Washington Extra – Imagine

December 8, 2010

To look ahead, sometimes it’s necessary to look back.

OBAMA/In January, President Barack Obama said in an interview with ABC News: “I’d rather be a really good one-term president than a mediocre two-term president.” At that time, his signature domestic issue, healthcare reform, had been dealt a setback with the election of Republican Scott Brown to the Senate seat long held by the late Edward Kennedy, and some senators were balking at approving Fed Chairman Ben Bernanke for a second term.

Bernanke got confirmed in late January and healthcare reform passed in March.

An outsider looking at the current hand-wringing on Capitol Hill over extending tax cuts could be forgiven for thinking the issue is on a razor’s edge, when in fact it is highly likely that Obama’s compromise with the Republicans will pass in some form. Vice President Joe Biden, the president’s arm-twister on this issue, has been up on the Hill talking to reluctant Democrats and in the end will likely have the votes.

“I expect everybody to examine it carefully. When they do, I think they’re going to feel confident that, in fact, this is the right course — while understanding that for the next two years we’re going to have a big debate about taxes and we’re going to have a big debate about the budget and we’re going to have a big debate about deficits,” Obama said.

Starting next month the political scene moves into adjustment mode for the new realities of a divided Congress and the strategizing for the 2012 presidential election.

Senior White House aide David Axelrod put it bluntly when he told reporters of the “political calculation” in the decision to cut a deal with Republicans over tax cuts: Obama is well aware that if the fragile economic recovery falters, his own political prospects will go down with it.

Which brings us to the 30th anniversary of the death of John Lennon and this haunting quote from an interview conducted three days before he was gunned down in New York at age 40, which is to be published in Rolling Stone magazine.

The former Beatle said of his critics: “I’m not interested in being a dead f—ing hero…”

Here are our top stories from Washington today…

Tax deal edges forward despite doubts

A plan by President Obama to broadly extend tax cuts edged forward despite opposition from his own Democrats and fear in bond markets of long-term damage to the economy. Harry Reid said the proposal to extend all Bush-era income tax cuts could move quickly in the Senate, in a sign Democrats may be conceding on the deal. “It’s further along than most people think,” Reid said. “I don’t think there is a great more to be done on that.”

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

House spending bill funds Obama priorities

The House of Representatives is scheduled to vote on a spending bill that reflects a sharp change of course from the generous spending increases that Democrats have backed over the past two years to fight the deepest recession since the 1930s. The bill would enable President Obama to implement tougher financial-industry regulations, increased education aid and other priorities as it funds government operations through October 2011, but at a level $46 billion less than he requested.

For more of this story by Andy Sullivan, read here.

Gates says Afghanistan strategy on right track

Defense Secretary Robert Gates said he was convinced the war in Afghanistan was on the right track as he toured the country to assess Washington’s strategy for reversing the Taliban’s momentum. Senior military officers echoed that view when Gates stopped in southern Helmand and Kandahar provinces — Taliban strongholds — saying international forces had made progress in the months since an extra 30,000 troops were deployed.

For more of this story by David Alexander, read here.

Scenarios: U.S. reviews Afghanistan war ahead of crucial period

A review ordered by President Obama of the Afghanistan war a year after he overhauled the strategy will be made public next week. The review, which is expected to reflect the administration view that U.S. and NATO forces are making some progress, is unlikely to bring any major changes to operations on the ground. But it will set the scene for decisions about how quickly Washington will start bringing its troops home, which it has said it will begin to do in the middle of next year.

For more of this story by Missy Ryan, read here.

Flash-crash halt extension sought ahead hearing

Major exchanges proposed extending temporary stock-trading halts by four months, as regulators and Congress explore ways to bolster the integrity of the markets after the May 6 flash crash. Big Board parent NYSE Euronext and privately held BATS Exchange want to extend the SEC’s program of circuit breakers, which pause trading in a volatile stock and are due to expire on Friday. Other exchanges, including Nasdaq OMX Group, later made the same request.

For more of this story by Jonathan Spicer and Rachelle Younglai, read here.

