Overnight Finance: Senate tax bill will include ObamaCare mandate repeal | Stock surge raises pressure for GOP to deliver tax reform | Ryan hints at short-term spending bill | House votes to overhaul federal flood insurance

Overnight Finance: Senate tax bill will include ObamaCare mandate repeal | Stock surge raises pressure for GOP to deliver tax reform | Ryan hints at short-term spending bill | House votes to overhaul federal flood insurance
© Greg Nash

Senate GOP tax bill will include repeal of ObamaCare mandate: Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellSunk judicial pick spills over into Supreme Court fight Hillicon Valley: Trump's Russia moves demoralize his team | Congress drops effort to block ZTE deal | Rosenstein warns of foreign influence threat | AT&T's latest 5G plans On The Money: Trump 'ready' for tariffs on all 0B in Chinese goods | Trump digs in on Fed criticism | Lawmakers drop plans to challenge Trump ZTE deal MORE (R-Ky.) announced Tuesday that the Senate tax bill will include language to repeal ObamaCare's individual mandate, which could make it tougher for moderate Republicans to support.

Conservatives led by GOP Sens. Ted CruzRafael (Ted) Edward CruzWashington needs to end hidden inflation tax on our capital gains GOP tax writer introduces bill to reduce capital gains taxes Senators push to clear backlog in testing rape kits MORE (Texas), Rand PaulRandal (Rand) Howard PaulThe Hill's Morning Report — Trump and Congress at odds over Russia GOP leader blocks resolution backing intelligence community on Russia Rand Paul blocks Sanders's Russia resolution, calls it 'crazy hatred' against Trump MORE (Ky.) and Tom CottonThomas (Tom) Bryant CottonBipartisan group introduces retirement savings legislation in Senate Overnight Defense: Fallout from tense NATO summit | Senators push to block ZTE deal in defense bill | Blackwater founder makes new pitch for mercenaries to run Afghan war Hillicon Valley: DOJ appeals AT&T-Time Warner ruling | FBI agent testifies in heated hearing | Uproar after FCC changes rules on consumer complaints | Broadcom makes bid for another US company | Facebook under fire over conspiracy sites MORE (Ark.) pushed hard to include the provision, which would eliminate the federal penalty on people who do not buy health insurance. President Trump has also pushed for the provision to be part of the tax bill.

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McConnell told reporters that adding the individual mandate repeal will make it easier to muster 50 votes to pass the bill.

"We're optimistic that inserting the individual mandate repeal would be helpful and that's obviously the view of the Senate Finance Committee Republicans as well," McConnell said.

It will raise an estimated $300 billion to $400 billion over the next year that could be used to pay for lowering individual and business tax rates even further: http://bit.ly/2AITXaP.

 

Senate Republicans move forward on taxes: Senate Republicans began marking up their tax package on Monday as Majority Leader Mitch McConnell (R-Ky.) said he hoped to start floor consideration the week after Thanksgiving.

The first day of the Senate Finance Committee hearing featured Republicans and Democrats exchanging jabs over the proposal to slash corporate taxes and reduce individual rates, while closing some tax breaks.

The House is expected to pass its version of the bill Thursday as Republicans seek to put a bill on President Trump's desk by year's end.

It's a heavy lift, given the tight time frame and differences between the chamber's bills, though so far Republicans are hitting their marks.

Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchLighthizer to testify before Senate next week as trade war ramps up Senators introduce bipartisan bill to improve IRS Senate panel advances Trump IRS nominee MORE (R-Utah) sought to highlight aspects of the measure that Democrats have supported in the past, including its preservation of some individual tax breaks and changes to the international tax system: http://bit.ly/2ALvFwH.

 

Stock surge raises pressure on GOP to deliver: Wall Street's sky-high expectations have raised the stakes for Republicans aiming to overhaul the tax code.

Stocks have surged since President Trump's election, in part because investors are betting that Republicans will follow through on their promise to slash corporate tax rates.

But the rapid rise in the stock market has alarmed regulators and traders, who fear there will be a sharp downturn if the GOP's tax legislation collapses. Even Trump administration officials have acknowledged that possibility, warning Republicans that failure is not an option.

"There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done," Treasury Secretary Steven MnuchinSteven Terner MnuchinGOP tax writer introduces bill to reduce capital gains taxes Dem lawmaker calls for cryptocurrency probe after Mueller indictments Meet the woman who is Trump's new emissary to Capitol Hill MORE said last month. http://bit.ly/2AJziDi.

 

Ryan hints at short-term spending bill: Speaker Paul RyanPaul Davis RyanInterior fast tracks study of drilling's Arctic impact: report Dems unveil slate of measures to ratchet up pressure on Russia National Dems make play in Ohio special election MORE (R-Wis.) on Tuesday said Republicans may need a short-term spending bill to prevent a government shutdown on Dec. 9.

Ryan said the House GOP's goal was to pass a long-term spending bill by the end of the year, but suggested lawmakers may not be able to do so by a Dec. 8 deadline.

"We're not talking about going into next year, we're talking about getting it done this year," Ryan said at a press conference on Tuesday. 

"We might need a little more time to let the appropriators write their bill," he added.

The government will shut down on Dec. 9 without a new spending measure.

Other Republicans have suggested a stopgap measure will probably be needed to buy more time to negotiate a longer-term deal. http://bit.ly/2AK7aAa.

 

GOP tax bill could spur $25 billion in Medicare cuts: CBO The GOP tax bill could trigger automatic cuts worth $136 billion from mandatory spending in 2018, including $25 billion in Medicare cuts, if Congress doesn't find another way to offset its deficit increases, according to the Congressional Budget Office (CBO). 

