Washington Extra – Wave goodbye

February 10, 2011

Might be time for a remake of an old classic film, with a contemporary twist: Mr. Smith gets out of Washington (or should that be Dodge?)

More and more lawmakers are deciding it’s time, enough is enough, see ya. The Number 2 Republican in the Senate, Jon Kyl, today announced he won’t seek reelection next year, with a quaint “my heart says it is time to go.”  USA-COURT/SOTOMAYOR

While not an elected official, Federal Reserve Governor Kevin Warsh said today he was stepping down from the central bank’s powerful board.

That of course followed Democratic Senator Jim Webb who said this week he won’t run for reelection, and Republican Congressman Christopher Lee who quit on the spot after the shirtless scandal.

Tea Party candidates were so excited to get congressional seats in November’s election that the notion of willingly stepping aside is probably unthinkable. Let’s see how they feel after a couple of budget cycles.

One official who has decided not to leave right away is Egyptian President Hosni Mubarak. After a day of suspense and drama worthy of an Alfred Hitchcock movie, Mubarak went on television to say he had transferred power to his vice president, but was not stepping down, but still intended not to seek reelection.

As is often said of the Middle East, it’s complicated…

See Kevin Drawbaugh’s interview with Congressman Barney Frank who vows a fight over Republican attempts to weaken Dodd-Frank financial reforms and Corbett Daly’s story detailing White House housing proposals to be unveiled tomorrow.

Here are our top stories from Washington today…

Rep Frank vows fight over GOP attack on Dodd-Frank

Democrats will resist Republican attempts to weaken Dodd-Frank financial reforms through underfunding key regulatory agencies, Representative Barney Frank told Reuters. “We intend to make a fight,” Frank, senior Democrat on the House Financial Services Committee, said in an interview. “I’m worried that (committee Republicans) are complicit with the appropriators in underfunding the SEC and the CFTC. That’s the biggest problem.”

For more of this story by Kevin Drawbaugh, read here.

Obama housing paper includes government insurance fund

President Obama’s housing white paper to be unveiled on Friday includes an option to create an insurance fund for mortgage backed securities that is similar to the FDIC, sources familiar with the plan told Reuters. The plan lays out three legislative options for making long-term changes to the housing finance system, while also taking near-term steps to slowly lessen the government’s role in the mortgage market now dominated by Fannie Mae and Freddie Mac.

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

Obama budget to ignite deficit debate

President Obama’s 2012 budget plan will bring a simmering deficit debate to a head when he sends it to Congress on Monday, but the U.S. is still far from tackling its huge fiscal gap as bond markets watch anxiously. With the deficit expected to widen in 2011 and 2012 — due largely to the December extension of tax cuts — there is a risk of a damaging stand-off that produces little concrete action on the deficit. The current political landscape “reminds me an awful lot of winter of 1995-’96,” said William Hoagland, a budget expert. Back then, the government endured partial shutdowns after a Democratic White House and a Republican-led House could not settle their budget disputes.

For more of this story by Alister Bull and Richard Cowan, read here.

For a Q&A on how the budget proposal works, click here.

House Republicans deepen spending cuts

Republicans in the House of Representatives agreed to deepen proposed federal spending cuts, resolving a split within their ranks but putting them even more at odds with the White House and Senate. House Appropriations Committee Chairman Hal Rogers said he would cut nearly $58 billion from current spending levels after warning fellow Republicans that cuts to that level could force airport closures, layoffs at the FBI and other harsh disruptions. The new target represents a victory for Tea Party-aligned conservatives who have pushed to nearly double the cuts initially proposed by Rogers and other senior Republicans.

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

Warsh, lone hawk on Fed board, to step down

Kevin Warsh, the Federal Reserve’s youngest-ever governor and a vocal inflation hawk skeptical of recent monetary easing efforts, is stepping down from the central bank’s powerful board. The departure of Warsh, a former banker at Morgan Stanley, may further tilt the balance of views in favor of those who support further monetary easing if economic weakness persists. No reason was cited for the decision and a Fed official said Warsh, 40, had no immediate career plans.

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

Republican presidential hopefuls woo the right

Potential Republican presidential candidates flocked to a gathering of conservatives to road-test a message that basically boiled down to this: Beat President Obama in 2012. Republicans have no obvious heir apparent for 2012, leaving 11,000 conservatives at a conference to ponder a crowded field fighting for attention 21 months before the election.

