Washington Extra – Driver’s seat

February 1, 2012

The day the Congressional Budget Office forecast that the United States is headed for its fourth straight year with a $1 trillion-plus budget deficit, President Obama touted the benefits of big government spending.

His venue? The Washington auto show. His tools? Shiny new American cars, preferably those from General Motors and Chrysler. Those were the two companies that received billions in a 2009 taxpayer funded bailout that has obviously paid off, both for the automakers and the Obama administration.

The president got behind the wheels of muscle cars, SUVs, trucks, and fuel efficient and electric models and proclaimed “The U.S. auto industry is back.” But he couldn’t just leave it at that, for there were more political points to score. He did so by taking a veiled swipe at his most likely opponent in the November election – Mitt Romney – for having opposed the bailout that helped bring Detroit back from the brink.

“It’s good to remember the fact that there were some folks who were willing to let this industry die,” Obama said.

Here are our top stories from Washington…

U.S. set for 4th year of $1 trillion-plus deficit-CBO

The United States is headed for a fourth straight year with a $1 trillion-plus budget deficit, congressional forecasters said, giving Republicans ammunition to hammer President Obama’s spending record. The CBO report is the opening salvo in the 2012 debate over the appropriate size of the federal government in coming years and whether the wealthy should shoulder more of the burden in fixing a fiscal mess highlighted by a national debt that has topped $15 trillion and is racing higher.

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

At auto show, Obama takes swipe at Romney

After getting behind the wheel of shiny new American cars at a Washington auto show, President Obama took a veiled swipe at likely White House opponent Mitt Romney for having opposed the 2009 auto bailout. “The U.S. auto industry is back,” Obama told reporters. “It’s good to remember the fact that there were some folks who were willing to let this industry die. Because of folks coming together we are now in a place where we can compete with any car company in the world.”

For more of this story, read here.

Romney confident, Newt to press on as Florida votes

Anticipating victory in Florida’s game-changing Republican presidential primary, Mitt Romney looked ahead while struggling rival Newt Gingrich vowed to press on. Florida is the largest nominating contest so far this year and, with double-digit leads in statewide polls, Romney seemed headed for a big boost in the battle to decide who will face President Obama in November. If Romney wins as expected, it would mark a sharp reversal of fortune for Gingrich.

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

Gingrich raises $10 mln in end 2011, $5 mln in January

Newt Gingrich raised about $10 million in the last three months of 2011 and $5 million in January, giving him the financial footing to stay in the race even if he loses Florida.

For more of this story, read here.

PayPal co-founders fund pro-Paul Super PAC

Co-founders of online payment service PayPal, now owned by eBay, donated to the Super PAC group supporting Republican presidential candidate Ron Paul, the group disclosed.

For more of this story by Alina Selyukh, read here.

US comedian Colbert’s Super PAC raises $1 million

Stephen Colbert’s presidential aspirations may not be serious, but his fundraising is. The comedian’s Super PAC announced that it has raised more than $1 million.

For more of this story, read here.

Oil reports may offer Obama an out on Iran

President Obama will soon get regular, albeit incomplete, reports on how oil markets are coping ahead of broader sanctions on Iran that could help him justify easing off sanctions to prevent a politically damaging jump in crude prices. Under the latest Iranian sanctions, the EIA must begin issuing reports by Feb 29 and every two months after that on oil production and prices as the United States moves to squelch Iranian oil shipments. The irony is that while the sanctions were designed to hit Iran, global oil prices could rise due to rising tensions over the sanctions and that could trouble Obama.

For more of this analysis by Timothy Gardner, read here.

Obama returns focus to small-business tax breaks

President Obama sought to revive a plan to give small businesses tax breaks and help start-up firms, ideas he proposed over the last year and which will feature in his 2013 budget next month, the White House said. Obama told a meeting of his cabinet that a top priority in this election year was to have Congress eliminate capital gains for investments in small businesses and extend some deductions for equipment and software purchases, to help smaller firms grow faster and create more jobs.

For more of this story, read here.

U.S. assessing risks of Taliban transfer-Petraeus

The Obama administration asked intelligence agencies for additional assessments of the risks of transferring five senior Taliban detainees to a third country as part of efforts to broker peace with Afghan militants, spy chiefs told Congress. The intelligence officials did not specify which country might be involved. But Reuters and other news agencies have reported that the detainees could be sent to the Gulf state of Qatar.

For more of this story by Mark Hosenball and Susan Cornwell, read here.

Democrats defend Obama administration over bungled gun sting

Democrats in the House of Representatives sought to blunt political attacks on the Obama administration over a botched gun sting operation, finding that the idea of allowing weapons to go across the border to Mexico came from field agents and prosecutors. Democrats issued the report just two days before Republicans on the same panel plan to grill Attorney General Eric Holder about the “Fast and Furious” operation.

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

Google defends change to privacy policies

Planned changes to Google’s privacy policies that have caught the attention of lawmakers would not take away the control its customers have over how data is collected and used, the company said in a blog post. When the new policy comes into effect on Wednesday, information from most Google products will be treated as a single trove of data, which the company could use for targeted advertising.

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

From elsewhere…

Nevada is friendly turf for Republican Romney

The next state in the Republican nominating contest, Nevada, is friendly turf for front-runner Mitt Romney, who easily won here four years ago and is perhaps even stronger in the state this time round. “I think it would be the upset of the upsets,” David Damore, a political scientist at the University of Nevada at Las Vegas, said of prospects of a win by anyone other than Romney.

For more of this story, read here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo Credits: REUTERS/Larry Downing (Obama inside a Chevy Silverado); REUTERS/Brian Snyder (Romney); REUTERS/Raheb Homavandi (View of  an oil dock seen from a ship in  Chabahar,  186 miles east of the Strait of Hormuz)

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