OVERNIGHT MONEY: Back to Blair House

The newest demand: at least $2 trillion in spending cuts if the debt ceiling is raised by that same amount. The GOP has floated a list of $715 billion in mandatory cuts to Biden for consideration, but reaching $2 trillion would be difficult without tacking entitlements. The House GOP budget rolls back another $1 trillion by block granting Medicaid.

Meanwhile, Republicans are also reaching out to Wall Street. As detailed by The Hill’s Russell Berman, House Speaker John Boehner (R-Ohio) delivered a speech Monday evening to the Economic Club of New York, in which he called for a serious discussion to begin on Medicare, but stopped short of demanding reforms in exchange for the debt-ceiling increase. 

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And Rep. Eric Cantor (R-Va.), the House majority leader, is set to join Tuesday’s Biden talks after a day of meetings in New York, where he will also ring the opening bell of the New York Stock Exchange.

WHAT ELSE TO WATCH FOR:

Back to the Big Apple: Boehner is expected to take questions during his Economic Club appearance, which is also being attended by a host of heavy hitters from the financial industry. Check back with The Hill later for the Russell Berman write-up. 

More budgets!: Sen. Pat Toomey (R-Pa.) is expected to release a fiscal 2012 budget of his own on Tuesday and is set to be joined for that unveiling by a trio of other Senate fiscal conservatives: Jim DeMint (R-S.C.), Marco Rubio (R-Fla.) and Ron Johnson (R-Wis.).

Sources tell The Hill that Toomey’s proposal will also shy away from Medicare reform, perhaps another sign that the GOP is bowing to the pressures of divided government and accepting that the House budget’s voucher-like system for the program is not being well-received elsewhere in Washington.

Just up the street from the Capitol, the Heritage Foundation is expected to release its budget on Tuesday – and that plan can be expected to make more than cosmetic changes to Medicare.

One more thing: Senate Democrats just announced they would be holding a Tuesday news conference to discuss cutting off certain tax credits and deductions for the five largest oil companies. 

Democrats say the savings from that move would then be put toward rolling back deficits. Check out OVERNIGHT ENERGY from our friends at E2-Wire for more on the back-and-forth over oil-and-gas.

China weighs in: The second, and final, day of the annual U.S.-China Strategic and Economic Dialogue is slated to feature high-level meetings attended by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner. 

China is expected to confront the U.S. over the need to raise the debt ceiling and to lower budget deficits, while the U.S. will work on lowering its trade deficit with China by pushing Beijing to allow a more flexible exchange rate for the yuan. Also on the table: China’s “indigenous innovation” program, which forces companies to hand over valuable intellectual property in order to bid on government contracts, and the U.S. desire for China to adopt rules for export credits.

More trade: William Lane, director of government relations at Caterpillar Inc. and a powerful lobbyist, is slated to join a panel at the Center for Strategic and International Studies discussing the benefits the U.S. will be able to reap from trade, regarding the expansion of the Panama canal, once the Panama free-trade agreement passes Congress.

Up on the Hill: The Senate Banking Committee is set to dig into the Financial Crisis Inquiry Commission’s final report on Tuesday, with Phil Angelides, the panel’s chairman. (As you may recall, the FCIC report, released earlier this year, was something of a split decision, gaining the backing of all six of the commission’s Democrats and none of its four Republicans.)

Senate Finance, meanwhile, is slated to examine deficit reduction and Social Security, another area where there’s not a ton of bipartisan agreement. There are signs that the entitlement program, which was dealt by President Obama’s fiscal commission, could also be part of any release from the Gang of Six.

And Mary Schapiro, the Securities and Exchange Commission chair, is among those scheduled to discuss capital formation with the House Oversight Committee.

Economic indicators:

— The Labor Department is scheduled to release April figures on export and import prices.

— Commerce is expected to circulate March numbers on monthly wholesale trade. 

BREAKING MONDAY:

About that debt limit…: The aforementioned Pat Toomey also stepped into the latest installment of the Schumer–Boehner budget messaging battle on Monday.

Sen. Charles Schumer (D-N.Y.), the Senate Democrats’ messaging guru, has called on Boehner to assure the markets that the U.S. will not default on its debt in his speech tonight, a statement dismissed by Boehner’s camp, which reiterated that a debt-ceiling hike will have to be paired with deficit-reduction measures. 

Toomey, meanwhile, took the opportunity to push his proposal to force the government to prioritize debt payments if the debt limit were not raised, which he says would take default off the table. For their part, the Treasury Department and Timothy Geithner have expressed a healthy dose of skepticism about Toomey’s measure.

WHAT YOU MIGHT HAVE MISSED:

On the Money’s Monday:

— Joe Biden calls out China for its human rights record.

— White House deficit meetings likely to delay Senate Budget markup.

— On a related note, Jeff Sessions thinks the Democrats are stalling.

— Sheila Bair exits the FDIC, stage right, on July 8.

— GOP senators want some IG action on Dodd-Frank rulemaking.

— Senate Banking to take a third crack at Peter Diamond’s nomination to the Federal Reserve Board. 

— Treasury pooh-poohs the selling off of assets as a debt-limit strategy.

— And, after nine consecutive declining quarters, consumer credit rises. 

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