Overnight Finance: Trump, GOP open to 401(k) changes | White House eyes gas tax hike for infrastructure | Republicans flex power over consumer agency | Cohn reportedly out of running for Fed chief
Trump, GOP open to 401(k) changes: Potential changes to 401(k) accounts appeared to get new life on Wednesday, with a key GOP chairman declining to rule out their inclusion in tax legislation and President Trump leaving room for negotiation.
Trump on Monday seemed to take a hard line against changing the rules for retirement plans, tweeting that “there will be NO change to your 401(k).”
But on Wednesday morning, House Ways and Means Committee Chairman Kevin Brady (R-Texas) — the lead drafter of the tax-reform bill — didn’t give a definitive answer when asked whether changes to 401(k)s were still being considered.
He said lawmakers are exploring ways to further encourage retirement savings.
“We think in tax reform, you can create incentives for Americans to save more and save sooner, which can help them,” he said at a breakfast hosted by the Christian Science Monitor.
Meanwhile, Trump appeared to soften his position, saying that 401(k) changes are still on the table “and maybe we’ll use it as negotiating.”
Financial industry stakeholders last week said they were hearing that Republicans were considering significantly limiting the amount that people could put into 401(k) plans on a pretax basis.
For more on Trump’s remarks today, click here: http://bit.ly/2izTX8c
Republicans hunt for tax-cut funding: Republicans are wrestling with how to pay for their tax cuts.
President Trump and congressional GOP leaders have set ambitious goals for their tax-code overhaul — including slashing the corporate tax rate from 35 to 20 percent and cutting most individual rates.
With Republicans promising legislative text next week, the hunt is on to find ways to fund $1.5 trillion in cuts.
“The options are many. We are wrestling through all of them,” Rep. Lynn Jenkins (R-Kan.) said about potential revenue raisers.
House Ways and Means Committee Chairman Kevin Brady (R-Texas) said Tuesday that his plan is to release a tax bill Nov. 1 if things go according to plan. That starts with the House voting Thursday on the Senate’s budget framework.
The panel’s Republican members met for several hours Tuesday morning and then in a wider-ranging meeting of the broader caucus later in the afternoon.
Leaving the meetings, lawmakers were tight-lipped but said they covered a wide range of tax topics. The Hill’s Naomi Jagoda take us there: http://bit.ly/2iA8b9l.
White House eyes 7-cent gas tax hike for infrastructure: The White House may back the first hike in the federal gasoline tax in decades in order to pay for President Trump’s $1 trillion infrastructure package.
Trump’s economic adviser Gary Cohn told moderate House lawmakers at a private meeting on Wednesday that they’ll get a chance to vote on a gas tax hike early next year as part of an infrastructure bill, which was first reported by Politico Playbook.
“Cohn seemed receptive to it,” one meeting participant told The Hill.
Separately, an industry source tells The Hill that the White House intends to back a 7-cent gas tax increase to pay for U.S. roads, bridges, highways and other public works, though it’s unclear if the proposal would be included in initial infrastructure legislation or if the administration will push to have it added at the committee level.
Trump signaled some openness to raising the federal gas tax earlier this year, telling Bloomberg News that it’s something he would “certainly consider.” But the idea, a politically fraught issue that lawmakers have avoided for years, quickly ran into fierce opposition from GOP lawmakers and influential conservatives.
Happy Wednesday 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.
On tap tomorrow
Senate Banking Committee: Hearing on the nominations of Brian Montgomery to be assistant secretary for housing, Mr. Robert Hunter Kurtz to be assistant secretary for public and Indian housing; and Suzanne Israel Tufts, assistant secretary for administration, Housing Department, 10 a.m.
GOP flexes power over consumer agency with arbitration repeal: Republicans scored their biggest victory yet against the Consumer Financial Protection Bureau (CFPB) late Tuesday, ending its push to regulate forced arbitration for years to come.
By nixing the arbitration measure through the Congressional Review Act (CRA), lawmakers effectively banned any federal agency from issuing a similar rule.
The GOP action sends a message to the CFPB that Republicans are willing and able to block its work, while Democrats and progressive groups wonder what the bureau’s future holds.
“The effort to stop forced arbitration is dead, for all intents and purposes,” said Dennis Kelleher, president of Better Markets, a nonprofit backing stricter financial regulations. I explain why here: http://bit.ly/2iBVV8p.
GOP chairman: Deduction compromise to be announced before tax bill: House Ways and Means Committee Chairman Kevin Brady (R-Texas) said Wednesday he anticipates announcing a compromise on the state and local tax deduction before a bill rewriting the code is unveiled next week.
“I expect before the bill is laid out next week that the solution will be announced,” Brady said at a Christian Science Monitor breakfast. “It’s a work in progress, but I think we’re making good progress.”
Congressional GOP leaders and the White House proposed eliminating the state and local deduction in a tax-reform framework they released last month. Doing so would help to raise revenue to pay for lower tax rates.
