Overnight Finance: Debate rages in GOP over $203B in cuts | Pence pitches tax reform to retailers | House to take up ‘security’ spending before recess | Trump hits Iran with new sanctions

Debate rages in GOP over $203 billion in cuts: The House Budget Committee’s $1.1 trillion budget resolution faces an uncertain future as infighting rages in the GOP over $203 billion in mandatory spending cuts.

The committee is expected to pass the budget resolution Wednesday, after what is set to be an all-day mark up in which Democrats plan to offer 28 amendments. 

But Republicans still lack the votes to pass the resolution on the House floor, making the next steps uncertain.

{mosads}

“There are not the votes to pass it,” said Rep. Mark Meadows (R-N.C.), chairman of the far-right House Freedom Caucus. “I haven’t read it all but, I mean, I’ve been following it pretty closely, and I didn’t see any epiphany there that would say, ‘Oh, my goodness, now everybody will jump on board.’ “

Without a budget resolution, Republicans will not be able to unlock the filibuster-busting procedure they plan to use for tax reform. The Hill’s Niv Elis reports: http://bit.ly/2td1XMX.

 

How the GOP would cut $203B in mandatory spending: The House GOP’s new budget resolution includes instructions for $203 billion in deficit reduction over a decade, a figure conservatives have said is too low and Republican moderates think should be dealt with outside the budget process.

To achieve those cuts, the Budget Committee tasks 11 other House panels with making savings from their areas of jurisdiction. The largest amount, $52 billion, is tasked to the Ways and Means Committee, which oversees tax policy and a large portion of Medicare. The lowest cuts, set at the nominal amount of $1 billion (or about $100 million a year), went to the Armed Services and the Veterans Affairs committees.

Notably, no savings are targeted from the Transportation and Infrastructure Committee, which oversees the Highway Trust Fund.

The Hill asked Marc Goldwein, senior vice president and head of policy at the nonpartisan Committee for a Responsible Federal Budget (CRFB), for some thoughts on how the committees might achieve the cuts, which come directly from the GOP budget proposal. Here is the breakdown: http://bit.ly/2uwMRFO.

 

For more on the $1.1 trillion budget… House GOP releases $1.1 trillion budget: The House Budget Committee unveiled a budget plan Tuesday for the next fiscal year that would cut $203 billion in mandatory spending and seek to balance the budget in a decade.

The resolution would also add work requirements for Medicaid recipients and set fast-track budget reconciliation instructions for deficit-neutral tax reform, a process that could allow the GOP to pass a tax bill through the Senate without fear of a Democratic filibuster.

The $1.132 trillion budget includes $621.5 billion for defense, a significant increase over both current levels and those proposed by President Trump. It contains $511 billion for nondefense discretionary spending, a cut from current spending but higher than Trump’s request. 

It also includes $87 billion in spending for the global war on terror, though this funding is not subject to budget caps.

The Budget panel says its blueprint would reduce the deficit by $15 billion in 2018 and projects that the deficit would turn into a $9 billion surplus by 2027. Niv Elis breaks it down: http://bit.ly/2td4Rl0.

 

House to consider ‘security’ spending bill before recess: The House is expected to consider a huge spending bill next week mostly for agencies protecting national security before it leaves for its month-long August recess.

The legislation will only provide funding for defense, the Energy Department, legislative branch operations and the Department of Veterans Affairs.

“It is vital that we demonstrate our commitment to America’s men and women in uniform and uphold our Constitutional duty to provide for the common defense. Therefore, this appropriations package will focus on meeting our nation’s security needs,” read an announcement from House Majority Leader Kevin McCarthy’s (R-Calif.) office on Tuesday.

The announcement comes after GOP leaders had begun talking to their members about doing an omnibus spending bill that would cover the entire federal government for the next fiscal year.

Cristina Marcos has more here: http://bit.ly/2u7JvrP

 

Happy Tuesday and welcome 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-staging.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 Health, Education, Labor and Pensions Committee: Hearing on the nomination of Marvin Kaplan and William Emanual to be members of the National Labor Relations Board, 10 a.m. http://bit.ly/2tn6k7y.
• House Financial Services Subcommittee on Oversight and Investigations: Hearing entitled “Congressional Oversight of Independent Regulatory Agencies,” 10 a.m. http://bit.ly/2tRCbR8.
• House Small Business Committee: Hearing entitled “Reversing the Entrepreneurship Decline,” 11 a.m. http://bit.ly/2to9wQe.

 

Trump administration unveils new Iran sanctions: The Trump administration on Tuesday unveiled a new slate of economic sanctions against Iran over its ballistic missile program and destabilizing actions in the region, a day after announcing that it will grudgingly recertify Tehran’s compliance with the nuclear agreement reached under former President Barack Obama.

