Business

OVERNIGHT MONEY: Postal Service’s finances in the spotlight

by Vicki Needham - 04/16/13 10:59 PM ET

Lawmakers fell short of reaching a deal before the end of last Congress, but still have time to enact a plan before the scaled-back Saturday service starts in August.

{mosads}Still, amid the change of mind about Saturday delivery,   the agency’s board of governors said it still backed the plan to no longer deliver letters and other pieces of first-class mail six days a week, which would provide those savings.

“Although disappointed with this congressional action, the board will follow the law,” the board said after the bill’s passage. “Delaying responsible changes to the Postal Service business model, only increases the potential that the Postal Service may become a burden to the American taxpayer, which is avoidable.”

At this point, the USPS is losing about $25 million a day and could, without congressional action, find itself in need of a taxpayer bailout — a situation all involved say they want to avoid.

Top postal service officials including Postmaster General Patrick Donahoe, who announced the Saturday change in February and asked lawmakers to erase any doubt that the USPS could move forward with its plan, will testify on Wednesday.

Also set to discuss the avenue toward solvency is Gene Dodaro from the Government Accountability Office and Fredric Rolando of the National Association of Letter Carriers, who has said that cutting Saturday service would eat into one of the service’s competitive advantages.

WHAT ELSE WE’RE WATCHING

Time to vote: Sylvia Burwell, President Obama’s nominee to be his next budget director, is expected to gain approval from the Senate Budget and the Senate Homeland Security and Governmental Affairs committees on Wednesday.

Burwell, who served as deputy director of the Office of Management and Budget in the Clinton administration, appears to be on the fast track to confirmation on the Senate floor. She is head of the charitable Wal-Mart Foundation and has spent more than a decade working with philanthropic groups.

Examining foreclosures: A Senate Banking subcommittee will examine, with several housing experts, how to improve accountability and transparency within the mortgage finance system, especially for homeowners who were harmed by foreclosures. Joseph Smith, who is overseeing the $25 billion national mortgage settlement reached a year ago with about dozen banks, will appear before the panel.

Budget outlooks: Several House Appropriations subcommittees will take a look at budgets for various agencies, including the Department of Housing and Urban Development, with HUD Secretary Shaun Donovan, as well as the State Department’s request with Secretary of State John Kerry and Customs and Border Protection’s Michael Fisher, who is chief of border patrol for CBP.

On the Senate side: Several Senate panels will discuss fiscal 2014 budget requests for a few agencies. Senate Finance Committee will chat with Health and Human Services Secretary Kathleen Sebelius about the budget for the department, a Senate Appropriations Committee subcommittee will look at the Education Department request with Education Secretary Arne Duncan, the Senate Homeland Security and Governmental Affairs Committee will sit down with Homeland Security Secretary Janet Napolitano, the Senate Armed Services Committee will talk about next year’s defense authorization with Defense Secretary Chuck Hagel and the Senate Small Business and Entrepreneurship Committee will talk to Small Business Administration Administrator Karen Mills about her agency’s budget.

Speed it up: A House Financial Services subcommittee will probably press the Securities and Exchange Commission on why its hasn’t implemented rules for a law designed to help small businesses grow. A year since the Jumpstart Our Business Startups (JOBS) Act landed on President Obama’s desk, the SEC has been slowed with putting the necessary rules in place because of other work needed on the Dodd-Frank financial reform law.

BREAKING NEWS

Immigration plan unveiled: The Senate’s Gang of Eight on Tuesday released the details of a broad agreement to overhaul the nation’s immigration laws.

The legislation would give provisional legal status to an estimated 11 million illegal immigrants and put them on a pathway to citizenship, but only after efforts are made to shore up the the U.S.-Mexico border.

It sets goals of persistent surveillance in high-risk areas — where more than 30,000 individuals are apprehended trying to enter the country illegally per year — along the southern border and a 90 percent success rate for stopping crossings in those sectors.

It would provide funding for 3,500 additional customs agents nationwide and authorize the deployment of the National Guard to the border to construct fencing and augment surveillance systems.

LOOSE CHANGE

Blocking Hochberg: The conservative Club for Growth urged Senate Minority Leader Mitch McConnell (R-Ky.) on Tuesday to lead the Senate GOP conference in blocking the confirmation of Fred Hochberg for another term as the head of the Export-Import Bank until a serious plan to wind down the bank is enacted into law.

“Sen. McConnell stood strong when he voted against reauthorizing the Export-Import Bank last year, and we hope he will show leadership again by blocking Fred Hochberg’s nomination and all other nominations to the Export-Import Bank’s board,” said Club for Growth President Chris Chocola.

Nearly a year ago, McConnell and 20 other Republicans vote against reauthorizing the bank’s charter for three years and raising the limit on the total financing the bank can guarantee, to $140 billion from $100 billion.

The Club for Growth had already expressed opposition to the nomination.

ECONOMIC INDICATORS

MBA Mortgage Index: The Mortgage Bankers Association releases its weekly report on mortgage application volume.

Fed’s Beige Book: The Federal Reserve releases its April summary on current economic conditions ahead of the Federal Open Market Committee’s next meeting, to take place April 30-May 1.

WHAT YOU MIGHT HAVE MISSED

— Credit unions rebut allegations about lending role

— IMF inches back U.S., global growth projections

— Bankers, lawmakers push back against community bank regs

— Shelby pushes banking regulators for Basel III analysis

— Reid: Ryan, Boehner stalling on budget

— Ryan signals no budget conference in sight

— Democrats warn that sequester cuts undermine fight against terror

— Appropriations chief: Pentagon should do more to stop China’s cyberattacks

— Researchers claim ‘serious errors’ in GDP study cited by deficit hawks

— Watchdogs press new SEC chairwoman to expose corporate cash in politics

— Housing starts clear 1 million mark for first time in nearly 5 years