OVERNIGHT MONEY: IRS trapped in spotlight

Panel Chairman Darrell Issa (R-Calif.) has taken steps to ensure her appearance.

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The Treasury inspector general's report shows that Lerner discovered IRS employees in a Cincinnati office were looking at Tea Party groups for added scrutiny in June 2011. She directed the guidelines be changed, but other IRS employees again altered the terms without her authorization.

Shulman told Congress on Tuesday that he only learned the full extent of the agency’s targeting of conservative groups after he left his post and did not know why employees initially implemented the policy.

He said IRS staffers should have more quickly alerted their superiors about the higher scrutiny given to Tea Party groups seeking tax-exempt status — a feeling shared by the acting commissioner, Steven Miller.

Shulman, in his first testimony on the controversy, said the report left him “saddened” and “dismayed,” but he also noted that it didn’t find any political motivations by the employees.

The testimony frustrated Republicans already irritated by Miller’s contentious appearance before the House Ways and Means Committee last Friday.

Off Capitol Hill, the White House said Tuesday that senior officials took part in discussions over how the IRS would disclose its targeting of conservative groups, marking the latest shift in the White House’s official line on the matter.

Press secretary Jay Carney told reporters that Mark Childress, deputy chief of staff, spoke twice with Treasury Department officials about the IRS’s public relations strategy.

“This was just part of trying to find out when and under what circumstances this information would be released, made public, and what those findings would be,” the press secretary said.

We'll see what revelations Wednesday brings. 


WHAT ELSE WE'RE WATCHING

Bernanke's back: Federal Reserve Chairman Ben Bernanke will give members of the Joint Economic Committee an update on the nation’s economic picture on Wednesday. Fed watchers will have their ears to the ground in case Bernanke provides any hints as to when the central bank will take its foot off the gas of monetary stimulus. 

Bernanke will probably face Republican scrutiny over the Fed's role in trying to boost economic growth, which they say has been largely ineffective and encouraged inflation.

His appearance comes a few hours ahead of the release of the Fed's minutes, which could show again that Fed governors are split on the matter of continuing the stimulus.

Another round: Treasury Secretary Jack Lew will head over to the House Financial Services Committee on Wednesday, where he will probably talk more about what and when he knew about the investigation into the Internal Revenue Service's practices of applying additional scrutiny to conservative groups seeking tax-exempt status. 

Lew told the Senate Banking Committee on Tuesday that he first learned about the possible problems in a March 15 meeting with the Treasury's inspector general for tax administration, Russell George.

He said he was immediately outraged by the IRS's actions, and vowed to Congress on Tuesday that the Obama administration is taking steps to address the matter.

Lew is actually scheduled to talk to the panel about the state of the nation's financial situation, but lawmakers will probably pounce at the chance to get the Treasury secretary to chat about the IRS scandal. 

Boosting trade: The Senate Finance Committee on Wednesday is set to discuss bipartisan legislation that would strengthen the trade facilitation and enforcement efforts of U.S. Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE).

The legislation reauthorizes CBP and ICE and directs them to dedicate resources to customs facilitation and trade enforcement, while establishing new tools and high-level trade positions to bolster trade efforts.

Too big to jail: A House Financial Services subcommittee will discuss Wednesday whether big Wall Street banks are effectively “too big to jail," with Deputy Attorney General James Cole.

Attorney General Eric Holder told Congress that the Justice Department faces challenges in bringing charges against large banks, but later said he was misunderstood, and did not mean it is impossible to prosecute them.

Cutting back: The Senate Homeland Security and Governmental Affairs Committee on Wednesday will examine a Government Accountability Office report that delves into the areas in the federal government where there is the fragmentation, overlap and duplication of programs. The GAO has made recommendations to Congress and the executive branch agencies to address these problems. 

More budgeting: The House Appropriations Committee will mark up the fiscal 2014 Homeland Security Appropriations bill on Wednesday. The measure provides $38.9 billion in discretionary funding for the agency, a decrease of $617.6 million below the fiscal 2013 levels and $34.9 million below the president’s request. 

Economic growth: The Senate Budget Committee will talk about creating economic growth through tax reform. Lawmakers are insistent on moving forward with an overhaul of the tax code within the next year or so. The panel will chat with a group of think tank experts on the issue. 

Deese up again: The Senate Homeland Security and Governmental Affairs Committee will hold a vote on the nomination of Brian Deese to be deputy director of the Office of Management and Budget. Deese sailed through the Senate Budget Committee on Tuesday. 


IRS ROUNDUP

Boehner: 'The American people deserve the truth'

— Poll: Benghazi, IRS scandals long-lasting

— Watchdog sues IRS to change regulations for tax-exempt groups

Tea Party group files first lawsuit against IRS over targeting scandal


ECONOMIC INDICATORS 

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

Existing Home Sales: The National Association of Realtors releases April figures for sales of existing homes. Existing-home sales are completed transactions across a broad range of housing types, including single-family homes. 


WHAT YOU MIGHT HAVE MISSED

— House panel approves military construction, veterans bill

— McCain bucks party by objecting to restrictions on budget conferees

— Smaller lenders express concern about final ability-to-pay rule

— Wall Street reform rule said to increase violence in Congo

— Court shuts investment firms out of FDIC lawsuit

— Lawmakers want to spear catfish inspection program

— Rand Paul: Senate should apologize to Apple for ‘spectacle’ hearing on taxes

— House Dems introduce two-year sequester replacement bill

— Senate rejects farm bill amendments aimed at changing cuts to food stamps

— Senate clears first amendment to the farm bill

— ND Senators: Sugar subsidies in farm bill are 'critical to compromise'


Catch us on Twitter: @VickoftheHill, @peteschroeder, @elwasson and @berniebecker3

Tips and feedback, vneedham@thehill.com

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