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Washington Extra — Not another stimulus
Sep 8th
On Wednesday, President Barack Obama plans to announce his latest package of plans to stimulate the sagging U.S. economy, most of which are already known. It was hardly a surprise to see Republicans quickly positioning themselves to block the plans, but more disappointing to the White House must have been the cautious response even from the president’s fellow Democrats on the Hill, who simply said they were looking at the proposals.
Even more damning, perhaps, was the verdict from the financial markets, which greeted the news with a big yawn. Both the Dow and the S&P indices ended the day more than one percent lower, dragged down by fresh growth worries in Europe. Economists on Wall Street said the plans would not do enough for small businesses or to solve the Democrats’ biggest economic and political problem: finding work for the 14.9 million unemployed. There are big questions, too, about how the plans will be paid for. “If he chooses to take away a corporate tax break to pay for this proposal, the net gain is zero,” said Andrew Busch at BMO Capital Markets. “This is likely why U.S. stocks are not seeing much of a bounce on the news.”
Last week White House economic adviser Christina Romer left town with a plea for a new deficit-financed economic stimulus. Today it was the turn of former budget chief Peter Orszag to go public with his prescription for the economy and taxes, views which differ from those of his former boss. Orszag suggested that the Bush-era tax cuts should be extended for all Americans for another two years in an effort to spur the economy, with a promise they will be allowed to expire altogether at the end of 2012. It is a view which makes some economic sense, but is unlikely to get much traction with a president likely to be campaigning for re-election that same year.
Some interesting interviews on the first day of the Reuters Aerospace and Defense Summit here in Washington. The CEOs of Lockheed Martin and of Boeing’s defense wing said both companies were well aligned for the new reality of huge fiscal deficits and tight defense budgets. Both men expressed strong support for the administration’s recently announced export control reforms, as well as new plans to extend and expand tax credits on research and development. Lockheed Martin’s Robert Stevens said he also saw the global security environment changing significantly in coming decades: withdrawals from Iraq and Afghanistan, coupled with threats from the Korean peninsula, Iran and China meant resources were likely to be shifted away from land and towards air and naval defense systems.
Finally, strong words today from State Department spokesman P.J. Crowley on a Florida pastor’s plans to burn copies of the Koran on the anniversary of the 9/11 attacks. Crowley said the actions were “un-American”, and appealed to the world’s public not to assume that any action by the obscure Dove World Outreach Center, which boasts only around 30 members, represented anything larger about the United States. Sadly, one can only shudder at the thought of images of Americans burning the Koran being repeated endlessly on TV screens across the Muslim world.
Here are our top stories from today…
Analysis: Obama plan may miss the most important mark – jobs
President Barack Obama’s new stimulus plan directs government assistance to some of the strongest parts of the economy without solving the biggest problem: finding work for the 14.9 million unemployed. The three main ideas he plans to introduce on Wednesday — $50 billion in infrastructure spending plus two sets of business tax incentives — could provide a modest burst of activity in a slow-growing economy.
For more of this story by Emily Kaiser, read here.
Congress Republicans wary of Obama economy plan
Republicans in the Congress showed little willingness to help President Barack Obama approve $350 billion worth of measures to boost the economy with midterm elections less than two months away. Obama’s plans for billions of dollars in tax breaks for businesses are policies that Republicans typically embrace, but the party has little motivation to give the Democratic White House a win.
For more of this story by Thomas Ferraro and Steve Holland, read here.
Lockheed says aligned for “new reality”
Lockheed Martin Corp is well aligned with the Pentagon’s priorities as the defense industry braces for a “new reality” shaped by massive deficits, tighter budgets and rapidly changing security threats, Chief Executive Robert Stevens said. Lockheed, the world’s largest defense contractor, expects to reach an agreement with the Pentagon “any day now” for a fourth batch of F-35 fighter jets, and it sees no major obstacles in the way of an agreement, Stevens told the annual Reuters Aerospace and Defense Summit.
For more of this story by Andrea Shalal-Esa and Karen Jacobs, read here.
Boeing cuts costs as defense outlook dim
Boeing Co’s defense unit is working to cut overhead and improve productivity, given the outlook for flat defense spending in the United States and Europe, the company’s top defense executive said. Boeing expects to expand international sales and grow in areas such as cyber security and unmanned systems, Dennis Muilenburg, chief executive of the defense, space and security division, told the annual Reuters Aerospace and Defense Summit.
