Washington Extra – Party games and blame games
A smart move by Republican leader John Boehner today, or a nicely laid trap if you prefer. Boehner echoed yesterday’s call from former White House budget director Peter Orszag, for a two-year extension to the Bush-era tax cuts for all Americans. Boehner appealed for both parties to “do this together” to “show the American people that we understand what is going on in this country.” There was, of course, one big difference between Boehner’s and Orszag’s suggestions – the Republican leader conveniently left out the all-important promise to let all the tax cuts expire at the end of that two-year period. Not surprisingly, President Barack Obama swiftly rejected the offer, insisting that the country could not afford to extend tax cuts for the rich. “This isn’t to punish folks who are better off — God bless them – it is because we can’t afford the $700 billion price tag,” he said in Ohio. You get the feeling this partisan battle isn’t going to be settled easily or early, and the lingering uncertainty this creates is probably not good news for the economy. Expect the blame game to continue.
Elsewhere today, a lovely special report on the Tea Party and how the upstart is growing up and going back to school, determined to shed its amateur status. If it succeeds, the movement’s influence could well extend beyond November and into the 2012 presidential race, although who that might ultimately benefit is very much an open question. Take a look also at our exclusive report on how the Pentagon’s top watchdog has abandoned efforts to do in-depth audits of defense contracts, leaving billions of dollars of taxpayer money at risk from overpayments and fraud.
Meanwhile, another blame game continues over the Gulf oil spill, with BP’s own investigation not impressing Democratic congressman and critic Edward Markey. “This report is not BP’s mea culpa,” he said. “Of their own eight key findings, they only explicitly take responsibility for half of one. BP is happy to slice up the blame as long as they get the smallest piece.”
Finally today, it could be time for a game of musical chairs at the White House. Washington is wondering how long Obama’s abrasive right-hand man Rahm Emanuel is going to be sticking around, now that the Chicago mayor’s job has come free. It would be ‘”an unbelievably attractive opportunity,” said David Axelrod, while Robert Gibbs pointed out that the job “doesn’t come around a lot.” Rahm, we are told, has not decided yet, but already people are talking about possible successors. The early field includes: deputy national security adviser Tom Donilon; Vice President Joe Biden’s chief of staff, Ron Klain; and Obama confidante Valerie Jarrett. Even more tantalizing, perhaps, is the possibility that his departure could represent the start of a shake-up of the president’s inner circle after the November elections.
Here are our top stories from today…
BP and partners trade blame for oil spill
A BP investigation of the Gulf of Mexico disaster played down its own role in the world’s worst offshore oil spill and pointed the finger at what it said were failures by contractors. The 193-page internal report drew fire from a prominent lawmaker and one of the contractors, Transocean Ltd, called it a “self-serving” attempt by the British energy giant to escape responsibility for the “fatally flawed” design of its deepsea Macondo well.
For more of this story by Tom Bergin and Ayesha Rascoe, read here.
Obama: U.S. can’t afford to extend tax cuts for rich
President Barack Obama, fighting to keep Democrats in charge of Congress, said the United States could not afford to extend Bush-era tax cuts for the rich and accused Republicans of being fiscally irresponsible. On a campaign trip to Ohio roughly two months before Nov. 2 midterm elections, Obama admitted his economic policies had not worked as quickly as hoped, but he said his party and proposals were still better placed to boost the economy.
For the full story by Patricia Zengerle, click here.
Exclusive: Pentagon watchdog broken, U.S. money at risk: report
The Pentagon’s top watchdog has abandoned efforts to do in-depth audits of defense contracts, leaving billions of dollars in taxpayer money at risk because of overpayments and fraud, according to an investigative report due to be made public on Thursday. The report, written by Republican Senator Chuck Grassley’s staff and obtained by Reuters, concludes that the Defense Department’s Office of Inspector General has focused instead on less important types of audits, and that its productivity has plunged in recent years.
For more of this story by Scot Paltrow, read here.
