Overnight Finance: Shutdown looms | Paul holds up Senate vote | House GOP scrambles for budget votes | What's in the deal | Dow falls 1,000 points for second time this week | Conservatives threaten Fed nominee | Trump announces IRS pick

Overnight Finance: Shutdown looms | Paul holds up Senate vote | House GOP scrambles for budget votes | What's in the deal | Dow falls 1,000 points for second time this week | Conservatives threaten Fed nominee | Trump announces IRS pick
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Paul holding up Senate budget vote: Sen. Rand PaulRandal (Rand) Howard PaulGraham promises ObamaCare repeal if Trump, Republicans win in 2020 Conservatives buck Trump over worries of 'socialist' drug pricing Rand Paul to 'limit' August activities due to health MORE (R-Ky.) is delaying a Senate vote on a funding bill to prevent a government shutdown, throwing Congress's timeline into limbo.

The House and Senate needs to pass the two-year budget deal, which includes a stopgap funding bill, by midnight Thursday in order to prevent the second shutdown in less than a month.

Paul is demanding 15 minutes of debate and a vote on an amendment to keep budget ceilings in place. 

If he doesn't get it, he signaling that he's willing to delay a procedural vote until early Friday morning.  


"If they want to stay up until 3 in the morning, I'm happy to do it," he said on Fox News late Thursday afternoon.

Under Senate rules, the earliest the chamber can take its first vote on the agreement is 1 a.m. Friday, after the deadline, unless every senator agrees to move it up.

The House won't hold a vote on the measure until it is approved by the Senate. 

Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellPelosi, Schumer press for gun screenings as Trump inches away The malware election: Returning to paper ballots only way to prevent hacking First House Republican backs bill banning assault weapons MORE (R-Ky.) tried to set up a procedural vote on the budget bill for 6 p.m., but Paul objected.

"My friend and colleague from Kentucky does not join the president in supporting the bill ... But I would argue that it's time to vote," the GOP leader said. 

Senate Minority Leader Charles SchumerCharles (Chuck) Ellis SchumerJohnson eyes Irish border in Brexit negotiations Lewandowski on potential NH Senate run: If I run, 'I'm going to win' Appropriators warn White House against clawing back foreign aid MORE (D-N.Y.) also pleaded with Paul to agree to let the vote be moved up, noting he could make the budget point of order and get a vote. 

"Frankly, there are lots of amendments on my side, and it's hard to make an argument that if one gets an amendment, that everybody else won't want an amendment, and then we'll be here for a very long time," Schumer said. 

He added that with a shutdown looming, he added that: "We're in risky territory here."



Meanwhile, over in the House... GOP leaders are scrambling for votes: House GOP leaders pleaded at a press conference Thursday for their members to back a sweeping budget deal that has come under fire from conservatives, as leadership races to lock down enough votes to avoid a government shutdown by Thursday's midnight deadline.

Rep. Martha McSallyMartha Elizabeth McSallyThe Hill's Morning Report - Trump searches for backstops amid recession worries Arizona poll shows Kelly overtaking McSally Fighter pilot vs. astronaut match-up in Arizona could determine control of Senate MORE (R), the Arizona combat veteran running for the Senate, urged the conference to back the bill for its boost in military spending. Rep. Liz CheneyElizabeth (Liz) Lynn CheneyDick Cheney to attend fundraiser supporting Trump reelection: report Steve King says 'left-wing media' and GOP leadership owe him apology after rape, incest comments GOP memo deflects some gun questions to 'violence from the left' MORE (R-Wyo.) called on the conservative House Freedom Caucus, whose members have criticized the budget for adding to the deficit, to stay on the GOP team and support the bipartisan package.

"We need to stay unified, we need to get this budget passed," Cheney said. "We cannot be in a situation where we are letting our political debates, our political fights, our arguments, get in the way of getting [the military] the resources they need in this increasingly dangerous world to protect and defend every one of us."