The U.S. Treasury Department designated 16 entities and individuals for supporting “illicit Iranian actors or transnational criminal activity,” according to a statement.

Some of those targeted had supported the Iranian military or Iran’s Islamic Revolutionary Guard Corps (IRGC) by developing drones, fast attack boats and other military equipment. Others stole U.S. and western software programs, which were sold to the Iranian government, according to the statement.

The State Department separately designated two organizations involved in Iran’s ballistic missile program.

“This Administration will continue to aggressively target Iran’s malign activity, including their ongoing state support of terrorism, ballistic missile program, and human rights abuses,” Treasury Secretary Steven Mnuchin said. The Hill’s Katie Bo Williams reports: http://bit.ly/2uwnBQe.

 

Pence sells Trump’s tax-reform plan to retailers: Vice President Pence pitched the White House’s tax-reform plan to retailers on Tuesday, as the administration seeks to enact legislation that cuts taxes for individuals and businesses by the end of the year.

“When it comes to your businesses, our tax plan is going to put American companies, including our retailers, back on a path to jobs and growth and better competitiveness,” Pence said at an event hosted by the National Retail Federation.

The White House released a one-page tax plan in April that would lower the corporate tax rate from 35 percent to 15 percent and reduce the top individual tax rate from 39.6 percent to 35 percent.

The plan would also repeal the estate tax, which Pence said would be particularly important for family-owned retailers.

“Death will no longer be a taxable event,” the vice president said.

Pence said that President Trump “is going to work with this Congress this year, and we’re going pass the largest tax cut since the days of Ronald Reagan.” The Hill’s Naomi Jagoda reports: http://bit.ly/2uwBYnK.

 

Dollar falls to 10-month low amid doubts that Trump can fulfill promises: The dollar has fallen to a 10-month low after the latest setback for the Republican effort to repeal and replace ObamaCare, Reuters reported Tuesday.

The dollar fell to its lowest value since last September. 

“The reform momentum of the Trump administration has received another blow,” said strategists at Morgan Stanley, led by Hans Redeker, in a note to clients, according to the news service.

“Clearly anything that comes along at the moment just corroborates the market’s negative attitude on the dollar,” said Neil Mellor, senior FX strategist with Bank of New York Mellon in London.

“There’s just not enough inflation at the moment. And anything like this (defeat for Trump) is liable to push it lower.”

The fall comes amid new doubts that President Trump will be able to fulfill his campaign promises: http://bit.ly/2td62k7.

  

Waters demands Sessions recuse himself from Deutsche Bank probe: Rep. Maxine Waters (D-Calif.) is demanding that Attorney General Jeff Sessions recuse himself from the Justice Department’s investigation of Deutsche Bank.

In a letter Tuesday to Sessions, the top Democrat on the House Financial Services Committee accused him of being “unwilling to stand up to the president on matters in which he has a vested interest,” the Washington Examiner reported.

The Justice Department is investigating the German bank for involvement in a possible Russian money-laundering scheme for which U.S. regulators fined the bank $629 million in January. 

The scheme led to more than $10 billion secretly being transported out of the country.

But Democrats also want answers about any loans between the bank and businesses owned by President Trump and his family: http://bit.ly/2uwLQxy.

 

Senate panel begins moving $38.4B energy, water spending bill: A Senate Appropriations Committee panel on Tuesday approved a $38.4 billion bill to fund federal energy and water programs, including the Department of Energy (DOE), in 2018.

The legislation would increase spending for the DOE and other programs by $629 million next year. Total funding in the bill is about $900 million more than that set aside in the House and is $4.1 billion more than the budget request President Trump released in May.

Sen. Lamar Alexander (R-Tenn.), the chairman of the energy and water subcommittee, said the bill provides record amounts of funding for several federal efforts, including the DOE’s Office of Science, the Army Corps of Engineers and the Advanced Research Projects Agency-Energy (ARPA-E).

Alexander said the White House’s budget represented an “unrealistic budget proposal from the president.” http://bit.ly/2uwN3oy.

Billions in student loan debt may be wiped away over missing paperwork: report: Billions of dollars in private student loan debt may reportedly be erased because of missing legal documents that have left creditors unable to prove who owns the loans. 

The New York Times reported Monday that the missing paperwork could result in tens of thousands of delinquent borrowers having their private student loan debt cleared. The loans in question total at least $5 billion.

Private student loans are a $108 billion market, and lenders often pursue delinquent borrowers in court. 

National Collegiate Student Loan Trusts, one of the country’s largest owners of private student loans, is locked in a prolonged legal battle with borrowers who have fallen behind on their loan repayments.

But at issue is the group’s ability to show paperwork proving that it owns the loans in question: http://bit.ly/2uwMET2.

 

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