OVERNIGHT MONEY: Jobs bill blues

BREAKING LATE TUESDAY:

President Obama’s jobs act, as modified by Senate Democrats, was defeated Tuesday night in the Senate.

Democrats knew they would not get the 60 votes needed to end debate on the bill, in the face of unified Republican opposition — the question all day was how many Democrats would vote against the stimulus measure and whether 51 senators would support it even after taxes on the middle class were replaced with a millionaire’s surtax.

At press time, the Democrats were on the edge of getting that simple majority.

After flirting with the possibility of skipping the vote, Sen. Jeanne
Shaheen (D-N.H.) was traveling from New England to vote in favor to bring up the total. At the last
minute, Sens. Jim Webb (D-Va.), Max Baucus (D-Mont.) and Joe Manchin
(D-W.Va.) bowed to leadership pressure and voted ‘yes’ despite
reservations about the underlying bill. Manchin said he would vote against the final bill, however.

Sen. Ben Nelson (D-Neb.) voted against proceeding to debate on the bill, as did Sen. Jon Tester (D-Mont.).

{mosads}“At a time when Americans want Washington to get its fiscal house in order, I can’t support this bill because it represents billions of dollars in new spending and more taxes,” he said. 

Once Shaheen arrives, the final vote
count is expected to be 51 to 48, with Sen. Tom Coburn (R-Okla) not voting due
to illness.

Limiting defections by Democrats was key for President Obama so he could continue to blame the GOP for blocking the jobs bill. As House Minority Whip Steny Hoyer (D-Md.) put it on Tuesday, “if we can’t get 51 Democrats to vote for it, I think it would be clearly argued by Republicans and construed by all of you as undermining the President’s message.”

Democrats will spend Wednesday charting a course forward — the White House is on board with breaking the bill up into pieces that are more likely to pass.

China bill: The Jobs Act vote came after the Senate approved a bill aimed at punishing China for its undervalued currency. The measure passed by a vote of 63 to 35. Conventional wisdom is that the bill is dead in the House. Majority Leader Eric Cantor (R-Va.) said Tuesday that the House will not decide what to do with it until President Obama makes clear his position on the legislation. The White House is quietly concerned that the bill violates U.S. commitments in the World Trade Organization Anti-dumping agreement and could open U.S. exporters to retaliation by China.

Also breaking: Slovakia has defeated the European Union’s bailout plan, heightening the prospect of a Greek bond default and an EU recession.

WEDNESDAY’S BIG STORY:

Trade will dominate Wednesday’s legislative calendar with rapid-fire votes in the House and the Senate on the long-stalled Colombia, Korea and Panama trade agreements, as well as Trade Adjustment Assistance (TAA) benefits. Senate Finance sent the deals to the floor late Tuesday.

Both chambers of Congress are expected to approve the deals, inked in 2006 and 2007, with Korean President Lee Myung-bak waiting in the wings to address Congress on Thursday. Only a surprise rejection in the House of TAA could upend Senate passage of the deals.

The U.S. Chamber of Commerce will play host Wednesday to Lee as the business group discusses relations between his nation and the United States.

The free-trade deals will lower barriers to U.S. goods and are projected to increase industrial and service exports to Korea as well as give big boosts to agricultural goods going into Colombia.

U.S. auto industry fears about a flood of Korean light trucks were alleviated when President Obama renegotiated the pact last year, but liberals are irate that Colombia has made only limited progress on stopping union organizers from being assassinated there. Labor unions argue that unless labor rights are enforced by trading partners such Colombia, the opened-up trade avenue will result in a race to the bottom in terms of worker protections and wages.

Trade experts will be watching House Democrats and freshman Republicans closely on the votes to assess the appetite for future trade projects that could be much more ambitious in scale.

Completion of the World Trade Organization Doha Round would dwarf the Korea FTA, as would a TransPacific (TPP) pact if it included Japan. The TPP agreement is being quietly negotiated Wednesday morning, when trade insiders will get a debrief from deputy trade representative Demetrios Marantis at the Washington International Trade Association.

WHAT ELSE TO WATCH FOR:

Supercommittee: The deficit supercommittee is running out of time — it is at the halfway point between the first post-Labor Day meetings and the Nov. 23 deadline for a report. Sources say the group is still debating fundamentals such as which budget baseline to use and whether to tackle fundamental tax code reform. With colleagues itching for information, details could start to emerge at party meetings on Wednesday.

