WEDNESDAY’S BIG STORY:
Unemployment benefits back in the spotlight: House and Senate Democrats will gather on Wednesday to make their case for a reauthorization of federal jobless benefits for the long-term unemployed.
At the end of the last week, the White House chimed in that President Obama is seeking a yearlong renewal of a federal unemployment benefits program that would ensure millions of jobless workers continue getting weekly checks.
{mosads}If the program, which expires Dec. 28, is not continued, 1.3 million workers who have been looking for a job for at least six months will be without benefits.
The issue is near and dear to Democrats, who argue that the national unemployment rate and joblessness across many states is still hampering Americans’ ability to find jobs and they still need the Emergency Unemployment Compensation (EUC) program to bridge them to new employment.
Gene Sperling, director of the National Economic Council, said last week that the Obama administration is willing to work with lawmakers toward finding the necessary offsets for the program, which is estimated to cost $24 billion to run through 2014.
House Ways and Means Committee ranking member Sandy Levin (D-Mich.) has called for quick action on ensuring the benefits continue into next year.
House Budget Committee ranking member Rep. Chris Van Hollen (D-Md.) has said he would like the benefits included in a budget deal that is due by Dec. 13.
But House-Senate budget conferees don’t appear to be making much headway, in public or behind the scenes, on a deal that would stave off another government shutdown in January and ensure the nation doesn’t default on its debt in February.
Still, budget leaders insist they can avoid a shutdown at the start of the year.
Overall, another extension of the jobless benefits program is a tough pill to swallow for congressional Republicans who have highlighted the five-year length and more than $252 billion cost of providing benefits, so far, with little economic benefit to show.
Supporters argue that the benefits give the unemployed at least some of the money they need to spend on necessities that they wouldn’t have otherwise.
“The fact is, the reality facing the long-term unemployed in today’s job market is scary, and we have an obligation to provide them with an adequate safety net while they continue to look for jobs,” said Judy Conti, federal advocacy coordinator at the National Employment Law Project.
“The president realizes that, and truth be told, just about everyone in Congress realizes it as well, even if they won’t admit it publicly.”
The emergency benefits kick in after unemployed workers exhaust their state-level benefits.
The EUC program was first authorized in 2008 when the unemployment rate was 5.6 percent, and has been reauthorized or expanded 11 times — most recently on Jan. 2, when it was extended until the end of the year.
Through the past couple of reauthorizations, benefits have been gradually curtailed as jobless rates have dropped in states.
In September, 1.4 million workers, or only 34 percent of all the long-term unemployed, received federal unemployment benefits, down from about 2.2 million workers a year ago.
WHAT ELSE WE’RE WATCHING
Vetting nominees: The Senate Finance Committee will hold a hearing on Wednesday to chat with a pair of President Obama’s nominees. Sarah Bloom Raskin, who is a governor at the Federal Reserve, has been tapped to serve as a deputy secretary in the Treasury Department. She would be the first woman to serve as a deputy at the Treasury if she gains approval from the Senate. Rhonda Schnare Schmidtlein has been picked to serve on the International Trade Commission.
Insight into the Fed: The Federal Open Market Committee (FOMC) will release its October meeting minutes on Wednesday. The central bank has decided to keep up its $85 billion in monthly monetary stimulus as the economy continues its recovery.
Bernanke said on Tuesday night that one of his main goals since taking over at the Fed eight years ago was “increasing the transparency of the Federal Reserve, and of monetary policy in particular.”
“In response to a financial crisis and a deep recession, the Fed’s monetary policy communications have proved far more important and have evolved in different ways than I would have envisioned eight years ago,” he told the National Economists Club on Tuesday night, according to his prepared remarks.
He made inroads on that transparency promise, opening up a bit during his speech and acknowledging that the bond buying will probably continue for awhile.
“The economy has made significant progress since the depths of the recession,” he said.
“However, we are still far from where we would like to be, and, consequently, it may be some time before monetary policy returns to more normal settings.”
Economists say it will probably take the Fed until March to begin pulling back its stimulus efforts.
“I agree with the sentiment, expressed by my colleague Janet Yellen at her testimony last week, that the surest path to a more normal approach to monetary policy is to do all we can today to promote a more robust recovery,” he said.
“The FOMC remains committed to maintaining highly accommodative policies for as long as they are needed. Communication about policy is likely to remain a central element of the Federal Reserve’s efforts to achieve its policy goals.”
