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Overnight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal

TRUMP SAYS HE'LL RENEGOTIATE OR WITHDRAW FROM NAFTA: Donald TrumpDonald John TrumpTrump to fundraise for 3 Republicans running for open seats: report Trump to nominate former Monsanto exec to top Interior position White House aides hadn’t heard of Trump's new tax cut: report MORE on Tuesday said he will demand a renegotiation of the North American Free Trade Agreement (NAFTA) between the United States, Mexico and Canada.

If those other countries refuse the renegotiation, Trump said he would withdraw from the trade pact, which would cause tariffs on imports from those countries and exports from the United States to rise.

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"I'm going to tell our NAFTA partners that I intend to immediately renegotiate the terms of that agreement to get a better deal for our workers," Trump said during remarks at an aluminum facility in Monessen, Pa., near Pittsburgh.

"And I don't mean just a little bit better, I mean a lot better," he said.

"If they do not agree to a renegotiation, then I will submit notice under Article 2205 of the NAFTA agreement that America intends to withdraw from the deal."

Trump's remarks come on the eve of the start of the North American Leaders summit in Ottawa, Canada. U.S businesses leaders are calling on U.S., Mexican and Canadian leaders to tighten their economic ties in the wake of Britain's vote to leave the European Union. Vicki Needham explains: http://bit.ly/296OIIe.

CLINTON ALLIES RIP TRUMP: Trump's remarks come as he faces pressure from Democrats on trade.

A pair of Hillary ClintonHillary Diane Rodham ClintonHillicon Valley: Bolton tells Russians 2016 meddling had little effect | Facebook eyes major cyber firm | Saudi site gets hacked | Softbank in spotlight over Saudi money | YouTube fights EU 'meme ban' proposal Dems lower expectations for 'blue wave' Election Countdown: Takeaways from heated Florida governor's debate | DNC chief pushes back on 'blue wave' talk | Manchin faces progressive backlash | Trump heads to Houston rally | Obama in Las Vegas | Signs of huge midterm turnout MORE supporters blasted Donald Trump for failing to produce a plan on trade that will help U.S. workers compete in a global economy.

Sen. Sherrod BrownSherrod Campbell BrownOn The Money: Deficit hits six-year high of 9 billion | Yellen says Trump attacks threaten Fed | Affordable housing set for spotlight in 2020 race Lawmakers, Wall Street shrug off Trump's escalating Fed attacks The Hill's Morning Report — Presented by PhRMA — Dem victories in `18 will not calm party turbulence MORE (D-Ohio) and Leo Gerard, international president of the United Steelworkers, said Tuesday that the presumptive Republican presidential nominee has profited from bad trade agreements and won't deliver on the promises he is making to rewrite global agreements.

"Donald Trump is a hypocrite about this. Donald Trump has made millions of dollars because of bad trade agreements," Brown said during a media conference call arranged by the presumptive Democratic presidential nominee's campaign.

"He's never put any effort into fixing these trade agreements or enforcing trade law," he added: http://bit.ly/28YKrRz.

SENATE FACES CRITICAL VOTE ON PUERTO RICO: Senate leaders from both parties threw their support behind a House bill to provide debt relief to Puerto Rico on Tuesday.

They also struck a confident tone that the legislation will be approved -- assuming the other side can deliver enough votes.

The Senate has until the end of Thursday to approve the Puerto Rico legislation before the island is expected to default Friday on $2 billion in bond payments.

Sen. John CornynJohn CornynManchin wrestles with progressive backlash in West Virginia O'Rourke's rise raises hopes for Texas Dems down ballot Five takeaways from Cruz, O'Rourke debate showdown MORE (R-Texas), the Senate majority whip, refused to entertain the idea that the bill could fail, which could expose the island to a raft of litigation from investors following the massive default.

"Failure is not an option," he said. "I'm not going to speculate because this isn't going down."

The bill is set for a procedural vote Wednesday. If it clears that 60-vote hurdle, the chamber could send it to the president as soon as Thursday -- one day before the island defaults. The Hill's Peter Schroeder and I have everything you need to know here: http://bit.ly/294ayLA.

REID BACKS THE BILL: Senate Minority Leader Harry ReidHarry Mason ReidFive takeaways from testy Heller-Rosen debate in Nevada Major overhauls needed to ensure a violent revolution remains fictional Senate heads home to campaign after deal on Trump nominees MORE (D-Nev.) is throwing his support behind a House-passed Puerto Rico debt crisis bill ahead of a key vote.

