Overnight Finance: Red-state Dems need more from Trump on taxes | States, counties worry about tax plan | Price to pay back part of private jet costs | House sends FAA extension to Trump | Bill would exempt some banks from Dodd-Frank

House sends FAA extension to Trump’s desk with hurricane tax relief: The House cleared legislation on Thursday to reauthorize federal aviation programs ahead of a Saturday deadline and provide tax relief for victims of recent hurricanes.

Lawmakers had previously approved a package earlier in the day that included a provision encouraging the creation of private flood insurance markets.

But with opposition mounting in the Senate to the flood insurance measure, senators stripped it out and sent it back to the House to ensure that the Federal Aviation Administration (FAA) wouldn’t face a shutdown after Saturday.

{mosads}

The Senate passed the revised bill by unanimous consent, with the House following suit without objection about an hour later. The Hill’s Cristina Marcos explains what happened: http://bit.ly/2hA09g5.

 

Red-state Dems need more from Trump before tax embrace: President Trump has his work cut out for him in winning over red-state and centrist Democrats for his tax plan.

Many of the Democratic senators who hail from states that Trump won in last year’s election say they fear the bill will end up being a giveaway to the rich that explodes the debt.

While none of them are willing to blast the plan as “wealth fare” — the descriptor used by Sen. Chuck Schumer (D-N.Y.) — they are skeptical of and want to see more details. The nine-page framework Republicans released Wednesday leaves many questions unanswered.

“Well, it was a framework, so there are a lot of I’s to be dotted and T’s to be crossed,” Jon Tester (D-Mont.), who is up for reelection in 2018 in a red-leaning state, told The Hill: http://bit.ly/2fUBdwf.

  

States, counties worry over GOP tax plan: A plan to pay for a massive overhaul of the federal tax code has state and local officials worried their constituents could face much higher bills in the future.

The tax-reform framework laid out by congressional Republicans and President Trump on Wednesday would eliminate a deduction for state and local taxes, a popular option known as SALT that is claimed by millions of Americans, especially in states with higher income tax rates.

Eliminating the deduction would raise $1.3 trillion in taxes over the next decade, according to the National Association of Counties, money that could pay for cuts to the corporate tax rate and cuts to higher-income taxpayers. 

Supporters of the deduction, first included in the nation’s first tax code back in 1913, say its end would mean taxpayers are taxed twice on the same income. More than 95 percent of all taxpayers who itemize their deductions, about 28 percent of federal income tax filers, took advantage of the SALT deduction in 2014, according to the Tax Foundation. The Hill’s Reid Wilson and Naomi Jagoda report: http://bit.ly/2fUTauq.

 

Cohn: ‘People don’t buy homes because of the mortgage deduction’ White House National Economic Council Director Gary Cohn on Thursday pushed back against criticism that Republicans’ tax plan could hurt the real-estate market, saying, “People don’t buy homes because of the mortgage deduction.”

“The No. 1 reason why people buy homes is they’re excited and optimistic about the economy,” Cohn said during a White House press briefing. “They have a job today, they feel confident they’re going to have a job tomorrow, and their kids are going to get a job and their spouse has a job.”

The mortgage interest deduction is currently among the most popular preferences in the tax code. It allows homeowners to reduce their taxable income by the amount of interest they’ve paid on their mortgage.

The GOP tax plan unveiled Wednesday would protect the mortgage interest deduction but would decrease the number of homeowners likely to claim it, as the plan would nearly double the standard deduction. Taxpayers can only claim the mortgage interest deduction if they itemize their deduction instead of taking the standard deduction.

Cohn said that the majority of taxpayers already take the standard deduction. He also noted that the National Association of Home Builders (NAHB) came out in favor of the GOP’s tax plan: http://bit.ly/2fUu9zy.

 

Happy Thursday and welcome back 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.

 

Mnuchin: Tax plan will cut deficits by $1 trillion: The tax cuts proposed by Republicans and the White House will stimulate enough economic growth to overcome expected deficits, Treasury Secretary Steven Mnuchin said Thursday.

“We think there will be $2 trillion of growth. So we think this tax plan will cut down the deficits by a trillion dollars. That’s a large number,” he said in an interview on Fox Business Network’s “Mornings with Maria.”

The impact of the tax cuts on the deficit is a major hurdle for Republicans as they seek to pass a tax overhaul. The framework released Wednesday for the bill is already drawing criticism from Democrats and ruffling feathers among fiscal conservatives in the party. 

While many economists agree that tax cuts stimulate the economy, there is skepticism over whether revenues from extra economic growth would produce enough tax revenue to pay for the cuts.

The Center for a Responsible Federal Budget has estimated that the GOP’s tax proposal would add $2.2 trillion to the deficit: http://bit.ly/2fVgFn7.

 

Cohn says tax reform kept him at WH after Charlottesville: National Economic Council Director Gary Cohn says he stayed at the White House even after President Trump’s controversial Charlottesville remarks because he wanted to participate in tax reform.

“Why am I here? I am here just for this reason,” Cohn said at a briefing on the reform plan.

President Trump ignited anger across the political spectrum with his response to a rally in Charlottesville, Va., last month held by neo-Nazis and members of the KKK. One young woman was killed when a car plowed into a crowd of people protesting the rally.