Fed report shows widespread signs growth easing
The economy has shown “widespread signs” of slowing over recent weeks, the Federal Reserve said in a report suggesting that while the recovery has been faltering, the economy may skirt a second recession. The Fed said in its Beige Book compilation of anecdotal reports that modest growth was the most common characterization of economic activity in Fed districts, primarily those in the western and middle portions of the country such as San Francisco, Dallas, and Kansas City.
For the full story by Mark Felsenthal, click here.
Speculation swirls as top Obama aide mulls mayoral run
Nobody at the White House would be surprised if President Barack Obama’s influential chief of staff, Rahm Emanuel, decides to run for Chicago mayor and already there is speculation as to who would replace him. Mayor Richard Daley’s decision to not seek re-election on February 22 leaves the door open for a run by Emanuel, the expletive-spewing former ballet dancer who has helped guide the direction of Obama’s presidency.
For more of this story by Steve Holland, read here.
Flash crash report: plunge still a mystery: sources
Regulators probing the stock market “flash crash” last May still have not uncovered a single cause but will point to “stub quotes” and other previously identified issues as having exacerbated the market’s dramatic drop, according to two sources familiar with the probe. A third source said the Securities and Exchange Commission is still asking about a “smoking gun” that might explain the May 6 crash, when the Dow Jones industrial average plunged some 700 points before sharply recovering, all in about 20 minutes.
For more of this story by Rachelle Younglai and Jonathan Spicer, read here.
Dallas Fed’s Fisher says more easing not on horizon
The Federal Reserve’s recent decision to buy more Treasury bonds does not signal the central bank is on the verge of another round of easing, a top official at the central bank said.
For more of this story by Ann Saphir and Pedro da Costa, read here.
EADS CEO says 1 billion euro M&A possible
EADS Chief Executive Louis Gallois said EADS is in talks with a few companies in defense, services and security areas for potential deals and could comfortably make an acquisition of around 1 billion euros. Speaking at the Reuters Aerospace and Defense Summit in Washington, Gallois said the Airbus parent’s cash position of 9 billion euros gives it room for “reasonable” acquisitions.
For more of this story by Soyoung Kim and Tim Hepher, read here.
Hillary Clinton says deficit sends message of weakness
The huge budget deficit poses a national security threat and projects a “message of weakness” internationally, Secretary of State Hillary Clinton said as she urged Democrats and Republicans to tackle the problem. Clinton, in a speech heralding a new “American moment” in U.S. foreign policy, said the Obama administration’s policy of greater engagement with the world has brought dividends such as a united front against Iran’s nuclear ambitions.
For more of this story by Andrew Quinn, read here.
Bankers urge government to pull plug on Fannie, Freddie
The federal government should take mortgage finance giants Fannie Mae and Freddie Mac off life support sooner rather than later, the Mortgage Bankers Association urged. The bankers said Fannie Mae and Freddie Mac should move beyond the “conservatorship” that started two years ago and be placed “receivership.”
For more of this story by Corbett Daly, read here.
U.S. asks appeals court to stay stem cell funding ban
The Obama administration asked an appeals court for an emergency stay that would lift the ban on federal funding of research involving human embryonic stem cells.
For more of this story by Jeremy Pelofsky, read here.
Special Report: The Tea Party goes to school
Some Tea Partiers admit mistakes were made. Others are quick to describe the movement’s recent efforts in the political arena as not quite ready for prime time. But the conservative upstart is determined to shed its amateur status. To that end, members are literally going to school.
For the special report by Nick Carey, click here.
Florida pastor not backing down on Koran-burning
An obscure Christian pastor whose plan to burn copies of the Koran on September 11 has sparked an international outcry said he will go ahead with the event despite warnings it will endanger American troops in Afghanistan and Iraq. Pastor Terry Jones, leader of a tiny Protestant church in Gainesville, Florida, which campaigns against what it calls “radical Islam,” is facing a barrage of calls from government, military and religious leaders, and from abroad, to cancel plans to publicly burn Islam’s holy book.
For the full story, click here.
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Photo Credits: REUTERS/Yuri Gripas (Boehner at House GOP Conference meeting on Capitol Hill, March 20, 2010) REUTERS/Kevin Lamarque (Emanuel at Obama news conference at the White House June 23, 2009)