Overnight Finance: Scoop – Trump team eyes dramatic spending cuts | Treasury pick survives stormy hearing

Trump team prepares dramatic cuts: Donald Trump is ready to take an ax to government spending.

Staffers for the Trump transition team have been meeting with career staff at the White House ahead of Friday’s presidential inauguration to outline their plans for shrinking the federal bureaucracy, The Hill has learned.

The changes they propose are dramatic, and The Hill’s Alexander Bolton got an exclusive look at what agencies are on the chopping block: http://bit.ly/2iYdnBw.

Dems blast plans for cuts: The proposed spending cuts detailed in The Hill’s report sparked fierce criticism from Democrats during Rick Perry’s Thursday hearing to be Energy secretary.

“This is absolutely nuts in terms of the future of energy in this country,” Sen. Angus King (I-Maine) told Perry.

“You’re going to have to really do some hard pushing back on this because, assuming this is true, I find it’s almost self-parody to be cutting energy research at this moment in time.”

{mosads}

Major cuts to the Energy Department would reduce nuclear physics and scientific computing research funding to 2008 levels, as well as eliminating three agency initiatives: the Office of Electricity, Office of Energy Efficiency and Renewable Energy and the Office of Fossil Energy.

Democrats implored Perry to push Trump away from those cuts. 

The Hill’s Devin Henry has more here. http://bit.ly/2jdKUpa

Mnuchin’s stormy hearing: President-Elect Donald Trump’s pick to head the Treasury Department, Steven Mnuchin, faced some intense grilling from Senate Democrats Thursday. But there was little to suggest that his nomination was in any significant danger.

In a wide-ranging hearing that exceeded five and a half hours, Mnuchin was pressed by Democrats for details on everything from his thoughts on tax reform to how he defended foreclosures carried out under his watch as the top executive of OneWest Bank.

Mnuchin also faced significant pressure over the fact that one day earlier, he had to update his financial disclosures to include nearly $100 million in previously unreported assets, as well as a fund based in the Cayman Islands, a notorious tax haven.

But like many of Trump’s picks, at the end of the day it appeared that Mnuchin could still rely on enough Republican support to win the job. The Hill’s Peter Schroeder takes us inside the hearing: http://bit.ly/2jdp4lp.

Heads up: We’ve got the top headlines from Mnuchin’s hearing later in the newsletter. See what he said on tax reform, Social Security, Dodd-Frank and housing. 

Ryan offers picture of public-private spending in Trump’s infrastructure plan: President-elect Donald Trump’s massive infrastructure package should have $40 of private-sector spending for every $1 of public spending, according to House Speaker Paul Ryan (R-Wis.)

“A great agency … has public-private partnerships. For every one dollar of federal dollars, there’s $40 of private sector spending,” Ryan said on The Charlie Rose Show. “We want to leverage as much private-sector dollars as possible to maximize the fixing of our infrastructure.”

It’s perhaps the clearest picture to date of whether and how much direct federal funding for transportation upgrades may be included in Trump’s promised $1 trillion infrastructure bill. The Hill’s Melanie Zanona tells us what it means: http://bit.ly/2iYeUY9.

Happy Thursday and welcome to Overnight Finance, where we’re being serenaded by the sounds of constant sirens driving past The Hill newsroom. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight’s highlights include the top moments from Steven Mnuchin’s confirmation hearing and a Democratic push to get Trump to officially abandon the Trans-Pacific Partnership.

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

• Donald J. Trump and Michael R. Pence are sworn in as President and Vice President of the United States, respectively. Keeping checking TheHill.com throughout the day for updates.

 

Mnuchin’s hearing, moment by moment: You can catch up on key moments from the Mnuchin hearing as it happened with our live blog. Find out what Mnuchin said on Social Security cuts, read about his discussion with Trump on a new Glass-Steagall, and find out about his contentious exchanges with Democratic and Republican senators: http://bit.ly/2iYlSg1.

 

Hearing derailed after senator suggests colleague needs Valium: Steven Mnuchin’s confirmation hearing quickly went off the rails Thursday as Democrats and Republicans feuded over a GOP lawmaker’s quip about giving antidepressants to the panel’s top Democrat.

Mnuchin, President-elect Donald Trump’s pick to head the Treasury Department, had yet to give his opening statement before the Senate Finance Committee when an offhand remark by Sen. Pat Roberts (R-Kan.) riled up committee members.

Roberts, who was permitted to ask a handful of questions before jumping to another hearing, jabbed at Sen. Ron Wyden (D-Ore.) after he gave a lengthy critique of Mnuchin’s experience.

“Sen. Wyden, I’ve got a Valium pill here that you might want to take for a second round,” he joked.

