Overnight Finance: GOP chair floats phasing in border tax | Treasury offers first proposal to roll back Dodd-Frank | Mnuchin’s idea of a ‘good shutdown’

GOP chairman suggests phasing in border tax: House Ways and Means Committee Chairman Kevin Brady (R-Texas) on Tuesday said that the GOP border-adjustment proposal could be phased in over five years, as concerns about the tax plan mount from lawmakers and business groups.

“My current thinking on border adjustment — after listening to our businesses large and small and our members — is a very gradual five-year transition,” Brady said at The Wall Street Journal-CFO Network annual meeting.

The border-adjustment proposal was a key part of the tax plan House Republicans released last year. Under the proposal, imports would be subject to U.S. taxes and exports would be exempt.

{mosads}Brady has argued that the proposal, championed by House Speaker Paul Ryan (R-Wis.), is the best way to prevent companies from moving their jobs and headquarters overseas.

But retailers, Trump administration officials, conservative groups and many GOP lawmakers worry it would amount to a tax increase for consumers. The Hill’s Naomi Jagoda reports: http://bit.ly/2rfeXkh.

 

Treasury releases first proposal to roll back Dodd-Frank: The Treasury Department on Monday proposed several changes to Obama-era banking regulations, the first specifics on how President Trump would try to “dismantle” the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Treasury’s proposal includes dozens of recommendations ranging from legislative fixes to be adapted by Congress to ways regulators could loosen rules on banks with the hopes of boosting economic growth. 

“Properly structuring regulation of the U.S. financial system is critical to achieve the administration’s goal of sustained economic growth and to create opportunities for all Americans to benefit from a stronger economy,” said Treasury Secretary Steven Mnuchin. “We are focused on encouraging a market environment where consumers have more choices, access to capital and safe loan products — while ensuring taxpayer-funded bailouts are truly a thing of the past.” 

Trump had long promised to “dismantle” Dodd-Frank without providing details on what he’d like to change. The Monday report contains the first proposals offered by the administration on how to reshape financial regulation. I break them down here: http://bit.ly/2reYm02.

 

Mnuchin talks ‘good shutdown’: Treasury Secretary Steve Mnuchin said Tuesday that there could be good reasons for shutting down the government, echoing a statement President Trump made in a Tweet in May.

Mnuchin was asked a direct question about Trump’s tweet earlier this year that “Our country needs a good ‘shutdown’ in September to fix mess!'”

Trump made the remarks after a spending deal was reached to fund the government through September. Many outside observers wrote that Democrats got the better of Trump in that negotiation. Republicans had feared they would be blamed for a shutdown.

“It’s an unfortunate outcome,” Mnuchin said when Sen. Tim Kaine (D-Va.) asked what a good shutdown would comprise during a Senate Budget Committee hearing on Tuesday.

“At times there could be a good shutdown, at times there may not be a good shutdown,” Mnuchin said. “There could be reasons at various times why that is the right outcome.” The Hill’s Niv Elis explains: http://bit.ly/2reOGCr.

 

More Mnuchin: Treasury Secretary Steven Mnuchin and liberal Vermont Senator Bernie Sanders (I) engaged in a testy exchange over President Donald Trump’s campaign promise to enact a “21st Century Glass-Steagall Act,” a financial regulation separating commercial and investment banking.

Our Niv Elis has the exchange here: http://bit.ly/2slnkOA

 

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.

 

Pelosi blasts start of appropriations: Congressional appropriators will kick off their process of marking up spending bills Monday evening, despite not having a top-line budget number to guide their spending.

Normally, appropriators start marking up spending bills after the passage of a budget resolution, which sets the amounts appropriators divvy up to various programs.

When the House appropriations subcommittee on Military Construction takes up the bill on Military Construction and Veterans Affairs Appropriations Monday at 7 p.m., it will be working to distribute portions of a budget without knowing how big that overall budget is.

House Minority Leader Nancy Pelosi (D-Calif.) on Monday said the process was “irresponsible.”

“Instead of working constructively, Republicans’ markup is just pushing us deeper into the destructive uncertainty and chaos over the budget. Marking up one discretionary bill without any sense of the whole is irresponsible and counterproductive,” Pelosi said: http://bit.ly/2rfdx9c.

