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Poll: Voters want court to kill Obama health care law

Posted by David Jackson, USA Today · November 23, 2011 3:43 PM · 1 reaction
A new poll shows that most voters want the Supreme Court to overturn President Obama's health care law, with opposition and support falling largely along party lines.

Overall, voters oppose the law by 48%-40%, according to the Quinnipiac University survey. Democrats support the Obama health care effort by 70%-19%, while Republicans oppose it by 86%-8%.

The Quinnipiac survey found independent voters opposed to the law by 45%-38%.

Of course, voters won't decide the fate of the health care law in the Supreme Court -- that's up to the justices, and they are likely to make a ruling by late June.

Whatever the court's ruling, health care figures to be a major factor in next year's election. The Republican presidential candidates have vowed to repeal what they call "Obamacare."

The health care numbers are included in a Quinnpiac Poll that also says, "Economic sanctions to stop Iran from developing nuclear weapons aren't effective, American voters say 60%-33%, and 50% of voters say the U.S. should take military action to stop Iran's nuclear program if sanctions don't work."

Obama's performance numbers in the poll aren't so great, notes National Journal:

A new Quinnipiac Poll released on Wednesday underscores the deep challenges facing President Obama next year, particularly when it comes to the groups he needs to win over for his reelection.

Only 44% of registered voters approve of Obama's performance, while half of the country disapproves of his performance, according to the survey. His job-approval rating is only at 42% among independents.

White voters continue to view Obama negatively -- just 37 % back the job he has done as president, the poll found, including only 34% of blue-collar whites. The numbers are better among whites with a college degree -- 42% support Obama -- but that's still a notable drop-off from the support he received in 2008. Then, 47% of whites with a college degree voted for Obama, according to exit polling.

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Ex-Solyndra Staff Eligible For TAA Federal Aid; Packages Worth Average $13,000 Each

Posted by IBD - Sean Higgins · November 22, 2011 1:26 PM · 1 reaction

The Labor Department today announced that it had approved Trade Adjustment Assistance for the former employees of the bankrupt solar panel maker Solyndra.

That means all of the firm’s 1,100 ex-employees are eligible for federal aid packages, including job retraining and income assistance. The department has valued packages at about $13,000 a head.

Taxpayers will have to cough up yet another $14.3 million as a result of Solyndra’s bankruptcy. They are already on the hook for $528 million in federal loan guarantees to the company that are unlikely to ever be paid back.

The department’s decision also bodes well for a trade complaint made against China by a coalition of domestic solar panel makers. The request for the TAA was based on the claim that Solyndra failed because China was underselling U.S. manufacturers. By granting the assistance, the Labor Department has indicated it believes those charges have at least some merit.

The announcement was made quietly today by the DOL’s Employment and Training Administration on its website. The decision was reached Friday.

There was some confusion regarding the decision, which was posted on the DOL website accidentally this morning before the official announcement. A department spokesman told Capital Hill that a programming error was the cause. DOL briefly pulled the information, but has reposted it.

The TAA request was first made on Sept. 2, just days after Solyndra went bankrupt. The Alameda County Workforce Investment Board, a public-private group that aids in job retraining programs, made the request on behalf of the employees.

“We are very pleased,” said Patti Castro, interim director of the board. “These workers are highly skilled but they need the retraining available through this.”

Most TAA requests take 60 days to process according to DOL, but this one took about 80.

The department said the delay was caused by a Senate fight over reauthorizing the program.

“During that period all pending TAA announcements were put on hold,” said DOL spokesman Joshua Lamont.

That fight was triggered in part by Republican lawmakers’ outrage that Solyndra employees were up for TAA help.

As it happens, the decision to grant the aid was made the day after Energy Secretary Steven Chu had a long-expected and highly contentious hearing before a House panel over the Solyndra failure.

 Lamont said the administration did not delay the decision until after Chu’s testimony.

The Obama administration has apparently pushed to delay bad news regarding Solyndra before.

The TAA program offers help to domestic workers who have lost their jobs due to the trade practices of foreign countries. The assistance includes job retraining, allowances for job searching, health benefits and up to 130 weeks of income support. The average recipient gets about $13,000 in assistance.

