OVERNIGHT MONEY: Limelight falls on JPMorgan, financial reform

The nation’s largest bank made trades that cost the firm upward of $3 billion in losses.

{mosads}The “Volcker rule” on bank trading is supposed to be completed by July 21, but regulators are expected to blow past that deadline

MF Global sideshow: Tuesday’s hearing also could touch on another financial scandal, MF Global, if Sen. Jon Tester (D-Mont.) has his way.

On Friday, Tester, who is in a tough reelection campaign, suggested that Gensler be fired for the October bankruptcy at MF Global, saying the failure cost farmers and ranchers more than $1.6 billion.

MF Global, which was run by former Sen. Jon Corzine (D-N.J.), filed for bankruptcy last year, but not before $1.6 billion in customer accounts went missing. 

The CFTC played a large role in regulating MF Global, and investigators are looking into whether customer funds were improperly transferred to cover losses tied to bad bets on European debt. Legally, the customer accounts were “segregated,” meaning they should have been off-limits.

“CFTC was asleep at the switch,” Tester told The Billings Gazette on Friday. 

“They were in the building when all that stuff went on, too. Maybe Gary Gensler needs to go.”

MF Global is under criminal and civil investigation. At least three lawsuits seeking class action status, including one filed by Montana farmers, have also been filed.

“From what I know about the issue, it’s pretty straight-forward. People need to go to jail over it,” Tester said.

Tomorrow’s hearing marks the first of two on the matter where lawmakers will probe regulators. At a third hearing, yet to be scheduled, JPMorgan CEO Jamie Dimon will testify on the losses.

WHAT ELSE TO WATCH FOR 

Questions on tax credits: Congressional Republicans continue to pour in their responses to a Government Accountability Office statement that found that tax credits in the Democratic healthcare overhaul aren’t robust enough for many small businesses.

Rep. Sam Graves (Mo.), the chairman of the House Small Business panel, and Sen. Olympia Snowe (Maine), the ranking Republican at Senate Small Business, said in a Monday statement that the report further illustrated that “the healthcare reform law is simply bad policy that is holding small businesses back, and therefore should be repealed.”

“This GAO report confirms that many small firms haven’t claimed the tax credit because it is too complex and its temporary nature didn’t provide a significant solution to their long term compliance problems — a regrettable, but all too foreseeable conclusion,” the lawmakers added. 

Our friends at Healthwatch have more on the report, which found that the amount in credits that businesses claimed in 2010 fell far short of the Congressional Budget Office’s original expectations. 

Working in harmony: A bipartisan quartet of senators — Jerry Moran (Kan.) and Marco Rubio (Fla.) on the GOP side, Chris Coons (Del.) and Mark Warner (Va.) from the Democratic one — are set to unveil new legislation encouraging start-up businesses on Tuesday.

The new measure is being cast as something of a follow-up to the JOBS Act, which the president signed into law last month. To hammer the point home, Steve Case, the former America Online executive and key proponent of the JOBS Act, is scheduled to join the senators on Tuesday.  

More spending decisions: A Senate Appropriations subcommittee is slated to mark up its State Department bill on Tuesday. House Appropriators approved a bill cutting $5 billion from the budget, including for the war on terror, last week. That bill contains controversial gun and anti-abortion riders, including the reinstating the global gag rule that would prevent non-governmental organizations funded by the United States from discussing abortion with clients. 

The full committee will mark up the Military Construction-VA spending bill that includes $54.5 billion for fiscal 2014 veteran medical services and $7.1 billion to fund military construction projects, $568.9 million below the president’s budget request for military construction. The bill matches President Obama’s fiscal 2013 request for $1 billion in readiness centers, training facilities and related military construction for reserve forces as well as his $1.6 billion request for family housing construction.

Heading to the Granite State: Vice President Biden heads north to promote the Obama administration’s economic policies at a campaign event on Tuesday in Keene, N.H. Biden has been spending plenty of time on the road in recent weeks, traveling to key battleground states, including Ohio, to tout the improving economy and what the White House is doing to accelerate economic growth. According to media reports out of New England, this marks Biden’s fourth trip this year to New Hampshire, a state President Obama and Mitt Romney want to put in their column come November. 

Talking trade: Commerce Secretary John Bryson spends this week in Paris, Dusseldorf and Berlin to meet with business and government leaders to discuss opportunities to strengthen economic ties between the United States and Europe, including efforts to support Obama’s goal of doubling U.S. exports by the end of 2014. The talks will also focus on attracting business investment in the United States to create jobs. 

Going big on small businesses: It’s National Small Business week, and it seems everyone is getting in on the act. The U.S. Chamber of Commerce will hold a summit on Tuesday featuring Frederick Smith, FedEx chairman, and Small Business Administration Administrator Karen Mills. Meanwhile, the Small Business Administration is holding a meeting of its own just down the road with Transportation Secretary Ray LaHood, Education Secretary Arne Duncan and Senate Small Business Chairwoman Mary Landrieu (D-La.).

Housing veterans: A trio of Democratic senators is pressing for improved housing policies for the nation’s armed forces and their families, especially during deployment. On Tuesday, Sens. Jack Reed (D-R.I.), Dick Durbin (D-Ill.) and Sheldon Whitehouse (D-R.I.), with Delaware Attorney General Beau Biden, will discuss new plans to help service members with their housing needs and minimize the financial stress that can be caused by deployment.

ECONOMIC INDICATORS 

Existing Home Sales: The National Association of Realtors releases April figures for sales of existing homes. Sales are completed transactions that include single-family, townhomes, condominiums and co-ops.

WHAT YOU MIGHT HAVE MISSED

— Axelrod says Booker’s argument ‘just wrong’
— GOP blasts $1 million Hawaii conference for judges in wake of GSA scandal
— Oil industry seizes on Obama order in push against Dodd-Frank rules
— Senate Dem urges Boehner to schedule vote on tax–dodging bill
— Survey: Private sector more bullish on job market

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