WEDNESDAY'S BIG STORY: 

When Ben Bernanke talks ... The financial world listens. On Wednesday, the Federal Reserve will provide the next policy update with everyone from Washington to Wall Street looking for possible clues as to when the central bank will end its massive stimulus efforts. 

Ahead of the press conference, stock markets were on the rise on Tuesday following reports that inflation remains low and homebuilding is picking up pace. 

Still, there is plenty of guessing going on about whether the Fed will announce a time frame for its support of the economy. 

Bernanke has balked at offering any timeline as to when the Fed would begin reducing $85 billion in monthly purchases of government and mortgage bonds, arguing that any decisions would be based on incoming economic data, with a keen eye on the labor market. 

Right now, unemployment remains high — 7.6 percent in May — and Bernanke has indicated quite clearly that the until there is substantial improvement on that front, the monetary stimulus will continue. 

At this juncture, that improvement isn't expected to be seen until next year. 

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The House Appropriations Committee will slog its way through another fiscal 2014 spending measure on Tuesday.

FRIDAY'S BIG STORY: 

Takes two for tax reform: The Max and Dave show is rolling into downtown D.C. on Friday morning with an eye on touting the need for an overhaul of the tax code. 

The two tax-writing chairmen — Rep. Dave Camp (R-Mich.) at House Ways and Means and Sen. Max Baucus (D-Mont.) at Finance — are scheduled to appear at a Christian Science Monitor breakfast, in a rare joint appearance.

Baucus and Camp will probably take the morning, with a few cups of coffee, to shift some of the focus back on to tax reform, with the investigation into the IRS's targeting of conservative groups taking up much of the oxygen in the tax world over the last month.

The tax chairmen are hoping to funnel some of the anger directed at the Internal Revenue Service into positive momentum for a rewrite of the tax code, with both facing the prospect of no longer being at the helm next Congress. 

Well, Baucus is retiring, so he has until the end of 2014 to bring reform to fruition. 

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The Oversight chairman's new measure reworks many controversial provisions in his previous bill.

The hearing will examine different tax strategies used by multinational corporations to shift income out of the United States.

WEDNESDAY'S BIG STORY: 

And so it begins: The Senate has finally turned its full attention to passing a new framework for the nation's immigration system. 

President Obama said Congress “needs to act and the moment is now" during an event at the White House on Tuesday that brought together business, union, religious and political leaders to coalesce around the issue ahead of what could be a summer of debate. 

Senate Majority Leader Harry Reid (D-Nev.) has said he wants a vote before Congress leaves town for the July 4 recess. 

“There are 11 million reasons to pass common sense immigration reform that mends our broken system — 11 million stories of heartbreak and suffering that should motivate Congress to act,” Reid said Tuesday. 

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TUESDAY'S BIG STORY: 

Moving right along: The Senate Finance Committee is planning on a quick turnaround of President Obama's nominee to become the nation's top trade official. 

With talks on a U.S.-European Union trade deal set to start next month and negotiations ongoing among the dozen nations of the Trans-Pacific Partnership, there seems to be general agreement that Michael Froman is the right choice for the U.S. Trade Representative's job. 

In a nomination hearing on Thursday, Froman addressed a broad range of questions from lawmakers, most on policy, including the Obama administration's willingness to move forward with fast-track authority, protections of financial regulatory laws amid trade negotiations and the issue of trade violations, specifically undervalued currency. 

Senate Finance Committee Chairman Max Baucus (D-Mont.) and panel ranking member Orrin Hatch (R-Utah) expressed support for the nomination and said they were pleased to get a commitment from the White House for trade promotion authority. 

"It's about time. I've been calling for this for many months; it's welcomed news," Hatch said. 

FRIDAY'S BIG STORY: 

Jobs, jobs, jobs: The much-anticipated May jobs report is set for release on Friday, with estimates of jobs added ranging between 160,000 and 170,000, around the same yield as in April. 

The Bureau of Labor Statistics could show that the unemployment rate is stuck right around 7.5 percent. 

And what about the revisions? February and March figures were revised up and an April boost could provide a brighter economic picture than what most economists are painting right now. 

