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OVERNIGHT MONEY: House aims to tackle automatic budget cuts bill
THURSDAY'S BIG STORY:
And now for something less agreeable: The House managed to work together and gather enough votes to pass an Export-Import Bank reauthorization on Wednesday. But its next task, voting on a Republican measure to replace next year’s automatic, across-the-board spending cuts, will be a bit more contentious.
The deficit-reduction package that House Republican leaders are bringing to the floor on Thursday restores $72 billion of $109 billion in automatic cuts to the Pentagon and domestic budget contained in the debt-ceiling deal Congress approved last summer and replaces those cut with up to $242 billion in cuts over 10 years.
The GOP measure goes well beyond replacing the sequester and includes $315 billion in cuts to social programs like food stamps as well as to the 2010 healthcare and financial regulatory laws.
The Republican measure, drawn up by six committees pursuant to instructions in Rep. Paul Ryan’s (R-Wis.) budget, contains no cuts to defense and no tax increases.
The bill was on its way to a House Rules Committee hearing on Wednesday night before heading to the floor.
House conservatives aren't exactly enamored with the legislation, although several said they would reluctantly vote for it even though it doesn't cut deeply enough.
Rep. Chris Van Hollen (D-Md.), ranking member of the House Budget Committee, said his alternative will have spending cuts as well as tax increases and will stop the entire $109 billion sequester, including the cuts to Medicare. Like the GOP, Democrats end the cuts for the military.
“We all agree that the meat-ax approach in the Budget Control Act’s sequester would be bad for the country," Van Hollen said. "But the Republican plan to replace it protects tax breaks for millionaires and corporations, while putting children and struggling families on the chopping block,” he said.
Van Hollen said the Democrats will cut direct payments to farmers, reform the National Flood Insurance Program, impose a "Buffet Rule" so millionaires pay higher taxes, and cut oil_and-gas subsidies.
Republicans have accused Democrats of failing to provide an alternative.
Neither the GOP bill, set for passage in the House, nor the Democratic amendment stand a chance of becoming law any time soon.
Senate Majority Leader Harry Reid (D-Nev.) issued a statement warning that the House GOP bill is dead on arrival in the Senate. He said the automatic cuts were “a tough pill to swallow, but it’s a balanced approach to reduce the deficit that shares the pain as well as the responsibility.”
Instead, the GOP and Democratic bills could provide a roadmap for expected lame-duck negotiations.
WHAT ELSE TO WATCH FOR
Conflict over conflict minerals: When most people think of Dodd-Frank, they think of the hustle and bustle of Wall Street. But one of the more contentious provisions reaches far beyond lower Manhattan, into the Democratic Republic of Congo. That's because one provision would require companies to publicly disclose if their products rely on so-called "conflict minerals" mined from the war-torn region. The provision is meant to make companies accountable for tapping resources in the troubled region, giving consumers the option of avoiding products that rely on them, including oodles of high-tech items, and making things tougher for militias exerting power in the region.
But skeptics warn that the measure could pose burdens on companies, and could end up doing more harm than good to the Congolese people by stifling that economic activity. Witnesses from industry, academia and the Congo will be on hand to offer their take.
Going postal: A day after announcing it would keep many rural post offices open, albeit for shorter hours, the Postal Service is scheduled to announce its second-quarter finances on Thursday.
If past history is any indicator — and it almost certainly is — the results won’t be pretty. USPS has lost billions of dollars in recent years, and is currently losing around $25 million daily, as potential customers find more and more options to communicate and conduct business electronically.
Looking at swaps: The Commodity Futures Trading Commission holds a meeting of minds on Thursday to consider two final rules under the Dodd-Frank Act tied to derivatives, a final rule on core principles and other requirements for designated contract markets and a proposed order amending the effective date for swap regulations.
Where have all the watchdogs gone?: The House Oversight and Government Reform Committee will hold a hearing about the number of inspector general vacancies; there are 10 right now. In 2009, the IGs identified $43.3 billion in potential savings, reflecting the need to have permanent inspectors in place to protect taxpayers. The hearing will be highlighted by testimony from Daniel Werfel, controller at the Office of Federal Financial Management, and Brian Miller, inspector general at the General Services Administration.
Two cheers for low rates: The White House continues pushing its student loan message on Thursday, with Vice President Biden discussing the issue with students and youth organizations. The event comes just days after Republicans blocked a Senate bill that would have continued current student loan interest rates, and paid for it by ending a tax break used by so-called S-corporations.
House Republicans have already passed a bill extending the rates, paying for it with savings from a public healthcare prevention fund from the Democratic healthcare overhaul.
U.S. Trade Representative Ron Kirk will make the case for keeping student loan rates in place during a trip to Dallas to participate in negotiations on the Trans-Pacific Partnership.
BREAKING NEWS
Let's get together: And pass the Export-Import Bank bill. Republicans and Democrats joined forces on a bipartisan compromise bill to reauthorize the Export-Import Bank. Still, 93 Republicans voted against the legislation, highlighting conservative angst over the bank's role. Opponents included Rep. Paul Ryan (R-Wis.), the author of the House GOP budget and a conservative seen as a leading contender to be the party's vice presidential candidate.
The margin, 330-93, easily met the requirement that the measure win two-thirds support in the House, which was necessary because the legislation was brought up under the suspension of House rules.
Open-door policy: The cash-strapped U.S. Postal Service announced Wednesday that it will keep small post offices open with shorter hours as it tries to ensure rural access to mail services.
Postal officials said the plan would balance the agency’s need to both serve customers and cut costs, and said the proposal would save about $500 million per year.
Going postal, part II: Scores of House Democrats, and a handful of Republicans, have also joined the club in urging Postmaster General Patrick Donahoe to extend a moratorium on postal closures that is set to expire on May 15.
The House letter comes the week after dozens of senators made the same request of Donahoe.
On Wednesday, USPS said it was not looking to shutter rural post offices, but the agency has given no indication that it will make a similar decision on processing centers. The service is scheduled to discuss its plan for those facilities next week.
ECONOMIC INDICATORS
Initial Claims: The Department of Labor releases its weekly filings for jobless benefits.
Trade Balance: The Department of Commerce releases its March data on exports and imports of U.S. goods and services.
Export Prices-Import Prices: The Department of Commerce releases its April report tracking trends in exports and imports. Exports are worth watching for indications of a strengthening competitive position at home and/or strengthening economies overseas. Imports provide an indication of domestic demand, but given the severe lag of this report relative to other consumption indicators, it is not particularly valuable.
Treasury Budget: The Treasury Department releases its April budget data, which is used mostly by the market for year-over-year changes in receipts and outlays.
Mortgage Rates: Freddie Mac release is weekly data on fixed-rate mortgages.
WHAT YOU MIGHT HAVE MISSED
— Fannie Mae reports income gain for first time since 2008
— Rep. Frank: Romney 'mindless' to suggest eliminating HUD
— Report: Millions of employers fail to claim healthcare tax credit
— House Dems set sights on overdraft fees
— House lawmakers urge US trade officials to preserve footwear tariffs
— Democrats push tax cut for firms that return jobs to the US
— House GOP calls for independent counsel in MF Global investigation
— Flood insurance wrangling intensifies in Senate
— Mortgage applications increased last week
— House conservatives rally leaders against spending minibuses
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