Solyndra was given a $535 million federal loan guarantee in 2009 by the Obama administration as part of a program to boost green jobs. The company was a favorite of the administration, with President Obama himself visiting its Fremont, Calif., location and singing its praises in 2010.

A top Obama fundraiser, George Kaiser, was a major backer of the company through his namesake foundation and discussed the company with White House officials in at least one private meeting in 2010.

Behind the scenes, the company was bleeding cash and seeking a second DOE loan to stay afloat. By late 2010 it had defaulted on the original loan and DOE agreed to a restructuring to allow the company to survive.

The renegotiation included giving private investors first crack at the first $75 million recovered in the event of liquidation. The decision was in apparent violation of DOE loan rules. It all but ensures that taxpayers will recover none of the original loan.

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‘Super Committee’ Fails to Reach Agreement, Obama Threatens to Veto Any Effort to Get Rid of $1.2T in Automatic Cuts

Posted by Christopher Santarelli · November 21, 2011 10:22 PM · 1 reaction
Congress’ supercommittee conceded ignominious defeat Monday in its quest to conquer a government debt that stands at a staggering $15 trillion, unable to overcome deep and enduring political divisions over taxes and spending.

Stock prices plummeted at home and across debt-scarred Europe as the panel ended its brief, secretive existence. Republicans and Democrats alike pointed fingers of blame, maneuvering for political advantage in advance of 2012 elections less than a year away. Both sides agreed action was still required, somehow, and soon.

“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve,” the panel’s two co-chairs, Sen. Patty Murray, D-Wash., and Rep. Jeb Hensarling, R-Tex., said in a somber statement.

They added it was not possible to present “any bipartisan agreement” – omitting any reference to the goal of $1.2 trillion in cuts over a decade that had been viewed as a minimum for success.

President Barack Obama held a press conference at 5:45 p.m. Monday to discuss the committee’s impotence, and threatened that he will veto any effort to get rid of automatic spending cuts that would take effect in 2013 if Congress can’t find other ways of trimming government deficits.

“Instead of pointing fingers and playing the blame game, Congress should act,” said Jay Carney. He said the automatic cuts that would fall on the Pentagon are “deeper than we think is wise,” but he added the administration does not think Congress should undo them. Obama signed the legislation earlier in the year that mandates the cuts as a stopgap in case the committee failed to agree.

“There are too many Republicans in Congress who have refused to listen to the voices of reason and compromise, that are coming from outside of Washington,” said President Obama Monday evening. “They continue to insist on protecting the hundred billion dollars worth of tax cuts for the wealthiest 2 percent of americans at any cost. Even if it means reducing the deficit with deep cuts to things like education and medical research. Even if it means deep cuts in Medicare.”

Some Republicans said Obama shared the blame for any failure. “It’s amazing to what lengths he will go to avoid making tough decisions,” said Texas Gov. Rick Perry, a GOP White House hopeful.

Based on accounts provided by officials familiar with the talks, it appeared that weeks of private negotiations did nothing to alter a fundamental divide between the two political parties. Before and during the talks, Democrats said they would agree to significant savings from benefit programs like Medicare, Medicaid and Social Security only if Republicans would agree to a hefty dose of higher taxes, including cancellation of Bush-era cuts at upper-income brackets. In contrast, The GOP side said spending, not revenue, was the cause of the government’s chronic budget deficits, and insisted that the tax cuts approved in the previous decade all be made permanent.

The Democrats’ “idea was this was the opportunity to raise taxes,’” said Sen. Jon Kyl of Arizona, the Senate’s second-ranking Republican and a member of the supercommittee. “It didn’t matter what we proposed; the price of that was going to be $1.3 trillion in new taxes,” he added in a CNBC interview, although Democrats made at least two offers that called for smaller amounts of additional tax revenue.

Sen. John Kerry, D-Mass., said on MSNBC, “I have demonstrations outside my office. I’ve had rallies. I’ve had unbelievable amount of pushback because we were ready and prepared to put on the table some of those so-called sacred cows.” Republicans, he said, refused to consider cancellation of the tax cuts for the wealthy.

The talks also were hampered by internal divisions within both parties.