For more of this story by Andrea Shalal-Esa and Soyoung Kim, read here.
Democrats seek allies in consumer agency debate
Key Democratic lawmakers hope to exploit the rare August return of the House of Representatives to intensify pressure on the White House to nominate Elizabeth Warren as head of the new consumer financial protection agency. Representative Carolyn Maloney and House Financial Services Chairman Barney Frank are urging President Barack Obama to act swiftly to nominate Warren — who has alienated Wall Street and Republicans in her role as a watchdog of the government’s $700 billion bailout of the financial system.
For more of this story by David Clarke, read here.
Obama decision on consumer job, CEA may come soon
President Barack Obama may be moving closer to making a decision on two key economic jobs: the top consumer financial regulator and chairman of the White House Council of Economic Advisers. “I can’t rule out that, at some point, that may come during the week,” White House spokesman Robert Gibbs said when pressed on the timing of an announcement about the two positions.
For more of this story by Caren Bohan, read here.
Ex-budget chief differs with Obama on U.S. tax cuts
Tax cuts should be extended for all Americans to help spur the economy, but even the middle-class cuts should end in two years, former budget director Peter Orszag said. Orszag’s views differed from those of his former boss, President Barack Obama.
For more of this story by Caren Bohan, read here.
NIH to use BP cash to study spill health effects
The National Institutes of Health said it would use $10 million from BP to start a multiyear study to look at the potential health effects from the oil spill in the Gulf of Mexico.
For more of this story by Maggie Fox, Health and Science editor, read here.
What we are blogging…
State Dept: church Koran burning plan “un-American”
There have been lots of angry words over plans by an obscure Florida pastor to burn copies of the Koran on the anniversary of the 9/11 attacks. But State Department spokesman P.J. Crowley pulled out the biggest gun of all in his effort to distance the government from the pastor’s incendiary proposal — he called it “un-American.”
For Andrew Quinn’s full blog, click here.
From elsewhere…
Google to start TV service this autumn
Google Inc will launch its service to bring the Web to TV screens in the United States this autumn and worldwide next year, its chief executive said, as it extends its reach from the desktop to the living room.
For the full story, click here.
Can money buy happiness? Maybe, up to $75,000
Can money really make you happy? Not really, but up to about $75,000 a year can ease the pain of life’s stresses, researchers reported. A survey of 1,000 Americans shows they are overall fairly happy, and more money equals more satisfaction up to a point, Daniel Kahneman and Angus Deaton of the Center for Health and Wellbeing at Princeton University in New Jersey found.
For the full story, click here.
For more stories from our Washington correspondents visit www.reuters.com and stay informed.
Photo Credit: REUTERS/Brendan McDermid (Traders work on the floor of the New York Stock Exchange, September 7, 2010)
Cleveland was no accident, Gibbs confirms
Sep 8th
White House Press Secretary Robert Gibbs confirmed what had been suspected.
There was a reason for choosing Cleveland as the venue for President Barack Obama’s economy speech on Wednesday and his name is John Boehner — the man who would likely be House Speaker if Republicans oust the Democrats from control on Nov. 2.
Cleveland was where House Republican leader Boehner gave his economy speech two weeks ago in which he suggested Obama toss out his economic team, including Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers.
And it’s no accident that Boehner and Obama are paying so much attention to Ohio less than two months before the congressional elections – it’s a swing state with a crucial Senate race and several competitive House races.
To what extent was tomorrow’s speech a direct resonse to Boehner’s remarks from a couple of weeks ago?
“It’s in the same city and I think the president will use that opportunity to contrast a vision of returning to a decade of policy and value decisions that got us into this mess which, if you look back at what Congressman Boehner said in that speech, he seemed to lay out a strong predicate for the very same type of decisions that had been made over the past 10 years that got us into this mess. I anticipate the president will spend a decent amount of time discussing it,” Gibbs said.
And the shorter answer to whether the White House chose Cleveland because Boehner gave his speech there?
Gibbs: “Yes.”
Photo credit: Reuters/Yuri Gripas (Obama walks past Marine One helicopter)
Washington Extra – pain relief
Sep 4th
Just a few quick thoughts ahead of the Labor Day weekend. President Barack Obama plans to unveil a package of measures to stimulate hiring and the economy next week, although we are assured this will absolutely not be a second stimulus. I guess that means it won’t have a major price tag attached, in terms of its effect on the deficit. But you also have to wonder how much effect it will have on the economy, even if Obama manages to get any of it through Congress. 
