FEDS REJECT LIVING WILLS FOR 5 BANKS: Federal regulators on Wednesday rejected the dismantlement plans from five major domestic banks, saying they either wouldn’t work or could plunge the economy into crisis.
{mosads}The Federal Reserve Board and Federal Deposit Insurance Commission (FDIC) said that Bank of America, Bank of New York Mellon, JP Morgan Chase, State Street and Wells Fargo all lacked resolution plans, often called “living wills,” that met federal standards.
Living wills are plans developed by major banks to outline how they could be dismantled in an orderly way to prevent an industry meltdown or bailout.
The Fed and FDIC said those banks’ plans were “not credible or would not facilitate an orderly resolution under the U.S. Bankruptcy Code.” I break it down here: http://bit.ly/1Q7EP5t.
WATCHDOGS PRAISE, WALL STREET FUMES: Wall Street is fuming over regulators’ rejection of the dismantlement plans from five major domestic banks, after news of the decision leaked early.
Financial sector watchdogs praised the Federal Reserve Board and Federal Deposit Insurance Commission (FDIC) announcement that five major banks lacked sufficient resolution plans, or living wills, to unravel without causing an economic meltdown.
But some of Wall Street’s loudest critics are enraged that the banks haven’t gone far enough. I’ve got more on the tension here: http://bit.ly/1Wson7m.
PUERTO RICO MARKUP DELAYED: Legislation to help Puerto Rico avoid a default in a few weeks has been put on hold by House lawmakers.
House Natural Resources Committee Chairman Rob Bishop (R-Utah) announced Wednesday evening that he was delaying indefinitely a markup for a Puerto Rico relief bill that had been unveiled one day prior.
In a statement, Bishop blamed the delay on the Obama administration, which he said was still trying to change the language.
“The Administration is still negotiating on provisions of the legislation, creating uncertainty in both parties,” he said. “This legislation needs bipartisan support, but Members need time to understand the complexity of the issue and the ramifications of any proposed changes. It is unfair to all Members to force a vote with provisions still being negotiated.”
Rep. Raul Grijalva (D-Ariz.), the top Democrat on the panel, painted a more harmonious picture in a competing statement.
“The Chairman and I elected to postpone the markup on Puerto Rico and keep working on the bill,” he said. “This is too important to rush through and make a mistake. The legislation continues to be a work in progress, with all sides working hard to find a viable path forward.” http://bit.ly/1SAQriV.
THE STEEP CLIMB: The Hill’s Peter Schroeder has more on the hearing earlier Wednesday:
House leaders are grappling with legislation to help Puerto Rico handle its debt crisis, with both parties still hesitant to embrace the bill.
At a Wednesday hearing on the legislation, there was a lot of praise for the work that has been done so far to address the island’s debt woes. But there was much less talk of concrete support for the bill.
Antonio Weiss, the top Treasury Department official on Puerto Rico, told members of the House Natural Resources Committee that the bill would provide “essential tools” to the island, where officials warn they cannot pay back all of the $72 billion they owe in financial markets.
But Weiss said there are “vital questions of workability in the draft bill that must be resolved.” More on those questions here: http://bit.ly/1Wsp5S0.
THE ‘B’ WORD: Speaker Paul Ryan (R-Wis.) blasted Wall Street investors on Wednesday as he tried to tamp down conservative discontent with a bill to assist Puerto Rico.
The GOP leader charged that “special money interest groups on Wall Street” are trying to sabotage the legislation by billing it as a “bailout.”
Ryan said that the government will be forced to actually bail out the island if Congress fails to act, predicting massive defaults on its bonds.
“Many big-money interest groups on Wall Street know this and have put a lot of money toward sabotaging this legislation in order to force a last-minute bailout upon Puerto Rico, putting U.S. taxpayers on the hook for their bad loans,” his office said in a lengthy statement. “They call this a bailout, because they know it is not. And a bailout is what they want.” http://bit.ly/1WsouzO.
