OVERNIGHT FINANCE: Hensarling hits Ex-Im, tax code

TOMORROW STARTS TONIGHT: House Financial Services Chairman Jeb Hensarling fueled speculation this afternoon that he’s eying to take Speaker John BoehnerJohn Andrew Boehner4 reasons Mike Pompeo will succeed at Foggy Bottom The misunderstood reason Congress can’t get its job done GOP sees McCarthy moving up — if GOP loses the House MORE’s (R-Ohio) gavel this fall during a major policy speech at The Heritage Foundation.

The financial services industry will continue to watch him tomorrow, when he chairs two separate hearings on the Consumer Financial Protection Bureau, which Republicans have blasted ever since its inception under Dodd-Frank.

The Hill’s Russell Berman reports: http://bit.ly/1m0MIOy


1.) He did nothing to quiet speculation that he might challenge BoehnerJohn Andrew Boehner4 reasons Mike Pompeo will succeed at Foggy Bottom The misunderstood reason Congress can’t get its job done GOP sees McCarthy moving up — if GOP loses the House MORE. As Berman reports: “While he made no mention of a leadership bid in his prepared remarks, he suggested the Republican majority in the House had not been aggressive enough in pursuing conservative proposals to rewrite the tax code, wind down Fannie Mae and Freddie Mac and eliminative federal farm subsidies.”

--What he said: “This is a call to action for Republicans and conservatives to reject the Washington insider economy and embrace the Main Street competitive economy... and when we do, America’s future will be one of unparalleled freedom, opportunity and growth.”

2.) He is not a fan of the Export-Import Bank, and he intends to make it a political issue. Hensarling’s committee has jurisdiction over the bank’s charter, which expires in September if Congress doesn’t act. While Ex-Im has enjoyed bipartisan support and backing in the business community, Hensarling signaled those days are long gone. He clearly intends to press the issue.

--What he said: “Its demise would clearly be one of the few achievable victories for the Main Street competitive economy left in this Congress. I believe it is a defining issue for our party and our movement.”

RT @TonyFratto, deputy press secretary to former Pres. George W. Bush: “If Chmn. Hensarling is saying ExIm doesn't support US job creation, he's flat-out wrong.”

3.) Hensarling’s rhetoric is an effort to break GOP’s ‘Big Business’ image. Hensarling’s attempt to politicize Ex-Im is an uphill battle, given most Americans don’t know it exists. But as Berman reports: “Hensarling said the debate over the bank was central to the broader battle within the GOP over a continued allegiance to big business interests versus policies that truly boosted free enterprise and benefits people without powerful lobbyists in Washington.”

--What he said: “The reauthorization debate clearly goes to the heart of the question: which economy do we believe in? The answer to that question lies collectively in the hands of our movement and our party.”

THIS IS OVERNIGHT FINANCE, where Washington and Wall Street collide. Tweet: @kevcirilli. Email: kcirilli@thehill.com.

Happy Tuesday. Back to work...

VA SCANDAL FALLOUT: SENATE PANEL BLOCKS VA BONUSES. This via our Erik Wasson: “Senate appropriators moved legislation on Tuesday to address a scandal surrounding allegations the Department of Veterans Affairs used falsified data to hide delays in care for veterans.

“The Senate Appropriations subcommittee overseeing the VA included language in the 2015 spending bill for the department suspending bonuses for department officials until an investigation into the wait list affair is completed.

“The bill also includes a $5 million increase for the VA inspector general to look into the matter.”

--Subcommittee Chairman Tim JohnsonTimothy (Tim) Peter JohnsonSenate GOP rejects Trump’s call to go big on gun legislation Court ruling could be game changer for Dems in Nevada Bank lobbyists counting down to Shelby’s exit MORE (D-S.D.): “Doctoring the books to make a hospital look good cannot and will not be allowed to take precedence over doctoring the patients.” Full story: http://bit.ly/1k32Srf

PAUL FIRES BACK AT CHAMBER OF COMMERCE. Sen. Rand PaulRandal (Rand) Howard PaulMichael Steele: Congress must lead on cannabis reform and stand with the American public Lawmakers renew call for end to 'black budget' secrecy McCain asks Trump's CIA pick to explain ties to torture MORE’s (R-Ky.) office fired back at the Chamber of Commerce today after it criticized the senator’s threat to block President Obama’s nominees to the Federal Reserve.

Paul said last week he’d oppose floor consideration of Obama’s Fed nominees to drum up support for his Audit the Fed bill, which would bring additional oversight to the central bank.