Some relief, then, that this week’s economic numbers have not been as grim as many had feared. The private sector is not dead and buried, if today’s payrolls report is anything to go by. But don’t expect growth or hiring to pick up nearly fast enough to save the Democrats from pain in November.
Finally, take a look at our special report on the Food and Drug Administration’s efforts to crack down on increasingly aggressive marketing tactics by drug companies. Critics accuse Big Pharma of pushing medicines on people which they often do not need, without fully disclosing the risks. Sadly, even the FDA admits it is outgunned, and lacks the resources to keep pace.
Here are our top stories from today…
Obama says to address new economic ideas next week
President Barack Obama will outline new measures next week to boost the economy after August data showed again that jobs — the central issue in November elections — were being created too slowly. Obama, speaking to reporters in the White House Rose Garden, greeted a better-than-expected August employment report that showed thousands of new private sector jobs were created as “positive news.”
For Alister Bull and Jeff Mason’s full story, click here.
Payrolls data offer ray of hope for recovery
Employment fell for a third straight month in August, but the drop was far less than expected and private hiring surprised on the upside, easing pressure on the Federal Reserve to prop up economic growth. Nonfarm payrolls fell 54,000, the Labor Department said, helping assuage fears of a double-dip recession in financial markets that had looked for a drop of 100,000 jobs.
For more of this story by Lucia Mutikani, read here.
Special Report: Outgunned FDA tries to get tough with drug ads
It wasn’t what you would call a casual get-together. In February 2009, a popular New York blogger attended a brunch with fellow “frazzled moms.” They took in tips from a style expert and listened to a nurse extol the virtues of Mirena, a birth control device sold by Bayer Healthcare. The nurse was on Bayer’s payroll. In a series of events organized with the help of a women’s website, Mom Central, the pharmaceutical company gathered a captive audience of young mothers. It provided the nurse with a script and had the women fill out a survey before they left. The sessions earned a stern rebuke from the U.S. Food and Drug Administration.
For more of this story by Susan Heavey and Lisa Richwine, read here.
Fed bond buying not big policy shift: Lockhart
The Federal Reserve’s decision to begin buying Treasuries again was a “precautionary” step, not the opening salvo in a new policy course, Atlanta Fed President Dennis Lockhart said. Lockhart said markets overreacted to the decision, reading a major worsening into the Fed’s view of the world that had not taken place.
For more of this story by Pedro Nicolaci da Costa, read here.
Clinton: time ticking for Israel-Palestinian peace
Secretary of State Hillary Clinton urged Israel and the Palestinians to overcome the final obstacles to peace, saying their new talks may be a last chance to end the conflict. Clinton, speaking to Israeli and Palestinian television one day after direct peace talks between the two sides were relaunched in Washington, said skepticism and suspicion cannot be allowed to derail the talks as has happened so many times in the past.
For more of this story by Andrew Quinn, read here.
Government probes Mariner platform fire
The government launched an investigation into Mariner Energy Inc’s Gulf of Mexico platform fire, and a light oil sheen spotted near the offshore facility was not believed to be a leak, according to the U.S. Coast Guard.
For more of this story by Bruce Nichols, read here.
What we are blogging…
It was just a game of golf!
Ever since he played golf with President Barack Obama last week, New York newspapers have been rife with speculation that Mayor Michael Bloomberg is being wooed by the administration to replace Timothy Geithner as Treasury Secretary. The White House dismissed the speculation as fantasy and Bloomberg dismissed the idea. But still as summer draws to an end, what else is there to talk about going into the Labor Day holiday weekend except the lackluster economy?
For Donna Smith’s full blog, click here.
Photo credit: Reuters/Arnd Wiegmann (vessel on Rhine floats past administration building of Bayer AG chemical company)
It was just a game of golf!
Sep 4th
Ever since he played golf with President Barack Obama last week, New York newspapers have been rife with speculation that Mayor Michael Bloomberg is being wooed by the administration to replace Timothy Geithner as Treasury Secretary.
The White House dismissed the speculation as fantasy and Bloomberg dismissed the idea. But still as summer draws to an end, what else is there to talk about going into the Labor Day holiday weekend except the lackluster U.S. economy?
