WEEK ONE

January 19, 2010

1. President Obama announced that he will ask Congress for $1.35 billion to extend an education grant program for states, saying that getting schools right “will shape our future as a nation:”

• The $787 billion economic stimulus program that Obama signed into law soon after taking office included $43 billion in competitive grants for states’ funding, and the president said that extending the program would allow more states to win grants.

2. A stinging loss in Massachusetts has cost President Obama and the Democrats the 60-vote Senate majority they have relied upon to push an historic healthcare overhaul to the verge of enactment:

• Democrats do not appear to have enough time to resolve differences between the House and Senate bills—and get costs and coverage estimates back from the Congressional Budget Office—before Scott Brown is sworn in, and that leaves House Democrats with the unpalatable option of passing a Senate bill that many of them profoundly disagree with.

3. Top Democrats said that President Obama is poised to name an official commission to come up with a plan to curb the spiraling budget deficit:

• The bipartisan 18-member panel would be asked to report a deficit-reduction plan after the November election that would be voted on before the new Congress convenes next year—a deficit panel would allow the president to signal resolve without recommending specific steps that might offend key interest groups.

4. Federal Reserve Chairman Ben Bernanke took the unusual step of asking Congress’ investigative arm to conduct a “full review” of the Fed’s role in bailing out insurance giant AIG:

• The Fed’s move is aimed at diffusing criticism of the government’s $182 billion rescue, which sparked public outrage and demands in Congress for more information, especially after it was revealed that millions in bonuses would go to employees in the AIG division most responsible for the company’s need for a bailout.

January 20, 2010

1. The U.S. House of Representatives unanimously approved a bill authored by Rep. Peter DeFazio to give the Department of the Interior authority to grant one-time contract extensions to buyers of timber on Bureau of Land Management forests:

• The U.S. Forest Service already has the authority to extend its contracts, and the legislation approved by the House would provide the BLM with similar authority—the bill now goes to the Senate.

2. President Obama signaled that he might be willing to scale back his proposed healthcare overhaul to a version that could attract bipartisan support:

• It was not clear that even a stripped down bill could get through Congress anytime soon, and throughout the day, White House officials and Democratic congressional leaders struggled to find a viable way forward for the healthcare bill and to digest the reality that much of their agenda, including an energy measure and an overhaul of banking regulations, had been derailed by the loss of the late Sen. Ted Kennedy’s Senate seat.

3. Data showed that the housing market remains a significant risk to the economy, as bad weather across the country hammered the construction industry:

• The government said that buyers will face higher fees and tougher standards for home loans backed by the Federal Housing Administration, and unemployment is expected to remain high throughout the year, which will drive the foreclosure rate to new records.

January 21, 2010

1. Speaker Nancy Pelosi said that she lacks the votes to quickly move the Senate’s sweeping health overhaul bill through the House, a potentially devastating blow to President Obama’s signature issue:

• Her concession meant there was little hope for a White House-backed plan to quickly push the Senate-approved health bill through the House, followed by a separate measure making changes sought by House members, such as the Senate’s tax on higher-cost health plans.

2. President Obama stepped up his campaign against Wall Street with a far-reaching regulation of the biggest banks:

• It was a stern, populist lecture from the president to Wall Street for what he perceives as its abandonment of Main Street, and Obama said that the government would have the power to limit the size and complexity of large financial institutions as well as their ability to make high-risk trades.

3. A bitterly divided U.S. Supreme Court overturned a 63-year old law and two of its own decisions that banned corporations and unions from spending money directly from their treasuries on ads that advocate electing or defeating candidates for president or Congress, but which are produced independently and not coordinated with the candidate’s campaign:

• The Courts sweeping 5-4 decision (the opinion was written by Justice Anthony Kennedy, and Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia, and Clarence Thomas formed the majority, while Justices Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayer joined Justice John Paul Stevens in his dissent, parts of which he read aloud in the courtroom) left in place the century-old ban on donations by corporations from their treasuries directly to candidates.

4. In a direct challenge to the EPA’s authority, Sen. Lisa Murkowsky (R-AK) introduced a resolution to prevent the agency from taking action to regulate carbon dioxide and other climate-altering gases:

• Murkowsky, joined by 35 Republicans and three conservative Democrats, proposed to use the Congressional Review Act to strip the agency of the power to limit emissions of greenhouse gases under the Clean Air Act—the Supreme Court gave the agency legal authority to regulate such emissions in a landmark 2007 rule.

5. Funding may be restored for cleanup efforts this summer at the abandoned Formosa mine on Silver Butte, several miles south of Riddle, that has been leaking acidic drainage into local creeks:

• Denise Baker-Kercher, remediation project manager with the EPA, said that she learned this week that she may get between $500,000 and $750,000 from the EPA headquarters in Washington D.C.

January 22, 2010

1. The Obama administration is posting to the Internet a wealth of government data from all Cabinet-level departments on topics ranging from child car seats to Medicare services:

• The mountain of newly available information comes a year and a day after President Obama promised, on his first full day on the job, an open, transparent government.

2. State and federal regulators took control of Columbia River Bank, making it the fourth, and by far the largest, bank in Oregon to fall since the economic downturn:

• All Columbia River deposit accounts have been transferred to Columbia State Bank of Tacoma and will be available to bank customers immediately, and Columbia River Bank locations will reopen on Saturday under the banner of Columbia State Bank.

3. Federal Reserve Chairman Ben Bernanke’s nomination to a second term is in jeopardy because of growing opposition from Senate Democrats, who have been battered by public anger about the economy and the surprising setback of losing a Massachusetts’ Senate seat to the GOP this week:

• At least four Senate Democrats, including Oregon’s Jeff Merkley, have said they will oppose President Obama’s decision to renominate the Fed chief, and critics of Bernanke, who was named by former President George W. Bush, are pressing the case that he was an architect of policy that helped drag the U.S. into the recession—his term expires January 31^st.

4. The government said that unemployment rates rose in 43 states last month, painting a bleak picture of the job market:

• The rise in joblessness was a sharp change from November when 36 states said that their unemployment rates fell, and four states—South Carolina, Delaware, Florida, and North Carolina—reported record-high jobless rates in December—analysts said that the report shows that the economy is recovering at too weak a pace to generate consistent job creation.

5. Taxpayers will be able to write off charitable donations to Haiti relief efforts when they file their 2009 taxes this spring under a bill signed by President Obama:

• The measure sped through Congress, receiving final approval Thursday—under current law, donors would have to wait until they file their 2010 returns next year to take the deductions, but this bill would allow donations made by the end of February to be deducted from 2009 returns.

January 23, 2010

1. Vice President Joe Biden said that the U.S. will appeal a court decision dismissing manslaughter charges against five Blackwater Worldwide guards involved in a deadly 2007 Baghdad shooting:

• Biden’s announcement, which came after a meeting with Iraqi President Jalal Talabani, shows just how diplomatically sensitive the incident remains nearly three years later, and the lawyer for one guard, noting that word of the intended appeal came in Iraq, accused the Obama administration of political expedience and said that the U.S. was pursuing an innocent man rather than justice.

2. The White House and Democratic lawmakers are moving swiftly to come up with new restraints on corporate political spending, including advertising limits on any company receiving bailout money, to blunt the impact of a Supreme Court ruling President Obama calls “devastating”:

• Obama unloaded on a divided Supreme Court for allowing more corporate influence over elections, intensifying his criticism of a ruling that has suddenly reshaped campaign rules in the midst of a midterm election year.

WEEK TWO

January 25, 2010

1. President Obama offered help for people struggling to pay bills and care for their families, appealing to a middle class he says have been “under assault for a long time:”

a. In a partial preview of a State of the Union address that aims to answer voters’ angst about the economy and reconnect with the public, Obama outlined a series of proposals from the White House, and the proposals, the product of a middle-class task force headed by Vice President Joe Biden, will also be included in Obama’s budget request due to be submitted to Congress next week;

b. Among the initiatives:

• a doubling of the child care tax credit for families earning under $85,000;

• a $1.6 billion increase in federal funding for child care programs;

• a program to cap student loan payments at 10% of income above “a basic living allowance;”

• expanding tax credits to match retirement savings;

• increasing aid for families taking care of elderly relatives—that program would also require many employers to provide the option of a workplace-based retirement savings plan.

2. Support for Federal Reserve Chairman Ben Bernanke’s confirmation for a second 4-year term mounted as the White House appealed to staunch opposition that had roiled the financial markets:

• Senate Majority Leader Harry Reid (D-NV) expects a vote by the end of the week, his spokesman said, and David Axelrod, a top advisor to President Obama, said that Bernanke has the votes to keep his job.

3. Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit:

• The big question hanging over the housing market this spring is whether a tentative recovery will stumble after the government pulls back support.

January 26, 2010

1. The Senate rejected a plan backed by President Obama to create a bipartisan task force to tackle the federal deficit this year despite glaring new figures showing the enormity of the red-ink threat:

• The measure went down because anti-tax Republicans joined with Democrats who were wary of being railroaded and cutting Social Security and Medicare.

2. GM signed a deal to sell Saab to Spyker Cars NV, a small Dutch automaker, for $74 million in cash plus $326 million worth of preferred shares in Saab—the latest sign that the auto industry is starting to emerge from its deep slump:

• Ford Motor Co. also said that it would hire an additional 1,200 workers, and GMC announced a big investment in manufacturing electric engines—$246 million in order to become the first U.S. automaker to design and manufacture electric engines, which it sees as the core technology for hybrids and electric vehicles.

3. According to the Conference Board, consumer confidence rose in January for the third straight month—people said that they feel better about the economy and were more willing to buy big-ticket items like cars and refrigerators:

• The group’s consumer confidence index now stands at its highest level since the financial meltdown in September 2008, but at 55.9, it’s far from readings of 90 or higher that would indicate an economy on solid footing.

January 27, 2010

1. President Obama used his first State of the Union address to reset his relationship with the American middle class—the highlights of that address are:

a. Economy and jobs:

• urged the Senate to follow the House and pass a second jobs bill;

• proposed using $30 billion repaid by Wall Street banks to help community banks lend money to small business;

• proposed new tax credits for small businesses that hire workers or raise the wages of current employees.

b. Financial overhaul:

• urged the Senate to follow the House and pass a bill to protect consumers from industry abuses and to make sure they have the information they need to make decisions about what to do with their money.

c. Healthcare:

• urged Democrats not to abandon their yearlong efforts to overhaul the healthcare system.

d. Federal spending:

• proposed a 3-year freeze on most domestic spending, with the exceptions of national security, Medicare, Medicaid, and Social Security, beginning in 2011;

• announced he would issue an executive order creating a task force to recommend ways to reduce the deficit.

e. Open government:

• called for “strict limits” on lobbyist contributions to candidates for federal office;

• urged lawmakers to pass a bill to undo a recent Supreme Court ruling that allows companies and labor unions to spend freely on campaign ads.

f. Iraq:

• reiterated pledged to remove all U.S. combat troops from Iraq by the end of August.

g. Gays in the military:

• pledged to work with Congress and the military to allow gays to serve openly.

h. Education:

• proposed a $10,000 tax credit for four years of college, along with higher Pell grants;

• proposed capping student loan repayments at 10% of income and forgiving all student loan debt after 20 years, or after 10 years if the student enters public service.

i. Immigration:

• said the government should continue working to fix a broken system by securing borders and enforcing laws.

j. Bipartisanship:

• proposed monthly meetings with both the Democratic and Republican leadership in Congress.

k. Energy:

• urged Senate passage of comprehensive energy and climate legislation to help the country shift toward cleaner energy sources and help create jobs.

January 28, 2010

1. Portland-Seattle Amtrak service will get a $598 million boost when President Obama announces economic stimulus grants for high-speed rail projects across the nation:

• Washington will get $590 million, while Oregon gets $8 million to spend in the Portland area, and the grant is the Northwest’s slice of $8 billion the Obama administration will allocate to 13 corridors nationwide.

2. The Senate voted (60-39 with both Oregon senators voting yes) to allow the government to go $1.9 trillion deeper in debt, offering an election-year reminder that the government has to borrow 40 cents of every dollar it spends:

• The measure would put the government on track for a national debt of $14.3 trillion—more than $45,000 for every man, woman, and child in the U.S.—and the debt is increasingly held by foreign nations such as China.

3. President Obama is essentially grounding efforts to return astronauts to the moon, and he is, instead, sending NASA in a new direction with about $6 billion more, according to officials familiar with the plans:

• A White House official confirmed that when next week’s budget is proposed, NASA will get an additional $5.9 billion over five years, and some of that money would extend the life of the International Space Station to 2020, and it would also be used to entice companies to build private spacecraft to ferry astronauts to the space station after the space shuttle retires.

4. The Obama administration pledged that the U.S. would cut its greenhouse gas emissions “in the range of” 17% below 2005 levels by 2020, an expected step that bolsters the global warming deal brokered in the final hours of the Copenhagen climate talks last month:

• Most of the world’s largest greenhouse gas emitters are expected to follow suit—Europe, Australia, Japan—and other industrialized nations such as China and India say they will curb emissions as a share of their growing economies.

5. The White House signaled the outlines of its strategy for breaking the partisan logjam holding up President Obama’s agenda, saying Democrats would try to act first on job creation, reducing the deficit, and imposing tighter regulations on banks before returning to the president’s top priority from last year, an overhaul of healthcare:

• But one day after the president upbraided Congress in his State of the Union address for excessive partisanship, Senate Republicans voted en masse against a plan to require that new spending not add to the deficit (it passed anyway as all 60 Democrats voted together), and some Republicans dismissed Obama’s main job-creating proposal, expressing no interest in using $30 billion in bank bailout money for business tax credits.

6. The Senate gave Ben Bernanke a second 4-year term as the head of the Federal Reserve as critics excoriated the bank’s conduct in the years leading up to the financial crisis:

• The 70-30 vote was the weakest endorsement ever extended to a chairman in the central bank’s 96-year history—the 30 dissents came from 18 Republicans, 11 Democrats, and one independent, Bernie Sanders of Vermont.

January 29.2010

1. Wages and benefits paid to U.S. workers posted a modest gain in the fourth quarter of a year in which recession-battered workers saw their compensation rise by the smallest amount ever on records going back more than a quarter-century:

• The anemic gains have raised concerns about the durability of the economic recovery, and the fear is that consumer spending, which accounts for 70% of economic activity, could falter if households do not have the income growth to support their spending.

2. President Obama traveled to a House Republican retreat to try to break through the partisan logjam that has helped to stall his administration, and for an hour and 22 minutes, with cameras rolling, they confronted each other’s policies and politics while challenging each other to meet in the middle:

• The encounter at a Baltimore hotel was unlike any of Obama’s presidency, or very many other presidencies, as such a sustained and public dialogue with a hostile audience is rare for a president, and the president’s lions-den strategy of addressing a Republican audience reinforced his efforts in the State of the Union address this week to reclaim a more bipartisan image and reach out to disaffected independents.

3. Secretary of State Hillary Clinton warned China it risks diplomatic isolation and disruption to its energy supplies unless it helps keep Iran from developing nuclear weapons:

• There is a new push for sanctions at the U.N. because of Iran’s continued refusal to engage on the matter with the five permanent members of the Security Council—Britain, China, France, Russia, and the U.S.—and Germany.

4. The U.S. economy grew at its fastest pace in more than six years at the end of 2009, even as business resisted hiring and continued to do more with less:

• But even the fourth-quarter surge was not enough to overcome a terrible start to the year, and the economy finished 2009 with its biggest contraction since 1946, when the country was cooling off from World War II.

5. The Obama administration issued new rules that promise to improve insurance coverage of mental healthcare for more than 140 million people insured through their jobs:

• In general, under the rules, employers and group health plans cannot:

a. provide less coverage for mental healthcare than for the treatment of physical conditions like cancer and heart disease;

b. set higher co-payments and deductibles or stricter limits on treatment for mental illness and addiction disorders;

c. establish separate deductibles for mental healthcare and for the treatment of physical illness.

January 30, 2010

1. China suspended military exchanges with the U.S., threatened unprecedented sanctions against American defense companies, and warned that cooperation would suffer after Washington announced $6.4 billion in planned arms sales to Taiwan:

• The response to the U.S. announcement, while not entirely unexpected, was swift and indicated that China plans to put up a greater challenge than usual as it deals with the most sensitive topic in U.S.-China relations.

WEEK THREE

January 31, 2010

1. In a quarterly report released to Congress, the inspector general for the Troubled Asset Relief Program (TARP), Neil Barofsky, said that the government’s response to the financial meltdown has made it more likely the U.S. will face a deeper crisis in the future:

• The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, and “even if

  TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on

  the same winding mountain road, but this time in a faster car,” Barofsky said.

February 1, 2010

1. President Obama unveiled a multi-trillion-dollar spending plan, pledging an intensive effort to combat high unemployment and asking Congress to quickly approve new job creation efforts that would boost the deficit to a record-breaking $1.56 trillion:

• Obama’s new budget indicates a need to make tough choices to restrain run-away deficits, but not before attacking

  what the administration sees as the more immediate challenge of lifting the country out of a deep recession that has cost

  7.2 million jobs over the past two years, and the result is a budget plan that would give the country trillion-dollar-plus

  deficits for three consecutive years.

2. The 2011 federal budget offers a mixed bag for Oregon: there is $50 million for work in eastside forests, millions in loan guarantees for struggling small businesses, and aid for the Klamath Basin, but that is offset by less money for rural schools and tighter spending on everything from water systems to economic development:

• Representative Greg Walden, Oregon’s lone Republican in Congress, called the budget tone deaf because it “recklessly

  applies another $1.6 trillion in new deficits on the American people,” but Sen. Ron Wyden (D-OR) was pleased that the

  Forest Service included $50 million for management and watershed protection programs—the money, he said, “is

  absolutely key to creating good paying jobs in rural Oregon and protecting watershed.”

3. Hopes that American factories will help drive the economic recovery gained support from news that manufacturing activity grew in January to its strongest point since 2004:

• Other reports offered a reminder that the recovery remains fragile as construction spending sank in December to its

  lowest level in more than six years, and gains in personal income and spending were too modest in December to

  suggest that consumers can fuel a strong rebound.

4. Personal incomes rose more than expected in December, and consumer spending increased for the third straight month, helping the economy slowly recover from the worst recession in decades:

• The Commerce Department said that incomes rose by 0.4%, the sixth increase in a row—slightly better than analysts’

  expectation of 0.3% income growth—but wages and salaries rose by only 0.1% after increasing 0.4% in November.

February 2, 2010

1. Ford Motor Co. sales rose 25% in January, buoyed by a stronger economy and Toyota Motor Co.’s decision to halt U.S. sales of eight models because of faulty gas pedal systems:

• Ford said that car sales rose 43% while sales of trucks and SUVs climbed 15%, and the automaker also more than

  doubled sales to rental car agencies and other fleets as the credit crunch eased and businesses started spending again.

2. The nation’s top two defense officials called for an end to the 16-year-old “don’t ask, don’t tell” law, a major step toward allowing openly gay men and women to serve in the U.S. military for the first time:

• Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, and Defense Secretary Robert Gates told the committee

  they needed more time to review how to carry out the change in policy, which requires an act of Congress, and

  predicted some disruption of the armed forces.

3. Al-Qaida can be expected to attempt an attack on the U.S. in the next three to six months, senior U.S. intelligence officials told Congress:

• CIA Director Leon Panetta said that the terrorist organization is deploying operatives to the U.S. to carry out attacks from

  inside the country, including “green” recruits with a negligible trail of terrorist contacts, and al-Qaida is also inspiring

  homegrown extremists to trigger violence on their own, he said.

4. A senior Chinese official strongly warned President Obama against meeting with the Dalai Lama, the exiled spiritual leader of the Tibetans, saying it would damage relations between China and the U.S., and the official, Zhu Weigun, said any country would suffer consequences if its leaders met with the Dalai Lama, whom China considers to be a dangerous separatist:

• But a White House spokesman said the president’s plans were unchanged, and Bill Burton, the White House spokesman,

  said, “the president told China’s leaders during his trip to China last year that he would meet with the Dalai Lama, and he

  intends to do so”—despite Obama’s earlier overtures to Beijing, tensions between the U.S. and China have been on the

  rise.

5. Iranian President Mahmoud Ahmadinejad announced he was ready to send uranium abroad for further enrichment as requested by the U.N., and he also proposed a swap of Iranians in U.S. prisons for three American hikers held in Tehran:

• It was unclear how much of a concession his comments represented, and he did not mention any specifics on the

  prisoner swap.

