Business

OVERNIGHT MONEY: Perez faces first hurdle

by Vicki Needham - 05/07/13 11:17 PM ET

Two House panels held a joint hearing on Tuesday with whistle-blower Frederick Newell that reflected clear lines of division between Republicans and Democrats.

Republicans contend that Perez, head of the Justice Department’s Civil Rights Division, made an unethical deal with city officials in St. Paul, Minn., to drop a Supreme Court appeal that would have had a potentially adverse effect on discrimination cases in exchange for the Justice Department’s agreement to step away from two whistle-blower cases and forfeit upward of $200 million in damages for the federal government.

{mosads}Democrats say Perez acted professionally and ethically and was only part of the process in the Justice Department making a decision not to intervene in the Newell case, which was eventually dismissed.

They accused Republicans of using the hearing to derail Perez’s nomination, but Republicans countered that the hearing was merely a part of a long investigation into how the Justice Department acted in dealing with several cases, including convincing St. Paul to drop a Supreme Court case that Perez has said could have permanently damaged a law used in discrimination cases.

Republican senators could chime in before the vote that they question Perez’s ability to lead Labor, while Democrats will likely express their support leaving it up to the full Senate to make a final decision.

WHAT ELSE WE’RE WATCHING

South Korea in focus: The House and Senate will hold a joint meeting on Wednesday to hear from South Korea President Park Geun-hye.

During a joint press conference on Tuesday, President Obama credited the new president for displaying “calm and steady resolve that has defined your life” amid early challenges.

“And today I’ve come to appreciate the leadership qualities for which you are known — your focus and discipline and straight-forwardness,” he said.

The two leaders agreed that the U.S.-South Korea free-trade agreement, which has been in place for a year, is “already yielding benefits for both our countries,” Obama said.

“On our side, we’re selling more exports to Korea — more manufactured goods, more services, more agricultural products.”

“Even as we have a long way to go, our automobile exports are up nearly 50 percent, and our Big Three — Ford, Chrysler and GM — are selling more cars in Korea.”

Obama said the leaders “believe that it’s going to make both of our economies more competitive” and will “boost U.S. exports by some $10 billion and support tens of thousands of American jobs.”

The Korean president said that the trade deal “is contributing to our shared prosperity.”

“We also said we will make efforts to enable our people to better feel the benefits of our free-trade agreement for them,” she said at the White House.

She said she also highlighted during their talks the importance of “securing high-skilled U.S. work visas for Korean citizens, and asked for executive branch support to the extent possible to see to it that the relevant legislation is passed in the U.S. Congress.”

But lawmakers and trade experts raised questions on Tuesday about the effectiveness of the trade deal between the two nations, including Sen. Elizabeth Warren (D-Mass.).

Debt default: The House will begin work Wednesday on a bill that would allow the Treasury Department to prioritize its debt payments if a default is looming.

Treasury insists it cannot prioritize payments and avoid a default because payments are electronically scheduled and are difficult to change, even if its borrowing capacity is reached.

Republicans, on the other hand, say their bill could provide some assurance that the nation will pay its debts.

Lawmakers will likely have to increase the debt ceiling sometime by the early fall.

The lower chamber is expected to complete work on the bill on Thursday.

Back at the budget: House appropriators will chat with Acting Environmental Protection Agency Administrator Bob Perciasepe on Wednesday and, in another subcommittee, Secretary of the Army John McHugh and Chief of Staff of the Army Gen. Raymond Odierno about their respective budgets.

Meanwhile, Senate appropriators will talk to Treasury Secretary Jacob Lew, Acting IRS Commissioner Steven Miller and Treasury Inspector General for Tax Administration J. Russell George about their agencies’ budgets.

They also will talk about the Air Force budget request with Secretary Michael Donley and Air Force Chief of Staff Gen. Mark Welsh III, and with Gen. Thomas Bostick, commanding general and chief of engineers at the U.S. Army Corps of Engineers, about his agency’s budget.

Curbing waste: The Senate Homeland Security and Governmental Affairs Committee will talk to several top government officials about how the executive branch can continue to reduce improper payments made by federal agencies, including the establishment of a government-wide “Do Not Pay” list.

Federal agencies made an estimated $108 billion in improper payments last year.

The hearing will examine the implementation of law passed last year by Congress that is designed to prevent improper payments by requiring agencies to check centralized lists of disbarred, dead or otherwise excluded individuals or companies before payments are made.