More bad news for Obama on Friday with the unemployment rate rising to 9.6 percent. The economy is not creating jobs fast enough to reduce the unemployment rate and give Democrats more comfort going into the Nov. 2 congressional elections with their majority in Congress at stake.
Some pundits suggest the gossip may be less about Bloomberg, who is serving a hard fought third term as mayor, and more about Geithner, who has come under fire from both the right and the left about his advice to Obama on the economy and the role he played in the 2008 government rescue of Wall Street.
As White House economic adviser Christina Romer leaves her post on Friday, following the departure of Peter Orszag as head of the Office of Management and Budget at the end of July, Obama so far is standing by his treasury secretary.
Would he really want to follow the advice of House Republican Leader John Boehner and fire Geithner and his National Economic Council Chairman Larry Summers just before an election that could put Republicans in charge of the House of Representatives?
Besides, some of the sourcing on the raft of speculation about Bloomberg has been thin as noted by a New York Magazine item pointing to a source used by another publication as ”one Democrat, who may or may not be the mayor’s hairstylist.”
Photo Credit: Reuters/Jason Reed (President Obama and Treasury Secretary Timothy Geithner stand together at Rose Garden remarks on the economy, and Geithner talks on cellphone)
Washington Extra – A glass half full, or half empty
Sep 3rd
Well at least no-one walked out, as one Middle East veteran remarked to me after the meeting between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas today. In fact, as our chief blogger Toby Zakaria observed, the public atmospherics between the two men were not too bad.
Seventeen years ago, President Bill Clinton practically forced Israeli Prime Minister Yitzhak Rabin and Palestinian leader Yasser Arafat to shake hands at the White House while observers held their collective breath. No such nudges were needed this week. Not only were there several, lingering handshakes, but even a brief animated conversation and a whispered aside.
But before we get carried away, my colleague Matt Spetalnick reminded us of all the obstacles facing the latest effort to forge peace in the Middle East. In decades of halting peace efforts, rarely has an Israeli-Palestinian peace process started with lower expectations. There were soaring words in public about the need for difficult compromises, but behind closed doors, the biggest tangible achievement was apparently an agreement to talk again.
Entrenched differences, the long history of mistrust, the looming expiration of a partial Israeli freeze on settlement-building, the threat from hardliners, and, perhaps above all, the political dynamics both men face at home: all reasons a breakthrough seems unlikely. Indeed many experts believe Netanyahu and Abbas have only come to the negotiating table, at least in part, to avoid being seen by President Barack Obama as the spoiler.
On the economy, it was a similar story, a glass half full or half empty depending on your mood. True there was better news from the housing and jobs markets, and from retailers, suggesting the economy might not after all be heading for a double dip recession. Nor, though, are we out of the woods or enjoying a Summer of Recovery. Indeed, most economists think tomorrow’s all important monthly labor market report could make for more grim reading.
Here are our top stories from today…
Israelis and Palestinians agree to more peace meetings
Israeli and Palestinian leaders opened direct peace talks under U.S. auspices and agreed to meet every two weeks to try to forge a deal within a year to end a conflict that has boiled for six decades. Secretary of State Hillary Clinton, who hosted the talks between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, expressed confidence that this effort could succeed where so many others have failed.
Read Andrew Quinn and Jeffrey Heller full story here, and Matt Spetalnick’s analysis here.
U.S. data dampen fears of new recession
Pending sales of previously owned homes rebounded unexpectedly in July and new claims for jobless benefits fell last week, helping dampen fears the economy could face a double dip recession. The data, including sturdy sales from retailers last month, followed a report on Wednesday showing a surprising gain in manufacturing activity and suggested the economy retained some underlying strength.
For more of this story by Lucia Mutikani, read here.
Bernanke takes blame for muddling message on Lehman
Federal Reserve Chairman Ben Bernanke said he was partly to blame for leaving the wrong impression that the central bank could have saved Lehman Brothers from failure in 2008. Bernanke, testifying before a congressional commission examining the causes of the worst financial crisis in 80 years, said he thought it “very likely” the investment bank was insolvent and lacked sufficient collateral to borrow enough from the central bank to avert collapse.
For more of this story by Mark Felsenthal and Dave Clarke, read here.