Economists including Federal Reserve Chairman Ben Bernanke have talked plenty about what they expect to happen to economic growth this summer and even through the rest of the year because of the combined effects of tax hikes and spending — and that is not a pretty picture. 

Yet, even with private-sector employment coming in at a disappointing 135,000, economists such as Mark Zandi of Moody's Analytics can't point to any specific piece of data that reflects those headwinds despite every indication that the breeze is picking up.

Still, Zandi said it feels like the economy is throttling back from the underlying average jobs growth of 175,000 jobs a month to 150,000 because of those policies. 

Maybe May's figures will provide a better indication of what exactly is weighing on growth. 

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The Pentagon is not following the key requirements of laws designed to cut down on improper payments made to contractors, according to a Government Accountability Office report.

The GAO report released Thursday found that the Pentagon had not implemented major provisions of laws passed in 2002 and 2010 that were intended to stop incorrect payments by federal agencies to contractors.

“GAO found that DOD's improper payment estimates reported in its fiscal year 2011 Agency Financial Report were neither reliable nor statistically valid because of long-standing and pervasive financial management weaknesses and significant deficiencies in the department's procedures to estimate improper payments,” the report says.

THURSDAY'S BIG STORY:

Live long and prosper: The House Oversight and Government Reform Committee on Thursday will tackle another problem at the scandal-plagued Internal Revenue Service (IRS), in the continuing saga of missteps at the agency. 

This time around, the panel examine another inspector general's report that found the agency spent $49 million on 225 conferences between 2010 and 2012, with one in Anaheim pricing out to more than $1,500 a person with a $4 million price tag. 

The hearing will feature Treasury's Tax Administration Inspector General J. Russell George, who wrote in the report that “Certain of the IRS’s expenses associated with the Anaheim conference do not appear to be a good use of taxpayer funds.”

Also expected to testify are Danny Werfel, the new acting IRS commissioner; and Faris Fink, an IRS commissioner who played Spock in the much-discussed "Star Trek" parody. Gregory Kutz of the inspector general's office is also scheduled to testify.

Expect another round of heated questioning about the IRS's policies. 

Price said he could reintroduce his replacement plan from the last Congress as early as today.

WEDNESDAY'S BIG STORY: 

Turning to jobs: With a break in IRS hearings on Wednesday — yes really — all eyes could turn to a private-sector jobs report for May, which could provide the first glimpse into exactly how the sequester's spending cuts are affecting the labor market. 

A strong number could relieve growing fears that jobs growth will slow substantially through the summer as the $80 billion in across-the-board cuts filter through the economy. 

The private group's report comes out two days ahead of the government's gauge, which measures public and private job creation.

The Labor Department's job figures were better than expected in April — the economy added 165,000 jobs in April and the unemployment rate fell to 7.5 percent — and it revised upward the figures initially released for February and March. 

The ADP report estimated last month that employers added 119,000 jobs in April; that figure will probably be revised when the report is released tomorrow morning. 

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TUESDAY'S BIG STORY: 

Tell me a little about yourself: The House Ways and Means Committee will chat with a handful of Tea Party groups on Tuesday about what they say was extra scrutiny by the Internal Revenue Service (IRS) in their application for tax-exempt status. 

Lawmakers are pretty much picking up where they left off before the Memorial Day recess in drilling down into what happened with the additional attention paid to conservative groups and how to remedy the problem for the long term. 

Danny Werfel, the new acting IRS chief, told a House Appropriations subcommittee on Monday that he is trying to do exactly that: fix the problems and put the agency back on good footing. 

Werfel, who is no stranger to Capitol Hill, made his first appearance as the agency's head after former acting Commissioner Steven Miller resigned amid the scandal. 

He called the singling out of Tea Party groups inexcusable.

“We have a great deal of work ahead of us to review and correct the serious problems that have occurred at the IRS and continue the important work of the agency on behalf of taxpayers,” Werfel said.

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The president will ask Congress to cap executive pay for federal contractors at $400,000.

The federal government's consumer watchdog is, for the first time in its young history, taking action against a company for abusive practices.

On Thursday, the Consumer Financial Protection Bureau (CFPB) filed a complaint against a Florida debt-relief company and its owner, alleging that the firm had charged illegal up-front fees and had misrepresented itself and its services to people across the country. The bureau also accused the company of violating a Federal Trade Commission law banning fraudulent telemarketing calls.