Republicans offered a plan crafted by Sen. Pat Toomey of Pennsylvania about two weeks ago that included an additional $250 billion in tax revenue through an overhaul of the tax code that included reducing the top tax rate from 35 percent to 28 percent. Some Republicans criticized it as a violation of the party’s long-standing pledge not to raise taxes. Even some in the GOP leadership, including Senate Republican Leader Mitch McConnell of Kentucky and House Majority Leader Eric Cantor of Virginia, declined to endorse it in public.

At the same time, Democrats ridiculed it as a tax cut for the rich in disguise – even privately criticizing Sen. Dick Durbin, D-Ill., when he said it could signal a breakthrough – and it failed to generate any momentum toward compromise. Senate Majority Leader Harry Reid, D-Nev., and others also accused Republicans of bowing to the wishes of Grover Norquist, an anti-tax activist whose organization has gathered signatures from GOP candidates on a petition pledging never to raise taxes.

And Democrats had problems of their own. An offer presented by Sen. Max Baucus, D-Mont., to cut about $3 trillion from future deficits failed to win the backing of two of the six committee members of his own party. Officials said they objected because it would have curtailed future cost-of-living increases for Social Security recipients. Some Senate liberals spoke out against the provision in speeches, Baucus jettisoned it from a subsequent offer and Republicans cited that as an example of Democratic intransigence.

The panel’s failure marked the end of an extraordinary yearlong effort by divided government to grapple with budget deficits that lawmakers of both parties and economists of all persuasions agreed were unsustainable.

Negotiations in the Capitol led by Vice President Joseph Biden were followed by an extraordinary round of White House talks in which Obama and House Speaker John Boehner sought a sweeping compromise to cut trillions from future deficits. They outlined a potential accord that would make far-reaching changes in Medicare and other programs, while generating up to $800 billion in higher revenue through an overhaul of the tax code. But in the end, they failed to agree.

By contrast, the supercommittee never came close, instead swapping increasingly small-bore offers that the other side swiftly rejected.

Within the past week, Democrats said they would accept a Republican framework for $400 billion in higher tax revenue and $800 billion or so in spending cuts, while rejecting numerous key proposals.

Late last week, Boehner floated an offer that included $543 billion in spending cuts, fees and other non-tax revenue, as well as $3 billion in tax revenue from closing a special tax break for corporate purchases of private jets. It also assumed $98 billion in reduced interest costs.

It was swiftly rejected.

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Supercommittee failure could trigger US credit downgrade, economists warn

Posted by Dominic Rushe · November 19, 2011 11:25 AM · 1 reaction

Economists predict dire consequences if committee fails to reach agreement on how to reduce America's massive debt

Economists are warning of dire consequences if US politicians fail to make progress this weekend in tense talks aimed at reducing America's massive deficit ahead of a Wednesday deadline.

The bi-partisan congressional super-committee is charged with drawing up plans for a $1.2tn reduction in the nation's deficit by the middle of next week. Failure to do so will trigger an automatic "sequester" that will make cuts of that size to defence and social welfare programmes starting in 2013. But the two sides seem far from finding a solution after clashing over tax revenues.

While Wednesday is the official deadline for the supercommittee to report back, it has until Monday to tell the Congressional Budget Office about the impact any plan they send to Congress will have on the budget.

"Time is running out. What I can say is we are leaving no stone unturned, negotiations continue and we are looking to find a way. We recognise what's at stake and we're hoping to reach an agreement," Democrat committee member Chris Van Hollen told CNN Friday.

Failure to reach an agreement on what is essentially a small reduction on the deficit – just 0.7% of gross domestic product in 2013 – could trigger another rating's agency downgrade, warned economists including Paul Ashworth, chief North American economist at Capital Economics.

"With all this pressure to reach an agreement, it really doesn't look good if they can't find a solution," said Ashworth.

He said that the US had much more serious problems that would need tackling first.

"The US is already spending 7% of GDP on Medicare and Medicaid [the government-run health schemes] and that will be up to 10-11% in the next two decades. Debt is on an unsustainable path, and if they can't reach an agreement on this, it doesn't look good for the future."

Ratings agency Standard & Poor's cited the "extremely difficult" political conditions in Washington when it made the controversial decision to downgrade its rating on US debt in August. The firm also put the US "on watch' implying further cuts could come.

