OVERNIGHT MONEY: Economy edging back into focus

THURSDAY'S BIG STORY:

Economy in focus: President Obama heads to the Sunshine State on Thursday where he will try to cast a bright ray of light over the nation's economic trajectory. 

The trip to Jacksonville, Fla., his third city in two days, is an attempt by the White House to prod Congress into refocusing their energies into crafting and passing policies that can spur economic growth at a faster rate. 

He will speak at the Jacksonville Port Authority where he will highlight the bright spots in the improving economy while reiterating how important it is to make more progress. 

Obama did a swing through Illinois and Missouri on Wednesday. 

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Following his first speech, Republicans argued that their focus always has been, and continues to be, on job creation and a much better economic recovery. 

"We agree with the president, too many Americans are struggling in today’s economy, and we stand ready to work toward real, bipartisan solutions, not listen to another stump speech," the Republican Illinois delegation said after his speech at Knox College in Galesburg, Ill.

Speaker John Boehner (R-Ohio) likened the address to “an Easter egg with no candy in it” during a floor speech on Wednesday.

“The president himself said it isn’t going to change any minds,” Boehner said. “All right, well. So exactly what will change? What’s the point? What’s it going to accomplish? You probably got the answer: Nothing.”

Rep. Chris Van Hollen (D-Md.), ranking member of the House Budget Committee, said that Democrats are "committed to helping middle class Americans get a job that pays enough to support their family, a good education for themselves and their kids, and health insurance that ensures that one illness won’t leave them in ruins."  

"It is time Congressional Republicans stop the partisan gridlock and work with us to make the American Dream attainable for all."

So, everyone can agree that we're all in agreement on improving the economy. Good. 

But the president didn't exactly endear himself to lawmakers on Capitol Hill after he suggested they drop the focus on “phony scandals” and think about the middle class and jobs. 

He dared GOP leaders to come up with their own proposals for how to fix the economy.

“With an endless parade of distractions, political posturing and phony scandals, Washington has taken its eye off the ball,” Obama said.

“And I am here to say this needs to stop. Short-term thinking and stale debates are not what this moment requires.”

He didn't say what controversies were at the heart of his talk but there have been no shortage lately — from the targeting of conservative groups by the IRS to the spying efforts by the National Security Agency.

The re-spin back toward the economy also is an avenue toward bolstering his sagging approval ratings.

To that end he went right for the legislative jugular, the budget. 

“As Washington prepares to enter another budget debate, the stakes for our middle class could not be higher,” he said.

Senate Republicans are building support around a proposal to could shut down the government if the next resolution to stop-gap measure includes any money for the healthcare law. Republicans tried this before but wound up backing off. 

He repeatedly targeted the “faction of Republicans in the House” that supported across-the-board automatic spending cuts and the looming debt-ceiling showdown.

Obama said "we can't afford to repeat" the “fiasco” that occurred during the 2011 debt-ceiling battle with Republicans.

The August recess is coming up quickly but Congress will return to a boatload of issues to manage and where, right now, there appears to be little momentum or agreement. 

“I will not allow gridlock, inaction or willful indifference to get in our way,” Obama said.

WHAT ELSE WE'RE WATCHING

Budget momentum: The Senate Appropriations Committee will mark up two fiscal 2014 spending bills on Thursday — a $50.6 billion State Department and foreign operations bill and a $23.19 billion financial services and general government measure that includes $315 million for the Commodity Futures Trading Commission, an increase over the $205 million enacted last year. 

Several Senate Democrats also will rally on Thursday for the upper chamber to pass a transportation and housing spending bill. 

LOOSE CHANGE

Foreign commerce: Secretary of Commerce Penny Pritzker met on Thursday with Toshimitsu Motegi, Japan’s minister of Economy, Trade and Industry, who is the head of the Commerce Department’s counterpart agency in Japan, and discussed concluding the Trans-Pacific Partnership (TPP) trade deal this year, a top priority for the Obama administration. 

