OVERNIGHT MONEY: Obama, Cameron get down to business on foreign affairs, economy

WEDNESDAY'S BIG STORY: 

The best offense is a good defense: President Obama and British Prime Minister David Cameron begin three days of meetings on Tuesday night at a college basketball game in Ohio, a swing state that propelled the president to victory in 2008. 

The two sports fans — Cameron prefers tennis and cricket; he got a briefing on March Madness — will spend the next several days discussing economic and national security issues focusing on Afghanistan, efforts to end the violence in Syria, Iran's nuclear program and the global recovery including resolving the European debt crisis, ahead of the upcoming NATO and G-8 summits.

While the two leaders have sports in common and mostly see eye-to-eye on foreign affairs, Obama and Cameron have taken different paths in an effort to jump-start their nations' economies. 

In 2009, the president injected nearly $800 billion in public economic stimulus in an effort to bolster the shrinking private sector and turn around the tanking economy. Cameron, meanwhile, opted for deep spending cuts as his country's economy showed signs of improvement.

There are proponents and opponents of each man's plan on both sides of the Atlantic. 

Congressional Republicans and GOP presidential candidates argue that Obama's stimulus under-delivered and only added to the growing U.S. debt. 

Those in support say the additional spending propped up the economy, which was going through its worst stretch since the Great Depression, has helped propel the recovery, though at a slower pace than had been hoped. 

Meanwhile, Cameron has come under fire in the United Kingdom for his spending cuts, with some arguing that the plan stifled what was a modest recovery. Many of those same critics say Obama has the upper hand in the battle of economic philosophies, with the U.S. economy growing faster than Britain's during the past several years. 

Through it all, the prime minister has defended the cuts, saying they are important to the nation's long-term future and will lead to a fairer economy. 

With this agenda, the two leaders might need an overtime or two.

WHAT ELSE TO WATCH FOR 

Prepay plans: A Senate Banking subcommittee will devote a hearing tomorrow to the prepaid card market. The cards are a rapidly growing tool of the financial sector, but critics say the financial product loads on fees and other charges on people with little financial know-how or few options. Consumers advocates and industry representatives will be on hand to offer their take.

Pass budgets for pay: The Senate Homeland Security and Governmental Affairs Committee will have a closer look at a bill that would block Congress from getting paid if no budget or spending bills are passed on time — a feat that has been tough for lawmakers. Bill sponsors Sen. Dean Heller (R-Nev.) and Rep. Jim Cooper (D-Tenn.) will testify. 

Run for the border: The House Financial Services Committee is hitting the road tomorrow, with a field hearing in San Antonio, Texas. Lawmakers will hear from various banking officials from the Lone Star State about how community banks and financial institutions are functioning following the recession and that little thing called Dodd-Frank.

It's the economy, stupid: National Economic Council Director Gene Sperling will deliver remarks at an event hosted by The Atlantic magazine on how to jump-start the economy. A whole host of familiar faces will expound on the nation's economic recovery — former Treasury Secretary Larry Summers; Thomas Palley, senior economic adviser at the AFL-CIO; Douglas Holtz-Eakin, former director of the Congressional Budget Office; and former Pennsylvania Gov. Ed Rendell. 

Not to be outdone, former Federal Reserve Chairman Paul Volcker, former Treasury Secretary Robert Rubin, former National Economic Council Director Lawrence Lindsey and former Council of Economic Advisers Chairwoman Laura D'Andrea Tyson will also deliver remarks on a wide range of economic issues.

BUDGET WRAP 

Budget hearings march on: Labor Department Secretary Hilda Solis and Energy Department Secretary Steven Chu head to Capitol Hill on Wednesday to testify on their fiscal 2013 budgets before subpanels of the Senate Appropriations Committee.

There is a handful of other budget hearings before Senate Appropriations — the House is out of session this week — that includes looks at the Air Force Budget with Secretary Michael Donley and spending levels for federal onshore and offshore energy development programs with Robert Abbey, director of the Bureau of Land Management; Tommy Beaudreau, director of the Bureau of Ocean Energy Management; and James Watson, director of the Bureau of Safety and Environmental Enforcement. 

Also testifying at Senate Appropriations Committee — U.S. Agency for International Development Administrator Rajiv Shah.

