Washington Extra – Let’s do lunch

February 8, 2011

Mending fences is clearly the White House play of the week.

USA/First a visit to the U.S. Chamber of Commerce, now lunch with Republican leaders from Capitol Hill. What next?

President Barack Obama at 12:30 p.m. tomorrow will host House Speaker John Boehner and his lieutenants Majority Leader Eric Cantor and Republican Whip Kevin McCarthy (that’s two of the three “Young Guns” of Capitol Hill).

Discussion will be heavy on the economy and spending. But if the Republicans are hoping for a heads-up on Obama’s budget proposal, they will be disappointed. “We will save that for them and for you for Monday,” White House spokesman Robert Gibbs told reporters.

(So who’s going to be pumping whom for information at that table?)

They will break bread at lunch, but it’s not exactly a tea party…

Take a look at today’s story by Corbett Daly, Rachelle Younglai and Margaret Chadbourn in which they obtained from sources details about the administration’s proposal to reduce government support of the mortgage market.

Here are our top stories from Washington today…

US plans to raise cost of govt backed mortgages-sources

The Obama administration will propose raising the cost of loans backed by the Federal Housing Administration as part of a plan to reduce government support of the mortgage market to below 50 percent, sources said. The White House is considering shrinking Fannie Mae and Freddie Mac’s $1.5 trillion mortgage portfolios within 10 years. The plan would give the private sector a dominant role in the housing market and reduce the government’s support to below 50 percent within five to seven years after the plan is adopted.

For more of this story by Corbett B. Daly and Rachelle Younglai, read here.

U.S. praises military restraint in Egypt protests

Defense Secretary Robert Gates praised Egypt‘s military for its restraint while the White House criticized its government for harassing protesters and journalists as demonstrations swelled anew. Egypt’s military — long the backbone of the government in Cairo — has behaved in “an exemplary fashion” by standing largely on the sidelines during the uprising against President Hosni Mubarak’s 30-year rule, Gates told a news conference. “I would say that they have made a contribution to the evolution of democracy and what we’re seeing in Egypt,” he said as Egyptians staged one of their biggest protests yet demanding Mubarak step down immediately.

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

Clash looms over extending US surveillance methods

The Obama administration urged Congress to extend for nearly three years key powers to track terrorism suspects, setting up a possible clash with Senate Republicans who have urged making them permanent. The methods, originally adopted shortly after the September 11, 2001, attacks and set to expire at the end of this month, permit roving wiretaps, tracking suspected foreigners who may be acting alone in plotting attacks, and accessing certain business records.

For more of this story by Jeremy Pelofsky, read here.

Bare “systemic” proposal keeps hedge funds guessing

Regulators put a bit more flesh on a bare-bones plan to determine which market players other than banks should be deemed “systemic,” subjecting them to costly oversight. The Federal Reserve released a proposal on how it would define these firms, including a two-year test to determine if a firm’s predominant business is financial, but the proposal still leaves insurers and hedge funds guessing if they will fall under the stricter rules. Under the financial reform law, the new risk council has the power to create a list of “systemic” firms that are so big and interconnected they could impact the stability of financial markets.

For more of this story by Dave Clarke, read here.

U.S. starts new offshore amnesty for tax cheats

Wealthy tax evaders with assets stashed offshore can come clean under a new amnesty program with reduced penalties. “It gives people a chance to come in before we find them,” Internal Revenue Service Commissioner Doug Shulman said.

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

Lawmakers want answers on exchange hack attacks

Senior lawmakers demanded answers from regulators and financial exchange operators about computer hacking attacks. Already under investigation by the FBI, the attacks were acknowledged over the weekend by the operator of the Nasdaq Stock Market. News of the incursions came amid growing concern about the stability of high-speed, computerized trading systems that can drive wild market swings. A “flash crash” that occurred on May 6 of last year saw U.S. stock markets plunge 700 points within minutes.

For more of this story by Sarah N. Lynch and Jonathan Spicer, read here.

Climate skeptics unpersuaded by extra warm 2010

Remember 2010? U.S. and international scientists reckon it tied for the warmest year on record, supporting findings of unequivocal global climate change. Climate skeptics remain unconvinced. Those who study the climate skeptic position say this raises echoes of scientific controversies of the past, including the debate over the health hazards of tobacco. In Washington, the most vocal denier of human-caused climate change is U.S. Senator James Inhofe, an Oklahoma Republican who has repeatedly dismissed the idea as a hoax.

For more of this story by Deborah Zabarenko, read here.

Probe clears Toyota’s electronic throttles

A government investigation showed no link between electronic throttles and unintended acceleration in Toyota vehicles, a victory for the world’s top automaker battered by recalls over runaway vehicles. The encouraging result for Toyota stems from a 10-month probe following recalls of nearly 8 million of its best-selling models in the United States over defective floor mats and accelerator pedals that hurt its reputation for quality.

For more of this story by John Crawley and David Lawder, read here.

Novel devices could see faster U.S. reviews

Health regulators are seeking to speed up reviews of promising medical devices and boost research for new technologies in hopes of getting novel products to market faster. Its first candidate is an artificial arm from DOD’s Defense Advanced Research Projects Agency that uses a microchip in the brain to control the device’s arm, hand and finger function.

For more of this story by Susan Heavey, read here.

US proposes moving phone subsidy focus to Internet

Communications regulators proposed new rules that they say will help bring broadband to all of rural America. The rules would shift government subsidies for landline telephone service to fund the buildout of high-speed Internet services in rural areas. “We won’t fully realize the promise of broadband and the fundamental promise of American opportunity if large swaths of our country are left out,” FCC Chairman Julius Genachowski said.

For more of this story by Jasmin Melvin, read here.

France confident US tanker deal will be “fair”

France is confident that the U.S. will conduct a “free and fair” competition between Boeing and Europe’s EADS for an order of refueling planes valued at up to $50 billion, French Defense Minister Alain Juppe said. “We are confident in the process … We are certain that this competition will be free and fair,” he said.

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

What we are blogging…

Is Rand Paul a U.S. Senate action hero?

It didn’t take Rand Paul long to become Captain America of the Senate. He’s tough-minded, strong-willed and he’s ready to battle the most dangerous titans on the political landscape, like Social Security and Medicare. And he tells ‘Morning Joe’ that a courageous and comprehensive plan for fixing America’s public finances will soon be on the march. If all goes as planned, much may be accomplished before the start of this year’s Major League Baseball season. “Within two to three weeks, I’m going to propose a fix for Social Security,” he says.

For David Morgan’s full post, click here.

From elsewhere…

Shark attacks rise globally but drop in Florida

Shark attacks on humans increased worldwide last year but declined in Florida, which still had more shark attacks than any other state, University of Florida researchers said. Florida’s year-round swimming weather and long coastline make it the nation’s leader in shark attacks and that didn’t change last year, when 13 attacks were reported, according to the university’s annual Shark Attack File report. But 2010 marked the state’s fourth straight year of decline and the total was significantly lower than the yearly average of 23 over the past decade.

For more of this story, read here.

Photo credit:  Reuters/Jim Young (Obama addresses Chamber of Commerce)

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Perhaps sharks want to taste different meat!

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