Overnight Finance: GOP goes after arbitration rule | Bill allocates $1.6B for Trump border wall | Fed officials cautious on rate hike | McConnell aiming for debt vote before August recess

Overnight Finance: GOP goes after arbitration rule | Bill allocates $1.6B for Trump border wall | Fed officials cautious on rate hike | McConnell aiming for debt vote before August recess
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Fed officials cautious about rate hikes: Two Federal Reserve officials sounded caution about increasing interest rates while inflation remains below the central bank's target range.

Federal Reserve Governor Lael Brainard said Tuesday that she's cautious about advocating for further interest rate hikes while the central bank weighs how to guide inflation back toward normal levels.

Brainard said she wants the Fed "to move cautiously on further increases" while inflation lingers below the central bank's target rate. She said that the federal funds rate, currently set between 1 and 1.25 percent, wasn't far from the neutral level sought by Fed officials.


"We would not have much more additional work to do on moving to a neutral stance," said Brainard, who had been cautious about hiking rates before supporting the Fed's past three increases.

Brainard's concerns were echoed Tuesday by Philadelphia Fed President Patrick Harker, who told The Wall Street Journal that a continued lack of inflation increases "would give me a little pause in terms of the policy path."

Federal Reserve Chairwoman Janet Yellen will likely be pressed on those questions when she testifies before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday. I've got more here: http://bit.ly/2tbJOOO.



GOP senator targets arbitration rule for repeal: Sen. Tom CottonTom Bryant CottonOvernight Defense & National Security — Milley becomes lightning rod Joint Chiefs Chairman Milley becomes lightning rod on right Overnight Energy & Environment — Presented by Climate Power — Senate Democrats ding Biden energy proposal MORE (R-Ark.) said Tuesday morning he would seek the repeal of a new Consumer Financial Protection Bureau (CFPB) rule cracking down on arbitration clauses in customer contracts with financial firms.

Cotton said in a statement that CFPB had "gone rogue again" with a rule released Monday meant to prevent credit card companies and banks from blocking class-action lawsuits with arbitration clauses.

The conservative senator and frequent CFPB critic said he had begun the process of repealing the rule through the Congressional Review Act. The law, which allows Congress to eliminate rules finalized within a certain timeframe, has been used frequently this year on regulations enacted late in President Obama's term.

"The Bureau's new rule on arbitration clauses ignores the consumer benefits of arbitration and treats Arkansans like helpless children, incapable of making business decisions in their own best interests," Cotton said. "The last thing Americans need is more anti-business regulation that will prompt frivolous lawsuits while hurting consumers."

Cotton's announcement is the first congressional action to rescind the rule. House Financial Services Committee Chairman Jeb Hensarling (R-Texas), senior U.S. Chamber of Commerce officials and major bank lobbying groups have already called for it to be repealed. I'll tell you more here: http://bit.ly/2tbE4o1.


McConnell: 'Ideally' debt ceiling vote is before August recess: Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellTrump seeking challenger to McConnell as Senate GOP leader: report Budget chairman: Debt ceiling fight 'a ridiculous position to be in' Buckle up for more Trump, courtesy of the Democratic Party MORE (R-Ky.) signaled on Tuesday that he wants a vote on raising the debt ceiling before lawmakers leave for the August recess.

"Ideally we'll deal with the debt ceiling before the August recess," he told reporters.

The timeline comes after Senate Republicans announced they would delay the start of the August recess by two weeks -- moving the recess start date from July 31 to August 14.

The move, McConnell suggested, could give lawmakers time to deal with a backlog of delayed legislation and work out an agreement to increase the debt ceiling before they leave Washington until early September: http://bit.ly/2tbs7Pp.


