Money in the Morning

ELECTION ECONOMIC ENDGAME -- Congress is using its final week in session before the midterms taking on offshoring and China's currency (and not debating the Bush tax cuts). The Senate's offshoring vote is scheduled for 11:30 a.m., Tuesday; it’s expected to fall because of a lack of GOP support. The House vote on China trade is expected to pass with some GOP support later this week.

Ezra Klein compares offshoring to tax cuts, and finds that Dems picked the wrong strategy. He dismisses the bill as “bad -- albeit unimportant -- policy” that could spark a trade war, while arguing that extending the Bush-era middle-class tax cuts would do more for the economy and for Democrats' chances in November. “They'll fight for one policy that doesn't make sense, and in doing, make success less likely on a policy that does make sense. They're doing this because they think the politics of it are better -- but are they?”

It’ll be harder for Dems to pass the tax-cut extension they want after the midterms, when three seats held by retiring Dems -- West Virginia, Illinois and Delaware -- will be immediately filled, possibly by Republicans, writes Daniel Indiviglio.

Dems did get a win on their small business lending bill, which President Obama signed into law Monday.

STATE TAXES ARE UP -- GOP candidates hope that means more traction for anti-tax attacks on Dems. WSJ: “In fiscal 2010, states raised taxes by the largest amount since at least 1979, according to the National Governors Association, ... with 29 states increasing taxes by about $24 billion... In southern New Jersey, former NFL football player Jon Runyan, the Republican candidate for congress, has been pounding freshman Democrat John Adler for his tax record during his long service in the state Senate. Mr. Adler in return has attacked Mr. Runyan for claiming a local tax break for keeping donkeys at his estate.

Don’t expect tax forms in your mailbox next year. The IRS won’t be sending them. People are just filing on the interwebs.

BIZ SLAMS CHINA TRADE BILL -- The measure taking on the yuan is riling up U.S. firms in China. They warn of a "downward spiral" if Congress ups the pressure on Beijing. The House measure, which has both Dem and GOP co-sponsors, would give the Commerce Department the power to impose duties on Chinese goods. “‘If we take this additional step, it's going to continue this downward spiral,’ Tim Stratford, a former U.S. trade official who was part of a delegation visiting Washington from the American Chamber of Commerce in Shanghai, told reporters.” Reuters:

House Maj. Leader Hoyer will make the case for it Tuesday at the Nat'l Press Club. In a speech, he's expected to tout the bill and the rest of the Dems' "Make It In America" agenda. Excerpt: “Manufacturing, and the middle-class economy it creates, is a part of the American character that we must not give up."

FINREG/JOBS: Nouriel Roubini says the Wall Street reform bill won't keep the global economy from suffering “a couple of financial crises” over the next decade. "Nothing has changed fundamentally,” the economist told CNBC. “When the regulatory reform was passed by the U.S. Congress, my view is too little, too late." 

Roubini, a.k.a. "Dr. Doom," also pushed his proposal for payroll tax cuts to deal with unemployment. He would pay for it with the expiration of the Bush tax cuts for upper-income earners.

Fed poking around for new ideas to boost the economy. The latest one: An "open-ended" approach to buying up bonds. WSJ: “Rather than announce massive bond purchases with a finite end, as they did in 2009 to shock the U.S. financial system back to life, Fed officials are weighing a more open-ended, smaller-scale program that they could adjust as the recovery unfolds... [H]aving pushed short-term rates to near zero, it now has to devise new, untested approaches at almost every turn. A misstep could lead to unintended consequences, one factor that makes officials wary and investors jittery about its every move.”

FDIC, empowered by finreg reform, will require banks to keep 5 percent of securities on the books to limit risk. 

FISCAL COMMISSION -- GOP members on the WH debt panel are pushing corporate and capital gains tax cuts. Sen. Conrad is resisting. TPM:

Deficit talk -- Expect CBO Director Doug Elmendorf to get questions about the deficit for fiscal 2010 (ending Thursday) during his 10 a.m. appearance Tuesday at Conrad's Senate Budget Committee.

Debate of the Day: The financial press on where Obama went wrong...

Clive Crook (FT/Atlantic) says the president should’ve started from the center, instead of starting out left and then “retreating feebly”:  “Mr Obama should have led the argument for tax cuts in the stimulus. He should have led a national discussion on long-term fiscal control, rather than tacitly accepting the progressives' view that long-term deficits are not a pressing concern. He should have led the argument against the public option for healthcare. The outcomes might have been the same, but Mr Obama would have been given credit for moderating the ambitions of the Democratic left. This was one of the main things centrist voters elected him to do.”

Crook’s Atlantic colleague Derek Thompson says Obama didn’t abandon the center, pushing centrist positions on healthcare (see public option), finreg (watered-down Volcker rule), the stimulus (tax cuts made up a third) and climate change (never really got going). “He acts more like a legislative realist. He's an advocate for what he sees as possible in Congress, or what is passable. Right now, what is possible or passable is ... well, nothing. The president's advocacy cause has ceased to exist, as Congress' will to do things has ground to a halt, along with the economy.”

Tip of the day: Don’t hit your Gmail inbox limit! Google won’t store overflow e-mails unless you pay up. Felix Salmon: (via Business Insider)