HOUSE LIKELY TO MISS BUDGET DEADLINE: House Republicans are expected to blow past a budget deadline this week after party leaders failed to resolve a months-long fight over spending levels.
Several lawmakers and aides said Tuesday the GOP was no closer to consensus on next year’s $1.04 trillion spending levels after a two-week hiatus from Capitol Hill.
The House GOP has until Friday to pass its budget resolution, but lawmakers and aides widely acknowledge that it still comes up short on votes. The budget was left out of this week’s to-do list of legislation and got little attention from most members over the break.
Speaker Paul Ryan (R-Wis.) addressed the party’s budget problem Wednesday morning, when the conference met in full for the first time since mid-March, though no formal presentation was scheduled. The Hill’s Sarah Ferris fills us in: http://bit.ly/1YudiRK.
FLORIDA (CONGRESS)MAN TO RETIRE: The top Republican in charge of funding for Wall Street watchdogs is retiring from Congress.
Rep. Ander Crenshaw (Fla.) announced on Wednesday he would not seek reelection in 2016.
“After a great deal of reflection, I have decided not to seek re-election this fall,” he said in a statement. “I am proud of the work we have accomplished for the citizens of Northeast Florida and our nation during my time in Congress. Progress is measured in projects completed and lives impacted, and I think we made a difference. Now, it is time to turn the page on this chapter of my life and see what’s next.”
Crenshaw is currently the chairman of the House Appropriations subcommittee for financial services and general government. He is in charge of setting the budgets for regulators like the Securities and Exchange Commission and Commodity Futures Trading Commission: http://bit.ly/1SN55UJ.
HAPPY WEDNESDAY and welcome to Overnight Finance, where we’re getting used to the sweet smell of legislation again. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
Tonight’s highlights include House passage of an energy funding bill, a slew of tax-themed bills and Democrats bashing Republicans on budget woes.
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://www.digital-stage.thehill.com/signup/48.
ON TAP TOMORROW:
- Senate Banking Subcommittee on investment and subcommittee on economic policy: Joint hearings to examine current trends and changes in the fixed-income markets, 10 a.m. http://1.usa.gov/1XwrFoq
- Senate Appropriations: Consideration of 302(b) Allocations, Markup of the FY17 Energy and Water Development and fiscal 2017 MilCon-VA appropriations bills, 10:30 a.m. http://1.usa.gov/23w1u8t
- House Science Committee hearing entitled “Can the IRS Protect Taxpayers Personal Information?” 10 a.m. http://1.usa.gov/1SgEfKb
- House Small Business Committee: Hearing entitled “Regulation: The Hidden Small Business Tax,” 10 a.m. http://1.usa.gov/1Vqt3eT
- House Financial Services: Hearing entitled “The JOBS Act at Four: Examining Its Impact and Proposals to Further Enhance Capital Formation,” 10 a.m. http://1.usa.gov/261nKWy
DEMS BASH GOP ON BUDGET: Republican lawmakers’ struggle to pass a new budget bill is just the latest sign of the GOP’s dysfunction, House Democratic leaders charged Wednesday.
“We’re shocked,” Rep. Xavier Becerra (D-Calif.), chairman of the House Democratic Caucus, said to laughter.
Democrats have long sought to highlight the deep divisions within the GOP, accusing Republican leaders of both empowering the rise of the Tea Party and caving to the demands of those same conservative lawmakers at the expense of governing: http://bit.ly/1YucT1J.
House Democrats are also unleashing a new line of attack against the House GOP’s budget — its failure to address poverty.
Rep. Chris Van Hollen (D-Md.), the top Democrat on the House Budget Committee, will release an 11-page report on Wednesday condemning the GOP budget as an across-the-board cut for programs from Medicaid to college assistance aid.
“It slashes the social safety net, cuts down ladders of opportunity, and will mean significantly increased hardship for millions of struggling Americans,” the committee writes in the report, shared first with The Hill: http://bit.ly/1SAGeD4.
