The U.S. is urging a "significant" increase in minimum capital requirements as part of broad new international standards currently under debate.

Michael Barr, assistant Treasury secretary, said Tuesday that U.S. negotiators in the so-called Basell III talks are pushing for higher capital ratios for financial firms in an effort to strengthen them against possible financial crises or uncertainties.

The new capital requirements may also be higher for riskier financial transactions, Barr said.

"Capital calculations for trading exposures will now have to be based on stressed market conditions, and the charges for securitization exposures will be increased substantially," Barr said. "In both derivatives and secured lending transactions, firms will now also be subject to a capital charge for losses associated with a deterioration in the credit worthiness of their counterparties."

The U.S. Census cost $1.6 billion less than expected primarily because of a high response rate from Americans, the Commerce Department announced Tuesday. 

Commerce Secretary Gary Locke said the Census came in 22 percent under budget primarily because contingency funding set aside for disasters or major operational failures was not used and because the high level of response and workforce productivity beat expectations.

"Over the last 17 months, we have worked tirelessly to ensure American tax dollars were being spent wisely," Locke said today in a statement.

The response rate was 72 percent, and field workers visited 47 million homes and completed their work faster than expected, Locke said. 

At least one lawmaker, Rep. Darrell Issa (R-Calif.), ripped the report, calling it "smoke-and-mirrors budget gimmickry that the American people have come to expect from the federal government."

Worker productivity unexpectedly fell for the first time in more than a year, a signal that firms might need to hire more employees to expand. 

After five-straight quarters of gains, worker output dropped 0.9 percent from April through June after a revised gain in efficiency of 3.9 percent, up from the initial 2.8 percent increase in the first three months of the year, the Labor Department reported Tuesday. 

Economists argue productivity gains have hurt the economic recovery. If companies start hiring, incomes will increase and consumers will start spending again. Consumer spending accounts for about 70 percent of the economy. 

In the fourth quarter of 2008, productivity fell 0.1 percent — the last time it has fallen. The biggest drop before that was a 1.3 percent decrease in the third quarter of 2008. 

House Financial Services Chairman disputes rumors that House Democrats were irritated at being called back to Washington by Pelosi.

Rep. Gerry Connolly (D-Va.) told The Hill on Tuesday that the Senate is looking at temporarily extending all the tax cuts enacted by President George W. Bush. 

"I think there is some chance that the Senate will provide for a temporary extension of all of the tax cuts," he said. 

Connolly is not a part of the tax-writing Ways and Means Committee, but said there is talk of a one-year extension. He did not know if its cost would be offset. 

Continuing the upper-brackets for 10 years would cost approximately $700 billion. But it is highly unlikely that lawmakers would pass a long-term extension. Some have said a one-year extension would cost roughly $40 billion, while others contend that figure is too low. 

Senate Finance Committee Chairman Max Baucus (D-Mont.) will likely take the lead on whatever moves in the Senate. 

"Sen. Baucus introduced a bill in March of 2009 to make the middle-class tax cuts permanent," a committee aide told The Hill. "He said when he introduced that bill that it should be a starting point in the conversation in Congress about how to handle the expiring rates." 

The so-called Bush tax cuts are slated to expire at the end of the year. But the sluggish economic rebound has created some concern that allowing those breaks to expire could hinder any chance for a robust recovery.

"The problem is the recovery has slowed down, and you don't want to do anything that is going to have a deleterious effect on what growth we are experiencing," Connolly said. 

House leaders recently have said that the Senate would take the lead on extending the Bush tax cuts. They have also repeatedly called for ending the breaks benefiting individuals earning more than $200,000 and couples making over $250,000 while extending relief for the middle class.

Connolly said the only way to continue the tax breaks for the wealthy is for the Senate to move first. 

"I've been told by some in leadership that [extending tax cuts for the wealthy] is simply not going to happen on our side," he said. "We won't have that option."

Connolly supports a temporary extension of all the Bush tax cuts, but would like to see their cost offset. 

"I never thought I'd say these words, but our hope is in the Senate," he said. 

The House is expected later on Tuesday to take up a $26.1 billion state-aid bill that provides $10 billion to education funding and $16 billion to Medicaid.

As the debate over the expiring Bush-era tax cuts heats up, there are echoes from the past as Democrats and Republicans dig in on whether to raise taxes on the nation's wealthiest Americans.

In a blog post Monday, the Tax Policy Center looked back to 1993 when a similar debate over deficit reduction proposals emerged during the early years of the Clinton administration.

President Obama, like Clinton did 17 years ago, is suggesting raising taxes on those who make the most, the top 2 percent of earners. 

Republicans are providing a nearly identical answer to that call, a tax increase on the nation's wealthiest would affect small businesses, kill jobs and bring the economic recovery to a halt. 

Another lawmaker has joined the chorus of those calling for changes to the new financial regulatory reform law that provides Freedom of Information Act (FOIA) exemptions for the Securities and Exchange Commission. 

In a letter, Rep. Darrell Issa (R-Calif.) asked the SEC to provide documents and clarify the agency's responsibilities under FOIA. 

He said the SEC has already tried to use the new provision, Section 929I, "to avoid disclosure of much broader categories of information." 

The SEC also didn't fully explain why the current FOIA exemptions were inadequate to protect sensitive information provided by firms regulated by the agency, he said. 

Issa introduced legislation last week, the SEC Freedom of Information Restoration Act. 

President Obama on Monday used a speech at a Democratic National Committee fundraiser in Austin, Texas, to bash Republicans who wish to continue the tax policies of President George W. Bush. Some contend those initiatives contributed mightily to turning record surpluses into historically high deficits.