Happy Tuesday and welcome 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:

  • Federal Reserve Chairwoman Janet Yellen will testify before the House Financial Services Committee at 10 a.m.
  • The Heritage Foundation holds an event on "U.S. Debt: Causes, Costs, and Consequences" at 12 p.m.
  • The full House Appropriations Committee marks up the fiscal 2018 Agriculture Appropriations Bill and Energy and Water Development Appropriations Bill at 10:30 a.m.
  • A House Appropriations subcommittee marks up the fiscal 2018 Interior Appropriations Bill at 3 p.m.
  • A House Appropriations Subcommittee marks up the fiscal 2018 Homeland Security Appropriations Bill at 4:30 p.m.




Bill allocates $1.6 billion for Trump's border wall: The House Appropriations Committee on Tuesday released a bill allocating $1.6 billion to begin construction of a physical barrier along the U.S. southern border, one of President TrumpDonald TrumpCapitol fencing starts coming down after 'Justice for J6' rally Netanyahu suggests Biden fell asleep in meeting with Israeli PM Aides try to keep Biden away from unscripted events or long interviews, book claims MORE's central campaign promises.

Conservative members in recent days had begun warning that they would pull their votes from a budget and spending plan that failed to fund the wall.

House Freedom Caucus Chairman Rep. Mark Meadows (R-N.C.) went so far as to tell Breitbart News that Trump would not sign a spending measure if a wall were not funded, though the White House has not commented on the matter: http://bit.ly/2tbyJ07.


House bill would cut EPA funding by $528M: House appropriators released a spending bill Tuesday that would cut the Environmental Protection Agency's (EPA) budget by $528 million next year, far less than the $2.6 billion cut President Trump requested.

The legislation would include language requiring the repeal of water jurisdiction regulations and include funding for buyouts at the agency. But it wouldn't include the deep cuts Trump proposed in May, when administration officials said they wanted to end 50 department programs and eliminate 3,200 of the agency's 15,000 jobs.

The spending bill also includes funding for the Interior Department, the Forest Service and related agencies. It's a $31.4 billion bill, which is $824 million less than current levels and $4.3 billion higher than Trump's budget.

Appropriators aim to pass on small cuts to the National Park Service, Bureau of Land Management, Fish and Wildlife Service, and the U.S. Geological Survey: http://bit.ly/2tbyP7V.


Russia sanctions bill stalled amid Trump Jr. emails: Bipartisan sanctions legislation targeting the Kremlin remain stalled on Tuesday amid the revelation of emails between Donald Trump Jr. and an intermediary purporting to offer help from Russia during the 2016 campaign.

House Democrats are objecting to a portion of proposed changes to the bill that would make it harder for the minority to force votes on the Trump administration's sanctions policy.

House GOP leadership requested the provision, which limits the power to bring up a resolution for a floor vote regarding sanctions policy to the majority.

With House members still traveling back to Washington on Tuesday, no progress was made on resolving the impasse.

The Hill's Cristina Marcos has more here: http://bit.ly/2va8LLS


State and local governments defend tax deduction: Groups representing state and local governments are stepping up their efforts to preserve the deduction for state and local taxes (SALT), arguing in a report released Tuesday that the preference does not just benefit the wealthy and residents of high-tax states.

"If SALT were repealed, almost 30% of taxpayers, including individuals in every state and in all income brackets, would be adversely impacted," the groups wrote in their report.

Under current law, taxpayers who itemize their deductions can deduct their state and local property taxes, as well as either their income taxes or sales taxes.

But the tax-reform plan that House Republicans released last year and the plan that the White House released in April both would repeal the state and local tax deduction. Congressional Republicans and administration officials have said they want to overhaul the federal tax code this year. The Hill's Naomi Jagoda breaks it down: http://bit.ly/2tbqu4b.


GOP chair asks CFPB to explain rulemaking actions: The head of the House Small Business Committee wants to make sure the Consumer Financial Protection Bureau (CFPB) isn't overly burdening small businesses.

Committee Chairman Steve Chabot (R-Ohio) sent a letter to CFPB Director Richard Cordray on Tuesday asking for more information on two recent rulemaking actions.

Chabot said the committee wants to know more about CFPB's request for information on the small business financing market to better implement Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The provision in the law requires financial institutions to compile, maintain and report information concerning credit applications made by women-owned, minority-owned and small businesses. The Hill's Lydia Wheeler explains: http://bit.ly/2tbHXcJ.


