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OVERNIGHT MONEY: Bernanke, Fed take center stage
THURSDAY'S BIG STORY:
A little less talk ... Federal Reserve Chairman Ben Bernanke could announce on Thursday that the central bank will take, possibly, a lot more action with its third major attempt to steer the economy out of the storm and into calmer waters.
All eyes on Wall Street, K Street and Capitol Hill will turn to the Fed for its latest policy statement in the afternoon.
This release seems to have captured a bit more interest — well, OK, a heaping bunch more — with the general groupthink of central bank watchers that the Fed is on the cusp of announcing a brand new broad effort to boost the economy after seeing a few months of laggard economic and job growth.
The August jobs report — with 96,000 created — puts added pressure on the central bank to make a move before the election.
What form it might take, or whether it will even materialize, is still an open question, but a lot of money is riding on a third round of "quantitative easing," those massive bond purchases by the Fed used to lower borrowing costs and spur more economic activity, as our Pete Schroeder will report in an in-depth piece on Thursday morning.
Bernanke has maintained for months that the primary challenges of the economy are not ones the Fed can fix, but fall under the purview of Congress and the White House.
But with lawmakers frozen before the elections and an 8.1 percent unemployment staring it in the proverbial face, the Fed might feel compelled to try something on its end to give the economy a kick.
If the Fed does order up "QE3," you can expect plenty of recriminations from the right, as Republicans for more than a year now have cautioned against such a move, warning it would sow the seeds of inflation and enable the government to keep borrowing while the Fed keeps buying.
WHAT ELSE TO WATCH FOR
In the clear: The House is slated to pass a continuing resolution (CR) on Thursday to keep the government open for the first six months of the 2013 fiscal year, which begins Oct. 1.
House Appropriations Committee Chairman Hal Rogers (R-Ky.) said Wednesday that a six-month stopgap spending bill will pass, although he knew some, but not how many, Republicans would defect.
Congressional leaders announced a deal before heading off for the five-week recess.
The bill will adhere to the top-line spending level of $1.047 trillion that was set in the August 2011 debt-ceiling deal.
House Budget Committee Chairman and GOP vice presidential nominee Paul Ryan (Wis.), who is headed back to Washington for the vote, has said he will support the measure.
Once the House passes the bill, the Senate will need to clear it for President Obama's signature.
On Thursday, the House also will take up a sequester replacement bill from Rep. Allen West (R-Fla.), which seeks to keep defense spending intact.
The White House announced its displeasure with the bill that would impose $19 billion in discretionary cuts next year and force the president to submit a proposal to replace $55 billion in automatic defense cuts set to go into effect in January.
Cordray talks consumer protection: The Senate Banking Committee will chat on Thursday with Consumer Financial Protection Bureau Director Richard Cordray about what the agency has been up to during the first six months of the year.
"It is important for us to exercise sensible oversight of the consumer finance markets, but it is also important that we empower consumers themselves to make responsible financial decisions," Cordray is expected to tell the committee.
"We also think it is important to engage directly with consumers so we know more about the struggles and frustrations they encounter in their daily lives."
Cordray will deliver his agency's semi-annual report to Congress, which he says provides concrete examples as to how the year-old agency is using all the tools to help consumers navigate the complex financial marketplace.
Watch out for that ... cliff: A House Small Business subcommittee is hoping to bring a little real-world perspective to the fiscal cliff tomorrow, bringing in a pair of company owners to testify about the effect of the looming tax increases and spending cuts.
At the same time, there appears to be some question over how deeply Washington will examine those issues after November's elections, no matter who controls the White House or Congress. Lawmakers are currently examining ways to buy a six-month punt on the fiscal cliff and, as our Russell Berman reports in an upcoming story, some House conservatives don't want Congress to do much of anything substantive in the lame-duck session.
Welfare watch: A pair of House panels is scheduled to mark up on Thursday a measure to block the Obama administration's welfare changes, as that issue plays a role in the fall campaign.
The markup from Ways and Means and Education and the Workforce comes just days after the Government Accountability Office said that Congress could weigh on in the changes, which give states the opportunity to seek waivers to change work requirements.
In exchange, states would have to show that their altered approaches to increasing employment had merit.
Republicans have slammed the administration move ever since it was announced on July, and top GOP lawmakers have accused the White House of trying to ignore Congress on the issue.
The continuing resolution extends TANF, which is set to expire at the end of the month, for six months.
Mitt Romney, the GOP nominee for president, has also cited the welfare changes in ads against President Obama.
But former President Clinton, who was in the Oval Office when welfare was reformed in 1996, has defended the president's policies. Independent fact-checkers have also questioned the GOP criticisms.
LOOSE CHANGE
We're here: There might not be a ton happening on Capitol Hill, but the lobbying over online sales taxes appears to still be heating up.
The WE R HERE coalition — yes, that's short for Web Enabled Retailers Helping Expand Retail Employment — was launched on Wednesday to oppose the push by retail groups to enact federal online sales tax legislation, and counts eBay among its members.
"It is not the job of small businesses to collect taxes for state and local governments where they don't live, do business or receive government services, it is unfair, unwise and it will undermine innovation," Phil Bond, the executive director of WE R HERE and a Commerce official under former President George W. Bush, said in a statement.
With Washington conceivably dealing with tax issues in the lame-duck session, some supporters of an online sales tax are hoping for action on their issue after November's election.
ECONOMIC INDICATORS
Initial Claims: The Labor Department is releasing its weekly filings for jobless benefits, which have fluctuated lately because of a change in the schedule of planned auto factory layoffs.
Mortgage Rates: Freddie Mac is releasing weekly data on fixed-rate mortgages, which are locked in at historic lows.
Treasury Budget: The Treasury Department releases its August budget data, which is used mostly by the market for year-over-year changes in receipts and outlays.
Producer Price Index (PPI): The Labor Department will release its August report that tracks the prices of goods at the wholesale level. The market tracks PPI closely because it represents prices for goods that are ready for sale to consumers.
WHAT YOU MIGHT HAVE MISSED
— Census: Poverty rate remains stuck at its highest level since 1993
— Survey: Political uncertainty a drag on manufacturers' optimism
— Business groups call for immediate action on coming fiscal cliff
— CEOs leave firms at fastest pace since February
Catch us on Twitter: @VickoftheHill, @peteschroeder, @elwasson and @berniebecker3
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