OVERNIGHT FINANCE: Obama wants to end sequester

Hillary ClintonHillary Diane Rodham ClintonAs Buttigieg rises, Biden is still the target Harris rips Gabbard over Fox appearances during Obama years Steyer, Gabbard and Yang shut out of early minutes of Democratic debate MORE v. Rand PaulRandal (Rand) Howard PaulSenate scraps plan to force second stopgap vote ahead of shutdown On The Money: Senate scraps plan to force second shutdown vote | Trump tax breaks for low-income neighborhoods draw scrutiny | McConnell rips House Dems for holding up trade deal Democratic debate at Tyler Perry's could miss the mark with black voters MORE? In wonk world, it's Rand Paul v. Janet Yellen. Keep reading... 

TOMORROW STARTS TONIGHT: BUH-BYE SEQUESTER? "President Obama said Thursday that he's asking Congress to fully reverse the automatic spending cuts known as sequestration in his annual budget proposal, set to be released next week. The sequestration cuts, triggered in 2013 when lawmakers were unable to strike an overall budget deal, have slashed federal military and domestic budgets. The White House argues that the cuts have held back economic growth and hurt the middle class." Justin Sink for The Hill: http://bit.ly/1vbzwPc

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-- SEN. JOHN MCCAIN (R-Ariz.): "I think it's unanimous, the view that sequestration is a meat axe. It was never intended to be employed... I'm willing to do a number of things in order to prevent sequestration from moving forward." Martin Matishak on McCain's comments: http://bit.ly/1ziXt5f

THIS IS OVERNIGHT FINANCE. Congratulations, you've made it through the first part of this week. Tweet: @kevcirilli; email: kcirilli@thehill.com; and subscribe: http://thehill.com/signup/48

ON-TAP FOR FRIDAY MORNING: HOW MUCH DID THE ECONOMY GROW? Josh Mitchell for The Wall Street Journal: "The government offers its broadest snapshot of the 2014 economy Friday with the first estimate of how much the economy grew in the final quarter. Economists estimate gross domestic product -- the sum of all goods and services produced across the economy -- grew at a 3.2% annual rate from October through December. That would mark healthy growth, though it wouldn't match the third quarter's blowout 5% reading." http://on.wsj.com/1Lnc3iy

TALK OF THE TOWN: W.H. SAYS TALIBAN ISN'T TERROR GROUP. "The Taliban carry out 'tactics that are akin to terrorism' but are not considered a terrorist organization by the Obama administration because they do not harbor ambitions outside Afghanistan, the White House said Thursday." Justin Sink for The Hill: http://bit.ly/1ESs8bF

Moving on...

EX-IM WATCH: POST-FINCHER FALLOUT... SHELBY SIGNALS REAUTH SUPPORT? Senate Banking Committee Chairman Richard Shelby (R-Ala.) signaled Thursday that he's willing to support reauthorizing the Export-Import (Ex-Im) Bank, as long as it is reformed to help small businesses. You already know: House Financial Services Committee Chairman Jeb Hensarling (R-Texas) is the Bank's top critic and he's got House jurisdiction over a reauth bill. They've got to reauthorize it by June 30 or it's dead.

-- SHELBY: "I have problems with the status quo, but I've supported Ex-Im before." Shelby said he'll have hearings on the bank's reauthorization and that he wants to see it reformed, so it isn't just "one or two or three big companies just getting corporate welfare."

-- HENSARLING: "I continue to oppose Ex-Im's reauthorization because hardworking American taxpayers -- who are already under tremendous stress -- shouldn't be forced to pay for foreign corporate welfare that advantages a handful of powerful, politically-connected corporations."  

-- FINCHER BILL 'NON-STARTER' WITH DEMS? You already know: On Wednesday, Rep. Stephen FincherStephen Lee FincherTrump announces, endorses ambassador to Japan's Tennessee Senate bid Lamar Alexander's exit marks end of an era in evolving Tennessee Tensions on immigration erupt in the House GOP MORE (R-Tenn.) introduced a five-year Ex-Im reauthorization bill co-sponsored by 57 other Republicans... Fincher's bill includes reforms that require an independent audit of the bank's financing portfolio. It reverses Ex-Im rules limiting the bank from financing projects with power plants that don't adopt greener technology... Senior Democratic aide tells me: "The coal provision is definitely a nonstarter for many Democrats." 