6. A top House Democrat said that leading lawmakers hoping to revive President Obama’s stalled healthcare overhaul have started writing a compromise bill, but it’s unclear when the legislation will be ready for a vote:

• In a brief interview, Rep. Charles Rangel (D-NY) said that the measure would change the massive Senate-approved

  health bill to what bargainers from the White House, Senate, and House agreed to last month, and if these remarks are

  borne out, this could be the first concrete sign that Democrats will try enacting major health legislation in the wake of the

  Republican upset in the Massachusetts’ special election that cost them their crucial 60^th seat.

February 3, 2010

1. Speaking to his party’s senators at their strategy conference, President Obama reminded Democrats that they still hold a 59-41 majority vote, one shy of the 60 needed to overcome Republican filibuster tactics:

• Obama urged Democrats to push legislation that, above all else, will help people get jobs, and he encouraged them to

  avoid the temptation to “tread lightly, keep your head down, and play it safe.”

February 5, 2010

1. Employers are boosting production without creating new jobs, and this has allowed companies to boost productivity in the October-December quarter, and last week, the number of people filing new claims for jobless aid rose:

• The Labor Department will issue its January employment report today, and economists project it will show a tiny gain of

  5,000 jobs—not nearly enough to lower the unemployment rate, which is expected to rise to 10.1%.

2. Seeking to create more jobs, President Obama asked Congress to temporarily expand two lending programs for the owners of small businesses:

• Just hours before he spoke, the nation’s jobless rate finally dipped below 10%—to a still stubbornly high 9.7%—in the

  latest government figures, and the president said that he wants businesses to be able to refinance their commercial real

  estate loans under the Small Business Administration, and he wants that government agency to increase loans used for

  lines of credit and capital.

WEEK FOUR

February 7, 2010

1. President Obama said that he would convene a half-day bipartisan healthcare session at the White House to be televised live this month, a high-profile gambit that will allow Americans to watch as Democrats and Republicans try to break their political impasse:

· Obama challenged Republicans to attend the meeting with their plans for lowering the cost of health insurance and expanding coverage to more than 30 million uninsured Americans, and Republican leaders said that they welcome the opportunity and called on Democrats to start the debate from scratch, which the president said that he would not do.

2. Treasury Secretary Timothy Geithner said that the U.S. is in no danger of losing its Aaa debt rating even though the Obama administration has predicted a $1.6 trillion budget deficit in 2010:

· Geithner said that investors around the world turn to U.S. Treasury securities and dollar-denominated assets whenever they are worried about global stability, and they reflect basic confidence in the U.S. and its ability to bounce back from the global recession.

3. Treasury Secretary Timothy Geithner, appearing on ABC News’ “This Week”, said that he thinks the economy is back in growth mode and, “we are seeing some encouraging signs of healing” following better-than-expected unemployment data, and he expressed confidence that the risk of a “double-dip” recession is receding:

· On NBC’s “Meet the Press”, Henry Paulsen, Treasury secretary under President George W. Bush when the financial crisis began, said, “The economy is clearly recovering.  There is more certainty.  Part of it is confidence and psychology. . . but ultimately, the private sector will do what needs to be done to create jobs.

4. After laying the groundwork for nearly a year, first lady Michelle Obama will launch a campaign against childhood obesity that she hopes will change the way millions of Americans eat, exercise, look, and feel:

· Obama’s goal is ambitious: to put America on track to solve the childhood obesity problem in a generation—health advocates could not be happier to have the first lady adopt childhood obesity as her cause, and they are keenly aware of how difficult the problem will be to solve.

5. Iran’s president ordered his atomic agency to significantly enrich the country’s stockpile of uranium, angering Western nations that want the Islamic republic to halt its nuclear program:

· Mahmoud Ahmadinejad maintained, however, that Iran was still willing to follow a U.N. plan to export its uranium for further enrichment, and the mixed messages have infuriated the U.S. and its European allies, which claim Iran is only stalling as it attempts to build a nuclear weapon.

6. President Obama said that he has not ruled out a New York federal court trial for September 11 planner Khalid Sheikh Mohammed, but he was taking into account the objections of the city’s mayor and police commissioner:

· The Obama administration has come under withering attack, mainly from Republicans, for a decision by his Justice Department to try the terrorist mastermind in a U.S. court near Ground Zero, site of the attack that destroyed New York’s World Trade Center, and Obama said that using the traditional judicial method was a “virtue of our system” in which Americans should take pride.

February 8, 2010

1. When Republicans take President Obama up on his invitation to hash out their differences over healthcare this month, they will carry with them a fairly well-developed set of ideas intended to make health insurance more widely available and affordable, by emphasizing tax incentives and state innovations, with no new federal mandates and only modest expansion of the federal safety net:

· The Republicans rely more on the market and less on government, and they would not require employers to provide insurance—they oppose the Democrats’ call for a big expansion of Medicaid, which Republicans say would burden states with huge long-term liabilities.

2. The Dow Jones industrial average closed below 10,000 for the first time in three months on nagging concerns about debt loads in Europe:

· Mounting deficits in weaker European economies, including Greece, Portugal, and Spain, have raised questions about the health of the global financial system, and that has compounded concerns about growth in China and proposed U.S. banking regulations that took the market down from a 15-month high reached in January.

February 9, 2010

1. Signaling that he would meet critics part way on healthcare, President Obama said that he is willing to sign a bill even if it doesn’t deliver everything he has pursued through a year of grinding effort:

· Republicans may run political risks if they just say no—a Washington Post-ABC News poll found that most Americans want Congress and the president to keep working on a comprehensive healthcare overhaul.

2. Iran’s move to produce higher-grade uranium for a medical reactor prompted widespread international condemnation and an uncharacteristically harsh response by Russia, whose support is key to U.S. and Western efforts to impose tough new sanctions against the Islamic Republic:

· But the response from China, which like Russia wields a U.N. Security Council veto and maintains robust economic ties with Iran, was far more muted, suggesting a tough road ahead for the Obama administration and Western nations seeking to put pressure on Iran.

3. Thirty-five-ton boulders are headed to the Oregon coast, where the Port of Garibaldi is using them to repair Tillamook Bay’s north jetty:

· The $16.1 million federal stimulus project will improve treacherous coastal waters that have claimed the lives of 20 fishermen since 1992, and the project calls for 1,100 boulders from two Washington quarries, with three a day rolling through Portland until August.

4. The debt crisis infecting parts of Europe and the Mediterranean is the latest wound in the global financial crisis:

· Three nations—Greece, Spain, and Portugal—are in the eye of the storm, but anyone who has lent to these countries or to businesses in them is now at risk, too, and because global finance is so closely linked, what happens in Europe affects the U.S. banks and Wall Street investors who manage the 401(k) accounts and pension funds of American workers.

5. Henry Paulson, the former Treasury chief, and billionaire Warren Buffett said that taxpayers will recover every cent paid out to banks during the economic meltdown and may even turn a profit:

· The staunch Democratic investor and the Treasury secretary under President George W. Bush spoke before 2,400 at the greater Omaha Chamber of Commerce’s annual meeting.

6. The Dow Jones industrial average jumped past 10,000 on hope that a resolution was near for Greece’s debt crisis:

· Global markets bounced back on reports that plans are being developed in the European union to rescue Greece, and that raised hopes that policy makers will take bigger steps to contain debt troubles in other weak economies, including Portugal and Spain.

February 10, 2010

1. The U.S. trade deficit surged to a larger-than-expected $40.18 billion in December, the biggest imbalance in 12 months:

· The wider deficit reflected a rebounding economy that is pushing up demand for oil and other imports, and analysts said that the wider-than-expected trade deficit combined with other disappointing reports will likely reduce overall economic growth in the October-December quarter.

2. Retail sales rose for a third month in a row compared to a year earlier, largely because of higher gas prices:

· Analysts expect the modest spending pace to improve in coming months—though it will be far from robust as high unemployment and tight credit show little sign of disappearing.

February 11, 2010

1. The number of U.S. households facing foreclosure in January increased 15% from the same month last year, and a surge in cash-strapped homeowners who have fallen behind on mortgages could be on the way:

· January marked the 11^th straight month with more than 300,000 properties receiving a foreclosure filing, and the number could stay above that level as unemployed homeowners who have tried to keep up with their mortgages finally start missing payments.

2. Three administration officials said that President Obama is planning to join the debate about where to try the accused mastermind of the September 11, 2001, attacks, signaling recognition that the administration mishandled the process and triggered a political backlash:

· Obama initially asked Attorney General Eric Holder to choose the site of the trial in an effort to maintain an independent Justice Department, but administration officials acknowledge that Holder and Obama advisors were unable to build support for the trial, and in an interview, Holder left open the possibility that Khalid Sheikh Mohammed’s trial could be switched to a military commission, although he said that is not his personal preference.

3. Democratic leaders in Congress unveiled proposals that would limit the impact of a Supreme Court decision allowing unfettered corporate spending on political campaigns:

· Sen. Charles Schumer (D-NY) and Rep. Chris Van Hollen (D-MD) called for bans on political participation in U.S. elections by companies with more than 20% foreign ownership, by companies holding government contracts, and by bank bailout recipients—other measures in the package included:

a. Corporations would be banned from spending money on U.S. elections if a majority of their board of directors are foreign nationals or if their U.S. operations fall under the direction of a foreign entity or country.

b. Additional disclosures would be required for companies that help sponsor political advertising.

c. Unions, advocacy groups, and all corporations, including nonprofits, would be required to set up special accounts for spending on “political activities” and would be required to report contributions and spending details to the Federal Election Commission.

4. Seventy-six Native American tribes will share $1 billion in economic stimulus money to help create jobs and revitalize their communities:

· The stimulus will allow tribes from California to Florida to issue low-interest bonds for projects such as healthcare centers, water plants, and wind farms—the money cannot be used for casinos or other gambling projects.

5. President Obama’s top economic advisors offered a cautious forecast that U.S. job gains for 2010 will average 95,000 a month, with analysts expecting hiring to expand by spring:

· In a conference call with reporters, Christina Romer, the head of the White House Council of Economic Advisors, said that the administration’s projection is below the consensus of private Blue Chip forecasters, who envision a more optimistic monthly average of 116,000 jobs.

6. Health insurer WellPoint blames the Great Recession and rising medical costs for its planned 39% rate increase for some California customers, but to President Obama, it’s Exhibit A in his campaign to revive the healthcare overhaul:

· Whether it will be enough to reignite the sputtering healthcare legislation remains uncertain, but the rate shock could help Obama to make his case that Republicans need to come to the table on healthcare.

February 12, 2010

1. The White House formally invited Republicans to attend a healthcare summit on February 25^th, calling it “the next step” in reforming the nation’s broken health insurance system, and in a letter to lawmakers, chief of staff Rahm Emanuel and Health and Human Services Secretary Kathleen Sebelius said the half-day meeting at Blair House would include the top congressional leaders in both parties and the ranking members in committees that deal with healthcare:

· The letter said that the White House package will “put a stop to insurance company abuses, extend coverage to millions of Americans, get control of sky-rocketing premiums and out-of-pocket costs, and reduce the deficit:”

2. Amid growing fears of a real estate bubble, Chinese officials moved to restrain bank lending and put a lid on incipient inflation, a surprise action that shook financial markets around the world on concern that the leading engine of the global recovery could be slowing:

· In the U.S., stocks fell sharply on the news on concerns that any slowdown in China could dampen the U.S. economy, but by the end of trading, Wall Street had recovered to post only a modest loss for the day.

3. Consumers in at least four states (Oregon, California, Maine, and Kansas) who buy their own health insurance are getting hit with premium increases of 15% or more—and people in other states could see the same thing:

· “You are going to see rate increases of 20, 25, 30%” for individual health policies in the near term, Sandy Praeger, chairwoman of the health insurance and managed care committee for the National Association of Insurance Commissioners, predicted, and she noted that most states do not have the legal authority to block or reduce health insurance rate increases.

4. A modestly better-than-expected report on retail sales for January could suggest stronger economic growth in coming months, but this week’s severe snowstorms will likely depress activity in February:

· Higher consumer spending is vital because it accounts for 70% of economic activity, but economists caution that the spending increases seen since summer could falter as the job crisis weighs on a fledgling recovery, and they noted a second report that showed consumer confidence slipping in early February—down 0.7% from January.

February 13, 2010

1. According to government figures, the decline in payroll tax revenue caused by the recession has begun to cut deeply into Social Security’s surplus funding as more than 2.7 million new beneficiaries were added to the Social Security rolls in 2009, up 20% from 2008—the one-year increase was the largest since at least 1975:

· Annual jobless rates for men and women 55 and older were higher in 2009 than at any time since the government started collecting the data in 1948, and that forced many to claim retirement benefits at 62, their first year of eligibility, instead of waiting to collect at the full retirement age of 66—current projections show the program has sufficient funds to remain solvent until 2037.

2. President Obama signed a bill reinstating budget rules known as “paygo”—which is “pay as you go”—rules that say spending cuts must accompany spending increases, forcing Congress to “pay for what it spends, just like everybody else,” the president said.

· In place during the 1990s, the rule helped create a balanced budget and surpluses, and Obama blames eliminating them for creating much of the $1.3 trillion deficit he faced upon taking office in January 2009 and for a total debt of $8 trillion projected over the next decade.

WEEK FIVE

February 15, 2010

1. In a sign of the increasing frustration among some politicians over the paralysis in Congress, Sen. Evan Bayh (D-IN) unexpectedly announced he would not run for reelection this year, blasting the Senate for its recent failure to address major issues such as unemployment and the federal deficit:

· Bayh’s decision to quit, despite a well-stocked campaign coffer, is the latest in a series of blows to Democrats’ efforts to cut potential Senate losses in November’s midterm election, and his retirement brings to about eight the number of seriously contested seats now held by Democrats—but the announcement did more than depress Democrats’ morale—in an election year that was already expected to whittle the party’s 59-vote majority in the Senate, Bayh also gave voice to frustration that crosses party lines over the poisonous political environment surrounding Capitol Hill and the gridlock that is allowing big national problems to grow worse.

2. Secretary of State Hillary Clinton bluntly warned that Iran is sliding into a military dictatorship, telling an audience in Qatar that economic sanctions against the Islamic republic should be increasingly aimed at its elite Revolutionary Guard:

· As the first high-level Obama administration official to make such an accusation, Clinton was reflecting an ever-dimming outlook for persuading Iran to negotiate limits on its nuclear program, which it has insisted is intended only for peaceful purposes—the U.S. and others, including the two Gulf countries (Saudi Arabia and Qatar), believe Iran is headed for a nuclear bomb capability.

February 16, 2010

1. President Obama is making roughly $8 billion in federal loan guarantees available to help build the first U.S. nuclear power plant in three decades:

· Obama told a union audience in Burke County, Georgia, that the initiative would create thousands of construction jobs and 800 permanent jobs.

2. The White House, marking the anniversary of the $787 billion spending package, said that two million jobs have been saved or created due to the stimulus act signed into law by President Obama a year ago:

· Jobs have been created thanks to tens of thousands of projects now underway nationwide, Vice President Joe Biden wrote to Obama in a 31-page progress report about the stimulus, and Biden said that the act is laying groundwork for “the economy of the next century,” as the U.S. invests in high-speed rail, health technology, green cars, and other projects.

3. Decades of fighting over scarce water in the Klamath Basin will come to an end with the signing of an agreement to remove four dams from the Klamath River, and the governors of Oregon and California, the chief executive of PacifiCorp and the U.S. Secretary of the Interior are joining farmers, fishermen, conservationists and Native American tribes for ceremonies February 18^th in the Oregon Capitol Rotunda:

· Part of the agreement lays out terms for removing the dams starting in 2020, if full funding is approved, and another part details a water management plan and $1 billion in environmental restoration—removing the dams will open hundreds of miles of river that have been closed to salmon for a century.

4. The Obama administration and Congress have identified universal broadband as a key to driving economic development, producing jobs, and bringing educational opportunities and cutting-edge medicine to all corners of the country, and in December, Oregon won $2.1 million in federal stimulus money to identify areas that do not have broadband access:

· Relative to other states, Oregon is well served by broadband with fast Internet access available to 70.1% of the state’s homes and according to federal data, Oregon has the eighth highest broadband reach of the 50 states.

February 17, 2010

1. The Treasury Department said that as of last month, about 116,000 homeowners had completed the application process for the government’s mortgage relief plan and had their loan payments reduced permanently—that compares with more than one million homeowners who started the process:

· More than 61,000 homeowners have dropped out so far, either because they failed to make payments or did not return the necessary paperwork, but the Treasury Department says that the program is on track—large banks continue to struggle with a huge volume of borrowers needing help, however, with Bank of America, J.P. Morgan, and Citigroup all below ten percent of completed modifications for borrowers who started the process.

February 18, 2010

1. President Obama welcomed the Dalai Lama for closely watched White House talks, risking fallout in China over the get-together and Obama’s statement supporting preservation of Tibet’s identity and human rights:

· Obama’s largely symbolic meeting with the Dalai Lama was kept low-key by comparison to other visiting leaders out of deference to China, and with Beijing considering the Buddhist monk a separatist, Obama does not want to overly anger China at a time when its cooperation is needed on nuclear standoffs with Iran and North Korea, climate change, and other priorities.

2. In a report that tried to tap public frustration with high costs in order to revive the stalled effort to overhaul healthcare, the Obama administration said that eye-popping health insurance premium increases of up to 39% are a worrisome sign of the times:

· Proposed premium increases by WellPoint’s Anthem Blue Cross for Californians purchasing their own coverage set up a wave of criticism last week and forced the company to announce a postponement, and now the Health and Human Services Department says that similar pressure on premiums is felt in at least six other states, including Oregon—the HHS report found that the Anthem numbers are in line with increases sought by insurers in other states—at a time of robust profit growth for the companies and a lack of competition in most states.

3. President Obama’s new deficit commission, the National Commission of Fiscal Responsibility and Reform, is likely to recommend a number of sacrifices necessary to avoid bankrupting future generations—with the total federal debt next year expected to exceed $14 trillion (about $47,000 for every U.S. resident), the 18-member commission is charged with coming up with a plan by December 1^st to reduce the government’s annual deficits to three percent of the national economy by 2015:

· The kinds of steps the panel is likely to consider include:

a. Raise the retirement age for full Social Security benefits to more than 67 years old and have benefits grow at a less-generous inflation rate;

b. Expose more income to Social Security and Medicare payroll taxes;

c. Require seniors to pay more Medicare costs out of their own pockets and curb payments to healthcare providers;

d. Raise taxes on people making less than $200,000 a year, requiring Obama to break a signature campaign pledge.

4. The U.N. nuclear agency said that it was worried Iran may currently be working on making a nuclear warhead, suggesting for the first time that Tehran had either resumed such work or never stopped at the time U.S. intelligence thought it had:

· The report by the International Atomic Energy Agency appeared to put the U.N. nuclear monitor on the side of Germany, France, Britain, and Israel, which, along with other U.S. allies, have disputed the conclusions of a U.S. intelligence assessment published three years ago that said that Tehran appeared to have suspended such work in 2003.

5. According to the White House, President Obama will post specific proposals for a comprehensive healthcare plan on the Internet by February 22^nd—the posting would come three days before a high-stakes summit that Obama plans to convene with congressional Democratic and Republican leaders in a bid to jump-start his stalled bid to overhaul the nation’s healthcare system with a new appeal for bipartisanship:

· His plan is expected to include proposals to bridge differences between the two healthcare bills passed by the Senate and House last year, and it’s still unclear what, if any, concessions Obama will make to Republicans, who steadfastly fought the Democratic healthcare campaign and are demanding that Obama abandon his push for overhaul.

February 19,2010

1. President Obama announced a $1.5 billion fund to help unemployed homeowners and other struggling borrowers in a handful of states:

· As part of the program, five states—Florida, Michigan, Arizona, California, and Nevada—have home prices that have fallen enough to qualify for the additional assistance, funding for which will come from capital set aside for housing from the $700 billion Troubled Asset Relief Program (TARP), and states where the average price for all the homes in the state has fallen more than 20 percent are eligible to participate.

WEEK SIX

February 22, 2010

1. President Obama put forward a nearly $1 trillion, 10-year compromise that would allow the government to deny or roll back egregious insurance premium increases that infuriate consumers:

· The White House demanded an up-or-down vote in Congress on the plan, or something close to it, but it’s highly uncertain that such sweeping legislation can pass—Republicans are virtually unanimous in opposing it, and some Democrats who previously supported a healthcare remake are having second thoughts in an election year.