"I think it's terribly disappointing that Senator McConnell would not allow for a single amendment," he told reporters, referring to Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellElection Countdown: Takeaways from heated Florida governor's debate | DNC chief pushes back on 'blue wave' talk | Manchin faces progressive backlash | Trump heads to Houston rally | Obama in Las Vegas | Signs of huge midterm turnout Sanders: Democrats ‘absolutely’ have chance to win back rural America  Trump privately ready to blame Ryan and McConnell if Republicans lose midterms: report MORE (R-Ky.).

Reid would not say, however, if the bill has enough support to pass. The Hill's Jordain Carney fills us in: http://bit.ly/299H0gJ.

MENENDEZ PULLS OUT THE STOPS: Sen. Robert MenendezRobert (Bob) MenendezTrump lowers refugee goal to 30,000, he must meet it Blame Senate, not FBI, for Kavanaugh travesty Dems urge tech companies to remove 3D-gun blueprints MORE (D-N.J.) took a hammer to the House-passed Puerto Rico debt relief bill on Tuesday.

"I have called this legislation the ultimate neocolonialism that we as a Congress would be passing. It treats the citizens of Puerto Rico like subjects," the New Jersey Democrat said from the Senate floor. "It's a power play, leaving the people of Puerto Rico unable to make their own government, make their own decisions, do what they believe is right."

Menendez held the floor for over four hours, speaking against the bill.: http://bit.ly/292HMIy.

SENATE DEMS BLOCK ZIKA FUNDING: Senate Democrats on Tuesday blocked a deal providing funding for the fight against the Zika virus, virtually guaranteeing that Congress won't get legislation to President Obama's desk this month.

In a 52-48 vote, the Senate fell eight votes short of moving past a procedural hurdle against the House-Senate conference report on a military and veterans spending bill, which includes $1.1 billion to fund the Zika virus research.

Sen. Joe DonnellyJoseph (Joe) Simon DonnellyDemocrats slide in battle for Senate Conservatives bankrolled and dominated Kavanaugh confirmation media campaign Donnelly parodies 'Veep' in new campaign ad MORE (D-Ind.) broke with his party and backed moving forward with the deal. GOP Sens. James Lankford (R-Okla.), Mike LeeMichael (Mike) Shumway LeeCongress raises pressure on Saudi Arabia Senators pledge action on Saudi journalist’s disappearance Bernie Sanders: US should pull out of war in Yemen if Saudis killed journalist MORE (R-Utah) and Majority Leader Mitch McConnell (R-Ky.) voted against the Zika deal. McConnell's "no" vote allows him to bring the measure back up for another vote.

The vote leaves the current fight over the Zika virus at a standstill with days left before the July 4th recess. Jordain Carney tells us what went wrong and what happens next: http://bit.ly/28YKEnS.

MCCONNELL PROMISES DO-OVER: Senate Majority Leader Mitch McConnell (R-Ky.) warned lawmakers Tuesday they would vote again on a $1.1 billion package to fight the Zika virus after their July Fourth recess.

"I'd like to call on my colleagues on the other side of the aisle to think about this, to think about where they have left this issue for the American people," McConnell said from the Senate floor Tuesday. "So when we get back after we've had some time to think about it all, we'll address this matter again." http://bit.ly/292rmRc.

BLAME GAME BEGINS: Republicans slammed Democrats for voting down the $1.1 billion bill, arguing the party is standing in the way of funding it has claimed for months to desperately want.

Democrats countered that the bill was not a serious effort at bipartisan compromise and was loaded with unacceptable riders, including limiting funding to Planned Parenthood and loosening Clean Water Act rules for pesticides. They also objected that the measure was paid for with cuts to Ebola-response funding and ObamaCare.

They called for a new round of negotiations to produce a bipartisan bill, but Republicans rejected that demand, saying that they would instead hold another vote on the same measure after the Fourth of July recess to give Democrats another chance.

Senate Majority Leader Mitch McConnell (R-Ky.) repeatedly said no changes would be made to the bill to address Democratic concerns. He said that as a conference report, the product of negotiations between the House and Senate, no amendments could be made. The Hill's Peter Sullivan tells us what happens next: http://bit.ly/295Omjm.

RYAN CALLS FOR UK FREE TRADE AGREEMENT: Speaker Paul RyanPaul Davis RyanElection Countdown: Takeaways from heated Florida governor's debate | DNC chief pushes back on 'blue wave' talk | Manchin faces progressive backlash | Trump heads to Houston rally | Obama in Las Vegas | Signs of huge midterm turnout Will the Federal Reserve make a mistake by shifting to inflation? Sanders: Democrats ‘absolutely’ have chance to win back rural America  MORE is calling on the United States to forge a trade deal with the United Kingdom in parallel with negotiations with Europe after Britain's surprising vote last week to leave the 28-nation bloc.
The Wisconsin Republican said that the United States should pursue a trade deal once Britain has formally separated from the EU, which could take two years or more.

