OVERNIGHT FINANCE: Obama pushes to close tax loophole

TOMORROW STARTS TONIGHT – OBAMA: BIG BIZ ‘GAMING THE SYSTEM.’ In a rare interview with CNBC, President Obama blasted companies that “game the system” with so-called tax “inversions.” He criticized U.S. companies that start or acquire a foreign company and then change their tax address to an overseas location to dodge U.S. taxes. In a speech in Los Angeles earlier today, Obama called for companies to have “economic patriotism.”

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Three points:

1.) What Obama said: “I think most people would say if you’re doing business here... but you’re simply changing your mailing address in order to avoid paying taxes, then you’re really not doing right by the country and by the American people... You’re just gaming the system.”

2.) What Obama wants: The White House wants Congress to pass a tax inversion fix-it bill ASAP that’d retroactively make any company that dodged taxes since May 2014 (hence the name “retroactive inversions”) fork-up the cash. Republicans are critical of passing any type of legislation that’s retroactive.

3.) Dems are divided. While many Dems cozied-up to big business recently on issues like reauthorizing both Ex-Im and Terrorism Risk Insurance, Obama’s new push for retroactive inversions could cause a headache for some 2014 Dems. Case-in-point: Finance Committee member Sen. Mark Warner (D-Va.), who dodged questions today about whether he would support a retroactive inversion bill. Still, even if the Senate did pass the bill, it’s unlikely the House pass the measure.

THIS IS OVERNIGHT FINANCE, and tomorrow is Friday. Tweet: @kevcirilli; email: kcirilli@thehill.com; and subscribe: http://thehill.com/signup/48.

NEWS YOU CAN USE --> Capital Weather Gang says we’re in for some great weather next week. Sunny skies in the mid-80s: http://wapo.st/1AcEvOp.

BIG DEAL: EU FOLLOWS U.S. WITH RUSSIA SANCTIONS? Justyna Pawlak and Adrian Croft reporting from Brussels for Reuters: “The European Union would target state-owned Russian banks vital to financing Moscow's faltering economy in the most serious sanctions so far over the Ukraine crisis under proposals considered by EU governments on Thursday.

“Ambassadors of the 28-nation bloc met in Brussels to discuss options drafted by the executive European Commission in response to the downing of a Malaysian airliner in an area of eastern Ukraine held by Russian-backed separatists. Decisions are likely next week at the earliest.

“In one key measure, European investors would be banned from buying new debt or shares of banks owned 50 percent or more by the state. These banks raised almost half of their 15.8 billion euro ($21 billion) capital needs in EU markets last year...

-- MERKEL’s MOVE: via Reuters: “A spokesman for German Chancellor Angela Merkel said on Wednesday she wanted to see quick decisions, adding that EU leaders had expressed their readiness last week to hold a special summit if necessary to approve the measures.” http://reut.rs/1qCyg4G.

-- HOW IT PLAYED IN RUSSIA, via columnist Ivan Sukhov for The Moscow Times: “The most frightening possible result of sanctions is that the West could nail shut the ‘window to Europe’ that Russia has been laboring hard to develop ever since Peter the Great first built it at tremendous cost in the early 18th century.” Read this, it’s a smart-take from the Maureen Dowd of Russia: http://bit.ly/1z90STr.

BOEHNER: NO CR UNTIL SEPTEMBER. Cue the music, Wake me up, when September ends. That’s right folks, House Speaker John Boehner (R-Ohio) said that the House won’t take up the CR this month and instead will wait until September.

The government will shut down on Oct. 1 without a funding bill. How short will the CR be? “I imagine it will go until early December,” Boehner told reporters at his presser today on the Hill. That means we could be doing the same thing just in time for the holidays. Cristina Marcos with the recap: http://bit.ly/1kZi0D0.