2. President Obama offered a blueprint for healthcare overhaul in an 11^th-hour bid to rally Democrats behind sweeping legislation that would expand coverage, tighten regulation of the insurance industry, and make the nation’s medical system more efficient:

· The White House, releasing the $950 billion plan ahead of February 25^th’s healthcare summit with congressional Democrats and Republicans, in effect challenged Republican leaders to offer an alternative.

3. A bipartisan jobs bill cleared a Republican filibuster with critical momentum provided by the Senate’s newest Republican, Scott Brown of Massachusetts:

a. The 62-30 tally to advance the measure to a final vote gives both President Obama and the Capitol Hill Democrats a much-needed victory—even though the measure in question is likely to have only a modest effect on hiring;

b. Joining Brown in voting to break the filibuster were moderate New England Republicans Olympia Snowe and Susan Collins of Maine, and retiring GOP senators, Kit Bond of Missouri, and George Voinovich of Ohio—Democrat Ben Nelson of Nebraska voted “nay”, and Frank Lautenberg (D-NJ) was absent.

February 23, 2010

1. New York Comptroller Thomas DiNapoli announced that in the same year that many of the investment banks were bailed out at taxpayer expense, Wall Street Bonuses climbed 17% to $20.3 billion:

· “Wall Street is vital to New York’s economy, and dollars generated by the industry help the state’s bottom line,” DiNapoli said, “but for most Americans, these huge bonuses are a bitter pill and hard to comprehend”—the reason for the surge in bonuses was simple: Wall Street firms had a great year.

2. In a sign of possible differences among top military officials, Army and Air Force chiefs voiced concern about ending a ban on gays serving openly in the armed forces while the country is in the midst of two wars:

· Army Gen. George Casey and Air Force Gen. Norton Schwartz both told Congress that they support the Pentagon’s plan to spend a year studying a change in the policy that allows gays to serve only as long as they keep their sexual orientation hidden.

3. The FDIC said that the number of banks in danger of failing shot up to 702 at the end of last year, the highest level since 1993, as the industry continues to struggle in its recovery from the so-called Great Recession:

· The FDIC has estimated that expected bank failures from 2009 to 2013 will cost about $100 billion, and the industry’s problems are taking a toll on the FDIC fund that covers most insured deposits—the balances of these funds, which is paid for by banks, dropped by $12.6 billion in the fourth quarter to end 2009 with a negative balance of $20.9 billion—as a percentage of total insured deposits at U.S. banks, it is the lowest level on record, the FDIC said.

February 24, 2010

1. Companies that hire the unemployed would claim new tax breaks under a job-promoting bill passed by the Senate, delivering President Obama and Democrats a much-needed victory:

a. The 70-28 vote (both Oregon senators voted yes) sends the bill back to the House, which passed a far more costly measure in December, and while many in the House consider the Senate bill too puny, they may simply adopt it and send it to Obama in order to get a win;

b. It is the first major bill to pass the Senate since the Christmas Eve passage of a deeply controversial healthcare bill and the subsequent election of Massachusetts Republican Scott Brown;

c. The bill contains two major provisions:

• It would exempt businesses hiring the unemployed from the 6.2% payroll tax through December and give them an additional $1,000 credit if new workers stay on the job a full year—the Social Security trust funds would be reimbursed for the lost revenue;

• It would extend highway and mass transit programs through the end of the year and pump $20 billion into them in time for the spring construction season—the money would make up for lower-than-expected gasoline revenues.

2. Ben Bernanke, the Federal Reserve chairman, signaled that he did not plan to begin raising interest rates anytime soon, saying that the economic recovery would remain halting for months to come:

· While Bernanke did not change his outlook on interest rates or the economy, he did announce two significant steps to improve transparency and accountability of the Fed: he said the Fed would “support legislation that would require the release” of the names of borrowers that used the extraordinary lending programs the Feds created in 2008 to prop up the markets for commercial paper, money market funds, and consumer loans.

3. Freddie Mac lost nearly $26 billion last year, and it is bracing for more pain: the mortgage finance company has lost nearly $80 billion since the housing crisis started in 2007, and the company said that a record four percent of its borrowers are behind on their payments and face foreclosure:

· This is a major problem for the federal government, which seized control of Freddie Mac and its sister company, Fannie Mae, in September 2008, and the two companies have already siphoned $111 billion from the government to stay afloat—that number is expected to hit $188 billion by fall 2011.

February 25, 2010

1. Senate Democrats have retreated from adding new privacy protections to the nation’s primary counter-terrorism law, Republicans refused to lend support and portrayed the majority as willing to harm terror investigations:

· Lacking the necessary 60-vote supermajority, Democratic leaders settled on a one-year extension of expiring surveillance and seizure provisions of the U.S. Patriot Act, tossing aside curbs—and greater scrutiny—on government authority agreed to by the Senate Judiciary Committee in October after a spirited debate.

2. A research company has found that the system Congress and the Obama administration want employers to use to help curb illegal immigration is failing to catch more than half the number of unauthorized workers it checks:

· The online tool, E-Verify, now used voluntarily by employers, wrongly clears illegal workers about 54% of the time, according to Westat, a research company that evaluated the system for the Homeland Security Department, missing so many workers mainly because E-Verify cannot detect identity fraud, Westat said.

3. Layoffs are no longer dropping as they were in the final months of last year, reinforcing fears that the job crisis will weigh down consumer spending and the economic rebound:

· Wells Fargo estimates that the economy’s growth rate will likely slow from more than three percent in the current quarter to less than two percent by the middle of the year, and in its report on jobless claims, the Labor Department said that first-time claims for unemployment benefits rose 22,000 to a seasonally adjusted 496,000—Wall Street analysts polled by Thomson Reuters had expected a drop to 455,000.

4. Secretary of Education Arne Duncan wants states to target the schools that need intervention the most and spur them to make what he believes can be game-changing reforms, and in Oregon, all but one of the 18 schools that qualify are high schools—the list targets low-income schools with the lowest test scores, and for high schools, any that have fewer than 60% of students graduating in four years:

· Oregon schools with chronic poor performance will be offered as much as $2 million a year over three years but will have to accept strict marching orders for change and will have to show results.

5. The Treasury Department said that under annual benchmark revisions, China’s holdings of U.S. Treasury securities stood at $894.8 billion at the end of December, keeping it in first place ahead of Japan:

· On February 16^th, the government reported data that showed China had been surpassed by Japan, but when Chinese purchases in places such as Britain were taken into account, the government said that in December, China’s holding grew by $139.4 billion above what was reported February 16^th.

WEEK SEVEN

March 1, 2010

1. Republican Sen. Jim Bunning has put a “hold” on legislation that would keep a host of federal programs operating:

a. The Department of Transportation furloughed nearly 2,000 employees without pay;

b. His one-man blockade also affects jobless benefits for thousands of unemployed workers, rural television customers, doctors receiving Medicare payments, and others;

c. Bunning (R-KY) wants the $10 billion price of extending the programs offset by reductions in spending elsewhere in the budget in order not to drive up the budget, and absent that, his objections to proceeding with the legislation deny the Senate the “unanimous consent” that Senate rules require for going forward under expedited procedure—the Senate can overcome his objection if 60 of its 100 members vote to do so, but so far they have not, and doing so would take at least four days under Senate rules.

2. Nine House Democrats indicated in an Associated Press survey that they have not ruled out switching their “no” votes to “yes” on President Obama’s healthcare overhaul, brightening the party’s hopes in the face of unyielding Republican opposition:

· Democratic leaders have strongly signaled that they will use a process known as “budget reconciliation” to try to push part of the package through the Senate without allowing Republicans to talk it to death with a filibuster—the road could be even more difficult in the House, where Speaker Nancy Pelosi is struggling to secure enough Democratic votes for approval, thus the effort to attract former foes.

3. AIG (American International Group Inc.) is selling a cornerstone of its business, Asia-based life insurer AIA Group, in a government-approved $35.5 billion deal, and the sale to British insurer Prudential PLC could reduce by nearly one-fifth the amount of federal bailout money still invested in struggling AIG:

· But officials and analysts say that it is not clear whether taxpayers will eventually recoup all the money AIG drew from a $182.5 billion rescue package the government committed to at the height of the 2008 credit crisis—in return for that package, the government got a nearly 80% stake in the insurer.

4. The government said that spending by consumers rose modestly in January as Americans reduced the amounts in their savings accounts, and though January was the fourth consecutive month that consumer spending increased, so far the growth is far short of the surge needed to lead the economy out of its downturn:

· According to a report by a private group, manufacturing continued to expand in February, but it also indicated that the fast-paced recovery for manufacturing slowed slightly in February amid fewer orders, though hiring reached its highest level in five years.

March 2, 2010

1. President Obama announced details of a proposed energy rebate program that he hopes will spur demand for insulation and water heaters, as well as jobs for Americans:

· Obama said that the administration’s “HOMESTAR” program would reward people who buy energy-saving equipment with an on-the-spot rebate of $1,000 or more, and he cast the idea as one that would save people money on utility bills, boost the economy, and reduce America’s dependence on oil.

2. In a move aimed at wavering Democrats who might find it easier to vote for the healthcare package if they could tell constituents it had bipartisan elements that Republicans should have supported, President Obama said that he might include four GOP-sponsored ideas in his final package even though no one in Congress or the White House thinks it will procure a single Republican vote:

· In a letter to congressional leaders, the president said that he would consider these ideas floated by Republican lawmakers:

a. sending investigators disguised as patients to uncover fraud and waste in Medicare and Medicaid;

b. expanding pilot programs to bring more predictability to medical malpractice lawsuits;

c. increasing payments to Medicaid providers;

d. expanding the use of health savings accounts.

3. The Senate passed a $10 billion measure to maintain unemployment benefits for the long-term jobless and provide stopgap funding for highway programs after a holdout Republican dropped stalling tactics that had generated a political firestorm:

· Kentucky Republican Jim Bunning wanted to force Democrats to find ways to finance the bill so that it would not add to the deficit, but his move sparked a political tempest that subjected Republicans to withering media coverage, and Bunning’s support among Republicans was dwindling.

4. Automakers enjoyed better-than-expected sales in February, and new incentives by Toyota will keep the momentum going into spring:

· Despite some analysts’ predictions of single-digit gains, sales increased 13% over last February, and all major automakers but Toyota reported higher U.S. sales.

March 3, 2010

1. U.N. Security Council diplomats said that the U.S. is circulating a draft of tougher sanctions against Iran that concentrate on the banking, shipping, and insurance sectors of its economy, and it is waiting for China and Russia to signal that they are willing to start negotiating the measure:

· There has been no reaction to the draft from China, which has publicly opposed sanctions, and the initial reaction from Russia was negative, saying the measures are too strong, but Moscow continues to endorse the idea of sanctions in tandem with negotiations.

2. A report by the Federal Reserve portrayed an economy that was making hesitant progress but still wrestling with familiar woes: high unemployment, tepid spending by businesses and consumers, and deterioration in the commercial real estate market:

· Nine of the central bank’s 12 districts reported improvement, mostly in such areas as consumer spending and residential real estate, which provided some reassurance that the recovery was on track, despite a recent batch of weak economic data, and James O’Sullivan, chief economist for MF Group, said that there was nothing in the report to show a double dip.

March 4, 2010

1. Health and Human Services Secretary Kathleen Sebelius told the nation’s leading health insurers to publicly justify a spate of double-digit premium hikes that have infuriated consumers in at least a half-dozen states:

· Meeting at the White House with the CEOs of WellPoint, Aetna, Cigna, UnitedHealth Group, and several state insurance commissioners, Sebelius asked the companies to post online their justification for proposing rate hikes primarily affecting customers who directly purchase their own coverage.

2. The House approved a $15 billion measure intended to spur job-creation by granting tax breaks to businesses that hire new workers, with Democrats pushing through the measure on a mainly party-line vote of 217-201—all Oregon Democrats except Schrader voted “yes”; Walden, Oregon’s sole Republican representative, voted “no”:

· Just six Republicans joined 211 Democrats in backing the measure; 166 Republicans and 35 Democrats were opposed.

3. Last month, consumers helped stores to post the strongest retail sales figures since November 2007, a month before the recession began:

· According to the International Council of Shopping Centers, the February sales report was the third consecutive monthly increase—their monthly index excludes Walmart, which stopped reporting monthly sales last year.

4. In January, orders to U.S. factories posted their sharpest rise in four months, another sign that manufacturing is helping to drive the recovery:

· The upbeat report followed other encouraging signs—according to a private survey of purchasing executives, the service sector grew at its fastest pace in more than two years, and a similar survey found that manufacturing is also growing—but first-time claims for jobless benefits remain elevated, and few economists expect the outsize productivity gains to continue.

March 5, 2020

1. Turkey warned the Obama administration of negative diplomatic consequences if it does not impede a U.S. resolution branding the World War I-era killing of Armenians genocide, with the Turkish foreign minister, Ahmet Davutoglu, adding that for Turkey, a key Muslim ally of the U.S., the issue is a matter of “honor” for his country:

· A U.S. congressional committee approved the measure on March 4^th, and their 23-22 vote sends the measure to the full House of Representatives, where its prospects for passage are uncertain—minutes after the vote, Turkey withdrew its ambassador to the U.S.

2. The unemployment rate held at 9.7% in February as employers shed 36,000 jobs—fewer than expected—and the figures suggested that the job market is slowly healing, but that significant hiring has yet to occur:

· The unemployment rate, which has not risen since October, could be bottoming out, but 14.9 million Americans are still unemployed, nearly double the total when the recession began, and the economy has shed 8.4 million jobs during that time.

3. The Obama administration’s surge of U.S. civilian officials and experts into Afghanistan in beset by a shortage of qualified personnel, a lack of housing, and other problems that could disrupt its timetable for turning over full control of the country to the Afghan government:

· The report by the State Department Inspector General’s Office said that the civilian buildup is a key component of the strategy that President Obama unveiled in December, and they said that the effort is dogged by problems, including its “unprecedented pace and scope”, the need to deploy personnel before there are places to house them, and difficulty finding civilians with adequate training and expertise.

4. Consumer borrowing broke a record stretch of declines with a small increase in January as a boost in auto loans offset weakness in credit card borrowing—a possible signal that Americans are regaining confidence in the economy:

· The Federal Reserve reported that consumer borrowing rose by $4.96 billion in January, surprising economists who were looking for it to decline by $4.5 billion—the first gain after a record 11 consecutive declines and the largest increase since July 2008.

5. A new congressional report says that the U.S.’ long-term fiscal woes are even worse than predicted by President Obama’s budget submission last month:

· The nonpartisan Congressional Budget Office predicts that Obama’s budget plans would generate deficits over the upcoming decade that would total $9.8 trillion—that’s $1.2 trillion more than predicted by the administration, and the agency says that its future-year predictions of tax revenues are more pessimistic than the administration’s because CBO projects slightly slower growth than does the White House.

WEEK EIGHT

March 8, 2010

1. Putting political pressure on the nation’s banks, FDIC Chairwoman Sheila Barr, speaking at the National Association for Business Economics, called for borrowers to identify and report banks that are not lending to consumers and small businesses:

• Her comments followed her agency’s recent release of 2009 bank industry data that showed a 7.4% contraction in lending, the largest since 1942, the first year the U.S. fully engaged in World War II—economists at the conference said that lending to large corporations had rebounded, and they cautioned that banks often have good reasons for keeping credit tight for smaller, less-proven firms during a tepid economic recovery.

2. AIG said that it will sell its American Life Insurance Company division for $15.5 billion to MetLife Inc., and the government-approved deal, AIG’s second big asset sale in two weeks, will give the insurer more cash to repay the billions of bailout dollars it still owes the government:

• The purchase expands MetLife’s presence in Japan and high-growth markets in Europe, the Middle East, and Latin America, and it also moves AIG closer to repaying taxpayers—as of December 31^st, the company owed the Treasury and the Federal Reserve Bank of New York nearly $130 billion.

March 9, 2010

1. A new Associated Press-GfK poll finds a hunger for improvements to the healthcare system—half of all Americans say that healthcare should be changed a lot or “a great deal”, and only four percent say it should not be changed at all:

• But they do not like the way the debate is playing out in Washington, where GOP lawmakers unanimously oppose the Obama-backed legislation, and Democrats are struggling to pass it by themselves with narrow House and Senate majorities—more than four of five Americans say it is important that any healthcare plan have support from both parties, and 68% say the president and congressional Democrats should keep trying to cut a deal with Republicans rather than passing a bill with no GOP support.

2. The Department of Labor said that the number of job openings in January rose about 7.6%, to 2.7 million, compared with December—the highest total since February 2009:

• The report is a sign that the economy is soon likely to generate consistent job gains, and some economists expect employers to add up to a net 300,000 jobs in March, although as many as a third of them could be temporary hiring for the 2010 census.

3. European officials urged the U.S. to join in a crackdown on speculators who bet against Europe’s currency union, warning that they might ban some credit default swaps—opaque financial instruments blamed for worsening the world financial crisis:

• The European Commission threatened to ban “purely speculative naked sales on credit default swaps of sovereign debt” and said that it would ask for a similar move globally at the Group of 20 summit of leading and emerging economies in June.

March 10, 2010

1. The latest Associated Press-GfK poll found that more than half of Americans still back President Obama, but fewer people approve of Congress than at any point in Obama’s presidency—support has dropped significantly since January to a dismal 22% as the healthcare debate has roiled Capitol Hill, and neither Republican or Democrats are safe as half of all people say they want to fire their congressman:

• Conversely, Obama’s job-performance standing is holding fairly steady at 53%, and over the past two months, he has gained ground on international security issues, specifically the subsiding Iraq war and the escalating Afghan war—on those issues, he still has the support of about half the people.

2. The Senate approved a $130 billion spending bill (both Oregon senators voted “yes”) that would extend jobless benefits, help the states pay for Medicare, and extend a bundle of tax measures designed to stimulate the economy:

• The measure—which must still be reconciled with the House’s version—also extends tax cuts for college tuition and tax breaks for research and development that has long been important to the nation’s high-tech industries, and in addition, it delays a threatened 21% cutback in the payments doctors receive for treating Medicare patients.

March 11, 2010

1. RealtyTrac Inc said that the number of U.S. households facing foreclosure in February grew six percent from a year ago, the smallest annual increase in four years—on the state level, foreclosures declined on a monthly and yearly basis in the hard-hit states of Nevada, Arizona, and California, but still grew rapidly in Florida:

• Still, fears remain about the hundreds of thousands of homeowners who are still being evaluated for help under loan-modification programs, and many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year.

• 
  

2. The Federal Reserve reported that household net worth rose 1.3% in the fourth quarter to $54.2 trillion, and it marked the third straight quarter of gains:

• Even with the gain, Americans’ net worth would have to rise an additional 21% just to get back to its pre-recession peak of $65.9 trillion—that shows the vast loss of wealth people have suffered from the worst downturn since the 1930s.

WEEK NINE

March 16, 2010

1. House Democrats struggled to defend procedural shortcuts they might use in the next few days to win approval for their healthcare proposals—a way to approve the bill passed by the Senate in December without explicitly voting for it:

a. Under that approach, House Democrats would approve a package of changes to the Senate bill in a budget reconciliation bill, and under this plan, the Senate bill would be “deemed passed” if and when the House adopts rules for debate on the reconciliation bill—or perhaps when the House passes that reconciliation bill.

b. The idea is to package the changes and the underlying bill together in a way that amounts to an amended bill in a single vote:

· Republicans paraded to the House floor to denounce the maneuver as a parliamentary trick, but it has been used at least a half-dozen times in the past—often to give political coverage to members voting on politically contentious matters such as the 1989 bill to ban smoking on airplane flights of less than two hours.

2. Attorney General Eric Holder told Congress that Osama bin Laden will never face trial in the U.S. because he would not be captured alive, and in testy exchanges with House Republicans, Holder compared terrorists to Charles Manson and predicted that events would ensure “we will be reading Miranda rights to the corpse of Osama bin Laden,” not to the al-Qaida leader as a captive:

· Holder sternly rejected criticism from GOP members of a House Appropriations subcommittee and said that it infuriates him to hear critics complain that terrorists would get too many rights in the court system.

3. Federal Reserve policy makers left their benchmark short-term interest rate unchanged in the range of zero to 0.25% and once again pledged to keep it low for an “extended period”—retaining the phrase they have used for the past year:

a. The central bank continues to sound relatively upbeat about the economy, saying that the data it looks at suggest that “economic activity has continued to strengthen and that the labor market is stabilizing.”

b. The Federal Reserve also said that it would end, on schedule, its program of buying mortgage-backed bonds to help keep home loan rates low—that program will conclude at the end of this month when the Federal Reserve mortgage bond holdings reach the $1.25 trillion limit it set last year.

