OVERNIGHT MONEY: Payroll tax bill moves into the legislative spotlight

Speaker John Boehner (R-Ohio) expressed confidence during a Monday press conference that he expects the bill to pass with "bipartisan support."

Boehner has insisted that most of the bill includes ideas floated by the Obama administration and should find some Democratic support. 

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Right now, the only Democrat publicly supporting the bill is Rep. Dan Boren (D-Okla.), one of the most conservative Democrats in Congress, who's also retiring. 

“At a time when many are without work, it is time that we come together in a bipartisan way to pass this legislation, which will create tens of thousands of new jobs,” Boren said on Monday. 

His fellow Democrats aren't sold on the measure and their list of problems is long — including a 40-week cut to unemployment benefits and the inclusion of the Keystone XL pipeline. 

Senate Majority Leader Harry Reid (D-Nev.) has said its inclusion is a "non-starter" in the Senate and Republican Sen. Lindsey Graham (S.C.) said Sunday that the provision "won't sell" in the upper chamber.

"I think we have a good shot, otherwise it wouldn't have been in there," Boehner said about passing the bill with the Keystone provision. 

The Obama administration has delayed a decision on that development until after the 2012 election, angering Republicans who say it would create thousands of American jobs.

So the online Christmas shopping will continue as lawmakers and staffers remain entrenched in what could be a week of behind-closed-doors meeting to hash out a final agreement on a bill that the president will sign and that will allow Congress to head out of town for the holidays. 

Boehner echoed his Democratic colleagues on Monday, saying that it is important to pass the payroll tax cut and the nine remaining spending bills, which are melded into a package. 

He wouldn't predict this week's schedule but hinted the House wouldn't go anywhere until the Senate acts — possibly meaning the House will see the bill again before adjourning for the year.

"We will have to wait until later on in the week to see what the Senate does," he said.

But don't make any $10,000 bets on that prediction.

Bob Nielsen, chairman of the National Association of Home Builders said Monday that his group opposes the GOP plan to raise fees charged by Fannie Mae and Freddie Mac and use them to help pay for an extension of this year's payroll tax cut.

"Congress is essentially proposing to raise taxes on millions of potential home buyers in order to pay for a payroll tax cut and other non-housing legislative initiatives," he said. "With the housing market struggling to regain its footing, such a short-sighted move would be extremely counterproductive and threaten the fragile economic recovery."

Other ideas emerged on how to pay for the bill on Monday, with Marc Goldwein, who served as a staffer on the failed deficit supercommittee, floating a plan to pay for the payroll tax extension bill that also extends unemployment insurance and patches the alternative minimum tax (AMT).

Goldwein, writing in The Atlantic online, suggests paying for the extension by changing the way the government calculates the consumer price index. 

There isn't any shortage of criticism off the Hill, as a report from the National Employment Law Project estimates that the House GOP proposal would result in as much as $22 billion in lost economic growth to the nation’s economy, as well as a loss of at least 140,000 jobs next year.

Meanwhile, Republicans bucked the Congressional Budget Office's analysis of their bill to extend the payroll tax holiday, arguing that it reduces the deficit. 

The CBO said Friday that the bill would increase the deficit by $25.3 billion.

But Republicans say the CBO did not count the $26.2 billion in reduced spending that would occur as a result of provisions to lower the future discretionary spending caps. Both parties agreed to those caps in the summer debt-ceiling talks. But the cuts were not included in the final score, though the CBO did estimate the savings in its analysis.


WHAT ELSE TO WATCH FOR

Here comes the Fed: The policymakers that control the levers of the Federal Reserve are convening Tuesday for the latest meeting of the Federal Open Market Committee (FOMC). The Fed has been keeping itself busy in recent months. First, it embarked on "Operation Twist," which has the central bank buying up hundreds of billions of longer bonds while selling short ones in a portfolio realignment it hopes will lower borrowing costs. Second, it recently announced a global effort with other central banks to make it cheaper to swap dollars for other foreign currencies in targeted relief for ailing European banks.

Expectations for major news out of Tuesday's meeting are low given those two big projects that are still under way, but Fed watchers will be keeping a close eye on the FOMC's statement to see if the recent run of positive economic news — including a dip to 8.6 percent in the unemployment rate — has members feeling any more upbeat about the sluggish economic recovery.