It is the first time the CFPB has taken an enforcement action against a company for taking advantage of consumers who misunderstood its terms and conditions.

An oil and gas company allegedly violated international sanctions by paying $60 million in bribes to Iranian officials over nearly a decade, according to a suit filed by the Securities and Exchange Commission (SEC) on Wednesday.

Total, a multinational corporation based in France, made more than $150 million in profits from the scheme, which regulators claim funneled money from intermediaries to the Iranian government in exchange for prime contracts to develop within the country’s oil fields. It will pay the U.S. government nearly $400 million to settle the charges.

Rep. Marsha Blackburn (R-Tenn.) on Wednesday linked the targeting of conservative groups by the IRS to the raid against Gibson Guitar, arguing both controversies reflect the Obama administration’s “use of excessive regulatory methods” to silence critics.

“The recent scandals surrounding this administration raise a number of questions about who they choose to target and why,” Blackburn said Wednesday in a statement.

House Republicans moved forward Tuesday with their effort to permanently repeal Medicare's payment formula for doctors.

Overhauling the payment system is a long-standing priority for the powerful doctors' lobby and for members of Congress. Both are frustrated by the constant string of expensive, temporary patches to the system and want to pursue a permanent fix.

Republicans on the Energy and Commerce Committee released a legislative proposal Tuesday that would end the current system and give doctors the option of gradually transitioning into a new, more coordinated model for medical care.

Lawmakers and travel industry advocates expect Penny Pritzker to aggressively pursue ways to boost foreign travel to the United States.

FRIDAY'S BIG STORY: 

Threepeat: Even with Congress out of session next week for the Memorial Day holiday, the Internal Revenue Service's (IRS) missteps made in singling out conservative groups for extra scrutiny will probably continue making headlines for a third straight week. 

Since Lois Lerner dropped the "targeting" bomb on May 10 when she answered a planted question at a Washington legal conference, Treasury and IRS officials have spent the better part of the past two weeks trying to explain their actions to irritated lawmakers on both sides of the aisle on Capitol Hill.

Lerner, not surprisingly, has been placed on administrative leave, as head of the IRS division that oversees tax-exempt groups.

In the meantime, Ken Corbin has been named to take her place. 

"The administration has taken a strong step to address serious mistakes," said Michigan Democrat Rep. Sandy Levin. "This and further corrective action are vital in restoring the confidence of the American people.”

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More than 170 business groups sent a letter to the Senate on Thursday urging lawmakers to oppose new campaign finance reform legislation that they said would curtail First Amendment rights.

The bipartisan bill, called the Follow the Money Act of 2013, would require groups engaged in political activity to disclose spending in real time.

The U.S. Chamber of Commerce has asked the Supreme Court to uphold a court decision that ruled President Obama’s recess appointments to the National Labor Relations Board (NLRB) were invalid.

In a brief filed with the high court on Thursday, lawyers with the Chamber’s National Chamber Litigation Center said the justices should uphold a federal appeals courts decision that found NLRB members Sharon Block and Richard Griffin were improperly appointed to the labor board.

That decision came from a legal challenge filed by Noel Canning, one of the Chamber’s member companies. Lawyers from the Chamber’s litigation center will represent Canning at the Supreme Court — the first time they have represented a member company in that venue.

“The D.C. Circuit got it right — these so-called recess appointments are unconstitutional,” said Tom Donohue, the Chamber’s president and CEO, in a statement. 

THURSDAY'S BIG STORY:

Let's talk Commerce: A Senate panel will talk on Thursday with President Obama's nominee to lead the Commerce Department.

Penny Pritzker, the billionaire Chicago businesswoman, faces her first hurdle toward confirmation at the Senate Commerce, Science and Transportation Committee to discuss a broad swath of issues, from creating jobs and increasing exports to manufacturing and weather forecasting.

Pritzker has garnered broad support from Democrats and groups such as the U.S. Chamber of Commerce and the Business Roundtable. 

Her home-state senators — Democrat Dick Durbin and Republican Mark Kirk — are expected to introduce her at the hearing. 

