–House Republicans Schedule Tuesday Vote On Their Alternative
–Democratic Leaders Say House GOP Plan Won’t Fly in the Senate
–House, Senate Appropriators Near Accord On $900 Billion FY’12 Package
–Senate To Vote On Balanced Budget Constitutional Amendment
–Congress Is Trying To Conclude Its Work By Friday

By John Shaw

WASHINGTON (MNI) – Congress appears to be nearing an agreement on a
massive nine bill $900 billion spending package to complete action on
the 2012 fiscal year budget, but there are no signs yet of an accord on
a separate package that would extend last year’s payroll tax cut, renew
uninsurance benefits, and approve other end-of-the-year items.

Congressional leaders have said they hope to adjourn for the year
by Friday, but the stalemate on the payroll tax cut extension and other
items could delay this target adjournment date for at least a few days.

House Republicans are pushing for a Tuesday vote in the House on a
package that would cost about $195 billion, with about $120 billion of
the cost coming from the payroll tax cut extension.

The House GOP plan would extend for one year the current 4.2%
payroll tax rate for employees and renew unemployment insurance benefits
for workers who have been unemployed for more than six months. The plan
would extend for two years the so-called “doc fix” to prevent Medicare
payments to doctors from being cut by more than 27%.

The package is paid for by a host of spending savings including
minor adjustments to the Social Security and Medicare programs and fees
imposed on Fannie Mae and Freddie Mac. It would also freeze the salaries
of civilian federal workers through 2013.

The House GOP plan would also expedite construction of the
controversial Keystone XL pipeline. President Obama has said that a
final decision on building the pipeline should be delayed until 2013.

The House GOP plan is objectionable from the Democratic perspective
for many reasons, including the provision to remove barriers to
construction of the Keystone XL project and to delay a new pollution
standard for industrial boilers.

Senate Republican leaders have said the House GOP plan should also
be approved by the Senate. But Senate Majority Leader Harry Reid has
dismissed the House GOP plan as “partisan joke that has no chance of
passing the Senate.”

Last year, the White House and Congress agreed on a tax cut package
that included reducing for one year the employee-paid share of the
Social Security tax from 6.2% to 4.2%.

A Senate Democratic plan would reduce the employee payroll tax to
3.1%.

As the battle over the payroll tax cut extension continues, House
and Senate appropriations leaders are narrowing in on a $900 billion
spending package that includes the 9 fiscal year 2012 bills that have
not yet been approved. The 2012 fiscal year began Oct. 1 and only 3 of
the 12 bills have been passed and signed into law.

The negotiators are trying to assemble a final package by Monday or
Tuesday so the spending package can pass Congress by the end of the
week. A stop-gap bill funding the federal government expires Friday.

In other action this week, the Senate Banking Committee will hold a
hearing Tuesday at 10 a.m. on the Federal Housing Finance Agency. Steve
Linick, the inspector general of the agency, will testify.

The Senate Banking Committee will also consider Tuesday morning
several pending nominations including Thomas Hoening to be vice
chairman of the FDIC.

A Senate Banking subcommittee will hold a hearing Tuesday afternoon
at 2:30 p.m. on ways to help homeowners harmed by foreclosures. Another
Banking Committee subcommittee will hold a hearing Wednesday at 9:30 a.m
on investor risks in capital raising efforts.

The House Budget Committee will mark up Thursday at 10 a.m.
line-item veto legislation.

Various subcommittees of the House Financial Services Committee
will be at work this week. One subcommittee will hold a mark-up
Wednesday at 10 a.m. on a private mortgage market investment bill.
Another subcommittee will hold a hearing Thursday at 9:30 a.m. on a bill
to improve access to capital markets for emerging growth companies.

Yet another subcommittee will hold a hearing Thursday at 1 p.m. on
the MFGlobal bankruptcy. Jon Corzine, the former CEO of the firm, will
testify as will Gary Gensler, chairman of the CFTC.

Finally, the Senate will vote this week on a balanced budget
constitutional amendment. The vote was mandated by this summer’s debt
limit agreement. The House rejected a balanced budget amendment several
weeks ago. The Senate is not expected to approve it.

Reid, the Senate Majority Leader, said last week that he does not
expect a lengthy debate on the amendment in the Senate this week.

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

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