The tax bill would add an estimated $1.5 trillion to the deficit over a decade. Congressional "pay-as-you-go" rules, called pay-go, require that the White House Office of Management and Budget (OMB) automatically cut mandatory spending if legislation increases the deficit beyond a certain point.

"Without enacting subsequent legislation to either offset that deficit increase, waive the recordation of the bill's impact on the scorecard, or otherwise mitigate or eliminate the requirements of the [pay-go] law, OMB would be required to issue a sequestration order within 15 days of the end of the session of Congress to reduce spending in fiscal year 2018 by the resultant total of $136 billion," CBO wrote on Tuesday.

Medicare can only be cut by a maximum of 4 percent through the pay-go rules, however, which amounts to $25 billion in cuts: http://bit.ly/2AHVGwS.

 

Happy Tuesday 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@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

 

On tap tomorrow

House Foreign Affairs Committee: Hearing entitled "Development Finance in Asia: U.S. Economic Strategy Amid China's Belt and Road," 2:30 p.m. http://bit.ly/2ApJRur.

 

House passes bill to renew, overhaul federal flood insurance: The House on Tuesday passed a bill to renew and overhaul the National Flood Insurance Program (NFIP) after months of negotiations between fiscal conservatives and lawmakers from coastal areas.

Called the 21st Century Flood Reform Act, the bill renews the debt-riddled NFIP for five years, updates federal flood mapping requirements, and seeks to bolster and emerging private flood insurance market.

The bill passed 237 to 189 along party lines, a week after Republicans struck a deal over proposed increases to flood insurance premium caps. That provision is one of several included in the bill meant to reduce the financial burden on NFIP, which faces more than $30 billion in debt.

NFIP was created in 1968 to fill gaps left by a lack of affordable private flood insurance options. The program provides flood insurance to residents of flood-prone areas where it's federally mandated. It stayed largely solvent until the toll of Hurricane Katrina and Hurricane Sandy saddled it with more than $24 billion in debt: http://bit.ly/2ALry3Q.

 

Collins says she's 'still trying to change' Senate tax bill: Sen. Susan CollinsSusan Margaret CollinsThe Hill's Morning Report — Russia furor grips Washington Overnight Health Care: Novartis pulls back on drug price hikes | House Dems launch Medicare for All caucus | Trump officials pushing ahead on Medicaid work requirements Senate panel to vote next week on banning 'gag clauses' in pharmacy contracts MORE (R-Maine) said Monday that she's "still trying to change" the Senate tax bill.

Collins told reporters that it's "premature" for her to say how she will vote on the bill but "would like to see more of the tax relief skewed to middle-income and lower-income families."

She added that she likes some aspects of the bill, such as its near-doubling of the standard deduction.

Collins's ultimate position on the tax bill could be important to the measure's prospects, since Republicans can only afford to lose the votes of two GOP Senators if Democrats all vote against the bill. The Maine senator is a moderate who opposed legislation earlier this year to repeal ObamaCare.

The Senate GOP tax bill, unveiled Thursday, would cut the top individual tax rate from 39.6 to 38.5 percent and lower the corporate rate from 35 percent to 20 percent: http://bit.ly/2AKflMI.

 

Housing groups: GOP tax plan could hurt hurricane rebuilding efforts: Housing groups in Texas and Florida are warning that the House GOP tax bill could hurt post-hurricane rebuilding efforts in the U.S., because the measure eliminates a critical infrastructure financing tool.

In a letter to House Speaker Paul Ryan (R-Wis.) on Monday, the organizations raised concern over a provision that would eliminate the deduction on tax-exempt private activity bonds (PABs), which are issued for private projects and have been used to finance a wide range of infrastructure projects around the country.

"This bill, as currently written, would make it significantly more difficult to repair and rebuild affordable housing in areas affected by Hurricanes Harvey and Irma," the Florida Housing Coalition and the Texas Affiliation of Affordable Housing Providers wrote. "We strongly urge you to not hold a vote on the bill until this issue is fully addressed."

Under the House GOP tax plan, interest on newly issued private activity bonds would no longer be tax-exempt. Eliminating the program would save $38.9 billion, according to a summary sheet. http://bit.ly/2AIVU75.

 

GOP senator: Congress may 'stumble' on paying for Trump's infrastructure plan: Sen. Shelley Moore CapitoShelley Wellons Moore CapitoSenate GOP attempts to wave Trump off second Putin summit Lots of love: Charity tennis match features lawmakers teaming up across the aisle Senate takes symbolic shot at Trump tariffs MORE (R-W.Va.) predicted Tuesday that the biggest hurdle for President Trump's infrastructure package will be finding a way to pay for its massive price tag.

"The pay-for issue is probably where we'll stumble," Capito said during The Hill's digital infrastructure event, which was sponsored by ABB. "But I think we can mount that challenge."

Further complicating the White House's rebuilding effort is that two of the largest potential funding options -- international tax reform and a gas tax increase -- are likely off the table, Capito said.

"I don't believe a gas tax will be in there. I don't see us doing that," Capito said. "And the repatriation dollar is getting scooped up into tax reform, so I don't think that will be available as a source." http://bit.ly/2AJYz0f.

 

From The Hill's opinion pages

Pockmarked tax reform bills move us in right direction, by Liz Peek

House tax bill harms path to economic opportunity for all, by Carolyn Heinrich

The Republican tax bill benefits the establishment and corporate allies, by Dan Palmer

 

Write us with tips, suggestions and news: slane@thehill.comvneedham@thehill.comnjagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill@NJagoda and @NivElis