“I believe that, based on her extensive experience in business, she will put jobs and economic growth first,” Kirk said this week. 

While she could face tough questioning, there is a general sense that her nomination might gain enough support to clear the Senate. The agency has been without a permanent head for nearly a year. 

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WEDNESDAY'S BIG STORY: 

Talkin' bout the IRS, or not: So Lois Lerner, who has played a leading role in the all-hell-breaking-loose political scandal season, has decided she will not tell a House panel how she spilled the beans about the Internal Revenue Service's in-depth look into conservative groups.  

The House Oversight Committee will tackle the matter Wednesday with Lerner, former IRS Commissioner Doug Shulman, Treasury watchdog Russell George and Treasury Deputy Secretary Neal Wolin, who is the first Treasury official to directly testify on the matter and could face the bulk of questions in the hot seat. 

Lerner, the head of the exempt organizations division of the IRS who publicly apologized for improperly singling out certain groups seeking tax-exempt status and set off the scandal, informed the panel that she won't answer questions from lawmakers on Wednesday.

That should make for an interesting few hours, in which lawmakers will likely lecture Lerner about her actions. Her lawyer argued to the panel that she has not committed a crime or lied but has "no choice but to take this course."

She will get plenty of practice exercising her Fifth Amendment rights, even if her lawyer has suggested that just sitting there would "have no purpose other than to embarrass or burden her." 

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TUESDAY'S BIG STORY: 

Hot Seat, Part 2: Members of the Senate Finance Committee get their chance on Tuesday to grill Internal Revenue Service (IRS) employees about why certain groups seeking tax-exempt status were put under a microscope.

IRS commissioner Steven Miller is scheduled to testify before the Finance Committee on Tuesday along with Doug Shulman, the former IRS commissioner who departed at the end of last year, as well as Russell George, the Treasury inspector general for tax administration. The hearing will be Shulman’s first public testimony on the matter.

Miller, who is on his way out, and George faced tough questioning on Friday at the House Ways and Means Committee. 

Senators are expected to turn up the heat tomorrow. 

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The agency's Steven Miller, who announced his resignation Wednesday, will testify before the House Ways and Means Committee on Friday.

The head of the Justice Department's Civil Rights Division is facing serious resistance from Senate Republicans.

Homeland Security executed a seizure warrant in Maryland to shut down the world's largest bitcoin exchange.

WEDNESDAY'S BIG STORY: 

Farm bill, day two: The House Agriculture Committee will take up its version of the farm bill on Wednesday with the hopes of not only moving it through the panel but finally getting it to the floor for a vote. 

The markup comes a day after the Senate Agriculture Committee on Tuesday approved its $955 billion five-year farm bill with relative ease. 

House Agriculture Committee Chairman Frank Lucas (R-Okla.) and Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) have expressed an eagerness to get their bills passed by their respective chambers so they can negotiate a final piece of legislation over the summer before this current extension of the 2008 law expires Sept. 30. 

The House bill has bigger cuts in spending — $39.7 billion over 10 years compared to $23 billion in the Senate bill — and it would slash food stamps by $20.5 billion, more than five times the amount of the Senate's $4 billion in cuts from the program. 

Food stamps is where the biggest fight is expected between the chambers. 

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The Senate Agriculture Committee is set to mark up its bill a day before its House counterpart follows suit.

Cameron Kerry will assume office as the acting secretary of Commerce at the end of May.

USPS has already racked up more than $3.2 billion in red ink for fiscal 2013.

FRIDAY'S BIG STORY: 

Economy takes front seat: With Congress wrapping business for the week, eyes can turn to the U.S. Chamber of Commerce, which will examine the latest economic growth data from the first three months of the year and chat with economists about what the business community can expect on the policy front. 

Growth came in at 2.5 percent in the first quarter on the first estimate, which was slightly below expectations. Jobs growth has been revised upward and could signal an uptick in the economic expansion. 

There's bound to be plenty of chatter about the $80 billion sequester, which many economists are saying will become a lead weight on jobs and growth just as it becomes too warm outside to want to wear a suit coat. 

Chamber experts and economists could offer some solutions to businesses concerned about the hurdles they face over the next several months. 

