A national community development group warned on Tuesday that dismantling a $29 billion mortgage modification program would put the U.S. economy at the mercy of millions of additional home foreclosures that are expected in the coming few years.

"Can we afford to have another 11 million foreclosures … given the damage we've already seen after 6 million?" John Taylor, president and CEO of the National Community Reinvestment Coalition (NCRC), said in an interview with The Hill. Taylor said he has seen estimates that as many as 3 million home foreclosures may take place in 2011 alone, about double the volume that has crippled the economy since the housing crisis began.

House Speaker Boehner's office is calling Sen. Schumer "Aesop" and claiming he's telling "fairy tales" regarding budget negotiations.

Tea Party Republicans have made it nearly impossible for GOP leadership to strike a deal on the budget, Senate Democratic Caucus Vice Chairman Charles Schumer (D-N.Y.) charged on Tuesday.

"The influence Tea Party elements are currently exercising over the process puts the chance of compromise seriously in doubt," Schumer said on the Senate floor. “They think compromise is a dirty word. They think taking steps towards avoiding a shutdown means being the first to blink.”

Sen. Mike Johanns (R-Neb.) on Tuesday morning warned that the failure of the Senate to pass a clean version of his amendment to repeal controversial IRS reporting language would put Congress at risk of never passing it, and letting it take effect next year to the detriment of US companies.

"Today we have a simple choice," Johanns said on the Senate floor. "We can pass my amendment with strong bipartisan support and demonstrate we have the 60 votes necessary for the House version, or we can pass the second-degree amendment to push this repeal off into limbo, into Never Never Land yet again."

Voting for the second-degree amendment would make it different from the House version, and thus harder to pass. "Eventually we are going to flirt with disaster on this, and it won't get done," Johanns warned.

Senate Majority Leader Harry Reid (D-Nev.) said House Republican leaders and the White House could strike a deal to prevent a government shutdown in the next few days.  


"There are conversations going on with the White House and the Republican leadership in the House and I think this matter, with a little bit of good fortune, could move down the road in the next day or two to get to the point where we can have something done so that there doesn't have to be a government shutdown," Reid said Tuesday morning. Read more...

Senate Minority Leader Mitch McConnell (R-Ky.) on Tuesday urged his colleagues to support an amendment that would prohibit the Environmental Protection Agency (EPA) from regulating the emission of greenhouse gases, just moments after Senate Majority Leader Harry Reid (D-Nev.) indicated that the Senate would vote on the amendment this week.

"At a time when Americans are looking for answers on the economy, this amendment is as good as it gets from Washington," McConnell said. "By voting for it, we'd be saying 'no' to more regulations and red tape, and we'd be saying 'yes' to American job creators and to the jobs they want to create."

Reid said a vote would be held on McConnell's amendment to the small business bill, S. 493, but also said he expects "a couple of other amendments that relate to EPA."

Reid also said he expects a vote on an amendment on Tuesday that would repeal language in last year's healthcare law that requires increased IRS reporting for companies, the so-called "1099 repeal."

The House returns at 2 p.m. Tuesday to consider two bills, with votes expected around 6:30 p.m.

First up is H.R. 1079, a temporary extension of the Federal Aviation Administration (FAA) authorization through May 31. The House is hoping that temporary extension will give Congress time to approve a four-year extension, which the House will take up later this week (H.R. 658).

The House will suspend its rules to pass H.R. 1079, which will require a two-thirds majority of voting members.

Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) expressed satisfaction Monday that the Senate was about to move on its 14th judicial nominee of the year. Last year at this time, the Senate had only managed to make two confirmations.

"It should not take weeks and months for the Senate to consider nominees reported by the Judiciary Committee, in particular those who are consensus nominees," said Leahy.

Sen. Mary Landrieu (D-La.) said on Monday that she hopes the Senate can approve language this week to repeal the controversial IRS reporting language in last year's healthcare bill. But Senate passage might only end up adding to the confusion over how so-called "1099 repeal" will finally happen, as the House and Senate keep passing different versions.

The 1099 language in the healthcare bill requires companies and other entities to report goods and services transactions valued at $600 or more to the IRS, and both parties have said they want to eliminate this requirement. Landrieu said Monday that the 1099 language from Sen. Mike Johanns (R-Neb.) could be approved either as an amendment to a small business bill, S. 493, or as a stand-alone measure.

"There's fairly across the board support on both sides of the aisle for that repeal, and I hope that we can get that done sometime this week as well, either specifically attached to this bill, or parallel to this effort," she said on the Senate floor.