Overnight Finance: CBO says debt ceiling will be hit in October | Senate passes updated Russia sanctions bill | GOP senator rips sugar deal with Mexico
CBO: Debt ceiling will be hit in October: The Congressional Budget Office on Thursday projected that the U.S. Treasury would “most likely” run out of cash in early to mid-October unless Congress raises the debt ceiling.
The exact timing is unclear, the CBO said in a new report, as unpredictable swings in revenues and outlays may deplete funds more quickly or slowly than projected.
Treasury Secretary Steven Mnuchin has urged Congress to lift the debt limit before its August recess, though he has said that the nation can likely pay its bills if they wait to act until September.
{mosads}He has also warned that the closer the U.S. gets to breaching the debt ceiling, the more likely financial markets are to react unfavorably.
On Thursday, following the release of the CBO report, he again urged Congress to take action.
“For the benefit of everybody, the sooner that they do this the better,” he said at a White House briefing. The Hill’s Jordan Fabian has more: http://bit.ly/2tqCyCt.
New sanctions on North Korea: The Treasury Department on Thursday targeted four Chinese entities and nationals for their ties to the government of North Korea, banning them from the U.S. financial system.
The Treasury’s Office of Foreign Assets Control (OFAC) designated Chinese citizens Sun Wei and Li Hong Ri, along with Dalian Global Unity Shipping Co. and Bank of Dandong, for offering financial services and assistance to North Korea.
Treasury Secretary Steven Mnuchin said that while the four targeted entities are Chinese, the action is not intended to be a shot at China. Mnuchin insisted the Trump administration is still committed to working with Beijing to crack down on North Korea’s provocative behavior with its nuclear and missile programs. I’ll explain here: http://bit.ly/2tqKTWP.
Russia sanctions bill, take two: The Senate on Thursday easily cleared a deal on legislation slapping new sanctions on Moscow, overcoming an unexpected roadblock that stalled the bill for weeks in the House.
Senators sent the House a technical fix to the sanctions bill by unanimous consent, sidestepping the need to have a formal vote that would eat up limited floor time and further delay the measure.
“The Senate has now transmitted to the House of Representatives the technical changes requested,” Sen. Bob Corker (R-Tenn.) said in a statement. “I had a good conversation with Speaker [Paul] Ryan [(R-Wis.)] last night, and I am hopeful the legislation will be considered in an appropriate and timely manner.”
The move caps off week of back-and-forth negotiations after the Senate passed the Russia sanctions bill, which also includes new penalties for Iran, in a 98-2 vote earlier this month.
Senators signaled earlier Thursday that they were nearing an agreement to try to overcome the hurdle that was threatening to leave the bill stuck in limbo as lawmakers leave for the weeklong July 4 recess.
The Hill’s Jordain Carney has the details: http://bit.ly/2tpfqEK
Happy Thursday 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.
Republican rips Trump sugar trade deal with Mexico: Sen. Pat Toomey (R-Pa.) on Thursday voiced his opposition to the Trump administration’s agreement with Mexico on the sugar trade, saying the deal increases the costs for consumers.
“I disagree–the new sugar deal hikes prices for consumers even more. Here’s why,” Toomey wrote on Twitter, quoting a tweet from President Trump and linking to his own remarks on the agreement.
Trump early Thursday touted the deal on Twitter, saying it is “a very good one” for both countries.
But Toomey, whose state is home to The Hershey Company, a chocolate manufacturer, argued that for sugar prices, the “deal actually makes the problem worse.” Here’s The Hill’s Mallory Shelbourne with more: http://bit.ly/2tqHp6A.
The ‘toughest issues’ in tax reform: White House economic adviser Gary Cohn said Wednesday that the “toughest issues” on tax reform that policymakers are dealing with relate to “pass-through” businesses whose income is taxed through the individual income tax code.
“The personal side is relatively easy and the corporate side is relatively easy,” Cohn said at a meeting in the White House with representatives from the energy industry.
But “there’s a big group in the middle, pass-through entities, which is really tough, but that group is really important,” Cohn added.
Most U.S. businesses, from many small businesses to law firms and hedge funds, are pass-throughs whose income is taxed on their owners’ returns.
The tax plan that the White House released in April floated a 15 percent rate for both corporations and small businesses. Treasury Secretary Steven Mnuchin said at the time that the administration would make sure that there are rules preventing wealthy people from creating pass-throughs to avoid taxes, but did not say what those rules would look like. Here’s more from Naomi Jagoda: http://bit.ly/2tqYL3a.