Morgan Stanley analyst Christine Tan predicted earlier this month that there was now a one-in-three possibility of another downgrade.

"If the supercommittee fails to reach a $1.2tn deficit reduction deal, if such a deal relies more upon accounting changes than real deficit reduction, or if congressional action lessens the impact of the $1.2tn automatic trigger, we believe this could potentially provide S&P with a pretext to downgrade the US further from AA+ to AA," wrote Tan in a note to investors.

HSBC's chief economist, Kevin Logan, said a "procrastination" solution was now the most likely outcome, with an agreement that specifies targets for spending cuts and revenue increases but leaves the details to congressional committees.

Passing the the hard choices back to congressional committees would lead to "lengthy and heated battles over the US deficit throughout 2012, we believe. The rating agencies might be tolerant of this for a while, but failure to make clear progress could lead to downgrades of the US sovereign credit rating at some point next year," Logan said.

David Semmens, US economist at Standard Chartered, said: "I think they will be forced into action. If not the consequences will be long-lasting. Failure will further highlight the political deadlock in Washington. It's very important the the supercommittee sends a strong message to the markets that the US is getting its house in order."

Stock markets are already under pressure form the credit crisis now sweeping Europe and further signals of a lack of leadership in the US could have negative consequences for the markets, said Semmens.

One of the major sticking points facing the supercommittee is what to do with Bush-era tax cuts that are set to expire at the end of 2012. Republicans are against any agreement that does not extend current income-tax rates.

Democrats want them extended only for lower- and middle-income Americans. Extending all the Bush tax cuts would add about $3.7tn to the deficit over the next decade.

Like the automatic deficit cuts, the Bush-era tax cuts too will automatically expire unless an agreement is reached. Gus Faucher, director of macroeconomics at Moody's Analytics, said: "We will see deficit reductions whether the super committee makes an agreement or not."

He said the "level of enmity" between Republicans and Democrats did raise concern, but he expects that some agreement will be reached.

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Congressional report slams TSA as bloated, ineffective

Posted by Bart Jansen, USA Today · November 17, 2011 1:22 PM · 1 reaction

The Transportation Security Administration is a bloated agency plagued by significant problems, says a congressional report released Wednesday on the 10th anniversary of the agency's creation. But an agency spokesman called the report a disservice to the workers.

According to the report, "A Decade Later: A Call for TSA Reform," TSA is:

•A bloated bureaucracy with 65,000 workers, including nearly 4,000 at headquarters and 9,656 administrators in the field.

•An ineffective agency, with 25,000 security breaches in the last decade.

•A sponsor of inadequate technology, including 500 advanced-imaging technology machines costing $122 million that are "easily thwarted" and $39 million wasted on explosive-detection "puffer" machines that were unreliable.

"Unfortunately, TSA has lost its way," said Rep. John Mica, R-Fla., chairman of the House Transportation Committee, at a news conference. "It is time for reform. TSA must become … a thinking, risk-based, flexible agency that analyzes risks, sets security standards and audits security performance."

But TSA spokesman Greg Soule said the agency has developed a highly trained workforce that has screened 5 billion passengers and prevented more than 1,100 guns from being brought onto planes this year.

"At a time when our country's aviation system is safer, stronger and more secure than it was 10 years ago, this report is an unfortunate disservice to the dedicated men and women of TSA who are on the front lines every day protecting the traveling public," he said.

TSA is developing risk-based security measures, such as an experimental pre-check program for frequent fliers to move more swiftly through screening at a handful of airports.

"Each of these initiatives … enhances our ability to provide the most effective security, focusing on those who present the highest risk, in the most efficient way possible," Soule said.

While Mica has become a vocal critic of the agency, others have been more supportive.

In a U.S. Travel Association survey, also out Wednesday, two-thirds of the 604 respondents were somewhat or very satisfied with TSA's overall performance; only one in eight were dissatisfied. But nearly nine out of 10 said it still takes too long to get through security.

The congressional report recommends:

Elevating the TSA administrator's authority.

•Revising the luggage-screening program to allow more competition with private security companies.

•Reducing staff.

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U.S. boosts estimate of auto bailout losses to $23.6B

Posted by David Shepardson/ Detroit News Washington Bureau · November 16, 2011 2:20 PM · 1 reaction

The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.'s steep stock decline.

