HILLARY RELEASES TAX PLAN: Democratic presidential candidate Hillary Clinton on Tuesday rolled out her tax plan, closing certain tax “loopholes.” The Hill’s Naomi Jagoda breaks down the proposal: http://bit.ly/1ONZfEr.
Clinton’s plan:
-End the carried interest tax break.
-Scrap a provision that allows the wealthy to stow money in tax-preferred retirement accounts.
-Remove provisions related to foreign reinsurance and gaming.
-Lower the threshold for the estate tax.
‘AUDIT THE FED’ FAILS: It’s been a tough week for Sen. Rand Paul (R-Ky.). After missing the cut for the next Republican presidential debate mainstage, the Senate voted down his bill to audit the Federal Reserve, an iconic priority of his. The bill failed to pass a 60-vote threshold 53-44, with only one Republican voting against it. The Hill’s Jordain Carney takes us inside the chamber: http://bit.ly/1TTb4ta.
{mosads}”Paul’s legislation, which would increase congressional oversight of the Fed and require it to undergo an audit by the Government Accountability Office, faced an uphill battle. Ahead of the vote, only 26 Republicans had signed on as co-sponsors.
“Sen. Dick Durbin (D-Ill.) told The Hill while he expected the vote would be close, ‘at this point I think it’s going to be difficult for the Republicans to get 60 votes.’
“Democrats suggested that Senate Majority Leader Mitch McConnell (R-Ky.), who supported the bill, was wasting floor time by making Paul’s legislation the first bill of 2016. McConnell backs Paul’s presidential run.”
SANDERS SUPPORTS IT: Democratic presidential candidate Sen. Bernie Sanders (I-Vt.) was one of two non-Republicans to vote for the bill. Sanders argued last month that the Fed had been “hijacked” by Wall Street bankers and required fundamental reform: http://bit.ly/1W4IC91.
CRUZ SKIPS OUT: Republican presidential candidate Sen. Ted Cruz (R-Texas) supported Paul’s legislation, but missed the vote while campaigning in New Hampshire. Both Paul and his father, former Rep. Ron Paul (R-Texas), ripped Cruz: http://bit.ly/1RB1z4l.
HAPPY TUESDAY and welcome to Overnight Finance, where we’re getting ready for President Obama’s final State of the Union. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
Tonight’s highlights include a nudge from Obama, a shot from Paul Ryan anda bad day for oil.
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://www.digital-staging.thehill.com/signup/48.
RYAN SHUNS OBAMA ECONOMY: The economic recovery will be a centerpiece of Obama’s final State of the Union tonight, but House Speaker Paul Ryan said the president can’t take credit for it. The Hill’s Peter Schroeder relays Ryan’s case: http://bit.ly/1nfDWl3.
“Speaking before reporters Tuesday, Ryan argued that while the president might tout the falling unemployment rate and growing economy under his watch, he shouldn’t take a victory lap. The Speaker said Obama’s policies are actually holding the economy back.”
“‘Wages are stagnant … 46 million people are still living in poverty today, among the highest poverty rates in a generation,’ said Ryan. ‘These are not the signs of a recovery, these are not the signs of a strong economy. These are signs of a weak economy.’
“Instead of crediting Obama for any of the economic gains that have occurred in the last seven years, Ryan argued that the Federal Reserve’s policies pushed the recovery. He added that the central bank’s controversial efforts to drive down borrowing costs may have driven growth, but the benefits failed to spread to everyone.”
TPP’S TENUOUS PATH: Obama is likely to tout the Trans-Pacific Partnership in his speech tonight, but House Ways and Means Committee Chairman Kevin Brady (R-Texas) says passing the massive trade deal is easier said than done.
Brady said there are challenges because the White House made “some policy decisions that are costing them votes on both sides of the aisle.” The Hill’s Vicki Needham explains why: http://bit.ly/1UN6D33.