Encore for Corzine: Lawmakers are holding up their lighters — or maybe their smartphones, or whatever the kids hold up these days when they want the band to play another set — for former New Jersey Gov. and Sen. Jon Corzine. Corzine had a very long Thursday before the House Agriculture Committee, as he was grilled by Republicans and Democrats for hours about the collapse of his former firm, MF Global. Now he gets to do it all over again on Tuesday, this time the other side of the Capitol before his former colleagues at a Senate Agriculture Committee. 

Once again, Corzine will face tough questions on his role in the firm's collapse and what happened to up to $1.2 billion in customer funds that have gone AWOL (Corzine says he doesn't know where the money went). So far, Corzine has steered clear of the Fifth Amendment and tried to actually answer questions, albeit carefully. Tomorrow's appearance will mark the second of three on Capitol Hill, with another appearance set before a House Financial Services subcommittee on Thursday.

Burning down the house: Well, not really, but the Senate Banking Committee will take a closer look at the role of the Federal Housing Finance Agency in the housing market's health on Tuesday. The FHFA, which oversees mortgage giants Fannie Mae and Freddie Mac, has come under fire recently for failing to adequately help struggling homeowners and for giving the OK on hefty bonus packages for executives at the two entities. Steve Linick, FHFA's inspector general, will testify.

But first: The Senate Banking Committee will precede that hearing by voting on a trio of Obama nominees. On tap are Maurice Jones to be the Department of Housing and Urban Development's (HUD) deputy secretary; Carol Galante to be HUD's assistant secretary; and Thomas Hoenig to be vice chairman of the Federal Deposit Insurance Corporation.

China's track record: Sunday marked the 10th anniversary of China joining the World Trade Organization, the start of a massive boom in Chinese exports to the United States. For years trade skeptics have said the U.S. has failed to hold China accountable under WTO rules.

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The Congressional-Executive Commission on China will look at the track record on Tuesday with a hearing. Claire Reade, the assistant U.S. Trade Representative for China Affairs, testifies.


PRESIDENTIAL DAYBOOK

Sell, sell, sell, Mortimer: President Obama is expected to keep up his lobbying efforts on the payroll tax, sitting down with local television outlets from across the country.

Keeping count: Vice President Biden, meanwhile, keeps up his oversight of waste and fraud within the government, holding a meeting on administration efforts with Cabinet members.


ECONOMIC INDICATORS

Business Inventories: The Department of Commerce report includes sales and inventory statistics from all three stages of the manufacturing process (manufacturing, wholesale and retail). 

Retail Sales: The Department of Commerce releases the measure of the total receipts of retail stores. The changes in retail sales are widely followed as the most timely indicator of broad consumer spending patterns. 


BREAKING MONDAY

Keep an eye out for the bus: Congress has less than a week to complete one more spending package to prevent a government shutdown.

This week’s fight will center on the cost of the package, controversial policy language and the desire by both parties to get out of Washington in time for the holidays.

Omnibus revving its engines: Lawmakers tried on Monday to wrap up a sprawling $1 trillion-plus spending bill that chips away at military and environmental spending and implements this summer's hard-fought budget pact between President Obama and Republican leaders. 

I'll bet you it's less than a trillion: The Treasury Department forecast Monday that the budget deficit for fiscal 2012 will come in at $996 billion, the first time President Obama has presided over an annual deficit of less than $1 trillion.

The budget deficit in fiscal 2011 and 2010 was $1.3 trillion, while the Obama stimulus law pushed the deficit up to $1.4 trillion in fiscal 2009.

A boon to the budget deficit: A new independent study says the tax plan by GOP presidential hopeful Newt Gingrich would provide big tax breaks to the rich and blow a huge hole in the federal budget deficit. The analysis by the Tax Policy Center says households making more than $1 million a year would see their taxes drop by an average of 62 percent. The study says federal tax revenues would drop by an estimated $850 billion in 2015 and worsen the budget deficit unless it is offset by unprecedented spending cuts.

Euro deal getting you down?: Stocks closed sharply lower Monday after two big rating agencies criticized a fiscal pact between European leaders last week that is aimed at easing the region's debt crisis. Fitch Ratings said the deal to bind Europe's budgets more closely will make little difference. 


WHAT YOU MIGHT HAVE MISSED

— Obama taps two to head manufacturing office

Vitter praises SEC's reported decision to go to court for investors

— House Democrat launches investigation into executive pay

Senators make case for mass transit tax credit

— Latest fight over 'Volcker rule' a matter of timing

Aerospace industry hails US move in WTO Airbus case

Tips and feedback, vneedham@thehill.com