Washington Extra -The audacity of hope?

September 1, 2010

If rescuing the U.S. economy from the Slough of Despond wasn’t enough, President Barack Obama took a stab at finding peace in the Middle East today. Obama is determined to forge a new relationship with the Muslim world, and presumably would like to unquestionably earn the Nobel Peace Prize he was awarded last year.obama_middleast But getting embroiled in the Middle East is a risk for the president, not least because failure to reach an accord could set back his efforts to win over Muslims and achieve solidarity over Iran. Ordinary Israelis and Palestinians are not optimistic about this latest peace effort, and experts say the one-year deadline to reach a deal does not appear very realistic. Nevertheless, it is hard to argue with Obama’s opening remarks today, and his hope that “extremists and rejectionists” should not be allowed to derail the peace process.

It is often interesting when high-ranking officials leave office and get the chance to unburden themselves. White House economist Christina Romer was no exception today, issuing an impassioned plea for more economic stimulus measures, even if they push up the fiscal deficit in the short term. “The only sure-fire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less. In my view we should be moving forward on both fronts,” she said in a speech at the National Press Club. “I desperately hope that policymakers on both sides of the aisle will find a way to finish the job of economic recovery,” she added. WashingtonExtra won’t be holding its metaphorical breath.

Finally today, another win by a Tea Party favorite in Alaska this week underlines that the movement is not just a passing fad, and has the staying power to be  a significant factor in November’s Congressional elections. What’s more, Democratic hopes that radical Tea Party candidates will alienate moderate voters and energize Democrats are not being realized. In fact, Tea Party favorites are already ahead of Democratic rivals in the opinion polls in Colorado, Kentucky and Florida, and only slightly behind in Nevada.

Here are our top stories from today…

Obama opens Mideast peace summit, says U.S. resolute

President Barack Obama vowed that “extremists and rejectionists” would not derail the relaunch of Israeli-Palestinian negotiations as he opened a peace summit shadowed by Middle East violence. Wading into Middle East diplomacy in the face of deep skepticism over his chances for securing an elusive peace deal, Obama condemned as “senseless slaughter” a Hamas attack on Tuesday that killed four Jewish settlers in the occupied West Bank.

For more of this story by Matt Spetalnick and Jeffrey Heller, read here.

Romer: U.S. must find will for further stimulus

Departing White House economist Christina Romer said the United States needed to find the political will for more economic stimulus, even if it pushed up the fiscal deficit in the short run. “While we would all love to find the inexpensive magic bullet to our economic troubles, the truth is, it almost surely doesn’t exist,” Romer said in a speech at the National Press Club.

For the full story by Caren Bohan, click here.

Tea Party promises to be a force in November

With another win in a Senate Republican primary, this time in Alaska, the conservative Tea Party movement showed it is more than a political fad and has the staying power to be a significant force in November’s elections. Polls show Tea Party favorites leading or running nearly even with Democratic foes in a handful of high-profile Senate races that could shift the balance of power in Congress — or at least inject a potent new strain of anti-spending, anti-big government conservatism into the staid Senate.

For more of this story by John Whitesides, read here.

Gunman takes hostages at US Discovery Channel

A man carrying a gun and possibly with explosives strapped to his body took a small number of hostages in the Discovery Channel headquarters building in suburban Washington. “Right now we have an unconfirmed number of hostages, a small number of hostages that are with the suspect at this point,” Tom Manger, Montgomery County police chief, told reporters. The man entered the building wearing what appeared to be metallic canister devices on his front and back and he pulled out a hand gun, Manger said.
For the full story by Maggie Fox, click here.

Send Pakistan aid, not jobs, U.S. textile groups say

Textile groups and cotton farmers strongly objected to proposed new trade benefits for Pakistan, saying the United States should send aid to the flood-ravaged country, not U.S. jobs. The groups expressed their concern in a letter to Secretary of State Hillary Clinton and Trade Representative Ron Kirk, who were urged last week by the Chamber of Commerce, a leading U.S. business group, to press Congress for a generous package of U.S. textile tariff cuts to help Pakistan recover.

For more of this story by Doug Palmer, read here.

Crisis panel chair: Politics may have doomed Lehman

Officials appeared to have made a policy decision not to bail out Lehman Brothers, the head of a panel investigating the financial crisis said, challenging the view of regulators that they had no legal authority to help. The comments lent support to former Lehman Chairman Richard Fuld’s contention that the Federal Reserve and Treasury could have done more to prevent his firm’s 2008 bankruptcy, which hastened the worst global recession since World War Two.

For more of this story by David Lawder and Dave Clarke, read here.

Obama struggles with urgent task of fixing economy

President Barack Obama has declared fixing the economy his “central mission” but he has few tools to bring down nearly double-digit unemployment or jump-start the faltering recovery this year. To get a quick fix, he would need a big initiative, but the president stands almost no chance of getting Congress to pass any substantial legislation in the few weeks left before the mid-term elections — a stretch of time he calls the campaign “silly season.”

For more of this analysis by Caren Bohan, read here.

Manufacturing grows in August but private jobs cut

The manufacturing sector grew faster than expected in August, but private employers unexpectedly cut jobs, showing the economic recovery still faces headwinds.

For more of this story by Lucia Mutikani and Burton Frierson, read here.

U.S. delays controversial decision on Web traffic rules

U.S. communications regulators on Wednesday put off a controversial decision on Internet traffic rules, giving industry and consumer groups a chance to forge a compromise while avoiding a politically sensitive issue ahead of the November elections.

For more of this story by John Poirier, read here.

What we are blogging…

Republican “Young Guns” take aim at Democratic-led Washington

Republican Representatives Eric Cantor, Paul Ryan and Kevin McCarthy are all in their 40’s. Yet with many of their colleagues far older — in their 60’s, 70’s and 80’s — they call themselves the “Young Guns,” part of a new breed of Republicans ready to challenge their Grand Old Party and take on Democratic-led Washington.

For Thomas Ferraro’s full blog, click here.

The World Bank’s $6 billion man on climate change

As the special envoy on climate change for the World Bank, Andrew Steer might be thought of as the $6 billion man of environmental finance. He oversees more than that amount for projects to fight the effects of global warming.

For Deborah Zabarenko’s full blog, click here.

From elsewhere…

Apple takes wraps off new lineup of iPods

Apple Inc unveiled a snazzier line of its iPod, with new designs for every model of the popular media device in hopes of kick-starting holiday sales. “We’ve gone wild,” Apple co-founder Steve Jobs said. “It’s the biggest change in the iPod lineup ever.” At a presentation to reporters and investors, Jobs said that to date the company has sold 275 million iPods.

For the full story, click here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo Credit: REUTERS/Jason Reed (Obama speaks to the media about the Middle East Peace talks staged at the White House , alongside Secretary of State Hillary Clinton (L) and George Mitchell, U.S. Special Envoy for Middle East Peace)

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