Looking to Asia: A Senate Foreign Relations subcommittee will discuss U.S. engagement in the Asia-Pacific region on Wednesday and will chat with government and policy experts about the path forward. Treasury Secretary Jack Lew just returned from a weeklong trip to the Pacific Rim to chat about ongoing negotiations around the Trans-Pacific Partnership (TPP) and to meet with Chinese government and business officials about their plans to restructure their growing economy. Currency valuation remains a hot topic throughout the region and on Capitol Hill. A majority of lawmakers in the House and Senate are threatening to push back on the White House’s trade agenda if provisions aren’t considered for inclusion into the TPP.
U.S. Trade Representative Michael Froman said Tuesday that adding them into the trade agreement could complicate a deal. But lawmakers say they have a clear framework for detection and enforcement that would ensure fairness for all nations involved in the trade deal.
CFPB oversight: The House Financial Services Committee will mark up several bills on Wednesday that would make changes to how the Consumer Financial Protection Bureau (CFPB) operates. One measure would create of a five-person board to oversee the agency’s activities. Another would give the Financial Stability Oversight Council (FSOC) a simple majority vote to veto a CFPB rule. Another measure ensures that sensitive personal information is protected as part of the agency’s data collection process.
Another bill would put the CFPB through the congressional appropriations process, which proponents argue would provide for better oversight of the agency.
Start ’em up: The Small Business Committee will be chatting Wednesday with business owners and academics about how to best encourage startups in the U.S. economy.
Yep, more tax stuff: Senate Finance Committee Chairman Max Baucus (D-Mont.) looks to continue the tax reform fun on Wednesday, with the second of three staff discussion drafts expected this week.
Wednesday’s effort is expected to concentrate on tax administration, meaning it could deal with issues like how taxes are collected, closing the so-called tax gap and making reforms to how the IRS operates.
That could give this draft broader real-world impact than the chairman’s Tuesday draft on international tax laws, and Thursday’s expected draft on how businesses recover costs. The IRS also remains a hot-button topic after acknowledging this spring that it targeted conservative groups.
Baucus’s Tuesday draft sought to install sort of a middle ground between the current U.S. tax system and the territorial system that Republicans and businesses want. GOP lawmakers and corporate groups complained that Baucus’s draft did not go far enough to help multinationals compete against foreign companies.
Speaking of the IRS: Rep. Charles Boustany (La.), the top Republican on the House Ways and Means Oversight subcommittee, is out with new IRS legislation, after the issue has receded from center stage in recent months.
Boustany, along with Ways and Means Committee Chairman Dave Camp (R-Mich.), says the bill would protect groups and people from the sort of targeting the IRS admitted to engaging in with Tea Party organizations.
“By instituting concrete reforms and shedding light on the audit practices of the IRS, this legislation provides a checks and balances system to the actions of unelected Washington bureaucrats like ousted IRS official Lois Lerner,” Boustany said in a statement. “The abuse of American taxpayers by the IRS must be stopped and this legislation advances that goal.”
ECONOMIC INDICATORS
MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume.
Retail Sales: The Commerce Department will release its October report measuring the total receipts of retail stores. Sales figures are widely followed as the most timely indicator of broad consumer spending patterns, which represent 70 of economic activity.
Consumer Price Index (CPI): The Labor Department releases its October report measuring the prices of a fixed market basket of goods and services purchased by consumers. CPI is the most widely cited inflation indicator and is used to calculate cost-of-living adjustments for government programs.
Existing Home Sales: The National Association of Realtors releases October figures for sales of existing homes. Existing-home sales are completed transactions across a broad range of housing types, including single-family homes.
Business Inventories: The Commerce Department will release its September report on sales and inventory from all three stages of the manufacturing process — manufacturing, wholesale and retail.
WHAT YOU MIGHT HAVE MISSED
— Corn, soy lobbies offer key farm bill compromise
— Report: Sales tax parity needed with online merchants
— No budget meetings scheduled before Thanksgiving
— Ryan: No need to ‘worry’ about another shutdown
— Dems hammer Ryan, GOP over budget
— JPMorgan reaches $13B settlement with government
— EPA ethanol decision pushes farm bill toward finish line
— Baucus offers revamp of corporate taxes
— Hatch questions Baucus plan to put out tax reform proposals
— Retailers flock to Washington to push tax reform
— K Street in the dark about tax reform plans
— Camp tax reform draft could drop by January
— GOP to probe ‘faked’ jobs report
— Trade negotiator warns currency push could backfire
— Lew ‘optimistic’ Volcker rule will be finished this year
— Lew praises Baucus draft international tax plan
— European, American retailers spar over safety in Bangladesh
— Ryan searches for GOP path on poverty
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