Some economists argue that if the economy can take the heat of the across-the-board spending cuts, the economic expansion could pick up pace in the fall and start to finally make significant headway on the 7.5 percent unemployment rate by the beginning of next year. 

Washington's policies are, pretty much, being blamed for any hiccups in the economic recovery. The jobs report for April ran higher than expected, but there are still plenty of cautionary tales to be told about what could happen down the road. 

Mostly, a batten-down-the-hatches mentality is firmly in place, a familiar position in the spring through the summer for the past several years. Seems like there's always a major economic disaster lying in wait to derail any perceived economic gains through the winter. 

We'll just have to see how the spending cuts bear out. 

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Students slow at moving through college classes would see an end to federal loan help under a new rule moving though the pipeline.

THURSDAY'S BIG STORY:

Debt-limit check: The House is expected to pass a measure on Thursday that would let the government borrow money above the debt ceiling to pay interest on the debt and continue Social Security benefits. 

Republicans defended the bill on the House floor on Wednesday, saying it provides a way to make sure the government does not default on its debt, which is right around $16.4 trillion, even as it nears its debt limit. 

In that defense, the GOP took a beating from Democrats over comments made by Speaker John Boehner (R-Ohio), who argued that the legislation is a part of a “pay China first” strategy.

Boehner said it would mean that bondholders get paid before other creditors, which is much like a corporate bankruptcy proceeding.

"Doesn't it mean, as Democrats have suggested, that you're basically choosing to pay China before you pay U.S. troops?," he was asked by Bloomberg television on Tuesday.

"Listen. Those who have loaned us money, like in any other proceeding, if you will, court proceeding, the bond holders usually get paid first. Same thing here,” Boehner said. 

But House Rules Committee ranking member Louise Slaughter (D-N.Y.) argued on Wednesday that "the legislation does not raise the debt ceiling." 

"But instead, the bill guarantees that when we hit the debt ceiling, our foreign creditors and the Social Security Trust Fund will be paid in full, while the well-being of millions of Americans, and vendors and people we owe legitimate debts to are left to chance"

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Sen. Warren called the increasing amount of student debt a "quiet but growing crisis."

WEDNESDAY'S BIG STORY: 

Hurdling criticism: The Senate Health, Education, Labor and Pensions Committee is expected to approve the nomination of Thomas Perez to head up the Labor Department in an afternoon vote on Wednesday. 

Panel Chairman Tom Harkin (D-Iowa) postponed the vote last month after Senate Republicans invited a whistle-blower involved with a Perez case to a hearing. 

Regardless of the outcome, Perez faces some fierce resistance on the road to the Labor Department. 

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The White House said Monday it would veto a Republican-backed bill that would give workers the ability to trade overtime for comp time.

"This legislation undermines the existing right to hard-earned overtime pay, on which many working families rely to make ends meet, while misrepresenting itself as a workplace flexibility measure that gives power to employees over their own schedules," the White House Office of Management and Budget said in a statement. "If the president were presented with this legislation in its current form, his senior advisers would recommend that he veto the bill."

According to the White House, the legislation does not guarantee that workers would be able to use their accrued comp time at a time of their choosing, instead providing "employers broad discretion to deny requests to use compensatory time off if it would unduly disrupt their operations." 

TUESDAY'S BIG STORY: 

Vetting Hochberg: On Tuesday, the Senate Banking Committee will chat with Fred Hochberg about leading the Export-Import Bank for a second four-year term. 

Hochberg, who has held the position since May 2009 and also serves on the President's Export Council, led the agency through the tough reauthorization fight last year that boosted the bank's lending limit. 

President Obama signed legislation a year ago to renew the bank's charter for three years and raise the limit on the total financing the bank can guarantee, to $140 billion from $100 billion. The reauthorization bill got broad support in the House and Senate last year. 

This time around, the conservative Club for Growth is urging lawmakers, specifically Senate Republican Leader Mitch McConnell (Ky.), to gather opposition to the nomination. 

By contrast, Hochberg's nomination has gotten nods from groups such as the National Association of Manufacturers and the U.S. Chamber of Commerce that argue the bank helps U.S. businesses remain globally competitive. 

A vote will be scheduled for a later date.

