By Bernie Becker, Erik Wasson, Peter Schroeder and Vicki Needham - 04/13/11 11:43 PM EDT
WHAT ELSE TO WATCH FOR:
State of the Union, redux: On the day after President Obama revamped his State of the Union (at least as far as deficit reduction is concerned), Rep. Paul Ryan (R-Wis.) is set to give a Thursday rebuttal of sorts — just as he did after the State of the Union.
The House Budget Committee chairman — who was visibly bothered on Wednesday after being invited to Obama’s speech only to hear his budget plan picked apart — is scheduled to give this response speech at Washington's Hyatt Regency. On Wednesday, Ryan's office sent around a YouTube clip from January 2010, where Obama praised Ryan for being courageous enough to propose Medicare vouchers, something Obama slammed as a betrayal of the elderly in the new speech.
Muni Madness: Welcome to Washington, Scott Walker.
The Wisconsin governor will almost certainly be the primary attraction tomorrow, with the House Oversight Committee set to explore whether there is a pending crisis for state and local government debt — and if so, just how big it might be.
Some market analysts have suggested that big budget gaps could lead to an increase in defaults on municipal bonds, long seen as a sleepier section of the financial market. And Republicans have been quick to point out that the Bailout Era is over — so if a state or local government struggles to meet obligations, they won't get any help from the federal government.
Peter Shumlin, Vermont’s Democratic governor, is also expected to testify Thursday, presumably as something of a counterpoint to Walker.
Dodd-Frank dissection: The House Financial Services Committee will cast its gaze upon the new landscape created by Dodd-Frank in a pair of hearings tomorrow.
In the morning, the oversight subcommittee will discuss the new Financial Stability Oversight Council (FSOC), which gathers the top financial regulators together to discuss broad issues affecting the nation's financial system — a veritable Justice League of financial regulation.
Republicans will likely use the hearing to detail concerns with the new entity — including the transparency of its operations, whether its work will impede the competitiveness of American companies and how the various agencies will be able to coordinate.
The committee’s capital markets subcommittee is slated to follow that up with an afternoon hearing delving into new rules on risk retention brought on by Dodd-Frank. Under rules proposed by regulators in March, financial firms would have to retain 5 percent of the risk on asset-backed securities unless they are filled up with mortgages where lenders provided at least a 20 percent down payment or if they were government-backed. The goal of the rules are to ensure firms keep "skin in the game" when creating and selling securities.
Tax day’s a comin’: Americans for Tax Reform's Grover Norquist and a horde of lawmakers are set to hold a news conference Thursday, one day ahead of the traditional tax filing deadline.
The top Republicans on the tax-writing committees — Sen. Orrin Hatch (R-Utah) and Rep. Dave Camp (R-Mich.) — are expected to join Norquist, as are Sen. Rand Paul (R-Ky.) and Reps. Jim Jordan (R-Ohio), Tom Price (R-Ga.), Cathy McMorris Rodgers (R-Wash.) and Kevin Brady (R-Texas).
— The Labor Department is slated to release initial jobless claims data in the morning that could show the third straight week of declines, a good sign for the job market.
Back to Obama: In some of the more detailed analysis of the Obama “vision,” Bob Bixby, one of Washington's foremost budget experts and the leader of the Concord Coalition, has pointed out what he calls key holes in the president’s proposal for a soft spending cap and Medicare alterations.
The president, in addition to his $4 trillion worth of spending cuts and tax increases, also called Wednesday for a “debt fail-safe trigger” that would require across-the-board spending cuts and tax expenditure reductions.
But Bixby says that “while triggers for across-the-board cuts can be important for enforcing budget agreements, policymakers need to be careful to not exempt large portions of the budget from cuts.”
“They also need to be mindful that simply setting spending targets, without specifying how to get there, is a recipe for deficit reductions on paper without the political consensus on the policies necessary to achieve them,” Bixby added.
Help me help you: Treasury Secretary Timothy Geithner has been reaching out to top Wall Street brass — the Jamie Dimons of the world — to see if they’ll talk to rank-and-file Republicans behind closed doors about not messing around with raising the debt ceiling, the Financial Times reports.
Breaking: Our Peter Schroeder breaks down the tongue-lashing Goldman Sachs got from a Senate panel for disgraceful and misleading tactics with regards to the financial crisis.
WHAT YOU MIGHT HAVE MISSED:
On the Money’s Wednesday:
John Boehner, Paul Ryan heap scorn on the Obama speech …
But Kent Conrad gives the president some props.
Heritage Foundation heartily gets behind Ryan budget …
While House Dems roll out their alternative.
Democrats on GOP’s debt limit stance: “Kamikaze politics” seeking out an “economic Chernobyl.”
The president might have gotten behind individual tax reform, but the devil’s in the details.
The Fed says some large mortgage lenders owe homeowners …
And that the economy’s still growing slowly.
House Oversight takes on federally employed tax delinquents.
Tech groups back away from their Durbin amendment stance.
Max Baucus, Chuck Grassley urge caution on linking tax collection, passports.
A hoax news release targets General Electric.
Mortgage applications drop.
And retails sales increase.
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