That’s when everything erupted: http://bit.ly/2iYdyN9.

Mnuchin: Debt limit increase important, unclear on ‘clean’ hike: Steven Mnuchin wants to raise the debt ceiling quickly and considers it an important issue, but he wasn’t familiar with what constituted a “clean” hike, which had been central to political fights in recent years.

Mnuchin, President-elect Donald Trump’s pick to lead the Treasury Department, suggested a lack of familiarity with some of the intricacies of the nation’s borrowing cap, while acknowledging the serious need to raise it in a timely fashion.

With the nation’s borrowing cap again set to take effect in March, Mnuchin told the Senate Finance Committee that honoring U.S. debt was “the most important thing of all.”

But when Sen. Michael Bennet (D-Colo.) asked if Mnuchin would commit to a “clean” debt limit increase, Mnuchin professed ignorance. Peter Schroeder tells us more: http://bit.ly/2iYgaKV.

Mnuchin: Unemployment rate is ‘not real’: Steven Mnuchin dismissed the sharp decline in the unemployment rate as “not real,” arguing that the average American still hasn’t felt anything from the economic recovery.

Testifying before the Senate Finance Committee Thursday, Mnuchin said that his travels with President-elect Donald Trump have changed his perspective and argued the nation’s needs a new approach.

In so doing, Trump’s pick to head the Treasury Department dismissed the validity of one of the nation’s central economic guideposts, which currently sits at 4.7 percent.

“I absolutely understand why he got elected,” said Mnuchin. “The average American worker has gone absolutely nowhere. The unemployment rate is not real.” http://bit.ly/2iYcCIy.

Mnuchin calls failure to disclose $100M in assets an ‘oversight’: Mnuchin on Thursday told the Senate Finance Committee that revised documents he filed with the committee a day earlier showed the additional assets, and blamed the complexity of nominee paperwork for the initial omission.

“As you all can appreciate, filling out these government forms is quite complicated,” he said. “The paperwork … was quite a job.”

Mnuchin said the oversight occurred because he was working to get his financial disclosure and other information to lawmakers as quickly as possible, calling his original 43-page disclosure a “preliminary questionnaire.” Most of the millions in assets Mnuchin added later on were various homes the hedge fund manager owned.

“Any oversight was unintentional,” he added: http://bit.ly/2iY8E2Q.

Warren burns Mnuchin over failure to disclose assets: Sen. Elizabeth Warren (D-Mass.) though blasted Mnuchin for failing to disclose the nearly $100 million in assets. 

Warren compared Mnuchin’s oversight, which came to light hours before his confirmation hearings, to the wave of home foreclosures by OneWest Bank, which Mnuchin oversaw from 2009 to 2015.

“When Mnuchin makes mistakes on complicated paperwork, he asks for forgiveness. When his customers made mistakes, he took their homes,” Warren tweeted. “Steve Mnuchin told [Sen. Stabenow (D-Mich.)] & [Sen. Bob Menendez (D-N.J.)] he didn’t disclose $100M because “the amount of paperwork” was tough. Boo hoo.” Here’s more from The Hill’s Jordain Carney: http://bit.ly/2iYeD7H.

Mnuchin: Tax reform shouldn’t add to the deficit: Steven Mnuchin also said Thursday that he thinks tax reform should be deficit-neutral.

“I think we want to make sure that tax reform doesn’t increase the size of the deficit,” Mnuchin said during his confirmation hearing.

Still, Mnuchin noted that the administration believes in “dynamic scoring,” which factors economic growth into cost estimates. The tax reform plan Trump released in September was estimated by outside groups to cost trillions of dollars, even under dynamic scoring.

House Republicans and Senate Majority Leader Mitch McConnell (R-Ky.) have also said they want tax reform to be revenue-neutral. The Hill’s Naomi Jagoda explains: http://bit.ly/2iYfFAB.

Senate Dems want Trump to withdraw from Pacific trade deal: Five Senate Democrats on Thursday introduced legislation to withdraw the United States from a sweeping Asia-Pacific trade agreement.

Sens. Tammy Baldwin (Wis.), Debbie Stabenow (Mich.), Elizabeth Warren (Mass.), Jeff Merkley (Ore.) and Ed Markey (Mass.) say the bill would hold President-elect Donald Trump accountable to fulfill his promise to leave the 12-nation Trans-Pacific Partnership (TPP).

Trump has said he would remove the United States on the first day of his new administration.

“Negotiated behind closed doors, TPP reflects the desires of multinational corporations, not the Wisconsin workers who will have to live with its consequences,” Baldwin said. The Hill’s Vicki Needham reports: http://bit.ly/2iYa2m0.

 

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.