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The Treasury Department's investment in General Motors is continuing to shrink as the government winds down one of the last major pieces of the Troubled Asset Relief Program (TARP).

The Treasury announced Monday that it had entered the second stage of its exit from the domestic car manufacturer, as it continues to sell off the roughly 241.7 million shares it has in the company. The government anticipates it will have fully exited its rescue of GM sometime in the first quarter of 2014.

"Earlier this year, Treasury launched an effort to sell its remaining shares in GM common stock," said Tim Massad, Treasury's assistant secretary for financial stability. "We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable and in a manner that maximizes returns for taxpayers.”

The House will consider legislation that would change how interest rates are set on federally subsidized student loans.

With student loan interest rates set to double on July 1, House Republicans will be pushing a bill in May that would tie the rate for subsidized Stafford loans to the borrowing rates for the federal government. About 7.5 million students used the loans in the 2010-2011 academic year, out of 36 million federal student loan borrowers, according to the Department of Education. The rate hike, if it were allowed to occur, would only impact new loans created for incoming students.

House Majority Leader Eric Cantor (R-Va.) told Republicans in a memo Friday that the legislation, coming from the House Education and Workforce Committee, would remove the politics from the interest rate fight and provide a long-term fix to a problem that has been recurring since 2007.

Republicans said the legislation "removes the risk of default" if the government hits the debt ceiling.

A new GOP effort to pass tax reform by tying it to the next increase in the nation’s debt ceiling could split Democrats.

Jobless rate in Eurozone reaches new high. Read more...

A false report on AP's hacked Twitter of an attack on the White House caused the Dow to nosedive.

The Commerce Department will be out Friday with its latest read on the nation's economic growth.

THURSDAY'S BIG STORY:

To be or not to be: The Senate could finish up its work on the online sales tax bill on Thursday. Of course, that is, unless it doesn’t.

A clear majority of senators has expressed support for the bill — through three votes in recent weeks, including two procedural votes in the past few days — yet the bill was struggling to get through the upper chamber. 

As it stands right now, the deadline for filing amendments is at 1 p.m. Thursday, according to a Democratic aide and outside groups backing the bill. 

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A Democratic congressman has launched a petition with the White House seeking support for his legislation to revamp the U.S. Postal Service.

Rep. Peter DeFazio’s (Ore.) bill would end a requirement that USPS prefund future retirees’ healthcare, mandate that the service deliver the mail six days a week, give the service more revenue-generating opportunities and push the agency to bring back overnight delivery standards.

DeFazio’s bill contains the sort of proposals that many liberals and postal unions favor, and comes after USPS lost close to $16 billion in the last fiscal year – most of it from defaults on the prefunding requirement.

Sen. Bernie Sanders (I-Vt.), who played a big role in bipartisan postal legislation that the Senate passed in 2012, has introduced companion legislation.

“Does the Administration support HR 630 and S 316 to make these changes, save American jobs, and allow USPS to remain competitive?” the petition to the White House asks.

The struggling U.S. Postal Service announced Tuesday that it had awarded FedEx a seven-year, $10.5 billion contract to fly certain classes of mail.

FedEx, based in Memphis, said in a statement that the contract would begin in October, and would allow the company to continue a service it has provided the USPS for a dozen years. FedEx's current contract with the USPS is set to expire in September.

The Postal Service, which lost a record $15.9 billion in fiscal 2012, said in a statement that it went with FedEx after "a rigorous evaluation of technical aspects, pricing, and other factors."

WEDNESDAY'S BIG STORY: 

Debt of contention: The House Ways and Means Committee will mark up a measure on Wednesday that is sharply dividing congressional Republicans and Democrats.

House Republican leaders are pushing for passage of a debt ceiling “prioritization” bill ahead of a possible battle this summer over raising the nation's borrowing authority. 

To say Democrats don't like the idea would be an understatement — they say the GOP bill is a clear sign that Republicans want to repeat 2011's debt battle. 

Ways and Means Committee ranking member Sandy Levin (D-Mich.) said on Tuesday that "apparently Republicans have forgotten how badly they hurt the American economy the last time they turned our nation toward default." 

"Otherwise they would not be entertaining this dangerous legislation," he said. 

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