TOMORROW STARTS TONIGHT: CBO SAYS DEFICIT WILL FALL IN 2015. Rebecca Shabad for The Hill: "The annual budget deficit will fall to $468 billion in fiscal 2015, the lowest level of President Obama’s tenure, the Congressional Budget Office (CBO) reported Monday.



"Lower government spending and the improving economy are driving down the annual deficit, the CBO reported, with the shortfall for the year projected to be 2.6 percent of gross domestic product (GDP), the lowest level since 2007.





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"The CBO projected that the economy will grow at an annual rate of 2.9 percent over the next two years and by 2.5 percent in 2017, with the unemployment rate falling to 5.3 percent by the end of 2017. The new CBO projections provide some good news for Obama, whose approval rating has reached 50 percent partly on the strength of the economy and falling gas prices." Story: http://bit.ly/15DXztn

THIS IS OVERNIGHT FINANCE, and we're reminding you to stay safe on the roads. I'll be on Capital Insider tonight on News Channel 8 at the top of the 8 p.m. hour. Tweet: @kevcirilli; email: kcirilli@thehill.com; and subscribe: http://thehill.com/signup/48.

WEATHER WATCH - - NORTH EAST BRACES FOR BLIZZARD... HOUSE CANCELS WEDNESDAY'S BORDER BILL VOTE. Peter Sullivan and Cristina Marcos for the hometown paper: "The House has canceled votes for Monday evening due to the snowstorm that is set to slam the Northeast. Originally, the House was to consider six bills to combat human trafficking, but with the National Weather Service issuing blizzard warnings from coastal New Jersey to Maine, lawmakers were having trouble making it back to Washington.

"Republicans are also delaying a vote on a controversial border security bill that had been scheduled for Wednesday. The bill, which is no longer on this week's schedule, would require the Department of Homeland Security to prevent all illegal crossings into the United States within five years." http://bit.ly/1xZguXy

FIRST ON THE HILL - - > Mel Watt Melvin (Mel) Luther WattFannie Mae and Freddie Mac reform should put American taxpayers first Watchdog: Former Rep. Mel Watt attempted to 'coerce' employee into relationship Budding housing crisis must be nipped now MORE'S HOUSE TESTIMONY... WATT PREPS FOR CHILLY HOUSE HEARING. My latest for The Hill: President Obama's top housing finance regulator will defend the administration's decision to refinance affordable housing trust funds that Republicans say put taxpayers at risk. Mel Watt, director of the Federal Housing Finance Agency (FHFA), will testify before the House Financial Services Committee that he's put 'prudent safeguards' in place to protect the taxpayers, according to his submitted testimony, obtained first by The Hill. Read Watt's testimony:http://bit.ly/1JQTOyy.

-- BACKSTORY: Watt announced in December that he was directing Fannie Mae and Freddie Mac to begin financing affordable housing groups through the Housing Trust Fund and Capital Magnet Fund, reversing the administration's 2008 decision to cut funding following the collapse. Both funds focus on providing affordable rental housing for low-income and impoverished families, including the homeless. The move was lauded by progressives, who argue that it would help the economy by allowing for low-income Americans to obtain housing. But Republicans, including House Financial Services Committee Chairman Jeb Hensarling (R-Texas), blasted the decision. Hensarling and other GOPers argue that the accounts are nothing more than a "slush fund" at the expense of taxpayers.



-- SENIOR AIDE TO GOP MEMBER: "Affordable housing groups are one of the reasons we got into the crisis in the first place because too many people bought homes they were unable to afford... [Watt's] done a poor job of being communicative with committee members and has often taken them by surprise with his decisions, such as this directive... [Watt has] a seeming lack of interest in playing a role in winding down" Fannie and Freddie. Story: http://bit.ly/1zjUooA.

FIDUCIARY FALLOUT - - INDUSTRY EXPECTS RULE 'AS SOON AS NEXT WEEK.' The insurance industry is in a tailspin as it awaits the Department of Labor's proposed rule on how investment advisers and broker dealers are paid. The administration, as illustrated in a senior White House official memo first reported by The Hill last week, thinks that more regulations are needed to shift the industry's payment model.

The effort, spearheaded by Labor assistant secretary Phyllis Borzi, would expand the regulatory definition of "fiduciary" by requiring more disclosures to clients about how their investment dealers' receive commissions as payment. The industry -- along with Republicans and about 100 House Democrats who've voiced concerns on the regulatory shift -- says that the new regulatory requirement would radically change the payment structure in such a way that it'd be a disincentive for them to take on low-income clients – therefore cutting financial access to those who arguably need it the most.

-- KENT MASON, an attorney with Davis & Harman who is skeptical of the new regulations, tells OVERNIGHT FINANCE: "We think a proposal will be sent to [the Office of Management and Budget] relatively soon. This is not three months away -- whether it's, for example, next week or three weeks, though, we just don't know... We were disappointed in the memo... They don't mention any of the Congressional concerns about access for middle and low-income Americans. That was very disappointing."

THE DO-SOMETHING CONGRESS? The Hill's Cristina Marcos ranks the most likely policy issues this Congress will address (with assists from Cory Bennett, Keith Laing, Julian Hattem and me). http://bit.ly/1CrSWzF

QUOTABLE: Vice President Joe Biden on "The Ellen DeGeneres Show" earlier today. DeGeneres: "Valentine's Day is coming up. What are you and Jill going to do for Valentine's Day?" Biden: "A lot and I'm not gonna tell you." Video: http://bit.ly/1yJ7Lwx.