In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion.

The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.

The big increase is a reflection of the sharp decline in the value of GM's share price.

The current estimate of losses is based on GM's Sept. 30 closing price of $20.18, down one-third over the previous quarterly price.

GM's stock closed Monday at $22.99, up 2 percent. The government won't reassess the estimate of the costs until Dec. 30.

The government has recovered $23.2 billion of its $49.5 billion GM bailout, and cut its stake in the company from 61 percent to 26.5 percent. But it has been forced to put on hold the sale of its remaining 500 million shares of stock.

The new estimate also hikes the overall cost of the $700 billion Troubled Asset Relief Program costs to taxpayers. TARP is the emergency program approved by Congress in late 2008 at the height of the financial crisis.

In total, the government used $425 billion to bailout banks, insurance companies and automakers, and provided $45 billion in housing program assistance.

The government now expects to lose $57.33 billion, including the full cost of the housing program, up from $36.7 billion. The new estimate means the government doesn't believe it will make an overall profit on its bailouts.

Republican presidential candidates, including former Massachusetts Gov. Mitt Romney, have seized on the auto bailout losses estimates, as evidence that the Bush and Obama administrations "wasted" money.

Matt Anderson, a spokesman for the Treasury Department, said, "Both TARP and the auto industry rescue are still on track to cost a fraction of what was originally expected during the dark days of the financial crisis."

In 2009, the government initially forecast it would lose $44 billion on its auto industry bailout. It revised it down to $30 billion, and later to as low as $13.9 billion earlier this year.The administration and President Barack Obama have argued that any losses on the auto bailout were worth the hundreds of thousands of jobs saved.

"The investment paid off. The hundreds of thousands of jobs that have been saved made it worth it," he said at an appearance last month at GM's Orion Assembly plant. "I want to especially thank the people of Detroit for proving that, despite all the work that lies ahead, this is a city where a great American industry is coming back to life and the industries of tomorrow are taking root, and a city where people are dreaming up ways to prove all the skeptics wrong and write the next proud chapter in the Motor City's history."

The new bailout forecast also represents an increase in the government's forecast in its losses from its $17.2 billion bailout of Detroit-based auto and mortgage lender Ally Financial Inc. The government holds a 74 percent stake in Ally, which has been forced to put its planned initial public offering on hold because of market conditions.



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Fannie CFO’s signing bonus: $1.7 million

Posted by Josh Boak · November 16, 2011 10:51 AM · 1 reaction

House Republicans are pointing out that Fannie Mae’s new chief financial officer shares something in common with a newly drafted pro football player — both landed signing bonuses.

Susan McFarland received $1.7 million for joining the mortgage giant that continues to lose billions of dollars after three years in government conservatorship, according to a draft report from the House Oversight and Government Reform Committee, which is holding a hearing into compensation practices at Fannie Mae and Freddie Mac Wednesday.

Fannie provided the sign-on bonus to offset compensation McFarland forfeited by leaving an executive position at Capital One, according to a Securities and Exchange Commission filing in June. In addition to the signing bonus, McFarland got a compensation package worth as much as $3.2 million.

“This is a standard approach to these situations in the financial services industry, where many executives receive equity grants as part of their compensation,” said Fannie spokeswoman Amy Bonitatibus. “It is not reasonable to expect executives to give up equity value they would get by staying at their current job to join us.”

News of McFarland’s signing bonus comes after POLITICO reported that the top five executives at Fannie and Freddie received combined bonuses of $12.79 million last year, in part for a mortgage modification program largely considered to be a disappointment.

The Federal Housing Finance Agency holds final approval for compensation packages at Fannie and Freddie, not Obama administration officials.

“These entities are independent and therefore they are independent decisions,” press secretary Jay Carney said earlier this month. “The White House is not involved, and nor should it be. That’s appropriate.”

But committee chairman Rep. Darrell Issa (R-Calif.) says it’s a contradiction for Obama to have chastised Wall Street bankers for bonuses while not seeking to curb compensation at Fannie and Freddie.

