We hear the White House is not wildly pleased with former budget chief Peter Orszag for abandoning the party line on tax policy this week. Now Democrats in Congress are beginning to distance themselves from President Barack Obama’s push to let taxes rise for the wealthiest Americans. We are unlikely to see this resolved before the mid-terms anyway, and there are still several different ways this could pan out. One possible compromise would be a short extension of the tax cuts for the rich and a longer extension for the middle classes, keeping any crucial decisions as far away from the 2012 campaign season as possible.
More today on the potential for a reshuffle in Obama’s inner circle after the November elections, especially if Rahm Emanuel departs for Chicago. Democratic sources tell us Larry Summers, never that happy in his role, might be among those who leave, but that Treasury Secretary Tim Geithner is likely to stay the course.
One administration official who is flagging his own retirement is Defense Secretary Robert Gates. As we report from our Aerospace and Defense Summit in Washington this week, Gates used to be viewed by the defense industry with apprehension, but these days many industry executives see his efficiency drive as both sensible and as the best way to protect the overall defense budget. It seems he will be missed.
Elsewhere, a glimmer of hope on the economy with some data on trade and jobless claims that might see some economists revising up their forecasts for third quarter growth. And a nice blog from our Summit lifting the lid on the exclusive and secretive “Conquistadores del Cielo” club, an annual gathering of the head honchos of the aviation world, for some informal bonding and maybe a little rodeo in Wyoming.
Here are our top stories from today:
Data shows economic recovery still on track
New claims for unemployment benefits fell more than expected last week to a two-month low, while the trade deficit narrowed sharply in July, hopeful signs for the stuttering economic recovery. The data helped to calm fears of a sharp slowdown in growth and implied the economy could start working its way out of a soft patch.