-- MCCARTHY BACKS HENSARLING: A senior House GOP aide tells me that House Majority Leader Kevin McCarthy (R-Calif.) and Hensarling "are on the same page regarding Ex-Im. If there is any bill regarding Ex-Im, it must come from the committee." My story: http://bit.ly/1LmCNQf

SHELBY PREVIEWS PRIORITIES: DODD-FRANK; EX-IM... AND... AUDIT THE FED? Shelby has been tightlipped about how he'll chair the all-powerful Senate Banking Committee this Congress. But he's retaken the gavel and today he signaled some of the issues on his radar... OVERNIGHT had it first: Shelby met privately with House Financial Services Committee Chairman Jeb Hensarling (R-Texas) on Wednesday morning. They were joined by Republican members of Hensarling's committee and they began to plot an extensive agenda for banking regulatory issues. Shelby tells OVERNIGHT that they discussed Dodd-Frank and the "litany" of government regulations. 

-- SHELBY TALKS 'AUDIT THE FED' AS YELLEN DINES WITH DEMOCRATS. Yesterday Sen. Rand Paul (R-Ky.) reintroduced legislation that would allow the Government Accountability Office (GAO) to audit the Federal Reserve... This is nothing new... but Paul is possibly running in 2016 and it's legislation first championed by his dad, libertarian lightening-rod former-Rep. Ron Paul (R-Texas). Shelby didn't co-sponsor Paul's bill... but Senate Banking has jurisdiction... "I support the concept," Shelby told me. "I want to make sure that what we do is the right thing. We don't want to run the Fed, but I do believe that the Fed — especially with the portfolio that it has — we need to know what they're doing." He said that he will "absolutely" have a Banking Committee hearing on the idea and that he "might" end up supporting Paul's bill. 

-- FED CHAIR JANET YELLEN grabbed lunch with Senate Democrats today on Capitol Hill. Yellen vehemently opposes the legislation and has vowed to fight it. She says it undermines the Fed's independence. Yellen and Fed policymakers said yesterday they're keeping interest rates at zero percent, telling the market they need to be "patient." Most economists don't expect a rate increase until at least June and some even are predicting not until early 2016. My story: http://bit.ly/1yS12R0

FLASH POLL - - AMERICANS UNPREPARED FOR FINANCIAL STORM. Pete Schroeder for The Hill: "A new study out Thursday from the Pew Charitable Trusts [found...] that 70 percent of American households face at least one of the following three problems: insufficient savings, high debt burdens or monthly expenses that exceed income." http://bit.ly/1Ci1SsS

FOR YOUR RADAR: SENATE PASSES KEYSTONE. Laura Barron-Lopez reports: "The Senate on Thursday voted 62-36 to build the Keystone XL oil sands pipeline, delivering Republicans the first legislative victory of their new majority. Nine Democrats joined with Republicans in voting to approve the $8 billion project, five votes short of the two-thirds majority that would be needed to override a promised veto from President Obama.

-- THE CHOSEN NINE: "The nine Democrats who voted to approve Keystone were Sens. Michael BennetMichael Farrand Bennet2020 primary debate guide: Everything you need to know ahead of the November forum Fox News anchor apologizes for saying Booker dropped out of 2020 race Klobuchar unveils plan to secure elections as president MORE (Colo.), Tom CarperThomas (Tom) Richard CarperLobbying World Overnight Energy: BLM staff face choice of relocation or resignation as agency moves | Trump says he's 'very much into climate' | EPA rule would expand limits on scientific studies Democrats give Warren's 'Medicare for All' plan the cold shoulder MORE (Del.), Bob CaseyRobert (Bob) Patrick CaseyNew ObamaCare enrollment period faces Trump headwinds Scrap House defense authorization provision benefitting Russia Here are the Senate Democrats backing a Trump impeachment inquiry over Ukraine call MORE Jr. (Pa.), Joe DonnellyJoseph (Joe) Simon DonnellyWatchdog accuses pro-Kavanaugh group of sending illegal robotexts in 2018 Lobbying world Trump nominees meet fiercest opposition from Warren, Sanders, Gillibrand MORE (Ind.), Heidi HeitkampMary (Heidi) Kathryn HeitkampThe Hill's Morning Report — Biden steadies in third debate as top tier remains the same Trump wins 60 percent approval in rural areas of key states Pence to push new NAFTA deal in visit to Iowa MORE (N.D.), Joe ManchinJoseph (Joe) ManchinPolitical purity tests are for losers Former coal exec Don Blankenship launches third-party presidential bid Centrist Democrats seize on state election wins to rail against Warren's agenda MORE (W.Va.), Claire McCaskillClaire Conner McCaskillMSNBC's McCaskill: Trump used 'his fat thumbs' to try to intimidate Yovanovitch GOP senator rips into Pelosi at Trump rally: 'It must suck to be that dumb' Iranian attacks expose vulnerability of campaign email accounts MORE (Mo.), Jon TesterJonathan (Jon) TesterTester: Our forefathers would not have tolerated Trump asking Ukraine to investigate Biden The Hill's Morning Report - Fallout from day one of Trump impeachment hearing Veterans face growing threat from online disinformation MORE (Mont.) and Mark WarnerMark Robert WarnerBipartisan senators urge national security adviser to appoint 5G coordinator Hillicon Valley: Commerce extends Huawei waiver | Senate Dems unveil privacy bill priorities | House funding measure extends surveillance program | Trump to tour Apple factory | GOP bill would restrict US data going to China Klobuchar unveils plan to secure elections as president MORE (Va.). Sen. Marco RubioMarco Antonio RubioSenate passes legislation supporting Hong Kong protesters Senators voice support for Iran protesters but stop short of taking action McConnell urges Trump to voice support for Hong Kong protesters MORE (R-Fla.), who is traveling, missed the vote, as did Senate Minority Leader Harry ReidHarry Mason ReidHarry Reid: Early voting states Iowa, New Hampshire 'not representative of the country anymore' The Memo: Democrats confront prospect of long primary Bottom Line MORE (D-Nev.), who is recovering from eye surgery." Laura's story: http://bit.ly/15XPsIx

