The MF Global bankruptcy, one of the largest in the nation’s history and the most prominent victim of the European debt crisis so far, has led to a series of questions about not only how the firm collapsed, but also how regulators failed to prevent it. Further driving the intrigue is the fact that Gary Gensler, the chairman of the Commodity Futures Trading Commission (CFTC), has opted to recuse himself from the fallout, given that he previously worked with Corzine both at Goldman Sachs and as a staffer on the Senate Banking Committee.
So far, both panels have unanimously approved issuing subpoenas for Corzine.
{mosads}Tomorrow could complete the trilogy.
WHAT ELSE TO WATCH FOR
Going big: The Senate Banking Committee will be talking about big stuff tomorrow — namely, a subcommittee will be discussing how the nation’s largest financial institutions will be regulated in the post-Dodd-Frank world, and specifically how consumers stand to be protected under the new regime. Several experts will testify, including Sheila Bair, as she returns to Capitol Hill in her capacity as a senior adviser to the Pew Charitable Trusts. Bair previously served as director of the Federal Deposit Insurance Corporation.
Credit card chat: One day before the Senate will vote on whether Richard Cordray will be director of the Consumer Financial Protection Bureau (right now, it looks like the vote will fail), CFPB special adviser Raj Date will unveil a new bureau initiative to simply credit card paperwork. Date, the man who has been holding down the fort in Cordray’s absence, will discuss the project on a conference call with Sen. Sherrod Brown (D-Ohio).
Budget reform at the ready: House Budget Chairman Paul Ryan (R-Wis.) will unveil a package of 10 budget reform bills at a morning news conference. After the failure of a balanced-budget amendment last month, the House GOP is looking to pass smaller process reforms. The most promising of these, in terms of passage and presidential approval, is a line-item veto ‘lite’ bill Ryan has sponsored with Rep. Chris Van Hollen (D-Md.). The White House is broadly supportive of the idea but has not yet endorsed it formally.
Balanced-budget amendment on hold: In the Senate, there will be no vote as planned this week on a balanced-budget amendment. Aides said that the Republican amendment and another sponsored by Sen. Mark Udall (D-Colo.) are now on track for votes next week. The GOP bill, supported by all 47 GOP senators, includes a spending cap and restriction on raising taxes. The Democratic version, supported by a handful of centrists, insulates Social Security from cuts.
Post Office problems: The Postal Regulatory Commission will meet and likely discuss new proposals by the U.S. Postal Service to eliminate next-day mail.
BREAKING TUESDAY
Payroll tax: Top Senate Republicans on Tuesday continued to express opposition to using a millionaires surtax to fund an extension of the current payroll tax, even as one of their own proposed that sort of solution.
Sen. Susan Collins (R-Maine) and Sen. Claire McCaskill (D-Mo.) released the plan that would use a surtax on millionaires that does not affect active business income to help fund an extension of the payroll tax cut and other economic initiatives.
Collins was the only Senate Republican to vote for a payroll tax proposal last week that included a surtax.
But Senate Minority Leader Mitch McConnell and other Republicans in the chamber said the carve-out was not enough to get them to back the surtax. GOP lawmakers have said in recent weeks that the surtax would hurt many small businesses, many of which pay taxes through the individual code.
“I am not in favor of raising taxes on working people. I do favor extending the payroll tax holiday for another year in conjunction with job-creating proposals, which we expect to be included in a final version of this that will come over from the House of Representatives,” McConnell told reporters.
Insider trading: Lawmakers agree that members of Congress should not personally profit off private insider information. But deciding on how to block such a practice is proving to be much more divisive.
Lawmakers at the House Financial Services Committee on Tuesday discussed how they could assure the public that members are not lining their pockets by trading on private information gleaned in the halls of Congress. But while bipartisan agreement was easy to come by when criticizing the practice, that unity fractured as lawmakers criticized various proposals, touting alternative approaches or wondering if existing laws were sufficient.
ECONOMIC INDICATORS
MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume.
Consumer Credit: The Federal Reserve releases its monthly measure of consumer debt.
WHAT YOU MIGHT HAVE MISSED
— Sens. Harkin, Shelby hold out hope on Labor, Health spending bill
— Dem leader: Lawmakers need ‘discipline’ of sequester to reach debt deal
— Unemployed protesters stage sit-ins in dozens of lawmaker offices
— Geithner: Fed not looking to boost IMF bailout fund
— Senators offer bipartisan jobs bill
— Senior House Democrat says millionaires tax puts ‘a lot of heat on GOP’
— House Dem on hearing: Why are we doing this now?
— Senate Republicans remain steadfast against Cordray nomination
— BP chief: Oil prices threaten U.S. economic recovery
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