Cohn and other Jewish members of the Trump administration have been under fire for staying by the president’s side after the comments that laid blame at “both sides” of the rally and insisted that some of the white supremacist protesters were “very good people.” Here’s more from The Hill’s Niv Elis:  http://bit.ly/2hzVevw.

 

Senate bill would exempt some banks from Dodd-Frank rules: Two senators introduced a bipartisan bill Thursday that would let the Federal Reserve exempt some banks from stricter federal oversight.

Sens. Claire McCaskill (D-Mo.) and David Perdue (R-Ga.) released a bill meant to reduce regulations on banks that have more than $50 billion in assets but are focused on regional business and don’t pose a global financial risk in the event of their collapse.

The bill is intended to reduce the regulatory burden of the Dodd-Frank Act on regional and community banks that are grouped in the same tier as major, well-known financial institutions.

Regional and community banks have long complained that complying with Dodd-Frank stifles their ability to loan and boost local economies. They argue that despite their large regional footprints, their relatively safe lending and investment practices don’t warrant the same rules as investment banks. I explain here: http://bit.ly/2hA0E9X.

 

Price to reimburse taxpayers part of private jet costs: Health and Human Services (HHS) Secretary Tom Price vowed Thursday to reimburse taxpayers for his use of private charter jets for official government business.

“Today, I will write a personal check to the U.S. Treasury for the expenses of my travel on private charter planes,” Price said in a statement. “The taxpayers won’t pay a dime for my seat on those planes.”

Price noted that all the travel has been “approved by legal and HHS officials” but said he will stop using private charter flights.

“I regret the concerns this has raised regarding the use of taxpayer dollars,” Price said. “It is clear to me that in this case, I was not sensitive enough to my concern for the taxpayer.”

An HHS spokesperson told The Hill that Price will pay $51,887.31 for his seat on the flights, not the entire cost, which is about $400,000.

“The Secretary has heard the taxpayers’ concerns and wants to be responsive to them. That’s why he’s taking the unprecedented step of reimbursing the government for his share of the travel,” the spokesperson said. “The taxpayers won’t pay a dime for his seats on charter planes.” http://bit.ly/2yaYiVZ

 

The controversy is not over yet. A report in Politico late Thursday claimed Price has taken $500,000 in military flights to events. http://bit.ly/2fuKdaL

 

Price on Thursday night also said he was working to “regain” President Trump’s trust over the matter. http://bit.ly/2xOYRns

 

Democrats unveil bills to ban Cabinet members’ private jet travel: House Democrats introduced legislation on Thursday to prevent Trump administration officials from using private jets on the taxpayers’ dime as multiple Cabinet heads come under fire for the practice.

Two groups of Democrats unveiled bills with correspondingly flashy titles.

Progressive Reps. Ted Lieu (Calif.), Ruben Gallego (Ariz.), Jamie Raskin (Md.) and Pramila Jayapal (Wash.) put forth the Swamp Flyers Act, while centrist Democratic Reps. Tom O’Halleran (Ariz.) and Kurt Schrader (Ore.) offered the Taxpayers Don’t Incur Meaningless Expenses (Taxpayers DIME) Act.

The Swamp Flyers Act prohibits executive branch officials from using private jets with taxpayer funds unless they certify that no commercial flights were available. The Taxpayers DIME Act, meanwhile, ensures that senior federal officials can’t spend more funds on travel than is necessary and directs the Office of Government Ethics to report on ways to enhance current rules: http://bit.ly/2fVoHg2.

 

Manchin: Trump has good intentions on taxes: Sen. Joe Manchin (D-W.Va.) said Thursday he gives President Trump the benefit of the doubt in not seeking a big tax cut on the rich and wants to sit down with his Republican colleagues on the issue.

“I believe the president when he says it’s not going to be a tax cut for the rich … I don’t think that was his intention,” Manchin, who was invited to dinner with Trump as part of the president’s courtship of red-state Democrats, told The Hill.

“I’m open to sitting down; I want to have a seat at the table.”

The conservative Democrat is up for reelection in 2018 in a state Trump won in the presidential election and has a target on his back from Republicans looking to expand their majority in the Senate. http://bit.ly/2fVxq1N.

 

Equifax interim CEO apologizes for breach: ‘We didn’t live up to expectations’ The interim chief executive officer of Equifax apologized for the massive breach of the company’s servers in an open letter published Thursday in the Wall Street Journal. 

Paulino do Rego Barros Jr. took the reins of the credit reporting bureau after former CEO Richard Smith stepped down earlier this week. Smith, like the company’s chief information and chief security officers, resigned in the wake of a breach that gave hackers potential access to Social Security numbers and other personal data of 143 million Americans. 

“On behalf of Equifax, I want to express my sincere and total apology to every consumer affected by our recent data breach. People across the country and around the world, including our friends and family members, put their trust in our company. We didn’t live up to expectations,” wrote Rego Barros. 

Damage from the breach was compounded by a poorly received response. The company did not properly prepare phone centers for the influx of calls from concerned potential victims and did not initially waive fees to freeze the credit accounts — raising the specter the company was profiting off its breach. After public outcry, Equifax quickly reversed its policy about charging to freeze accounts. http://bit.ly/2fV1muP.

 

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