State revenues can’t cover stimulus end-report

States are not pulling in enough revenue to make up for a shortfall that will emerge when the federal stimulus plan ends, with nearly a third of them reporting that gaps are already emerging in their budgets, a report by a state legislatures’ group found.

For more of this story by Lisa Lambert, read here.

Treasury to cut AIG stake in big stock sale

The Treasury plans to sell about one-fifth of insurer AIG through a stock offering in the first half of 2011, an important test of the government’s ability to profitably exit one of its most controversial bailouts. American International Group Inc and the Treasury would both sell stock in the offering, which could total $10 billion to $15 billion, sources familiar with the matter said. That would place it among the largest secondary share offerings in history.

For more of this story, read here.

US regulations hurt competitiveness-business group

A prominent business group has urged the Obama administration to consider modifying provisions of a broad-based financial regulatory overhaul that they said hurt American competitiveness. The Business Roundtable said the Dodd-Frank bill passed earlier this year will be costly to implement and won’t be effective. “What we want to do is stop, take a breather, fix those things that won’t work the way they were intended to do,” Ivan Seidenberg, chief executive of Verizon Communications and group chairman.

For more of this story by Glenn Somerville, read here.

CFTC’s Chilton wants more high frequency trade oversight

Top futures regulating official Bart Chilton said he supported tougher oversight of the high-frequency trading market that’s responsible for a third of the volume on regulated U.S. futures exchanges, including requiring that the trades be reviewed and monitored.

For more of this story by Christopher Doering, read here.

“Inept” moves preceded BP spill -US panel co-chair

BP and its contractors made a series of decisions that were “breathtakingly inept” ahead of the largest offshore oil spill in U.S. history, a co-chair of the White House oil spill commission said. Bill Reilly blasted the conduct of the oil giant and its partners, Transocean and Halliburton, in drilling the doomed Macondo well. “There is virtual consensus among all the sophisticated observers of this debacle that three of the leading players in the industry made a series of missteps, miscalculations and miscommunications that were breathtakingly inept and largely preventable,” he said.

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

Navy inviting execs to play “shipping game”

Executives from top companies, including Wal-Mart and Exxon, are teaming up with the Navy this week in a “gaming” exercise to study how a warming Arctic Ocean and the widening of the Panama Canal could dramatically change global shipping. The complex two-day exercise will look at the security concerns and massive investments that may be necessary to cope with the shakeup of global trade routes.

For more of this story by Andrea Shalal-Esa, read here.

What we are blogging…

Seth Meyers to headline annual WHCA dinner

Drum roll please…The White House Correspondents’ Association has lined up a headliner for its annual fundraising dinner: “Saturday Night Live” head writer and performer Seth Meyers. Meyers, who recently hosted the 2010 ESPY Awards on ESPN, is anchor of SNL’s “Weekend Update.”

For Caren Bohan’s full post, click here.

From elsewhere…

Magazine publishes Lennon’s last print interview

Rolling Stone magazine is publishing an interview with John Lennon, conducted three days before the former Beatle was gunned down in New York, in full for the first time. The magazine said the nine-hour discussion with Jonathan Cott was the singer/songwriter’s final print interview. Lennon was murdered outside his apartment on Dec. 8, 1980. Rolling Stone ran excerpts from the interview shortly after Lennon’s death, but Cott never transcribed all of the tapes until recently. “Earlier this year I was cleaning up to find some files in the recesses of my closet when I came across two cassette tapes marked ‘John Lennon, December 5th, 1980,'” Cott said.

For more of this story, read here.

As jurors go online, U.S. trials go off track

The explosion of blogging, tweeting and other online diversions has reached into jury boxes, in many cases raising serious questions about juror impartiality and the ability of judges to control their courtrooms. A Reuters Legal analysis found that jurors’ forays on the Internet have resulted in dozens of mistrials, appeals and overturned verdicts in the last two years alone.

For more of this story, read here.

Photo credit: Reuters/Kevin Lamarque (Obama listening during meeting with Polish president)

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/