The Week Ahead: Dec. 9-15, 2013

December 8, 2013 11:32 PM

via a special arrangement with Informa Economics, Inc.

Major week for budget and farm bill negotiations

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Barring a change, House members will recess for the year on Friday, Dec. 13; the Senate will be in session until Dec. 20. The end of session timeline will bring a host of issues to the front, with possible announcements this week or next, including information about budget and farm bill conference negotiations.

The Senate this week will resume debate on the Department of Defense (DOD) authorization bill (S 1197).

The House may consider a measure on the sustainable growth rate in Medicare and conference reports on the farm bill (HR 2642) and the budget (SConRes 8), if they become available.

Senators will return to Capitol Hill after a two-week break to continue consideration of the nomination of Patricia Ann Millett to be a US circuit judge for the District of Columbia Circuit. The Senate on Nov. 21 invoked cloture on the Millett nomination with less than 60 votes. That vote came after the chamber agreed to Senate Majority Leader Harry Reid's (D-Nev.) rule change that permits most judicial and executive branch nominees to be confirmed with a simple majority. The Senate will vote on confirmation of the Millett nomination late this afternoon.

The Senate plans to spend the remainder of the week on a bill authorizing appropriations for Fiscal Year 2014 for military activities of the DOD.

The House will consider several bills under suspension of the rules, including a bill (HR 2019) that would shift taxpayers' money from financing presidential campaigns and party conventions to financing a 10-year pediatric research initiative through the Common Fund administered by the National Institutes of Health.

For the balance of the week, House Majority Leader Eric Cantor (R-Va.) said the House might consider legislation regarding the 2014 budget resolution (SConRes. 8) and the 2013 farm bill (HR 2642) — if conferees can reach an agreement, but the farm bill will likely be an early January topic. Farm bill negotiators are waiting on updated budget scores from the Congressional Budget Office (CBO) regarding a proposed move to calculating Title I safety net payments on various base acreage calculations.

A measure changing the sustainable growth rate and Medicare payment for physicians' services may also be brought to the House floor.

On the hearing front, House and Senate committees will meet on a variety of topics, including financial services, renewable fuels, the Affordable Care Act, nominations to government agencies and transportation.

Focus on the Renewable Fuel Standard (RFS). On Wednesday, the Senate Environment and Public Works Committee will hold a hearing on the RFS. EPA recently scaled back the mandate. The committee will hear from senior EPA and Energy Department officials, as well as supporters and critics of the biofuels mandate.

The Senate Energy and Natural Resources Committee on Thursday will vote on a slate of executive branch nominees to fill the key Energy and Interior Department posts.

Regarding economic and finance policy, a key will be votes on the long-awaited "Volcker Rule," a provision of the 2010 Dodd-Frank financial reform law that would ban banks from making speculative trades with their own money. At least four of the five regulators writing the rule are expected to vote Tuesday. Treasury Secretary Lew has said Wall Street should be prepared for a "tough" final version of the rule.

Also this week, Ben Bernanke's replacement at the helm of the Federal Reserve could be confirmed by a Senate vote. The nomination of Janet Yellen, who is currently the Fed's vice chair, passed out of the Senate Banking Committee with a 14-8 vote last month and is expected to easily receive the 51 votes necessary for final approval. Senate leadership is expected to bring a vote to the floor before recess begins Dec. 20.

The Senate Banking Committee on Tuesday will hold another in its series of hearings on housing finance reform, with witnesses from the Federal Housing Finance Agency, Freddie Mac, Fannie Mae, and the Mortgage Guaranty Insurance Corp.

Some other highlights for the week ahead include:

  • On Tuesday, Secretary of State John Kerry is scheduled to testify before the House Foreign Affairs Committee amid congressional skepticism over the interim nuclear deal with Iran. He is expected to explain why the administration believes easing sanctions is prudent.

  • The Supreme Court on Tuesday will hear oral arguments in a showdown over a major piece of the White House air-quality agenda. The justices are reviewing a 2012 Appeals Court decision that struck down the Environmental Protection Agency's cross-state air-pollution rule.

  • Senate Finance Committee Chairman Max Baucus (D-Mont.) will likely unveil legislation to deal with the Sustainable Growth Rate formula used to reimburse doctors under Medicare, also known as the "doc fix." His bill could come as early as Tuesday and will be considered by the committee on Thursday.