For more of this story by Steve Holland, read here.

Jobless claims data boosts labor market outlook

New applications for unemployment benefits dropped to a 2-1/2-year low last week, pointing to a stronger footing for the labor market as the economic recovery gathers momentum. The fall in claims reported by the Labor Department partly reflected the unwinding of a weather-related spike in late January but analysts said it was consistent with other indicators suggesting a strengthening labor market. “We had a bit of volatility due to all the harsh weather,” said Mark Vitner, an economist at Well Fargo Securities in Charlotte, North Carolina. “Despite all that, layoffs seem to be trending down and that should allow for job growth to pick up over the next few months.”

For more of this story by Lucia Mutikani, read here.

Obama lays out plan for wireless Internet expansion

President Barack Obama outlined his plan to expand high speed wireless Internet service to 98 percent of Americans while reducing the U.S. deficit by $9.6 billion over the next 10 years. During a trip to Marquette, Michigan — a politically important state that has been especially hard hit by the rough U.S. economy — the president proposed investing $5 billion into a fund that will ensure fast wireless technology is made available to rural areas across the country. “This isn’t just about a faster internet or being able to find a friend on Facebook. It’s about connecting every corner of America to the digital age,” Obama told an audience at Northern Michigan University.

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

Government hands may be tied on ethanol-USDA official

The government has few options to slow down the ethanol boom that has played a big role in drawing down corn supplies to their lowest level in 15 years, a top Agriculture Department official said. “The fact is the industry has pretty much been built,” USDA chief economist Joe Glauber told reporters on the sidelines of a Commodity Markets Council conference. “This isn’t a question of just saying ‘cut it off,” he said. “It’s much more complicated than that.” Government mandates, tax incentives and an upturn in profit margins during the past year make ethanol attractive to produce, he said.

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

Medicare chief says health law working

President Obama’s chief of health programs for the elderly and poor said the year-old healthcare overhaul was reducing Medicare costs and called a push by congressional Republicans to repeal the law unfortunate. Donald Berwick told the House of Representatives Ways and Means Committee that the latest data show premiums are down an average 6 percent this year, while enrollment is up by 6 percent to more that 12 million people.

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

Chinese hackers infiltrate five energy firms: study

Hackers in China broke into the computer systems of five multinational oil and gas companies to steal bidding plans and other critical proprietary information, the computer security firm McAfee said in a new report. The report, which named the attacks Night Dragon, declined to identify the five known companies that had been hacked and said that another seven or so had also been broken into but could not be identified.

For more of this story by Diane Bartz, read here.

US intelligence faces ‘belt-tightening’

The United States faces cuts in intelligence spending despite threats ranging from al Qaeda in Yemen and Somalia to nuclear programs in Iran and North Korea, the top intelligence official said. With newly powerful Republicans in Congress eager to slash spending on many fronts, senior intelligence officials faced questions about the future of U.S. spycraft even as Washington tries to gauge the impact of turmoil in the Middle East. “We all understand that we’re going to be in for some belt tightening,” Director of National Intelligence James Clapper told a committee hearing.

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

What we are blogging…

Just the right tavern to celebrate 200 years of U.S.-French military ties

Not every ally who visits the Pentagon needs to be treated to a dinner that evokes more than 200 years of peaceful military relations. France is the rare exception. So when Defense Minister Alain Juppe traveled to Washington this week for talks with Robert Gates, the defense secretary found just the right venue: Gadsby’s Tavern in Alexandria, one of the few establishments in the United States that can boast of “fine dining since 1770.”

For David Alexander’s full post, click here.

From elsewhere…

Chirac’s dowdy wife suddenly hip later in life

Former French first lady Bernadette Chirac has transformed her image from a dull, dowdy and dutiful wife into a glamorous fashionista who pokes fun at her fuddy-duddy hubby and is adored by the hippest Parisians. Jacques Chirac’s petite wife, now 77 and previously best known for her bouffant hairdo and impeccable breeding, has a new following among France’s uber-hip clubbing set and has become a fashion muse, inspiring a range of “Bernadette” T-shirts. “He’s not much fun, you know. He’s never really been one for going out, it’s a shame,” she said of Chirac in a recent interview on French television.

For more of this story, read here.

Photo credit: Reuters/Joshua Roberts (Kyl at hearing on Supreme Court nominee Judge Sonia Sotomayor, July 14, 2009)

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Don’t the door hit you on the way out Mr.Kyl.

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