“While the Obama administration wants to pay senior officials at Fannie and Freddie like bank executives, the federal government has plenty of employees at the Department of Housing, Treasury, and other agencies who work to advance the president’s policies for far less,” Issa said before Wednesday hearings about the bonuses. “The administration’s case for these exorbitant payments is based on highly dubious assumptions.”

The House Oversight and Government Reform Committee is scheduled to have testimony from Fannie CEO Michael Williams, Freddie CEO Ed Haldeman and the FHFA’s acting director, Ed DeMarco.

As the House Financial Services Committee voted 52-4 Tuesday on a measure to place Fannie and Freddie employees on a government payscale, DeMarco defended the compensation packages before the Senate Banking, Housing and Urban Affairs Committee.

The packages provide an incentive to attract talented executives who can manage a joint portfolio at the companies that totals $5 trillion, DeMarco said. Fannie and Freddie are also filling a vacuum left by private firms, making their stewardship crucial for maintaining a degree of stability in the markets. And until lawmakers agree to housing finance reforms that could dissolve the companies, the government conservatorship will be in place.

Issa’s report challenges DeMarco’s argument, saying that “perverse incentives” enabled executives to pocket millions of dollars in bonuses for highly questionable achievements.

Compensation consultants—who received more than $1.2 million for their services in 2008 and 2009—-based the packages on compensation at large banks and insurance companies, instead of “truly similar institutions” like the government-owned mortgage firm Ginnie Mae and the regulator FHFA, the report said.

Fannie and Freddie have received about $170 billion in taxpayer support over the past three years and recently requested an additional $14 billion, sums that indicate a comparison with pay in the private sector is misguided, the report charges.

“If these private sector institutions were not profitable by themselves … instead of being handsomely rewarded with bonuses, their executives would likely be fired,” the report said.

In some cases, the performance goals were aided by dramatic government intervention. The Federal Reserve purchased $1.25 trillion in mortgage-backed securities in 2009, the report noted, likely enabling Fannie to meet its objective of issuing more than 37.5 percent of new mortgage-backed securities.

The FHFA has not developed any criteria to determine whether executive performance “may be overstated because of federal assistance,” the report said.

“Three years and hundreds of billions of dollars later,” the report concludes, “the time has come to cut off these government-sponsored moguls.”

The House Oversight and Government Reform Committee is scheduled to have testimony from Fannie CEO Michael Williams, Freddie CEO Ed Haldeman and the FHFA’s acting director, Ed DeMarco.

As the House Financial Services Committee voted 52-4 Tuesday on a measure to place Fannie and Freddie employees on a government payscale, DeMarco defended the compensation packages before the Senate Banking, Housing and Urban Affairs Committee.

The packages provide an incentive to attract talented executives who can manage a joint portfolio at the companies that totals $5 trillion, DeMarco said. Fannie and Freddie are also filling a vacuum left by private firms, making their stewardship crucial for maintaining a degree of stability in the markets. And until lawmakers agree to housing finance reforms that could dissolve the companies, the government conservatorship will be in place.

Issa’s report challenges DeMarco’s argument, saying that “perverse incentives” enabled executives to pocket millions of dollars in bonuses for highly questionable achievements.

Compensation consultants—who received more than $1.2 million for their services in 2008 and 2009—-based the packages on compensation at large banks and insurance companies, instead of “truly similar institutions” like the government-owned mortgage firm Ginnie Mae and the regulator FHFA, the report said.

Fannie and Freddie have received about $170 billion in taxpayer support over the past three years and recently requested an additional $14 billion, sums that indicate a comparison with pay in the private sector is misguided, the report charges.

“If these private sector institutions were not profitable by themselves … instead of being handsomely rewarded with bonuses, their executives would likely be fired,” the report said.

In some cases, the performance goals were aided by dramatic government intervention. The Federal Reserve purchased $1.25 trillion in mortgage-backed securities in 2009, the report noted, likely enabling Fannie to meet its objective of issuing more than 37.5 percent of new mortgage-backed securities.

The FHFA has not developed any criteria to determine whether executive performance “may be overstated because of federal assistance,” the report said.

“Three years and hundreds of billions of dollars later,” the report concludes, “the time has come to cut off these government-sponsored moguls.”


