OVERNIGHT MONEY: Conferees continue work on payroll tax, unemployment benefits deal

But the conferees seem a fair ways apart on what other provisions should go in their final product, with Republicans renewing their push for the Keystone XL oil sands pipeline and Democrats calling to include a slew of expired tax incentives.

And that doesn’t even get into how, if at all, to pay for any deal. Democrats have been lobbying, again, for a millionaire surtax, while Republicans have thrown out the continuation of a federal pay freeze, similar to a bill that the House is expected to consider on Wednesday.

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On Tuesday, Sen. Bob CaseyRobert (Bob) Patrick CaseyScrap House defense authorization provision benefitting Russia Here are the Senate Democrats backing a Trump impeachment inquiry over Ukraine call Ex-GOP congressman to lead group to protect Italian products from tariffs MORE Jr. (D-Pa.), one of the conferees, told reporters that the committee had yet to really drill down into the potential offsets for the deal.

"It’s really hard to tell right now how far apart we are," Casey said.


WHAT ELSE TO WATCH FOR 

We're hoping for lots of oversized checks: Rep. Jeff Landry (R-La.) and a group of conservative House GOP freshmen are teasing a "major announcement" at a press conference scheduled for Wednesday morning.

According to our intrepid colleague Russell Berman, one Republican source says the announcement involves the national debt and the member allowances that congressional offices are provided each year. Members of the Senate have reportedly returned more than $500 million in unused office funds to the Treasury in the last two years, though the GOP source said the House announcement would have "a new twist."

Recess redux: You might have there's a hot debate on Capitol Hill over recess appointments. Republicans have been digging into the issue ever since President Obama opted to ignore pro forma sessions in the Senate to make four recess appointments, including that of Richard Cordray, head of the Consumer Financial Protection Bureau, who testified on Capitol Hill Tuesday. The House Oversight Committee will keep at it on Wednesday with a hearing to examine the legal implications. Popular opinion says it's just a matter of time until courts will have to weigh in on the matter, and a handful of attorneys and experts will offer their expertise. Sen. Mike LeeMichael (Mike) Shumway LeeSenate votes for North Macedonia to join NATO Zuckerberg launches public defense of Facebook as attacks mount Overnight Defense — Presented by Boeing — Pence says Turkey agrees to ceasefire | Senators vow to move forward with Turkey sanctions | Mulvaney walks back comments tying Ukraine aid to 2016 probe MORE (R-Utah) was invited to testify after he announced he would block all future Obama nominees until the recess appointments are rescinded.

All eyes on Europe: As the United State tries to get its economy back on the right track, a major concern is whether a likely recession in Europe will weighing down the recovery. With European leaders huddling to strike a deal to manage the situation, the Senate Budget Committee will hear from a handful of economists on whether the European debt crisis poses a threat to the U.S. recovery.

Stockpiling insider trade measures: As lawmakers in both parties scramble to get in front of legislation curbing potential insider trading by members of Congress, Sen. Sherrod BrownSherrod Campbell BrownHillary Clinton has said she'd consider 2020 race if she thought she could win: report Democrats jump into Trump turf war over student loans Critics pounce as Facebook crypto project stumbles MORE is throwing his own proposal onto the pile. The Ohio Democrat will be discussing the "Putting the People's Interests First Act of 2012" tomorrow, which not only would prohibit members from making financial moves based on private information, but would require members to either sell off all their stock or stick it in a blind trust.

So, what's that about the deficit?: Congressional Budget Office Director Douglas Elmendorf will discuss findings at the House Budget Committee on Wednesday following Tuesday's report that predicted the deficit will rise to $1.08 trillion in 2012. The office also projected the jobless rate would rise to 8.9 percent by the end of 2012, and to 9.2 percent in 2013. 

These are much dimmer forecasts than in CBO's last report in August, when the office projected a $973 billion deficit. The report reflects weaker corporate tax revenue and the extension for two months of the payroll tax holiday.

