By John Shaw

WASHINGTON (MNI) - In a week packed with activity, President Obama will travel to Capitol Hill to give his first State of the Union address, the Congressional Budget Office will release its revised 10-year budget and economic report and the Senate will take critical votes to confirm Federal Reserve Board Chairman Ben Bernanke and increase the statutory national debt ceiling.

And Treasury Secretary Tim Geithner will testify before a House panel on his role in rescuing AIG when he served as president of the New York Federal Reserve Board.

When Obama travels to the Capitol Wednesday evening to deliver his State of the Union address he will try to help Democrats reclaim control of a legislative agenda which was deeply shaken by the loss of the Massachusetts Senate seat.

Obama is likely to focus on job creation, measures to ease the struggles of middle class families and a general strategy to begin driving budget deficits downward.

Lawmakers are eager to hear how Obama proposes to advance health care legislation, the passage of which has been seriously complicated by the victory of Scott Brown in Massachusetts.

Much of the focus of Washington this week will be on the Senate as the upper chamber tries to deal with two critical matters: voting on Bernanke's nomination and hiking the debt ceiling.

Washington's echo chamber was in full display Friday with feverish reports of the sinking of Bernanke's nomination. By the end of the weekend, it seemed clear that the Senate is still on track to confirm Bernanke, albeit with a large number of "no" votes.

Senate Banking Committee Chairman Chris Dodd said he is "very confident" that Bernanke will be confirmed.

Bernanke is meeting with Senate Majority Whip Dick Durbin Monday afternoon; other senators are likely to schedule meetings with the Fed chairman this week before the Senate vote.

Bernanke was approved in late December by the Senate Banking Committee on a 16-to-7 vote.

Since several lawmakers are strongly opposed to Bernanke's renomination, Senate Majority Leader Harry Reid will probably move early in the week to end the debate on Bernanke's nomination.

Ending the Senate debate on Bernanke would require 60 votes. Even if cloture is invoked the Senate, the debate on Bernanke could extend for 30 hours. A final Senate vote on Bernanke could come late in the week; his term as Fed chairman expires Sunday.

The Senate Monday afternoon will resume its debate on legislation to increase the current statutory debt ceiling of $12.374 trillion by $1.9 trillion. The bill would raise the debt ceiling to $14.294 trillion.

In late December, Congress voted to increase the debt ceiling by $290 billion to $12.394 trillion.

Senate Finance Committee Chairman Max Baucus said Friday the Senate may vote on up to ten amendments to the debt ceiling. Senate Republicans have indicated that they plan to offer amendments that cap discretionary spending and rescind spending from last year's stimulus bill.

Reid is considering offering an amendment to turn pay-as-you-go budget rules into law. There is likely to be a Senate vote on creating an entitlement reform panel that would assemble a deficit reduction package to Congress for an up or down vote.

The amendment under consideration was drafted by Senate Budget Committee Chairman Kent Conrad and Sen. Judd Gregg, the top Republican on the panel. The Conrad-Gregg amendment would create a special panel to craft a deficit reduction package that would be considered by Congress on an up or down vote.

The Conrad-Gregg amendment needs 60 votes to pass and a number of senators have said this is unlikely. However, Obama endorsed the idea over the weekend.

The Congressional Budget Office will release a new 10-year budget and economic report Tuesday, a report that will help frame the fiscal debate in Congress for the coming year.

The CBO report will give budget and economic estimates for fiscal years 2011 through 2020.

After the report is released, CBO director Doug Elmendorf will testify on the update to the House Budget Committee on Wednesday at 10 a.m and to the Senate Budget Committee Thursday at 10 a.m..

The White House will release its fiscal year 2011 budget on February 1.

The House Oversight Committee will hold a hearing Wednesday at 10 a.m. on the events leading to the federal rescue of AIG. Treasury Secretary Tim Geithner is the main witness and will be grilled about his activities as president of the New York Fed.

** Market News International Washington Bureau: 202-371-2121 **