This week: Economy holds center stage on Capitol Hill

Federal Reserve Chairman Ben Bernanke will be a regular presence on Capitol Hill this week, as the economy takes center stage in Congress.

The head of the nation’s central bank is set to deliver his semi-annual monetary policy report to both the House and Senate, where he will also have to field a number of pressing questions from lawmakers. On Tuesday, he will appear before the Senate Banking Committee, before heading to the House Financial Services Committee Wednesday. Lawmakers will be eager to hear the latest on the Fed’s thinking on the weakening U.S. recovery, and how close it is to making new policy moves to boost it. 

Bernanke also will likely get questions about an ongoing scandal over a key interest rate set by banks, following the resignation of top officials at the British bank Barclays and a massive settlement over long-running efforts to manipulate the rate.

The Fed will follow that up with the release of its “beige book” on Thursday, which is its regular collection of anecdotal evidence about the economy from business contacts nationwide.

The full House will take up the 2013 defense appropriations bill this week. The bill would provide $519.2 billion in regular funding, which is more than the Pentagon wants; the bill’s non-war funding represents an increase of $1.1 billion over this year and is $3.1 billion more than the administration wanted. 

Sources say the measure will be the last 2013 spending bill that will be coming to the floor. The Rules Committee has prepared the Agriculture and Financial Services bills for floor consideration, but the schedule through August is tight given the desire to pass anti-tax-increase legislation. 

The Ag bill is caught up in a battle over whether to bring it to the floor, as GOP leadership is cool to the bill and has shown no signs of bringing it forward.

Both appropriations bills have earned Democratic ire for significant cuts to the agencies tasked with implementing the Dodd-Frank financial overhaul.

At the subcommittee level, House appropriators will spend Wednesday marking up the Labor, Health and Human Services appropriations bill — the last of the dozen annual spending bills still to move through the committee.

To meet the terms of the House-passed budget, the bill will need to cut spending by more than $8 billion. It will also likely contain anti-abortion riders that could cause a political firestorm.

The Senate Finance Committee is expected to take up a bill that would grant permanent normal trade relations to Russia. The panel is expected to combine the repeal of the Jackson-Vanik provision with human-rights legislation that would punish some Russian officials involved in the death of lawyer Sergei Magnitsky, who died in police custody. 

The Russian government is expected to complete the process to join the World Trade Organization before the July 23 deadline. That puts pressure on Congress to send a bill to President Obama before leaving for the August recess. 

The Obama administration, House Republicans and the Russian government have expressed opposition to the human-rights language, preferring a clean bill that would repeal the Cold War-era Jackson-Vanik provision.

House Ways and Means is scheduled to discuss Thursday the impact tax reform could have on U.S. manufacturers, a sector both Democrats and Republicans are interested in supporting. Both parties have said they want the tax code to incentivize manufacturing, and House Democrats have their own campaign, “Make It in America,” aimed at offering assistance.

The House Financial Services Committee will continues its testing of Dodd-Frank with a pair of subcommittee hearings Thursday, where Republicans members will critique the overhaul.

---