What's the score?: The full House Rules Committee meets to formulate a rule on the "Baseline Reform Act of 2011," a bill to force the CBO to assume that current spending does not grow automatically with inflation. It will also prepare for floor action the "Pro-Growth Budgeting Act of 2011." That bill would require dynamic scoring of some bills to show, for example, how tax cuts could spur growth and reduce deficits.

Honestly, it's budget season: Senate Budget Committee ranking Republican Sen. Jeff SessionsJefferson (Jeff) Beauregard SessionsSanctuary city policies are a threat to decent people Trump attacks Sessions: A 'total disaster' and 'an embarrassment to the great state of Alabama' Ocasio-Cortez fires back at Washington Times after story on her 'high-dollar hairdo' MORE (R-Ala.),  Sen. Kay Bailey Hutchison (R-Texas), Rep. Austin Scott (R-Ga.) and Rep. Martha RobyMartha Dubina RobyOvernight Defense — Presented by Boeing — Pence says Turkey agrees to ceasefire | Senators vow to move forward with Turkey sanctions | Mulvaney walks back comments tying Ukraine aid to 2016 probe Here are the lawmakers who aren't seeking reelection in 2020 Pelosi: GOP retirements indicate they'll be in the minority, with Democrat in the White House MORE (R-Ala.) will introduce a new version of the  Honest Budget Act, aimed at preventing budget gimmicks.

A focus on middle-class policies: Sen. Tom HarkinThomas (Tom) Richard HarkinWisconsin lawmaker gets buzz-cut after vowing not to cut hair until sign language bill passed Democratic debates kick off Iowa summer sprint Key endorsements: A who's who in early states MORE (D-Iowa), chairman of the Senate Health, Education, Labor and Pensions Committee, will join Center for American Progress President Neera Tanden for a discussion on rebuilding the middle class on Wednesday. Harkin will reflect on what he's learned from the recent series of HELP Committee hearings and events on the decline of the middle class, and outline a policy agenda that puts the middle class first.

In the coming months, Harkin plans to introduce sweeping legislation that will rebuild America's middle class through investments in areas like education and workforce training, U.S. infrastructure and manufacturing jobs, as well as securing pensions and ensuring college is affordable.


WHITE HOUSE SCHEDULE

All for the economy: President Obama heads out to Virginia to talk about the economy in Falls Church as part of a series of ongoing speeches since his State of the Union address a week ago. 

The president won't be alone as his second in command heads to Michigan to talk with workers about the administration's plan to help businesses bring manufacturing jobs back to America by eliminating incentives to ship jobs overseas and offering tax credits for insourcing. Vice President Biden will hold the discussion at the American Seating Company in Grand Rapids.


ECONOMIC INDICATORS 

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

ADP Employment Change: Two days before the government will release its report on January employment — public and private — ADP will drop its numbers on private-sector employment for the last month.  

ISM Index: The index measures the pace of growth of the manufacturing sector.

Construction Spending: The Commerce Department releases its report on spending that is broken down between residential, non-residential and public expenditures on new construction. The monthly changes are volatile and subject to huge revisions and rarely have a market impact. 

Auto and Truck Sales: Individual auto manufacturers begin releasing their monthly sales data for U.S.-built vehicles, with seasonal factors by the Commerce Department.


WHAT YOU MIGHT HAVE MISSED

— Lawmakers renew call to pressure China on currency value

Senate Republicans challenge legitimacy of Obama's consumer bureau chief

— Feds nab 58 in identity theft crackdown

— Cantor: Senate needs to strengthen congressional insider-trading bill

Lawmakers debate temporary tax provisions, with eye on reform

Consumer confidence stalls in January

— Poll: Strong support for ‘Buffett Rule’ and Keystone XL pipeline

Housing prices dropped in 19 of 20 cities in November

Tips and feedback, vneedham@thehill.com