OVERNIGHT MONEY: Lawmakers delve into lawmakers’ insider trading practices

THURSDAY’S BIG STORY:

Hot and getting hotter: You’ve got to hand it to CBS’s “60 Minutes” for shining a bright light on the apparent shady dealings of members of Congress in the financial markets. Lawmakers are dutifully trying to shield their finances from the spotlight put on their trading habits and whether they have used their inside-Congress knowledge to beef up their stock portfolios. 

The issue hits the big stage Thursday when the Senate Committee on Homeland Security and Government Affairs holds a hearing on how to crack down on the practice, which some lawmakers argue isn’t prevalent in the halls of Congress. 

{mosads}The TV news piece, as well as a new book, cast aspersions far and wide when it came to questionable pocket-lining, targeting Speaker John Boehner (R-Ohio), Democratic leader Nancy Pelosi (D-Calif.) and House Financial Services Committee Chairman Spencer Bachus (R-Ala.) for particular scrutiny. 

All three lawmakers have strongly defended their records from accusations of illicit profits, but the harsh piece has given new life to bills in both chambers that would prohibit even the appearance of impropriety.

Sens. Scott Brown (R-Mass.) and Kirsten Gillibrand (D-N.Y.) will testify on legislation they are backing that would prohibit the practice. On a second panel, a slew of legal experts and government watchdogs will offer their take.

As legislation goes, tomorrow’s hearing is likely the first round of a heavyweight bout — the House Financial Services Committee, chaired by Bachus, will hold its hearing next week.

WHAT ELSE TO WATCH FOR

Hello, Dodd-Frank: The Senate Agriculture Committee will take the temperature of financial regulators Thursday, with a hearing checking in on how the implementation of the Wall Street overhaul is coming along. Commodity Futures Trading Commission Chairman Gary Gensler and Securities and Exchange Commission Chairwoman Mary Schapiro will be on hand to discuss where the law stands nearly 18 months after it was signed by President Obama. 

CFPB chat: Treasury Secretary Timothy Geithner will be paying a visit to the Consumer Financial Protection Bureau, as that new agency gets off the ground. Geithner, along with Deputy Treasury Secretary Neal Wolin, will head to the bureau’s offices downtown to visit Raj Date, the Treasury’s adviser in charge of setting up the agency (and the man running the show until Richard Cordray is confirmed by the Senate as the agency’s director).

Let’s get high-tech: The Treasury Department will begin a two-day conference Thursday devoted to various tools that can be brought to bear to protect the stability of the financial system. Hosted by the Office of Financial Research and the Financial Stability Oversight Council — two new entities created by the Dodd-Frank financial reform law — the event will focus on “data and technology issues and analytical approaches for assessing, monitoring and mitigating threats to financial stability,” per the Treasury Department. On hand for Day 1 will be Geithner and Martin Gruenberg, acting chairman of the Federal Deposit Insurance Corporation.

Housing hub: The House Financial Services Committee will be the place to be for all things housing tomorrow, as the panel holds a pair of high-profile hearings to discuss that troubled market. In the morning, Housing and Urban Development Secretary Shaun Donovan will testify to discuss the fiscal health of the Federal Housing Administration, following reports that its cash reserves have dwindled to the point that there is close to even odds it will need federal assistance in the next year.

Then, in the afternoon, hefty bonuses paid out to executives at Fannie Mae and Freddie Mac will be the topic du jour. The chief executives of the trouble housing giants — Charles Haldeman for Freddie, Michael Williams for Fannie — as well as their regulator, Edward DeMarco of the Federal Housing Finance Agency, will, most likely, defend themselves from what promises to be another good grilling from angry lawmakers. The trio had to pay a visit to the House Oversight Committee on the same issue earlier this month.

REIN it in: The House Rules Committee will meet to prepare the REINS Act for floor consideration. The bill, sponsored by Rep. Geoff Davis (R-Ky.), would require Congress to approve all major federal regulations and is a centerpiece of the House GOP’s fall anti-regulatory agenda. It has no hope of passing the Senate.

