OVERNIGHT MONEY: Time for tax reform ... almost

WEDNESDAY'S BIG STORY:

Tax reform takes center stage: House Ways and Means Committee Chairman Dave Camp (R-Mich.) didn't even have a chance to unveil his tax reform plan on Wednesday before it got doused with cold water.

Camp is set to release a long-awaited plan to overhaul the tax code but House and Senate leaders made clear on Tuesday that his plan had no chance of getting through Congress this year.

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Senate GOP Leader Mitch McConnell (Ky.) said Tuesday that differences between the two parties were too great to overcome, arguing that any tax plan would move forward at a faster clip if both chambers were under Republican control.

“I think we will not be able to finish the job, regretfully, in 2014,” McConnell said.

House Republican leadership didn't give the plan any chance, either, especially in an election year. 

But while Senate Majority Leader Harry Reid (D-Nev.) thinks Camp's plan is a long shot, at best, this year he expressed support for his tax-writing efforts.

GOP Rep. Greg Walden (Ore.) said he expects Camp's draft will fire up the discussion about how to change the tax code.

The plan is expected to slash individual and corporate tax rates while eliminating or paring back incentives, which The Hill's Bernie Becker and Russell Berman discuss in a story set for release Tuesday night. 

The panel chairman could show how to reduce the the individual and corporate rate to 25 percent.

There also are expectations that Camp includes a tax on the largest banks — those with assets exceeding $500 billion — and also potential changes or limits to the mortgage interest deduction, the state and local tax deduction and certain retirement accounts.

"Camp has cast his plan as a challenge to the special interests, and to those policymakers that are willing to accept the status quo," the story will say. 

After years of talking about tax reform, lawmakers on both sides of the aisle will finally be able to debate an aggressive, organized plan that emerged from a pool of seemingly disjointed ideas. 

Here we go ... 

 

WHAT ELSE WE’RE WATCHING 

Talking about taxes: Sen. Carl Levin’s (D-Mich.) Permanent Investigations subcommittee will hold on Wednesday the latest in a series of hearings focused on offshore tax evasion and the effort to collect billions in hidden offshore accounts.

Retirement challenges: A Senate Finance subcommittee will look at how lower-income workers can save for retirement with government officials and retirement experts.

Examining the IRS: A House Appropriations subcommittee will continue its examination on Wednesday into the workings of the Internal Revenue Service, with John Koskinen, the IRS commissioner, and Russell George, the Treasury’s inspector general for tax administration, along with IRS National Taxpayer Advocate Nina Olson.

Social Security disability fraud: A House Ways and Means subcommittee will also explore fraud issues in the Social Security disability program on Wednesday.

Staying busy: A couple of House Financial Services subcommittees will look into a few issues, one of which will examine lobbying at the Housing and Urban Development Department. A second panel will discuss Dodd-Frank’s effect on securities.

On the road: President Obama will head to St. Paul, Minn., on Wednesday to tour the Metro Transit Light Rail Operations and Maintenance Facility. He is expected to announce a new competition encouraging investments to create jobs and restore infrastructure.

Building relationships: Commerce Secretary Penny Pritzker will meet with Alexey Ulyukayev, Russian minister of economic development, along with other Russian officials, to discuss efforts to strengthen the U.S.-Russia bilateral economic relationship, including the forging of investment and trade pacts to further open the Russian market to U.S. exports. 

 

LOOSE CHANGE

Up and down: Home prices last year posted their largest annual gain since 2005, although they dropped in the final two months of the year, according to the S&P/Case-Shiller price index released Tuesday. 

Overall, prices for the year increased 13.4 percent, and were up 11.3 percent in the fourth quarter compared to a year earlier.

On a monthly basis, home prices declined by 0.1 percent in December from November in the 20-city index, the second straight monthly decline, but dropped at a much slower pace since 2006.

A separate report showed home prices rising 1.2 percent in the fourth quarter, according to the Federal Housing Finance Agency (FHFA) House Price Index. 

“Home price appreciation in the fourth quarter was considerable, but more modest than in recent periods,” said FHFA principal economist Andrew Leventis. 

Growth continues: Commerce Secretary Penny Pritzker announced Tuesday that U.S. exports supported more than 11.3 million jobs in 2013, up 1.6 million jobs since 2009, according to a Commerce report.

“The strong correlation between exports and U.S. jobs is why the Department of Commerce is focused on helping American companies sell their goods and services all over the globe,” Pritzker said.

“The fact is, 95 percent of worldwide consumers live outside U.S. borders, and for our businesses to grow and create jobs, we have to make it possible for them to reach new markets."

 

ECONOMIC INDICATORS

MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume.

New Home Sales: The Commerce Department releases its January report on new privately owned one-family houses sold and for sale. New home sales usually have a lagged reaction to changing mortgage rates.  

 

WHAT YOU MIGHT HAVE MISSED

— Senators chide DOJ on tax cheats

— Manufacturers warn of ObamaCare fallout

— Ron Paul: Feds shouldn't 'interfere' with bitcoin

— Bitcoin firm's collapse triggers fear

— Dems to roll out minimum wage discharge petition

— Reid delays minimum wage vote

— Trumka expresses concerns about Asia-Pacific trade deal

— No deal after four days of Asia-Pacific talks

— Consumer confidence dips slightly

 

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