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OVERNIGHT MONEY: Bernanke to talk economy, probably budget, with a Senate panel
TUESDAY'S BIG STORY:
Let there be fireworks, Mr. Chairman: Federal Reserve Board Chairman Ben Bernanke returns to Capitol Hill on Tuesday for a hot date with the Senate Budget Committee over the economy and the central bank's role in trying to boost the recovery.
The fireworks could go off if the panel talks about the fiscal 2013 budget — panel ranking member Jeff Sessions (R-Ala.) was none too pleased when Senate Majority Leader Harry Reid (D-Nev.) said last week he isn't planning to bring a budget blueprint to the Senate floor. Chairman Kent Conrad (D-N.D.) has pledged to mark up a budget resolution, but his panel has concluded that the budget numbers were essentially staked out by the debt-limit agreement in August.
Several Republicans, including House Budget Chairman Paul Ryan (Wis.), were incensed after Reid's announcement, calling it a "disgrace" and a "recipe for crisis."
Bernanke will probably take some heat from Sessions and other GOP lawmakers but he'll likely take a pass on rendering his opinion on Reid's decision because it's a congressional matter.
WHAT ELSE TO WATCH FOR
An aide with knowledge of the discussions said Tuesday’s meetings should have a more robust conversation on how to pay for a payroll tax package.
The panel’s two meetings last week concentrated more on what sort of policies conferees would like to see in a payroll tax deal, and less on the even more charged discussion of how to pay for their proposals.
With all sides acknowledging that the conference committee has significant obstacles to overcome, Tuesday’s meeting will also come as congressional leaders have again started to insert themselves into the payroll tax debate.
House Majority Leader Eric Cantor (R-Va.) on Monday pooh-poohed the idea of another short-term extension of the payroll tax cut, which received a two-month reprieve late last year.
And on Friday, the Senate Majority Leader, Harry Reid (D-Nev.), said that Democrats in his chamber were working on a “back-up plan,” should the conferees end up sputtering.
With all that in mind, conferees are leaving their schedules open for what could amount to three total meetings this week, while private negotiations could ramp up soon as well.
And while Congress has made a habit of conjuring up deals just before a deadline, keep in mind: Lawmakers are scheduled to be away from Washington the week after next, which means they would then return with just days left before the payroll tax cut expires.
Let's talk about unemployment benefits: The bicameral Joint Economic Committee will gather to discuss the payroll tax cut as well as the extension of unemployment benefits wrapped on Tuesday with economists. Mark Zandi, chief economist at Moody's Analytics, James Sherk, senior policy analyst The Heritage Foundation, and Judy Conti, federal advocacy coordinator at the National Employment Law Project will testify about where they stand on the issues.
Trio of bills on the docket: The Insurance, Housing and Community Opportunity subcommittee of the House Financial Services Committee will be keeping busy Tuesday, as lawmakers amend and vote on a trio of bills, with some contentious topics on the docket. One bill is aimed at reforming affordable housing programs, with a second devoted to helping shore up the troubled books of the Federal Housing Administration. The third is intended to help provide assistance to homeless children.
Closing down the loopholes: Sens. Carl Levin (D-Mich.) and Kent Conrad (D-N.D.) will introduce legislation on Tuesday designed to reduce the budget deficit and pay for priorities by closing tax loopholes they say come at the expense of working families.
Based on estimates from the Joint Committee on Taxation and the Office of Management and Budget, the measure would yield at least $155 billion in deficit reduction over 10 years, which would more than cover the $100 billion cost of a full-year extension of the payroll tax cut and could contribute to the kind of balanced deficit reduction agreement that the country needs.
Ticket to ride: The Senate Finance Committee will mark up a transportation bill on Tuesday that would prohibit taxpayers from claiming the alternative mixture credit or the cellulosic biofuels credit on any new or amended returns made on or after Feb. 3, raising an estimated $2.786 billion over 10 years. The bill, sponsored by panel Chairman Max Baucus (D-Mont.), is a companion piece to the $109 billion Moving Ahead for Progress for the 21st Century Act (MAP-21), and would be folded into the larger transportation bill for senate debate. Majority Leader Harry Reid has said he wants to quickly pass a two-year, $109 billion plan that has cleared the Environment and Public Works and Banking committees while House Republicans push their own bill that relies on oil drilling to pay for infrastructure funding.
Misspent federal funds: A Senate subpanel on Government Organization, Efficiency and Financial Management will discuss $115 billion in improper federal payments. Sen. Tom Carper (D-Del.), chairman of the Homeland Security and Government Affairs subcommittee on Federal Financial Management, Government Information, Federal Services and International Security; Daniel Werfel, controller of the Office of Management and Budget's Office of Federal Financial Management; Michael Wood, executive director of the Recovery Accountability and Transparency Board; and Beryl Davis, director of financial management and assurance at the Government Accountability Office, will testify.
Leg branch spending: The House Appropriations Committee will hold its first hearing of the 2013 cycle on Tuesday, focusing on the legislative branch. Librarian of Congress James Billington; U.S. Comptroller General Gene Dodaro; Acting U.S. Public Printer Davita Vance-Cooks; and Congressional Budget Office Director Douglas Elmendorf will testify on their needs in the next fiscal year. Last year attempts to cut funding for the Government Accountability Office were reversed late in the spending cycle.
HOUSE COMMITTEE ROUNDUP
— The House Homeland Security subcommittee on Border and Maritime Security will look at balancing security and the need to speed processing at ports.
— The House Foreign Affairs Committee will look at the Obama administration’s ongoing export control reform effort. The administration wants to clean up the messy web of agencies overseeing exports of weapons and “dual use” items and ease controls on less sensitive items, but Chairwoman Ileana Ros-Lehtinen (R-Fla.) has her own vision.
— The House Education and the Workforce Committee will look that the controversial recess appointments at the National Labor Relations Board that President Obama made in January.
LOOSE CHANGE
Perhaps not surprising: The Obama administration announced on Monday that it strongly backs a House bill that would give the executive branch more power over the appropriations process.
The bill, from Reps. Paul Ryan (R-Wis.) and Chris Van Hollen (D-Md.), would give the president 45 days to ask for a rescission of appropriated funds, a request that would then get an up-or-down vote in Congress.
Later this week, the full House is expected to consider the bill, which has a mix of bipartisan support and opposition.
Appropriators are among those who generally don’t back the measure, and the Supreme Court deemed a true line-item veto unconstitutional in the 1990s.
Tax poll: Lake Research, a Democratic polling outfit, found that the vast majority of small-business owners believe that corporate tax breaks are a problem, and a majority feel like households making more than $1 million a year don't pay enough in taxes.
The poll comes as Congress continues to debate tax fairness and income inequality, with President Obama having recently fleshed out his so-called "Buffett Rule" and called for U.S. multinationals to pay a minimum amount in taxes.
Other polls over the last year have also found that a majority of Americans believe the wealthiest should pay more in taxes. Republicans have said that tax increases on the highest earners would hurt small-business owners, many of whom pay taxes through the individual code.
ECONOMIC INDICATORS
Consumer Credit: The Federal Reserve releases its monthly measure of consumer debt.
WHAT YOU MIGHT HAVE MISSED
— Members struggle to get hearing on bill punishing Congress for budget failure
— Housing market shows wider improvement
— Mass Dems say housing regulator is misreading his authority
— US to comply with WTO rulings on anti-dumping duties
Catch us on Twitter: @VickoftheHill, @peteschroeder, @elwasson and @berniebecker3
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