Coming soon: The tax plan

COMING SOON: THE TAX PLAN — Mark your calendars. House Republicans are preparing to release details of their long-awaited tax reform framework on Sept. 25. The stakes couldn’t be higher after months of slow progress, unrealistic deadlines and the failure of the GOP to advance its other big agenda items.

The path forward is still murky. According to reporting by POLITICO’S Colin Wilhelm and Aaron Lorenzo, “consensus on major top-line goals remains elusive, as does a budget that will serve as a vehicle to move tax reform.”


If Republicans produce a plan in the next two weeks, the announcement will “set the stage for a series of tough votes pitting industries, geographic regions and Republican Party factions against one another,” the Wall Street Journal’s Richard Rubin writes.

ADDING TO THE CONFUSION — President Donald Trump broke with Republicans yesterday when he suggested that the wealthy “will not be gaining at all with this plan” and could even see their taxes go up.

According to POLITICO’s Rachael Bade and Burgess Everett, Trump’s willingness to entertain Democrats on tax reform is making some Republicans uneasy and “could upend the party-line strategy that White House and GOP leaders have been pursuing for months.” Read more.

MNUCHIN SOUGHT AIR FORCE PLANE FOR HONEYMOON — ABC News has the latest twist in Treasury Secretary Steven Mnuchin's transition from financier to public servant: He requested use of a government jet for his honeymoon to Scotland, France and Italy this summer.

ABC reports: "Officials familiar with the matter say the highly unusual ask for a U.S. Air Force jet, which according to an Air Force spokesman could cost roughly $25,000 per hour to operate, was put in writing by the secretary's office but eventually deemed unnecessary after further consideration … by Treasury Department officials."

TREASURY'S RESPONSE — “The Secretary is a member of the National Security Council and has responsibility for the Office of Terrorism and Financial Intelligence. We have multiple issues around the world where the Secretary is directly involved in national security, notably North Korea, Iran, and Venezuela, among others. It is imperative that he have access to secure communications … Treasury withdrew its request after a secure communications option was identified during the Secretary's extended travel.”

Mnuchin will be interviewed by Ben White at about 4 p.m. today at the POLITICO Pro Policy Summit in Washington. Check out the full agenda here.

SHELBY AIDE IN LINE FOR BIG PROMOTION — Bloomberg's Robert Schmidt and Benjamin Bain: "William Duhnke, a veteran staff member for former Senate Banking Committee Chairman Richard Shelby, is on track to be selected to become chairman of the Public Company Accounting Oversight Board, according to four people familiar with the matter. …

"The job is seen as one of the most attractive regulatory roles in Washington because it pays more than $670,000 per year — well above the president’s $400,000 salary. The selection of Duhnke, whose name has been circulating as a possible pick for more than a year, would likely be controversial among investor advocates concerned that he would promote a pro-business agenda." Read more.

PRO-CFPB GROUP WIELDS EQUIFAX TO DERAIL GOP — A progressive advocacy group will invoke the Equifax data breach in ads designed to pressure GOP senators to protect a rule that prohibits banks and credit card companies from forcing their customers into arbitration during disputes. Allied Progress will run the television and digital ads defending the CFPB rule in Alaska, Maine and Ohio.

The ads will call out "big corporations like Equifax" that tried to "sneak" arbitration clauses past consumers. The Alaska version includes a clip of Sen. Lisa Murkowski and narration that goes, "when it comes to the fine print, she may have the final say."

ICYMI — Zach reported on how the Equifax breach is threatening the finance industry's push for deregulation. Read the story here.

GOOD THURSDAY MORNING — Thanks for indulging a fill-in host while Ben helps out with our POLITICO Pro Summit. Keep sending tips to [email protected] and [email protected]. And please stay in touch with @zachary.