4. The U.S. and Israel stepped back from their deepest rift in decades, a dispute over new Jewish homes in a traditionally Arab part of Jerusalem that quickly became a test of U.S. and Israeli commitment to peace talks and to one another:

· Secretary of State Hillary Clinton said that U.S. and Israeli officials are in intense talks about resuming peace talks, moving past the breach opened when Israel announced last week, during a visit to Jerusalem by Vice President Joe Biden, that it will build 1,600 more Jewish houses in east Jerusalem.

March 17, 2010

1. The jobs bill easily won final congressional approval with a bipartisan 68-29 vote in the Senate that sends the legislation to the White House where President Obama has promised to sign it into law:

· It will be the first of several election-year jobs bills promised by the Democrats to be enacted into law, though there is plenty of skepticism that the measure will do much to actually create jobs—optimistic estimates predict the tax break could generate perhaps 250,000 jobs through the end of the year, but that would be just a tiny fraction of the 8.4 million jobs lost since the start of the recession.

2. With time and tempers short, everyone is playing hardball in the pass-or-stop drive by the weekend of President Obama’s massive healthcare legislation:

· Business groups are spending $1 million a day to depict the bill as a job killer on television ads in the home districts of 26 wavering Democrats, and a new ad barrage from supporters of the legislation went up yesterday in 11 districts, some overlapping—and unions are threatening some of those lawmakers to come through for Obama or pay the price in the fall elections.

March 18, 2010

1. With the House on the brink of passing a landmark $940 billion healthcare overhaul bill that would simultaneously deliver on President Obama’s promise to expand coverage while slashing the deficit, and leaving nothing to chance, the White House announced that Obama has put off his planned trip to Asia for a second time, delaying it until June—Obama was to have left on the 21^st when the House is planning to vote:

a. The 10-year plan would provide coverage to 32 million people now uninsured through a combination of tax credits for middle class households and an expansion of the Medicaid program for low-income people.

b. The Congressional Budget Office estimated the legislation would reduce the federal deficit by $138 billion over its first 10 years and continue to drive down the red ink thereafter—Democratic leaders said that the deficit would be cut by $1.2 trillion in the second decade, and Obama called it the biggest reduction since the 1990s when President Bill Clinton put the federal budget on a path to a surplus.

2. President Obama pledged “to do everything in my power” to get immigration legislation moving in Congress this year, and he said that work on an immigration bill should move forward based on an outline released by Sens. Chuck Schumer (D-NY) and Lindsey Graham (R-SC):

· The outline calls for:

a. Illegal immigrants to admit they broke the law, pay a fine and back taxes, and perform community service if they want to get on a pathway to legal status;

b. Legal permanent residence to be given to people who graduate from U.S. universities with doctoral or masters’ degrees;

c. Zero tolerance to be given to illegal immigrants who commit crimes and expand enforcement of immigration laws;

d. The creation of a flexible legal immigration system that brings in more low-skilled workers when jobs are available and fewer during a recession;

e. All U.S. workers—citizens and legal immigrants—to be required to get fraud-proof Social Security cards with a biometric identifier.

3. As banks gambled on the risky mortgages that helped create the worst financial crisis in generations, the U.S. government handed out millions of dollars in bonuses to regulators at agencies that missed or ignored warning signs that the system was on the verge of a meltdown:

a. The bonuses, detailed in payroll data released to The Associated Press, were part of a reward program little known outside of the government.

b. Records show that during the 2003-2006 financial boom, the three agencies that supervise most U.S. banks—the FDIC, the Office of Thrift Supervision, and the Office of the Comptroller of the Currency—gave out at least $19 million in bonuses.

4. The head of the FDIC said that the agency would decide soon whether to end a special government guarantee for special deposit accounts in banks used by businesses:

· The guarantee for non-interest bearing accounts is part of a program backing hundreds of billions of dollars in U.S. banks’ debts that was put in at the height of the financial crisis in October 2008, and FDIC Chairman Sheila Bair said that a decision will be made in the next 30 days—it is the latest sign of the unwinding of federal financial rescue programs, and Bair says that such programs must be ended “as soon as possible.”

March 19, 2010

1. Rep. Peter DeFazio vowed to vote against the healthcare measure unless payments to doctors in Oregon and several other states are increased:

a. DeFazio voted for the healthcare bill in November when it passed 220-215, but that bill included a fix that would have increased Medicare payments to doctors in Oregon and 16 other states, a long-time source of friction between low-reimbursed states such as Oregon and those that receive higher payments, such as New York and Florida.

b. House Speaker Nancy Pelosi said in a news conference that the Medicare problem was well-known and promised to fix it at a later date and indicated that it would not be part of the healthcare bill because of concerns in the Senate that the Medicare language could bring a parliamentary challenge—but DeFazio was dismissive and said that he did not believe any of it.

2. Regulators shut down seven banks in five states, bringing to 37 the number of bank failures in the U.S. so far this year—the closings follow 140 in 2009:

· The FDIC took over banks in Alabama, Georgia, Minnesota, Utah, and Ohio—the total cost to the federal deposit insurance fund is expected to be more than $1 billion.

WEEK TEN

March 21, 2010

1. Congress gave final approval to legislation that would provide coverage to tens of millions of uninsured Americans and remake the nation’s healthcare system along the lines proposed by President Obama:

a. By a vote of 219-212 (all Oregon Democrats voted “yes”—no Republicans voted for this bill), the House passed the bill after a day of debate that echoed the epic struggle of the past year—the action sent the bill to Obama, whose crusade for such legislation has been a hallmark of his presidency.

b. Democrats hailed the votes as historic, comparable to the establishment of Medicare and Social Security and a long overdue step forward in social justice, but the bill passed without a single Republican vote—at no time in modern history has a major piece of legislation received not one Republican vote, even Lyndon Johnson got just shy of half the Republicans in the House to vote for Medicare in 1965, a piece of legislation denounced in many of the same terms as this one.

March 22, 2010

1. Democrats sent a massive Wall Street regulation bill to the full Senate on a party-line vote after a temporary retreat by Republicans that still left the bill’s chances for bipartisan passage in doubt:

· In a surprise move, the Senate Banking Committee met briefly to approve the bill 13-10, and the decision to move it swiftly through committee made it much more difficult to predict what the Senate would ultimately do with the legislation—committee senators had been expecting a long week of votes and debate, but Republicans jettisoned more than 300 amendments they had planned that would have put their imprint on the measure.

March 23, 2010

1. A beaming President Obama, presiding over the biggest shift in U.S. domestic policy since the 1960s, signed a historic $938 billion healthcare overhaul that guarantees coverage for 32 million uninsured Americans and will touch nearly every citizen’s life:

· The celebration continued even as Congress labored to complete the overhaul with a companion measure making changes to the main bill that were a condition of House Democrats’ approval, but not everyone was cheering the new law—attorney generals from 13 states (Florida, South Carolina, Nebraska, Texas, Michigan, Utah, Pennsylvania, Alabama, South Dakota, Louisiana, Idaho, Washington, and Colorado) filed suit to stop the overhaul just after the bill’s signing, contending that the law is unconstitutional, and other GOP attorney generals may join the lawsuit later or sue separately.

2. Members of Oregon’s congressional delegation, led by Rep. Peter De Fazio, played hardball to win concessions on Medicare reimbursements in exchange for their support for the new healthcare law:

· Over the next two years, Oregon doctors and hospitals will receive higher payments, and at the same time, Kathleen Sibelius, the Secretary of Health and Human Services, will commission a study that will lead to recommendations on how to fix the geographic disparities in the Medicare reimbursements—the changes are set to be implemented by 2012.

3. Senate Republicans are preparing to mount an assault against one of President Obama’s federal appeals court choices—Goodwin Liu, the president’s pick for the 9^th Circuit Court of Appeals in San Francisco, is expected to testify before the Senate Judiciary Committee March 24^th in what promises to be a contentious hearing:

· Liu (39) is viewed by opponents as a game changer—by all accounts, he is an opinionated and intellectually fierce academic with no judicial experience, but Liu’s advocates point to support for his nomination from an ideologically diverse group of supporters, including former White House special prosecutor Kenneth Starr and former Bush administration lawyer John Yoo.

March 24, 2010

1. Hours after President Obama signed historic healthcare legislation, a potential problem emerged, and administration officials are now scrambling to fix a gap in highly touted benefits for children:

· Under the new law, insurance companies still would be able to refuse new coverage to children because of a pre-existing medical problem, said Karen Lightfoot, spokeswoman for the House Energy and Commerce Committee, one of the main congressional panels that wrote the bill, and the administration said that Health and Human Services Secretary Kathleen Sibelius would try to resolve the situation by issuing new regulations making it clear that the term “pre-existing condition” applies to both a child’s access to a plan and his or her benefits once he or she is in the plan.

2. The bursting of the real estate bubble and the ensuing recession have affected jobs, home prices, and now Social Security—this year, the system will pay out more in benefits than it receives in payroll taxes, a threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office:

· Stephen Goss, chief actuary of the Social Security Administration, said that while the CBO projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

3. The U.S. and Russia reached a breakthrough agreement for a historic treaty to reduce the nuclear arsenals of the former Cold War rivals, the most significant pact in a generation and an important milestone in the decades-long quest to lower the risk of global unclear war:

· President Obama and Russian President Dmitry Medvedev are to sign the treaty in two weeks in Prague, and the accord is expected to cut the number of long-range nuclear weapons held by each side to about 1,500, and it raises hopes for further disarmament in the years ahead.

4. The jobs bill passed by the House combines $13.2 billion in interest subsidies for local construction bonds with $3.6 billion in tax cuts for small businesses and $2.5 billion in aid to states to pay for expanded welfare programs through September 2011:

· The House passed the bill 246-178 (all Oregon Democrats voted “yes”; Rep. Walden voted “no”), with nearly all Republicans opposed to the measure, which now goes to the Senate.

5. The recovery in the housing market is at risk of collapsing—home sales are sliding, prices are stalling and foreclosures are rising, and mortgage rates are likely to go up after next week when the Federal Reserve ends a program that has driven them down:

a. The latest sour news came when the Commerce Department said that sales of new homes fell last month to their lowest point on record—it was the fourth straight drop.

b. But as the housing market sputters, manufacturing remains a source of strength for the economic recovery—the Commerce Department said that orders for durable goods rose 0.5% last month.

March 25, 2010

1. House Majority Leader Steny Hoyer (D-MD) voiced concern over warnings of violent reprisals against members of Congress who voted for landmark healthcare legislation, saying the threats are being taken “very seriously:”

· The FBI is working with lawmakers subjected to menacing obscenity-laced phone messages—in some instances, bricks were hurled through at least four Democrats’ offices in New York, Arizona, and Kansas, and at least ten members of Congress have reported some sort of threats, congressional leaders have said.

2. Congress gave final approval to a package of changes to the sweeping healthcare overhaul, and the bill now goes to President Obama for his signature:

a. The budget reconciliation measure that included the final changes made by the Senate and then by the House passed by a vote of 220-207 in the House and by 56-43 in the Senate with the Republicans unanimously opposed in both chambers—both Oregon senators voted “yes”, and all Oregon House Democrats voted “yes” with Walden, Oregon’s sole Republican, voting “no.”

b. The reconciliation bill makes numerous revisions to many of the central provisions in the measure adopted by the Senate on December 24^th, including changes in the levels of subsidies that will help moderate-income Americans afford private insurance, as well as changes to the increase in the Medicare payroll tax that will take effect in 2013 and help to pay for the legislation.

c. Oregon Sen. Ron Wyden inserted an amendment in the new healthcare law that allows states to opt out of the federal plan, including the contentious individual insurance mandate—as long as the states meet the general requirements of the new law, “they can go up and do their own thing,” Wyden said.

3. The Department of Defense announced stricter guidelines for discharging gay and lesbian service members under the “don’t ask, don’t tell” policy, raising the standards for charging that someone is gay and allowing only generals to approve discharges:

· It is the biggest change to the policy since Congress passed it and President Bill Clinton signed it into law in 1993, and the changes are expected to protect as many as one in five of the servicemen and servicewomen who are kicked out now because of their sexual orientation—the remaining 80% come forward and say that they are gay, according to Pentagon statistics.

4. As Congress heads for its Easter recess, Republican Sen. Tom Coburn of Oklahoma, blocked a stop-gap bill to extend jobless benefits, saying its $9 billion cost should not be added to the national debt—as a result, some people who have been out of work for more than six months will, at least temporarily, lose benefits, and newly jobless people will not be eligible to sign up for generous health insurance subsidies:

· Jim Manley, a spokesman for Majority Leader Harry Reid (D-NV) said that the Senate would attempt to retroactively bestow the jobless benefits when it returns from spring recess April 12^th.

5. More needy college students will have access to bigger Pell Grants and future borrowers of government loans will have an easier time repaying them under a vast overhaul of higher education aid that Congress passed and sent to President Obama:

· The legislation, passed in the House on a 220-207 vote as part of an expedited bill that also fixed provisions in the new healthcare bill, and it passed in the Senate on a 56-43 vote, representing the most sweeping rewrite of college assistance programs in four decades.

March 26, 2010

1. The U.S. and Russia sealed the first major nuclear-weapons treaty in nearly two decades, agreeing to slash their warhead arsenals by nearly one-third:

· President Obama and Russian President Dmitry Medvedev will sign the agreement April 8^th in Prague, and, if ratified by the Senate and by Russia’s legislature, the reductions still would leave both countries with immense arsenals—together, the U.S. and Russia possess about 95% of the world’s nuclear weapons, according to the Center for Arms Control Non-Proliferation.

2. Two court decisions are likely to help set the ground rules for 2010 election fundraising: the Republican Party lost its bid to raise unlimited contributions, while a conservative group won approval to raise big donations for ads but must regularly disclose its givers:

· Republican National Committee Chairman Michael Steele said that the RNC will appeal its case to the Supreme Court—if the court takes the case, it would be unlikely to rule before the November elections—and the conservative group, SpeechNow.org, is considering whether to appeal the disclosure requirement ruling to the Supreme Court.

3. U.S. economic growth in the last quarter of 2009 was slightly less robust than previously thought, the government said, but corporate profit in the quarter increased significantly, providing hope that businesses might begin hiring again:

· The quarterly growth rate was the fastest in more than six years, but economists expect the pace will slow again, given chronic unemployment and struggling real estate markets.

4. The EPA proposed to halt the largest mountaintop mining operation in central Appalachia, saying that the project would pollute drinking water and harm wildlife in mountain streams and that the damage to the mountains would be irreversible:

· Despite the strong language, the EPA’s action only begins another lengthy process involving the mine, and in the end, the agency could prohibit the mine altogether or allow it to continue with restrictions.

WEEK ELEVEN

March 29, 2010

1. Oregon is one of five states that will share in a $600 million federal program aimed at helping regions hardest hit by unemployment, home foreclosures, and upside-down mortgages:

· Lisa Joyce, spokeswoman for the Oregon Department of Housing and Community Services, said that the agency would distribute the $88 million awarded to Oregon under an aid program expansion announced by the Obama administration to help homeowners avoid foreclosure—the details of who will get help under the program and how to apply have not yet been worked out, Joyce said.

2. The Treasury Department said that it would begin selling its stake in Citigroup Inc. at a potential profit of about $7.5 billion—not too bad for an 18-month investment:

· The move is a major step in the government’s effort to unravel investments it made in banks under the $700 billion Troubled Asset Relief Program at the height of the financial crisis, but other parts of TARP—particularly troubled automakers GM and Chrysler and insurer AIG—show no signs of being profitable.

March 30, 2010

1. Under pressure from the White House, health insurance companies said that they would comply with rules to be issued soon by the Obama administration requiring them to cover children with pre-existing medical problems:

· Karen Ignagni, president of America’s Health Insurance Plans, a trade group, made the commitment in a letter to Kathleen Sebelius, the secretary of Health and Human Services, who had said that she feared some insurers might exploit a possible ambiguity in the new healthcare law to deny coverage to some sick children.

2. With the president of France at his side, President Obama declared that because of its continuing nuclear program, he hopes to have international sanctions against Iran in place “within weeks” not months, but he acknowledged he still lacks full support at the U.N.:

· On the U.N. Security Council, veto-wielding permanent members Russia and China have expressed reservations toward a tougher set of sanctions, as have several of the rotating members who do not have veto powers, and Obama said that he understands that countries that have business ties with Iran, especially those who depend on Iran for oil imports, might be reluctant to support stronger sanctions.

March 31, 2010

1. Administration officials say that President Obama will announce new plans to drill for oil off California, Oregon, and Washington state through 2017:

· Obama’s plans are widely expected to include opening new areas of coastal Virginia, the mid-Atlantic, Alaska, and the eastern Gulf of Mexico, but officials say that the president will block any drilling in Alaska’s Bristol Bay, where Bush administration drilling plans angered environmentalists, and administration officials said that Obama’s plan includes no drilling within 125 miles of the Florida coastline.

April 1, 2010

1. The Obama administration is setting tough gas mileage standards for new cars and trucks—the heads of the Transportation Department and the EPA said final rules requiring 2016 model-year vehicles to meet fuel efficiency targets of 35.5 miles per gallon combined for cars and trucks, an increase of nearly 10 mpg over current standards set by the National Highway Traffic Administration:

· President Obama said that the new requirements will save 1.8 billion barrels of oil under the life of the program, which will cover the 2012-16 model years—the new standards move up goals set in a 2007 energy law, which required the auto industry to meet a 35 mpg average by 2020.

April 2, 2010

1. The nation’s economy posted its largest job gain in three years in March, while the unemployment rate remained at 9.7% for the third straight month—the increase in payrolls is the latest sign that the economic recovery is gaining momentum and healing in the job market is beginning:

· The Labor Department said that employers added 162,000 jobs in March, the most since the recession began but below analysts’ expectations of 190,000—still there are 15 million Americans out of work, roughly double the total before the recession began in December 2007.

WEEK TWELVE

April 5, 2010

1. The Institute for Supply Management, a trade group, said that its service index rose to 55.4 in March from 53 in February—any reading above 50 signals expansion—and it was the strongest growth since the institute revised how it measured the service in January 2008:

· Offering more optimism, the National Assn. of Realtors said that the number of people who agreed to buy previously occupied homes increased 8.2% in February—both reports suggest the broader economy is recovering and employers are taking notice, but some analysts are less optimistic, and they worry the economy will slow sharply over the next few months as government stimulus ends, and other factors, such as a rebound in company inventories, fade.

2. According to the findings of the new AP Economy Survey of leading economists, jobs and home values will remain shaky well into 2011, and as a result, three-quarters of the economists said, the Federal Reserve would be forced to keep interest rates near zero until at least the final quarter of this year:

· The new AP survey, which will be conducted quarterly, compiles forecasts of leading private, corporate, and academic economists on a range of indicators, including employment, home prices, and inflation.

April 6, 2010

1. The Obama administration will narrow the circumstances under which the U.S. would use nuclear weapons, altering a decades-old policy that helped maintain a global balance of power during the tense days of the Cold War:

a. The administration revealed the new policy in a document called a nuclear posture review, drafted after a year of deliberation led by the Pentagon in consultation with allied governments, and while the move seems certain to provoke a partisan debate, its just one in a series of White House initiatives limiting the roll of atomic warheads in national defense, following President Obama’s pledge last year to move toward a nuclear-free world;

b. The document alters the role of nuclear weapons in defense policy by reducing the number of potential U.S. nuclear targets, asserting—with caveats—that the U.S. would not use nuclear weapons to respond to a chemical or biological attack, but that assurance would only apply to countries that had signed the Nuclear Non-Proliferation Treaty and had met their obligations.

April 8, 2010

1. Sunrise Enterprises has been awarded $760,000 from the federal Economic Development Administration for improvements at the nonprofit group’s new headquarters and recycling center in Green, and at the same time, the Coos Curry Douglas Business Development Corp. was given $67,189 to implement a comprehensive economic development program:

a. “This planning investment will assist in the support and recovery of businesses, identify infrastructure needs, and help create employment in the Coos, Curry, and Douglas region,” Wayne Luzier, the CCD’s executive director, said in a release;

b. Sam Gardner, Sunrise executive director, said that Sunrise expects to create 20 new jobs in its wood products division and another 15 jobs in the recycling division.

2. President Obama and Russian President Dmitry Medvedev signed an arms-control treaty designed to open an era of harmony between the former superpower rivals while launching an arms agenda extending far into the future:

· The treaty would require each country to deploy no more than 1,550 long-range nuclear warheads, down from a current ceiling of 2,200, and it would limit the number of the submarines, missiles, and bombers that carry them to 800, down from the 1,600 permitted under the Strategic Arms Reduction Treaty of 1981.