Japan joined the TPP talks on Tuesday. Tokyo is facing heavy criticism from Democratic lawmakers and the U.S. auto industry for its market-access policies. Rep. Sandy Levin (D-Mich.) detailed a three-pronged plan on Tuesday that would lower tariffs faster if Japan is willing to open its market at a quicker pace. If not, tariffs mostly stay in place. 

U.S. Trade Representative Michael Froman also met with Motegi to discuss the TPP and ongoing cooperation on multilateral trade issues.

Froman underscored the importance of Japan working closely to conclude a TPP agreement this year, while emphasizing a positive outcome with Japan in parallel bilateral negotiations on autos, insurance and other non-tariff measures.

Also in that vein, Froman met on Wednesday with Vietnam’s President Truong Tan Sang and Minister of Industry and Trade Vu Huy Hoang to discuss TPP talks. The leaders renewed their shared objective to complete talks this year. 

President Obama will hold a meeting with the Vietnamese president on Thursday morning. 

They welcomed the significant progress being made during the round of TPP negotiations in Malaysia this week, and agreed to direct their negotiators to intensify engagement on a range of market access and rules issues.

“Vietnam has come a long way in addressing its own challenges to meet the high standards of the TPP, but we still have work to do together,” Froman said.  

Housing recovery picking up: Sales of new homes rose 8.3 percent in June to a seasonally adjusted annual rate of 497,000, the highest since May 2008, the Commerce Department said Wednesday. 

Sales are still below the 700,000 pace consistent with healthy markets but they are up 38 percent in the past year. 

"The takeaway from this report is that the housing recovery is solidly on track and isn't going to be derailed by slightly higher mortgage rates," said David Crowe, chief economist at the National Association of Home Builders. 

"After years of fence-sitting, buyers are back and are ready to move forward with an investment in homeownership." 

Looking ahead, he said he anticipates further, though more incremental, gains in sales through the end of this year.

Three out of four regions saw solid gains in new-home sales activity in June, with the Northeast, South and West posting increases of 18.5 percent, 10.9 percent and 13.8 percent, respectively. The Midwest posted an 11.8 percent decline following an above-trend bump in activity in May.

Better off dead: Senate Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-Del.) and ranking member Tom Coburn (R-Okla.) introduced legislation on Wednesday that would help agencies improve coordination to curb millions of dollars in improper payments to deceased individuals. 

“In 2011, it was reported that a Delaware man collected 28 years of Social Security payments that were meant for his deceased aunt because the federal government did not include her death in its basic records,” Carper said. 

“Unfortunately, stories like this are not uncommon and can too often be traced to basic errors in the way our government maintains and shares death records."

ECONOMIC INDICATORS

Initial Claims: The Labor Department releases its weekly filings for jobless benefits. 

Mortgage Rates: Freddie Mac is releasing weekly data on fixed-rate mortgages, which remain around historic lows.

Durable orders: The Department of Commerce releases its June report measuring the dollar volume of orders, shipments and unfilled orders of durable goods, which are goods intended to last three or more years. Orders are considered a leading indicator of manufacturing activity, and the market often moves on this report despite the volatility and large revisions that make it a less than perfect indicator.

WHAT YOU MIGHT HAVE MISSED

— Senate votes 81-18 to approve a bipartisan student loan bill

— Senators are promised 50 years of secrecy for tax reform proposals

— Baucus, Collins unveil legislation to extend trade assistance

— GOP prepares to restore cuts to Great Lakes cleanup

— Lew: IRS targeting not politically motivated

— Liberals defy Obama, push increase in Social Security benefits

— Spending panel clears $5.8 billion cut to foreign aid

GOP delays controversial Labor-Education-HHS bill, but says it is close

— Path to housing finance market overhaul must smoothly mesh all components

— House panel approves bill to overhaul mortgage finance system

— Camp, Levin press IRS for more documents

— House GOP seeks answers on status of IRS's Lerner

— White House 'strongly supports' Senate student loan plan

Labor board nominees head to full Senate

— Thirty-year veteran leaving Financial Services Roundtable

— SEC's Lench joins Kirkland & Ellis


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