WEEK ONE HUNDRED & FORTY-FIVE

October 24, 2011

1.     President Obama hit the road offering mortgage relief to struggling homeowners, taking the wraps off changes to a refinancing program that will make it easier to take advantage of record-low interest rates:

  • Changes to the Home Affordable Refinance Program, or HARP, eliminate a cap on just how far underwater a mortgage can be before it can be refinanced through a federally-guaranteed loan program and adds protections for banks wary of participating--but its unclear how effective the changes will be as the White House did not give an estimate about how many mortgage holders would be eligible for relief, and the Federal Housing Finance Agency behind the program said only that it could reach another one million borrowers, a fraction of an estimated 11 million who owe more than their homes are worth.

2.     The EPA will move forward with air rules that have come under attack from Republicans and electric utilities, the agency's top air-quality official said:

  • The Obama administration has faced "a backlog of rule makings" required under the Clean Air Act, but not implemented on time or overturned by the courts--the announcement by Gina McCarthy, assistant administrator for EPA's Office of Air and Radiation, comes a month after House Republicans passed a bill to weaken the rules and delay them by several years each, but a recent poll taken before the bill's passage showed 67 percent of U.S. voters oppose efforts by Congress to delay the rules.

3.     The top U.S. envoy to North Korea has reported some progress after the first day of talks over Pyongyang's nuclear program, the second direct encounter between both sides in less than three months:

  • Speaking from the U.S.'s U.N. mission in Geneva, Stephen Bosworth called himself "neither optimistic nor pessimistic"--Bosworth said that the U.S. and North Korea were "conducting very intensive discussions" and would try to narrow their differences, but he would not provide specifics.

October 25, 2011

1.     The Justice Department said that electronic parts made in Minnesota were smuggled through Singapore to Iran, and some of them ended up in the remote controls of makeshift bombs seized by U.S. forces in Iraq:

  • About 60 percent of all U.S. casualties in Iraq have been caused by makeshift bombs, and the U.S. military has long reported finding evidence that the most sophisticated and deadly of them were designed or fabricated in Iran--by implicating Iran, at least circumstantially, in insurgent attacks on U.S. soldiers in Iraq, the charges add to the worsening tensions between the two countries.

2.     U.S. and North Korean officials emerged from two days of meetings in Geneva agreeing they had narrowed their differences about negotiating on the North's nuclear program, but they parted without fixing a date for further bilateral or multilateral talks:

  • Speaking outside the U.S. mission after the talks ended, Stephen Bosworth, the U.S. official envoy, called the talks "very positive and generally constructive", and his North Korean counterpart in the talks, first Vice Foreign Minister Kim Kye Gwan, speaking across town at his country's diplomatic mission, said that the two sides had made "big progress" in talks that focused on trust-building, but had differences they could not overcome--of the two negotiators, Kim sounded the more upbeat and said that the two sides would meet again "as soon as possible."

October 26, 2011

1.     "Supercommittee" Democrats proposed a "grand bargain" of spending cuts and new taxes to reduce deficits, picking up where President Obama and House Speaker John Boehner broke off this summer as the panel has four weeks left to strike a deal:

  • The package, up to $3 trillion, was a first peek at what have been mostly closed-door deliberations, but it drew swift resistance from Republicans who objected to the inclusion of new taxes--the supercommittee has until November 23rd to reach agreement on a proposal to reduce the nation's deficit by at least $1.5 trillion over the next decade, and failure to cut at least $1.2 trillion would trigger mandatory cuts in 2013 that many are sceptical would ever take place.

2.     The Obama administration's new student-loan plan, titled "Know Before You Owe" would allow college graduates to cap federal student loan repayments at ten percent of discretionary income starting in January, two years before the cap was due to take effect under federal law:

  • The accelerated "pay as you earn" option, which Obama will authorize through executive authority, could benefit up to 1.6 million borrowers and reduce their payments by as much as a couple of hundred dollars a month, administration officials said--all remaining debt on the federal loans would be forgiven after 20 years, which is five years earlier than under current law.

October 27, 2011

1.     Monthly Medicare Part B premiums for most beneficiaries will rise next year by $3.50, to $99.90, a much smaller increase than had been expected, the Obama administration said:

  • Premiums are set to cover about 25 percent of projected spending under Part B of Medicare, a voluntary program that covers doctors' services, diagnostic tests, and outpatient hospital care for 48 million people who are 65 and older or disabled--high-income people pay higher premiums, based on a sliding scale, and for the most affluent beneficiaries, individuals with annual incomes of more than $214,000 and couples with more than $428,000, the monthly premium next year will be $319.70, the administration said.

2.     After weeks of negotiating in secrecy, the supercommittee on deficit reduction has allowed its proposals to spill into the open in a display of partisanship that shows how far apart Congress remains in striking a deal:

  • As a counter-proposal to the "grand bargain" of up to $3 trillion in spending cuts and new taxes on wealthier households that the Democrats put on the table, the GOP proposed cutting corporate and individual tax rates to spur economic growth and bring in $200 billion in new revenue, and they also proposed selling government assets and slashing $1.2 trillion from spending, including cuts to Medicare beneficiaries and providers--with less than a month remaining to reach an agreement, both sides dismissed the other's offer as a non-starter.

3.     The threat of a double-dip recession eased with new government data showing the U.S. economy grew at a 2.5% annual rate from June through September, and while that's welcome news, the growth was still too weak to knock down the 9.1% unemployment rate:

  • While such growth is well short of a boom, coming after the dismal rates in the year's first two quarters, these numbers eased anxiety over the near-term economic future.

4.     The House has voted to make it harder for hundreds of thousands of people to qualify for Medicaid under the president's healthcare overhaul:

  • Lawmakers voted 262-157 to include Social Security and railroad retirement benefits in the formula that determines whether people qualify for aid--the Senate has not voted yet on the health measure.

October 28, 2011

1.     According to the latest New York Times/CBS News poll, Americans' distrust of government is at its highest level ever:

  • Almost half of the public thinks the sentiment at the root of the Occupy movement generally reflects the views of most Americans, and with nearly all Americans remaining fearful that the economy is stagnating or deteriorating further, two-thirds of the public said that wealth should be distributed more evenly--seven in ten Americans think the policies of congressional Republicans favor the rich, two-thirds object to tax cuts for corporations, and a similar number prefer increasing income taxes on millionaires;
  • Not only do 89 percent of Americans say they distrust government to do the right thing, 74 percent say the country is on the wrong track, and 84 percent disapprove of Congress;
  • The approval rating for President Obama, 46 percent, appears to be elevated by positions he has taken on foreign affairs, and 60 percent of those questioned said that they approve of his handling of Iraq--but the president's disapproval rating is also 46 percent;
  • Congressional Republicans are viewed even worse than the president, with 71 percent of the public saying the party does not have a clear plan for creating jobs, and support for several other Republican proposals is more tepid than for Obama's initiatives to lift the economy.

2.     Consumers boosted their spending in September at three times the pace of the previous month, but their incomes barely budged--they financed the gains by saving at the lowest level since the start of the Great Recession:

  • The Commerce Department says that consumer spending rose 0.6% in September, helped by a big rise in purchases of durable goods such as autos, but incomes rose only 0.1%, the same amount by which incomes fell in August--after adjusting for inflation, after-tax incomes fell 0.1% last month, the third straight monthly decline in after-tax incomes.
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