3. National retail sales increased a record 9.1%, providing the best monthly showing in at least a decade and offering new evidence that a strong economic recovery could be ahead:

· Robust growth was widespread: department stores, discounters, apparel sellers, and luxury chains reported strong gains, and many retailers boosted their earnings guidance.

April 9, 2010

1. Supreme Court Justice John Paul Stevens, the court’s oldest member and leader of its liberal bloc, is retiring, and President Obama now has his second high court opening to fill:

· Stevens said that he will step down when the court finishes its work for the summer in late June or early July, and the timing of his announcement leaves ample time for the White House to settle on a successor and Senate Democrats, who control 59 votes, to conduct confirmation hearings and a vote.

WEEK THIRTEEN

April 12, 2010

1. Presidents, prime ministers, and top officials from 47 countries gathered on the threshold of President Obama’s nuclear proliferation summit, the largest assembly hosted by a U.S. leader since the founding conference of the U.N. In 1945:

Obama wants world leaders to confront the threat of nuclear arms falling into the hands of terrorists—a specter he labels “the single biggest threat to U.S. security”—and he is looking at the high profile security forum here to help him reach his goal of ensuring that all nuclear materials worldwide are secured from theft or diversion within four years.

2. The Senate agreed to consider a temporary extension of unemployment benefits after four Republicans (Scott Brown of Massachusetts, George Voinovich of Ohio, and Susan Collins and Olympia Snowe of Maine) joined Democrats in voting to debate the proposal, which has become the focus of an intensifying fight over deficit spending:

• Despite objections from conservation Republicans, the Senate voted 60-34 to move ahead with a measure that would keep checks flowing to jobless Americans who are exhausting their benefits and would maintain federal subsidies for health insurance for the unemployed—the $9 billion cost of the aid would be added to the deficit, which Democrats said was justified because of the grim national employment picture.

3. President Obama secured a promise from President Hu Jintao of China to join negotiations on a new package of sanctions against Iran, administration officials said, but Hu made no specific commitment to backing measures that the U.S. considers severe enough to force a change in direction in Iran’s nuclear program:

• U.S. officials portrayed the Chinese response as the most encouraging sign yet that Beijing would support an international effort to ratchet up the pressure on Iran and as a sign of “international unity” on stopping Iran’s nuclear program before the country can develop a working nuclear weapon.

4. The Dow Jones industrial average inched above 11,000—and, for the first time since the dark days of 2008, actually managed to stay there:

• The Dow gained 8.62 points, a mere 0.08%, to close at 11,005.97, but that modest gain, driven largely by news of a long-awaited financial rescue for the debt-strapped Greek government, was enough to help the market tick off yet another milestone in its long recovery.

April 13, 2010

1. President Obama completed a first meeting of world leaders on combating terrorism with a list of specific commitments from dozens of nations to eliminate or lock down nuclear materials in what he called a “bold and pragmatic” program to finish the task in the next four years:

• At the end of two days of meetings, Obama could claim two major accomplishments: the summit meeting forced countries that had failed to clean up their nuclear surpluses to formulate detailed plans to deal with them, and it kicked into action nations that had failed to move on previous commitments—a second summit meeting will be held in two years in South Korea, Obama said, to make sure countries are on track.

April 15, 2010

1. President Obama has signed a bill extending unemployment befits through June 2^nd and restoring full Medicare payments to doctors:

a. The House cleared the bill by a 289-112 tally taken two hours after it emerged from the Senate on a 59-38 vote that capped an unusually partisan debate—all Oregon congressmen voted “yes” on this measure;

b. The measure provides up to 99 weekly unemployment checks averaging $335 to people whose 26 weeks of state-paid benefits have run out—it is a temporary extension through June 2^nd that gives House and Senate Democrats time to iron out a measure to fund the program through the end of the year.

2. President Obama ordered his health secretary to issue new rules aimed at granting hospital visiting rights to same-sex partners and making it easier for gays to make medical decisions on behalf of their partners:

• The rules will take time to draft and put in place, so Obama’s order will have no immediate effect, but gay rights groups called it a major advance—the president said that the rules would affect any hospital that participates in Medicare or Medicaid.

3. One grim statistic casts a long shadow over the recovering economy—a record 44% of the nation’s 15 million unemployed have been out of work for more than six months—and evidence suggests that many of them may never completely rebuild the working lives they lost:

• Not since the Depression has the U.S. labor market seen anything like it—the previous high in long-term unemployment was 26% in June 1983, just after the deep downturn of the early 1980s, and the 44% rate in March translates into more than 6.5 million people.

April 16, 2010

1. The government accused Wall Street’s most powerful firm of fraud, saying that Goldman Sachs & Co. sold mortgage investments without telling the buyers that the securities were crafted with input from a client who was betting on them to fail—and fail they did:

• The civil charges filed by the Securities & Exchange Commission are the government’s most significant legal action related to the mortgage meltdown that ignited the financial crisis and helped plunge the country into recession.

WEEK FOURTEEN

April 20, 2010

1. Fearing that health insurance premiums may shoot up in the next few years, Senate Democrats laid a foundation for federal legislation of rates—four weeks after President Obama signed into law a bill intended to rein in soaring healthcare costs:

· After a hearing on the issue, the chairman of the Senate health committee, Tom Harkin (D-Iowa) said that he intended to move this year on legislation that would “provide an important check on unjustified premiums,” and he praised a bill by Sen. Dianne Feinstein (D-California) that would give the secretary of health and human services power to review premiums and block “any rate increase found to be unreasonable.”

April 21, 2010

1. The International Monetary Fund is recommending that banks and other financial institutions pay fees to cover the cost of any future government bailouts:

· The proposals were requested by the “Group of 20” countries with the largest economies and will be discussed at a meeting of finance ministers and central bank governors in Washington this week.

2. Family members of severely wounded Iraq and Afghanistan veterans who forego jobs and health insurance to provide care for an injured loved one would get relief under a bill unanimously passed by the House:

· The estimated $1.7 billion in caregiver benefits over a five-year period was part of comprehensive veterans’ legislation that would open the door wider for the Veterans’ Affairs Department to offer assistance to veterans’ family members.

3. GM accelerated toward recovery, announcing the repayment of $8.1 billion in U.S. and Canadian government loans five years ahead of schedule, and the Obama administration is pleased about the “turnaround” at GM and fellow bailout recipient Chrysler LLC, saying the government’s unpopular rescue of Detroit’s automakers is paying off.

· The U.S. government still owns 61% of GM, and the automaker is counting on a public stock offering to allow the U.S. government to begin recouping its remaining $45.3 billion investment.

April 23, 2010

1. In a letter to congressional leaders obtained by The Associated Press, Treasury Secretary Timothy Geithner is telling Congress that the administration believes the final costs of the government’s heavily criticized financial bailout effort could be as low as $87 billion—a year ago, officials estimated the bailout could cost $500 billion:

· The new estimate said that the biggest losses would occur from the government’s support of mortgage companies Fannie Mae and Freddie Mac—that loss was put at $85 billion followed by a loss of $49 billion from helping homeowners facing the threat of foreclosures, and Geithner estimated that the government would lose $48 billion through support provided to insurance giant AIG and $28 billion would be lost through the assistance provided to GM, Chrysler, and their auto financing arms.

2. White House spokesman Robert Gibbs said that the explosion at an oil rig in the Gulf of Mexico is no reason to give up plans to expand offshore drilling, and he said that President Obama continues to believe that the U.S. needs a comprehensive solution to its energy problems—including expanded domestic production of oil and natural gas:

· Interior Secretary Ken Salazar said that the Obama administration’s drilling plan would assess potential risks and benefits of any offshore site before drilling is pursued—no new lease sales are planned before at least 2012.

WEEK FIFTEEN

April 26, 2010

1. A tough new Arizona law aimed at rooting out illegal immigrants is reshaping the approach the Obama administration and congressional Democrats are using to pass a sweeping overhaul of the nation’s immigration system:

· President Obama’s game plan is not to put forward his own bill, but rather to wait for a pair of influential senators, Lindsey Graham (R-SC) and Charles Schumer (D-NY) to release a proposal that might command bipartisan backing, and complicating matters for the White House, according to a Democratic Senate aid, is a divided Democratic caucus, with two Democratic senators, Ben Nelson of Nebraska and Blanche Lincoln of Arizona, privately telling Democratic leaders they would prefer to see immigration delayed until 2011—the Arizona law has emerged as a wild card in the national debate.

2. Undaunted by a Senate setback, Democrats appeared increasingly confident they will be able to take advantage of America’s anger at Wall Street and push through the most sweeping new controls on financial institutions since the Great Depression:

· The Senate—in a 57-41 vote, failed to get the 60 supporters needed to proceed on the regulatory overhaul—one Democrat, Sen. Ben Nelson of Nebraska, joined with the Republicans, but Democrats believe that public pressure and the scent of a Wall Street scandal have given them the upper hand.

April 27, 2010

1. Home prices in February posted their first annual increase in more than three years, though it’s too early to say the housing market is recovering—the last time prices rose on a year-over-year basis was December 2006:

· Home prices are up more than three percent from the bottom in May 2009, but are still 30% below the May 2006 peak—a recovery in prices is considered necessary to boost consumer optimism and help revive the economy.

2. President Obama said that every politically painful choice must be considered—including spending cuts, tax increases, even changing the new healthcare law—as he launched what he hopes will be a bipartisan effort to reduce the government’s soaring budget deficits:

· One area of possible agreement: Sen. Max Baucus (D-MT) suggested the panel try to cut waste and fraud in spending and to collect more in taxes already owed—he said that the IRS had estimated that it failed to collect $345 billion a year in income taxes owed either because people under-reported their income or took too many deductions.

April 28, 2010

1. Hawaii legislators have passed a measure allowing a state agency to ignore repeated requests from a person or organization for President Obama’s birth certificate:

a. The measure approved by the state legislature would carve out an exemption in the state’s public records’ law and allow officials to ignore all kinds of duplicative requests, including those for Obama’s birth certificate;

b. Hawaii Health Director Dr. Chujome Fukino has issued two statements since 2008 saying she had seen vital records proving Obama is a natural-born American citizen, but state officials say that they still get between 10 and 20 emails each week seeking verification of Obama’s birth.

2. In a significant shift away from church-state separation, the Supreme Court gave its approval to display a Christian cross on government land to honor the war dead, saying the Constitution “does not require the eradication of all religious symbols in the public realm:”

· By a 5-4 vote, the justices reversed lower courts in California that ordered the U.S. Park Service to remove an eight-foot-tall cross that has stood in various forms in the Mojave National Preserve since 1934 as a memorial to the soldiers of World War I.

3. Gov. Charlie Crist will turn Florida’s U.S. Senate race on its head by formally announcing that he will run as an independent and walk away from the party that has made him one of the state’s most recognizable politicians—two sources close to Crist say that the Republican governor will launch his independent bid in his hometown of St. Petersburg and will portray himself as a candidate more interested in serving “the people” than partisan politics:

· His long-rumored break from the GOP will turn Florida’s race into the nation’s hottest political ticket—a three-way contest pitting Crist against Marco Rubio, the charismatic pinup boy of movement conservatives and tea party activists, and likely Democratic nominee, U.S. Rep. Kendrick Meek.

4. The most sweeping new controls on financial institutions since the Great Depression advanced when Republicans abandoned their blockade in the Senate, and now the battle begins over crucial details—the House has passed its version:

· Democrats said that the Republicans had given in after three days of votes to block debate, realizing they were on the losing end of a battle for public opinion.

5. The Federal Reserve sounded a more confident note that the economy is strengthening, and, in a 9-1 decision, pledged to hold rates at record lows to make sure it gains traction:

· The Fed offered a more upbeat view of the economy even as it noted that risks remain, and while the job market is “beginning to improve,” it observed that the unemployment situation was merely stabilizing.

April 29, 2010

1. Anger mounted over Arizona’s measure to crack down on illegal immigration as a Tucson police officer sued to challenge it; governors in Texas and Colorado weighed in to oppose such a law in their own states; activists demonstrated outside an Arizona Diamondback game; at least three Arizona cities—Phoenix, Flagstaff, and Tucson—are considering legal action to block the law; and the National Coalition of Latino Clergy and Christian Leaders also sued and sought an injunction to prevent authorities from enforcing the law:

· U.S. Attorney General Eric Holder has said that the federal government may challenge the law, which requires local and state law enforcement to question people about their immigration status if there is reason to suspect they are in the country illegally and which makes it a state crime to be in the U.S. illegally.

2. The fight over the new healthcare law shifted to the states, as some governors claimed federal money to run a new insurance pool for people with serious medical problems, while others said that they would not operate the program—April 30^th is the deadline for states to tell the Obama administration whether they want to run the high-risk insurance pool for uninsured people with pre-existing conditions or whether they will leave the task to Kathleen Sebelius, the secretary of health and human services:

· Democratic officials in Montana, Pennsylvania, Washington, and Wisconsin—among other states—were joined by California governor Arnold Swarzenegger, a Republican, and said that they intended to operate the program under contract with the federal government, while Republican officials in Georgia, Nebraska, Nevada, and Utah turned down the opportunity to run the pool, as did at least one Democratic governor, Dave Freudenthal of Wyoming—the temporary federal program runs from July 2010 to January 1, 2014, when insurers will be required to accept all applicants.

3. Moving to blunt what they call “one of the worst decisions” in Supreme Court history, Sen. Ron Wyden of Oregon and three Democratic allies offered legislation that would require corporate CEOs, labor leaders, and directors of special interests to appear in—and take credit for—any political ad they finance:

· Sponsors said that the provisions are designed to limit “the negative effects” of the Supreme Court’s 5-4 ruling in January that gave corporations and special interests the same free-speech rights as individuals—no Republican in the Senate has endorsed the bill, but Sen. Charles Schumer (D-NY) and the bill’s chief sponsor, said that he expects GOP support once it reaches the floor.

4. Administration officials said that the massive oil spill in the Gulf of Mexico could trigger changes in President Obama’s recently announced plans to open new coastal areas for offshore drilling, and Sen. Bill Nelson (D-FL) said that he would introduce a bill to block the administration’s increased offshore drilling plans for now:

· Government officials said that the blown-out oil well 40 miles offshore is spewing five times as much oil into the water as originally estimated: about 500 barrels a day, and at that rate, the spill could eclipse the worst oil spill in U.S. history—the 11 million gallons that leaked from the grounded tanker Exxon Valdez in Alaska’s Prince William Sound in 1989.

5. President Obama chose Janet Yellen as vice chairwoman of the Federal Reserve and filled two other vacancies on the board—the nominations are subject to Senate approval, but if the Senate confirms all three, Obama will have appointed five of the seven members of the Federal Reserve Board:

· Yellen is president of the Federal Reserve Bank of San Francisco, and as vice chairwoman, the second-highest ranking Fed official, her duties would include helping to build support for policy positions staked out by Fed Chairman Ben Bernanke, who has begun his second term.

April 30, 2010

1. Under heavy political fire, the Pentagon has dropped its opposition to the huge Shepherds Flat wind energy farm in north-central Oregon, a decision that brings construction jobs, royalties, and taxes to two counties that badly need them:

a. The Pentagon had stopped Shepherds Flat because of Air Force concerns that the 338 towering turbines planned in Gilliam and Morrow counties would scramble radar signals from a station built outside Fossil in 1958;

b. On Friday, Oregon Democratic senators Ron Wyden and Jeff Merkley and Rep. Greg Walden (R-OR) announced that the Pentagon had agreed to allow the project, the largest in the U.S. to go forward.

3. Defense Secretary Robert Gates told Congress that he strongly opposed any immediate efforts to repeal or alter the ban on gays serving openly in the military, and while Gates supports an eventual repeal of the ban, he said in a letter to the House Armed Services Committee that before Congress acts, he wants the Pentagon to first finish its review of the impact of any potential changes and to develop an implementation plan:

· President Obama, in his State of the Union address, said that he would work with Congress and the military to repeal the law “this year”, and Gates has set a December timetable for completing a review of the impacts of changing the 1993 “don’t ask, don’t tell” law, which bars gays and lesbians from serving openly.

4. For the first time, officials in the Obama administration began to publicly chastise BP America for its handling of the spreading oil gusher in the Gulf of Mexico, calling the oil company’s current resources inadequate to stop what is unfolding as an environmental catastrophe:

· BP officials said that they did everything possible, but a review of the response suggests that it may be too simplistic to place all the blame on the oil company since the federal government also had opportunities to move more quickly but did not do so while it waited for BP to provide a resolution to the spreading spill.

5. Regulators have shut down three banks in Puerto Rico, two in Missouri, and one each in Michigan and Washington, bringing the number of U.S. bank failures this year to 64:

· The U.S. had 140 bank failures last year, the highest annual tally since 1992, at the height of the savings-and-loan crisis, which cost the FDIC more than $30 billion—25 banks failed in 2008, and only three succumbed in 2007.

WEEK SIXTEEN

May 2, 2010

1. President Obama visited Louisiana for a first-time look at the response effort to an oil spill he called a “potentially unprecedented environmental disaster,” and BP officials, the company responsible for the cleanup, described in detail, for the first time, their desperate efforts to kill the gushing well:

• Over the next few days, the National Oceanic and Atmospheric Administration said that the spill appeared likely to move toward the Mississippi and Alabama coasts and engulf the Chandeleur Islands off Louisiana’s southeast tip, and while the president did not criticize BP in his public remarks, Obama’s comments reflected increased frustration with BP’s inability to plug the oil leak.

2. Police investigation of a terror attack that could have set off a deadly fireball in Times Square focused on finding a man who was videotaped shedding his shirt near the SUV where the bomb was found:

a. Police said that the gasoline-and-propane bomb was crude but could have sprayed shrapnel and metal parts with enough force to kill pedestrians and knock out windows on one of America’s busiest streets, full of theaters and restaurants on a Saturday night;

b. Police had already identified the registered owner of the 1993 Nissan Pathfinder, which did not have an easily visible vehicle identification number and had license plates from another car, and they were looking for him so they could interview him.

May 3, 2010

1. Investigators spoke to the registered owner of the SUV used as a homemade car bomb in a failed terror attack in the heart of Times Square, but police said that the person was not considered a suspect:

• Attorney General Eric Holder said that investigators have some good leads and that it is too early to tell whether the incident was of foreign or domestic origin or to designate it as terrorism.

2. BP PLC said that it would pay for all the cleanup costs from a massive oil spill in the Gulf of Mexico that could continue spewing crude for at least another week:

• BP chief executive Tony Hayward said that chemical dispersants seem to be having a significant impact, keeping oil from flowing to the surface, though he would not elaborate, and the update on the dispersants came as BP was preparing a system never tried before to siphon away the geyser of crude from the well, but it will take at least another six to eight days before crews can lower 74-ton, concrete-and-metal boxes being built to capture the oil and siphon it to a barge waiting at the surface.

3. United Airlines has agreed to buy Continental in a $3 billion-plus deal that would create the world’s largest carrier with a commanding position in several U.S. Cities:

• The new United would surpass Delta Air Lines in size, which should help it attract more high-fare “business” travelers—it will fly to 370 destinations in 59 countries.

4. U.S. Secretary of State Hillary Clinton, accusing Iran of “flouting the rules,” called for a strong international response to Tehran’s alleged development of a nuclear weapons program, proposing that the non-proliferation treaty be strengthened by introducing “automatic penalties” for noncompliance, rather than depend on drawn-out council diplomacy”

• Earlier in the day, Iran’s President Mahmoud Admadinejad denounced the Obama administration’s refusal to rule out the use of U.S. nuclear weapons and invited President Obama to join a “humane movement” that would set a timetable for abolishing all atomic arms.

5. Factories are churning out more goods; consumers are spending; and government aid is fueling construction activities; but stagnant pay and weak hiring are likely to restrain the economic rebound in coming months:

• Manufacturing in April grew at the fastest pace in six years, according to the Institute for Supply Management, as companies began to rebuild their inventories and consumer spending propelled more production in retail goods, but Joel Naroff, chief economist at Naroff Economic Advisors Inc. said that while “household are spending again,” their incomes are not keeping up, and “household spending can only be supported if we get better income growth.”

