–President To Address Joint Session of Congress Tuesday Night
–House-Senate Conference Panel On Payroll Tax Cut To Begin Tuesday
–House To Vote On Budget Process Reform Bill
–Senate Set To Vote To Disapprove Last Tranche Of Debt Ceiling Hike

By John Shaw

WASHINGTON (MNI) – President Obama will give his State of the Union
address Tuesday night and is likely to use the primetime address to try
and frame the economic agenda that Congress will consider for the rest
of the year.

Obama will speak at 9 p.m. ET and is likely to, among other things,
call on Congress to quickly approve a payroll tax cut extension package.

Negotiations between the House and Senate on a payroll tax cut
extension package will formally begin Tuesday at 2:30 p.m. House Ways
and Means Committee Chairman Dave Camp will chair the House-Senate
conference committee which will seek to develop a one year extension of
the payroll tax cut, extend unemployment insurance benefits, and prevent
a sharp decrease in Medicare reimbursements for doctors.

The main areas of contention are likely to be on how to pay for the
package that could cost nearly $200 billion, how the unemployment
insurance program might be overhauled, and the fate of Keystone XL
pipeline project.

A two-month payroll tax cut extension package was approved by
Congress in December and expires at the end of February.

The House-Senate conference committee will formally negotiate the
package, but the talks are likely to be guided by congressional leaders
with input from the White House.

Both the House and Senate will convene Monday afternoon.

The Senate is expected to vote this week on a motion to disapprove
the final installment of last year’s debt hike agreement.

The House passed its disapproval motion last week on a largely
party line vote.

The Congressional votes were triggered by Obama’s recent letter
seeking the final $1.2 trillion tranche of the debt ceiling increase
that was negotiated last August. Under last year’s debt hike agreement,
once Obama formally made this request, Congress has two weeks to vote on
a motion to disapprove the debt ceiling increase.

It remains very unlikely that the Democratic-controlled Senate will
pass the disapproval motion. It rejected a similar disapproval motion
last fall on a mostly party line vote.

Even if the Senate does pass the resolution, Obama could veto the
measure. Overriding a presidential veto would require two-thirds
majorities in both the House and Senate — a virtually inconceivable
scenario.

Obama’s formal request and the congressional votes will have the
effect of increasing the current $15.2 trillion debt ceiling to $16.4
trillion, an adjustment that would probably delay any future debt
ceiling hikes until after the November election.

In other action this week, the House will consider a bill that
would overhaul several features of the congressional budget process,
notably requiring the president to be part of the process under which
Congress passes its annual budget resolution.

The House Budget Committee will hold hearings Tuesday and Wednesday
at 10 a.m. to consider other aspects of a broader budget process
overhaul package.

The Senate Budget Committee will hold a hearing Thursday at 10 a.m.
on the outlook for the U.S. and global economy. Several experts will
testify including Alan Blinder, a former Federal Reserve Board Governor.

A subcommittee of the Senate Homeland Security and Governmental
Affairs Committee will hold a hearing at 10 a.m. Thursday on the
taxation of mutual fund commodity investments.

The House Agriculture Committee will mark-up legislation Wednesday
at 9 a.m. to overhaul the regulation of derivatives and over-the-counter
swaps markets which are used to trade agricultural commodities.

A subcommittee of the House Oversight Committee will hold a hearing
Tuesday at 1:30 p.m. on the future of the Consumer Financial Protection
Bureau.

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

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