Appropriations

Most market professionals do not believe the White House and Congress will strike a deal to avoid automatic spending cuts, and the stock market will pay the price as a result.

A survey of money managers from the Potomac Research Group reveals split opinion among the investing world about the future of the nation's fiscal policy. Fifty-three percent of respondents expect sequester cuts to take effect beginning March 1, while 47 percent believe a deal will be struck in time to avoid them.

The financial industry is also divided when it comes to the impact of those cuts if they occur, as 51 percent of the 55 respondents believe the Dow Jones Industrial Average would drop at least 5 percent if the sequester occurs. Another 42 percent believe the stock market would experience little to no change if those billions of dollars' worth of cuts take effect.

The Capitol will be abuzz this week thanks to a slew of high-profile events.

Jack Lew’s bid to become the next Treasury secretary will be put to the test on Wednesday when he appears before the Senate Finance Committee.

So far, it does not look as if Republicans are mounting a major effort to block his confirmation, but the hearing will be the first chance for GOP lawmakers to grill Lew on a wide range of budget, tax and financial matters.

The evening before Lew’s testimony, President Obama will pay the Capitol a visit to deliver the first State of the Union address of his second term.

With major fights looming on sequestration and government funding, expect Obama to lay down his vision for the nation’s finances and contrast it with the GOP’s approach. Sen. Marco Rubio (R-Fla.) will deliver the Republican rebuttal.

Appropriations Chairman Hal Rogers said his panel has begun to craft legislation to fund the government after March 27.

House liberal Democrats on Tuesday offered their own plan to replace automatic spending cuts slated to begin on March 1.

The Congressional Progressive Caucus is calling for nearly $1 trillion in tax increases and nearly $300 billion in targeted defense cuts over ten years to replace nine years of across-the-board cuts.

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Rep. Scott Garrett (R-N.J.) on Thursday pressed the Treasury Department not to use the upcoming reprieve from the debt ceiling to unwind the "extraordinary measures" it has put in place over the last month, which have kept the government from exceeding its borrowing limit.

In a letter to Acting Treasury Secretary Neal Wolin, Garrett stressed that the No Budget, No Pay Act, which has now passed the House and Senate, was not meant to give Treasury wiggle room to unwind these measures. The bill suspends the debt ceiling through May 18 while a longer-term debt ceiling deal is reached.

The conservative Club for Growth announced Friday that it will punish members who fail to vote for a key Hurricane Sandy amendment coming to the Senate floor on Monday.

A $50 billion Sandy aid package will be voted on, and the only amendment will be offered by Sen. Mike Lee (R-Utah).

The Lee amendment would offset the entire cost of the bill with spending cuts. It applies an 0.5 percent trim to spending every year through 2021.

The Club for Growth will include the vote in its annual scorecard.

“As we have said before about disaster relief, Congress should offset disaster relief with spending cuts elsewhere. With $16.4 trillion in debt, it's the very least Congress can do to start acting in a fiscally responsible manner,” the group says in a press release.

“That is going to be our first item of business," the Senate majority leader said Tuesday. "It is long overdue."

Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that Democrats would introduce the first 10 bills in the 113th Congress.

Reid did not list all of the bills that would be introduced, but said some of them will be bills that the Senate passed during the 112th Congress that were left to “languish” in the House.

This week’s economic slate will be headlined by House Republican efforts to bring up a short-term debt limit increase in an effort to pressure the Senate into adopting a budget.

House Republicans announced Friday that they would be considering legislation that would authorize a three-month increase to the debt limit, setting the stage for future battles over budgets and spending. They said a longer-term debt limit increase would be contingent on the Senate adopting a budget that cuts spending. In addition, the House GOP will be pushing legislation that would halt pay for members of Congress if a budget were not adopted.

The 0.5 percent pay increase is the first across-the-board cost-of-living adjustment since a pay freeze was ordered in 2010.