"We would probably want to put together our own trade agreement with Great Britain, which would be easier to do actually," Ryan told WBEL in his home state on Friday, the day after the U.K. voted to leave the European Union.

The United States and the EU had been trying to accelerate completion of the Transatlantic Trade and Investment Partnership (TTIP), although last week's vote is expected to stall progress through at least the end of this year.

"We're in talks with Europe on something we call TTIP, but I think we should do a parallel track of United Kingdom trade agreement while we talk with Europe about TTIP," Ryan said.Here's more from The Hill's Vicki Needham: http://bit.ly/291f75g.

OBAMA TRIES TO CALM BREXIT FEARS: President Obama is warning against worldwide "hysteria" in response to Britain's vote to leave the European Union.

Obama told NPR in an interview published Tuesday that the vote will "pause" European integration efforts but said the basic security and economic relationship between the U.S. and Europe won't be disrupted.

"There's been a little bit of hysteria post-Brexit vote, as if somehow NATO's gone, the transatlantic alliance is dissolving, and every country is rushing off to its own corner," he said. "That's not what's happening." The Hill's Jordan Fabian with more on Obama's reaction to Brexit.

HAPPY TUESDAY and welcome to Overnight Finance, where we're wondering who's doing advance work for Donald Trump. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight's highlights include new financial regulations and how a program for coal miners could complicate the Puerto Rico vote.

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:

  • Senate Judiciary Committee: Hearing to examine protecting older Americans from financial exploitation, 10 a.m. http://1.usa.gov/28TgXqL.
  • Senate Small Business Committee: Hearing to examine the consequences of dwindling startup activity, 10 a.m. http://1.usa.gov/28VWjsX.
  • Procedural vote on Puerto Rico debt bill in the Senate.

IRS UNVEILS CYBER SAFEGUARDS: The Internal Revenue Service (IRS) is implementing new cybersecurity initiatives for 2017 to stay ahead of hackers.

The agency is expanding a pilot program to add 16-digit verification codes to W-2 forms, which are used to report wage and tax information.

The IRS is also expanding its information campaigns to teach the public about tax safety and is ramping up research and the use of data to protect taxpayers. Those efforts will include the launch of an information-sharing program to help prevent future threats.

"The bottom line for taxpayers is that the IRS and the states, with the help of the tax industry, are stopping more suspicious tax returns at the door, and we're preventing more fraudulent refunds from being issued," said IRS Commissioner John Koskinen at the IRS Security Summit Tuesday.

The moves come a day after the IRS announced it would no longer use its embattled e-File PIN system to protect taxpayer security. The Hill's Joe Uchill breaks it down: http://bit.ly/2924eTn.

SENATORS RALLY FOR COAL MINER PENSION FIX: A group of senators took to the floor on Tuesday calling for a congressional fix for coal miner pension programs.

Coal unions and lawmakers from mining states have long pushed Congress to provide a backstop for retiree pensions and healthcare plans. Those plans are funded through a federal program approaching insolvency due to the financial crisis and bankruptcies across the coal industry.

On Tuesday the members -- a bipartisan group that included Sens. Joe ManchinJoseph (Joe) ManchinElection Countdown: Takeaways from heated Florida governor's debate | DNC chief pushes back on 'blue wave' talk | Manchin faces progressive backlash | Trump heads to Houston rally | Obama in Las Vegas | Signs of huge midterm turnout The Hill's Morning Report — Presented by PhRMA — Early ballots pouring in with 15 days to the midterms Manchin wrestles with progressive backlash in West Virginia MORE (D-W.Va.), Shelley Moore CapitoShelley Wellons Moore CapitoThe Hill's Morning Report — Presented by PhRMA — Dem path to a Senate majority narrows GOP shrugs off dire study warning of global warming Overnight Health Care — Presented by the Coalition for Affordable Prescription Drugs — Senators face Wednesday vote on Trump health plans rule | Trump officials plan downtime for ObamaCare website | Lawmakers push for action on reducing maternal deaths MORE (R-W.Va.) Sherrod Brown (D-Ohio) and Rob PortmanRobert (Rob) Jones PortmanOn The Money: Trump to seek new round of tax cuts after midterms | Mnuchin meets with Saudi crown prince | Trump threatens to cut foreign aid over caravan On The Money: Mnuchin to attend anti-terror meeting in Saudi Arabia | Treasury releases guidance on 'opportunity zone' program | Maxine Waters gets company in new GOP line of attack Election Countdown: O'Rourke brings in massive M haul | Deal on judges lets senators return to the trail | Hurricane puts Florida candidates in the spotlight | Adelson spending big to save GOP in midterms MORE (R-Ohio) -- tied the coal miners' problems to financial issues in Puerto Rico, which the Senate will look to address this week.

