of Defense Trade Controls and pay the $2,250 annual registration fee.

Here’s why opponents are on edge: 

They fear the change will make it easier for deadly weapons to end up in the hands of terrorists and drug cartels.

Democrats say the shift would eliminate congressional review that’s now required under the Arms Export Control Act for any commercial sales of lethal weapons worth $1 million or more. 

Here’s why supporters say concerns are premature: 

The rule is expected to mimic a proposal that was drafted and slated for release under the Obama administration, but stalled after 20 children and six adults were killed in the mass shooting at Sandy Hook Elementary School in Newtown, Conn.

A former administration official familiar with the rule discussions said export licenses still would have been required for assault weapons under the Obama-era rule. Licensing requirements would have been eased, however, for the less sensitive gun parts like screws and springs. 

Find the story here. 

 

REG ROUNDUP 

Health care: The Trump administration on Thursday unveiled guidance allowing states for the first time to impose work requirements in Medicaid, a major shift in the health insurance program for the poor.

The move opens the door for states to apply for waivers to allow them to require Medicaid enrollees to work in order to receive coverage, something that has never before happened in the 50-year history of the program.

Seema Verma, the administrator of the Centers for Medicare and Medicaid Services (CMS), says the move will help people get out of poverty.

“Our policy guidance was in response to states that asked us for the flexibility they need to improve their programs and to help people in achieving greater well-being and self-sufficiency,” Verma said in a statement.

Democrats are sharply opposed to the changes, saying people will lose coverage if they can’t meet the requirements or simply because new bureaucratic hurdles will discourage them from applying.

Democratic groups are expected to sue over the changes, arguing that the administration does not have the power to make them without action from Congress.

Peter Sullivan has the story here.

 

Criminal justice: President Trump and Jared Kushner, his son-in-law and senior adviser, met with criminal justice reform advocates Thursday, giving new hope that action to reverse the nation’s burgeoning incarceration rates is still possible.

A White House official told The Hill the meeting was focused on prison reform and reentry, as well as the successes states like Georgia, Kansas and Kentucky have had in enacting programs aimed at reducing recidivism rates and rehabilitating inmates.

Trump said during the meeting that his administration is committed to helping former inmates become productive, law abiding members of society.

The meeting emboldened some advocates who saw it as sign the White House is officially on board with criminal justice reform.

“It has long been an excuse used on the Hill that we need to see where the White House is on this issue and this is a positive signal the folks on the Hill have been waiting on,” said Holly Harris, executive director of Justice Action Network.

“I don’t think there’s going to be any more justifications to hold up this legislation.”

Read the story here. 

 

Taxes: The IRS and Treasury Department on Thursday issued new guidance on tax withholdings from employees’ paychecks, a key step in the implementation of the new tax law that President Trump signed last month.

The new guidance will allow many taxpayers to start seeing bigger paychecks due to the new law. The IRS is encouraging employers to implement the new withholding tables by Feb. 15.

“We estimate that 90 percent of wage earners will experience an increase in their take home pay,” Treasury Secretary Steven Mnuchin said in a news release. 

Naomi Jagoda has the story here. 

 

Environment: The Environmental Protection Agency’s internal inspector general is again expanding its investigation into the travel habits of agency head Scott Pruitt.

An internal memo dated Jan. 10 alerts the agency of the amendment to the investigation, which expands the dates of travel covered in the probe to include Pruitt’s travel through the end of 2017. The memo noted that the decision to expand the probe came in response to “additional congressional requests.”

Sen. Tom Carper (D-Del.) requested the investigation include Pruitt’s December trip to Morocco, which reportedly cost $40,000 in taxpayer dollars.

Timothy Cama has the story here. 

 

Finance: Equifax was the subject of more consumer bureau complaints than any other financial services company in all but one state in 2017, according to an analysis of agency data published Thursday.

In every state but North Dakota, more residents complained to the Consumer Financial Protection Bureau (CFPB) about the credit reporting company than any other firm.

The analysis is according to LendEDU, a financial resources website, which complied the most frequently appearing companies in the CFPB’s Consumer Complaint Database. The database tracks and — to the ire of the finance industry — publishes every complaint received by the CFPB about a bank or financial services company.

Sylvan Lane has the story here. 

 

Tech: The Senate Banking Committee will hold a hearing with top financial regulators in early February examining the implications of bitcoin.

Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo and Securities and Exchange Commission (SEC) Chairman Jay Clayton will testify before the committee at the hearing, a source with knowledge of the matter confirmed to The Hill.

Both agencies have largely not taken firm regulatory action on bitcoin or other cryptocurrencies over the past several months, but have issued warnings to investors about digital currencies in recent months.

Over the past year, bitcoin and other cryptocurrencies have exploded in value. Bitcoin hit an all-time high of over $19,000 within the past month. At the start of 2017, it was trading below $1,000.

Ali Breland and Sylvan Lane have more here.

 

IN OTHER NEWS 

Facebook, Google have a tough new job in Germany: Content cop — The Wall Street Journal

‘Fiduciary rule’ poised for second life under Trump administration — The Wall Street Journal

Ford urges 2,900 pickup owners to stop driving after new Takata death — Reuters

Bitcoin bashed on the head in a global game of regulatory whack-a-mole — Bloomberg

Study suggests Trump’s “Muslim ban” actually improved attitudes toward Muslims –Vox 

New tax guidelines rely on workers to double-check their paychecks – The Washington Post