Overnight Finance

OVERNIGHT FINANCE: Manchin-Kirk Ex-Im bill ready for showtime


THE BOTTOM LINE: It’s a short and sweet nine-page bill that reauthorizes the bank for five years, and increases its credit exposure limit from $140 billion to $160 billion.

{mosads}Sens. Joe Manchin (D-W. Va.) and Mark Kirk (R-Ill.) are expected to unveil their bill later this week and are rounding up co-sponsors. Ex-Im supporters hope that if the Senate passes the legislation with enough bipartisan support, it’ll pressure House GOPers to get onboard, too.

— BIG WINNER: COAL. Manchin-Kirk reverses Ex-Im restrictions enacted last December that prevents financing for overseas power plants that won’t adopt greener technology. The working House proposal from Rep. John Campbell (R-Calif.) also includes such language.

— BIGGEST UNKNOWN: AIRCRAFT. Manchin-Kirk doesn’t step into the battle between Delta and Boeing. Delta is pushing for Ex-Im reform that’d lower how much the bank can finance wide-body aircrafts internationally, arguing that the bank helps Delta’s competitors overseas.

We’ve got more on that later on… keep reading.

THIS IS OVERNIGHT FINANCE, happy hump day. Tweet:@kevcirilli; email: kcirilli@thehill.com; and subscribe: http://thehill.com/signup/48.

The Federal Reserve released its June meeting minutes. No surprises. Two quick points:

1.) QE will likely end in October. That’s right, Fed officials think the economy is ready for ending bond-buying purchases aimed at stimulating economic growth.

2.) There’s concern about Washington brinkmanship – again. Fed officials reported that some businesses are “worried about a renewal of federal fiscal restraint after the current congressional budget agreement expires.” We asked Ernie Cecilia, chief investment officer at Bryn Mawr Trust, if businesses think D.C. learned its lesson from last year:

“Regarding skepticism about Washington, we don’t believe that anything has significantly changed in order for business leaders to view the legislative process as being more functional than it has in the past,” Cecilia says.

3.) Fed: Market has a ‘complacency’ problem. Fed officials were concerned that financial institutions are taking on too much risk. “Signs of increased risk-taking were viewed by some participants as an indication that market participants were not factoring in sufficient uncertainty about the path of the economy and monetary policy,” according to the minutes.

Source material: http://1.usa.gov/1mgGbAR. Pete Schroeder for The Hill: http://bit.ly/1mgGGec.


DELTA VS. BOEING EX-IM WAR TAKES FLIGHT. Yesterday, the Government Accountability Office reported that Ex-Im’s financial exposure in wide-body jets is $32 billion – 28 percent of Ex-Im’s total financial exposure.

Delta hit back hard in a statement today: “The Bank devotes too much of its funds to finance wide-body jets purchased by foreign competitors of U.S. airlines and supports too many foreign airlines that simply don’t need the help.

“As the GAO found, the Bank provides foreign airlines – many of which are owned by their host governments and can obtain financing on their own – with U.S. taxpayer funded subsidies…  That subsidy puts our own airline industry at a competitive disadvantage and it’s why Delta believes it’s now time to end the Bank’s practice of helping creditworthy, state-owned and -supported foreign carriers purchase wide-body aircraft at the expense of U.S. airlines and American jobs.”

Read the GAO reporthttp://1.usa.gov/1oIcQix.

GRAHAM TO GOP: PAY FOR BORDER OR ELSE. “[Sen. Lindsey Graham (R-S.C.)], a long-time supporter of an immigration system overhaul, said a failure to provide the funds will exacerbate the crisis while handing Obama and the Democrats a political victory ahead of November’s midterm elections.”

— WHAT GRAHAM SAID: “If we do that, then we’re going to get blamed for perpetuating the problem,” Graham told reporters on Wednesday. Mike Lillis and Bernie Becker have the story: http://bit.ly/1rTVrGX.

COMFIRMED: JULIAN CASTRO AT HUD. The Senate confirmed San Antonio Mayor Julian Castro earlier today on a 71-26 vote to be secretary of Housing and Urban Development.

FIRST LOOK — HOUSE FINSERV FED HEARING TOMORROW. The House Financial Services Committee will have a hearing tomorrow at 10 a.m. on transparency at the Federal Reserve. On the all-star panel: Stanford University economic Professor John B. Taylor; George Mason University senior research fellow Hester Peirce; Massachusetts Institute of Technology economics professor Simon Johnson; and Cato Institute financial regulation director Mark Calabria.

From Calabria’s testimony: “I can think of no part of the federal government more in need of review than the Federal Reserve. It should also be clear that review and oversight of the Federal Reserve is likely to be insufficient. Legislative change of the Federal Reserve’s structure, powers and operating procedures is badly needed.” Full remarks: http://bit.ly/VLYe80

CONVICTED: RAY NAGIN SENTENCED 10 YEARS. Ginny LaRoe for The Times-Picayune: “Former New Orleans Mayor Ray Nagin was sentenced… to 10 years in federal prison. Nagin, 58, the two-term mayor who was the face of the city during Hurricane Katrina… is New Orleans’ first mayor to be convicted and sent to prison for public corruption. Nagin is set to report to prison on Sept. 8.” http://bit.ly/1jewRh8.

CAPITO MAKES BANK – POSTS RECORD FUNDRAISING NUMBERS. West Virginia GOP Senate candidate Shelley Moore Capito raised more than $1.3 million in the second quarter, according to her campaign. The current House Financial Services committee member’s total campaign war chest now totals $5 million, and she has raised more than $7.1 million. She’s got a wide lead over Democratic senatorial challenger Natalie Tennant.

Wonder if Elizabeth Warren can do anything about that? She’s headed to Mountaineer country on Monday…

WARREN UNLEASHES GRASSROOTS ON GLASS-STEAGALL. Earlier today, liberal groups – like MoveOn.org, Americans for Financial Reform and Credo – delivered a petition with more than 400K signatures urging Congress to reinstate Glass-Steagall. Warren introduced the legislation along with Sens. John McCain (R-Ariz.), Maria Cantwell (D-Wash.) and Angus King (I-Maine) a year ago today.

Her bill, which hasn’t seen any traction this Congress, would split-up commercial and investment banking, a barrier that former President Bill Clinton lifted during his second term. Warren got the signatures delivered to her in a box earlier today. See the pic:http://bit.ly/1oD6yiu.

SIDESHOW: PALIN VS. BOEHNER. Oh, the drama. GOP 2008 vice presidential candidate Sarah Palin told Breitbart earlier this week that she thinks Obama should be impeached. In response, House Speaker John Boehner (R-Ohio) told reporters today: “I disagree,” adding that House GOPers are suing Obama.

QUOTABLE, Palin earlier today to Sean Hannity: “You don’t bring a lawsuit to a gunfight. There is no place for lawyers on the frontline. Where are the front lines in America? They are our borders.”


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Tags Angus King Bill Clinton Boehner Elizabeth Warren Export-Import Bank Federal Reserve System Glass–Steagall Act Joe Manchin Joe Manchin John Boehner John Boehner John McCain Lindsey Graham Maria Cantwell Mark Kirk Mark Kirk Sarah Palin Shelley Moore Capito
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