‘Quote stuffing’ a focus in flash crash probe
Regulators probing the May flash crash are focusing on a trading practice known as “quote stuffing”, in which large numbers of rapid-fire orders to buy or sell stocks are placed and canceled almost immediately. CFTC commissioner Scott O’Malia told Reuters that the futures regulator was reviewing data from Nanex LLC, a trade database developer that issued a study suggesting that computer algorithms used quote stuffing to gain an edge during the May 6 crash.
For more of this story by Roberta Rampton, Rachelle Younglai and Jonathan Spicer, read here.
U.S. sues Arizona sheriff in immigration probe
The Justice Department sued an Arizona sheriff for refusing to cooperate with its investigation into allegations the sheriff discriminates against Hispanics in his program to crack down on illegal immigrants.
For more of this story by Jeremy Pelofsky, read here.
Workers see higher health costs, less care
Companies are cutting healthcare costs further amid a continuing sour economy, scaling back benefits and shifting a greater share of the expense to employees. The findings come as the congressional campaign heats up over the nation’s stagnant economic growth and whether recently passed healthcare reforms should be repealed.
For more of this story by Susan Heavey, read here.
What we are blogging…
Mideast peace veterans and handshake diplomacy
Secretary of State Hillary Clinton repeatedly referred to them as “veterans” of the Middle East peace process. That description is probably one thing everyone can agree on. The process to bring Israelis and Palestinians to a lasting peace agreement has been going on for decades and every U.S. president hopes he’s the one who will finally achieve what those before him tried and failed.
For Toby Zakaria’s full blog, click here.
From elsewhere…
God did not create the universe, says Hawking
God did not create the universe and the “Big Bang” was an inevitable consequence of the laws of physics, the eminent British theoretical physicist Stephen Hawking argues in a new book.
For the full story, click here.
Hurricane Earl bears down on East Coast
Hurricane Earl took aim at North Carolina and was on track to lash its barrier islands with dangerous winds and pounding surf before cutting a path up the East Coast to Canada.
For the full story, click here.
For more stories from our Washington correspondents visit www.reuters.com and stay informed.
Photo Credits: REUTERS/Jason Reed (Clinton (L) and George Mitchell, U.S. Special Envoy for Middle East Peace (2nd L), Netanyahu (R), Abbas (2nd R) at the State Department)
Obama to push message on economy, hold news conference
Sep 3rd
Washington pundits questioned President Barack Obama’s decision to devote so much time this week to foreign policy with his Iraq speech on Tuesday and his foray on Wednesday into Middle East peacemaking at a time when Americans are preoccupied with the economy.
But Obama’s message next week seems like it will be heavily focused on jobs and the economy. He will mark Labor Day with a “Laborfest” event on Monday in Milwaukee and travel to Cleveland on Wednesday for an event on the economy. 
On Friday, he will hold a news conference at the White House.
Could next week bring a decision on how he will fill two key jobs — chairman of the Council of Economic Advisers and the head of the new U.S. consumer agency?
White House spokesman Robert Gibbs won’t say. But he did advise that it was unlikely there would be a decision on either of those jobs this week.
Meanwhile, speculation is growing that Austan Goolsbee is the favorite to replace departing CEA chair Christina Romer and that Elizabeth Warren is likely to be tapped as head of the Consumer Financial Protection Bureau.
Talk that the White House might be getting ready to make an announcement on Warren grew on Thursday after The Washington Post reported that the Harvard law professor and outspoken consumer advocate will no longer be teaching a contracts class that had been on her schedule for the fall.
But a Harvard spokesman said she is still scheduled to teach another course.
Photo credit: Reuters/Jim Young (Treasury Secretary Timothy Geithner greeted by Elizabeth Warren, December 2009)
Mideast peace veterans and handshake diplomacy
Sep 2nd
Secretary of State Hillary Clinton repeatedly referred to them as “veterans” of the Middle East peace process.
That description is probably one thing everyone can agree on. The process to bring Israelis and Palestinians to a lasting peace agreement has been going on for decades and every U.S. president hopes he’s the one who will finally achieve what those before him tried and failed. 
President Barack Obama is the latest to take up the baton. He’s already won the Nobel Peace Prize, but will he be The One to triumph on Middle East Peace?
“We are under no illusions,” Obama said on Wednesday when he met with leaders ahead of today’s talks. “Passions run deep. Each side has legitimate and enduring interests. Years of mistrust will not disappear overnight.”
