Washington Extra – Chicken and ducks
The wrangling continues over the Bush-era tax cuts. President Barack Obama said he was confident Democrats and Republicans could break the deadlock and reach a deal soon. But with time running out, there is something of a game of chicken being played by the two sides. Each is watching to see who blinks first, and with the economy still struggling, both know the stakes are high.
Texas Republican Congressman Jeb Hensarling warned of the risks of failure: “In a lame duck session, a lame duck Congress should not turn our economy into a dead duck economy.”
Let’s just hope they don’t duck the issue.
Here are our top stories from Washington today…
White House memo outlines new anti-leak measures
The White House has set up a special anti-WikiLeaks panel after the embarrassing flood of State Department cables leaked by the website, and its proposals include teams of inspectors who would prowl government agencies looking for ways to tighten security. A four-page draft memo circulated by the White House says President Obama’s national security staff has created an “Interagency Policy Committee for WikiLeaks.”
For more of this story, read here.
Geithner, lawmakers debate Bush-era tax cuts
President Obama’s top economic advisers and key leaders in Congress haggled over how to extend low Bush-era tax rates on Wednesday, seeking to break a political deadlock and prevent taxes from rising next year. Treasury Secretary Timothy Geithner, who is leading negotiations for the White House with budget director Jack Lew, said participants had a “civil, constructive discussion” but he would not talk about where those talks were heading.
For more of this story by Kim Dixon, read here.
U.S. sees big costs for banks to fix foreclosures
Banks will have to cope with big costs to clean up their foreclosure practices, with some lenders also facing “significant exposure” to investor demands that they buy back faulty mortgages, a top official said. Fed Governor Daniel Tarullo was hesitant to put a number on the potential costs and told a Senate hearing regulators are trying to get a handle on the threat to the financial system.
For more of this story by Dave Clarke and Corbett Daly, read here.
CFTC sets out swap dealer rules; feared too tight
The U.S. futures regulator unveiled a key piece of its plan to toughen rules on trading in the vast swaps market, making clearer which firms will have to set aside more funds to cover their deals. After last-minute wrangling that underscored the strain facing agencies trying to implement the biggest financial regulatory overhaul since the Great Depression, the proposal defined who will be subject to capital and margin requirements as swap dealers and major swaps participants.
For more of this story by Roberta Rampton and Christopher Doering, read here.
Obama won’t allow drilling off Atlantic, Florida
The Obama administration will not allow drilling in Atlantic Coast waters or off Florida’s Gulf shoreline as part of a new five-year offshore energy exploration plan. The 2012-2017 drilling plan reverses President Obama’s pledge made last spring to open up more offshore tracks, but the move would not be seen as a surprise given the administration’s new concern over offshore exploration since BP’s massive oil spill earlier this year.
For more of this story by Tom Doggett, read here.
Deficit panel recalibrates, seeks more support
A presidential commission trying to balance the budget has softened a proposed tax overhaul to win broader support for its bold plan to slash the $1.3 trillion federal deficit. The plan faced an uphill struggle to win sufficient backing to trigger a congressional vote. Even if that happens, analysts predict Congress won’t take substantive steps to reduce the deficit this year.
For more of this story by Kevin Drawbaugh and Donna Smith, read here.
Fed opens curtain on $3.3 trillion of crisis lending
The Federal Reserve released details on $3.3 trillion in emergency loans made during the financial meltdown that showed Citigroup and Bank of America leaning on overnight loans from the central bank well into the spring of 2009. The findings, published in accordance with a deadline set by a wide-ranging rewrite of U.S. financial rules enacted in July, shed light on who benefited most from the central bank’s controversial efforts to support financial institutions and credit markets.
For more of this story by Pedro da Costa and Rachelle Younglai, read here.
U.S. economy stays on sluggish growth path: Fed
The economy continued its slow recovery in recent weeks with pockets of strength in manufacturing offset by “depressed” housing markets and employers still reluctant to hire in significant numbers. The Fed’s Beige Book showed more anecdotal evidence that the economy is struggling to break into a faster expansion needed to generate sufficient job growth.
For more of this story by David Lawder, read here.
FCC chief backs some rationing of Internet traffic
Internet service providers would be allowed to ration web traffic on their networks under a strategy unveiled by the top U.S. communications regulator that no longer focuses solely on open access. FCC Chairman Julius Genachowski proposed banning the blocking of lawful traffic but allowing Internet providers to manage network congestion and charge consumers based on Internet usage.
For more of this story by Jasmin Melvin, read here.