This week: More wrangling over spending

The spending debate will continue to be the hot topic on Capitol Hill in the days ahead. The gap between the two parties appears significant, but with both sides wanting to avoid a shutdown, the haggling will continue in earnest all week.

The Senate is planning a pair of test votes Tuesday on two spending packages. The one passed by the Republican-led House would cut $61 billion this year, while another, pushed by the White House, would cut $6.5 billion over the same time frame. Republicans leaders were quick to dismiss the administration’s proposal Friday, and the test votes should crystallize where lawmakers stand.

The spending debate will be the subject of two hearings on Tuesday. The Senate Budget Committee will welcome the architects of the deficit reduction package from President Obama’s fiscal commission — former Sen. Alan Simpson (R-Wyo.) and former Clinton Chief of Staff Erskine Bowles.

The pair will tout their comprehensive proposal, which did not advance to a vote in Congress. At the same time, Jack Lew, the president’s budget director, will talk with the Senate Appropriations Committee about the administration’s fiscal 2012 budget proposal.

Elsewhere, the debate on tax reform will continue during a pair of hearings on Capitol Hill as lawmakers continue to wrestle with how to whip the tax code into shape. On Tuesday, the Senate Finance Committee will explore whether the current tax code is a boost or a burden to the economy, with the help of several academics. The following day, the Senate Budget Committee will hear from a set of experts about the efficiency of the tax code.

On Wednesday, the House Financial Services Committee will mark up two bills that would spell the end of two more of the administration’s housing relief programs. Last Thursday, Republicans on the panel pushed through two similar bills, as they aim to take down foreclosure mitigation programs they deem ineffective and costly.

Those bills will be considered on the House floor late this week. At Wednesday’s hearing, the administration’s flagship effort, the Home Affordable Modification Program (HAMP), will be one of the programs on the chopping block.

Also Wednesday, the Senate Finance Committee will welcome U.S. Trade Representative Ron Kirk to discuss the administration’s 2011 trade agenda.

On Tuesday, the Senate Banking Committee will discuss the administration’s nomination of Peter Diamond to join the Federal Reserve Board. The panel twice approved the Nobel laureate last year, but procedural moves from critics blocked a full Senate vote.

Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro will stump for a bigger budget for her agency before Senate Banking on Thursday. Democrats are pushing for more money for the SEC as it works to implement the Dodd-Frank financial reform law, but Republicans are pushing for cuts.

That same day, the Senate Appropriations Committee will welcome Transportation Secretary Ray LaHood and Attorney General Eric Holder to discuss their departments’ fiscal 2012 budget requests.