That last sentence is another thing that probably everyone can agree on.
But if the Israeli-Palestinian leaders’ handshakes over the years are any kind of indicator, perhaps there is a glimmer of hope.
Seventeen years ago in September 1993, President Bill Clinton practically forced Israeli Prime Minister Yitzhak Rabin and Palestinian leader Yasser Arafat to shake hands at the White House while observers held their collective breath wondering will they or won’t they?
No nudges needed this week, the handshakes flowed.
Before Wednesday evening’s White House dinner, my colleague Jeff Mason who was in the East Room observed that when Israeli Prime Minister Benjamin Netanyahu returned to his seat from the podium, Palestinian President Mahmoud Abbas was in the process of standing up when they had a lingering handshake.
When it came time for Abbas to return from the podium, he and Netanyahu had another brief, cordial handshake. And while they were seated, Netanyahu was observed whispering in Abbas’ ear, showing a smidgeon of rapport between the leaders.
This morning at the State Department, my colleague Jeffrey Heller tells me that both leaders shook hands and engaged in animated conversation for a few moments in what appeared to be a relaxed atmosphere.
Perhaps in addition to breaking bread, some ice was broken at last night’s dinner…
Photo credit: Reuters/Gary Hershorn (top) and Jim Young (combination photo of Bill Clinton, Rabin, and Arafat, contrasted with Hillary Clinton, Netanyahu and Abbas), Reuters/Jim Young (Netanyahu and Abbas at White House ), Reuters/Jason Reed (Netanyahu and Abbas reach to shake hands in front of Clinton)
Inside “Vanity Fair” world of Sarah Palin
Sep 2nd
So you think you know Sarah Palin?
There’s so much more to the former Alaska governor and possible 2012 presidential candidate than is on public view, according to a new and very lengthy “Vanity Fair” profile, which takes readers behind the scenes and into “the surreal new world Palin now inhabits.”
It’s not pretty. Indeed, her supporters at Conservataives4Palin have gone on defense calling it “a hit piece.” And Palin tweets that it’s “yellow journalism.”
The article by writer Michael Joseph Gross goes on extensively about a lot of things that do not cast the former governor in a nice light, including:
- Palin’s new vocation — “She keeps tight control of her pronouncements, speaking only in settings of her own choosing, with audiences of her own selection, and with reporters kept at bay.”
- Her temperament — “As soon as she enters her property and the door closes, even the insects in that house cringe. She has a horrible temper, but she has gotten away with it because she is a pretty woman.” (attributed to a friend of the Palins’)
- Her image — “This whole hunter thing, for Sarah? That is the biggest fallacy,” says one longtime friend of the family. “That woman has never hunted.”
- Her tipping — Not so generous with the gratuities, according to maids and bellhops at a couple of hotels in the Midwest.
- And her underwear — Something about Spanx girdles and push-up bras.
There’s a reason they call them unmentionables.
The folks at Conservatives4Palin point out that even some people who aren’t Palin fans agree that mentioning the underwear was just wrong.
Among them, New York Times Op-Ed columnist Charles M. Blow who tweeted: “When’s the last time you read a profile of a male politician that mentioned his underwear? This is the kind of thing that crosses the line.”
Photo Credits: REUTERS/Jonathan Ernst Palin greets the crowd at the Lincoln Memorial in Washington for TV commentator Glenn Beck’s “Restoring Honor” rally)
Washington Extra -The audacity of hope?
Sep 2nd
If rescuing the U.S. economy from the Slough of Despond wasn’t enough, President Barack Obama took a stab at finding peace in the Middle East today. Obama is determined to forge a new relationship with the Muslim world, and presumably would like to unquestionably earn the Nobel Peace Prize he was awarded last year.
But getting embroiled in the Middle East is a risk for the president, not least because failure to reach an accord could set back his efforts to win over Muslims and achieve solidarity over Iran. Ordinary Israelis and Palestinians are not optimistic about this latest peace effort, and experts say the one-year deadline to reach a deal does not appear very realistic. Nevertheless, it is hard to argue with Obama’s opening remarks today, and his hope that “extremists and rejectionists” should not be allowed to derail the peace process.