The Chamber’s chief economist J.D. Foster called the ploy “dangerous to the economy,” urging Paul to not play politics with the nominees.

An aide tells The Hill: "Transparency at the Federal Reserve is not dangerous to the economy. To the contrary, mandating transparency will hold the Federal Reserve accountable.” My story: http://bit.ly/1jSeBDZ

More on the Fed nom drama in a minute, but first...

ON-TAP FOR TOMORROW: House Financial Services has two hearing on CFPB oversight at 10 a.m. and 2 p.m. ... April’s FOMC minutes are released ... Fed Chairwoman Janet Yellen gives a commencement speech in Yankee Stadium for New York University’s graduation.

PHILLY FED OFFICIAL RATTLES MARKETS, as Kate Gibson writes for CNBC.com: “U.S. stocks fell sharply on Tuesday after a Federal Reserve official said rate hikes might come sooner than expected and Staples and other retailers offered disappointing quarterly results.”

--Philadelphia Federal Reserve President Charles Plosser said Tuesday that a strengthening U.S. economy may force the central bank to hike rates "sooner rather than later" to stay ahead of inflation. Full story: http://cnb.cx/1mU3Vdy

TRADE OFFICIAL: NO END IN SIGHT FOR TPP NEGOTIATIONS. Our Vicki Needham reports:U.S. Trade Representative Michael FromanMichael B.G. FromanUS will investigate aluminum imports as national security hazard Overnight Finance: WH floats Mexican import tax | Exporters move to back GOP tax proposal | Dems rip Trump adviser's Goldman Sachs payout Froman heads to Council on Foreign Relations MORE said Tuesday that no deadline has been set to conclude talks on a massive Asia-Pacific trade deal but negotiations will intensify in the coming weeks.” http://bit.ly/1gjeIgN

PRESSURE MOUNTS FOR CONGRESS TO PASS TAX EXTENDERS BILL. Our Vicki Needham reports: “A powerful trade group has teamed up with 150 business associations in urging the Senate to quickly pass a bill that would renew a slew of expired tax breaks.

“The National Association of Manufacturers sent a letter signed by more than 150 business groups to the Senate on Tuesday pressing lawmakers to reach an agreement and pass the $85 billion tax extenders measure, which stalled out over a fight about floor debate procedures.”

--WHAT NAM SAID: "These tax provisions benefit a wide range of taxpayers, including associations, businesses, individuals, community development organizations and non-profit organizations and are important to U.S. jobs and the broader economy.” Full story: http://bit.ly/1j5RBBb

BAUCUS MEETS WITH CHINA OFFICIALS IN WEB WAR. Sui-Lee Wee for Reuters: “China summoned the U.S. ambassador after the United States accused five Chinese military officers of hacking into American companies to steal trade secrets, warning Washington it could take further action, the foreign ministry said on Tuesday.

“The U.S. Ambassador to China Max BaucusMax Sieben BaucusFarmers hit Trump on trade in new ad Feinstein’s trouble underlines Democratic Party’s shift to left 2020 Dems pose a big dilemma for Schumer MORE, met with Zheng Zeguang, assistant foreign minister, on Monday shortly after the United States charged the five Chinese, accusing them of hacking into American nuclear, metal and solar companies to steal trade secrets.” http://reut.rs/1hZG7iU

CREDIT SUISSE FALLOUT: 24 HOURS LATER. Peter J. Henning writes for The New York Times: “There is a new felon on Wall Street – Credit Suisse. Yet for the most part, the bank will be doing business as usual.

“The guilty plea the federal government extracted from the bank on Monday was intended to send a clear signal that global financial firms are not ‘too big to jail...’

“Still, the government went out of its way to make sure the conviction was not too costly for Credit Suisse...

“The government’s concern with minimizing the collateral consequences almost gives the impression that this was a guilty plea without all the guilt – the equivalent of a diet in which you don’t have to stop eating your favorite foods.” http://nyti.ms/SfGwYw

GM RECALLS ANOTHER 2.4 MILLION VEHICLES. Our Peter Sullivan reports: “General Motors announced a new set of recalls Tuesday for 2.42 million vehicles, which come on the heels of controversy over a delayed response to other safety defects. The new recalls are separate from the ignition switch problem at the center of the controversy roiling the company. http://bit.ly/RSgWIA

OBAMA BRINGS BIZ LEADERS TO WHITE HOUSE, our Justin Sink reports: “President Obama on Tuesday asked business executives visiting the White House to help the government find new ways to attract global investment in the United States...

