OVERNIGHT MONEY: Fiscal issues back on front burner

FRIDAY’S BIG STORY: 

Devoid of a resolution: House and Senate lawmakers continued their back-and-forth on Thursday over how to proceed on looming fiscal issues — keeping the government open beyond the end of the month and raising the debt ceiling in mid-October — but didn’t seem to find any solutions. 

Democrats and Republicans didn’t stray from their tracks during meetings and no progress appeared to be made despite the efforts. 

So, onto next week.

Growing concern over the lack of a solution has House leaders on both sides warning their members in recent days that without passage of a bill to keep the government running next week, the recess planned for the final week of the month could be canceled. 

Senate Majority Leader Harry Reid (D-Nev.) said he’s scared that the government is headed for a shutdown after meeting with Speaker John Boehner (R-Ohio) Thursday morning.

“I’m really frightened,” he said. 

{mosads}Reid, Boehner, Senate GOP Leader Mitch McConnell (Ky.) and House Minority Leader Nancy Pelosi (D-Calif.) all met in Boehner’s office to discuss a path forward. 

During the meeting, Reid told Boehner that he won’t delay the healthcare law in exchange for keeping the government open after Sept. 30. 

Reid said any language to defund the healthcare law won’t survive in the Senate. He intends to pass a “clean” stopgap spending measure to keep the government open through year’s end.

On Wednesday, House GOP leaders were forced to push consideration of a short-term spending bill to next week for lack of Republican support. 

Reid’s tone was similar on the debt ceiling: no concessions, a stance in line with the White House’s position.

Boehner was, once again, clear on Thursday that Republicans are insisting on spending cuts in exchange for raising the debt ceiling.

“We have a spending problem. It must be addressed. Period,” Boehner said.

Meanwhile, Republican leaders said they have yet to land on a viable alternative plan to keep the government running, a day after conservative opposition forced a delay of a vote on their original proposal.

Talks are ongoing on how to proceed. 

Boehner and Majority Leader Eric Cantor (R-Va.) on Tuesday presented a plan to their members in which they would pass a stopgap spending bill while forcing the Senate to vote on a measure to defund President Obama’s healthcare law. 

Many Republicans called the idea a “gimmick” and are pushing the leadership take a harder line.

The Speaker suggested the leadership’s proposal still might work but that it could be revised before it comes to the House floor.

“There are a million options that are being discussed by a lot of people,” Boehner said. 

Another wrench got tossed into the works on Thursday. 

Sen. Tom Coburn (R-Okla.) announced his opposition to the spending level of the $986.3 billion three-month temporary spending bill unveiled by House Republicans on Wednesday evening.

The Oklahoma Republican argues that the top-line number for 2014 is actually supposed to be $967 billion.

WHAT ELSE WE’RE WATCHING

Home on the range: Senate Finance Committee Chairman Max Baucus (D-Mont.) will lead a group of trade ambassadors on a four-day tour of his home state of Montana starting on Friday. 

He will be joined by representatives from Canada, China, Germany, Japan and Peru — a mix of countries participating in the ongoing Trans-Pacific Partnership and U.S.-E.U. trade negotiations.

The tour also includes an economic summit with some of the nation’s top business leaders, including the CEOs of Boeing, Facebook, Google and Ford.

LOOSE CHANGE 

Falling foreclosures: Foreclosures fell to an eight-year low in August as the housing market’s recovery continues making strides.

Lenders started the process on nearly 55,775 homes last month, down 8 percent from July and a sharp drop of 44 percent from August last year, the lowest level since December 2005, RealtyTrac said Thursday.

Nevada’s foreclosure rate ranked highest nationwide, knocking Florida out of the top spot, followed by Ohio, Maryland and Delaware.

“The foreclosure floodwaters have receded in most parts of the country, but lenders and communities continue to clean up the damage left behind, which means the recent uptick in bank repossessions is a trend that will likely continue into next year,” said Daren Blomquist, vice president at RealtyTrac. 

“Meanwhile foreclosure flash floods will continue to hit some markets over the next few months as delayed foreclosure starts are quickly pushed into the pipeline. This was the case with the jump in Nevada foreclosure starts in August.”

Bank repossessions (REO) in August increased 6 percent from the previous month but were still down 25 percent from a year ago. REO activity nationwide has increased on a month-to-month basis in three of the last four months, reaching a five-month high in August.

There were about 1.3 million homes in some stage of foreclosure at the end of August, a drop of about 5 percent from a year earlier.

Completed foreclosures are now on track to finish the year at 490,000, down about 26 percent from 2012’s total.

Foreclosures peaked at 1.05 million in 2010 and have been on the downturn since then. 

They should reach a normal level in early 2015, RealtyTrac estimates. 

Mortgage rates steadying: Average rates on fixed mortgages held steady this week, holding near two-year highs. 

There is uncertainty heading into next week, when the Federal Reserve is expected to start curtailing its bond-buying program. 

The 10-year Treasury rate was 2.92 percent on Wednesday, down from 2.97 percent Tuesday.

The average rate on the 30-year loan was unchanged from last week at 4.57 percent, just below the two-year high of 4.58 percent that was reached Aug. 22, Freddie Mac said Thursday. 

The average rate on the 15-year fixed mortgage held at 3.59 percent, down a tad from the two-year high of 3.6 percent hit on Aug. 22.

Still, mortgage rates are at historic lows, keeping home purchases more affordable. 

ECONOMIC INDICATORS

Business Inventories: The Commerce Department will release its July report on sales and inventory from all three stages of the manufacturing process, manufacturing, wholesale and retail.

Michigan Sentiment: Thomson Reuters/University of Michigan will release its measure of consumer sentiment for September.

Producer Price Index (PPI): The Labor Department will release its August report that tracks the prices of goods at the wholesale level. The market tracks PPI closely because it represents prices for goods that are ready to sell to consumers. 

Retail Sales: The Commerce Department will release its August report measuring the total receipts of retail stores. Sales figures are widely followed as the most timely indicator of broad consumer spending patterns, which represent 70 of economic activity. 

WHAT YOU MIGHT HAVE MISSED

— Senate Banking panel sets goal to approve housing finance bill this year

— Employers warned about using payroll cards

— GOP lawmaker calls for criminal penalties against IRS’s Lerner

— Marijuana sellers unfairly penalized, say odd couple Norquist, Blumenauer

— House GOP renews attacks on ‘unbridled’ consumer bureau

— Boehner defends debt demands to Lew

— Jobless claims drop below 300,000 last week

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