WEDNESDAY WRAP-UP

We’ll take your payroll tax cut: And raise you the cost savings of freezing federal workers’ pay and any extra from safety net programs to pay for an extension of the current payroll tax cut.

In a further sign that the debate had shifted to how to, instead of whether, to extend payroll tax relief, Senate Republicans would take a page from President Obama’s own fiscal commission and freeze salaries for federal civilian employees for three years. That would amount to a five-year pay freeze in total, given that a two-year policy is already in effect.

Don’t blow it: Speaker John Boehner (R-Ohio) said Wednesday that Republicans support extending the payroll tax cut but that “there’s no debate” about whether the measure should be paid for. “We’re going to continue to seek common ground on this issue,” Boehner told reporters after a House GOP conference meeting. 

It’s getting shilly out: The current divide over extending a payroll tax holiday is a clear indication that Republicans are ready to fight for the wealthy at the expense of the middle class, top Democrats charged Wednesday.

Payroll tax for sale: The Obama administration is continuing to press its case for a payroll-tax extension, releasing a report Wednesday laying out the benefits state by state.

We’ve got this: The Federal Reserve and other global central banks announced a coordinated effort to boost the financial system by making it easier for banks across the world to trade in U.S. dollars. The step is the most dramatic effort taken by the Fed to contain a European debt crisis that threatens to spark a global recession. 

What’s the big idea?: Rep. Ron Paul (R-Texas) suggested Wednesday that the latest move by the Federal Reserve might have come at the direction of the White House. The longtime Fed basher also said that the Federal Reserve’s new agreement with other central banks is “grasping at straws” and putting American taxpayers effectively on the hook for Europe’s troubles.

Republicans provided a mixed reaction to the Fed move. 

Economic recovery, dead ahead: The Fed said it sees some promising signs of economic growth in its latest beige book analysis of the economy released Wednesday, offering a glimmer of hope to President Obama’s reelection campaign.

It’s getting weasely in here: Democratic Rep. Xavier Becerra, a member of the recently dissolved deficit panel, accused Republicans of trying to “weasel out” of the automatic cuts triggered after the budget supercommittee failed to reach a deal on deficit reduction.

Gimme an E … gimme an X: T-E-N-S-I-O-N of unemployment benefits. That’s the mantra of House and Senate Democrats who held a pep rally of sorts on Wednesday to make it clear they will stay in Washington until a bill passes. The North Pole is mum on the issue so far, but it’s assumed Santa would like to avoid a delay in his yearly deliveries. 

During a rally with workers on Capitol Hill, Sen. Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor and Pensions Committee, guaranteed that there would be “no Christmas for Congress unless an extension of unemployment benefits is passed.”

That’d be a ‘no’ on the earmark ban — thanks, though: Sen. Claire McCaskill (D-Mo.) told reporters Wednesday that she does not think Senate leaders from either party want to bring her permanent earmark ban up for a vote. McCaskill and Sen. Pat Toomey (R-Pa.) teamed up to introduce the earmark ban Wednesday. Asked whether Senate leaders support bringing it to the floor, she replied: “I would say no.”

ECONOMIC INDICATORS

Initial Claims: The Department of Labor releases its weekly filings for jobless benefits a day before the monthly report comes out. Claims have been trending up recently as the economy struggles to add jobs and bring down the unemployment rate. 

ISM Index: The index measures the pace of growth of the manufacturing sector.

Construction Spending: The Department of Commerce releases its report on spending that is broken down between residential, non-residential and public expenditures on new construction. The monthly changes are volatile and subject to huge revisions, and rarely have a market impact.

Auto and Truck Sales: Individual auto manufacturers begin releasing their monthly sales data, while the Commerce Department releases seasonal effects on the figures. 

WHAT YOU MIGHT HAVE MISSED

—  Van Hollen optimistic on budget reform bill

— Ryan teams up with Van Hollen on budget bill

— Additional budget cuts could force House committees to lay off staffers

— House Democrats want analysis of viability of programs to reduce mortgage principal 

— Job cuts flat in November but totals eclipse last year’s levels

— Private employers add 206,000 jobs, exceed expectations

— E-filing ensures refund delivery, says IRS

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