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June 27, 2013 | The Washington Post

Congress should establish a taxpayers’ bill of rights, clarify the guidelines for tax-exempt status and compensate some of the groups the IRS subjected to inappropriate reviews, according to a federal ombudsman. The Taxpayer Advocate Service made those recommendations on Wednesday as part of its mandated mid-year report to Congress, which included an analysis of the recent IRS targeting controversy.

June 27, 2013 | CQ

The two top tax-writers in the Senate are ready to put the blank sheet theory of tax reform to the test, according to multiple sources on K Street. Senate Finance Chairman Max Baucus (D-Mont.) and the panel’s ranking member, Sen. Orrin Hatch (R-Utah) are expected to release a framework on Thursday that would essentially scrub the tax code of incentives. Lawmakers would be challenged to then make their case to put certain tax breaks back in the code.

June 27, 2013 | The Hill

The two top tax-writers in the Senate are ready to put the blank sheet theory of tax reform to the test, according to multiple sources on K Street. Senate Finance Chairman Max Baucus (D-Mont.) and the panel’s ranking member, Sen. Orrin Hatch (R-Utah) are expected to release a framework on Thursday that would essentially scrub the tax code of incentives. Lawmakers would be challenged to then make their case to put certain tax breaks back in the code.

June 27, 2013 | Bloomberg

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota, who doesn’t vote on monetary policy this year, said he favors continuing bond purchases until unemployment falls below 7 percent, which he doesn’t expect until the second half of next year. “I’m expecting the unemployment rate to be hitting 7 percent sometime in the second half of 2014,” Kocherlakota said today in an interview on CNBC. He backs a strategy of buying assets “at least until” unemployment is below 7 percent.

June 27, 2013 | The Wall Street Journal

It remains an “open question” whether the Federal Reserve could use its emergency lending powers to help an individual financial institution in times of crisis, Richmond Fed President Jeffrey Lacker told U.S. House lawmakers Wednesday. Mr. Lacker questioned measures included in the 2010 Dodd-Frank financial overhaul law to prevent the Fed from using its “unusual and exigent” powers to rescue a failing financial firm, as happened with American International Group Inc. in September 2008.

June 27, 2013 | Econbrowser

According to one widely adopted class of economic models, raising the inflation rate would be one of the most helpful things that could happen to economies in the situation currently faced by Japan and the U.S. Here I describe some new research relevant for testing that theory. With the short-term interest rate stuck near zero at the moment for the United States and Japan, an increase in expected inflation would mean a reduction in the expected real interest rate.

June 27, 2013 | Calculated Risk Blog

Several people have asked me about a comment from Fannie Mae chief economist Doug Duncan as quoted in a NY Times article a couple of weeks ago: In a Shift, Interest Rates Are Rising: “There’s no strong correlation between interest rates and home prices,” said Douglas Duncan, chief economist at Fannie Mae.” Duncan is correct. However, a key difference now compared to earlier periods, is that there is more investor buying.

June 26, 2013 | Danald Marron's Blog

The Fed believes the stimulus from quantitative easing depends on the stock of Treasuries and mortgage-backed securities that it owns, not on the flow of its purchases. If that view is correct, the future tapering of Fed purchases won’t be monetary tightening, it will a slowing pace of monetary easing. The chart shows a hypothetical trajectory for the Fed’s bond and MBS holdings.

June 26, 2013 | Politico

The Senate on Tuesday easily confirmed Penny Pritzker as Commerce secretary, after early speculation that her nomination could cause trouble for the White House. The vote was 97-1. Vermont Independent Sen. Bernie Sanders was the only senator to vote against the nomination. Pritzker, the Hyatt Hotel heiress, was the national finance chairwoman of President Barack Obama’s 2008 campaign and the national co-chairwoman of his reelection campaign.

June 26, 2013 | The Washington Post

Supporters of a massive bipartisan immigration measure in the Senate were struggling late Tuesday to reach an agreement with Republicans to hold votes on a few remaining amendments before approving the bill by Friday. The impasse came as the Senate is scheduled to give final approval Wednesday to a Republican amendment that would double the size of the U.S. Border Patrol and require the construction of 700 miles of fencing along the U.S.-Mexico border.


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