Week ahead in finance: Lawmakers brace for high-stakes September

Congress returns to Washington on Tuesday with critical work to complete by the end of the month if they hope to avert a government shutdown and global financial crisis.

Lawmakers have until September 30 to fund the government beyond this month, and raise the legal limit on how much debt the federal government can hold. Both deadlines have risky political implications and GOP leaders have been publically divided about the path forward.

President Trump over the August recess promised to veto must-pass government funding legislation if it didn’t include funding for his proposed wall along the Mexico border, threatening a shutdown. House Speaker Paul Ryan (R-Wis.) and Senate Majority Leader Mitch McConnell (R-Ky.) both pushed back on the president, insisting a shutdown isn’t necessary and that lawmakers could find border wall funding through the regular appropriations process.

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Senate Minority Leader Charles Schumer (D-N.Y.) already said his caucus wouldn’t support a bill that funds the border wall. And even House Freedom Caucus Chairman Mark Meadows (R-N.C) said his group of more than 40 conservative lawmakers wouldn’t sink a short-term spending bill that doesn’t fund the wall.

There were hints Friday that the White House might be willing to punt on the border funding issue until after September.

Congress will also have to decide how to raise the debt ceiling before the federal government defaults on part of its debt. The Treasury Department can put off making critical payments until roughly the end of September, though that deadline could come earlier because of Hurricane Harvey.

Congressional leaders reportedly are mulling attaching a debt ceiling increase to one of several upcoming bills to fund Harvey relief efforts. That could make it harder for some Republicans to vote against a debt limit hike.

But Meadows has already said the two shouldn’t be combined.

“The Harvey relief would pass on its own, and to use that as a vehicle to get people to vote for a debt ceiling is not appropriate,” he said in an interview with The Washington Post.

GOP leaders will likely need Democratic votes to raise the debt ceiling. And Democrats are already warning they won’t sign onto a package that includes spending cuts.

Harvey’s impact could further complicate raising the debt ceiling if Congress needs to raise the National Flood Insurance Program’s $30 billion borrowing limit. The NFIP is already facing nearly $25 billion in debt from Hurricanes Katrina and Rita, and Superstorm Sandy.

Experts say the total cost of Harvey could exceed $15 billion, and flood insurance policy claims could be a significant portion of that cost.

Congress has until September 30 to reauthorize NFIP, and lawmakers are attempting to agree on a package that keeps the program funded while making major changes meant to reduce cost and modernize flood mapping procedures.

Tax reform will also be in the spotlight in the coming week.

Trump is delivering a speech in North Dakota on Wednesday, his latest public pitch for a massive overhaul of the U.S. tax code. Trump has said lawmakers and the White House have a “once-in-a-generation opportunity to deliver real tax reform.”

GOP leaders are under pressure to deliver as they look for a legislative victory after falling short on ObamaCare repeal.

Trump warned lawmakers in a recent speech not to disappoint him on tax reform.

Your week ahead:

Monday

• Labor Day

Tuesday:

• House and Senate return to D.C.

Wednesday:

• House Education and the Workforce Committee: Hearing entitled “The Sharing Economy: Creating Opportunities for Innovation and Flexibility,” 10 a.m. http://bit.ly/2gpjuMS.
• House Small Business Committee: Hearing entitled “Expediting Economic Growth: How Streamlining Federal Permitting Can Cut Red Tape for Small Businesses,” 11 a.m. http://bit.ly/2gpEhzL.
• House Financial Services Subcommittee on Terrorism and Illicit Finance: Hearing entitled “Low Cost, High Impact: Combatting the Financing of Lone-Wolf and Small-Scale Terrorist Attacks,” 2 p.m. http://bit.ly/2gpxDJO.
• President Trump delivers a speech on tax reform efforts in North Dakota. 

Thursday:

• Senate Banking Committee: Hearing entitled: “Evaluating Sanctions Enforcement and Policy Options on North Korea,” 9:30 a.m. http://bit.ly/2evHVem.
• House Financial Services Subcommittee on Financial Institutions and Consumer Credit: Hearing entitled “Legislative Proposals for a More Efficient Federal Financial Regulatory Regime,” 10 a.m.  http://bit.ly/2gpo5OT.
• House Financial Services Subcommittee on Capital Markets, Securities, and Investment: Hearing entitled “Oversight of the Financial Industry Regulatory Authority,” http://bit.ly/2evqSJr.
• U.S. Chamber of Commerce: Interactive discussion entitled “Fiduciary Duty: Assessing the Real World Impact,” 12 p.m. http://uscham.com/2gphOD2.

Recent stories:

Trump to give tax speech in North Dakota next week, by Naomi Jagoda

Economy adds 156K jobs in August, by Sylvan Lane

Texas judge strikes down Obama overtime rule, by John Bowden

Mnuchin: More tax details coming shortly, by Naomi Jagoda

Mnuchin: Treasury could scrap plans to replace Jackson on $20 bill, by Sylvan Lane

Wells Fargo: Nearly twice as many potentially fake accounts than originally thought, by Sylvan Lane

Mexico plans to leave negotiations if Trump cancels NAFTA: report, Rafael Bernal

Trump touts 3 percent economic growth, takes shot at Obama, by Niv Elis

AFL-CIO chief: Trump torn between ‘racists’ and ‘Wall Streeters’, by Megan R. Wilson

Write us with tips, suggestions and news: slane@digital-staging.thehill.com, vneedham@digital-staging.thehill.com, njagoda@digital-staging.thehill.com and nelis@digital-staging.thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill, @NJagoda and @NivElis