BREAKING NEWS

China crackdown: The Obama administration on Tuesday stepped up pressure on China to loosen export restrictions on rare-earth minerals critical to the production of high-tech goods. 

President Obama announced the United States would file a case in the World Trade Organization, along with the European Union and Japan, requesting talks with China over its export controls. The request is the first formal step in a WTO legal case. 

The grades are in: The nation's third largest bank, Citigroup, was among a handful of banks to fail the latest "stress test" conducted by the Federal Reserve.

The central bank announced Tuesday that under tough economic conditions, Citigroup, Ally Financial and Suntrust Banks all saw their Tier 1 common capital ratio, which is used to measure a bank's ability to weather losses, fall below the 5 percent minimum set by the Fed.

However, the tests also showed that 15 of the 19 banks would be able to shoulder a significant economic downturn with an acceptable level of capital intact, an indication that the banking sector as a whole, hit hard by the financial crisis, is getting back on more solid footing.

Banking on the stock markets: Bank stocks pushed the financial markets to their biggest gains of the year. The Dow Jones industrial average rose 218 points and closed at its highest level since the end of 2007.

The Nasdaq composite closed above 3,000 for the first time since December 2000.

The big gets bigger: The nonpartisan Congressional Budget Office said Tuesday that the deficit for 2012 is $93 billion larger than last estimated in January.

The deficit is estimated to reach $1.2 trillion this year, now that CBO has factored in new policies such as the extension of the payroll tax holiday. 

In January, CBO assumed the 2-percentage-point payroll tax break expired Feb. 29. After a bruising battle between the House GOP and the White House, the payroll tax break was extended to the end of this year without being offset by spending cuts.

LOOSE CHANGE

Importing a plan: Senate Democrats are on track to offer a four-year reauthorization of the Export-Import (Ex-IM) Bank to the JOBS Act. Republicans pushed back on Tuesday, with Sen. Jon Kyl (R-Ariz.) urging Senate Majority Leader Harry Reid (D-Nev.) to make sure conflict over the bank does not hold up the House-passed JOBS bill.

House Majority Leader Eric Cantor (R-Va.) is planning to offer a one-year charter for the bank, and wants to set its outstanding loan limit at $113 billion, sources said. Senate Democrats want to raise the $100 billion limit to $140 billion in order to encourage exports. House Republicans oppose the Ex-Im Bank as corporate welfare, but bank supporters from the business community say that the bank makes money for the government while leveling the playing field with government-backed foreign competitors.

Going postal: Senate Majority Leader Harry Reid (D-Nev.) sounded a bit impatient on Tuesday about the pace of postal reform negotiations, and pledged to move legislation on the matter in the coming weeks. 

Supporters of a bipartisan postal bill – from Sens. Joe Lieberman (I-Conn.), Susan Collins (R-Maine), Tom Carper (D-Del.) and Scott Brown (R-Mass.) — had hoped their measure would hit the floor weeks ago.

But a group of Democratic senators, led by Sen. Bernie Sanders (I-Vt.), has expressed some concern with that bill from the Senate Homeland Security Committee, and Sanders has said he is working on his own plan to reform postal operations with a group of senators.

Star power: If there's anything to brighten a hum-drum day of hearings on Capitol Hill it's human-rights activist and movie star George Clooney. He will testify before the Senate Foreign Relations Committee on Wednesday on the situation in Sudan. 

Clooney is co-founder of the Satellite Sentinel Project, a Washington, D.C.-based organization that works to deter the "return to full-scale civil war between northern and southern Sudan" by documenting threats to human rights with satellite imagery and analysis.

ECONOMIC INDICATORS 

MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume. 

Export Prices-Import Prices: The Department of Commerce releases its report tracking trends in exports and imports.

WHAT YOU MIGHT HAVE MISSED

— No changes from the Fed
— CBO: Obama's health law to cost less, cover fewer people than first thought
— Consumer spending picks up in February
— Unemployment rate drops in 45 states
— Dems ramp up push to protect lower student loan rates
— Reid, McConnell lock horns over legislative agenda in Senate
— Small-business optimism up for sixth consecutive month
— House GOP on track to produce budget

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