But the proposal has raised significant concerns from Republican House members in high-tax states such as New York, New Jersey, California and Illinois. Brady and other House GOP leaders have been meeting with the blue-state Republicans to try to find a compromise on the deduction. Naomi Jagoda has more: http://bit.ly/2izoOlu.
Ryan: Tax reform to enter toughest phase yet: Speaker Paul Ryan (R-Wis.) warned Wednesday that Republicans will have to navigate the most difficult phase of tax reform yet once a bill is unveiled next week and lobbyists start fighting to preserve prized tax breaks.
The House is expected to adopt the Senate-passed budget on Thursday, which will pave the way for Republicans to pass tax reform that adds up to $1.5 trillion to the deficit without Democratic votes.
House Ways and Means Committee Chairman Kevin Brady (R-Texas) is aiming to release a tax bill next week, with a markup the subsequent week. GOP leaders have set an ambitious timeline of passing the legislation through the House by Thanksgiving break.
Yet many details remain uncertain, despite Ryan and other GOP leaders’ hope for a quick process. The Hill’s Cristina Marcos reports: http://bit.ly/2iyDLUR.
Trump rules out Gary Cohn for Federal Reserve chairman: report: President Trump won’t nominate National Economic Council Director Gary Cohn as the next chairman of the Federal Reserve, Bloomberg reported on Wednesday.
A source told the news outlet that Trump wants to keep Cohn at the White House to help get tax reform through Congress.
Cohn is expected to leave the White House at the conclusion of the tax reform push, two sources added.
Trump said Monday that he was “very, very close” to choosing a nominee to replace Janet Yellen, whose term expires in February, but he did not elaborate on his timeline or discuss potential candidates.
He has previously said he intends to announce his decision prior to departing for a 12-day trip to Asia on Nov. 3.
In an interview set to air Wednesday night, Fox Business Network’s Lou Dobbs tells Trump that he thinks Yellen might be worth keeping.
“She was very impressive. I like her a lot,” Trump said in a preview of the interview. “In one way, I have to say you like to make your own mark, which is maybe one of the things she’s got a little bit against her, but I think she’s terrific.” http://bit.ly/2xouWQc.
Pelosi calls for DACA deal ahead of spending debate: House Minority Leader Nancy Pelosi (D-Calif.) on Wednesday said she wants a solution on the Deferred Action for Childhood Arrivals (DACA) program before a Dec. 8 deadline for an omnibus spending package.
“My hope would be that DACA would be done before then,” Pelosi said, without ruling out that the issue could still be included in the omnibus.
Pelosi’s comments come after a Huffington Post report that House Speaker Paul Ryan (R-Wis.) expected a DACA fix in the spending omnibus.
Pelosi had earlier threatened that Democrats would vote against spending bills, which would lead to a government shutdown in December, if they did not include a solution for DACA recipients, young immigrants who were brought to the country illegally as children and are commonly known as Dreamers: http://bit.ly/2izyYm0.
White House reviewing proposal to kill Obama rule on workers’ tips: A Labor Department proposal to kill an Obama-era rule preventing employers from pooling workers’ tips is now under White House review.
The White House Office of Information and Regulatory Affairs (OIRA) received the proposed rule from the Labor Department on Tuesday according to the list of regulations under review.
In the semi-annual Unified Regulatory Agenda in July, the agency announced plans to rescind the current restriction on tip pooling by employers that pay tipped employees the full minimum wage under the Fair Labor Standards Act. The change would allow restaurants, for example, to share the tips waiters receive with untipped workers, such as cooks.
The National Restaurant Association has long been pushing for the change. The group argues the rule finalized under former President Barack Obama created pay disparity between servers in the front of the house and the cooks in the kitchen.
It does not appear the Labor Department will allow employers to pool the tips of employees who make less than minimum wage, but the agency’s proposal has not yet been made public. http://bit.ly/2izmXNi.
Carson says people of Puerto Rico have ‘suffered just tremendously’: Housing and Urban Development Secretary Ben Carson said Puerto Rico has suffered ‘tremendously’ after the devastation from Hurricane Maria.
Carson made the comment in an interview hosted by The Hill on Wednesday morning.
“The people in Puerto Rico have suffered just tremendously,” Carson said, detailing his department’s efforts to help newly homeless American citizens there rebuild their lives.
He added jokingly that rebuilding the U.S. territory could take between “one and 100 years.” http://bit.ly/2izkQck.
Sales of new homes hit 10-year high: Sales of new homes hit a 10-year high in September, bouncing back after a few slow months.
New home sales surged 18.9 percent to a seasonally adjusted annual rate of 667,000 units from 561,000 in August, the highest sales rate since October 2007, a couple of months before the recession started, the Department of Commerce reported on Wednesday.
“New home sales have bounced back from a few soft months and have returned to the strong growth trend we saw earlier this year,” said Robert Dietz, chief economist for the National Association of Home Builders (NAHB).
“As existing home inventory remains tight, we can expect new homes sales to continue to make gains in the months ahead,” Dietz said. http://bit.ly/2izgSAO.
From The Hill’s opinion pages:
The House needs to pass the Senate’s budget and move to tax reform, Jenny Beth Martin, president of Tea Party Patriots
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