Washington Extra – Red light, green light
The White House seems to be in go-slow amber mode over the protests in Egypt – declaring President Hosni Mubarak an ally, but supporting free speech as the American way.
It’s much easier to take a stance when the government is not an ally, as happened with Iran’s crackdown on street protests in 2009 when President Barack Obama said firmly: “I strongly condemn these unjust actions.”
Today, Obama was asked in a YouTube interview that took questions from the public about the protests in Egypt. His response: “Egypt’s been an ally of ours on a lot of critical issues, they made peace with Israel, President Mubarak has been very helpful on a range of tough issues in the Middle East, but I’ve always said to him that making sure that they are moving forward on reform — political reform, economic reform — is absolutely critical for the long-term well-being of Egypt. And you can see these pent-up frustrations that are being displayed on the street.”
Closer to home, the color-coded security alert system created after the Sept. 11 attacks is about to go the way of the disco ball. We will now be told whether there is an “imminent” threat or an “elevated” risk.
And finally, it looks like Jay Carney got the green light at the White House and will be switching from Veep spokesman to the president’s press secretary podium.
Here are our top stories from Washington today…
Bernanke: all but one major firm at risk in 2008
Twelve of the 13 most important financial firms were at the brink of failure at the height of the credit crisis in 2008, according to previously undisclosed remarks made by Federal Reserve Chairman Ben Bernanke in November 2009. The deeply divided Financial Crisis Inquiry Commission’s final report was endorsed only by its six Democratic members. It criticized the culture of deregulation championed by former chairman Alan Greenspan and said the government had ample power to avert the crisis but chose not to use it.
For more of this story by Dave Clarke and Kevin Drawbaugh, read here.
Treasury starts maneuvering on debt limit
The Treasury has initiated the first in what is likely be a series of maneuvers aimed at preventing it from hitting a legal debt limit as a political battle over spending intensified. The action to reduce the amount of money the Treasury holds in a special account at the Federal Reserve marked only a small step in freeing up new borrowing capacity, but was symbolically important as the Obama administration and Republican lawmakers stake out ground in a wider budget debate.
For more of this story by Glenn Somerville, read here.
US defense chief warns of “crisis” over funding
Defense Secretary Robert Gates warned that Congress was causing a “crisis on my doorstep” by failing to approve Pentagon spending, inaction that could lead to a funding shortfall and hurt the military. “It’s one thing to talk about (fiscal year 2012) and then to express concerns about something that may or may not happen in four or five years, but I have a crisis on my doorstep,” Gates said. “Frankly, that’s how you hollow out a military even in wartime.”
For more of this story by Phil Stewart, read here.
U.S., Japan must spell out plans to cut debt-IMF
The United States and Japan urgently need to spell out plans for cutting their budget deficits before financial markets turn on them and force borrowing costs higher, the IMF warned, as rating agency Standard & Poor’s cut Japan’s long-term sovereign debt rating. A day earlier, a U.S. agency raised its 2011 budget deficit forecast by 40 percent.
For more of this story by Lesley Wroughton, read here.
US Rep Paul gloomy on deficit outlook, sees crisis
A world currency crisis awaits if the U.S. Congress and the White House do not balance the federal budget soon and that appears unlikely, Representative Ron Paul said in an interview. The iconoclastic Texas Republican also told Reuters he expects wide support for a bill he has reintroduced in the U.S. House of Representatives to allow greatly expanded scrutiny of the Federal Reserve by Congress’ investigative wing.
For more of this story by Kevin Drawbaugh, read here.
GM drops US loan application after turnaround
GM has withdrawn an application for $14 billion in subsidized loans from the Department of Energy, saying it has the financial strength to fund investment in more fuel-efficient and electric vehicles on its own. The move could provide a public-relations boost to GM, which has struggled to distance itself from the controversy of a $50 billion bailout and the stigma of having become “Government Motors” after being restructured in bankruptcy.
For more of this story by David Lawder, read here.
Mixed U.S. data point to growth momentum
Housing and factory data show the economy still gaining strength in December but at a pace unlikely to cause the Federal Reserve to rethink its stimulus program. Economists said they expected Friday’s GDP data to show the U.S. picking up speed, and they shrugged off a surprise jump in new claims for unemployment benefit as a result of bad weather.
For more of this story by Lucia Mutikani, read here.
Pension issues may hurt US state ratings – Moody’s
Some states face so much pressure to fund pensions for public employees that it could hurt their credit ratings, Moody’s said. As concerns grow over the financial health of many states and how they will cut spending to cope, the ratings agency said its report combined pension and debt data to rank the liabilities of each state. Connecticut, Hawaii, Illinois, Kentucky, Massachusetts, Mississippi, New Jersey and Rhode Island, along with Puerto Rico, have the largest debt-and-pension loads, Moody’s found.
For more of this story by Lisa Lambert, read here.
US to provide specifics in future terrorism alerts
The Obama administration has unveiled a new system to warn about terrorism threats, scrapping the widely ignored color-coded alerts. The old approach was criticized because it lacked specifics about threats and so people ignored the warnings. The new approach will tell the public whether the threat is “imminent” or there is an “elevated” risk of threat. “The new system reflects the reality that we must always be on alert and be ready,” Homeland Security Secretary Janet Napolitano said.
For more of this story by Jeremy Pelofsky, read here.
Bovine bellies yield clues for new biofuels
Researchers looking for better ways to make biofuels turned to experts at breaking down grass — cattle — and found more than a dozen new compounds in their guts that might help make new, cheap sources of energy. They used new genetic sequencing techniques to find microbes that make enzymes that in turn can break down tough grasses into usable products.
For more of this story by Maggie Fox, read here.
When will your tax refund arrive? There’s an app for that
With the onset of the annual tax season in the United States, residents concerned about the status of their refund or their federal tax returns don’t have to worry — because there is an app for that. The IRS introduced an app, IRG2Go, the first smartphone application that enables taxpayers to keep track of their returns.
For more of this story, click here.
Photo credit: Reuters/Lucas Jackson (traffic light)