OVERNIGHT MONEY: Obama Revved Up to Deliver State of the Union

Eye of the tiger: President Obama delivers his annual State of the Union address on Tuesday where he'll be "risin' up to the challenge" of his rivals. Yep, I said it with some bad 80s lyrics. 

The president is expected to exert a firm tone in drawing clear lines between himself and the congressional Republicans he's battled during his three years in the White House. He's expected to focus on his efforts to accelerate  the economic recovery, with a message designed to hit home with middle-class voters as the 2012 campaign gears up. 

While Obama may ask for bipartisan cooperation — lawmakers will have to find agreement on several issues within the next month on the extending the payroll tax cut and unemployment benefits — he will most likely proclaim that he's just as happy to act without the help of his opponents, if he thinks his actions will spur economic growth.

The White House hasn't provided many details for the address although he is expected to discuss the expansion of the manufacturing sector; more steps to stem the housing crisis; more details on his plan to increase tax rates on those with higher incomes; improving workers skills through education and training, including making college more affordable; and pushing forward with American energy production, including alternative energy sources. 

It is his first appearance before Congress since he recess-appointed Richard Cordray to run the Consumer Financial Protection Bureau, a move that incensed Republicans and will remain not only a hot topic on Capitol Hill but possibly face legal challenges. 

A win for Obama in November is dependent on the economy — during the past several months there have been some gradual improvement in the unemployment rate, the housing market and consumer confidence — but Obama is facing plenty of dissatisfaction over what he's done — or hasn't done — to help it along. 

WHAT ELSE TO WATCH FOR

Getting the gang together: The 20 lawmakers on a conference committee tasked with hammering out a year-long extension of the payroll tax cut are scheduled to meet face-to-face for the first time on Tuesday — a month and a day after Congress passed the two-month extension of the tax break.

Some observers have suggested that, given the political hit Republicans took at the end of 2011 over the payroll tax cut, reaching a year-long deal might be a comparatively smooth process. But conferees from both parties have pooh-poohed that idea, saying the two sides have broad differences to overcome.

“My sense is that there’s a lot of key issues, a lot of them not easily solved,” Rep. Kevin Brady (R-Texas), one of the conferees, told reporters last week.

Republicans, for instance, have indicated they might look to overturn the Obama administration’s brush-off of the Keystone XL oil sands pipeline within the conference committee. And some Democrats are saying they’d like higher taxes on millionaires to help offset the cost of whatever package the conference committee comes up with.  

In addition to the payroll tax cut, conferees are expected at least to take a look at the reimbursement rate for physicians under Medicare — the so-called “doc fix” — and federal unemployment benefits.

Looking into Social Security: The House Ways and Means Subcommittee on Social Security is also scheduled to spring into action on Tuesday, with a hearing focused on weeding out fraud in the entitlement's disability program. A string of news reports over the last year or so have raised questions about the disability program, including one about a judge who OK'ed the vast majority of disability claims that he heard. 

Vexing Volcker: The U.S. Chamber of Commerce will open its doors to Sen. Bob Corker (R-Tenn.) on Tuesday for a chat about the Volcker Rule. The key piece of the Dodd-Frank financial reform law is aimed at preventing banks from getting in deep on risky investments that might force a government bailout, but getting the thing to actually work has vexed regulators and frustrated lawmakers. The original proposal, which runs hundreds of pages and asks over a thousand questions of the public, was blasted last week, particularly by Republicans, who were no fans of the rule to begin with. We're guessing that Corker's trip to the business lobby will not yield many kind words for the hefty rule.

Chatting with Cordray: Consumer Financial Protection Bureau Director Richard Cordray has been on the job for a few weeks now, and he'll be making his Capitol Hill debut as the head of the contentious agency tomorrow. Cordray is slated to discuss his controversial appointment atop the agency before the House Oversight subcommittee headed by Rep. Patrick McHenry (R-N.C.) — the lawmaker who famously sparred with CFPB architect Elizabeth Warren about her schedule back in May. President Obama's decision to push Cordray through via a controversial recess appointment will likely be a hot topic of conversation at tomorrow's hearing.

FINSERV Preview: Looking for a sneak peek at what the House Financial Services Committee has on the agenda for 2012? Committee Chairman Spencer Bachus (R-Ala.) and a handful of other committee members will be hitting TV screens tomorrow morning, as CNBC broadcasts live from the Rayburn committee room.

Let's go budgeting: As House lawmakers work on multiple ways to revamp the budget process with a package of bills, the House Budget Committee will  be marking up a bill that makes congressionally passed budgets the force of law as well as a trio of other budget reform measures. Those bills would change the way budgets are scored to give credit to growth due to tax cuts; eliminate automatic spending increases baked into the baseline; and put federal credit agencies like Fannie Mae and Freddie Mac on the books.

LOOSE CHANGE

Budget GPS: The deficit experts at The Concord Coalition came out Monday with a voter's guide to the budget. The guide outlines what questions voters should ask the candidates. It includes difficult questions for members of both parties including "if you oppose much or all of the healthcare law, what would you put in its place to improve healthcare quality, expand insurance coverage and curb the rapid rise in costs?" 

A little short: The Bipartisan Policy Center has analysis out Monday that shows the $1.2 trillion in automatic deficit cuts due to the failure of the supercommittee is actually closer to $1.06 trillion.

BREAKING MONDAY

Budget brakes: President Obama will release his 2013 budget a week late, the third time the administration has missed the legal deadline. 

Under the law, the budget is to be released on the first Monday in February, but the Office of Management and Budget (OMB) will be releasing the budget on Feb. 13.

House Budget Committee Chairman Paul Ryan (R-Wis.) said the delay is symptomatic of a fiscally reckless administration.

ECONOMIC INDICATORS

State Unemployment: The Labor Department releases regional and state employment and unemployment for December along with the weekly earnings of wage and salary workers in the final three months of last year. 

WHAT YOU MIGHT HAVE MISSED

— House GOP yet to decide on tax reform legislation

— Poll: Economy remains Americans' top concern

— FHFA report: Mortgage principal reductions would cost $100 billion

— GOP lawmaker calls on Obama to chart course for Fannie, Freddie

— US officials praise EU sanctions on Iran

— US, Canada extend lumber trade agreement

— House committee to probe recess appointments

— Warren Buffett defends Romney's tax rate

— Reid, McCaskill in running for 'pork' award

— Former GOP congressman to lead higher-ed group