THIS MORNING ON POLITICO PRO FINANCIAL SERVICES – Patrick Temple-West on SEC Chairman Jay Clayton’s statement that companies are facing “systemic” risks from cyberattacks. To get Morning Money every day before 6 a.m., please contact Pro Services at (703) 341-4600 or [email protected].

DRIVING THE DAY — POLITICO Pro Summit in Washington featuring Mnuchin, Commerce Secretary Wilbur Ross and House Ways and Means Chairman Kevin Brady … Senate Finance holds a hearing on individual tax reform at 10 a.m. … Senate Banking holds a hearing on CFIUS at 10 a.m.

PEOPLE MOVES — Carol Danko, VP of Public Affairs at the Securities Industry and Financial Markets Association is joining the Overseas Private Investment Corp. as managing director of communications … Mary Kertz Jones, assistant vice president of federal government relations at MassMutual, is leaving to pursue her MBA

THE NEXT DEBT FIGHT — FEMA now estimates that Hurricane Harvey alone will cost the National Flood Insurance Program $11 billion, a sum that would burn through the financial resources it has at its disposal and breach its $30 billion borrowing limit with the Treasury. Lawmakers are already angling to advance reforms as part of raising the debt cap, and some are questioning the program's increasingly expensive borrowing arrangement.

"Sure, you borrow money, you gotta pay it back," Rep. Tom MacArthur, a New Jersey Republican, told M.M. "But do we have to charge interest to ourselves?" Read more.

DEMOCRATS, RNC SEEK NEW LIFE FOR FANNIE, FREDDIE — POLITICO's Lorraine Woellert: "Senate Democrats urged Treasury and the Federal Housing Finance Agency to allow Fannie Mae and Freddie Mac to build cash to prevent another taxpayer bailout of the mortgage giants.

"The Democratic appeal came on the heels of a policy shift by the Republican National Committee, which last month adopted a resolution calling for recapitalization of the companies, which have long been vilified by free-market and fiscal conservatives.

"Combined, the positions could signal a shift in thinking on the companies, which are in limbo after receiving a $187 billion government bailout during the housing collapse." Read more.

TRUMP BLOCKS CHINESE TAKEOVER — POLITICO's Megan Cassella: "Trump has blocked a Chinese venture capital fund from purchasing a U.S.-based semiconductor company because of national security concerns, the White House announced Wednesday.

"The president’s order prohibits the acquisition of Lattice Semiconductor Corporation by China Venture Capital Fund Corporation Limited, known as CVCF, which manages industrial investments and venture capital. …

"White House officials said there were concerns about the potential transfer of intellectual property to CVCF, Beijing’s role in supporting the transaction and the importance of the semiconductor supply chain and Lattice products in particular by the U.S. government." Read more.

SCORE ONE FOR THE CREDIT UNIONS — Via a release from the National Association of Federally-Insured Credit Unions: "The credit union industry scored a big win this afternoon as the House passed an amendment sought by [NAFCU] to keep the [National Credit Union Association] out of the appropriations process. … The amendment, offered by Reps. Mark Amodei, R-Nev., and Pete Aguilar, D-Calif. … will maintain the integrity of NCUA as an independent regulator of the credit union industry."

HILLARY CLINTON'S HAIR BRINGS SHKRELI TO JUSTICE — NYT's Stephanie Clifford: "Martin Shkreli, the former pharmaceutical executive who is awaiting sentencing for a fraud conviction, was sent to jail on Wednesday after a federal judge revoked his bail because he had offered $5,000 for a strand of Hillary Clinton’s hair. …

"Mr. Shkreli’s online offer last week prompted prosecutors to request that his bail be revoked — and the Secret Service to investigate. 'On HRC’s book tour, try to grab a hair from her,' he wrote, referring to Mrs. Clinton. 'Will pay $5,000 per hair obtained from Hillary Clinton.'" Read more.

MORE BITCOIN BASHING FROM JPMORGAN — Bloomberg’s Luke Kawa: “Well, it ain’t Jamie Dimon, but there’s another heavy hitter at JPMorgan Chase & Co. who isn’t a fan of cryptocurrencies.

