House Ways and Means Chairman Sandy Levin (D-Mich.) on Wednesday said he will hear from just about everybody before deciding how to handle the economic problems caused by China's alleged currency manipulations.

Those discussions will begin after Treasury Secretary Timothy Geithner testifies before the Committee on Thursday. 

The threat of tax increases is "hindering job creation," Rep. Mike Pence (R-Ind.) said Wednesday during a GOP leadership press conference.

"Whether it be out-of-control spending, government mandated healthcare, the threat of a national energy tax, cap-and-trade, the possibility of tax increases in January — all of these policies are creating a paralysis in small business like, really, I've never seen in my lifetime," he said. 

“Higher taxes won't get anybody hired. Raising taxes on job creators won't create jobs. And House Republicans will stand united to oppose any tax increase on any American in January.”

House Ways and Means Chairman Sandy Levin (D-Mich.) on Wednesday said he expects the Senate will act first on the extending at least a portion of the Bush-era tax cuts. 

"Our assumption has been that the Senate will act first and that remains my assumption," he told reporters. 

House Majority Leader Steny Hoyer (D-Md.) on Wednesday indicated that leaders of the tax-writing committees will take the lead in deciding which chamber acts first in extending the Bush-era tax cuts. 

Mortgage applications decreased for the second straight week as refinancing requests dropped despite continued record-low loan rates. 

The seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, dropped 8.9 percent for the week that ended Sept. 10, which include an adjustment for the Labor Day holiday, the Mortgage Bankers Association said Wednesday.

Meanwhile, refinancing requests fell by 10.8 percent from the previous week, while the purchase index dropped 0.4 percent, today's report said. 

Senate Finance Committee Chairman Max Baucus (D-Mont.) said that passing a tax extenders bill is a high priority for him and that he hopes to get to it "fairly soon."

"Hope to. Trying to. Good policy," he told reporters on Tuesday.

TAX CUTS -- Centrist Republican senators veered slightly from the GOP line on tax cuts Tuesday, a day after centrist Dem senators did the same with their party's leaders.

Sen. Olympia Snowe (R-Maine) said she wants an tax cut extension but also signaled she could back a deal that didn’t make the cuts permanent. "Where we start is to extend all the tax cuts. I think that's important," she told reporters Tuesday. She added, "I'm not drawing lines in the sand.”  http://bit.ly/bPGnC4

Sen. George Voinovich (R-Ohio), who has made the $13.4 trillion national debt his top issue, said he’s leaning against voting for an extension of any of the cuts, including those for the middle class. “My gut is probably no,” Voinovich told The Hill when asked about the cuts. “I think I would probably not vote, period, for it.” http://bit.ly/bglOQu

Sen. Susan Collins (R-Maine) said she “hopes we could agree” on a two-year extension of all the cuts.

Their statements came on the same day Senate GOP Leader Mitch McConnell rolled out his plan: extend all the 2001 and 2003 cuts permanently, limit the alternative minimum tax and cap the estate tax to estates worth more than $5 million for individuals and $10 million for couples.

While the package hasn’t received a cost estimate, WaPo’s Lori Montgomery says it’s nearly as pricey as Congressional Budget Office budget scenario that cost $3.9 trillion over the next decade. “That's more than four times the projected deficit impact of President Obama's health-care overhaul and stimulus package combined.”

Here’s McConnell pitching his proposal Tuesday: "We have a spending problem. We spend too much. We don't have a taxing problem. We don't tax too little. And if we want to begin to get ourselves out of this economic trough that we're in, the only way to do that is to grow the private sector." http://bit.ly/9t0hY2

Dems leaders are trying hold fast against an extension of cuts for the wealthy. Senate Finance Chairman Max Baucus (Mont.) said a one-year extension of all the Bush tax cuts would be bad idea. http://bit.ly/bcpAb1

THE HOUSE -- Speaker Nancy Pelosi (D-Calif.) urged Dems during a Tuesday night caucus to stand for the middle class by extending their tax breaks but not the ones for the rich. TPM: http://bit.ly/9i6jHC

Liberals urge vote on Obama plan: A trio of House Dems -- Reps. Mary Jo Kilroy (Ohio), Raul Grijalva (Ariz.) and Alan Grayson (Fla.) -- are circulating a letter for colleagues to sign that calls for a vote on the president's plan: make permanent the middle-class cuts and let the ones for upper-income taxpayers elapse.

Excerpt: "Please join me in the following letter urging Speaker Pelosi to bring to the floor, before Congress adjourns in October, a vote on President Obama’s recently proposed tax plan... During the past decade, President Bush rammed through Congress a multi-billion dollar giveaway for the wealthiest Americans on the backs of our nation’s middle-class.  In the process, the aforementioned Bush tax cuts eviscerated an unprecedented budget surplus and weakened our nation’s fiscal health... It is critical that we pass the Obama middle-class tax cuts – not provide an even greater lift for the wealthiest Americans who don’t need it."

