OVERNIGHT MONEY: Senate set to vote on debt-ceiling pause

The House easily passed the measure last week and, barring any changes, passage in the Senate will send the measure to President Obama’s desk for his signature. 

{mosads}That will free up some much-needed time to handle other pressing issues — a scheduled batch of deep spending cuts to defense and domestic spending set to kick in March 1. Lawmakers also must finish up work on a bill to keep the government running through the end of the fiscal year. 

On the debt-ceiling legislation, the Senate has agreed on six votes Thursday: four amendments, one motion and then passage of the bill, sometime in the afternoon.

Senate Majority Leader Harry Reid (D-Nev.) had said he wanted to move the bill quickly to turn attention the other priorities. 

On sequestration, Reid has said the automatic spending cuts should be replaced “in short increments” by, for instance, repealing oil and gas subsidies.

On that note, the White House on Wednesday called for ending tax breaks for oil-and-gas companies, corporate jet owners and hedge fund managers to help replace the sequester.

Sequester cuts are set to go into effect in a month, and officials on both sides of the aisle increasingly believe they will move forward as scheduled.

Jay Carney, the White House press secretary, on Wednesday blamed Republicans for the current impasse.

He said the GOP shouldn’t “insist that tax loopholes remain where they are for corporate jet owners, or subsidies provided to the oil and gas companies that have done so exceedingly well in recent years have to remain in place.”

“That’s not I think a position that will earn a lot of support with the American people.”

WHAT ELSE TO WATCH FOR

Unchained melody: Sen. Bernie Sanders (I-Vt.) is holding a news conference on Thursday to announce that there is a growing number of seniors, veterans and labor organizations banding together against the idea of a chained Consumer Price Index that could cut benefits for Social Security and disabled veterans.

Sanders will be joined by Sen. Sheldon Whitehouse (D-R.I.), AFL-CIO President Richard Trumka, Nancy LeaMond, AARP executive vice president and other opponents by changing the way CPI is calculated. 

CABINET WATCH

The rounds continue: Sen. Michael Bennet (D-Colo.), a member of the Senate Finance Committee, is backing President Obama’s nominee for Treasury secretary, Jack Lew.

After a meeting on Wednesday, Bennet said: “I am confident that his experience, expertise and deep knowledge about the issues we face make him an outstanding candidate to serve as Treasury Secretary. I look forward to working with him to reform our tax code and put our country on a sustainable fiscal path.”

Commerce chatter: There hasn’t been much movement on choosing a nominee to head up the Commerce Department but a familiar name is popping up again — Penny Pritzker, a well-known Chicago businesswoman and campaign contributor to President Obama. 

She was considered a leading candidate in 2008 but removed herself from the running. Now her name is back in the mix as the Obama administration seeks to add racial and gender diversity to the Cabinet.

LOOSE CHANGE

Retailers reassure: The National Retail Federation (NRF) said Wednesday that few, if any, merchants are expected to tack on a surcharge for customers using a credit card as theoretically allowed under a proposed lawsuit settlement with Visa and MasterCard.



“The ridiculous concept that merchants will start surcharging on any widespread basis is propaganda being spread by the card industry in an attempt to divert attention from their skyrocketing swipe fees,” said Mallory Duncan, NRF senior vice president and general counsel. 

“The lawsuit sought to bring down swipe fees and the prices paid by consumers, not to increase prices. The card companies’ new surcharging proposal runs 180 degrees counter to the intent of the lawsuit.”

While the settlement would technically allow retailers to add the 4 percent surcharge, there are a number of hurdles to leap. 

• Ten states representing 40 percent of all U.S. credit card transactions prohibit surcharges by law — California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

• Visa and MasterCard require a retailer to have the same card acceptance policies in all its stores, making it difficult for national or regional chains with stores in the 10 states to implement the charge in the remaining states.

• The settlement requires merchants who surcharge Visa or MasterCard to include American Express. But there are rules that won’t allow any merchant that accepts American Express to implement the surcharge.

• Merchants would be required to go through a number of complicated steps, including giving Visa and MasterCard detailed plans at least 30 days in advance, posting extensive signage in stores, and spending significant amounts to reprogram or replace cash register systems. 

BREAKING NEWS

Honey, who shrank the economy? The nation’s economy unexpectedly shrank by 0.1 percent in the fourth quarter of last year. But not to worry, say most economists and the stock markets. A huge drop in defense spending, in fact the biggest drop in 40 years, weighed heavily on the figure. But that factor is expected to abate this year despite scheduled spending cuts to defense and domestic programs. 

It’s the first time in 3 1/2 years that the economy has been in the negative. 

Not so surprising: The Federal Reserve kept the economic ship on course on Wednesday, holding interest rates near zero, and continuing the purchasing of $85 billion of bonds a month to bolster the recovery. 

In its policy statement, the FOMC said that economic growth had “paused” in recent months but blamed the slowdown on a range of other factors including Hurricane Sandy. There was no mention of the “fiscal cliff” battle. 

Employment kept growing at a “moderate pace,” even as unemployment remained elevated.

Or maybe …: There’s another factor to blame in the economy’s arrest. White House press secretary Jay Carney laid the blame on congressional Republicans Wednesday, saying the fiscal-cliff negotiations tamped down defense spending.

“Our economy is facing a major headwinds, and that’s Republicans in Congress,” Carney said.

Initial Claims: The Labor Department releases its weekly filings for jobless benefits a day ahead of January job numbers. 

Mortgage Rates: Freddie Mac is releasing weekly data on fixed-rate mortgages, which have been hovering around historic lows.  

Challenger Job Cuts: The firm measures the number of jobs cuts that are planned by U.S. employers in January.

Personal Income: The Commerce Department releases December figures  measuring income from all sources. The largest component of total income is wages and salaries, which is estimated using payrolls and earnings data from the employment report.

WHAT YOU MIGHT HAVE MISSED

— Businesses added 192,000 jobs in January

— Report: IRS hiring new employees faster

— US, China should address economic challenges

— Democratic senators call for legislation on equal pay for women

— Study: State tax systems regressive

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