  • Health and Human Services Secretary Kathleen Sebelius will testify Wednesday on the implementation of the Affordable Care Act before the House Energy and Commerce's Health Subcommittee.

  • The Senate Finance Committee is to hold a hearing Tuesday to consider the nomination of John Andrew Koskinen to head the Internal Revenue Service.

  • Treasury Secretary Jacob Lew Lew will appear before the House Financial Services Committee on Wednesday for his annual testimony on the international financial system.

A rather light calendar of US economic data is on tap this week, with no major releases until Wednesday, with the Treasury Budget statement. Thursday will see the weekly jobless claims data, Retail Sales, Import/Export Prices and Business Inventories information all released, with the week wrapping up on Friday with the Producer Price Index (PPI). And there are a flurry of Fed speakers on Monday, with Richmond Fed’s Lacker, St Louis Fed’s Bullard and Dallas Fed’s Fisher all giving remarks. But the blackout period ahead of the Dec. 17-18 FOMC meeting will arrive, so that will keep markets in speculation mode on what the Fed may or may not do. Otherwise, any data out of China or Europe will be watched closely by markets especially anything early in the week without a lot of US economic data on tap.

For agriculture, the Tuesday update on US and global Supply/Demand conditions will be the biggest data focus, with the Thursday Weekly Export Sales report also key with the recap of production costs released on Friday. But the other item that will potentially garner significant attention is on the issue of the GMO corn variety that China has yet to approve. There is a significant volume of corn that is en route to China that is likely to get snared by this situation. Foreign production prospects will also be an important item on the market radar screen.

Monday, Dec. 9
A bank-failure plan for Europe will be the topic during a Brussels meeting of euro-zone and EU finance ministers.
Federal Reserve: Richmond Federal Reserve Bank President Jeffrey Lacker speech to economic outlook conference in Charlotte, North Carolina. St. Louis Federal Reserve Bank President James Bullard speech on the economy in St. Louis. Dallas Federal Reserve Bank President Richard Fisher speech on banking trends, and responds to questions on the economy in Chicago.

Tuesday, Dec. 10
The Volcker rule to ban banks from proprietary trading is expected to win final approval from the Federal Reserve, the SEC and other regulators.
Iran nuclear deal: Secretary of State John Kerry will testify before the House Foreign Affairs Committee on the Iran nuclear deal. Russia's foreign minister arrives in Iran to discuss the same subject.
IRS commissioner nomination: Committee hearing. Senate Finance Committee hearing to consider the nomination of John Koskinen to be commissioner of the Internal Revenue Service.
Foreign aid: Subcommittee hearing. Senate Appropriations — Subcommittee on State, Foreign Operations and Related Programs hearing to examine aid to Jordan and Lebanon.
Economic reports: Selected Interest Rates (Federal Reserve) | NFIB Small Business Optimism Index | ICSC-Goldman Store Sales | Wholesale Trade
USDA reports: Export inspections (AMS) | Cotton, Grains, Oilseeds, and World Agricultural Production Data (FAS) | Crop Production (NASS) | WASDE (WAOB) | Cotton Ginnings (NASS) | World Agricultural Production (FAS) | Oilseeds: World Markets and Trade (FAS) | Grains: World Markets and Trade (FAS) | Cotton: World Markets and Trade (FAS) | Season Average Price Forecast (ERS) | Aquaculture Trade Data (ERS) | Weekly Weather and Crop Bulletin (WAOB)


