OVERNIGHT MONEY: Bogged down

Here’s what we know now: Sen. Harry Reid (D-Nev.), the majority leader, has scheduled a cloture vote for Tuesday night on whether to allow debate on House-passed legislation that would cut an additional $57 billion in spending this year. 

That vote is expected to fail, but Reid said Monday he hopes to have up-or-down votes this week on both the House bill and the Democratic alternative, which cuts another $6.5 billion in spending.

Meanwhile, Sen. Mitch McConnell, the minority leader, is trying to make sure that his conference is on board with the House legislation. The Kentucky Republican agreed to a test vote on that measure during a meeting last week with Vice President Joe Biden and other congressional leaders. 

Reid has signaled that Speaker John Boehner is a driving force behind the test votes, saying that the Ohio Republican has called them a prerequisite for more negotiations on 2011 spending levels. 

Boehner, of course, may at some point need to at least try to persuade his own eager freshman class to compromise on spending levels. But for right now, it’s far from clear whether the Speaker will accept a reduced number of spending cuts or removing some of the riders his chamber passed, like the defunding of Planned Parenthood. 

With all this going on, Jack Lew, President Obama’s budget director, is no longer set to testify on Capitol Hill on Tuesday. 

WHAT ELSE TO WATCH FOR:

Looking further down the road: While spending levels for this year are making headlines, Democratic Sen. Kent Conrad, the chairman of the Senate Budget Committee, and the heads of President Obama’s debt commission will do their best on Tuesday to turn attention toward longer-term deficit solutions.

Erskine Bowles and Alan Simpson, the co-chairmen of the fiscal panel, are set to testify before Conrad’s panel and hold a Capitol Hill rally for turning the commission’s recommendation of spending cuts, tax increases and entitlement reform into legislation.

For their part, Boehner and McConnell have made clear in recent days there will be some GOP proposal on entitlements this year. In a Monday floor speech, McConnell blasted Obama for not leading enough on Social Security and Medicare and Medicaid.

Diamond in the rough: The Senate Banking Committee may suffer from a case of déjà vu on Tuesday, as the panel will once again consider the nomination of Peter Diamond for the Federal Reserve Board.

The Obama administration is hoping the third time will be the charm for Diamond, after the Senate has twice failed to approve him for the economic panel. (The CliffsNotes version: The Senate first returned the nomination to the president in August; the administration sent Diamond’s name up again; the nomination then cleared the banking panel during its second go-round, only to be held up by some Senate Republicans.)

Sen. Richard Shelby (R-Ala.), the banking committee’s ranking member, has been one of Diamond’s more vocal critics among GOP senators, saying the Massachusetts Institute of Technology economist lacked sufficient monetary policy experience. 

Diamond — who was re-renominated in January and once taught Ben Bernanke, the current Fed chairman — was awarded a Nobel Prize in October, but that honor didn’t sway Shelby and other Republicans.

Following Diamond's win, Shelby said in a statement that "while the Nobel Prize for Economics is a significant recognition, the Royal Swedish Academy of Sciences does not determine who is qualified to serve on the Board of Governors of the Federal Reserve System." 

Your Tuesday tax reform talk: The Senate Finance Committee is scheduled to host four academics to discuss tax reform on Tuesday, as Sen. Max Baucus (D-Mont.), the panel’s chairman, aims to hold weekly hearings on the issue. 

Capitol Hill Roundup: Transportation Secretary Ray LaHood (Senate Commerce) and Interior Secretary Ken Salazar (House Appropriations subcommittee on the Interior) are among the administration officials expected on Capitol Hill on Tuesday to discuss various budget issues. 

Economic indicators:

—The American Petroleum Institute is set to drop its weekly statistics on gasoline production and inventories. 

BREAKING MONDAY:

Hey, what about those other two?: Ron Kirk, the U.S. trade representative, signaled Monday that the administration had taken another step toward the passage of a free-trade agreement with South Korea, reports Erik Wasson. 

But with Kirk’s office now done preparing the Korea deal, Rep. Dave Camp (R-Mich.) retorted that a letter from the trade representative said nothing on trade pacts with Colombia and Panama, and reiterated his desire to see all three considered by Congress during the first half of this year.  

Where are the Gang of Six?: Sens. Mark Warner (D-Va.) and Saxby Chambliss (R-Ga.) joined up for a bipartisan town hall in Richmond, Va., on Monday, The New York Times reports, where they repeated their assertions that both political parties are going to have to make sacrifices to clean up America’s budget situation.

The two senators, who are set to hold a similar event in Chambliss’s home turf of Atlanta in April, also declined to say when their so-called Gang of Six negotiations would lead to concrete proposals to reduce deficits. 

Whither QE2?: A trio of Fed bank presidents said they expected the central bank’s latest round of bond-buying to run through its scheduled end date in June. But, as Reuters reports, the Fed officials also said that higher oil prices could conceivably cause a change in their thinking. 

WHAT YOU MIGHT HAVE MISSED:

On the Money’s Monday:

—Larry Summers: Anyone who gives a second thought to not raising the debt ceiling is “a child with a match in a dynamite storeroom.”

—Progressive think tank pushes $382 billion stimulus aimed at unemployment.

—Jon Tester, facing a 2012 reelection bid, gets targeted on interchange fees.

—Bernie Sanders thinks it's time to up the tax revenue when tackling the deficit.

—And consumer credit climbed again in January. 

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