Speaker Paul RyanPaul Davis RyanPaul Ryan moving family to Washington Embattled Juul seeks allies in Washington Ex-Parkland students criticize Kellyanne Conway MORE (R-Wis.), who needs to reach across the aisle for some Democratic votes, also reiterated his pledge to address immigration, saying "do not" doubt his commitment to fixing the Obama-era Deferred Action for Childhood Arrivals (DACA) program that President TrumpDonald John TrumpFacebook releases audit on conservative bias claims Harry Reid: 'Decriminalizing border crossings is not something that should be at the top of the list' Recessions happen when presidents overlook key problems MORE is ending in March: http://bit.ly/2ErzQ5r.

The conservative House Freedom Caucus is opposing the deal. Earlier in the day, Speaker Paul Ryan had expressed confidence he had the votes. The Hill's Melanie Zanona with the recap: http://bit.ly/2ET1WUU


But Ryan will need to rely on Democratic votes to reach the finish line... House Minority Leader Nancy PelosiNancy PelosiJohnson eyes Irish border in Brexit negotiations Mueller report fades from political conversation Five key players in Trump's trade battles MORE says she is opposed to the bill but won't urge Democratic members to vote no.


Pelosi will not whip Democrats against budget vote: House Minority Leader Nancy Pelosi (D-Calif.) on Thursday reiterated her opposition to a sweeping two-year budget deal expected to hit the floor later in the day, but said she won't be pushing rank-and-file Democrats to join her in voting against it.

"I'm just telling people why I'm voting the way I'm voting," she told reporters in the Capitol, just hours before federal funding expires.

The decision not to whip against the package is sure to infuriate some immigrant rights advocates, including those in her own caucus.

Critics have accused Pelosi and other Democratic leaders of failing to maximize their leverage in recent budget fights for the sake of securing legal protections for the "Dreamers," young immigrants brought to the country illegally as kids: http://bit.ly/2BMzO7A.


What you need to know about the Senate budget deal: Senate leaders have agreed to the biggest budget deal of Donald Trump's presidency, ending a months-long partisan standoff that briefly shuttered the federal government in January.

Here's what's in the deal, from The Hill's Alexander Bolton: 

Spending cap increases... The measure raises the cap on defense discretionary spending by $80 billion in fiscal year 2018 and $85 billion in fiscal year 2019.

Disaster relief... The bill provides nearly $90 billion in emergency funding for disaster relief in Puerto Rico, Florida and Texas, among other areas.

A debt ceiling hike... The measure suspends the debt ceiling until March 1, 2019, sidestepping a fight with House conservatives who have demanded attaching spending reforms to any expansion of federal borrowing authority.

Money to fight opioid addiction... The agreement allocates $6 billion over two years to fight opioid addiction.

Infrastructure spending... The bill provides $20 billion in new infrastructure investment, reflecting demands from Republicans who wanted a portion of the nondefense spending hikes to go to infrastructure.

Details on each and more here: http://bit.ly/2ErLkWD.


Happy Thursday 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.

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.

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


More on the Budget deal's special tax breaks: The Bipartisan Budget Act that Congress is set to pass Thursday is brimming with tax provisions for a variety of special interests, including racehorse owners, small private colleges and television and film companies.

At least two of the tax breaks help the constituents of Senate Majority Leader Mitch McConnell (R-Ky.), who negotiated the deal with Democratic Leader Charles Schumer (N.Y.). 

Altogether, the special tax provisions amount to $17.4 billion over the next four years, with most of the costs incurred -- $13.3 billion -- in fiscal year 2018, according to an analysis released by the Joint Committee on Taxation (JCT).

One provision limits the excise tax on investment income at private colleges and universities to schools with at least 500 tuition-paying students, shielding smaller institutions and costing the government an estimated $2 million a year in revenue over the next decade.

It's a win for small schools such as Berea College, which is based in Kentucky: http://bit.ly/2nMhNxd.