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White House says no on balanced-budget amendment

Posted by Philly.Com · November 16, 2011 10:47 AM · 1 reaction

White House says no on amendment

WASHINGTON - A balanced-budget amendment heading for a House vote this week could impose serious risks on the economy and force cuts to essential programs such as Medicare and Social Security, the White House said Tuesday.

It said it strongly opposed the amendment and said members of Congress should "find bipartisan common ground to restore us to a sustainable fiscal path."

The debt-ceiling agreement that set up the bipartisan supercommittee commissioned with reducing the debt also required that Congress vote on a balanced-budget amendment. The version being taken up by the House would require that Congress not spend more than it receives in revenues unless three-fifths of both the House and Senate vote to do so. Proposed amendments to the Constitution must be approved by two-thirds majorities in both chambers and be ratified by three-fourths of state legislatures.
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Senators introduce "STOCK Act" to stop "insider trading" in Congress

Posted by Stephanie Condon · November 15, 2011 7:31 PM · 1 reaction

A bill to stop "insider trading" in Congress is gaining momentum with two new Senate supporters.

Sen. Scott Brown, R-Mass., today introduced the Stop Trading on Congressional Knowledge (STOCK) Act of 2011, which would prohibit members or employees of Congress, as well as executive branch employees, from using nonpublic information obtained through their public service for investing or any attempt at personal financial gain. Sen. Kirsten Gillibrand, D-N.Y., is introducing a slightly different version of the legislation on Wednesday.

Like everyone else, members of Congress are subject to current insider trading laws. However, current insider trading laws do not apply to nonpublic information about current or upcoming congressional activity -- that's because members of Congress aren't technically obligated to keep that information confidential.

So, for instance, if a lawmaker learns an upcoming bill will grant a company a large government contract, which could boost that company's stock, he or she is free to buy that stock ahead of the bill's public introduction. This form of "insider trading" is one of the reasons why there are so many wealthy members of Congress, CBSNews.com reported earlier this year.

Democratic Reps. Louise Slaughter of New York and Tim Walz of Minnesota introduced legislation in the House to stop this practice -- but the bill, which has been introduced before, has never had more than 14 congressional sponsors. Now, however, there is more interest in the bill after a "60 Minutes" report shedding new light on congressional "insider trading."

CBSNews.com Series: United States of Influence

"Members of Congress should live under the same laws as everyone else," Brown said in a statement today. "If they trade on inside knowledge to line their own pockets, they should be punished. Serving the public is a privilege and honor, not an opportunity for personal gain."

The legislation would also require members of Congress and employees to report the purchase, sale or exchange of any stock, bond, or commodities future transaction in excess of $1,000 within 90 days.

Gillibrand's legislation would, in addition to enabling the Securities and Exchange Commission to prosecute cases of insider trading by members of Congress, also make such trading a violation of the House and Senate rules.

Out of 975 federal entities, Congress and the Supreme Court are the only two that have no rules or laws prohibiting them from trading securities based on nonpublic information.

Congressmen can get away with "the type of insider trading that would send Martha Stewart to prison," Craig Holman, government affairs lobbyist for the consumer advocacy organization Public Citizen, told CBSNews.com in June. "They go into hearings and confidential meetings with business interests, understanding new legislation is going to come out next week," and are free to trade on that information.

A report released earlier this year by four universities found that on average, stock portfolios held by House members from 1985 to 2001 beat the market average by approximately 6 percent annually. In 2004, the same group of professors found that the average stock portfolios held by members of the Senate beat the market average by about 10 percent.

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With supercommittee deadlocked, leaders Reid and Boehner meet

Posted by Alexander Bolton · November 15, 2011 7:28 PM · 1 reaction

Senate Majority Leader Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio) met Tuesday, a sign they might take a larger role in deficit talks, congressional aides say.

A leadership aide said Reid and Boehner discussed a range of topics in Boehner’s office but declined to provide any details.

 Some congressional sources interpreted the meeting as a sign that the deficit-reduction talks of the supercommittee are moving to the leadership level.

But leadership aides in the Senate and House say the meeting does not signal that Reid and Boehner are taking over the floundering negotiations.

“They’re not about to dive in,” said one aide.

A bigger role for Reid and Boehner in the talks seems the next logical step, however, as supercommittee members acknowledge they are at an impasse with only eight days until the Nov. 23 deadline.

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