It is often interesting when high-ranking officials leave office and get the chance to unburden themselves. White House economist Christina Romer was no exception today, issuing an impassioned plea for more economic stimulus measures, even if they push up the fiscal deficit in the short term. “The only sure-fire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less. In my view we should be moving forward on both fronts,” she said in a speech at the National Press Club. “I desperately hope that policymakers on both sides of the aisle will find a way to finish the job of economic recovery,” she added. WashingtonExtra won’t be holding its metaphorical breath.
Finally today, another win by a Tea Party favorite in Alaska this week underlines that the movement is not just a passing fad, and has the staying power to be a significant factor in November’s Congressional elections. What’s more, Democratic hopes that radical Tea Party candidates will alienate moderate voters and energize Democrats are not being realized. In fact, Tea Party favorites are already ahead of Democratic rivals in the opinion polls in Colorado, Kentucky and Florida, and only slightly behind in Nevada.
Here are our top stories from today…
Obama opens Mideast peace summit, says U.S. resolute
President Barack Obama vowed that “extremists and rejectionists” would not derail the relaunch of Israeli-Palestinian negotiations as he opened a peace summit shadowed by Middle East violence. Wading into Middle East diplomacy in the face of deep skepticism over his chances for securing an elusive peace deal, Obama condemned as “senseless slaughter” a Hamas attack on Tuesday that killed four Jewish settlers in the occupied West Bank.
For more of this story by Matt Spetalnick and Jeffrey Heller, read here.
Romer: U.S. must find will for further stimulus
Departing White House economist Christina Romer said the United States needed to find the political will for more economic stimulus, even if it pushed up the fiscal deficit in the short run. “While we would all love to find the inexpensive magic bullet to our economic troubles, the truth is, it almost surely doesn’t exist,” Romer said in a speech at the National Press Club.
For the full story by Caren Bohan, click here.
Tea Party promises to be a force in November
With another win in a Senate Republican primary, this time in Alaska, the conservative Tea Party movement showed it is more than a political fad and has the staying power to be a significant force in November’s elections. Polls show Tea Party favorites leading or running nearly even with Democratic foes in a handful of high-profile Senate races that could shift the balance of power in Congress — or at least inject a potent new strain of anti-spending, anti-big government conservatism into the staid Senate.
For more of this story by John Whitesides, read here.
Gunman takes hostages at US Discovery Channel
A man carrying a gun and possibly with explosives strapped to his body took a small number of hostages in the Discovery Channel headquarters building in suburban Washington. “Right now we have an unconfirmed number of hostages, a small number of hostages that are with the suspect at this point,” Tom Manger, Montgomery County police chief, told reporters. The man entered the building wearing what appeared to be metallic canister devices on his front and back and he pulled out a hand gun, Manger said.
For the full story by Maggie Fox, click here.
Send Pakistan aid, not jobs, U.S. textile groups say
Textile groups and cotton farmers strongly objected to proposed new trade benefits for Pakistan, saying the United States should send aid to the flood-ravaged country, not U.S. jobs. The groups expressed their concern in a letter to Secretary of State Hillary Clinton and Trade Representative Ron Kirk, who were urged last week by the Chamber of Commerce, a leading U.S. business group, to press Congress for a generous package of U.S. textile tariff cuts to help Pakistan recover.
For more of this story by Doug Palmer, read here.
Crisis panel chair: Politics may have doomed Lehman
Officials appeared to have made a policy decision not to bail out Lehman Brothers, the head of a panel investigating the financial crisis said, challenging the view of regulators that they had no legal authority to help. The comments lent support to former Lehman Chairman Richard Fuld’s contention that the Federal Reserve and Treasury could have done more to prevent his firm’s 2008 bankruptcy, which hastened the worst global recession since World War Two.
For more of this story by David Lawder and Dave Clarke, read here.
Obama struggles with urgent task of fixing economy
President Barack Obama has declared fixing the economy his “central mission” but he has few tools to bring down nearly double-digit unemployment or jump-start the faltering recovery this year. To get a quick fix, he would need a big initiative, but the president stands almost no chance of getting Congress to pass any substantial legislation in the few weeks left before the mid-term elections — a stretch of time he calls the campaign “silly season.”
For more of this analysis by Caren Bohan, read here.
Manufacturing grows in August but private jobs cut
The manufacturing sector grew faster than expected in August, but private employers unexpectedly cut jobs, showing the economic recovery still faces headwinds.
For more of this story by Lucia Mutikani and Burton Frierson, read here.