BREAKING NEWS

Don’t think so: Speaker John Boehner (R-Ohio) said Tuesday that he probably can’t support the online sales tax bill that the Senate passed this week, underscoring the challenge that supporters face in getting the measure through the lower chamber.

Boehner told Bloomberg Television that the Marketplace Fairness Act, which got 69 votes in the Senate on Monday, would heap a “big burden on some very small businesses.”

“I just think that moving this bill where you have 50 different sales tax codes, it is a mess out there,” Boehner said. “You are going to make it much more difficult for online businesses to be able to comply with it.”

LOOSE CHANGE

Credit check: Sen. Bill Nelson (D-Fla.) asked federal regulators on Tuesday to investigate and crack down on the mortgage industry’s inaccurate reporting of short sales as foreclosures to credit agencies.

“Many homeowners who go through short sales are hoping for a fresh start,” Nelson said in a statement. “Instead, a lot of them might not even know they’re continuing to be punished.”

In recent months, it has come to light that the lending industry has been reporting short sales with the same computer code used for foreclosures in the credit reports of an untold number of consumers, hurting their credit ratings and potentially their ability to qualify for new loans.

He sent the letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray and Federal Trade Commission Chairwoman Edith Ramirez.

“If a short sale is reported as a foreclosure, it could unfairly ruin short sellers’ credit scores and make it more expensive for them to borrow,” he wrote. “Instead of being able to qualify for a new home loan in just two years due to a short sale, they may have to wait up to seven years if that short sale is reported as a foreclosure.”

WTO welcome: The U.S. Chamber of Commerce and the National Foreign Trade Council (NFTC) congratulated the pick of Roberto Carvalho de Azevêdo of Brazil as the next director-general of the World Trade Organization (WTO), which is expected to be announced on Wednesday.

“We need the WTO more than ever,” said Thomas Donohue, the U.S. Chamber’s president and CEO. “The organization is at a crossroads. While success will ultimately depend on the WTO’s member states, incoming Director-General Azevêdo has the skills, knowledge, and Geneva-based experience that will be essential to broker a deal.”

Jake Colvin, the NFTC’s vice president for global trade issues, said of Azevedo that “we admire his extensive experience and deep familiarity with international trade institutions and processes on behalf of Brazil and the focus he has placed on consensus-building in Geneva.”

“The next head of the WTO faces two critical tasks in steering the membership toward a successful outcome to the ministerial conference this December in Indonesia and building consensus toward a broader agenda to modernize trade rules for the digital age.”

Deese hearing: The Senate Homeland Security and Governmental Affairs Committee announced on Tuesday that lawmakers will hold a hearing on Monday to consider the nomination of Brian Deese to be deputy director of the Office of Management and Budget. The Senate recently cleared the way for a permanent head of the agency, Sylvia Burwell.

Comments, please: The U.S. Trade Representative put out the official call for comments on Japan’s entry into the Trans-Pacific Partnership (TPP) talks on Tuesday. Late last month, the Obama administration notified Congress of its intention to include Japan in the TPP negotiations. The move has the support of a broad range of business groups but is opposed by U.S. automakers and some Democrats, especially those from Michigan, who argue that the Japanese economy is closed to U.S. exports, especially autos.

Meanwhile, the White House sent Mike Froman’s nomination to Congress to lead the U.S. Trade Representative.

FHFA nomination: The White House also sent the nomination of Rep. Mel Watt, a Democrat from North Carolina, to head up the Federal Housing Finance Agency for a term of five years. While Watt has gathered up support, several congressional Republicans are balking at the move. Some GOP senators are calling for the White House to produce a plan to reduce the role of Fannie Mae and Freddie Mac in the mortgage finance industry before considering anyone to replace Edward DeMarco, who has served as the acting director since 2009.

ECONOMIC INDICATORS

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

WHAT YOU MIGHT HAVE MISSED

— Senate panel aims to move quickly on Hochberg

— Treasury identifies dangerous Mexican cartel bosses

— House Dems split on Dodd-Frank changes

— CBO shows decline in budget deficit

— White House threatens veto of GOP bill to defuse debt-limit fight

— Consumer bureau, DOJ team up against fraudulent debt-relief firm

— White House, budget chairmen give bleak outlook for deficit agreement

— Senate GOP denies formation of budget conference for third time

— Boehner suggests House will take its time on Internet sales tax