House Dems press Trump on paid leave plan: Ivanka Trump's proposal for a guaranteed paid family leave program is encountering resistance from Democrats who say it doesn't go far enough after she tried to make the case for it last week.

In a letter to her father, President Trump, on Monday, more than 100 House Democrats expressed concerns with the proposal's funding mechanism and limited applicability.

Ivanka Trump, who also serves as a White House adviser, penned a Wall Street Journal op-ed last week defending her plan in response to a critical editorial in the newspaper.

She wrote that her plan would be "an investment in America's working families." The proposal as outlined in the Trump administration's budget would provide six weeks of paid leave for new parents, funded by the nation's unemployment insurance program.

But Democrats pointed to legislation authored by Rep. Rosa DeLauro (D-Conn.) that they say offers a more comprehensive alternative. U.S. employers currently aren't required by law to allow even one day of paid parental leave. Here's more from The Hill's Cristina Marcos: http://bit.ly/2tbFPSa.


Ohio senators urge crackdown on import duties: A pair of Ohio senators are urging the head of U.S. Customs and Border Protection (CBP) to crack down on foreign companies that skirt import duties.

Sens. Sherrod BrownSherrod Campbell BrownThe Trojan Horse of protectionism Advocates call on top Democrats for 0B in housing investments Democratic senators request probe into Amazon's treatment of pregnant employees MORE (D) and Rob PortmanRobert (Rob) Jones PortmanEmboldened Trump takes aim at GOP foes Overnight On The Money — Presented by Wells Fargo — GOP senator: It's 'foolish' to buy Treasury bonds Senate lawmakers let frustration show with Blinken MORE (R) sent a letter on Tuesday to Kevin McAleenan, the acting commissioner of U.S. Customs, urging him to fully implement laws aimed at improving the collection of antidumping and countervailing duties and stopping evaders.

The senators argue that a wide range of U.S. industries are hurt by the combination of under-collection and evasion of those duties.

The senators urged McAleenan to rework an interim rule published in August, which they said comes up short on what is needed to make the duty evasion process more transparent and timely.

"We urge you to issue a revised rule that addresses the concerns outlined above to ensure all U.S. workers and companies who are affected by unfair trade practices get the relief they deserve," they wrote to McAleenan.

Duty evasion occurs when goods entering the United States aren't covered by antidumping or countervailing duty cases: http://bit.ly/2tbkPLn.


Seattle passes new tax on wealthy residents: Seattle's city council unanimously passed an income tax on the city's wealthiest residents on Monday but will likely face a legal challenge over violating state law.

The measure applies a 2.25 percent tax on total income above $250,000 for individuals and above $500,000 for married couples filing taxes together, Reuters reported Tuesday. The tax would affect fewer than 20,000 residents, out of the city's population of more than 660,000.

Seattle Mayor Ed Murray (D) said proceeds from the tax could be used to pay for transit services and affordable housing.

"Our goal is to replace our regressive tax system with a new formula for fairness, while ensuring Seattle stands up to President Trump's austere budget that cuts transportation, affordable housing, healthcare, and social services," Murray said in an email, according to Reuters: http://bit.ly/2tbckQr.


Hackers stole Trump hotel guests' credit card info for months: Hackers gained access to credit cards and other information from guests at 14 Trump organization properties in 2016 and had unfettered access to the information for months, the organization reported Tuesday.

A statement released on the organization's website reported that hackers gained access to "cardholder name, payment card number, card expiration date, and potentially card security code" information for guests who stayed at Trump hotels between August 2016 and March 2017. 

In some cases, hackers also gained access to guest names, email, phone numbers, addresses, and other information, although the company reported that Social Security numbers and passports were not accessed.

"The privacy and protection of our guests' information is a matter we take very seriously," the Trump organization said in the statement. 

The Hill's John Bowden has more here: http://bit.ly/2tbxCOa


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