DAYS UNTIL EX-IM EXPIRES: 68. From my piece for the hometown paper earlier this morning: “Democrats think they have the upper hand with Republicans in the fight to renew the Export-Import Bank. Seeing a chance to cozy up to the business community, Democrats have rallied around renewing the bank and say it should be included as part of a bill to fund the government that Congress must pass before the end of September.

“That puts significant pressure on Republicans, who are divided over renewing the Export-Import Bank’s charter in the first place. By marrying Ex-Im to the government funding measure, Democrats believe they can go on offense by threatening to blame the GOP for a possible government shutdown over refusing to fund an institution that has had bipartisan support for decades.

“Without a new funding bill by the end of September, the government will shut down. The Export-Import Bank will also shut down on Oct. 1 without a new authorization.” http://bit.ly/WLMinh.

QUOTABLE, House FinServ Committee Chairman Jeb Hensarling (R-Texas), on Rep. Patrick McHenry (R-N.C.), who will hold a subcommittee hearing on Ex-Im next week on allegations of Ex-Im cronyism: “At our recent Financial Services Committee hearing on Ex-Im reauthorization, the Bank’s chairman refused to answer repeated questions about whether he was aware of a criminal investigation into these allegations.  So I’m pleased [McHenry’s subcomm] is taking this action."

NOTABLE: THE END OF CHEAP CHOCOLATE, Marcy Nicholson for Reuters: “Hershey Co., one of the world's best known names in chocolate, expects its first price hike in three years to crimp short term sales, but over the long haul the popularity of chocolate will prevail, the company's chief executive said on Thursday.”http://reut.rs/1z99iuj.

SUABLE? BARACK OBAMA. From The Hill’s Elise Viebeck: “The House Rules Committee on Thursday approved a resolution that would authorize Speaker John Boehner's (R-Ohio) lawsuit against President Obama over his use of executive power.

“The panel voted along party lines to move forward with the legal challenge against Obama over his delay of the healthcare law's employer mandate, which Republicans say was outside his authority as president. The House is expected to approve the lawsuit before lawmakers leave town next week for a five-week summer recess.” http://bit.ly/1rPHdoq

SIDESHOW: Kristen Bell plays Mary Poppins in a new ‘Funny or Die’ spoof on the timeless Disney tale. In it, the nanny quits her job because her wages are too low. “Well, isn’t that supercalifragilisticexpiali-BULLSH-T,” Poppins quips in the clip. WATCH HERE: http://bit.ly/1rygygJ.

FLASHBACK -- OBAMA: ‘I’M LEBRON, BABY!’ Sen. Barack Obama (D-Ill.) made his speech to the Democratic National Convention ten years ago today. And just minutes before his introduction to a national audience, he quipped to a reporter at The Chicago Sun Times: “I’m LeBron, baby. I can play on this level. I got some game.” C-SPAN has O’s DNC speechhttp://bit.ly/1bUGMRS.

RYAN’s WAR ON POVERTY, via Bernie Becker: “House Budget Committee Chairman Paul Ryan (R-Wis.) on Thursday unveiled a sweeping new package of proposals to battle poverty that he says will help low-income people currently bogged down by the federal bureaucracy.”

“The centerpiece in Ryan’s new plan is what he calls the Opportunity Grant — a program that would consolidate as many as 11 separate federal initiatives into a single chunk of funding for states.”

“In a speech at the American Enterprise Institute on Thursday, Ryan said that the setup would aid state governments and local organizations that should be the ‘front lines’ in the war on poverty, instead of the federal bureaucracy.” http://bit.ly/WGmIQQ.

STATE OF PLAY – ECONOMY EDITION: Lucia Mutikani, for Reuters: “The number of Americans filing new claims for unemployment benefits fell to the lowest level in nearly 8-1/2 years last week, suggesting the labor market recovery was gaining traction.

“While another report on Thursday showed a sharp decline in new homes sales in June, economists cautioned against reading too much into the drop, noting that other data have pointed to housing getting back on track after stalling in late 2013.”http://reut.rs/WFzuyN.

 

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