CBO: Economic growth to stall at 1.9 percent, deficits to rise: The economy will grow less quickly than projected, according to a new Congressional Budget Office (CBO) outlook released Thursday.
Under current law, the economy would grow at 2.2 percent this year and drop in 2018 to a growth rate slightly above 2 percent before settling into a 1.9 percent growth rate over the course of the next decade, the CBO projects.
President Trump’s budget proposal projected that under his policies, growth would rise to 3 percent over the course of a decade, a figure some economists say is unrealistic.
The projected deficit for 2017 rose to 3.6 percent of gross domestic product (GDP), a significant jump from the 2.9 percent projected in the CBO’s January report. The office attributed the drop, in part, to slowing revenues and increased mandatory outlays from subsidy accounts. Niv Elis breaks it down: http://bit.ly/2tqvkOO.
Bill to roll back labor board rules advances in House: A Republican proposal to roll back the National Labor Relations Board’s (NLRB) controversial ambush election rule and scrap its 2011 ruling that allowed unions to organize employees in so-called micro-unions advanced in the House on Thursday.
The House Education and the Workforce Committee passed the Workforce Democracy and Fairness Act 22-16 along party lines.
The bill introduced by Rep. Tim Walberg (R-Mich.) prohibits a union election from being held less than 35 days after the petition for representation is filed and gives employers 14 days to object to its employees unionizing.
The Hill’s Lydia Wheeler explains: http://bit.ly/2tuyge6
Progressive groups launch ‘Email Orrin’ campaign: Two progressive groups on Thursday launched a campaign urging members of the public to email Senate Finance Committee Chairman Orrin Hatch (R-Utah) with their concerns about potential tax cuts for the wealthy.
Earlier this month, Hatch released an open letter soliciting comments about tax reform from industry groups and other stakeholders. With their “Email Orrin” campaign, Tax March and Stand Up America are calling on individuals to take Hatch up on his request.
Tax March set up a page on its website where people can email Hatch and send tweets to lawmakers. The group has also placed ads on social media drawing attention to the effort.
“Senator Hatch asked for input from ‘stakeholders.’ Every taxpaying American is a stakeholder, and far too often they are silent ones when it comes to tax policy,” Tax March Executive Director Nicole Gill said in a news release. “There is no appetite in this country for another government-backed giveaway to millionaires and billionaires at the expense of middle class families.” http://bit.ly/2tqK8x3.
Koch-backed group launches new ads on tax reform: Americans for Prosperity (AFP) on Thursday announced that it is launching a new wave of ads on tax reform — this time targeting Republican senators.
This is the third set of ads that AFP, which is backed by wealthy GOP mega-donors Charles and David Koch, has released as part of a six-figure campaign on tax reform. The previous ads targeted members of the tax-writing House Ways and Means Committee and Senate Democrats.
The latest ads, which will run online, urge senators to “support AFP’s plan to un-rig the economy,” according to a news release.
AFP and other groups in the Koch network have five principles on tax reform: simplicity, efficiency, equitability, predictability and a lack of new burdens on taxpayers: http://bit.ly/2tqTwAr.
House Appropriations approves $658B defense bill: The House Appropriations Committee on Thursday approved a $658 billion spending plan for the Defense Department.
The measure, which passed by voice vote, includes $584 billion for the base budget and $74 billion in war funding known as the Overseas Contingency Operations account.
The bill includes language that would repeal the 2001 Authorization of Use of Military Force (AUMF) after the passing of the spending act, but gives lawmakers 240 days to debate and pass a new AUMF in its place.
The provision, introduced by Rep. Barbara Lee (D-Calif.), was the only amendment to make it into the bill during the markup Thursday.
The base funding recommendation is $28 billion above President Trump’s request and $60 billion above last year’s enacted level, according to defense subcommittee Chairwoman Rep. Kay Granger (R-Texas).
The bill also exceeds the mandatory spending level of $549 billion set by the 2011 Budget Control Act. Defense hawks are pressing for the BCA caps to be repealed and are expecting a deal to be worked out between Republicans and Democrats by September.
The Hill’s Ellen Mitchell has more here: http://bit.ly/2tqJD60
Uber met with SEC about giving driver’s equity: Uber has met several times with the Securities and Exchange Commission (SEC) to talk about distributing equity in the company to its drivers, the company confirmed Thursday.
The ride-hailing giant’s drivers are considered independent contractors and not employees, which makes distributing equity to them more difficult.
Axios first reported the SEC meetings.
Uber and other ride-hailing companies have taken criticism for their independent contractor arrangement with drivers, who don’t receive benefits and often make low wages.
The Hill’s Ali Breland explains here: http://bit.ly/2s6VKSk
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