DEMS TO OBAMA: DOUBLE OVERTIME THRESHOLD. Bernie Becker for The Hill: "More than half of the Senate's Democrats are urging President Obama to more than double the salary threshold governing overtime rules. The Democrats, led by Sens. Patty MurrayPatricia (Patty) Lynn MurrayTrump FDA pick dodges questions on Trump's flavored vape ban Overnight Health Care: GOP senator says drug price action unlikely this year | House panel weighs ban on flavored e-cigs | New York sues Juul Schumer: Leadership trying to work out competing surprise medical bill measures MORE (D-Wash.) and Bernie SandersBernie SandersFive takeaways from the Democratic debate As Buttigieg rises, Biden is still the target Leading Democrats largely pull punches at debate MORE (I-Vt.), are pushing the White House to make sure that workers who make less than $56,680 a year are automatically eligible for overtime.

"Currently, that threshold stands at $23,660 — a level that covers just over 1 in 10 American workers, and which Democrats say leaves behind far too many middle-class families. Obama directed Labor Secretary Thomas PerezThomas Edward PerezClinton’s top five vice presidential picks Government social programs: Triumph of hope over evidence Labor’s 'wasteful spending and mismanagement” at Workers’ Comp MORE to update the overtime regulations in March of last year, and the new rules are expected soon." Becker's report: http://bit.ly/1zj8ROy

TRADE TALK: DEMS PLAY HARDBALL WITH OBAMA. Mike Lillis reporting from my hometown for your hometown paper: "PHILADELPHIA -- House Democratic leaders have a simple message for the Obama administration in its push for new trade deals: If the pacts don't increase working-class wages, you've lost our support... A large number of liberal Democrats are balking at the administration's trade agenda, citing concerns over currency manipulation, environmental degradation, food safety and worker protections, among other issues." Story: http://bit.ly/1yGeDpM

WEISS FIGHT: ANTONIO'S OUT... NOW WHAT? Where's the debate stand now that Sen. Elizabeth WarrenElizabeth Ann WarrenFive takeaways from the Democratic debate As Buttigieg rises, Biden is still the target Leading Democrats largely pull punches at debate MORE (D-Mass.) blocked Wall St. investment banker Antonio Weiss from becoming one of Obama's top guys at Treasury? William D. Cohan for DealBook in The New York Times: "Ms. Warren chose the wrong battle. Not only is Mr. Weiss a bona fide progressive thinker, he is supremely qualified for the under secretary role and, frankly, is the kind of person that one marvels is willing to serve in government at all, given the huge sums of money he can continue to make in the private sector. (Full disclosure: Mr. Weiss worked briefly for me at Lazard more than 20 years ago.)

"Mr. Weiss is also no fool. Rather than continue to be berated publicly by Ms. Warren and to continue to fight an uphill battle for Senate confirmation, he withdrew from consideration on Jan. 12 in a compromise that allows him to take the advisory role, a job that requires no Senate confirmation, and affords him many of the same responsibilities as the under secretary position and perhaps even better access to the levers of powers...

"It is far better to have Mr. Weiss, who understands Wall Street and is a progressive thinker, in a position to curtail the kind of bad behavior that leads to financial crises than have Ms. Warren and her allies prevent him from serving. That may be the best thing to come out of this embarrassing episode." http://nyti.ms/1zafvbv

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