"As much as we want to help this, we shouldn't be voting on restructuring Puerto Rico's debt without lifting a finger to help our retired miners," Brown said. The Hill's Devin Henry has more: http://bit.ly/292FWb2.

GOP TAX-WRITERS: TREASURY RULES WOULD REDUCE INVESTMENT: Republicans on the House Ways and Means Committee said they had "grave concerns" about proposed Treasury Department rules that would treat some debt as equity.

"If not significantly altered, they will undoubtedly reduce overall investment and economic activity to the detriment of the United States and its business community," the Republican tax-writers said in a letter sent to Treasury Secretary Jack LewJacob (Jack) Joseph LewOvernight Finance: US reaches deal with ZTE | Lawmakers look to block it | Trump blasts Macron, Trudeau ahead of G-7 | Mexico files WTO complaint Obama-era Treasury secretary: Tax law will make bipartisan deficit-reduction talks harder GOP Senate report says Obama officials gave Iran access to US financial system MORE on Tuesday.

Treasury has said that the proposed rules, released in April, are intended to limit the tax benefits of corporate inversions -- transactions in which a U.S. company moves its headquarters overseas to reduce its tax burden.
But the Ways and Means Republicans said the rules are "broadly applicable to a wide array of ordinary business transactions, creating unacceptably high levels of uncertainty and adverse collateral consequences for non-tax motivated business activity."

Treasury's proposed rules fall under section 385 of the tax code. Republican lawmakers said that Congress did not intend for Treasury to use that section to address inversions. The Hill's Naomi Jagoda explains: http://bit.ly/295NzPl.

US ECONOMY GROWS SLIGHTLY FASTER: The U.S. economy expanded at a slightly faster pace in the first three months of the year on stronger export sales, better growth in housing and less drag from business investment.

Growth picked up to a 1.1 percent annual pace in the January-March quarter, modestly better than the 0.8 percent rate reported in May, the Commerce Department reported Tuesday.

Jason FurmanJason FurmanOn The Money: Jobless rate hits 49-year low | Officials face legal obstacles to pursuing tax charges against Trump | Tax story prompts calls to revise estate rules Unemployment hits 49-year low, economy adds 134K jobs in September Trump gets good news on wages MORE, chairman of the Council of Economic Advisers, said that while strong growth in residential investment boosted growth "weakness in business investment, exacerbated by weak foreign demand and low oil prices--weighed on growth."

"Going forward, increased uncertainty, including uncertainty regarding the consequences of British voters' decision last week to leave the European Union, underscores the importance of proactive policy steps to strengthen the U.S. economy," Furman said in a statement: http://bit.ly/295OxLI.

COURT REJECTS REQUEST TO REHEAR UNION CASE: The Supreme Court has refused to rehear a case concerning whether public-sector employees can be forced to pay union fees after reaching a deadlock earlier this year.

The conservative Center for Individual Rights asked the court to rehear the case, Friedrichs v. California Teachers Association. The court handed a victory to labor unions in April when it affirmed a lower court ruling in a 4-4 tie, upholding a California law that requires some public-sector workers to pay union fees.  

The law at the center of the case allows school districts to require public school teachers, as a condition of employment, to either join the union representing teachers in their district or pay the equivalent of dues to that union -- typically 2 percent of a new teacher's salary.

In its petition, CIR said the questions presented are "too important to leave unsettled with an affirmance by an equally divided Court, and they are guaranteed to recur in the absence of a definitive ruling from this court."   

The court rejected the request without explanation in releasing other miscellaneous orders Tuesday, a day after ending its current term: http://bit.ly/293h0UB.

REGULATORS FINALIZE MINING, DRILLING, PAYMENT DISCLOSURE RULES: Federal financial regulators finalized rules on Monday requiring oil drillers, hydraulic fracturing operators and mining firms to disclose more information about payments they make to federal and foreign governments.

The Securities and Exchange Commission (SEC) rule is mandated by the Dodd-Frank Wall Street reform law, and deeply opposed by the drilling industry, which says it exposes individual companies' private financial data. A federal court blocked an earlier version of the rule.

The regulation requires natural resources firms that make SEC filings to disclose payments worth more than $100,000 annually to the federal government or to foreign governments: http://bit.ly/293bUrv.

Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com; pschroeder@thehill.com, and njagoda@thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill; @PeteSchroeder; and @NJagoda.