U.S. delays controversial decision on Web traffic rules
U.S. communications regulators on Wednesday put off a controversial decision on Internet traffic rules, giving industry and consumer groups a chance to forge a compromise while avoiding a politically sensitive issue ahead of the November elections.
For more of this story by John Poirier, read here.
What we are blogging…
Republican “Young Guns” take aim at Democratic-led Washington
Republican Representatives Eric Cantor, Paul Ryan and Kevin McCarthy are all in their 40’s. Yet with many of their colleagues far older — in their 60’s, 70’s and 80’s — they call themselves the “Young Guns,” part of a new breed of Republicans ready to challenge their Grand Old Party and take on Democratic-led Washington.
For Thomas Ferraro’s full blog, click here.
The World Bank’s $6 billion man on climate change
As the special envoy on climate change for the World Bank, Andrew Steer might be thought of as the $6 billion man of environmental finance. He oversees more than that amount for projects to fight the effects of global warming.
For Deborah Zabarenko’s full blog, click here.
From elsewhere…
Apple takes wraps off new lineup of iPods
Apple Inc unveiled a snazzier line of its iPod, with new designs for every model of the popular media device in hopes of kick-starting holiday sales. “We’ve gone wild,” Apple co-founder Steve Jobs said. “It’s the biggest change in the iPod lineup ever.” At a presentation to reporters and investors, Jobs said that to date the company has sold 275 million iPods.
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Photo Credit: REUTERS/Jason Reed (Obama speaks to the media about the Middle East Peace talks staged at the White House , alongside Secretary of State Hillary Clinton (L) and George Mitchell, U.S. Special Envoy for Middle East Peace)
Republican “Young Guns” take aim at Democratic-led Washington
Sep 2nd
Republican U.S. Representatives Eric Cantor, Paul Ryan and Kevin McCarthy are all in their 40’s.
Yet with many of their colleagues far older — in their 60’s, 70’s and 80’s — see themselves as “Young Guns,” part of a new breed of Republicans ready to challenge their Grand Old Party and take on Democratic-led Washington.
“Young Guns: A New Generation of Conservative Leaders,” is the title of their book.
Published by Simon & Schuster, it’s to be on book shelves on September 14 in advance in advance of the Nov. 2 election that may see Republicans win control of the House from President Barack Obama’s Democrats.
“We’ve seen both parties ignore the needs of Americans while they concentrate on doing favors for the special interests that get them elected,” Cantor writes in his section of the book.
“Don’t get me wrong. We’re proud Republicans,” Cantor adds. “We just believe that our party has at times lost sight of the things we believe in, ideas like economic freedom, limited government, the sanctity of life, and putting families first.”
Ryan makes a plug for his “Roadmap for America’s Future.” Embraced so far by relatively few House Republicans, it includes gradually raising the retirement age to 70, reducing future Social Security benefits for the rich and putting Medicare and Medicaid recipients in private insurance plans.
With the U.S. facing record deficits, Ryan writes, “The problem, in a nutshell is this. Medicare, Medicaid and Social Security — three giant entitlements — are out of control.”
McCarthy introduces readers to a number of ”Young Gun” House Republican candidates who he says are ready to “stand for solutions based on American principles.”
Cantor, Ryan and McCarthy are members House Republican leadership. Ryan is the top Republican on the House Budget Committee while McCarthy is House minority chief deputy whip.
As House minority whip, Cantor is the chamber’s number two Republican, behind House Minority Leader John Boehner.
There are few mentions of Boehner in the nearly 200-page book, which is certain to stir discussion among House Republicans.
Boehner is line to be elected House speaker if Republicans take the chamber. But in the book’s foreword, Fred Barnes, editor of The Weekly Standard, writes Cantor may get the job.
“I’m convinced Eric Cantor will be speaker or majority leader the next time Republicans control the House,” writes Barnes, who first dubbed Cantor, Ryan and McCarthy as the “Young Guns” in a 2007 profile of them.
Joe Scarborough, a former House Republican turned MSNBC talk show host, ripped into the three on air on Wednesday for embracing the “Young Guns” moniker. Laughing, he noted they are all middle aged.
A spokesman for the three brushed off such criticism, saying, “Young Guns is not about age, it’s about a concept and a long-term vision for a new generation of conservatives.”
Photo Credit: REUTERS/Larry Downing (U.S. House Republican Leader John Boehner and Republican Whip Eric Cantor walk through the Capitol)