OVERNIGHT MONEY: Obama takes economic message home

The president is pressing Congress to pass a ban on military-style assault weapons and high-capacity magazines, as well as improve background checks.

The divisive issue will probably have a hard time gaining traction in Congress. 

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On Tuesday, Obama urged lawmakers to consider some changes and give those who have suffered from gun violence “a simple vote.” 

Chicago is enduring one of its worst-ever periods of gun violence, with more than 500 killed last year. 

The trip to Chicago comes after a visit to Asheville, N.C., where he focused on ramping up the nation's manufacturing sector, and a trip on Thursday to Atlanta, where he presented a plan to provide nationwide pre-K program. 

He told teachers in Decatur, Ga., that "we all pay a price" when students don't have access to quality early-childhood education.

"The size of your paycheck shouldn't determine your child's future," Obama said. "So let's fix this. Let's make sure none of our kids start out the race of life a step behind."

Obama's proposal, which he first mentioned on Tuesday, provides federal matching dollars to states with the goal of providing preschool for every 4-year-old from moderate- or low-income families. 

On Wednesday, he argued that manufacturing would keep the nation's middle class "growing" and "thriving" at an auto parts plant in Asheville, N.C.

“I believe in manufacturing,” Obama said. “I believe it makes our economy stronger.”


WHAT ELSE WE'RE WATCHING

Freeze frame: The House on Friday will vote on and probably pass legislation that would halt President Obama's executive order calling for a 0.5 percent pay hike next month.

Republicans are arguing that the government can't afford the pay hike, which will cost $11 billion over the next decade. Democrats countered that the bill is an attempt by Republicans to continue picking on federal workers who have had their pay frozen for the last two years.


Democrats complained throughout the debate that the bill should be split in two, because it would freeze the pay of federal workers and members of Congress. 

Rep. Jared Polis (D-Colo.) accused Republicans of combining the two because of the difficulty some might have voting against a bill that limits congressional pay.


BREAKING NEWS

Selling the sequester: Senate Democratic leaders unveiled a $110 billion sequester-replacement bill at a caucus meeting on Thursday that would replace $85 billion in automatic spending cuts set to hit March 1.

The Senate Democratic package is split evenly between spending cuts and provisions raising new tax revenues.

It would raise nearly $54 billion in taxes by implementing the Buffett Rule, setting a minimum effective tax rate for wealthy individuals and families, as well as raise additional revenues by changing the tax treatment of oil extraction from oil sands.

The measure also contains $3.5 billion in new farm program spending, pushed by Senate Agriculture Committee Chairwoman Debbie StabenowDeborah (Debbie) Ann StabenowSenators push HHS to negotiate lower prices on opioid overdose reversal drug Senators press administration on mental health parity Progressive groups launch M midterm initiative in three battleground states MORE (D-Mich.).

In exchange, Stabenow has signed off on a cut of $27.5 billion in farm subsidies known as direct payments. 

White House press secretary Jay Carney said Republicans face "a simple choice" now that Senate Democrats have proposed a plan.

"Do they protect investments in education, health care and national defense or do they continue to prioritize and protect tax loopholes that benefit the very few at the expense of middle and working class Americans?" Carney asked in a statement released by the White House.

Earlier in the day, House Speaker John BoehnerJohn Andrew BoehnerA warning to Ryan’s successor: The Speakership is no cakewalk With Ryan out, let’s blow up the process for selecting the next Speaker Race for Republican Speaker rare chance to unify party for election MORE (R-Ohio) said if the president was "serious about enacting his agenda," Senate Democrats needed to start proposing solutions to looming financial deadlines.

Still, the Democratic plan could face opposition from its more liberal members, who want to raise more money through taxes and cut less in spending.


CABINET WATCH

A no-go, for now: Senate Republicans voted 58-40 to block former Sen. Chuck HagelCharles (Chuck) Timothy HagelShould Mike Pompeo be confirmed? Intel chief: Federal debt poses 'dire threat' to national security Hagel: Trump is 'an embarrassment' MORE’s (R-Neb.) nomination as Defense secretary from proceeding to a final up-or-down vote, with 60 needed to end debate. 

Four Republicans — Sens. Susan CollinsSusan Margaret CollinsTrump aide: Mueller probe 'has gone well beyond' initial scope Trump attorney Cohen overshadows Mueller probe Collins: Comey should have waited to release his memoir MORE (Maine), Thad CochranWilliam (Thad) Thad CochranChamber of Commerce makes play in Mississippi Senate race for Hyde-Smith Shelby approved as Appropriations panel chairman Cindy Hyde-Smith sworn in as Mississippi's latest senator MORE (Miss.), Lisa MurkowskiLisa Ann MurkowskiSenators press administration on mental health parity Overnight Energy: Watchdogs unveil findings on EPA, Interior controversies | GAO says EPA violated law with soundproof booth | IG says Zinke could have avoided charter flight | GOP chair probes Pruitt's four email addresses GOP fractures over push to protect Russia probe MORE (Alaska) and Mike JohannsMichael (Mike) Owen JohannsMeet the Democratic sleeper candidate gunning for Senate in Nebraska Farmers, tax incentives can ease the pain of a smaller farm bill Lobbying World MORE (Neb.) — joined 55 Democrats and independents in supporting the nomination. 

