Washington Extra – Table options

February 24, 2011

What to do about Libya? Options. So many options.

President Barack Obama is taking his time to think it all through. The White House today threw down the line: “There are no options we’re taking off the table.” OBAMA/

That deliberately leaves murky whether military action is being contemplated.

Former President George W. Bush used the “all options are on the table” line from time to time when talking about Iran’s nuclear program, leaving some wondering if he was signaling an attack on Iran. Obviously he never did.

One option is enforcing a no-fly zone over Libya. The United States imposed no-fly zones over Iraq for a decade and it didn’t shake Saddam Hussein’s grip on power.

Then there are sanctions — but those don’t tend to lead to leaders stepping down.

Maybe there are more and better options: Obama was set to call British and French leaders today to discuss the situation.

One scenario that would have limited their options: the demise of Libyan leader Muammar Gaddafi.

Indeed, a rumor Gaddafi had died made the rounds in the energy market and knocked down oil prices. It proved to be just that — a rumor — as far as foreign policy correspondent Arshad Mohammed could ascertain.

Gaddafi in fact looks to be his old self. He blamed the revolt on al Qaeda leader Osama bin Laden and said the protesters were fueled by milk and Nescafe spiked with hallucinogenic drugs.

“A maniacal whack job” according to folksy conservative Mike Huckabee in an interview with Steve Holland late yesterday.

Here are our top stories from Washington today…

Obama to talk to Cameron, Sarkozy on Libya

President Obama will talk to the leaders of Britain and France about the crisis in Libya as Washington kept all options open, including sanctions and military action. The United States is working to build consensus for action against Libya’s government, which Obama has condemned for “outrageous” violence against its own people. “I’m not ruling out bilateral options,” White House spokesman Jay Carney said when asked whether the United States was considering military steps. “I’m not ruling anything out.”

For more of this story by Andrew Quinn and Matt Spetalnick, read here.

Trapped ferry limits U.S. response to Libya crisis

A ferry carrying hundreds of Americans and other passengers that has become central to Washington’s response to Libyan leader Muammar Gaddafi’s bloody crackdown on opponents remained trapped in Tripoli. U.S. officials say they have tempered their response to the violence in Libya for fear that tougher language could invite retaliation against U.S. citizens in the North African country. High winds and rough seas have stalled the ferry’s departure.

For more of this story by Ross Colvin, read here.

Lawmakers urge Obama to release emergency oil

Three lawmakers have urged President Obama to consider tapping America’s emergency oil supply to help lower crude prices that have spiked above $100 a barrel over disruptions in Libya. The IEA, which coordinates policy among the world’s consumer nations, has said it would likely let OPEC move first to address any supply shortages. But the call by the Democratic Representatives suggests pressure is building for Obama to get more involved.

For more of this story by Tom Doggett, read here.

Pentagon to announce winner of US tanker saga

The Air Force will announce today the winner of an epic $35 billion procurement battle between Boeing and Airbus over 179 aerial refueling planes, its third attempt to start replacing a fleet of planes built before humans first landed on the moon. Analysts increasingly expect Airbus to win a price shootout that saw both companies submit aggressive offers.

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

For a related factbox, click here.

Saudi charged in US bomb plot, Bush possible target

A 20-year-old Saudi student has been arrested in Texas in a bomb plot that may have targeted former President George W. Bush and nuclear plants. Khalid Ali-M Aldawsari, who was attending college in Lubbock, Texas, was arrested by FBI agents. He was accused of terrorism charges involving the purchase of chemicals and equipment to make a bomb, with potential targets that included nuclear power plants. One of his e-mails included the Dallas address of Bush. Another cited three former military members who had been stationed at the Abu Ghraib prison, where Iraqis faced abuses by their American jailers.

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

Will this be Gingrich’s year for US presidential run?

Will this be the year that Republican Newt Gingrich finally steps into the presidential race, after years of talking about it? The former House of Representatives speaker, who led a conservative upsurge in the 1990s but lost a fight over government spending, is nearing a decision on whether to run. He would seem to be a natural for a campaign expected to be centered around the economy. He has been talking for years about the issues that gave birth to the conservative Tea Party movement — government spending and debt.

