OVERNIGHT MONEY: IRS officials on hot seat at Senate Finance

Chairman Max Baucus (D-Mont.) and the committee’s ranking Republican, Sen. Orrin Hatch (Utah), said Monday they want more information from the IRS about the extra scrutiny the agency gave to conservative groups.

{mosads}They sent a letter to Miller asking the agency more than three dozen questions, requesting emails, phone logs, calendars and datebooks, along with details on any conversations between IRS and White House employees, how the IRS went about searching for the groups and who was involved. 

The lawmakers have given the officials two weeks to answer 41 questions, a guarantee that this issue will not only have legs after the Memorial Day holiday but will probably stick in the craw of Congress for much longer than that. 

In another revelation on Monday, White House press secretary Jay Carney said that Chief of Staff Denis McDonough and other senior officials knew generally about the inspector general’s report but kept the president in the dark.

Hatch said on Monday that he isn’t buying the White House line.

“I don’t think that they’re very credible this time,” Hatch said, according to reporter Jennifer Martinez, our friend at Hillicon Valley. 

“I’m not saying he knew,” he added, referring to the president. “I’m saying that it would hard to believe that he didn’t know because this is such a bombastic thing that I can’t imagine the people at the White House that did know not telling the president.”

President Obama has said he first learned about the IRS misconduct when the public did, on May 10. 

Carney said it was House counsel Kathryn Ruemmler’s call not to tell the president. As it turns out, Ruemmler learned about the inspector general’s conclusions during the week of April 22.

Carney defended the decision, arguing that conclusions of those types of reports frequently change and that the White House can’t get involved in an ongoing investigation.

“To be clear, we knew the subject of the investigation and the nature of some of the potential findings,” Carney said. “But we did not have a copy of the draft report, we did not know the details, the scope, or the motivation surrounding the misconduct. And we did not know who was responsible. Most importantly, the report was not final and still very much subject to change.”

WHAT ELSE WE’RE WATCHING 

Lew facing questions: Treasury Secretary Jack Lew heads up to Capitol Hill on Tuesday to deliver the annual report for the Financial Stability Oversight Council to the Senate Banking Committee. Sure, some lawmakers will want to discuss the condition of the financial markets, but Lew is probably going to face questions about the ongoing of the IRS scandal. Lew learned about the inspector general’s office in March, but has said that he did not learn about the report’s findings until they went public.

Planting the seeds: Keep an eye on the Senate this week as it takes up the $955 billion farm bill, which was recently approved by the Senate Agriculture Committee. 

The White House on Monday said it supports passage, although President Obama wants deeper cuts to farm subsidy programs.

Majority Leader Harry Reid (D-Nev.) has said he wants to complete the bill before the Memorial Day recess. Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.) has predicted that the Senate will pass the bill with solid support. 

Floor action will include amendments on the sugar program, as well as ones targeting the $4 billion in food stamp cuts that are a part of the bill.

Republicans want deeper cuts, and the House bill slashes about $20 billion from food stamps.

Filling vacancies: The Senate Budget Committee will hold a hearing on Tuesday on the confirmation of Brian Deese to be deputy director of the Office of Management and Budget. The Obama administration is trying to fill a bunch of openings at the agency. Sylvia Burwell recently took the helm of the budget office, but the agency still needs a couple of deputy directors, among other positions, and will need a controller once Danny Werfel moves over to the IRS to take the acting commissioner’s job. 

Illegal financing: A top Treasury official will travel to Qatar, the United Arab Emirates and Saudi Arabia on Tuesday to continue talks with international partners on countering terrorist financing as well as the implementation of economic sanctions against Iran and Syria. 
David Cohen, under secretary for Terrorism and Financial Intelligence, is focusing on building international relationships to combat financing for groups such as al Qaeda affiliates in Syria and throughout the region, as well as for the Taliban, Haqqani Network and other terrorists operating in South Asia.

302(b)s: The House Appropriations Committee will meet Tuesday to approve a controversial outline for its 12 annual spending bills. The panel also will hold a full committee markup of the fiscal 2014 $73.3 billion military construction and veterans affairs spending measure, which includes $9.9 billion for military construction projects and $63.1 billion in discretionary funding for the VA.

CFTC budget: On Tuesday, the House Agriculture Committee will discuss the reauthorization of the Commodity Futures Trading Commission (CFTC) with various futures industry experts. The agency’s $315 million budget request includes $102 million for technology updates that are needed to implement and enforce the Dodd-Frank law. 

Apple under fire: The Senate’s permanent investigatory subcommittee will delve into offshore tax shelters on Tuesday. Top Apple executives will be on hand to defend their business practices, which include extensive offshore activity. A Senate report released on Monday found that Apple has funneled money through three offshore companies to dodge billions of dollars in taxes.

“Apple sought the Holy Grail of tax avoidance,” Sen. Carl Levin (D-Mich.), the panel’s chairman, said. “It has created offshore entities holding tens of billions of dollars, while claiming to be [a] tax resident nowhere.”

Mortgage rules: A House Financial Services subcommittee will discuss qualified mortgages and the ability of borrowers to repay their loans in a Tuesday hearing.

The new rules from the Consumer Financial Protection Bureau require lenders to compile documentation from potential homeowners to determine their ability to repay a loan. The rules are designed to avoid the abundance of bad lending practices that crashed the housing market and nearly sank the economy nearly five years ago. 

More on the budget: A Senate Appropriations subcommittee will hold a hearing on the proposed budget estimates for fiscal 2014 for the Government Accountability Office, Government Printing Office and the Congressional Budget Office (CBO) with the heads of the agencies — U.S. Comptroller General Gene Dodaro; acting Public Printer Davita Vance-Cooks; and CBO Director Douglas Elmendorf.

WHAT YOU MIGHT HAVE MISSED

— Dem Rep. Davis would back IRS special prosecutor

— Judd Gregg snags top Wall Street job

— Business groups step up push for fast-track authority

— Sapiro will take helm at trade office

— Hotel workers union rejects Pritzker as Commerce nominee

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