In Congress, there are two other big bills coming after the FinReg bill finally gets dispensed with. There’s an emergency supplemental appropriations bill that will include $33 billion for Afghanistan, some disaster relief, and possibly $23 billion in state fiscal aid to keep 300,000 teachers from receiving layoffs. The other expected bill is a massive “tax extenders” package, which has passed both houses of Congress and is in conference committee. Apparently it’s been made not-so-massive. David Rogers reports:

House and Senate Democrats worked into Tuesday night, trying to reach a final deal on a scaled-back package of tax cuts and new spending designed to stimulate jobs and assure a stable flow of benefits for the long-term unemployed through November’s elections.

Unable to win over Republican moderates in the Senate, Democrats are resigned to scrapping much of an ambitious five-year, $90 billion-plus plan to provide Medicare physicians with a little more certainty as to their reimbursements. But in their own ranks, Democratic tax writers must also battle back-channel efforts to weaken reforms aimed at wealthy investment fund managers who shelter their income at the lower 15 percent rate afforded capital gains.

The draft bill envisions a blended approach where each year a greater portion of the managers’ income would be taxed as ordinary income subject to higher rates. Venture capital interests are still pressing for a more preferable rate for themselves, but how long they — and their Senate allies — can hold out is a delicate question given the risk any stalemate poses for the unemployed.

Max Baucus says a bill is coming today. It would include the expired tax breaks, extensions of small business lending, increased infrastructure spending, extensions of unemployment benefits and the COBRA subsidy to the end of the year, and a closing of that carried interest loophole (which would offset some of the spending). While some Senators are holding out for exemptions for venture capitalists, it looks like they might not get their way on that. There also might be an energy loan guarantee program that would link new loan guarantees for nuclear plants to guarantees for solar production. Thank Nancy Pelosi for extracting the solar addition. The loan guarantee piece could end up in either bill.

This jobs and tax extenders bill has a close to $120 billion price tag; the emergency supplemental is closer to $60 billion. Ideally the House would begin voting on the tax extenders conference bill this week. They want this all finished by Memorial Day, a tall order given the stalemate in the Senate over Wall Street reform.

David Dayen

David Dayen