Budget deal renews expired tax breaks: The budget deal that is coming up for a vote on Thursday includes the one-year, retroactive renewal of a host of expired tax breaks.

About 30 tax breaks that expired at the end of 2016 were renewed for 2017, allowing taxpayers to claim them on the 2017 returns they file this year. 

Senate Republicans had pushed for the renewal in 2018 of the tax breaks, known as "extenders." But conservative groups had urged lawmakers against including the extenders in a spending bill, arguing that doing so would have undercut the new tax law.

The tax preferences include those relating to renewable energy, motorsports and race horses.

Rep. Vern BuchananVernon Gale BuchananMORE (R-Fla.), chairman of the House Ways and Means Tax Policy Subcommittee, said that the panel intends to hold hearings on the extenders this year: http://bit.ly/2nMfXfY.


Corker a no on budget deal: Sen. Bob CorkerRobert (Bob) Phillips CorkerTrump announces, endorses ambassador to Japan's Tennessee Senate bid Meet the key Senate player in GOP fight over Saudi Arabia Trump says he's 'very happy' some GOP senators have 'gone on to greener pastures' MORE (R-Tenn.) said on Thursday that he will oppose the bipartisan two-year budget deal, citing concerns about the deficit.

"To say I am discouraged by the outcome of these negotiations would be an understatement," he said.

Corker, a fiscal hawk, added that the agreement "perpetuates the abuse" of a war account not subjected to the budget restrictions and "tees up" another spending fight in two years. 
Last year, Corker, who is retiring after 2018, threatened to oppose the GOP tax plan over similar concerns about the deficit before ultimately voting for the final bill: http://bit.ly/2nOp5ka.


More on the budget deal:

The two-year budget deal reached by congressional leaders would set up the biggest sale in history from the nation's emergency oil stockpile, reports The Hill's Timothy Cama: http://bit.ly/2ESjil0

Drug pricing advocates are decrying the budget deal for leaving out a bipartisan drug pricing measure that they had pushed for. The Hill's Peter Sullivan has the story: http://bit.ly/2GZRiMU

And read the bipartisan budget bill - all 652 pages - here: http://bit.ly/2nTGU0E


Meanwhile on Wall Street...


Dow closes more than 1,000 points down for second time this week: The Dow Jones industrial average closed 1,033 points lower on Thursday, the second day of the week it has experienced a four-digit loss.

The Dow fell 4.1 percent, closing at 23,860. The Nasdaq lost 274 points on the day (3.9 percent), while the S&P 500 closed with a 100-point loss (3.75 percent).

Thursday's close is the second time in history the Dow has lost more than 1,000 points in one day. It fell 1,175 points on Monday. 

Overall, the Dow has lost more than 2,000 points since Jan. 26, erasing 2018's early stock gains and cutting into the massive increase the index experienced during President Trump's first year in office.

Investors fear that low unemployment, increasing U.S. growth and rising wages will spur the Federal Reserve to raise interest rates, which would boost the cost of borrowing money: http://bit.ly/2EqUiDH.


Thursday's drop means that U.S. stocks entered a formal correction, as two weeks of steep losses have cost two major index at least 10 percent of their value.

The Dow Jones industrial average and S&P 500, which tracks financial stocks, have sunk 10 and 12 percent since Jan. 26, when the indexes reached record highs of 26,616 and 2,872, respectively.

The Dow has lost 2,756 points since then while the S&P has shed 291 points. The Nasdaq has lost 9.7 percent of its value in the same span, falling short of the 10 percent threshold that defines a stock correction.

For more on Wall Street's worries, click here: http://bit.ly/2Eeqp6b


Senate panel clears three Trump financial regulatory nominees: The Senate Financial Services Committee on Thursday approved three of President Trump's major financial regulatory nominations.

The panel voted to recommend Jelena McWilliams to be chair of the Federal Deposit Insurance Corporation, Marvin Goodfriend to be a governor on the Federal Reserve Board and Thomas Workman to be the Financial Stability Oversight Council member with insurance industry experience.

