Washington Extra – Dinner party ideas

November 4, 2010

ron_paulCongress might not get much done in the next two years, but boring it won’t be. Certainly not with Ron Paul as likely head of the monetary policy (aka Fed oversight) subcommittee in the House.

Today, Paul the elder told Reuters correspondent Andy Sullivan that he was looking forward to his new “very, very important” role. The Fed, he said, was ”way too independent” and “totally out of control.” Quantitative easing – the Fed’s controversial program to purchase government securities – is not just lousy economics and lousy monetary policy, he said, it is “central economic planning at its worst.” More here.

Expect more fireworks from other conservative Republicans in the coming Congress, people who believe the Fed is enabling excessive government borrowing through its purchases of government debt, that it is printing money to finance the deficit. Then there is Darrell Issa, likely head of the oversight committee, with the subpoena power to be at least as much of a thorn in Ben Bernanke’s side than either of the Paul clan. It will be interesting to see if any of them can get under the skin of the normally unflappable Fed chairman.

Meanwhile, as first predicted in Washington Extra in early September, one possible compromise on extending the Bush-era tax cuts is already taking shape. That would revolve around a permanent extension of the cuts for the middle classes, and a temporary extension for the wealthiest. At least that is something President Barack Obama would be “open” to discussing, according to his spokesman Robert Gibbs. Taxes will be high on the menu when Congressional leaders come to the White House on November 18, for a meeting that Obama hopes will “spill over into dinner”. Let’s see if the Republicans bite.

Here are our top stories from Washington today…

White House signals tax compromise with Republicans

The White House signaled it could compromise with Republicans on tax cuts, the first possible policy shift by President Obama since his the midterms. The two parties need to agree on extending Bush-era tax cuts or they will run out at the end of the year.

For more of this story by Jeff Mason and Caren Bohan, read here.

Republican Boehner says Obama seems in ‘denial’

President Obama seems to be in denial about the full meaning of congressional elections in which Republicans made big gains, Republican leader John Boehner told ABC News. “When you have the most historic election in over 60, 70 years, you would think the other party would understand that the American people have clearly repudiated the policies they’ve put forward in the last few years,” he said.

For more of this story, read here.

US jobless claims up, productivity caps inflation

New claims for jobless aid rose last week and a strong rebound in productivity showed employers wringing more output from current workers rather than hiring. “The big picture is that firms are trying to squeeze every ounce out of the workers they have and this is one reason they feel no need to hire,” one analyst said.

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

Fed sets up office to spot economic bubbles

The Federal Reserve has set up a new office to spot financial bubbles before they trigger financial crises and tighten the central bank’s regulatory scrutiny of big financial firms.

For more of this story, read here.

Obama’s climate pessimism dims UN, G20 outlook

Obama has conceded that big Republican gains in midterm elections undermined prospects for comprehensive climate legislation. “The U.S. elections confirm what many people already suspected: the next U.N. meeting in Cancun won’t be a breakthrough on emission reductions,” said Richard Klein, of the Stockholm Environment Institute.

For more of this story, read here.

Republicans to attack healthcare law funding

Senate Minority Leader Mitch McConnell took a hard line against Obama’s landmark health overhaul and showed no sign of compromise. “We can and should propose and vote on straight repeal repeatedly,” he said. More realistically, McConnell said Republicans should aim to hobble the healthcare law by “denying funds for implementation” of the measure.

For more of this story by Richard Cowan, read here.

Republicans scuffle over US House banking panel

Just days after winning control of the House of Representatives, Republican leaders have faced an internal fight over the chairmanship of a committee that oversees Wall Street. Representative Spencer Bachus was expected to prevail over rival Ed Royce to become the next head of the House Financial Services Committee, aides said, but the struggle could play a role in setting the panel’s agenda for 2011-12.

For more of this story by Kevin Drawbaugh, read here.

A prince, a sultan, diamonds and a lawsuit

Prince Jefri Bolkiah and his brother, the Sultan of Brunei, have at long last reconciled, but their epic feud involving diamonds, fast cars, luxurious homes and billions of dollars generated a treasure trove of legal documents. One of the world’s richest men, Jefri is expected to face vigorous grilling when he gives rare public testimony later this month in New York. His lawsuit charges that two of his personal lawyers enriched themselves through “fraud,” “breach of contract” and “criminal enterprise.”

For more of this special report by Mark Hosenball, read here.

What we are blogging…

Campaign’s over, so start campaigning

Folks at the White House may be asking if chastened President Obama will face a primary challenge from the left. That speculation got churning after newly unemployed Senate Democrat Russ Feingold conceded defeat with the decidedly unchastened message: “It’s on to the next fight. It’s on to the next battle. It’s on to 2012. And it is on to our next adventure — forward!” Then Politico wondered if Obama’s meek-sounding response to the midterms could make him vulnerable to a fiery challenge from Howard Dean.

For David Morgan’s full post, read here.

What wilderness? Republicans emerge from elections ready to charge

Republicans have emerged from the political wilderness, and they’re wasting no time laying down markers. Never mind that Mitch McConnell’s party is still in the minority in the Senate (and would need support from Democrats and the president to get anything enacted), McConnell appears ready to lay down the law. “The White House has a choice: they can change course, or they can double down on a vision of government that the American people have roundly rejected,” he said. “If the administration wants cooperation, it will have to begin to move in our direction.”

For Tabassum Zakaria’s full post, read here.

From elsewhere…

Harry Potter fans, black magic decimating India’s owls

Die-hard fans of Harry Potter are seriously threatening India’s owl population, as demands for the ultimate wizarding accessory increase, a wildlife group says. Potter’s snow-white owl Hedwig is being blamed for fuelling the trade in Indian owls, as fans look to ape their young wizard hero. “Following Harry Potter, there seems to be a strange fascination even among the urban middle classes for presenting their children with owls,” India’s Environment Minister Jairam Ramesh told the BBC.

For more of this story, read here.

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

Photo Credit: REUTERS/Richard Clement (Paul questions Bernanke at a hearing in  February)

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