May 4, 2010

1. Authorities said that a Pakistani-born U.S. citizen was hauled off a plane about to fly to the Middle East and arrested in the failed attempt to explode a bomb-laden SUV in Times Square, and one official said that he claimed to have acted alone:

a. Faisal Shahzad was on board a Dubai-bound flight that was taxiing away from the gate at Kennedy airport when the plane was stopped, and FBI agents and New York Police Department detectives took him into custody;

b. Officials said that federal authorities charged Shahzad with terrorism-related crimes, and Shahzad admitted his role in the attempted attack, and said that he had received explosives training in Waziristan, a lawless region of Pakistan;

100. Shahzad’s arrest was followed within hours by reports of arrests in Pakistan of seven or eight people—U.S. intelligence officials said that while Shahzad’s ties to international terrorist groups remained murky, evidence was mounting that the Pakistan Taliban played a role in the attempted attack.

2. BP officials told congressional representatives that, in a worst-case scenario, the Gulf of Mexico oil spill could grow at a rate more than ten times current estimates—officials have estimated that the leak is gushing oil at a rate of 5,000 barrels a day:

• Press Secretary Robert Gibbs said that the administration wants to work with Congress to change a law that caps at $75 million BP’s liability for economic damages such as lost wages or dwindling tourist dollars for, while BP PLC is responsible for all cleanup costs under the Oil Pollution Act, other costs could easily top $75 million.

3. Stocks plunged around the world as fears spread that Europe’s attempt to contain Greece’s debt crisis would fail, and the euro fell to its lowest point against the dollar in a year:

• The Dow Jones industrial average lost 225 points, its biggest drop in three months, erasing a 143-point gain from the day before—the Dow and broader indices each fell more than two percent, while Treasury prices rose on increased demand for safe investments.

May 5, 2010

1. The Coast Guard says that after 16 days, BP PLC has managed to cap one of three leaks at the deepwater oil well, and while that is not expected to reduce the overall flow of oil into the Gulf of Mexico, it does make it possible to drop a single containment on the breach spewing the vast majority of oil:

• Two satellite images indicate that oil has reached the Mississippi Delta and the Chandeleur Islands off the coast of Louisiana, and Hans Graber, an imaging expert and director of the University of Miami’s satellite sensing facility, said that the images also show oil drifting to the south, toward the Loop Current, which could carry oil toward Florida and the Florida Keys.

2. The Senate voted 93-5 to revamp how regulators can dissolve large financial firms that are dubbed “too big to fail,” a rare bipartisan agreement that replaced a controversial proposed $50 billion bank-financed fund to help break up ailing companies:

• The Senate also voted 96-1 to guarantee that no taxpayer money will be used to bail out financial institutions, a stand of political cosmetics since no bailouts are contained in the legislation, and those tallies kicked off Senate voting on the historic bill that would overhaul how the government regulates and oversees the nation’s financial institutions.

May 6, 2010

1. In a burst of volatility that recalled the 2008 financial crisis, the Dow Jones industrial average plunged almost 1,000 points before recovering most of its losses to close down 347.8 points, a swing triggered by fears that debt problems in Greece and elsewhere in Europe will infect other high-debt economies around the world:

• The market slide is occurring even as most economic indicators point to a U.S. recovery gaining steam, and most analysts expect growth to average 3-3.5% this year—the economy has expanded for three consecutive quarters.

2. Homeowners could collect thousands of dollars in Cash for Caulkers rebates for renovating their homes with better insulation and energy-saving windows and doors under a new economic stimulus bill—the Home Star bill passed the House 246-161 (Oregon’s Blumenauer did not vote, the other Oregon Democrats voted “yes”, while Oregon’s sole Republican voted “no”)—the bill would authorize $5.7 billion over two years for a program that supporters—mostly Democrats—said would have the added benefit of invigorating the slumping construction industry and making the planet a little cleaner:

• Republicans overwhelmingly opposed the bill, and they were able to attach a condition that it would be terminated if Democrats do not come up with a way to pay for it.

3. A fixture since President Harry S. Truman signed a bill proclaiming a National Day of Prayer 58 years ago, 2010 could be the last time the event is observed if the White House fails in an appeal against a court ruling that it violates the ban on government-backed religion:

• Wisconsin-based U.S. District Court Judge Barbara Crabb ruled April 15^th in favor of the Freedom from Religion Foundation in a suit brought against President Obama—she ruled that the federal law that designates a National Day of Prayer and requires an annual presidential proclamation violates the establishment clause of the Constitution’s First Amendment.

4. In separate defeats for Republicans and liberal Democrats, the Senate rejected two contentious regulatory measures—one to dilute consumer provisions and the other to breakup large banks:

a. A 61-38 vote cleared away a GOP proposal that Democrats and the president said would have “gutted” consumer protections—only two Republicans, Sen. Olympia Snowe of Maine and Charles Grassley of Iowa, joined Democrats to defeat the GOP measure;

b. Democrats and Republicans joined to reject a proposal to limit the size of the nation’s largest banks as a means of reining in the financial sector—that vote was 61-33, with 33 Republicans, 27 Democrats, and one Independent voting to kill the measure.

May 7, 2010

1. A 100-ton concrete-and-steel box plunged toward a blown-out well at the bottom of the sea in a first-of-its-kind attempt to stop most of the gushing crude fouling the Gulf of Mexico:

• Once the contraption gets to the sea floor, underwater robots will secure it over the main leak at the bottom—a process that will take hours—and if the delicate procedure works, the device could be collecting as much as 85% of the oil spewing into the Gulf and funneling it to a tanker by May 9^th—it’s never been tried so far below the surface where the water pressure is enough crush a submarine.

2. The leading sponsors of a long-delayed energy and climate change bill, Senators. John Kerry (D-MA) and Joe Lieberman (I-CT), said that they would press ahead despite losing the support of a crucial Republican partner, Sen. Lindsey Graham (R-SC):

• Graham has been negotiating with Kerry and Lieberman for months, but he said that while he believes there will be 60 votes for this bipartisan concept in the future, he does not see 60 votes now while “we deal with the uncertainty of the immigration debate and the consequences of the oil spill”—Kerry and Lieberman said that they plan to introduce the bill May 12^th.

3. The economy got what it needed in April: a burst of hiring that added a net 290,000 jobs—the biggest monthly total in four years—and the improved picture caused so many more people to pour into the labor force in search of employment that the jobless rate rose from 9.7 to 9.9%:

• The new jobs—the most since March 2006, according to the Labor Department—were generated by sectors across the economy, and they are the first sign that the recovery is adding significant numbers of new jobs—the encouraging message in this report is that employers are finally hiring again.

May 8, 2010

1. Defense Secretary Robert Gates said that he is ordering a top-to-bottom paring of the military bureaucracy in search of at least $10 billion needed to prevent an erosion of U.S. combat power:

• He took aim at what he called a bloated bureaucracy, wasteful business practices, and too many generals and admirals, and he outlined an ambitious plan for reform that is almost certain to stir opposition in the corridors of Congress and the Pentagon.

2. Ice- in a worst-case scenario like crystals encrusting a 100-ton steel-and-concrete box meant to contain oil gushing from a broken well deep in the Gulf of Mexico forced crews to back off the long-shot plan, while more than 100 miles away, blobs of tar washed up at an Alabama beach full of swimmers:

• More than three million gallons of crude have spewed into the Gulf since a rig exploded April 20^th, killing 11, and officials said it would be at least May 10^th before a different solution is found.

WEEK SEVENTEEN

May 9, 2010

1. Democrats close to the White House said that President Obama will nominate Solicitor General Elena Kagan as the nation’s 112^th Supreme Court Justice—after a month-long search, Obama informed Kagan and his advisors of his choice to succeed retiring Justice John Paul Stevens, and he plans to announce the nomination with Kagan by his side at 7 a.m. PDT May 10^th in the East Room of the White House, said the Democrats:

· In choosing Kagan, the president chose a well-regarded 50-year-old lawyer who has served as a staff member in all three branches of government and was the first woman to be dean of the Harvard Law School—if confirmed, she would be the youngest member and the third woman on the current court, as well as the first justice in nearly four decades with no judicial experience.

2. Nineteen days after oil started spewing into the Gulf of Mexico, experts appeared to have no certain plan for sealing the runaway well located 5,000 feet below the Gulf’s surface anytime soon:

· With what had been thought to be the best immediate solution to contain the leak, a 78-ton steel-and-concrete box known as a cofferdam, resting useless on the sea floor, the Gulf’s fragile ecosystem seems to face a worst-case scenario—a leak that will go on for perhaps three more months until a relief well can be drilled to intercept, then seal the leaking one.

3. The International Monetary Fund has put up nearly $40 billion to help bailout Greece and appease investors’ fears of a spreading European debt crisis—the IMF’s executive board met to approve the three-year loan for the debt-plagued nation, part of a $140 billion package negotiated with other eurozone countries:

· Dominque Strauss-Kahn, IMF managing director, said that IMF’s strong action would contribute to the broad international effort underway to help bring stability to the euro area and help to secure recovery in the global economy.

May 11, 2010

1 BP PLC told Congress that its massive Gulf oil spill was caused by the failure of a key safety device made by another company—in turn, that company says that BP was in charge, and that a third company that poured concrete to block the exploratory well did not do it right, and that third company, which was blocking the well in anticipation of future production, says that it was only following BP’s plan:

· Executives of the three companies, all scheduled to testify before the Senate Energy and Natural Resources Committee, are trying to shift responsibility for the environmental crisis to each other, according to prepared testimony, and the industry testimony planned for the hearing demonstrated the fissures among companies caught up in the accident and its legal and economic fallout.

May 12, 2010

1. President Obama signaled that, despite his earlier hesitation, he might embrace a plan by his Afghanistan counterpart, President Hamid Karzai, to reconcile with certain Taliban leaders in hopes of uniting the country and ending a conflict that has stretched out for nearly nine years:

· Obama and Karzai, at a White House news conference, downplayed grievances that had surfaced in recent months, and they said that tensions were bound to recur and that difficult work remained in addressing one another’s concerns, such as corruption in the Afghan government and civilian casualties resulting from U.S.-led military action.

2. The federal deficit hit an all-time high for April as the government kept spending to aid the recovery while revenue fell sharply:

· The Treasury Department said that the April deficit soared to $82.7 billion—significantly higher than last year’s April deficit of $20 billion, and the largest imbalance for that month on record.

3. Global trade rebounded in March, driving U.S. exports and imports to their highest levels since October 2008, according to a Commerce Department estimate:

· The U.S. trade deficit increased by $1 billion to a seasonally adjusted $40.4 billion, the highest since December 2008, when global trade contracted violently after the September 2008 financial crisis.

May 13, 2010

1. A key Senate panel approved a $58.8 billion war-funding measure that would raise the total price tag for Pentagon operations in Iraq and Afghanistan over the decade to $1 trillion:

· The measure, approved by a unanimous 30-0 vote, blends about $30 billion for President Obama’s 30,000 troop surge in Afghanistan with more than $5 billion to replenish disaster aid accounts; provide for Haitian earthquake relief; and makes a down payment on aid to flood-drenched Tennessee and Rhode Island.

2. The EPA moved to more tightly control air pollution from large power plants, factories, and oil refineries, a step to limit emissions widely blamed for global warming:

· The EPA said that it is completing a rule requiring large polluters to reduce the amounts of carbon dioxide and other greenhouse gases that they release into the air, to install better technology, and to improve energy efficiency whenever they build, or significantly modify, a plant.

3. Striking at a lucrative bank business, the Senate voted to force credit-card companies to reduce fees for debit card transactions and permit merchants to offer customer discounts based on their payment method:

· The 64-33 vote inserted the fee requirement in a package of new financial rules the Senate is considering to ward off a repeat of the financial crisis, and the vote was a major defeat for banks which had lobbied hard against it—the measure attracted heavy bipartisan support with 17 Republicans voting for the amendment, and ten Democrats voting against it.

WEEK EIGHTEEN

May 16, 2010

1. After more than three weeks of efforts to stop a gushing oil leak in the Gulf of Mexico, company officials said that BP engineers had achieved some success when they used a mile-long pipe to capture some of the oil flow and divert it to a drill ship on the surface, 5,000 feet above the wellhead:

· After two false starts, engineers successfully inserted a narrow tube into the damaged pipe, but BP’s senior executive vice president, Kent Wells, said that he could not yet say how much oil had been captured or what percentage of the oil leading from a 21-inch riser pipe was flowing into the four-inch insertion tube.

May 17, 2010

1. The Obama administration unveiled a tax cut for small companies that provides health insurance, and even if it amounts to free money, many small business won’t qualify for the tax credit:

· The full benefit goes to companies that have ten or fewer workers with average salaries of $25,000 or less—they can get Uncle Sam to pick up 35% of their premiums—but sole proprietorships are not eligible and neither are firms with 25 or more employees or average wages of $50,000 and above.

2. Scientists warned that the oil from the spill in the Gulf of Mexico was moving rapidly toward a current that could carry it into the Florida Keys and the Atlantic Ocean, threatening coral reefs and hundreds of miles of additional shoreline:

a. Government officials insisted that the oil had not entered the Gulf’s so-called loop current, but two independent scientists, analyzing ocean current and satellite data, said that the oil was in an eddy that was quickly being drawn into the current;

b. The White House said that President Obama would soon name an independent commission to investigate the cause and response to the spill, largely supplanting the inquiry now being conducted by the U.S. Coast Guard and the Minerals Management Service—the Interior Department is responsible for overseeing offshore oil operations.

May 18, 2010

1. The U.S. introduced a U.N. resolution aimed at Iran’s suspected nuclear program, having won long-sought and pivotal support from China and Russia for new sanctions against Tehran’s powerful Revolutionary Guard and new measures to try to curtail Iran’s military, financial, and shipping activities:

· The draft resolution, which appeared to be a significant victory for the Obama administration, would ban Iran from pursuing ballistic missiles capable of carrying nuclear weapons, freeze assets of nuclear-related companies linked to the Revolutionary Guard, bar Iranian investment in activities such as uranium mining, and prohibit Iran from buying several categories of heavy weapons, according to a senior U.S. official, speaking on condition of anonymity because the resolution has not been released publicly.

2. The U.S. Coast Guard official leading the cleanup warned that the massive oil spill in the Gulf of Mexico is growing despite BP’s efforts to siphon some of the spewing crude from its ruptured deep-water well:

a. BP doubled its estimate of the amount of crude being captured by a mile-long recovery tube to 84,000 gallons a day—but what percentage of the spill remains is still uncertain;

b. Related results include:

o U.S. regulators nearly tripled the federal waters in the Gulf where fishing is shut down;

o One hundred fifty-four dead sea turtles, 23 dead birds, and 12 dead dolphins have been found along Gulf coastlines since the spill started;

o Shell Oil Company will take additional steps to insure the exploratory drilling it plans to do in the Arctic Ocean this summer will be done safely.

3. A furious Sen. Jeff Merkley (D-OR) accused Republicans of blocking debate of a closely watched amendment that would prohibit banks from making risky, but highly lucrative, trades that, at times, bet against investments made by their customers and helped set off the recession:

· Merkley”s outburst came after Republicans objected to what Democrats thought was a routine request for the Senate to consider—and later vote on—the amendment co-sponsored by Sen. Carl Levin (D-MI)—a pattern that had been followed for the last two weeks.

May 19, 2010

1. Another wave of selling hit the stock market in response to growing fears that Europe has no quick fix for its debt crisis, and the Dow Jones industrial average fell about 67 points after being down as much as 186 points—it was the Dow’s ninth drop in 12 days:

· The Standard & Poor’s 500 index, widely considered one of the best measures of how the stock market is doing, neared a 10% drop from the 2010 trading high it reached last month—that would make the first time the market has had a correction since it bounced off a 12-year low in March of last year.

May 20, 2010

1. The Senate approved the toughest set of regulations since the Great Depression, adding tools and legal authorities that supporters hope will diminish the risk to investors and the potential for future meltdowns:

a. Final passage came in an early evening vote of 59-39 after days of parliamentary jousting and legislative sacrifices—only four Republicans voted for the bill, while two Democrats, including Sen. Maria Cantwell of Washington, voted against it;

b. An amendment by Sen. Jeff Merkley (D-OR) to ban banks from engaging in high-risk proprietary trade was blocked from a vote by Republican objections and maneuvers—Merkley’s amendment would have also better insulated consumers from conflicts of interest such as the ones made famous by Goldman Sachs and Co.

2. Gooey, rust-colored oil washed into the marshes at the mouth of the Mississippi River for the first time, and BP conceded what some scientists have been saying for weeks: the oil leak at the bottom of the Gulf of Mexico is bigger than originally estimated:

· At least six million gallons of crude have gushed into the Gulf (more than half the amount spilled by the Exxon Valdez tanker in Alaska in 1989) since the Deepwater Horizon drilling platform exploded 50 miles off the coast on April 20^th, and the EPA has now ordered BP to switch to less toxic dispersants to break up the oil gushing into the Gulf amid fears that the chemical now being sprayed over the sea and injected deep under water could harm marine life.

3. Obama administration officials condemned North Korea for a torpedo attack they say sank a South Korean naval patrol ship in March, and they began a diplomatic effort through the U.N. to crack down on Pyongyang:

· Officials said that Secretary of State Hillary Clinton is expected to signal strong U.S. support for a new round of U.N. Security Council sanctions against North Korea when she visits Seoul on Monday, and officials said that she will also urge support of the sanctions while she is in China, which has more leverage over North Korea than any other country.

4. The stock market had its worst day in more than a year, with the Dow industrials tumbling 376 points, as fears intensified that a debt crisis in Europe could jeopardize the global economic recovery:

· The sell-off put the major U.S. stock indices in the red for the year and down more than 10% in less than four weeks—the market’s sharpest retreat since March 2009, when share prices bottomed out at 12-year lows.

5. Daniel Tarullo, the Federal Reserve governor, said that Europe’s debt crisis poses serious risks to the unfolding economic recoveries in the U.S. and around the globe, and Tarullo told a House subcommittee that if the crisis were to crimp lending and the flow of credit globally, triggering more financial turmoil, that would endanger both the U.S. and global recoveries:

· Tarullo said, however, that such a development is viewed as unlikely, and for now there are good reasons to believe that U.S. banks and financial institutions can withstand some fallout from European financial difficulties.

6. The Obama administration has made no major changes to a plan to protect endangered wild salmon runs in the Columbia River Basin in their submission of revisions for a 2008 Bush-era biological plan provided to U.S. District Judge James Redden in Portland:

· Redden said in February that the Bush-era plan likely violated the Endangered Species Act, but he gave the government three months to review new science that might strengthen it, and at that time, Redden warned that he would view with “heightened skepticism” efforts to deal with the issues superficially.

May 21, 2010

1. National Intelligence Director Dennis Blair is resigning under pressure from the White House, ending a 16-month tenure marked by intelligence failures and spy agencies’ turf wars:

· Blair, a retired Navy admiral, is the third director of national intelligence, a position created in response to public outrage over the failure to prevent the September 11, 2001, terrorist attacks, and his departure comes two days after a stark Senate report criticized Blair’s office and other intelligence agencies for new failings that, despite a top-to-bottom overhaul of the U.S. intelligence apparatus after September 11^th, allowed a would-be bomber to board a Detroit-bound airliner on Christmas Day.

2. According to the Labor Department, unemployment rates fell in a majority of states last month as 34 states and the District of Columbia reported lower jobless rates in April, while six states reported higher rates, and ten saw unemployment hold steady:

· After cutting their workforces to the bone during the recession, companies are now starting to boost hiring as their sales and profits improve.

3. Obama directed the government to set the first-ever mileage and pollution limits for big trucks and to tighten rules for future cars and SUVs—the new standards, to be issued in July of next year, would apply to big trucks and buses for model years 2014-2018, and, at the same time, the EPA and the National Highway Traffic Safety Administration will get to work on stricter standards for cars and for trucks like SUVs to kick in with the 2017 model year and carry through 2025:

· According to the EPA, commercial trucks account for 21% of greenhouse gas emissions in the transportation sector—compared with 33% for passenger cars and 29% for SUVs, pickups, and minivans.

May 22, 2010

1. Republicans scored a mid-term election victory when Honolulu City Councilman Charles Dijou won a Democratic-held seat in Hawaii in the district where President Obama grew up:

· Dijou’s victory was a blow to Democrats who could not find a way to win a congressional race that should have been a cakewalk—the seat has been held by Democrats for nearly 20 years and is located where Obama was born and spent most of his childhood.

2. BP PLC said that it wants to keep using a contentious chemical dispersant to fight the Gulf of Mexico oil spill, despite orders from federal regulators to use something less toxic:

· According to BP Chief Operating Officer Doug Suttles, the chemical dispersant, Corexit 9500, is “the best option for subsea application,” and he said that tests showed Corexit to be among the most effective agents at dispersing the oil.

