Business

OVERNIGHT MONEY: First look into May jobs growth

by Vicki Needham - 06/04/13 11:05 PM ET

A couple of weeks ago, Federal Reserve Chairman Ben Bernanke warned Congress again that the central bank can only do so much to stave off an economic drag caused by rising taxes and spending cuts.

He said at a recent hearing that several fiscal policy issues are creating headwinds and will “exert a substantial drag on the economy this year.”

{mosads}For months, Bernanke has been warning that the sequester cuts this year could slow the recovery. He has suggested nixing the short-term approach to deficit cutting in favor of a more deliberate approach.

Despite similar warnings of economic damage from economists, lawmakers have yet to take any action on replacing the sequester.

President Obama said this week that he would not sign any spending bills until Congress replaces the sequester.

So, the stalemate continues.

Bernanke reiterated that the Fed will keep up its monetary stimulus while the job market remains “weak” and the unemployment rate is still historically high. So it probably continue until at least into next year.

We’ll see how it’s all working out with tomorrow’s report.

WHAT ELSE WE’RE WATCHING

OPM fund oversight: A House Oversight and Government Reform subcommittee is holding a Wednesday hearing with federal officials to discuss whether a $2 billion fund that federal agencies pay into, run by the Office of Personnel Management, is contributing to government waste and needs more oversight.

The revolving fund has not been audited in its entirety since the 1990s and concerns have been raised about how the money in the fund has been spent.

Ag spending: A House Appropriations subcommittee on Wednesday will mark up the 2014 agriculture spending bill, which is proposing to hold spending mostly flat at the current level post-sequester level of $19.5 billion. That reflects the automatic cut of $1.3 billion from the 2013 level that went into effect on March 1. The bill comes in $516 million less than President Obama’s request. The bill is slated for floor action before the July 4 recess.

Defense budget: A House Appropriations subcommittee will hold a closed markup on Wednesday of the 2014 defense spending bill that comes in at $512.5 billion, about $3 billion less than the White House’s request and $5.1 billion below last year’s levels.

SBA efficiency: The House Small Business Committee will chat with Small Business Administration Inspector General Peggy Gustafson on Wednesday and ask about her views on how to reduce program duplication at the agency.

Proxy advisory firms: A House Financial Services subcommittee will hold a hearing on Wednesday on role of proxy advisory firms, which recommends how shareholders should vote on corporate issues. There is concern that the advisory firms are pushing a political agenda instead of focusing on policies that promote shareholder interests. Earlier this year, the U.S. Chamber of Commerce proposed guidelines to promote greater transparency for the firms arguing that “as the number and complexity of issues on the proxy has grown exponentially, proxy advisory firms have failed to develop open, clear and evidence-based standard setting systems to help ensure the advice they provide strengthens corporate governance and shareholder value. They also are riddled with conflicts of interest and outdated processes that threaten the credibility and reliability of their recommendations.”

IRS ROUNDUP

Tearful testimony: In the first hearing focusing on what questions conservative groups faced in their quest for tax-exempt status, several representatives offered emotional testimony on Tuesday, saying they received a string of intrusive questions from the agency as it considered their applications.

Conference time: IRS officials spent $49 million across 225 conferences between 2010 and 2012, a new report said Tuesday.

One division of the Internal Revenue Service spent more than $4 million on a single 2010 conference in Anaheim, Calif., including on “Star Trek” parody video that has already caused the agency embarrassment.

LOOSE CHANGE

Steely defense: Ohio Sens. Rob Portman (R) and Sherrod Brown (D) applauded on Tuesday the Commerce Department’s preliminary ruling on a petition in favor of defending companies from illegally traded steel pipe by ensuring antidumping duties and countervailing duties continue to be levied on illegally subsidized and intentionally undersold Chinese steel pipe imports.

“This preliminary ruling to crack down on foreign companies who attempt to circumvent the laws on the books and in turn put Ohio’s businesses and workers at risk is a step in the right direction,” Portman said. “Washington must stand up for American manufactured goods and ensure that they are on a level playing field with their global competitors.”

ECONOMIC INDICATORS

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

Productivity-Unit Labor Costs: The Labor Department will release a its first-quarter figures that measure the productivity of workers and the costs associated with producing a unit of output.

Factory Orders: The Commerce Department is releasing April data on factory orders that consist of the earlier announced durable goods report plus non-durable goods orders.

ISM Services: The Institute for Supply Management will release its May index that measures the pace of growth of the services sector.

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

WHAT YOU MIGHT HAVE MISSED

— Former top Baucus staffer joins law, consulting firm

— GOP Appropriations chairman still hopes for budget compromise

— House ‘deems’ passage of Ryan budget to start appropriations process

— House Dems to support spending bill despite Obama veto threat

— GOP: Obama veto threat on spending is empty

— Reid will move to shut off farm bill debate

— Hundreds of lawmakers push for focus on currency manipulation

— CFPB releases procedures for new mortgage rules

— Corporate heavyweights form new tax reform coalition

— Trade deficit jumps to $40.3 billion in April

— McCain: Reagan would not have disagreed with having a budget