NOTABLE: Julian Castro, Housing and Urban Development Secretary to National Journal on rumors he'll be Hillary Clinton's running mate in 2016: "A lot of people try and brag about long, close relationships with the Clintons... We don't have a long, close relationship... But I think we're on the same page about a lot of stuff." http://bit.ly/1Csoq8P

ON THE AGENDA - - FED MEETING THIS WEEK. The central bank's policymakers are scheduled to meet this week in Washington on Tuesday and Wednesday and will release a policy statement on hump day. There is growing uncertainty about when Fed Chairwoman Janet Yellen and her team of policymakers will decide to raise interest rates, which have been kept at zero since the financial collapse in 2008. Most economists expected rates to rise in July, but Yellen and her team have been tight-lipped about providing new clues. And growing concerns about unstable overseas economic conditions have rattled Fed-watchers in recent weeks, with some delaying their interest rate predictions until early 2016.

-- INTEREST RATE CHEAT SHEET, via The Wall Street Journal's Michael S. Derby: Derby breaks down all of the recent comments from Fed officials about when they expect to raise the interest rate. http://on.wsj.com/1tgIZDA

KEATING: DODD-FRANK ISN'T SCRIPTURE. Frank Keating, president of the American Bankers Association, in an op-ed for USA Today: "No one ever confused Capitol Hill for Mount Sinai. But some today think the Dodd-Frank Act is as set in stone as the two tablets of the Ten Commandments. That's the wrong way to think about any legislation. Every law can be improved, and Dodd-Frank is no exception." http://usat.ly/1C6HYRv

OBAMA'S APPROVAL , via Justin Sink: "Half of Americans approve of President Obama's job performance for the first time in 19 months, according to a new Gallup poll released Monday."http://bit.ly/1EMQDa9

Meanwhile...

BUSINESSES OPTIMISTIC, via Vicki Needham for The Hill: "U.S. businesses say that an improving economy will drive them to hire more workers and raise wages this year, according to a survey released Monday by the National Association for Business Economics... Overall, 51 percent of those asked said they expect wages and salaries to increase at their companies in the first quarter this year, a big jump from the 34 percent in the last survey." http://bit.ly/1uT17o5

But wait...

RISING ECONOMIC CONFIDENCE & DECLINING AMERICAN DREAM, via Quentin Fottrell for MarketWatch: "Feelings of financial security hit a four-year high in January, new research finds, but mostly because everything has stayed the same... Feelings of financial security reached a low of 92.3 in August 2011 when the stock market plunged on fears of a global economic crisis... Fast-forward four years: Americans now appear to be feeling slightly better.

"A new survey by personal finance site Bankrate.com clocked feelings of financial security at 103.1, the highest it has been in the past four years. Any number below 100 indicates deteriorating financial security versus one year ago and any number above 100 indicates improved financial security. The possible range is 50 to 150...

THE NEW NORM? - - > "People have downsized their expectations when it comes to the American dream. Once upon a time, it meant buying a home or having a bigger net worth than your parents’ generation, says Erin Currier, director of the economic mobility project at The Pew Charitable Trusts. But more people desire 'security' and 'stability' rather than to be 'wealthy' and 'rich,' according to Pew focus groups on the American dream." http://on.mktw.net/1C7nPL6

ICYMI: PAUL RYAN 'RIGHT MAN FOR THE JOB' ON TAX REFORM. Mark Bloomfield, CEO of American Council for Capital Formation, writing in The Wall Street Journal on Friday: "Rep. Paul Ryan (R-Wis.) recently gave up a race for the presidency to devote all his energy to his long-time true passion – tax reform... Mr. Ryan makes a distinction between being pro-market and pro-business ('crony capitalism'). Mr. Ryan is not only concerned about marginal tax rates but also what is taxed, with a predilection to avoid taxing savings and investment...

-- RYAN IN HISTORICAL CONTEXT: "Mr. Ryan is no Chairman Dan Rostenkowski (1981-1994), the politically astute Chicago ward dealer. Nor is he the legendary Chairman Wilbur Mills (1958-1975), who knew every section of the tax code. Mr. Ryan may be a combination of both. [Ryan] is a proven legislator and is highly respected in his own party, which controls Congress. He has a bipartisan track record and a vision and passion for what tax policy can do to facilitate economic growth and alleviate poverty.

-- RYAN AND REAGAN: "He agrees with President Reagan, who observed when he took on the hard core in his party: 'Half a loaf is better than none.' Mr. Ryan will compromise on tax reform without surrendering his principles–if it’s a significant step forward, and the right corporate tax reform fits that bill. Will tax reform happen? Mr. Ryan says, 'It’s just a matter of when.' He may be just the right man for the job." http://on.wsj.com/1yliVme

2016 WATCH - - RISING GOP STAR CARLY FIORINA IN INDIA. Carly Fiorina, former CEO of Hewlett Packard, is in India this week with Opportunity International, an organization that promotes micro-financing loans and financial literacy to impoverished women in 20 countries. Fiorina, who sparred with White House senior adviser Valerie Jarrett last week on MSNBC's "Morning Joe," is a global ambassador for the program, which formed a partnership with her own One Woman Initiative that promotes similar goals. Video: Fiorina confronts Jarrett on White House equal pay: http://bit.ly/1xyDFI6

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