WEEK NINETEEN

May 24, 2010

1. President Obama sent legislation to Congress that would allow him to force lawmakers to vote on cutting earmarks and wasteful programs from spending bills:

· The legislation would award Obama and his successors the ability to take two months or more to scrutinize spending bills that have already been signed into law for pork-barrel projects and other dubious programs, and he could then send Congress a package of spending cuts for a mandatory up-or-down vote on whether to accept or reject them.

May 25, 2010

1. The Dow Jones industrials plunged below 10,000 after traders dumped stocks on worries about the global economy and tensions between North and South Korea:

· The Dow fell about 160 points in afternoon trading—it has fallen 1,346 points, or more than 12%, from its recent high of 111,205, reached April 26^th.

2. President Obama will send up to 1,200 National Guard troops to the southwestern border and seek increased spending on law enforcement there to combat drug smuggling after demands from Republican and Democratic lawmakers that border security be tightened:

· The troops will be stationed in the four border states for a year, according to White House officials, and it is uncertain when they will arrive—they will join a few hundred members of the Guard already there, and the additional troops will provide help to law enforcement officials by helping observe and monitor traffic between official border crossings.

May 26, 2010

1. The Organization for Economic Cooperation and Development, an international research group, raised its overall growth forecast and its outlook for the U.S., the euro zone, China, and Japan, saying that despite mounting concerns about European debt and Asian economies that may be overheating, the global recovery is taking root:

· They said that the rebound from the severe downturn that plagued the global economy for much of 2008 and 2009 is driven by a healthy increase in trade flows, booming emerging markets, the continued support of government stimulus policies that are now unwinding, and better market conditions.

May 27, 2010

1. The Senate approved $10 million to help farmers in the drought-stricken Klamath Basin, good news to a region that has suffered a shortage of water for months:

a. The effort was orchestrated primarily by Sen. Jeff Merkley (D-OR) who found a way to add the money to a must-pass spending bill that financed President Obama’s troop surge in Afghanistan—it also includes $5 billion to replenish disaster aid accounts as well as money for earthquake relief in Haiti and U.S. allies in the fight against terror;

b. The measure, totaling nearly $60 billion—more than half for the Pentagon—passed by a bipartisan 67-28 tally with Sen. Ron Wyden of Oregon voting against it.

2 The House voted to let the Defense Department repeal the ban on gay and bisexual people serving openly in the military, a major step toward dismantling the 1993 law widely known as “don’t ask, don’t tell”:

· It was adopted as an amendment to the annual Pentagon policy bill, which the House is expected to vote on today—the repeal would be allowed 60 days after a Pentagon report is completed on the ramifications of allowing openly gay service members, and the report is due by December 1^st.

3. The Obama administration released a sweeping statement of its national security goals, emphasizing a strong counter-terrorism effort, but also citing the importance of government action on issues such as climate change and the economy:

· The 52-page manifesto, called The National Security Strategy, aims to draw contrast with President Bush’s 2006 version, which centered heavily on the anti-terror fight—by contrast, the Obama plan says that the government effort against radical extremism is “only one element of our strategic environment and cannot define America’s engagement with the world.”

4. After days of sudden losses and reversals in the market, investors rallied around the news that the Chinese government had dismissed reports that it might pare its European investments given Europe’s debt problems:

· The broader market was up 3.3%, one of its biggest advances this year—the Dow Jones industrial average gained 28.54 points, the broader Standard & Poor was up 35.11 points, and the Nasdaq gained 81.3 points.

5. Treasury Secretary Timothy Geithner said in Berlin that the U.S. and Europe were in “broad agreement” on the need for stricter market regulations, but stressed that they would take different paths when necessary:

· The G-20 nations are trying to reach a consensus on new rules to avoid “regulatory arbitrage” in which some banks or hedge funds move their activities to whatever location offers the lowest oversight.

May 28, 2010

1. House Democrats salvaged a bill to continue providing unemployment checks to people out of work more than six months and to revive tax breaks popular with families and businesses:

· The House approved the legislation 215-204 (all Oregon Democrats voted “yes”; Walden, Oregon’s sole Republican, voted “no”), capping a week where Democratic leaders were forced to kill $24 billion in aid to cash-strapped states and $7 billion for health insurance subsidies for laid-off workers.

2. Stocks closed out their worst month in more than year by sliding again on more unsettling news about Europe:

· The Dow Jones industrials dropped 122 points after Fitch Ratings gave Spain the second downgrade of its credit rating in a month—another reminder to traders of long-term economic problems facing several European countries—and perhaps the rest of the continent and the global economy as well.

3. Consumers earned more income in April but also spent less, according to government statistics released today, raising some questions about the pace of the recovery:

· The Commerce Department said that personal income rose by $54.4 billion or 0.4%, and spending increased by $4 billion and was essentially flat—both were less than economists had forecast, but savings grew, the rate rising to 3.6% in April from 3.1% in March.

4. The Obama administration urged the Supreme Court to prevent Arizona from enforcing a law that punishes businesses that employ illegal immigrants, arguing that federal immigration law trumps state efforts:

· In asking the Supreme Court to take the employer sanctions case, the Obama administration said that federal immigration law expressly pre-empts any state law imposing sanctions on employers hiring illegal immigrants—the administration added that if Arizona businesses knowingly use illegal immigrants, the businesses can have any of their state licenses suspended or revoked.

May 29, 2010

1. BP admitted defeat in its attempt to block the Gulf of Mexico oil leak by pumping mud into a busted well, but they said that, after a series of failures, they are readying yet another approach to fight the spill:

· BP PLC Chief Operating Officer Dug Suttles said that the company had determined that the “top kill” had failed after it spent three days pumping heavy mud into the crippled well located 5,000 feet underwater—more than 1.2 million gallons of mud was used, but most of it escaped out of the damaged riser.

WEEK TWENTY

May 31, 2010

1. In their last report before the U.N. Security Council votes on sanctions against Iran, international nuclear inspectors declared that Iran has produced a stockpile of nuclear fuel that experts say would be enough, with further enrichment, to make two nuclear weapons:

· The report, by the International Atomic Energy Agency, a branch of the U.N., appears likely to bolster the Obama administration’s case for a fourth round of economic sanctions against Iran and further diminish its interest in a deal, recently revived by Turkey and Brazil, in which Iran would send a portion of its nuclear stockpile out of the country.

June 1, 2010

1. With the deepening crisis threatening to define President Obama’s second year in office, the Obama administration said that it had begun civil and criminal investigations into the massive oil spill in the Gulf of Mexico:

· Attorney General Eric Holder said in New Orleans that he planned to “prosecute to the fullest extent of the law” any person or entity that the Justice Department determines has broken the law in connection with the oil spill, and shortly after Holder’s announcement, the Dow Jones industrial average fell 120 points as energy stocks tumbled on expectations of federal investigations—BP lost 15% of its market value during the day’s trade.

3. The Supreme Court backed away from strict enforcement of the famous Miranda decision and its right to remain silent, ruling that a crime suspect’s words can be used against him if he fails to specifically tell the police that he does not want to talk:

a. In the Court’s 5-4 decision, written by Justice Anthony Kennedy, the court shifted the balance in favor of the police and against the suspect—joining Kennedy to form the majority were Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas, and Samuel Alito;

b. In her first strongly written dissent, Justice Sonia Sotomayer said that the ruling “turns Miranda upside down” and “marks a substantial retreat from the protection against compelled self-incrimination”—joining her in dissent were Justices John Paul Stevens, Ruth Bader Ginsberg, and Stephen Breyer.

3. The Justice Department is not prepared to ensure public safety in the aftermath of an attack using weapons of mass destruction, the agency’s inspector general said in the latest warning about U.S. government readiness for a terrorist event:

· In the event of an attack by nuclear, biological, or chemical weapons, the Justice Department is supposed to coordinate federal law enforcement activities and take over if the incident overwhelms state and local police, the report says, but, according to a unidentified Justice Department office, “we are totally unprepared,”, and while the report praises the FBI for meeting planning requirements, it says that the department as a whole and its other component law enforcement agencies have not—that includes the Bureau of Alcohol, Tobacco, Firearms and Explosives, which is supposed to take the lead on public safety after an attack.

4. A defense expert says that a problem that rendered as many as 10,000 U.S. military GPS receivers useless for days is a warning to safeguard a system that enemies would love to disrupt:

· The Air Force has not said how many weapons, planes, or other systems were affected or whether any were in use in Iraq or Afghanistan, but the problem, blamed on incompatible software, highlights the military’s reliance on the Global Positioning System and the need to protect technology that has become essential for protecting troops, tracking vehicles, and targeting weapons.

June 2, 2010

1. The BP oil slick drifted perilously close to the Florida Panhandle’s famous sugar-white beaches as a risky gamble to contain the oil by shearing off the well pipe ran into trouble a mile under the sea when the diamond-tipped saw became stuck, and it took BP 12 hours to free it—the company said that preparations were being made to resume cutting but did not give a timetable on when that might start:

a. If the strategy fails—like every other attempt to control the leak located 5,000 feet underwater—the best hope is probably a relief well, which is at least two months from completion;

b. The president has placed a moratorium on new deepwater drilling projects, but federal regulators have approved the first new well in the Gulf of Mexico since he lifted a brief ban on drilling in shallow water—the Minerals Management Service granted a drilling permit sought by Bandon Oil and Gas for a site about 50 miles off the coast of Louisiana and 115 below the ocean’s surface.

June 3, 2010

1. BP sliced off a pipe with giant shears in its latest bid to contain the worst spill in U.S. history, but Coast Guard Admiral Thad Allen said that the cut was jagged and placing a cap over the gusher will now be more challenging:

a. Allen said that the cap was to be lowered and sealed over the next couple of hours, and it will not be known how much oil BP can siphon to a tanker on the surface until the cap is seated, but the irregular cut means it won’t seat as snugly as officials had hoped;

b. The Minerals Management Service stopped issuing permits for new oil and gas drilling in the Gulf, even as an administration spokeswoman denied a formal freeze on drilling in shallow water—earlier in the day, according to a copy of an e-mail obtained by The Associated Press, a top official in the federal agency that oversees offshore drilling told a company seeking a permit that “until further notice,” no new drilling is being allowed in the Gulf, no matter the water depth.

2. The EPA set a new health standard that coal-fired power plants and other industries will have to meet on sulfur dioxide, a pollutant that triggers asthma attacks and causes other respiratory problems:

· The EPA set the standard within a range that an industrial panel of scientists had suggested, and this makes the first time the standard has been changed since the original one was issued in 1971.

3. Treasury Secretary Timothy Geithner said that he does not think the European debt crisis will derail the U.S. economic recovery, and he praised the steps Europe is taking to deal with the crisis:

· Geithner said that because of the momentum the economy has built up during the past several months, the U.S. is in a strong position to weather the global turmoil caused by Europe’s debt problems.

June 4, 2010

1. Tar balls crashed onto the white sands of the Florida Panhandle as BP engineers, trying to collect the crude now fouling four states, adjusted a sophisticated cap over the Gulf oil gusher:

· Even though the inverted funnel-like device was set over the leak late on June 3^rd, crude continued to spew into the sea in the nation’s worst oil spill, and BP engineers hoped to close several open vents on the cap throughout the day in their latest attempt to contain the oil.

2. U.S. officials said that James Clapper, the Pentagon’s chief official for intelligence, counterintelligence, and security matters, has been chosen to become the next director of national intelligence, a position described by the White House as the second toughest in Washington—if confirmed, Clapper, a retired Air Force general, would replace Dennis Blair, who resigned last month:

· Created in the wake of the 9/11 terrorist attacks, the national intelligence director coordinates 16 intelligence agencies and is supposed to smooth out areas of conflict, and he is also in charge of the president’s daily intelligence briefing.

3. The U.S. Department of Energy said that Oregon will get $1 million in stimulus funds to train workers to weatherize homes, and the $1 million is part of $29 million awarded to help develop and increase availability of weatherization training—Oregon’s is the largest of 34 similar projects nationwide to receive recovery act funding:

· Gov. Ted Kulongoski said that the state’s goal is to make 5,000 homes more energy efficient, and about 1,200 have been weatherized so far—with $38.5 million already allocated from federal stimulus grants for weatherization, there are not enough trained workers to meet the demand.

4. Stocks fell to their lowest level in four months after the government said that hiring remains weak, and another European country warned that its economy was in trouble:

· The Dow Jones industrial average dropped 323 points to close below 10,000—the lowest finish since February and the third-worst slide of the year.

5. The government reported, in a disappointing employment report that fell short of Wall Street’s expectations, that employers had added only 41,000 private-sector jobs in May, sending stocks skidding and raising questions about the strength of the economic recovery:

· Mark Zandi, the chief economist for Moody Analytics, said, “only 41,000 private-sector jobs were created in May and close to 100,000 on average since job growth resumed at the start of the year, and the economy needs closer to 150,000 in monthly gains to stabilize the unemployment rate.”

WEEK TWENTY ONE

June 7, 2010

1. Coast Guard Admiral Thad Allen said that with the help of a wellhead cap, now keeping up to 462,000 gallons of oil a day from leaking into the Gulf of Mexico, the oil geyser spewing from the sea floor is tapering off more day by day, but there is no quick fix for containing much of the crude that has already escaped and is spreading across the Gulf—federal authorities have estimated the ruptured pipe is leaking between 500,000 and one million gallons a day:

· Allen said, “Dealing with the oil spill on the surface will take a couple of months,” but the process of getting oil out of marshlands and other habitats “will be years.”

2. Countrywide Home Loans and its mortgage service unit, which are now part of Bank of America, agreed to pay $108 million to settle federal charges that the company overcharged customers who were struggling to hold onto their homes:

a. The Federal Trade Commission claimed that Countrywide charged inflated amounts—$300 to mow a lawn, in one instance—to more than 200,000 homeowners whose mortgages Countrywide serviced as part of its home-loan business;

b. The $108 million payment resolves the largest mortgage-servicing case in the FTC’s history with one of its largest overall judgments—the money will be used to reimburse homeowners who were charged the excess fees by Countrywide before their July 2008 acquisition by Bank of America.

June 8, 2010

1. Senate Democrats proposed quintupling the tax that oil companies pay into a spill liability fund as they seek to pare back a House-passed tax hike on investment fund managers:

· The legislation unveiled would raise the tax on oil produced offshore from eight cents to 41 cents per barrel—that’s nine cents higher than legislation that passed the House last month, and the move to increase the tax would raise $15 billion over the coming decade as Congress seeks to shore up the fund in the wake of the catastrophic spill in the Gulf of Mexico.

2. Job openings jumped in April to the highest level in 16 months, a sign that private employers may boost hiring in coming months:

· The number of jobs advertised at the end of April rose to 3.1 million from 2.8 million in March, the Labor Department said, and that’s the most openings since December 2008—private employers accounted for the entire net gain, while government advertising for jobs decreased, despite the hiring of hundreds of thousands of census workers in May.

3. The government and university researchers confirmed that plumes of dispersed oil from the leaking well in the Gulf of Mexico were spreading far below the ocean surface, raising fresh concern about the spill’s potential impact on sea life:

· The tests, the first detailed chemical analyses of the deep seawater, show that some of the most toxic components of the oil are not necessarily rising to the surface where they can evaporate, as would be expected in a shallow oil leak, but are, instead, drifting through deep water in plumes or layers that stretch as far as 50 miles from the leaking well—scientists outside the government noted that the plumes appear to be so large that organisms might be bathed in them for extended periods, possibly long enough to kill eggs or embryos.

4. Facing public skepticism about the new healthcare law, President Obama traveled to Maryland to tout the distribution of $250 rebate checks for senior citizens who hit the so-called doughnut hole in Medicare’s drug coverage, one of the law’s first benefits:

· At the same time, Obama announced a new initiative to cut in half the amount of waste, fraud, and abuse in the Medicare program by the end of 2012, an ambitious goal that would require the government to recover as much as $18 billion—government authorities recovered $2.5 billion in 2009, according to the Department of Health and Human Services and the Department of Justice, which are jointly charged with stepping up enforcement.

5. The White House raised the stakes on the Senate’s first major climate-change vote of the year, threatening to veto a Republican-led effort to stop the EPA from carrying out regulations controlling greenhouse gases:

· The White House, citing the environmental damage caused by the Gulf oil spill, said that the measure to overturn new EPA regulations would increase the nation’s dependence on oil and other fossil fuels, and “block efforts to cut pollution that threatens our health and well-being.”

6. Senate Democrats weakened efforts to end a controversial Wall Street break, watering down a bid to raise taxes on managers of hedge funds, private-equity funds, venture capital firms, and other business partnerships:

· The Senate action retreated from a step taken last month by the House of Representatives, where lawmakers voted to get tough with Wall Street financiers, an apparent bow to election-year pressure from constituents outraged that some captains of finance are taxed at a lower rate than their secretaries are.

June 9, 2010

1. Coast Guard Admiral Thad Allen said at a news briefing in Washington that the current containment system being used for the crude spewing from the gushing well in the Gulf of Mexico is catching 630,000 gallons daily—officials had previously cited that figure as the system’s general capacity, but Allen said that officials now believe it can handle 756,000 gallons daily:

· Even so, there is still more oil eluding capture, and BP is bringing in a second vessel that will increase capacity, as well as the North Sea shuttle tanker, which will assist in the transfer of the oil, and a device that will burn off some of it.

2. The U.N. Security Council leveled its fourth round of sanctions against Iran’s nuclear program, but the measures do little to overcome widespread doubts that they—or even the additional steps pledged by U.S. and European officials—would accomplish the Council’s long-standing goal: halting Iran’s production of nuclear fuel:

· The resolution, hailed by President Obama as delivering “the toughest sanctions ever faced by the Iranian government,” took months to negotiate and major concessions by U.S. officials, but they still fail to carry the symbolic weight of a unanimous decision—12 of the 15 nations on the Council voted for the measure, while Turkey and Brazil voted against it and Lebanon abstained.

3. According to a survey released by the Federal Reserve, for the first time since the beginning of the recession, modest growth has spread to every corner of the country—the first clean sweep since 2007:

· But Oregon’s recovery is faltering, economists said, as unemployment jumps again with no big source of job growth in sight—the state’s economy is just not growing fast enough to produce the jobs it would take to leave the recession behind, according to Tim Duy, a University of Oregon economist who produces a monthly index tracking items ranging from trucking activity to manufacturing.

June 10, 2010

1. The Obama administration cautioned Senate leaders not to meddle with a proposed $3.4 billion settlement in a 14-year class-action lawsuit that accuses the government of mismanaging Indian trust funds:

· Attorney General Eric Holder and Interior Secretary Ken Salazar wrote letters to Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell asking the Senate to pass the settlement without amendments, saying any changes could nullify the deal—the Senate faces a June 15^th deadline to vote on the settlement mandated by a federal court.

2. The Senate rejected a challenge to Obama administration rules aimed at cutting greenhouse emissions from power plants and other big polluters—the defeated resolution would have denied the EPA the authority to move ahead with the rules, crafted under the federal Clean Air Act and set to go into effect in January:

· With President Obama’s broader green energy legislation struggling to gain a foothold in the Senate, the vote took on a greater significance as a signal of where lawmakers stand on dealing with climate change—the Republican-led effort to restrain the EPA was defeated with 47 senators voting yes and 53 voting no (both Oregon senators voted no).

3. The Justice Department has decided that federal prosecutors should enforce crucial provisions in the Violence Against Women Act in cases involving gay and lesbian relationships, according to a newly disclosed memo:

· In a seven-page legal analysis, David Barron, the acting assistant attorney general of the Justice Department’s Office of Legal Counsel, concluded that federal prosecutors may use the law in cases of interstate stalking and domestic violence regardless of whether the victim or the defendant is a man or a woman—Congress passed the Violence Against Women Act in 1994.

4. Researchers studying the flow of oil from the blown-out well at the bottom of the Gulf of Mexico said that crude, in an amount of up to twice the amount previously thought, may be spewing into the sea since an oil rig exploded nearly two months ago—the new figures could mean anywhere from 42 million to more than 100 million gallons of oil may have already fouled the fragile waters:

· Louisiana politicians have been rushing to the defense of the oil-and-gas industry and have pleaded with Washington to bring back offshore drilling, warning that although they are angry over the disaster, state officials believe that the Obama administration’s temporary ban on drilling in the Gulf has sent Louisiana’s most lucrative industry into a death spiral.

