Banking & Finance

JCT: Low-Income Households Worse Off Under New Senate Tax Plan
Families will be “clobbered,” Wyden says

The Senate Finance Committee is debating a revised GOP tax plan that would raise taxes on lower-income households, according to the JCT. Pictured here, ranking member Ron Wyden, left, and Chairman Orrin G. Hatch at a Wednesday markup. (Bill Clark/CQ Roll Call)

An updated Senate plan to overhaul the U.S. tax code could dramatically raise taxes on households earning between $10,000 to $30,000 starting in 2021, according to new findings released Thursday by the Joint Committee on Taxation.

The analysis incorporates the effect of changes released by Senate Republicans late Tuesday in a chairman’s mark, including repeal of the individual mandate penalty for failure to purchase health insurance coverage, bigger tax rate cuts and child tax credits, and sunsetting provisions affecting individuals and families after 2025.

‘Pass-Through’ Changes Dog Senate GOP Tax Overhaul
Republican Ron Johson says plan not generous enough to pass-throughs

From left, Michigan Sen. Debbie Stabenow, Senate Finance ranking member Ron Wyden, Senate Finance Chairman Orrin G. Hatch and Iowa Sen. Charles E. Grassley participate in the committee markup of the Senate GOP’s tax bill Wednesday. (Bill Clark/CQ Roll Call)

Trouble signs emerged Wednesday for the Republican tax overhaul effort, even as the Senate Finance Committee crept closer — slowly, and sometimes painfully — toward approving its bill later this week.

The top tax writers on each side forecast long hours still ahead. “Tomorrow, we are going to be here a while,” Sen. Ron Wyden, the Finance panel’s ranking member, said Wednesday.

Analysis: New Senate Tax Bill Solves Some Issues, Raises Others
‘This is largely a partisan exercise,’ McConnell tells CEOs

If there were any doubts that Republicans were bent on advancing the tax bill with only GOP support, those were squashed on Tuesday by Senate Majority Leader Mitch McConnell, seen here with Senate Finance Committee Chairman John Cornyn. (Bill Clark/CQ Roll Call)

The latest version of the Senate bill to overhaul the U.S. tax code solves some problems for Republican leadership, but potentially creates a host of others.

The updated chairman’s mark would direct more tax relief to lower- and middle-class Americans through several new provisions, including a proposed reduction in the tax rates for the current seven income brackets. But those cuts would now be temporary and expire in 2026. At the same time, the proposal would make the reduction in the corporate tax rate from 35 percent to 20 percent permanent.

Freedom Caucus Chairman Predicts Tax Bill Will Pass
But Rep. Mark Meadows says members expect more changes in conference

Freedom Caucus Chairman Mark Meadows says caucus members still have more changes they’d like to see in the final GOP tax overhaul. (Tom Williams/CQ Roll Call file photo)

House Freedom Caucus Chairman Mark Meadows on Monday predicted the Republican tax bill will pass the House this week, saying several members of his caucus appear willing to support the bill to keep the process moving.

“I think most of our members are a ‘Lean yes,’ some are undecided,” the North Carolina Republican said. “But all of that is with the caveat that there is still much work that needs to be done before there’s support for a final bill. So if this bill were to come up for a final vote on the floor, there wouldn’t be as many yeses as there are right now.”

Trump Picks Jerome Powell to Head Federal Reserve
President praises nominee as a “consensus builder”

Jerome Powell, who was nominated by President Donald Trump for chairman of the Federal Reserve, looks on as Trump speaks at the White House Rose Garden on Thursday. (Drew Angerer/Getty Images)

President Donald Trump announced Thursday he has selected Jerome H. Powell to be the next chairman of the Federal Reserve. Powell, a longtime Republican, has been a member of the Fed’s board of governors for five years.

“I hope the Senate will swiftly confirm him once again,” Trump said in an announcement Thursday at the White House Rose Garden. He also called the nominee a “consensus builder,” who understands what it will take to grow the economy.

Garrett Does a 180 on Ex-Im Bank
Trump nominee will reverse course on bank, according to prepared remarks

Former New Jersey Rep. Scott Garrett faces a confirmation hearing Wednesday on his nomination to lead the Export-Import Bank. (Bill Clark/CQ Roll Call file photo)

President Donald Trump’s nominee to lead the Export-Import Bank is preparing to make a full reversal of his past opposition to the agency’s continued operation.

Former Rep. Scott Garrett plans to tell senators that he not only opposes winding down the Ex-Im Bank, but that he wants it fully operational going forward under his potential stewardship.

Warren Dared Pence to Protect Arbitration Rule Before Senators Killed It
Vice president needed to cast a late-night vote to break the tie

Massachusetts Sen. Elizabeth Warren focused her attention on President Donald Trump and Vice President Mike Pence in a speech before the vote on killing the CFPB rule. (Bill Clark/CQ Roll Call)

Just before Vice President Mike Pence arrived to cast the tie-breaking vote to upend a banking rule limiting arbitration clauses, Sen. Elizabeth Warren dared him to vote against the wishes of Senate Republicans.

“Everyone assumes that Mike Pence will side with the big banks, and I have just one simple question: Why? President Trump, Mike Pence works for you. His job is to cast his vote the way that you tell him to cast it,” the Massachusetts Democrat said. “You’ve gone on and on and on about how strong you are, how tough you are, and how you are going to stand up to Wall Street. Well, this bill is a giant wet kiss to Wall Street.”

Garrett’s Jabs at Export-Import Bank May Stop His Bid to Lead It
The former N.J. congressman once voted against reauthorizing the bank

Former New Jersey Rep. Scott Garrett, center — shown here at a 2015 House Financial Services hearing — has been nominated to head the Export-Import Bank, an organization he once said “embodies the corruption of the free enterprise system.” (Chip Somodevilla/Getty Images)

Former New Jersey Rep. Scott Garrett faces an unusual combination of Democrats and business groups opposing his nomination to lead the Export-Import Bank as the Senate hearing on his confirmation approaches.

Garrett, who lost his bid for re-election in 2016, is part of the wing of the Republican Party that sees the Ex-Im Bank’s loan, insurance and guarantee programs as corporate welfare that mainly benefits large companies. He was a founding member of the hard-line conservative House Freedom Caucus. 

Ex-Equifax CEO Gets Trolled at Senate Banking Hearing
Monopoly character in top hat and mustache sat behind Richard Smith on second day of hearings

A protester dressed as Monopoly character Rich Uncle Pennybags sat behind former Equifax CEO Richard Smith. (banking.senate.gov)

The Monopoly logo character known as Rich Uncle Pennybags attended a hearing Wednesday to sit behind Richard Smith, the former chairman and chief executive officer of Equifax.

A protester with the advocacy organization Public Citizen trolled Smith while dressed in a fake mustache and top hat.

Regulator Warns Capital Buffers Shrinking at Fannie, Freddie
Lack of capital most serious risk

Melvin Watt (Chris Maddaloni/CQ-Roll Call File Photo)

Federal Housing Finance Agency Director Melvin L. Watt warned that Fannie Mae and Freddie Mac are in danger of losing the capital buffers that enable the two government-sponsored enterprises to absorb financial losses, a development that could put a chokehold on the mortgage market and lead to another taxpayer-funded bailout.

The GSEs will see their capital cushions reduced to zero on Jan. 1, 2018, Watt said in testimony before the House Financial Services Committee Tuesday.