OVERNIGHT MONEY: Senate tackles farm bill

TUESDAY'S BIG STORY:

 


Plowing ahead: The Senate takes the first step on Tuesday to dispense with the long-delayed farm bill. 

The Senate Agriculture Committee is set to mark up its version of the bill a day before its House counterpart follows suit.

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Last year, the heads of the committees — Sen. Debbie Stabenow (D-Mich.) and Rep. Frank Lucas (R-Okla.) — made a valiant effort to push through a measure that could be signed by President Obama. But the House never took up the bill that moved through committee.

Expect another weighty effort this summer to reach a final compromise as farmers continue to operate under an extension of the 2008 bill.

The nonpartisan Congressional Budget Office (CBO) on Monday released its score of the Senate farm bill, which cuts $18 billion over 10 years, and another $6.4 billion when counting sequestration.

That brings the total savings to $24.4 billion — about $1.4 billion more than Stabenow estimated when the bill was released last week.

The bill cuts $4 billion from food stamp programs, $17 billion from traditional farm subsidies and $3.6 billion from environmental programs while spending $5 billion to provide a boost to crop insurance programs.

While House and Senate leaders are determined to clear a bill, the major difference is cuts to food stamps — the Senate cuts $4 billion, while the House's bill takes a bigger bite of around $20 billion, which makes up about half of its nearly $40 billion in savings over the next decade. 

Meanwhile, sugar growers are feeling pretty good that the U.S. sugar program will remain intact. The bills from both chambers keep the program. 


WHAT ELSE WE'RE WATCHING 

'Too big' ideas: The Bipartisan Policy Center will dive into the "too big to fail" debate tomorrow, releasing a report recommending how policymakers can ensure that Wall Street giants are not seen as enjoying an implicit lifeline from Uncle Sam. The report comes from BPC's working group devoted to financial reform, and comes as members of Congress, as well as the financial industry's advocates and critics, are still engaged in a heated debate about whether the Dodd-Frank financial reform law effectively puts the matter to bed.

More on Medicare: The Senate Finance Committee on Tuesday will chat with top policy experts on how comprehensive tax reform might change how Medicare payments are made to physicians. 

Housing reform: A Senate Banking, Housing and Urban Affairs subcommittee will tackle the topic of how to lure private capital back into the housing market in a chat with several policy experts. Congress and the White House have said that the roles of Fannie Mae and Freddie Mac need to be reduced in the housing finance market, but a debatable plan has yet to emerge.  

Infrastructure projects: Acting Secretary of Commerce Rebecca Blank is traveling through Latin America on a trade mission that looks to give U.S. companies opportunities to expand their infrastructure businesses into countries that are ramping up building. 

Blank will swing through Brazil, Colombia and Panama with 20 U.S. companies representing a broad range of infrastructure industry sectors on this trade mission, which will help them make the connections to expand their businesses.


BREAKING NEWS

IRS on the hot seat: President Obama said Monday that he would “not tolerate” political targeting by the Internal Revenue Service (IRS), calling reports that the agency had gone after conservative groups “outrageous.”

“If you've got the IRS operating in anything less than a neutral and nonpartisan way, then that is outrageous. It is contradictory to our traditions, and people have to be held accountable,” Obama said at a joint press conference with British Prime Minister David Cameron.

Obama said he first learned that employees of the federal tax agency had targeted conservative groups when news reports emerged on Friday.

Meanwhile, press secretary Jay Carney acknowledged on Monday that the White House was informed in April that the Treasury Department's inspector general was investigating the IRS's Cincinnati field office.

"My understanding is that the White House Counsel’s Office was alerted in the week of April 22 of this year, only about the fact that the IG was finishing a review about matters involving the office in Cincinnati," Carney told reporters aboard Air Force One. "But that’s all they were informed as a normal sort of heads up. And we have never — we don’t have access to, nor should we, the IG’s report or any draft versions of it."

Amid all the chaos, the House Ways and Means Committee announced a Friday hearing.

"News that the agency admits it targeted American taxpayers based on politics is both astounding and appalling," said Chairman Dave Camp (R-Mich.). "The Committee on Ways and Means will get to the bottom of this practice and ensure it never takes place again.”

A long line of lawmakers from both parties condemned the IRS actions and called for a congressional investigation. 

Senate Majority Leader Harry Reid (D-Nev.) on Monday said targeting groups for political reasons was “terrible" and a "breach of the public's trust."

Senate Finance Committee Chairman Max Baucus (D-Mont.), whose powerful committee has jurisdiction over taxes, said his panel will launch an investigation, calling the IRS's action's an “outrageous abuse of power.” 

The panel's ranking member Orrin Hatch (R-Utah) also requested a bipartisan investigation.

On the House side, Rep. Michael Turner (R-Ohio) introduced legislation that would significantly increase penalties against IRS workers who discriminate against people or groups for reasons related to political speech.

"Americans of all political beliefs have been rightly outraged by the revelation of the IRS's efforts to target certain political organizations," Turner said Monday. "The fact that this could occur with little to no corrective action against those who seek to silence their fellow citizens is unacceptable."


LOOSE CHANGE

Looking up: April proved to be a stronger month for small-business confidence. After March’s disappointing drop, last month's gauge showed that the outlook rose 2.6 points to 92.1, just above the recovery average of 90.7. 

“Small-business confidence saw an uptick this last month, but it was a ho hum, yawn, at-least-it-didn’t-go-down reading," said National Federation of Independent Business chief economist Bill Dunkelberg. 

"Nothing in the NFIB data suggests that the small business half of the economy is expanding other than by an amount driven by population growth and associated new business starts now in excess of terminations," he said. 

Owners were asked to identify their top business problem: 23 percent cited taxes, 21 percent said regulations and red tape and 16 percent said weak sales. Only 2 percent reported financing as their top business problem. 

Job creation plans rose 6 points to a net 6 percent planning to increase total employment.

Nearly half (49 percent) percent of owners surveyed hired or tried to hire in the last three months and 38 percent (78 percent of those trying to hire or hiring) reported few or no qualified applicants for open positions.  


ECONOMIC INDICATORS

Export Prices-Import Prices: The Commerce Department releases its April report tracking trends in exports and imports with the export data worth watching for indications of how the global economy is faring. Imports provide an indication of domestic demand, but given the severe lag of this report relative to other consumption indicators, it is not particularly valuable.


WHAT YOU MIGHT HAVE MISSED

— Obama, Cameron vow comprehensive US-EU trade deal

— UK’s Cameron wants ‘global standard’ on energy payments disclosure

— GOP pushes new SEC head on JOBS Act regulations

— Feds warn sequester cuts weakened readiness for wildfire season

— John Kerry's brother to join Cabinet

— Administration reasserts veto power over Fannie, Freddie salaries

— Liberal group challenges Norquist to lobbying duel


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