This week other committees will have a chance to weigh in by Friday. Don’t expect any assistance from the House Appropriations or Budget committee, though, aides say — Budget Republicans believe they have already laid out their vision in the House-passed budget. and appropriators see little chance the supercommittee will re-open the debate on discretionary spending, their bailiwick.

So far Senate Finance Republicans have been clear they are looking to make recommendations, and the House Armed Services Committee will submit recommendations. Defense hawks have a lot riding on the supercommittee’s success, since a failure to make $1.2 trillion in deficit cuts by Nov. 23 would result in automatic Defense cuts in 2013 and beyond.

And, as The Hill’s Healthwatch, E2 Wire and Hillicon Valley reported Tuesday, Energy and Commerce ranking member Henry Waxman (D-Calif.) has gone forward with his recommendations, including that the administration ramp up spectrum sales. House Financial Services is still mulling making its views known, while Senate Banking is unlikely to make a report.

Volcker rule: The Securities and Exchange Commission will follow the lead set by the Federal Reserve and Federal Deposit Insurance Corp. (FDIC) and sign off on proposed rules implementing the Volcker Rule — a major component of the Dodd-Frank financial reform law intended at keeping banks from engaging in potentially risky practices. The Fed and FDIC rolled out a roughly 300-page proposal Tuesday, and the Commodity Futures Trading Commission will soon offer up its own take.

Capital in the Capitol: The House Financial Services Committee will spend part of Wednesday discussing ways to get credit unions further involved in lending to small businesses and helping get the economy chugging again.

{mossecondads}Prior to that subcommittee hearing, another FinServ panel will discuss the stability of the Federal Home Loan Bank System. Those 12 government-sponsored banks were created by Congress in the 1930s, and exist to help ensure access to housing and community lending.

Fed time: On Wednesday, the Federal Reserve will pull back the curtain on “Operation Twist,” as it releases the details from the meeting that set the new policy. The minutes of the most recent meeting of the Federal Open Market Committee will shine a light on the central bank’s latest bid to boost the economy by buying up long-term bonds while selling shorter securities.

GOP lawmakers explicitly asked the Fed before it announced its decision not to interfere in the economy. However, three committee members dissented from that decision, and tomorrow’s minutes could help flesh out some of those concerns, as well as other Fed thinking.

Budget process reform: The Senate Budget Committee is preparing to recommend budget process changes to the supercommittee, including a switch to two-year budgets. Some members of the committee want also to recommend that the president be required to sign the annual budget resolution (he or she currently only signs the appropriations bills developed according to the budget framework). Members also want to beef up consequences for failure to pass a budget, something the Senate has not done in about 900 days. The committee will hold a hearing on possible changes.

Disaster relief redux: Senate Appropriations will revisit the controversial issue of federal disaster-relief assistance in a hearing featuring Craig Fugate, the Federal Emergency Management Agency administrator. Sen. Mary Landrieu (D-La.), chairwoman of the Appropriations Committee’s Homeland Security subpanel, is pushing for about $5 billion more disaster relief funding for FEMA for 2012 than was approved in the last temporary spending bill. A fight over offsetting disaster relief in that bill almost shut down the government at the beginning of the month.

The GOP is less likely to insist on offsets going forward since the August debt-ceiling deal allows up to $11 billion in extra disaster funding in 2012 without offsets.

More Obama jobs-bashing: The House Transportation Committee will hold a hearing to blast President Obama for calling for a national infrastructure bank. The idea has support from labor unions and the U.S. Chamber of Commerce, but the opposing view will get a full hearing on Wednesday.

Dodd-Frank do-over: The House Agriculture Committee will continue poking and prodding the Dodd-Frank financial reform law Wednesday, specifically the portion that affects commodities and financial derivatives. A number of financial market gurus will be on hand to offer their take as lawmakers debate seven different bills that would make various changes to the Wall Street overhaul.

WHAT YOU MIGHT HAVE MISSED:

— Cantor urges White House to weigh in on China currency bill

— Waxman’s draft of supercommittee recommendations includes spectrum auctions

— Waxman urges supercommittee to leave Medicaid and Medicare alone, extend drug rebates

— Chamber to score vote on Obama jobs bill

— Shaheen likely to miss Jobs Act vote

— Levin: Repatriation helps few corporations at expense of many

— Economist Zandi: Recession odds high even with jobs bill

— Obama’s jobs council gives cautious endorsement to Keystone pipeline

— Obama jobs council offers up proposals appealing to GOP

— Regulators roll out Volcker Rule regulations