OPPONENTS POINT TO KEYSTONE: More from Vicki–“Environmental groups, trade groups and labor unions say TransCanada’s attempt to secure $15 billion in compensation for the rejection of Keystone under the North American Free Trade Agreement (NAFTA) is emblematic of how trade agreements favor corporate interests, harm workers and undermine U.S. law.” http://bit.ly/1OgBsM4.
OIL TANKS TO LOWEST PRICE IN YEARS: The price for a barrel of crude oil fell to $29.97, the lowest price in more than 12 years. It eventually climbed back to $30.22 by the end of trading Tuesday. The Hill’s Timothy Cama lays out the economic dangers: http://bit.ly/1J1n4Z7.
“World oil markets are seeing a historic supply glut as production has increased in the United States, thanks largely to drilling techniques such as fracking and horizontal drilling. The Organization of Petroleum Exporting Countries (OPEC), meanwhile, has continued to either refuse to pull back production or been unable to agree on production.
“Earlier Tuesday, Nigeria’s oil minister said some OPEC countries requested a meeting to consider supply cuts, Reuters reported. Soon after, his counterpart in the United Arab Emirates rejected the idea, sending prices tumbling even more.”
CONGRESS TACKLES TAX RELIEF FOR WRONGFUL JAILING: A bipartisan pair of House members is asking the head of the Internal Revenue Service about the agency’s plans for implementing a new law that bars federal taxation on restitution for people who have been wrongfully imprisoned. Naomi Jagoda has more: http://bit.ly/1Kc8l8z.
“Reps. John Larson (D-Conn.) and Sam Johnson (R-Texas) had sponsored the Wrongful Convictions Tax Relief Act, which was included in the tax extenders package that was enacted in December.
“The new law allows individuals who receive compensation for wrongful federal or state incarceration to exclude that money from income for federal tax purposes. It also allows exonerated individuals who previously paid taxes on their awards to get their money back if they make a request by December of this year.”
INTERNET TAX BATTLE COMING SOON: The Senate will vote on a bill to including a permanent ban on Internet taxes, and supporters are feeling good about their chances, according to The Hill’s Mario Trujillo: http://bit.ly/1ZYZwIm.
“Sen. John Thune (R-S.D.), the No. 3 Republican in the Senate… predicted opponents will not have the votes to strip it out.
“‘I think you can expect that that there’ll be some procedural attempts to strip that out, but I don’t think the votes are going to be there,’ he told reporters Tuesday. ‘I think it is going to be a very hard vote for people to vote to say as a matter of policy and practice in this country that we’re going to allow taxes to go into place — we’re going to allow states to impose taxes on the Internet.'”
NEW FEDERAL RULES FOR HOME LOANS: The Federal Housing Finance Agency (FHFA) released a new rule Tuesday limiting who can join a network of government-sponsored home loan banks. Here’s more from me: http://bit.ly/1ZqIlml.
“The rule excludes so-called captive insurers from membership in the Federal Home Loan Bank, which gives financial institutions access to cheaper capital to finance home loans. These insurers, which largely exist to cover risks of their parent companies, will be phased out of the network over 12 months… The rule also scraps a proposed requirement for members to invest at least 10 percent of their assets in certain residential mortgages. FHFA officials found that only two percent of current bank members would be affected by the requirement, and that the costs of implementation outweighed the benefits.”
NIGHTCAP: Looking to buy a new pad with your Powerball winnings? The Playboy Mansion is yours for just $200 million–but only if you let Hugh Hefner rent it out until he dies (CNBC): http://cnb.cx/1SNkV5m
Write us with tips, suggestions and news: slane@digital-staging.thehill.com; vneedham@digital-staging.thehill.com; pschroeder@digital-staging.thehill.com; and njagoda@digital-staging.thehill.com. Follow us on Twitter: @SylvanLane; @VickofTheHill; @PeteSchroeder; and @NJagoda.