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

Foreclosure deal slowed by infighting-sources

Regulators’ efforts to settle with banks over improper mortgage foreclosures are being hampered by infighting among the groups in the talks, and a settlement may take a while, according to sources familiar with the matter. Banking regulators, a coalition of state attorneys general, and the biggest mortgage lenders are trying to forge a settlement with banks, which have been accused of foreclosing on borrowers without the necessary paperwork. Sources say the groups disagree on the size and scope of a settlement.

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

House panel may kill housing rescue programs

The Obama administration’s key housing market rescue programs have landed on the chopping block as the House Financial Services Committees scheduled a vote next week to terminate them. The panel’s Republican leadership said it will consider a bill to kill the Home Affordable Modification Program, which it said has failed to help a sufficient number of distressed homeowners to justify its cost.

For more of this story by David Lawder and Corbett Daly, read here.

Jobless claims fall, durable orders mixed

New claims for jobless aid fell last week, indicating labor market healing, but declines in new home sales and orders for a range of factory goods in January showed the recovery remains uneven. The recovery has been slow by historical standards and the unemployment rate remains at a painfully high 9 percent. But analysts see the economy making headway and saw the jobless claims data as evidence of better days ahead.

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

Commodity, energy to drive food prices higher-USDA

Consumers should brace for rising food costs this year as higher commodity and energy prices make their way to products lining grocery store shelves, USDA said. Food prices are forecast to rise a sharp 3.5 percent this year — nearly double the overall inflation rate. The lion’s share of the increase is expected in the second half of 2011. Just last month, USDA forecast an increase of 2.5 percent in 2011. “We’re keeping an eye on this but I would suggest that as a result of what we went through in 2007 and 2008 we are better prepared to respond as a country and as a globe,” Agriculture Secretary Tom Vilsack said at USDA’s annual Outlook Forum.

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

For a related graphic, click here.

Grain supplies to remain thin despite huge U.S. crops

Farmers will plant massive corn and soybean crops this spring but it may take more than two years to rebuild razor-thin stocks and quell the global surge in grain prices, USDA said. With growing concern among world governments over rising food prices, the U.S. corn stockpile is forecast to be the smallest since 1996 and soybeans would amount to a mere two-week supply by the time this year’s crops were ready for harvest. “While it is often said the cure for high prices is high prices, even with additional supplies expected this year, it is likely that the tight stocks-to-use situation will not be entirely mitigated over the course of one or even two growing seasons,” USDA Chief Economist Joseph Glauber told the department’s annual outlook conference.

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

For a related graphic, click here.

Nasdaq bid for NYSE would hit antitrust stumble

Antitrust regulators will give a hard look at any attempt by Nasdaq OMX Group Inc to acquire NYSE Euronext, experts said, with some predicting a prolonged review or “serious” snags. The Nasdaq Stock Market parent is mulling a rival bid for the operator of the Big Board, according to a source. In considering a Nasdaq bid for the NYSE, antitrust regulators at the Justice Department — which is most likely to look at such a deal — would likely focus on two issues: overlaps in equity options exchanges and equity exchanges, one expert said.

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

CFTC guidance on bans may keep traders guessing

The futures regulator proposed guidance on trades it will soon ban as disruptive, but one of its top officials said the new information would leave traders guessing about what is allowed and what is barred. The Dodd-Frank financial reform law banned three specific trading practices, but traders have complained the prohibitions are so vague that they could chill markets, or leave the CFTC tied up in court challenges if it tries to police the bans.  ”This proposal does not cure that vagueness,” said Jill Sommers, a Republican commissioner at the agency.

For more of this story by Roberta Rampton, read here.

IRS says it’s easing up on those who owe

The IRS is going to go easier on taxpayers who owe money, its commissioner said. “We are making fundamental changes to our lien system and other collection tools that will help taxpayers and give them a fresh start,” Doug Shulman told reporters. “I always encourage our employees to try to walk in the taxpayer’s shoes.”

For more of this story by Linda Stern, read here.

From elsewhere…

Dirty air triggers more heart attacks than cocaine

Air pollution triggers more heart attacks than using cocaine and poses as high a risk of sparking a heart attack as alcohol, coffee and physical exertion, scientists said. Sex, anger, marijuana use and chest or respiratory infections and can also trigger heart attacks to different extents, the researchers said, but air pollution, particularly in heavy traffic, is the major culprit. The findings, published in The Lancet journal, suggest population-wide factors like polluted air should be taken more seriously when looking at heart risks.

For more of this story, read here.

Photo credit: Reuters/Kevin Lamarque (Obama arrives for meeting of economic advisory council)

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