Washington Extra – Tragedy in Alaska
There were three big stories competing for our attention in Washington today. The first was the tragic death of former Senator Ted Stevens in a small plane crash in his home state of Alaska. Stevens, the longest serving Republican senator ever, was on a fishing trip with Sean O’Keefe, the North American chief of European aerospace giant and Airbus maker EADS, who was among the survivors.
Dominating eyeballs in the financial markets was the Federal Reserve’s surprise decision to move back in the direction of what it calls “quantitative easing.” The Fed will use cash from maturing mortgage bonds it holds to buy more government debt. So for now, there is no more talk of an “exit strategy” from the extraordinary monetary stimulus the central bank delivered during the financial crisis. It is a significant policy shift for the Fed, and a sign it does not view the recent slowing in the economy as simply a soft patch.
The third is our exclusive Reuters/IPSOS poll from Ohio, which showed Republican Rob Portman holding a narrow lead over Democrat Lee Fisher in a race marked by, guess what, concerns over the economy and unemployment. Interesting nuggets in the survey too about who voters blame for the economic mess. Bankers and Wall Street were identified by 93 percent of voters as mostly or partially to blame for the economic downturn, while Bush’s administration was blamed by 86 percent. Obama, though, did not get off scot-free, with 69 percent of voters also holding his administration at fault.
Here are our top stories from today…
Fed takes fresh steps to support fragile recovery
The Federal Reserve took fresh steps to lower borrowing costs amid a softening economic recovery, announcing it would use proceeds from its maturing mortgage bonds to buy more government debt. The decision to reinvest proceeds from the more than $1.3 trillion in mortgage-related debt the Fed holds, an effort to keep market-set borrowing costs down, represents a significant policy shift.
For the full story by Pedro da Costa and Mark Felsenthal, click here.
Republican Rob Portman leads Senate race in Ohio
Ohio Republican Rob Portman holds a narrow lead over Democrat Lee Fisher in a Senate race marked by voter worries about a stumbling economy and high unemployment, according to a Reuters/Ipsos poll. Portman, director of the Office of Budget and Management and the Trade Representative under former President George W. Bush, leads Fisher 43 percent to 36 percent among likely voters less than three months before the Nov. 2 election for the open Senate seat.
To read the rest of this story by John Whitesides, click here.
Former Senator Ted Stevens dies in Alaska plane crash
Former Senator Ted Stevens, who for decades had a leading hand in controlling the nation’s purse strings, died in a small plane crash in his home state of Alaska, officials said. Alaska Governor Sean Parnell said five people, including Stevens, died in the Monday night crash and four survived.
For more of this story by Jeremy Pelofsky and Yereth Rosen, click here.
House passes state aid bill Obama is eager to sign
The House of Representatives gave final congressional approval to an election-year bill to provide $26 billion to struggling states by closing tax loopholes for multinational companies and cutting back food assistance for the poor. The Democratic-controlled House passed the bill on a largely party-line vote of 247 to 161 after President Barack Obama urged lawmakers to send it to him to sign into law.
For more by Lisa Lambert and Matt Spetalnick, click here.
Democrats play defense in battle over tax rates
Barack Obama and fellow Democrats will be playing defense in what is a heated issue this election season, whether to extend lower tax rates for the rich during a waning economic recovery. Despite a risk of being perceived as coddling the rich and fueling deficits, Republicans have the upper hand in selling renewal of lower tax rates for a small slice of wealthy Americans, political analysts say. The critical battle will likely affect the November elections, where Republican hope they can win at least one chamber in Congress.
For the rest of this analysis by Kim Dixon, click here.
Bank regulators move to replace credit rating
Banking regulators took a first step on the road to replacing the use of private credit ratings to assess the soundness of banks, while also expressing nervousness about the transition. Under the new Dodd-Frank financial regulatory overhaul law, bank regulators over the next year will have to propose alternatives to the use of private credit ratings in their assessments of banks’ capital levels.
To read the rest of the story by Dave Clarke, click here.
Productivity weakens in second quarter
Business productivity fell for the first time in 1-1/2 years in the second quarter and labor costs hardly rose, according to government data that underlined the halting pace of economic recovery. Falling output per worker implies the economy is operating less efficiently because overall production is below its potential.
For more by Glenn Somerville, click here.
Despite charges, Representative Rangel is not resigning
Representative Charles Rangel said he was not resigning in the face of ethics charges and asked for an expedited resolution of his case before he has to face voters in November elections. “I am not going away. I am here,” Rangel, a Democrat, said to some applause during a lengthy, rambling speech on the floor of the House of Representatives.
To read more of Susan Cornwell’s story, click here.
U.S. increases aid to Pakistan, wary of flood fallout
The United States announced an additional $20 million to help Pakistani flood victims amid growing concern over the political, economic and security ramifications of the disaster. The new aid brought to $55 million the amount of funds committed by Washington so far to flood relief efforts in Pakistan, along with U.S. military helicopters that have been airlifting survivors trapped by the worst floods in 80 years.
For more by Sue Pleming, read here.
What we are blogging…
White House spokesman’s “professional left” comment bites back
If the White House was trying to fire up its liberal base ahead of the Nov. 2 elections, this was probably not the way to go about it. White House spokesman Robert Gibbs criticized the “professional left” for criticizing his boss, President Barack Obama, but the comment came back to bite him.
For the rest of the blog by Toby Zakaria, click here.
And a final story from New York…
U.S. steward who fled via emergency chute gets bail
A JetBlue flight attendant who became an Internet hero after storming out of a plane with an expletive-filled intercom address and an escape down the emergency chute had bail set at $2,500. Steven Slater, 39, captured the sympathy of frustrated travelers and airline industry workers on Monday with his theatrical departure that was provoked by an altercation with a passenger aboard a jet that had just arrived at New York’s John F. Kennedy international airport.
To read more of this story by Daniel Trotta, click here.
Photo Credit: REUTERS/Jonathan Ernst (Former Sen. Ted Stevens (c) leaves a Senate Republican luncheon meeting at the Capitol, Sept. 5, 2007) ; REUTERS/Kevin Lamarque (Stevens departs the U.S. District Court in Washington, Oct. 22, 2008)