–Senate Expected to Confirm Kagan as Supreme Court Justice
–Senate Budget Committee to Hold Tuesday Hearing on U.S. Economy
–Senators Expected to Skirmish Over Fate of 2001, 2003 Tax Cuts

By John Shaw

WASHINGTON (MNI) – Like the House last week, the Senate is expected
to end the final week of its summer session with much partisan jousting
but without passing high profile legislation.

The Senate is expected to confirm Elena Kagan as an associate
Justice on the Supreme Court Thursday or Friday, the final vote of the
summer.

Before then, the Senate is set to continue partisan battles over a
small business loan bill, a $26 billion domestic spending package, and a
much scaled-back energy bill.

The Senate will vote Monday evening to end debate on the $26
billion package which includes $10 billion to avoid teacher layoffs this
fall and $16 billion for Medicaid.

Both provisions were in other bills that have been stalled. The
bill is fully offset, but Senate Republicans have been cool to the
package and are not likely to support it.

Republicans continue to press for the opportunity to offer a number
of amendments to a package that has a $30 billion small business lending
fund and $12 billion in tax breaks. The measure has been stalled for
several weeks.

Senate Majority Leader Harry Reid and Senate Minority Leader Mitch
McConnell have been negotiating on a procedure to consider the bill, but
it is unclear if they will reach an agreement this week.

Senate Democrats are also set to formally offer this week an energy
bill that would restructure federal oversight of the outer-continental
shelf, promote electric and natural gas powered cars, and allocate $4.5
billion for state and federal recreational and public lands programs.

Republicans are likely to block that bill, seeking votes on a
number of amendments.

The Senate Budget Committee will hold a hearing Tuesday at 10:00
a.m. on the status of the American economy. Richard Berner, chief
economist of Morgan Stanley, Simon Johnson, a professor at MIT, and Joel
Naroff, of Naroff Economic Advisors, are set to testify.

A subcommittee of the Senate Banking Committee will hold a hearing
Thursday at 10:30 a.m. on the administration’s manufacturing agenda.
Nicole Lamb-Hale, the assistant secretary of Commerce for manufacturing,
is scheduled to testify as will William Strauss, a senior economist at
the Federal Reserve Bank of Chicago.

The Senate Agriculture Committee will hold a hearing on agriculture
trade policy Wednesday at 9:30 a.m. with U.S. Trade Representative Ron
Kirk.

Senators are expected to continue skirmishing over the fate of the
2001 and 2003 tax cuts that are set to expire at the end of the year,
but no congressional votes on the matter are expected before September.

Treasury Secretary Tim Geithner has said the administration
supports allowing the tax cuts for the wealthy to expire at the end of
the year.

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.

The House is on recess until Sept. 14. The Senate will begin its
recess on Friday and will also return Sept. 14.

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

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