All three will play critical roles in the Trump administration's efforts to rollback the Dodd-Frank financial reform law: http://bit.ly/2EqWRpj.


But Goodfriend's nomination quickly ran into trouble after the vote...


Senate conservatives threaten Trump's controversial Fed pick: Key Senate conservatives could derail President Trump's choice to fill a spot on the Federal Reserve Board, threatening to derail the nomination that has a small margin for GOP opposition.

Sen. Rand Paul (R-Ky.) told reporters Thursday that he would vote against Marvin Goodfriend's nomination to be a Fed governor, according to multiple reports, citing the economist's unconventional monetary policy proposals.

And a spokesman for Sen. Mike LeeMichael (Mike) Shumway LeeMcConnell, allies lean into Twitter, media 'war' Conservatives buck Trump over worries of 'socialist' drug pricing Criminal justice reform should extend to student financial aid MORE (R-Utah) told The Hill that the conservative senator was "undecided" on Goodfriend's nomination.

Paul's opposition means Goodfriend must receive unanimous support from the 50 other Senate Republicans to be confirmed, including Sen. John McCainJohn Sidney McCainMcCain's family, McCain Institute to promote #ActsOfCivility in marking first anniversary of senator's death Arizona poll shows Kelly overtaking McSally 3 real problems Republicans need to address to win in 2020 MORE, who has missed Senate votes while he recovers from treatment for brain cancer at home in Arizona.

No Democrats are expected to vote for Goodfriend, meaning that should Goodfriend receive 50 votes, Vice President Pence would have to break the tie to confirm the nominee: http://bit.ly/2EwAvmt.


Trump announces nominee to lead the IRS: President Trump is nominating California tax lawyer Charles Rettig to be commissioner of the IRS, the White House said Thursday.

The nomination comes as the IRS works to implement the new tax-cut bill that Trump signed in December.

Rettig has experience representing clients before the IRS and the Justice Department's tax division. He also served as chairman of the IRS Advisory Council, has served on advisory boards in California and serves as vice chairman of the administration of the American Bar Association's taxation section.

Rettig's background as a tax lawyer is different from that of many of the more recent IRS commissioners, who came from management backgrounds.

He is being nominated to serve the remainder of the five-year term that started Nov. 12: http://bit.ly/2nOWnzC.


Jobless claims holding steady near 45-year low: Jobless claims fell unexpectedly last week, with the monthly average posting a 45-year low, another sign of the labor market's steady tightening.

The number of workers filing for unemployment benefits dropped 9,000 to a seasonally adjusted 221,000 for the week ended Feb. 3, the Labor Department said on Thursday.

The monthly average, which is a less volatile measure of where the labor market is heading, dropped 10,000, to 224,500, the lowest level since March 1973, when it was 222,000.

Claims have remained below 300,000, which signals a healthy labor market, for 153 weeks.

The continued low level of jobless claims reflects how employers are holding onto their workers.

Unemployment, which at 4.1 percent is a 17-year low, is expected to drop into the mid-3 percent range this year.

In January, employers added a robust 200,000 jobs and wages finally rose for workers, which raised inflation fears across the stock markets: http://bit.ly/2nOjtql.


Senators demand answers from CFPB on Equifax probe:  More than 30 senators are asking the Consumer Financial Protection Bureau (CFPB) for details about their investigation into last year's massive Equifax data breach following reports the agency has been dragging its feet on the probe.

The group, led by Sen. Brian SchatzBrian Emanuel Schatz'Medicare for All' complicates Democrats' pitch to retake Senate Criminal justice reform should extend to student financial aid Booker, Durbin and Leahy introduce bill to ban death penalty MORE (D-Hawaii), sent a letter to the CFPB, dated Feb. 7, which cites a Reuters report that Acting Director Mick MulvaneyJohn (Mick) Michael MulvaneyDick Cheney to attend fundraiser supporting Trump reelection: report Chris Wallace becomes Trump era's 'equal opportunity inquisitor' Appropriators warn White House against clawing back foreign aid MORE has not approved a number of preliminary steps in the investigation.