"Global Head of Quantitative and Derivatives Strategy Marko Kolanovic (also known as "’Gandalf and ‘Half-Man, Half-God’) echoed many of his boss’ warnings about digital currencies in an assessment of the asset class on Wednesday. …

“’Cryptocurrencies cannot be reliably valued and they have significant ‘tail risk’ that could come in the form of a regulatory ban, writes Kolanovic. ‘Moreover, the whole cryptocurrency market exhibits some parallels to fraudulent pyramid schemes.’” Read more.

THERE’S NEVER BEEN A HOTTER TIME TO FREEZE YOUR CREDIT — WSJ’s AnnaMaria Andriotis, Daisy Maxey and Telis Demos: “Until the Equifax Inc. hack, many consumers didn’t know what a credit freeze was. Now, the credit-reporting company’s massive data breach has people reaching for the tool, a move that could have a host of implications for both consumers and the financial industry. …

“Equifax peers TransUnion and Experian PLC said the number of credit-report freezes being requested by consumers increased significantly in the days after the Equifax news last week. Tens of thousands of U.S. consumers initiated credit freezes on Friday and Saturday alone, said Alex Lintner, president of consumer information services at Experian.” Read more.

PAULSON, BOWLES TO CO-CHAIR NEW ECONOMIC POLICY GROUP — WSJ’s Nick Timiraos: “Former Treasury Secretary Hank Paulson and former White House chief of staff Erskine Bowles will co-chair a new economic policy group at the Aspen Institute designed to shape policy making that addresses problems such as low productivity, stagnant growth and income disparity.

“The bipartisan group of 62 invitation-only members won’t focus on front-burner legislative debates such as how to write a tax-code overhaul but rather will focus on broader issues reshaping the economy, such as the changing nature of the employer-employee relationship and the impact of automation and artificial intelligence, Mr. Paulson said.” Read more.

WALL STREET TITANS WARY — FT’s Robin Wigglesworth and Nicole Bullock: “Fund managers are hoarding cash and buying protection against turbulence despite the S&P 500 rally this week becoming the second-strongest bull run in US history, as some investors fear that markets’ buoyancy and calm will be punctured.

“Global equity and fixed-income markets have been on a tear in 2017, returning more than 13 percent and 8 percent respectively despite simmering worries about geopolitical tensions, economic growth and the withdrawal of central bank stimulus. But valuations across bonds and equities are at or near historical highs, and the lack of serious volatility this year has spurred fears that a reversal is overdue.” Read more.

VENEZUELA SUSPENDS DOLLAR AUCTIONS, BLAMES U.S. SANCTIONS — Reuters: “Venezuela on Wednesday temporarily suspended the sale of U.S. dollars through its Dicom auction system, following an announcement last week that it was moving away from the greenback in response to U.S. sanctions.

“The United States in August prohibited dealings in new debt from Venezuela and state oil company PDVSA in response to the creation of a new legislative superbody that critics call the consolidation of a dictatorship. President Nicolas Maduro last week said the crisis-stricken OPEC country would create a basket of currencies to ‘free’ Venezuela from the dollar, using the Dicom auction system.” Read more.

GOLDMAN FACES FIGHT IN FINDING NEW TRADING CLIENTS — WSJ’s Aaron Back: “Goldman Sachs has a plan to get its trading mojo back. The only thing standing in its way is literally every other bank on Wall Street.

“Goldman outlined in some detail on Tuesday how it plans to boost revenue by $5 billion across various segments over the next three years. The focus was on fixed income, currency and commodities trading, which posted disappointing performance over the last two quarters. Harvey Schwartz, the firm’s co-chief operating officer, said Goldman could boost revenue in this business by around $1 billion over the period. …

“The problem is that rivals like J.P. Morgan Chase , Citigroup and Bank of America are hardly eager to give this business up.” Read more.

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