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OVERNIGHT MONEY: Senate expected to reject debt resolution
THURSDAY'S BIG STORY:
Debt bill headed for its final resting place: The Senate will take up and reject a resolution on Thursday that would deny President Obama the ability to raise the federal debt ceiling and borrow another $1.2 trillion. The Treasury Department has been running for weeks on an emergency measure to prevent the United States from exceeding the current $15.194 trillion debt ceiling.
Under the terms of the August debt-ceiling deal, this is the last increase that occurs automatically unless Congress blocks it. The next increase, expected after the November election, will once again require approval of Congress.
The House last week approved the resolution on a nearly party-line 239-176 vote. House GOP freshmen told The Hill they wanted deeper budget cuts from the August deal-ceiling deal and used the vote to express their dissatisfaction with that agreement.
Speaker John Boehner (R-Ohio) was reminded by his members before the vote that he is calling the plays, and argued that the restive caucus needs to present a united front.
Obama wanted to raise the debt ceiling earlier in January but delayed his request to allow Republicans from both chambers the chance to return to Washington, D.C., and cast the symbolic vote against raising the debt ceiling.
WHAT ELSE TO WATCH FOR
Let's chat about the economy: The Senate Budget Committee will hold a hearing on the U.S. economic outlook on Thursday as the budget season approaches. Professor Alan Blinder of Princeton University, Joel Prakken of Macroeconomic Advisers and Ike Brannon of the American Action Forum will are set to discuss what can be done to accelerate the nation's economic recovery.
"We tell them [European counterparts] to keep at it, make sure they deliver and put in place a stronger, more credible firewall so that investors around the world know that, if they invest in Europe today, those investments will be rewarded with the support necessary countries that are making really tough decisions, in Italy and Spain, in Ireland and Portugal, those countries have the support they need for it to work," Geither told Bloomberg in an interview.
Democrat discussions: House Democrats will continue their issues retreat in Maryland on Thursday with a handful of special guests who will talk about jobs and the economy, including former Gov. Edward Rendell (Pa.), Commerce Secretary John Bryson, Steve Case, co-founder and former CEO and chairman of AOL and Small Business Administration Administrator Karen Mills. Also headlining is Brookings Institution political scholar Thomas Mann, who will discuss the importance of reform in reining in special-interest influence.
LOOSE CHANGE
So, this much we know: The Obama administration is scheduled to release more details about its framework for corporate tax reform around the same time the budget comes out next month.
According to an administration aide, the goal of it all is to hammer out a plan with Congress that is consistent with the framework and the ideas laid out in the president’s State of the Union address on Tuesday.
Those ideas include ensuring that U.S. multinationals pay a minimum amount in taxes each year, as part of a push to kick-start American manufacturing and take away incentives to funnel jobs offshore.
But, as the president also noted, companies that keep their operations domestic get hit with a comparatively high tax rate of 35 percent. Treasury Secretary Timothy Geithner suggested on Wednesday that lowering the overall corporate rate and ensuring a minimum rate for multinationals were linked in the administration’s mind.
“Around the world, over the last several years, you've had countries compete in a bit of a race to the bottom, by lowering their tax rates to try to attract investment by other countries,” Geithner told Bloomberg Television. “So for us to compete in this world, we have to really do two things. One is we have to change our tax system so that we're trying to catch up to them a bit, so we're not sitting up there really high against the rest of the world, and create more incentives for investment here, but we also have to change parts of the tax system that now encourage people to build that next plant outside the United States.”
Moonbase Alpha to Earth, come in please: Newt Gingrich doesn't want to shrink the moon like Gru and his nemesis in "Despicable Me" — instead he wants to fly us there. The former House Speaker and GOP presidential candidate told a Florida audience on Wednesday that, if he were president, the United States would have a permanent colony on the moon by the end of his second term.
PRESIDENTIAL SCHEDULE
Roll the dice: President Obama is on day two of his three-day spin around the United States, with expected speeches at UPS in Las Vegas before he heads to Buckley Air Force Base in Aurora, Colo. The trip follows on his State of the Union address on Tuesday, which focused on bolstering the nation's manufacturing sector and creating jobs. The president will end his day with a stop in Detroit.
Vice President Biden is on the road again on Thursday, as well. He'll head to Rochester, N.H., to discuss with workers how the Obama administration is promoting partnerships between community colleges and businesses to train skilled workers.
BREAKING WEDNESDAY
That's a no on the four more years: Treasury Secretary Timothy Geithner said he is "pretty confident" the president would not ask him to stay on if he is reelected. Geithner mulled leaving the administration this summer once a deal to raise the federal debt limit was reached, but was persuaded to stay on by the president.
Keeping it on the down low: The Federal Reserve announced Wednesday that it did not expect to raise interest rates until “late 2014,” as the central bank pushed back its expectations for when the economy would pick up steam.
In its latest statement, the Federal Open Market Committee said economic conditions, including subdued inflation, are likely to warrant “exceptionally low levels” until the tail end of 2014. Previously, the Fed had said it expected low rates to persist through mid-2013.
In for the long haul: The central bank threw cold water on growing hopes that the economic recovery might be gaining momentum, indicating Wednesday that it expects the economy to take longer to get back on its feet. The policy-setting arm of the central bank announced that it was pushing back, by a year and a half, how long it expects the economy to take before interest rates need to be increased from their near-zero levels. The Fed now expects it will keep those bottom-barrel rates until the end of 2014, up from the mid-2013 expectation of last year, as it struggles to “support a stronger economic recovery.”
But Federal Reserve Chairman Ben Bernanke said the economic recovery remained “fragile” and had a long way to go.
Bernanke doesn't take the bait: Bernanke didn't let himself get dragged into the Capitol Hill debate over extending the payroll tax cut.
He told reporters that he preferred not to wade too deeply into the legislative process, after being asked about the economic impact of both not extending the payroll tax cut and not implementing the automatic $1.2 trillion in spending cuts triggered by the failure of the congressional supercommittee.
Instead, the Fed chairman leaned on advice he’s made to lawmakers before, saying Congress needs to get its fiscal house in order but in a way that does not damage the still-delicate economy.
ECONOMIC INDICATORS
Initial Claims: The Department of Labor releases its weekly filings for jobless benefits.
Durable Orders: The Department of Commerce releases the report that measures the dollar volume of orders, shipments and unfilled orders of durable goods (defined as goods whose intended lifespan is three years or more). Orders are considered a leading indicator of manufacturing activity, and the market often moves on this report despite the volatility and large revisions that make it a less than perfect indicator.
New Home Sales: The Department of Commerce releases a report that shows sales of new privately owned single-family houses. The sales could be the worst performance on record as the housing market remains depressed.
Leading Indicators: The Conference Board will release a batch of previously announced economic indicators: new orders, jobless claims, money supply, average workweek, building permits and stock prices.
WHAT YOU MIGHT HAVE MISSED
— Chamber of Commerce mobilizes behind highway bill
— White House fleshes out manufacturing tax breaks
— Dems say it would be 'unfair' to cut federal worker benefits in payroll deal
— Consumer group to regulators: Break up Bank of America
— Lawmakers pitch cuts, reforms to congressional pensions
— Senate Dems make Mitt Romney the poster boy for tax reform
— Pending home sales fall off slightly after hitting a 19-month high
— Mortgage applications fell last week
— Ryan has high hopes for deficit deal in 2013
— Bergsten to step down from Peterson Institute
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