–Senate Banking Panel To Vote This Week On Yellen, Diamond, Raskin
–Hill Debate On Future of Bush Tax Cuts Heats Up; Decisions in Fall
–House Ponders How To Proceed On War Spending Bill

By John Shaw

WASHINGTON (MNI) – The Senate Banking Committee is scheduled to
vote Wednesday on President Obama’s three nominations to the Federal
Reserve Board: Janet Yellen to serve as vice chairman and Peter Diamond
and Sarah Bloom Raskin to serve as Fed governors.

The Senate Banking panel will vote on the nominations at a 2:30
p.m. meeting. During their confirmation hearing several weeks ago, all
three nominees won praise from members of the Banking Committee.

Senate Banking Committee Chairman Chris Dodd has said that he
believes it is unlikely the full Senate will vote on the three Fed
nominees prior to beginning its summer recess on August 6.

Congress is likely to spend the next week beginning in earnest a
debate on which of the 2001 and 2003 tax cuts should be extended. No
congressional votes on the matter are expected before September.

Treasury Secretary Tim Geithner said in Sunday TV interviews that
the administration supports allowing the tax cuts for the wealthy to
expire at the end of the year.

Both the administration and congressional Democrats have repeatedly
said that tax cuts for individuals making up to $200,000 and couples
earning up to $250,000 should be extended.

The cost of extending these tax cuts would be about $1.4 trillion
over a decade. Extending all of the 2001 and 2003 tax cuts would cost
more than $2 trillion over a decade.

Congressional Republican leaders support extending all of the 2001
and 2003 tax cuts.

Senate Finance Committee Chairman Max Baucus and Acting House Ways
and Means Committee Chairman Sander Levin have been discussing this
summer how to deal with a tax cut package in the fall.

House Democratic leaders are hoping to pass an emergency spending
bill this week.

Before the July 4th recess, the House passed an $82 billion
emergency spending bill, which includes $37 billion for the wars in
Afghanistan and Iraq and $22 billion to prevent a wave of teacher
layoffs.

The Senate approved a $59 billion emergency bill earlier this
summer which did not have the teacher funding. The Senate last week once
again passed the $59 billion spending package.

House Democrats need to decide if they will accept the Senate
version or continue to push for the higher spending.

House Democrats are hoping to begin their recess this Friday until
Sept. 14.

Before then, they want to pass two fiscal year 2011 spending bills:
the Military Construction-VA spending bill and the Transportation-HUD
spending bill.

The Senate is scheduled to be in session until August 6.

The Senate will consider a scaled-back energy bill this week and
then take up the nomination of Elena Kagan to become an associate
justice on the Supreme Court next week.

** Market News International Washington Bureau: (202) 371-2121 **

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