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OVERNIGHT MONEY: Hello, budget cycle
TUESDAY’S BIG STORY:
Are you ready for the fiscal 2013 spending cycle?
Ready or not, here it comes.
The Congressional Budget Office will start the season off on Tuesday, with the 11 a.m. release of its long-term economic and budget forecast. The report, CBO’s biggest of the year, will show the extent of the American fiscal hole after three years of $1 trillion-plus budget deficits.
But one caveat, before you dig in tomorrow: the scorekeeper uses a somewhat unrealistic baseline, based on current law, that assumes that all of the Bush-era tax rates will be washed away at year’s end. In fact, the Bush cuts are expected to stay in place for at least the vast majority of taxpayers, which would drive up the deficit projection even further.
The release of the forecast tomorrow will also launch Douglas Elmendorf, CBO’s director, back into the spotlight. Elmendorf is expected to headline a news conference on the projections tomorrow, to be followed by Wednesday (House Budget) and Thursday (Senate Budget) appearances on Capitol Hill.
WHAT ELSE TO WATCH FOR:
Cordray chat: Richard Cordray is a popular man on Capitol Hill — in his own way, that is.
But don’t be surprised if the controversy over how Cordray got the job occupies the attention of several members. President Obama's decision to ignore the Senate's pro forma sessions to push through a recess appointment for Cordray has been hailed by Democrats and scorned by Republicans, who say it circumvents the hallowed "advise and consent" powers of their congressional chamber.
But Cordray won’t hear his appointment called unconstitutional, illegitimate and a power grab by at least one GOP lawmaker: Sen. Roger Wicker (R-Miss.) has announced he is officially boycotting the hearing.
No word yet on what Wicker has instead lined up for 10 a.m. tomorrow.
Sailing on through ...: The Stock Act, the measure designed to ensure that lawmakers can’t profit off information gleaned from their day jobs, easily cleared a procedural vote in the Senate just now.
In the end, two GOP senators — Richard Burr of North Carolina and Tom Coburn of Oklahoma — cast the only 'no' votes.
The Senate vote comes on the same day that the Obama administration came out in favor of the bill. The House is expected to advance its own version of the bill in the coming weeks.
On Tuesday, a bipartisan group of senators — Joe Lieberman (I-Conn.), Tom Carper (D-Del.), Kirsten Gillibrand (D-N.Y.) and Scott Brown (R-Mass.) — are scheduled to hold a press conference to continue pressing for the Stock Act.
Extended talk about extenders: Senate Finance is scheduled on Tuesday to discuss the “tax extenders,” that group of temporary tax provisions that Congress is inevitably forced to deal with in a rush.
Lawmakers were unable to deal with the current crop of extenders before they expired at the end of 2011, in large part because of the hullabaloo over extending the payroll tax cut.
Some Democrats are pushing to attach some of those expired provisions, which can be reauthorized retroactively, and include incentives for research and development and alternative energy to a year-long deal to extend the payroll tax cut.
But on Tuesday, Finance members will examine more long-term solutions to the tax extenders, and also discuss how the provisions fit into the drive for tax reform.
More budget!: In addition to the CBO projections, the House Rules Committee also will mark up a bipartisan budget reform proposal late Tuesday afternoon.
The Expedited Legislative Line-Item Veto and Rescissions Act – sponsored by the top lawmakers on the House Budget Committee, Reps. Paul Ryan (R-Wis.) and Chris Van Hollen (D-Md.) – would grant the president greater powers in the spending process.
Under the bill, presidents would be able to ask Congress for up-or-down votes to cancel specific appropriations in spending bills.
But while the White House and fiscal conservatives are on board with the proposal, appropriators view it as a violation of the separation of powers. The Supreme Court ruled in the 1990s that a true line-item veto was unconstitutional.
Two is better than one: The payroll tax conference committee — set to meet again on Wednesday — is the only game in town no more.
Lawmakers in the Senate announced on Monday that conferees tasked with finding long-term funding for the Federal Aviation Administration, now on its 23rd short-term extension, will meet on Tuesday.
Check in with Transportation Report, our sibling blog, for more updates.
Hit them where it hurts: Rep. Sam Graves, the chairman of the House Small Business panel, is set to drop a pair of new measures on Tuesday.
One of the Missouri Republican’s measures would give the federal government the goal of awarding 25 percent of contract dollars to small businesses, up from the current 23 percent.
The measure would also deny bonuses to certain agency officials if those targets aren’t met. According to House Small Business, the federal government has fallen short of the 23 percent goal every fiscal year since 2004.
Graves’s other measure would seek to give more powers to federal offices of small and disadvantaged business utilization.
“Small businesses have proven time and time again that they can perform a service or produce goods for the government cheaper and often quicker than their larger counterparts,” Graves told The Hill in a statement. “However, various bureaucratic impediments remain for small contractors. Any avenue to save taxpayer dollars, increase competition and spark growth is the route we should be taking.”
ECONOMIC INDICATORS:
S&P/Case-Shiller 20-city Index: The housing price index could find that home prices have dropped in the nation's 20 largest metropolitan areas. Housing experts say the housing market, including prices, has likely bottomed out and should begin to show improvement this year.
Consumer Confidence: The Conference Board's monthly report, which is helpful in predicting shifts in consumer spending, could show that confidence improved in January. Confidence has been improving along with the job market.
Employment Cost Index: This quarterly report prepared by the Labor Department provides details in the changes in the costs of labor for businesses. The last report showed that costs for workers increased 0.3 percent in the third quarter. Wages and salaries, which make up about 70 percent of compensation costs, increased 0.3 percent, and benefits, which make up the remaining 30 percent of compensation, were virtually unchanged at 0.1 percent.
BREAKING MONDAY:
Legislative reality: Sen. Sheldon Whitehouse (D-R.I.) announced Monday that he was making legislation out of the president’s "Buffett Rule," the idea that those making north of $1 million a year should be paying at least a 30 percent tax rate, The Hill's Jonathan Easley reports.
Across the pond: Transaction taxes might not be getting much traction in these parts. But according to Bloomberg, the French president, Nicolas Sarkozy, has said that his country will unilaterally put a 0.1 percent levy on financial transactions come August.
European Union officials are expected to discuss a union-wide transaction tax in March.
Disapproval stamp: The conservative group Heritage Action announced on Monday that it was scoring a vote on the Senate’s postal reform bill, which could happen in the next couple of weeks.
Heritage says that provisions in the bipartisan Senate bill — including the proposal to keep six-day delivery for at least two years — merely delay the fundamental changes that the U.S. Postal Service needs.
Stamping out earmarks: Sens. Claire McCaskill (D-Mo.) and Pat Toomey (R-Pa.) announced Monday that they would press to attach a permanent earmark ban to the Stock Act.
WHAT YOU MIGHT HAVE MISSED:
On the Money’s Monday:
— CBO: Federal workers get, on average, 16 percent more than private-sector counterparts.
— CFPB: We received 13,000 complaints in our first six months.
— Sherrod Brown calls out Citibank for designating airline miles as taxable income.
— Bob Casey asks President Obama to end bets Freddie Mac reportedly took against homeowners.
— WTO sides with United States in dispute with China.
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