Republicans senators argued that they needed more time to vet Hagel for the job and would take time during next week's recess to make a final decision of their support or opposition. 


LOOSE CHANGE

Failure threat: Sen. Bob CorkerRobert (Bob) Phillips CorkerKorean peace talks pose new challenge for Trump GOP senator: Democratic opposition to Pompeo 'driven 100 percent by politics' Corker: Charming North Korea into getting rid of nuclear weapons is not realistic MORE (R-Tenn.), sent a letter to federal banking regulators after a Senate Banking Committee hearing on Thursday asking if the economy would be threatened by the failure of any single financial institution. He sent the letter to Under Secretary of the Treasury Mary J. Miller and Federal Reserve Governor Daniel K. Tarullo.

“My question was: ‘Are there any individual financial institutions whose failure would pose a systemic risk to the United States?’ I was disappointed in your answer, which seemed to indicate that you do not know if there are institutions whose failure might threaten the stability of our country,” Corker wrote. 

“[W]ould you please let me know if there are currently any financial institutions so large or so complex that their failure would threaten the financial stability of the United States?  If so, how do you plan to resolve this issue?”

So sweet: A group of bipartisan lawmakers is co-sponsoring a bill to lower sugar prices and make it easier to sell and trade sugar as a way to save consumers and businesses upward of $3.5 billion a year. 

The result, they say, would be lower food prices across the board, as well as lower costs and more jobs for businesses, such as confectioners. 

Sen. Pat Toomey (R-Pa.), who introduced the measure to the farm bill last summer, was joined by Sens. Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenSenators pledge to pursue sanctions against Turkey over imprisoned American pastor Dems walk tightrope on Pompeo nomination Menendez rips characterization of Pompeo as 'nation's top diplomat' MORE (D-N.H.), Mark KirkMark Steven KirkHigh stakes as Trump heads to Hill Five things to watch for at Trump-Senate GOP meeting Giffords, Scalise highlight party differences on guns MORE (R-Ill.), Dick DurbinRichard (Dick) Joseph DurbinTo succeed in Syria, Democrats should not resist Trump policy Hannity, Kimmel, Farrow among Time's '100 Most Influential' The Hill's Morning Report: 200 Days to the Election MORE (D-Ill.), Rob PortmanRobert (Rob) Jones PortmanTax rules will be subject to more OMB review under new memo Ending sex trafficking tomorrow requires preventing child abuse today Doctors bristle at push for opioid prescription limits MORE (R-Ohio), Frank Lautenberg (D-N.J.), Dianne FeinsteinDianne Emiel FeinsteinSunday Shows Preview: Emmanuel Macron talks ahead of state dinner CIA declassifies memo on nominee's handling of interrogation tapes Senate panel punts Mueller protection bill to next week MORE (D-Calif.), Bob Corker (R-Tenn.), Kelly AyotteKelly Ann AyotteAudit finds US Defense Department wasted hundreds of millions of taxpayer dollars US sends A-10 squadron to Afghanistan for first time in three years No, the US did not spend million on a gas station in Afghanistan MORE (R-N.H.) and Lamar AlexanderAndrew (Lamar) Lamar AlexanderThe risk of kicking higher ed reauthorization down the road Maternal deaths keep rising in US, raising scrutiny Supreme Court weighs future of online sales taxes MORE (R-Tenn.), as well as Reps. Joe Pitts (R-Pa.), Danny Davis (D-Ill.), Earl BlumenauerEarl BlumenauerRussia, China eclipse US in hypersonic missiles, prompting fears Water has experienced a decade of bipartisan success Way to go, Ted Poe MORE (D-Ore.) and Bob GoodlatteRobert (Bob) William GoodlatteComey memo fallout is mostly fizzle Impeaching Rosenstein? Some Republicans are talking about it Trump claims vindication after release of Comey memos MORE (R-Va.). 

“This flawed policy hurts not only candy companies and food manufacturers, but also the families who end up paying higher costs for products made with sugar,” Toomey said.


ECONOMIC INDICATORS 

Industrial Production-Capacity Utilization: The Federal Reserve will release its January report showing the physical output of the nation's factories, mines and utilities. The monthly report also provides a measure of capacity utilization. 

Michigan Sentiment: Thomson Reuters/University of Michigan will release its measure of consumer sentiment for February. 


WHAT YOU MIGHT HAVE MISSED

— Legislation would raise business lending caps for credit unions
— Senate Dems hold the line on consumer bureau
— Sen. Warren presses regulators to take firmer line with banks
BoehnerJohn Andrew BoehnerA warning to Ryan’s successor: The Speakership is no cakewalk With Ryan out, let’s blow up the process for selecting the next Speaker Race for Republican Speaker rare chance to unify party for election MORE challenges Senate Dems to take lead, pass Obama second-term agenda
— USPS poll: Public backs five-day delivery
— Gallup: Americans support ending Saturday mail delivery
— Lawmakers claim momentum in push for Internet sales tax
— Obama favors sacking the penny
— Talks continue between AFL-CIO, Chamber on immigration reform
— Senators urge regulators to scrap down payment rule
— US, Switzerland sign tax evasion agreement
Jobless claims drop by 27,000


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