Pundits are reminding us of the tax cuts’ budget impact...

U. Wisconsin econ Prof. Menzie Chinn has graphs suggesting that any economic boost from permanently extending all the tax cuts would be smaller than the boost that would give to the deficit. Econbrowser: http://bit.ly/aOnR9e

Megan McArdle says letting the Bush tax cuts for the wealthy expire will deter small business productivity and investment, but she notes that extending them won’t help our unsustainable budget situation. http://bit.ly/byFTjv

Jon Chait finds that making the middle-class tax cuts permanent will unaffordable. http://bit.ly/bLT9wE

BIG IDEA -- The Atlantic’s Michael Kinsley proposes a universal estate tax to cut the deficit. http://bit.ly/b52Hev

“I am suggesting a tax that reaches far more people—essentially anyone who inherits any significant amount of money—but at a much lower rate. The principle behind the current estate tax (or once-and-future estate tax) is frankly redistributive: to prevent large private fortunes from growing, generation after generation, with the recipients accumulating power as well as money...

"The idea of my tax is to produce a lot of money that can then be used to pay off, or at least buy down, society’s debts. If we could collect just 20 percent of the alleged $41 trillion about to pass through two generations, that would be more than $8 trillion."

If not taxes to cut the deficit, it’ll have to be cuts to entitlements, the Wall Street Journal’s front page suggests. Hed: “Obstacle to Deficit Cutting: A Nation on Entitlements.”

“Efforts to tame America's ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history.” http://bit.ly/anQKo9

SMALL BIZ BILL ADVANCES IN SENATE

The upper chamber moved to debate the small-business lending bill favored by Democrats and President Obama. Two GOP senators, Voinovich and George LeMieux (Fla.), voted with all of the Dems. Bloomberg: http://bit.ly/bfR6Qm

The latest NFIB small business optimism report suggests Democrats have failed small businesses: “The Index has been below 93 every month since January 2008 (32 months), and below 90 for 25 of those months, all readings typical of a weak or recession-mired economy. Near the beginning of the recession in 2008, USA Inc. shareholders elected a new CEO and management team but unfortunately the change in leadership did nothing to curb the recession. In fact, the economy only got worse while new policy tactics enacted by management made little sense in terms of dealing with the main problems.”

But small biz’s woes aren’t all that different from everyone else’s economic problems, argues Daniel Indiviglio. “Consumers continue to spend apprehensively. And just as the broader recovery, if weak demand persists, so will the problems of small business.” http://bit.ly/9JKGt1

ELIZABETH WARREN UPDATE

Sen. Chris Dodd (D-Conn.), one of the main authors of the Wall Street reform bill, isn’t happy with the idea of President Obama appointing Elizabeth Warren as head of the new consumer finance protection bureau instead of putting her through the confirmation process.

Dodd on Tuesday suggested Congress could even defund the bureau. HuffPo: “Dodd said that an interim appointment would deprive the director of the legitimacy that comes with Senate confirmation. He added that such an appointment could create a backlash that would lead Congress to defund the bureau.... [Dodd said,] ‘This is a big job, an important job, and it needs to be -- you've got to build the support for that institutionally or the next Congress - and none of us know what the outcome's going to be politically -- you could gut this before it even gets off the ground.’” http://huff.to/aeCNKT

Reuters’ Jim Pethokoukis says the outspoken Warren may seem scary, but perhaps not as much as Wall Street thinks: “Rather than shutting down exotic ideas, she may instead push for more disclosure on them. But even if a Warren commission were to clamp down on some complex and risky products, it’s hard to believe the financial engineers won’t find a way to design simpler, and profitable, ones for consumers.” http://bit.ly/9yzO7i

WaPo’s Steven Pearlstein says that bank regulators were once bamboozled, but are now emboldened with the international finance regulations agreed to in Basel. “The new rules... bring the capital requirement back up to 7 percent, with even more required from the very biggest banks and an extra surcharge that kicks in the next time bank lending grows faster than the underlying economy... The trillion-dollar question is whether regulators have learned from the last credit bubble the lessons necessary to prevent the next one.” http://bit.ly/b8hjgE

The press conference suddenly announced Tuesday evening by House Democratic leaders revealed little on how they intend to proceed with the Bush-era tax cuts. 

Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.) reiterated their desire to extend the middle-class tax cuts and did not say whether the Senate or the House would move first on the issue.

House Majority Leader Steny Hoyer (D-Md.) on Tuesday said that he and Speaker Nancy Pelosi (D-Calif.) will address the press later this evening on a host of issues, including the fate of the Bush-era tax cuts. 

"The Speaker and I will be talking to all of you a little later," Hoyer told reporters.