Wednesday, Dec. 11
Italy's parliament will hold a confidence vote on the government of Prime Minister Enrico Letta.
Person of the Year announced by Time magazine.
IMF: Treasury Secretary Jacob Lew tells the House Financial Services Committee about reforms of the International Monetary Fund (IMF).
Domestic renewable fuels: Committee hearing. Senate Environment and Public Works Committee hearing titled "Oversight Hearing on Domestic Renewable Fuels." Panel: Chris Grundler, director, Office of Transportation and Air Quality, United States Environmental Protection Agency; Steven Chalk, deputy assistant secretary for renewable power, Office of Energy Efficiency and Renewable Energy, United States Department of Energy. Panel: Wesley Clark, co-chairman, Board of Directors, Growth Energy; Jim Collins, Jr., senior vice president, Industrial Biosciences, Performance Polymers and Packaging & Industrial Polymers, DuPont; Charles Drevna, president, American Fuel & Petrochemical Manufacturers; Jon Holzfaster, owner and operator, Holzfaster Farm; Scott Faber, vice president of government affairs, Environmental Working Group; Brooke Coleman, executive director, Advanced Ethanol Council.
Affordable Care Act assessment: Subcommittee hearing. House Energy and Commerce — Subcommittee on Health Subcommittee hearing to examine the Affordable Care Act, its implementation and the rollout of Witness: Kathleen Sebelius - secretary of Health and Human Services.
Climate and weather: Subcommittee hearing. House Science, Space and Technology — Subcommittee on Environment hearing titled "A Factual Look at the Relationship Between Climate and Weather."
Trade and development agencies abroad: Subcommittee hearing. Senate Homeland Security and Governmental Affairs — Subcommittee on Financial and Contracting Oversight. Witnesses: Elizabeth Littlefield, president and CEO, Overseas Private Investment Corporation; Leocadia Zak, director, US Trade and Development Agency.
Manufacturing in US: Committee hearing. Senate Banking, Housing and Urban Affairs Committee.
Energy reports: Weekly Petroleum Status Report (EIA) | Weekly ethanol plant production (EIA)
Economic reports: MBA Purchase Applications | Treasury Budget
USDA reports: Broiler Hatchery (NASS) | National Dairy Products Sales Report (AMS)


Thursday, Dec. 12
Energy conference: Shale Oil is the theme of the Platts Global Energy Outlook Forum in New York. Energy Secretary Ernest Moniz will keynote.
Mexico's markets are closed.
Russian President Vladimir Putin is expected to make his state of the nation address on the country’s constitution day. He is likely to outline policies on economic growth, immigration, Eurasian integration, judicial reform and defense capabilities.
Iran nuclear agreement: Committee hearing. Senate Banking, Housing and Urban Affairs Committee. Witnesses: Wendy Sherman, undersecretary for political affairs, Department of State; David Cohen, undersecretary for terrorism and financial intelligence, Department of the Treasury.
FCC oversight: Subcommittee hearing. House Energy and Commerce — Subcommittee on Communications and Technology.
Federal Reserve anniversary review: Committee hearing. House Financial Services Committee hearing titled "Rethinking the Federal Reserve's Many Mandates on Its 100-Year Anniversary."
Weather forecasting services: Subcommittee hearing. Senate Commerce, Science and Transportation — Subcommittee on Oceans, Atmosphere, Fisheries and Coast Guard hearing titled "Forecasting Success: Achieving US Weather Readiness for the Long Term."
Energy reports: Weekly US underground natural gas stocks (EIA)
Economic reports: Jobless Claims (Labor Dept.) | Retail Sales | Import & Export Prices | Business Inventories
USDA reports: Export Sales (FAS) | Wheat Outlook (ERS) | Oil Crops Outlook (ERS) | Feed Grains Outlook (ERS) | Rice Outlook (ERS) | Potato Stocks (NASS)


Friday, Dec. 13
Budget negotiations: A self-imposed deadline for budget negotiations to reach agreement on Fiscal Year 2014 and possibly FY 2015. The real deadline is Jan. 15, when the current stopgap funding measure expires.
Japan hosts a three-day summit of ASEAN countries to discuss security, amid growing tension over China's newly declared air-defense zone.
Economic reports: Producer Price Index
USDA reports: Coffee: World Markets and Trade (FAS) | Peanut Prices (NASS) Dairy: World Markets and Trade (FAS) | Cost of Production Forecast (ERS)


Saturday, Dec. 14
Germany's Angela Merkel's hopes of forming a coalition government hinge on the day's announced results of a referendum vote in the nation's Social Democratic Party. Merkel, cautious winner of recent parliamentary elections, faces a serious challenge from her main negotiating partner, Sigmar Gabriel, leader of the center-left Social Democrats. If members vote no, the attempt to build a grand coalition will collapse – and with it hopes of creating a new government before the year-end.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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