OVERNIGHT MONEY: Senate ponders debt-ceiling bill

On Tuesday, Reid didn't specify when the debt-ceiling bill would hit the floor for a vote, although he said last week, after the House passed the measure, that the Senate would take it up and pass it quickly, without amendment.

The House easily passed the measure last week, 285-144. 

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Reid suggested on Tuesday that lawmakers also could continue work on replacing scheduled cuts to defense and domestic spending — a sequester — with different spending cuts and tax hikes.

"There are many low-hanging pieces of fruit out there that Republicans have said they agreed on previously," Reid said. 

He said the cuts should be replaced "in short increments" by, for instance, repealing oil and gas subsidies as previously discussed.

"So there's a lot of things we can do out there, and we're going to make an effort to make sure that there sequestration involves revenue," he said.

McConnell has suggested that Democrats focus on spending cuts and put aside any ideas to further hike taxes.


WHAT ELSE TO WATCH FOR 

Interest in interest rates: The Federal Reserve will be out with a piping-hot new policy statement tomorrow, as the Federal Open Market Committee (FOMC) wraps up a two-day meeting on the nation's monetary policy. The Fed announced at its December meeting that it was expanding its monthly bond purchases under its latest "quantitative easing" effort from $40 billion to $85 billion, and remained committed to keeping those purchases up until unemployment dropped significantly — so long as inflation remained under control. With those conditions still more or less the same now, few are expecting any major news out of the Fed tomorrow. Rather, the Fed is likely to reiterate its ongoing policy in Wednesday afternoon's statement.


LOOSE CHANGE

Balancing act: Sen. Richard Shelby (R-Ala.), ranking member of the Senate Appropriations Committee, is taking square aim at the nation's finances. The lawmaker introduced a pair of bills on Tuesday that he says would simplify and rectify the nation's fiscal picture, and provide a big break to taxpayers. One bill would require the government to adhere to a balanced budget amendment capping spending at 20 percent of GDP, which could be waived only during wars or emergencies when agreed to by three-fifths of Congress. The second bill would implement a flat tax of 17 percent on all income, and give taxpayers just one exemption to employ.

"In my judgment, these proposals will revive our economy by reducing government spending and creating an environment conducive to private sector growth," he said.

Tumbling, tumbling: Who said that the IRS hasn't joined the 21st century?

The tax-collecting agency announced Tuesday that it had joined Tumblr "to help share information about important programs to help taxpayers, such as late tax law changes, the Earned Income Tax Credit and free file."

(Tumblr, for those unaware, is a microblogging site.)

The IRS already has its own Twitter feed, and a YouTube page. 


CABINET WATCH

Support for Lew: Senate Banking Committee Chairman Tim Johnson (D-S.D.) said Tuesday that the upper chamber should confirm Jack Lew as secretary of the Treasury.

"Lew is well-qualified, has the right temperament, and should be confirmed by the Senate without delay," Johnson said after a meeting. "He shares my commitment to sustaining and strengthening the economic recovery and providing certainty through implementation of Wall Street Reform." \

"The next Treasury Secretary already has his work piling up with ongoing budget negotiations, the debt-ceiling debate, and continued implementation of Wall Street Reform."  

One down, plenty to go: As expected, the Senate confirmed one of its own to become President Obama's second secretary of State on Tuesday.

Sen. John Kerry (D-Mass.) got all but three Republican votes, notching a quick 94-3 vote with Sen. James Inhofe (Okla.) and Texas Sens. Ted Cruz and John Cornyn as the only noes. Kerry will replace Hillary Clinton.

Divesting for Defense: Former Sen. Chuck Hagel (R-Neb.) will divest from Chevron and leave the company’s board of directors if confirmed as Defense secretary.

The Pentagon pick and his wife hold between $100,001 and $250,000 of Chevron common stock and earn between $5,001 and $15,000 in dividends. He also pulled $116,000 in income for serving on Chevron’s board.

On the road, again: Transportation Secretary Ray LaHood became the next Cabinet member to announce his departure from the Obama administration. Possible replacements include Los Angeles Mayor Antonio Villaraigosa (D) and former Michigan Gov. Jennifer Granholm (D).

The administration did not even confirm LaHood's expected departure until he announced it on Tuesday.   


ECONOMIC INDICATORS 

GDP: The Commerce Department will release its first measure of the nation's economic activity for the final three months of the last year. Economic growth is projected to have slowed significantly in the fourth quarter, possibly to as low as 1.1 percent from 3.1 in the third quarter. Despite the slowdown, economists predict that consumer spending and business investment, better indicators of a recovery, may have picked up pace, providing a solid foundation for continued improvement down the road. 

ADP National Employment Report: Automatic Data Processing (ADP) will release its January report for private-sector job growth, which is expected to come in around 175,000. The report hits two days ahead of Friday's scheduled government estimate that includes public- and private-sector job growth. 

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


WHAT YOU MIGHT HAVE MISSED

— US debt headed toward 200 percent of GDP even after 'fiscal cliff' deal
— Study: Consumers spent more of payroll tax cut than intended
Senators accuse Justice Department of treating banks as 'too big to jail'
— Senate Dems look to help consumers shake off medical debt from credit scores
— Home prices make largest annual gain in six years
— SEC names new inspector general


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