BUSY DAY FOR HOUSE COMMITTEES:
- A panel of the House Appropriations Committee on Wednesday approved a $37.4 billion bill to fund the Department of Energy and federal water programs for fiscal 2017: http://bit.ly/1SaYRQX.
- The House Financial Services committee approved two bills Wednesday that would repeal a post-recession bailout fund and give Congress control of the Consumer Financial Protection Bureau’s (CFPB) budget: http://bit.ly/1Vq7OKr.
- The House Ways and Means Committee on Wednesday passed four bills that would place limits on the Internal Revenue Service: http://bit.ly/1TS2kq4.
IRS REBUFFS IMMIGRATION CRITICISM: It is not within the Internal Revenue Service’s jurisdiction to go after illegal immigrants who use others’ Social Security numbers just to get jobs, the agency’s commissioner, John Koskinen, said Wednesday.
“Our responsibility is to make sure they pay their taxes,” Koskinen said at a House Small Business Committee hearing. “We have Social Security and immigration authorities and others who enforce that part of the law, and if we start looking behind the system and doing their job for them, we’re going discourage a lot of people from paying the taxes they owe.”
Koskinen’s comments come after remarks he made about undocumented workers using others’ Social Security numbers at a Senate Finance Committee hearing Tuesday. The Hill’s Naomi Jagoda explains: http://bit.ly/1NoNvog.
SENATE INTROS TARIFF RELIEF BILL: A bipartisan group of senators unveiled legislation on Wednesday that would overhaul the process for businesses requesting tariff relief, mirroring a recently introduced House bill.
Senate Finance Committee Chairman Orrin Hatch (R-Utah) and ranking member Ron Wyden (D-Ore.) debuted the measure that would put the International Trade Commission in charge of requests to lower or reduce duties on manufacturing components that aren’t produced in the United States.
The miscellaneous tariff bill (MTB) aims to ensure that Congress won’t violate an earmark ban.
“With this legislation, we offer a smart bicameral and bipartisan approach for MTBs — one that improves transparency and allows domestic firms to receive appropriate tariff relief on products that can only be found abroad so that those firms can produce American-made goods here at home,” Hatch said. The Hill’s Vicki Needham walks us through it: http://bit.ly/1VWuH6D.
…AND JUST IN TIME: The U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) are pressuring Congress to complete work on a long-delayed tariff overhaul that would reduce costs for their businesses.
The two powerhouse groups say there is growing momentum on Capitol Hill to lower or eliminate tariffs on hundreds of imported production components that are not manufactured in the United States.
Christopher Wenk, executive director of international policy at the U.S. Chamber of Commerce, said the “stars are aligning” for tariff legislation after years of delays. The last package expired at the end of 2012: http://bit.ly/23FVeHW.
IRS TRIES TO MAKE LIFE EASIER: The Internal Revenue Service is taking a number of steps to make it easier for small businesses to comply with their tax obligations, the agency’s head said Wednesday.
“The IRS can and does contribute to tax simplification in important ways,” IRS Commissioner John Koskinen said at a House Small Business Committee hearing, which came less than a week before the April 18 tax due date.
The IRS does not play a direct role in simplifying tax laws, since that is the domain of Congress, the White House and the Treasury Department.
However, the IRS assists small businesses by simplifying forms, streamlining policies, providing regulatory relief, easing record requirements and offering voluntary compliance programs: http://bit.ly/1N9fM7h.
NIGHTCAP: The shoe company New Balance is accusing the Obama administration of reneging on a deal to consider them for a military contract in exchange for holding back on criticism of the Trans Pacific Partnership (TPP), according to a Boston Globe report.
Write us with tips, suggestions and news: slane@digital-stage.thehill.com, vneedham@digital-stage.thehill.com; pschroeder@digital-stage.thehill.com, and njagoda@digital-stage.thehill.com. Follow us on Twitter: @SylvanLane, @VickofTheHill; @PeteSchroeder; and @NJagoda.