OVERNIGHT MONEY: Budget plan in focus

WEDNESDAY’S BIG STORY:

Digging deep: Congress will begin the process on Wednesday of picking apart and breaking down the components of the fiscal 2015 White House budget, which was released on Tuesday.

Treasury Secretary Jacob Lew will hit Capitol Hill to discuss President Obama’s fiscal plan before the Senate Finance Committee on Wednesday. 

{mosads}Meanwhile, Sylvia Mathews Burwell, director of the Office of Management and Budget, will testify on Obama’s blueprint Wednesday before the House and Senate Budget committees.

The budget released on Tuesday calls for $3.9 trillion in spending next year.

The proposal, which exceeds spending caps set by a budget agreement worked out in December, calls for spending $302 billion over four years on infrastructure and includes a series of tax breaks for lower-income workers, among other items. 

A $56 billion bump in stimulus funding is aimed at job training programs to help everyone from young people and those who have been struggling to find work following the end of the recession in 2009. 

Obama calls for raising the minimum hourly wage to $10.10 an hour and urges Congress to provide another round of federal unemployment benefits for those out of work for more than six months. 

The plan has little chance for approval — Senate Democrats already said they aren’t pursuing a budget blueprint in an election year — but it should churn up conversation about priorities in the short and long term, which could lead to action next year. 

The House and Senate Appropriations committees already are looking at how to best spend the $1.014 trillion in discretionary spending, which was set as part of that budget deal last year. 

National Economic Council Director Gene Sperling said Tuesday the White House is providing plenty of options on how to direct spending in the 12 annual spending bills. 

Sperling pointed out on Tuesday that tax increases in the budget are aimed mostly at the top 1 or 2 percent of earners, while the middle class sees $40 billion in tax cuts.

The budget raises $650 billion in taxes under the “Buffett Rule” and garners $56 billion from bank taxes.

Revenue from ending those provisions is used to double the value of the Earned Income Tax Credit for workers without children to $1,000, dropping the minimum age requirement from 24 to 21 and raising the maximum age to 65.

The plan, as expected, was unpopular with Republicans on Capitol Hill, while hitting on several Democratic priorities.

Fasten your seat belts … it’s a rocky budget ride. 

 

WHAT ELSE WE’RE WATCHING 

She’s back: Lois Lerner, the former IRS official best known for her role in the agency’s targeting controversy, is expected to return to Capitol Hill on Wednesday after a more than nine-month absence.

House Oversight Committee Chairman Darrell Issa (R-Calif.) has recalled Lerner after his committee ruled that the former chief of an IRS tax-exempt division waived her Fifth Amendment rights by making a substantive opening statement at a May hearing.

Bill Taylor, Lerner’s attorney, said last week that his client had not waived her rights, and would continue to assert them when she returned this week.

Democrats and Republicans have openly discussed whether to offer Lerner some form of immunity for her testimony, as well.

Lerner was the first IRS official to apologize for the agency’s treatment of Tea Party groups, and was sharply criticized by Democrats and Republicans for her leadership of the tax-exempt division.

She is scheduled to return to House Oversight as Republicans sharpen their criticism of the IRS ahead of the midterms, after the controversy faded from view somewhat late last year.

The already strange journey then took some more twists over the weekend, after Issa said on “Fox News Sunday” that Lerner’s attorney had indicated she would testify.

Turner then denied Issa’s assertions, while the California Republican’s staff released emails on Monday that seemed to suggest that Lerner was open to testifying after a one-week delay. Those emails don’t go into detail about under what conditions Lerner would testify.

In his Sunday interview, Issa also pointed to emails sent by Lerner in 2010 that her team be “cautious” to ensure their work did not look like a “per se political project.” He argued that request proved Lerner was trying to cover up something.

But Democrats have been quick to criticize Issa’s assertions of a smoking gun, saying the broader context of the emails make clear Lerner was trying to do just the opposite.

Earlier emails in the same chain show Lerner saying her goal is specifically to not look for political activity, but rather to see if groups that self-declare as a tax-exempt 501(c)(4) organization are meeting the standards.

“My guess is most who conduct political activity never pay the tax on the activity and we surely should be looking at that,” she wrote.

Furthermore, the email exchange cited by Issa does not refer to the review of tax-exempt organizations that came under fire but to a separate project where groups of various types, including 501(c)(4)s, would self-declare their status to the IRS.

Protecting info: A House Financial Services subcommittee will chat on Wednesday with government officials and experts about how to better protect personal financial data.

Spending priorities: Several House Appropriations panel subcommittees will tackle budget issues on Wednesday. The subpanels will explore the Agriculture Department, Library of Congress and Government Accountability Office budgets.

Nominee at the ready: The Senate Small Business and Entrepreneurship Committee will hold a vote on the nomination of Maria Contreras-Sweet to be the administrator of the Small Business Administration.

Raising wages: President Obama heads to Connecticut on Wednesday to push his proposal to raise the minimum wage to $10.10 per hour.

The plan faces an uphill battle in both chambers. Sen. Tom Harkin (D-Iowa) has said that he doesn’t want to nickel-and-dime the issue.

Obama will speak at Central Connecticut State University before traveling to Boston for two Democratic National Committee fundraisers.  

White House economic adviser Gene Sperling said Tuesday that Obama’s plan would boost the economy overall.

 

ECONOMIC INDICATORS

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

ADP National Employment Report: Automatic Data Processing (ADP) will release its February report for private-sector job growth. 

ISM Services Index: The Institute for Supply Management will release its February index that measures the service sector’s pace of growth. The sector employs 90 percent of all workers, including those at restaurants, hotels and retailers.

Fed’s Beige Book: The Federal Reserve releases its March summary on current economic conditions ahead of the Federal Open Market Committee’s next meeting, March 18-19.

 

WHAT YOU MIGHT HAVE MISSED

— Obama’s budget wish list: Money and manpower for regulations

— Trade office gets budget boost for next year; trade agenda is released

— Behind flood bill, a torrent of lobbying

— IRS chief applauds Obama funding request

— Budget includes billions for job-training, apprenticeship programs

— Obama seeks billions more from international tax system

— White House lowers funding request for IRS

— Obama targets wealthy in budget pitch

— Budget lowers economic expectations

— Obama presses budget boost for Wall Street watchdogs

 

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