 

Dem hits Treasury secretary over tax breaks for the rich: The top Democrat on the Senate Finance Committee on Tuesday accused Treasury Secretary Steve Mnuchin of reneging on a past promise that the Trump administration’s tax reform proposal would not include an absolute tax cut for the wealthy, warning that such a backtrack would stifle a bipartisan deal.

“We will not get bipartisan tax reform when the secretary of Treasury walks back a pledge to have no absolute tax cuts for the wealthy,” Sen. Ron Wyden (D-Ore.) said during a Finance panel hearing. 

Mnuchin said Monday during the hearing that while the administration hoped to avoid a tax cut for the wealthy, doing so would not be the paramount rule of tax reform efforts: http://bit.ly/2rf50mF.

 

Verizon completes Yahoo purchase; Marissa Mayer resigns: Verizon has completed its $4.48 billion purchase of Yahoo on Tuesday, and Marissa Mayer, the website’s CEO, resigned.

Verizon will be combining its portions of the Yahoo business with its AOL subsidiary to create a new entity called Oath.

Oath will comprise the Huffington Post, Yahoo Sports, AOL, Tumblr, Yahoo Finance, Yahoo Mail and other brands. The remainder of the Yahoo business will be rebranded as Altaba.

Former AOL CEO Tim Armstrong will head the new subsidiary: http://bit.ly/2rf2ixF.

 

Koch-backed group expands tax ads: Americans for Prosperity (AFP) on Tuesday announced that it is expanding its six-figure ad campaign on tax reform to target senators in addition to members of the House.

The group, which is tied to the wealthy GOP donors Charles and David Koch, launched ads earlier this month that are focused on members of the House Ways and Means Committee. Now, AFP said it is launching digital ads urging senators to “fix our broken tax code.”

The ads will target about 10 senators, including Democrats Claire McCaskill (Mo.), Sherrod Brown (Ohio) and Bill Nelson (Fla.). All three serve on the tax-writing Senate Finance Committee and are up for re-election in 2018 in states that President Trump won.

AFP and other groups in the Koch network are calling on lawmakers to pass tax-reform legislation that follows five principles: simplicity, efficiency, equitability, predictability and no new burdens on taxpayers. They oppose the border adjustment tax proposal in the House Republicans’ tax plan. Here’s more from Naomi Jagoda: http://bit.ly/2reQN9A.

 

Senate rejects effort to block Saudi arms sale: The Senate on Tuesday narrowly rejected an effort to block part of President Trump’s $110 billion arms sale to Saudi Arabia. 

Senators voted 47-53 on advancing the resolution, falling short of the simple majority needed to move forward. GOP Sens. Mike Lee (Utah), Rand Paul (Ky.) Todd Young (Ind.) and Dean Heller (Nev.) voted with most Democrats to advance it.

Democratic Sens. Joe Donnelly (Ind.), Claire McCaskill (Mo.), Bill Nelson (Fla.), Joe Manchin (W.Va.) and Mark Warner (Va.) voted against moving the measure.

The motion faced an uphill climb in the Senate, despite growing concerns about Saudi Arabia’s involvement in Yemen’s civil war.

Top Republicans, including Majority Leader Mitch McConnell (R-Ky.), signaled ahead of the vote that they were opposed to the motion, arguing that reneging on the arms agreement would undercut a key U.S. ally. The Hill’s Jordain Carney has more here: http://bit.ly/2rYg8r7

 

Uber CEO taking leave of absence: Travis Kalanick will be taking an indefinite leave of absence from his post as CEO of Uber, he told employees in an email Tuesday.

“For the last eight years my life has always been about Uber,” Kalanick wrote in the email, which was sent to reporters by a spokeswoman.

“Recent events have brought home for me that people are more important than work, and that I need to take some time off of the day-to-day to grieve my mother, whom I buried on Friday, to reflect, to work on myself, and to focus on building out a world-class leadership team.

Kalanick’s decision to step down comes as the company undergoes massive changes and amid reports that Uber’s board was considering suspending the embattled CEO. The company is struggling to deal with allegations of widespread sexual harassment, one of a number of controversies and missteps that have dogged the company in recent months. The Hill’s tech team, Harper Neidig and Ali Breland, have more here: http://bit.ly/2rXYiV8

 

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