"The CFPB has a statutory mandate to participate in this process by conducting an investigation," the senators wrote. "If that investigation exposes wrongdoing or consumer harm, the CFPB has the authority, and indeed a duty, to bring appropriate enforcement actions."

The CFPB said it received the letter but declined to comment on it. A spokesperson pointed to a statement put out earlier this week by Mulvaney's senior advisor John Czwartacki: http://bit.ly/2nN5j8I.


Crypto boom sends Washington scrambling: Federal officials in Washington are scrambling to get a handle on the sudden boom in cryptocurrencies as questions swirl about their place in the financial system.

The two top U.S. federal agencies for regulating cryptocurrencies both say they want tighter oversight of the currencies, which have exploded in popularity and are increasingly used as an investment vehicle.

The heads of both the Securities and Exchange Commission (SEC) and Commodity Futures Trade Commission (CFTC) testified this week that they would like to work with each other, the Federal Reserve and state regulators on a "coordinated" strategy for bringing stability to the lightly regulated cryptocurrency market.

Their effort comes amid a larger push for increased regulation by both the U.S. government and governments around the world.

The sense of urgency has been heightened by wild swings in the value of cryptocurrencies over the past year.

"We should all come together, the federal banking regulators, the CFTC and SEC -- there are states involved as well -- and have a coordinated plan for dealing with the virtual currency trading market," Jay Clayton, chairman of the SEC, told the Senate Banking Committee on Tuesday.

The Hill's Ali Breland on what that means: http://bit.ly/2GZIVB6


CVS boosts hourly pay to $11 after tax cut: CVS Health announced Thursday it would boost starting wages for employees and increase other benefits, citing tax-reform legislation that gave the company a $1.5 billion tax break.

Effective April 2018, the starting wage for hourly employees will increase to $11 an hour from $9 an hour.

Pay ranges and rates for other employees, including front-of-store associates and retail pharmacy technicians, will also be adjusted later in the year, the company said.

Additionally, CVS Health will not increase premiums for the 100,000 employees participating in the company-sponsored health plan for the 2018-2019 plan year.

Jessie Hellmann has the story: http://bit.ly/2nUTYTs


Dem bill would block funds for Trump's military parade: Two Democratic lawmakers are introducing legislation in the House and Senate that would block federal funds from being used to pay for President Trump's reported plan to hold a military parade.

Sen. Ben CardinBenjamin (Ben) Louis CardinAmerica is in desperate need of infrastructure investment: Senate highway bill a step in the right direction Financial aid fraud is wrong — but overcorrection could hurt more students Democrats denounce Trump's attack on Cummings: 'These are not the words of a patriot' MORE (D-Md.) and Rep. Marc VeaseyMarc Allison VeaseyLawmakers clash after Dem reads letter on House floor calling Trump supporters 'racist,' 'dumb' Democrats face voters clamoring for impeachment Current, former lawmakers celebrate release of new book on Jack Brooks, 'The Meanest Man in Congress' MORE (D-Texas) introduced bills in their respective chambers that would bar the Trump administration from using taxpayer money to fund such a parade, which could come with a multimillion dollar price tag.

In a letter to Senate colleagues, Cardin called on lawmakers to throw their support behind his measure.

"We have the best armed forces in the world. We don't need to flex our muscles to showcase our military hardware," Cardin wrote. "Our brave military men and women flex their might around the world every day on behalf of our nation."

Trump has long floated the idea of holding a grand display of the nation's military might.

But his musings took on a more concrete form last month when he directed Pentagon officials to begin exploring the possibility of a military parade, The Washington Post reported. The Pentagon later confirmed that officials were looking into the idea.

Max Greenwood has more: http://bit.ly/2ETrMsc