Washington Extra – A snowball’s chance?

November 10, 2010

American voters made their feelings very clear last week. U.S. government borrowing is too high and needs to be reduced. How sad, then, that the presidential commission tasked with coming up with a credible plan to cut the deficit is already being dismissed as a non-event.erskine

“This is the most predictable economic crisis we have ever faced,” Erskine Bowles rightly said today as he unveiled his joint proposals with co-chair Alan Simpson.

What is lacking, though, is not a realization of this fact, but the political will and bipartisanship to find a solution. Already, some members of their own commission have expressed skepticism about the plan or dismissed it entirely, while the wider audience in Congress is hardly rushing to embrace the ideas.

The commission was supposed to show the way to bipartisanship and magically supply the missing political will. It is already clear that has not happened.

Bowles and Simpson challenged critics of their plan to come up with better ways to cut the deficit. Somehow, that too seems like a vain hope.

And yet, perhaps, as the White House said, this is “just a step in the process,” or, as Senator Judd Gregg put it, “just a starting point.”  Perhaps American politicians will surprise me.

Here are our top stories from Washington today…

Deficit panel targets Social Security, taxes

Leaders of a presidential commission proposed raising taxes and the retirement age among  bold ideas for slashing the U.S. budget deficit, but faced a difficult task in winning the support of Congress. Days after voters vented their fury over government red ink in midterm elections, commission co-chairmen Erskine Bowles and Alan Simpson floated proposals that they said would bring $4 trillion in deficit reduction through 2020. But their ideas might not even win the support of their own commission.

For more of this story by Jeff Mason and Donna Smith, read here.

Economy gets reprieve as consumers hang tough

The “new normal” for the economy is beginning to look, well, a little more normal. While it is difficult to get euphoric about a recovery that has yet to curb unemployment, pockets of relative strength have at the very least pushed back fears of a double-dip recession.

For more of this analysis story by Pedro Nicolaci da Costa, read here.

Boehner stands firm on tax cuts

The top Republican in the House of Representatives said he was firm in backing permanent lower tax rates for all income groups, including the wealthy, setting up a showdown with President Barack Obama.

For more of Kim Dixon’s story, click here.

CFTC’s position limit deadline seen out of reach

With two months to go, it now appears practically impossible for the futures regulator to meet its January deadline for setting new speculative limits in energy and metals markets. The logistics of the rule-making process will likely put that goal beyond reach, five industry sources said. “It’s mathematically still possible … but it’s very difficult,” said one.

For more of this exclusive story by Roberta Rampton and Christopher Doering, read here.

Key lawmaker plans tough energy oversight

The Republican expected to lead a key Congressional energy committee said he plans to probe whether Obama administration policies are blocking offshore oil development, as his party pushes for more extensive oversight of federal agencies.

For more of this interview by Ayesha Rascoe, read here.

EPA to push efficiency on big carbon emitters

The EPA will push power plants, manufacturers and oil refineries to become more energy efficient to comply with coming greenhouse gas rules. The move helped relieve some fears in the industries that the agency would require emitters to quickly invest in expensive, unproven technologies to cut output of gases blamed for global warming.

For more of this story by Timothy Gardner, read here.

Clinton says Israel building plan not productive

Secretary of State Hillary Clinton called Israel’s plan to go ahead with more settlement building in the West Bank counterproductive to peace negotiations but voiced hope that a deal was still possible.

For more of this story by Andrew Quinn, read here.

U.S. unveils graphic tobacco warnings

Diseased lungs, dead bodies, a man on a ventilator and mothers blowing smoke in their children’s faces are among the images health officials are considering in their effort to revamp tobacco warning labels. The graphic warnings aim to depict the negative effects of smoking and will be required on all cigarette packages and advertisements.

For more of this story by Jon Lentz and Emily Stephenson, read here.

What we are blogging…

Did GOP victory boost economic optimism?

It’s not exactly a tsunami of euphoria. But Republican victories in the midterm elections may have helped goose economic optimism, at least among …well… Republicans. A new Gallup survey finds that Republicans grew more optimistic during the first week of November, as Tea Party candidates led a GOP charge that captured the House and narrowed the Democratic majority in the Senate.

For David Morgan’s full post, read here.

From elsewhere…

Obamamania books a place in record books

At a thumb-numbing 5,472 pages, a book devoted to the life of Barack Obama is probably not going to be on the President’s list of beach reads, but its Indonesian author is hoping for interest. Hailed by Indonesian record keepers as the world’s thickest book, “The Collection, Obama and Pluralism,” was unveiled by local author, director and artist, Damien Dematra to coincide with a visit by the president which ended on Wednesday.

For more of this story, read here.

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

Photo Credit: REUTERS/Larry Downing (National Commission on Fiscal Responsibility and Reform co-Chairmen Alan Simpson (L) and Erskine Bowles (R) speak at the U.S. Chamber of Commerce “Jobs for America Summit 2010″ in Washington, July 14, 2010)

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