“Executives at the meeting included representatives from Ford, Swedish cellular firm Ericsson, and German airliner Lufthansa, among others.

“Obama also announced that the White House would hold a summit intended to attract foreign business investment next March. According to the White House, its SelectUSA investment program has attracted more than $18 billion in business investments and helped nearly 500 businesses in the past six months.”

--WHAT OBAMA SAID: "We don’t always do what it takes to go after business around the world and make sure that they know the benefits of investing in the largest market on Earth." Read the full story: http://bit.ly/1oOQzkM

WONK WARS – CATO VS. THE CHAMBER OF COMMERCE. Cato’s Mark A. Calabria hit back at J.D. Foster’s criticism of Paul’s Fed politicking.

Foster fired first: "Senator Paul should continue to raise questions about the Fed, just as he should remove his procedural block to the Fed nominations now under consideration."

Calabria, director of financial regulation at The Cato Institute, tells OVERNIGHT FINANCE: “[Paul] isn’t stopping a vote, he’s stopping the nominations from moving by UC [unanimous consent].  Reid can bring up these noms at any time and pass with just 51.

“Given the importance of the Federal Reserve, I think Senators should have to go on the record for their vote. And of course the Fed can continue doing its business even short a few board members.”

--CALABRIA’s KEY-QUOTE: “Is their bailout ability more limited? Yes, but that’s a good thing. So if the Chamber wants the Senate to ‘quickly decide’ they should take that up with Harry ReidHarry Mason ReidHarry Reid tears into Trump, Senate GOP: They’re ‘acolytes for Trump’ GOP pushes to change Senate rules for Trump Trump presses GOP to change Senate rules MORE, who actually sets the floor schedule.”

LOBBYISTS SCOFF AT WYDEN’s TAX THREAT, by Bernie Becker: “K Street lobbyists are brushing aside efforts in Congress to keep corporations from slashing their tax bill by ‘inverting’ to a foreign address.

“Finance Committee Chairman Ron WydenRonald (Ron) Lee WydenLawmakers renew call for end to 'black budget' secrecy Overnight Finance: Stocks bleed as Trump seeks new tariffs on China | House passes .3T omnibus | Senate delay could risk shutdown | All eyes on Rand Paul | Omnibus winners and losers Trump will delay steel tariffs for EU, others MORE (D-Ore.) has said he would seek to limit that practice and would make any legislative fix retroactive to this month.

“Wyden’s push comes in the wake of the drug company Pfizer’s high-profile bid to take over the British-based AstraZeneca, and the very threat of legislation appears to be part of the Finance chairman’s strategy to warn corporations away from inversion.” http://bit.ly/Tq52XP

HOUSE MAKES A SPLASH ON WATER BILL, by Cristina Marcos: “The House overwhelmingly passed a $12.3 billion water infrastructure projects bill on Tuesday after months of negotiations.

“Passed 412-4, the Water Resources Reform and Development Act (WRRDA) would authorize funding for construction and repair of waterway projects. If the Senate adopts the conference report, it would be the first federal water infrastructure authorization since 2007.

“The measure passed despite opposition from the influential conservative group Heritage Action, which urged lawmakers to vote against it. Heritage Action said that the bill ‘hikes spending while doing little to reduce bureaucracy and limit the role of the federal government.’

“But only four Republicans voted in opposition: Justin AmashJustin Amash25 House Republicans defy leadership in key spending bill vote Two-year defense spending smooths the way to a ready military House Oversight a gavel no one wants MORE of Michigan, Louie GohmertLouis (Louie) Buller GohmertDoug Collins to run for House Judiciary chair Congress votes to expand deficit — and many in GOP are unhappy 25 House Republicans defy leadership in key spending bill vote MORE of Texas, Tim Huelskamp of Kansas and Matt SalmonMatthew (Matt) James SalmonQuiet jockeying for McCain seat angers Republicans McSally tells GOP colleagues she'll run for Arizona Senate GOP Senate hopeful Kelli Ward leads challengers in internal poll MORE of Arizona.” http://bit.ly/1jANYcg


--Panel to cut red tape gains Dem support, by Benjamin Goad: http://bit.ly/1k33nBu

--House panel cuts school nutrition standards, via Erik Wasson: http://bit.ly/1jSh417

--Schools win delay on whole grains rule, via Erik Wasson: http://bit.ly/1sQRxuL

Catch The Hill’s finance team on Twitter: @VickoftheHill, @peteschroeder, @elwasson @berniebecker3 and @kevcirilli.