5. A picture of a steady but still sluggish recovery emerged from reports that showed fewer people are claiming unemployment aid while U.S. exports are slowing, and the reports echo Federal Reserve Chairman Ben Bernanke’s suggestion this week that the rebound will remain intact despite high unemployment, a fragile housing market, and Europe’s debt crisis:

· Initial unemployment claims fell by 3,000 to a seasonally adjusted 456,000, the Labor Department said, and that’s the third straight drop, but claims have not moved below where they stood in January, and it will take time to create enough jobs to bring down the 9.7% unemployment rate.

June 11, 2010

1. A big drop in May retail sales has raised new concerns about the durability of the new economic recovery, according to the Commerce Department, who said that retail sales plunged 1.2% last month—the largest decline in eight months:

· Americans slashed spending on everything from cars to clothing to building materials, and economists are worried that households will start trimming outlays as they continue to be battered by high unemployment and uncertainty in the stock market—consumer spending accounts for 70% of total economic activity.

2. President Obama called on Congress to pass a series of proposals to stimulate hiring by small businesses through tax credits and lending incentives, arguing that similar measures are partly responsible for the economic recovery during the past few months:

· Obama said that small businesses have historically been responsible for two out of three new jobs created in the U.S., and they need to be a crucial part of the economic recovery: “We need to make sure small companies are able to open up, expand, and add names to their payrolls,” Obama told reporters gathered in the Rose Garden.

June 12, 2010

1. The Coast Guard sent a testy letter to BP’s chief operating officer demanding that BP step up its efforts to contain the oil gushing into the Gulf of Mexico by the end of the week and telling the British company that its slow pace in stopping the spill is becoming increasingly alarming:

· The letter follows nearly two months of tense relations between BP and the government and reflects the growing frustration over the company’s inability to stop the largest environmental disaster in U.S. history.

WEEK TWENTY TWO

June 14, 2010

1. The Obama administration announced new regulations to discourage companies from scaling back their health benefits, a goal Democrats described as a top priority of the new healthcare law—these rules may have a profound effect on the health coverage more than 160 million Americans get from an employer:

a. The rules affect plans that were in operation when the president signed the new healthcare law March 23^rd;

b. Employers would be able to raise premiums and still retain grandfathered status, but the rules limit how much companies could raise co-pay, deductibles and other employee contributions;

c. Employers would be able to adjust benefits but not cut them altogether;

d. Any company can choose to forego grandfathered status and still offer health benefits, but the company health plan would then be considered a new plan and would be subject to an escalating series of new mandates.

June 15, 2010

1. Seeking to reassure Americans that his administration can handle the growing Gulf Coast oil crisis, President Obama, in his first address from the Oval Office, vowed to hold BP accountable for all costs and to marshal all available resources for a federal response to the calamity:

· Recent developments include:

a. A new estimate by scientists of the amount of oil gushing from the ruptured well indicates that the well is leaking between 1.47 million and 2.52 million gallons of oil daily;

b. The Discovery Enterprise, a drill ship siphoning off oil gushing from the blown out well resumed processing oil about five hours after an emergency shutdown caused when a bolt of lightning struck the vessel and ignited a fire that halted containment efforts—engineers on the ship have been siphoning about 630,000 gallons of oil a day through a cap on top of the well;

c. The Senate has killed an attempt to repeal lucrative tax breaks enjoyed by the oil and gas industry—the move by Sen. Bernie Sanders (I-VT) would have raised $35 billion over ten years by limiting the ability of oil companies to write off drilling expenses, but the proposed measure lost on a 61-35 vote;

d. President Obama has selected a former federal prosecutor, Michael Bromwich, to take over the troubled government agency that oversees oil and gas development and that has been accused of lax oversight.

2. The Federal Reserve adopted new rules aimed at protecting credit-card customers from getting socked by hefty late-payment charges and other penalty fees—the rules respond to public and congressional outrage over practices by credit-card companies:

· The new rules, which take effect August 22^nd:

a. Bar credit-card companies from charging a penalty fee of more than $25 for paying a bill late;

b. Prohibit credit-card companies from charging penalty fees that are higher than the dollar amount associated with the customer’s violation;

c. Ban so-called inactivity fees when customers do not use the account to make new purchases;

d. Prevent multiple penalty fees on a single late payment.

June 16, 2010

1. Senior administration officials said that BP will set aside $20 billion to pay the victims of the massive oil spill in the Gulf, a move made under pressure by the White House as the company copes with causing the worst environmental disaster in U.S. History:

· Lawyer Kenneth Feinberg, who oversaw payments to families of victims of the September 11, 2001, attacks will lead the independent fund.

2. President Obama’s plea for more stimulus spending as insurance against a double-dip recession hit a roadblock in the Senate, the victim of election-year anxiety over huge federal deficits:

a. A dozen Democrats joined Republicans on a key 52-45 test vote (both Oregon senators voted yes), rejecting an Obama-endorsed $140 billion package of unemployment benefits, aid to states, family tax breaks, and Medicare payments for doctors because it would swell the federal debt by $80 billion;

b. The swing toward frugality runs counter to the advice of economists who support the funding for additional jobless benefits and help to states to avoid layoffs of public-service jobs, fearing that the economy could slip back into recession just after emerging from the biggest economic downturn since the Great Depression.

3. The Obama administration, seeking to build on the momentum of the Iranian resolution passed last week by the U.N., announced that it had imposed sanctions on dozens of Iranian firms and individuals with links to the country’s nuclear and missile programs:

· The list includes two top commanders of the Islamic Revolutionary Guard Corps, a major Iranian bank, and five front companies for the Iranian state shipping line, as well as 71 ships with names that had been changed to skirt previous sanctions.

June 17, 2010

1. In another setback for President Obama and Democrats controlling Congress, the Senate rejected long-sought legislation to provide stimulus spending and a reprieve for doctors about to get hit with a big cut in their Medicare payments:

· The failed measure, killed by a GOP filibuster, would have provided further jobless aid for the long-term unemployed, $24 billion in aid to cash-strapped state governments, and the renewal of dozens of proposed tax breaks for businesses and individuals.

2. Rep. Joe Barton created a political furor by first apologizing to BP CEO Tony Hayward at a morning hearing on the Gulf of Mexico oil spill—for what the Texas Republican called a White House “shakedown” that created a $20 billion escrow fund—and then being forced to retract it after coming under intense GOP pressure that almost stripped him of his position as ranking member on the House Energy and Commerce Committee:

· In a highly unusual joint statement, House Minority Leader John Boehner of Ohio, Minority Whip Eric Cantor of Virginia, and Republican Conference Chairman Mike Pence of Indiana said, “Congressman Barton’s statements this morning were wrong. BP itself has acknowledged that responsibility for the economic damages lie with them and has offered an initial pledge of $20 billion for that purpose.”

3. The latest Associated Press GfK poll on President Obama’s top domestic achievement, the healthcare bill, finds support for the new overhaul has risen to its highest point since the survey started asking people about it in September—six months before it became law:

· Poll results now: 45% in favor, 42% opposed, a significant shift in public sentiment considering that opposition hit 50% after Obama signed the health plan into law in March and that in May, supporters were outnumbered 39% to 46%.

4. Bankers would retain some say over the operations of the 12 regional Federal Reserve banks but would lose their ability to vote for regional bank presidents under a House-Senate deal on a broad financial regulation bill:

· The compromise by the House and Senate negotiators diluted a Senate plan that would have made the Fed far more independent of the banking industry, and separately, House members sought to soften a Senate requirement that would have toughened standards on how much banks should hold in reserve to guard against losses.

5. The U.S. Department of Housing and Urban Development has awarded $11.4 million to 18 public housing authorities in Oregon for major capital improvements:

· HUD officials said the funding is aimed at stimulating the economy and creating jobs—the largest grant in Oregon was $5.1 million for the Housing Authority of Portland, and about $1.2 million each went to Lane and Clackamas counties.

June 18, 2010

1. Signaling a shift in strategy to fight against BP’s ruptured well in the Gulf, the Coast Guard is ramping up efforts to capture oil closer to shore:

· Admiral Thad Allen said that an estimated 2,000 private boats in the so-called “vessels of opportunity” program will be more closely linked through a tighter command and control structure to direct them to locations less than 50 miles offshore to skim the oil—estimates of the oil being siphoned from the well a mile below the Gulf are growing with more than 1.2 million gallons sucked up to containment vessels on June 17^th, according to Allen.

2. After a week of partisan wrangling, the Senate passed legislation to spare doctors a 21% cut in Medicare payments looming for months, but the last-ditch effort came too late because moments after the Senate acted, Medicare announced it would begin processing claims it has received for June at the lower rate:

· Because the House cannot act on the fix until next week, doctors, nurse practitioners, physical therapists, and other providers who bill Medicare’s physician fee schedule will have to resubmit their claims if they want to be made whole, with added paperwork costs for both the providers and for taxpayers.

WEEK TWENTY THREE

June 21, 2010

1. Federal regulators adopted a plan to insure that banks’ pay policies do not encourage employees to take reckless gambles like those that contributed to the recent financial crisis:

· The plan, originally proposed by the Federal Reserve last year, was also endorsed by other key banking regulators: the FDIC, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.

June 22, 2010

1. A federal judge struck down the Obama administration’s six-month ban on deepwater drilling in the Gulf of Mexico as rash and heavy-handed, saying the government simply assumed that because one rig exploded, the others pose an imminent danger, too:

· The White House promised an immediate appeal—the Interior Department had imposed the moratorium last month after the BP disaster, halting approval of any new permits for deepwater drilling on 33 exploratory wells.

2. The Obama administration issued new regulations to protect Americans from the insurance industry as the president met at the White House with people who had been denied care:

a. With some exceptions, insurance plans will no longer be able to deny coverage to children under 19 with pre-existing medical conditions;

b. Insurers will not be able to rescind coverage except in clear-cut cases of fraud;

c. Insurers will be prohibited from imposing lifetime limits on what they will pay for care;

d. Insurers will not be able to impose annual limits of less than $750,000 on coverage of essential benefits including maternity care, emergency services, and pharmaceuticals—the minimum annual limit would rise to $2 million by 2014.

e. Insurers will be prohibited from requiring their customers to get prior approval before they get emergency care outside the provider’s network.

June 23, 2010

1. The judge who struck down the Obama administration’s six-month ban on deepwater drilling in the Gulf of Mexico has reported extensive investments in the oil and gas industry, according to financial disclosure reports:

· U.S. District Judge Martin Feldman, a 1983 appointee of President Reagan, reported owning considerable holdings in oil and gas stock, including less than $15,000 in stock in 2008 in Transocean Ltd., the company that owned the sunken Deepwater Horizon drilling rig which exploded in the Gulf on April 20th.

2. A source told the Associated Press that President Obama had ousted Gen. Stanley McChrystal as the top U.S. commander in Afghanistan, choosing the general’s direct boss—General David Petraeus—to take over the troubled nine-year-old war:

· McChrystal offered his resignation and Obama accepted it, said the source, who spoke on condition of anonymity because the president’s decision had not yet been made public.

3. The future of BP’s offshore oil operations in the Gulf of Mexico has been thrown into doubt by the recent drilling disaster and court wrangling over a moratorium, but about three miles off Alaska, BP is moving ahead with a controversial and potentially record-setting project to drill two miles under the sea and then six to eight miles horizontally to reach what is believed to be a 100-million-barrel reservoir of oil under federal waters:

· All other new projects in the Arctic have been halted by the Obama administration’s moratorium on offshore drilling, but BP’s project, called Liberty, has been exempted as regulators have granted it status as an “onshore” project even though it is about three miles off the coast in the Beaufort Sea because it sets on an artificial island—a 31-acre pile of gravel in about 22 feet of water—built by BP.

4. Sales of new homes collapsed in May, sinking 33% to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits:

· The bleak report from the Commerce Department is the first sign of how the end of federal tax credits could weigh on the nation’s housing market—the credits expired April 30^th, and that’s when a new-home buyer would have had to sign a contract to qualify.

June 24, 2010

1. A bipartisan coalition of 35 members of Congress—including all seven members of the Oregon delegation—has sent a letter asking federal Department of the Interior Secretary Ken Salazar to speed up payment of money owed to rural counties across the nation in lieu of taxes:

· The payments, including an estimated $500,000 for Douglas County, have been made each June for at least the last five years, but last week, the department announced the payments would come late, but no later than July 15^th.

2. Mortgage rates fell this week to the lowest level on record, giving consumers added incentive to lock in low payments for home purchases and refinanced loans:

· Mortgage Company Freddie Mac said that the average rate for 30-year fixed loans sank to 4.69%, from 4.765% last week—that’s the lowest point since Freddie Mac began tracking rates in 1971.

3. Republicans defeated Democrats’ showcase election-year jobs bill, including an extension of weekly unemployment benefits for more than a million people out of work for more than six months:

· The 57-41 vote (both Oregon senators voted yes) fell three short of the 60 required to crack a GOP filibuster, delivering a major blow to President Obama and Democrats facing big losses of House and Senate seats in the fall election.

4. U.S. companies are spending again, and that could mean better economic times ahead:

· Businesses have invested more money in machinery, computers, steel, and other metals in three of the past four months, and the up tick is fueling economic growth in the second quarter and may lead to more jobs later this year.

5. Doctors would temporarily be spared a 21% cut in Medicare payments under a bill passed by Congress:

· The measure would delay the cuts for six months while lawmakers work on a more permanent solution—the bill now goes to President Obama for his signature.

June 25, 2010

1. President Obama declared victory after congressional negotiators reached a dawn agreement on a sweeping overhaul of rules overseeing Wall Street, the toughest financial regulations since the Great Depression, aiming to rein in Wall Street excess and tighten rules on everything from simple debit card swipes to the most complex securities:

· Lawmakers shook hands on the compromise legislation after Obama administration officials helped broker a deal that cracked the last impediment to the bill—a proposal to force banks to offer up their lucrative derivatives trading business.

2. The company said that tests show BP is on target for mid-August completion of a relief well in the Gulf of Mexico, the best hope of stopping the oil that has been gushing since April:

· BP shares fell nearly four percent in New York, and if the decline holds, BP will have lost more than $100 billion in market value since the Deepwater Horizon exploded in the Gulf on April 20^th.

WEEK TWENTY FOUR

June 28, 2010

1. The Supreme Court, in a 5-4 vote, held that Americans have the right to own a gun for self-defense anywhere they live, advancing a recent trend by the John Roberts-led bench to embrace gun rights:

· The court was split along familiar ideological lines, and the decision did not explicitly strike down the Chicago-area law, but rather ordered an appeals court to reconsider its ruling.

2. Americans spent a little more in May, but not enough to speed along the economic recovery—the Commerce Department said that consumer spending rose 0.2% after no change in April:

· Incomes rose for the sixth time in seven months, boosting household finances and potentially providing fuel for greater future spending.

3. An ideologically split Supreme Court, in a 5-4 judgment, ruled that a law school can legally deny recognition to a Christian student group that will not let gays join, with one justice saying that the First Amendment does not require a public university to validate or support the group’s “ discriminatory practices”:

· The court turned away an appeal from the Christian Legal Society, which sued to get funding and recognition from the University of California’s Hastings College of the Law—Hastings, which is in San Francisco, said no recognized campus groups may exclude people due to religious belief or their sexual orientation.

4. BP said that its mounting costs for capping and cleaning up the Gulf of Mexico spill have reached $22.65 billion, but BP denied reports out of Russia that CEO Tony Hayward is resigning:

· BP said that the rig drilling the relief well—the best hope of stopping the oil spill—has made it to within about 20 feet horizontally of the blown-out well, and BP Senior Vice President Kent Wells said that the rig is going to drill an additional 900 feet down before crews cut in sideways and start pumping in heavy mud to try to stop the flow from the damaged well—it is currently about 16,770 feet down.

June 29, 2010

1. Authorities said that the last of 11 suspects in a Russian spy ring, assigned to infiltrate American society a decade or more ago, has been captured overseas—a huge bust that threatens to tear apart recently mending relations between the U.S. and Russia:

· Russia angrily denounced the U.S. arrests as an unjustified throwback to the Cold War, and senior lawmakers said that some in the U.S. government might be trying to undercut President Obama’s warming relations with Moscow.

2. This week, the Obama administration is launching a special coverage program for uninsured Americans with medical problems, the most ambitious early investment of President Obama’s healthcare overhaul:

a. However, premiums will be a stretch for many, even after government subsidies to bring rates close to what healthier groups of people are charged, and the $5 billion that Congress allocated to the program through 2013 could run out well before that;

b. Officials said that the Pre-existing Condition Insurance Plan would begin accepting applications in many states on July 1^st, with coverage available as early as August 1^st.

3. With Republicans citing concerns about the growing national debt, the House rejected a bill to extend unemployment benefits for people who have been out of work for long stretches—the House is expected to vote again on the bill as early as June 30^th, and Senate Majority Leader Harry Reid filed a motion to force a vote by July 1^st to extend the benefits:

· Without an extension, payments would continue to phase out for more than 200,000 people a week—the last extension expired at the end of May, and House Democrats said that more than one million people have already lost benefits.

4. The Supreme Court reaffirmed a ban on unlimited contributions to political parties, rejecting a Republican Party appeal to undo a major aspect of campaign law:

· Five months after the court ruled in favor of unlimited corporate and labor spending in federal elections, the justices turned down a request to consider ending the ban on the raising of soft money—unlimited donations from corporations, unions, and others—by national party committees.

5. A dramatic drop in consumer confidence sent stocks plunging and left a key index at its lowest level of the year, heightening fears that the economic recovery is stalling:

· The Consumer Confidence Index came in at 52.9 in June, a jarring decline from 62.7 in May, according to a survey released by the Confidence Board, a private research group—it was the biggest drop since February and came on top of several gloomy economic developments in recent days.

6. Under a bill overwhelmingly passed by the House, homeowners would get an extra three months to complete their purchases and qualify for a generous tax credit:

· Under current law, home buyers who signed purchase agreements by April 30^th have until June 30^th to close on the sale to qualify for tax credits of up to $8,000—the bill would give buyers until September 30^th to complete their purchase.

June 30, 2010

1. The Department of the Interior, which had said earlier that it would not be able to make payments on time for money owed to counties in lieu of taxes, made those payments ahead of schedule:

· Oregon’s 36 counties shared $12.7 million out of the $358.1 million handed out nationally—Douglas County’s share came to $552,605 for 1.7 million acres of land held by the federal government.

2. The stock market rounded out its worst quarter since late 2008 with a late slide that spared few blue chips:

· A day after the broad market tumbled to its lowest level so far this year, it fell a further one percent after Moody’s warning that it might lower the credit rating of Spain—this news, coupled with disappointing data on the American jobs market, cast more doubt over the health of the global economy.

3. Nearly two years after a Wall Street meltdown left the economy reeling, the House passed a massive overhaul of financial regulations that would extend the government’s reach from storefront thrifts to the executive suites of Manhattan:

· Senate support remained in flux, however, forced to delay its vote until mid-July as Democrats struggled to secure the votes of a handful of Republican senators even after meeting their demands and backing down on a $19 billion tax on big banks and hedge funds.

July 1, 2010

1. Fears that the economic recovery is fizzling grew after the government and private sector issued weak reports on a number of fronts:

· Unemployment claims are up, home sales are plunging without government incentives, manufacturing growth is slowing, and 1.3 million people are without federal jobless benefits since Congress adjourned for a week-long Independence Day recess without passing an extension—all of which worries economists because as jobless claims grow and benefits shrink, Americans have less money to spend and the economy cannot grow fast enough to create new jobs.

2. Three Oregon projects have won $16.1 million in federal broadband grants—the money will help bring fast Internet access to parts of the state, including some parts of the Portland metro area that are not well served:

a. Bend Cable Communications won $4.4 million that, together with $1.9 million committed by the cable company, will finance the construction of 130 miles of fiber-optic cable in central Oregon;

b. Clackamas County receives a $7.8 million federal grant, to be paired with $3.3 million from the county, to expand high-speed Internet access in poorly connected areas;

c. Crook County secured $3.9 million in federal funding—together with $1.8 million from the county, the money will pay for a 65-computer learning center in Prineville to provide education, training, and broadband access.

3. Sales of new cars and trucks cooled in June on worries about the economy, signaling that the auto industry’s recovery is far from certain:

· GM, Ford, and Chrysler said that sales of new cars and trucks fell between 12 and 13% in June, while sales at Toyota slid 14%—Hyundai, however, reported a slight gain.

July 2, 2010

1. Sixty-three members of Congress, including Oregon Representatives Peter DeFazio, Greg Walden, David Wu, and Kurt Schrader, have sent a letter to the EPA questioning its decision to treat emissions from biomass the same as those from fossil fuels:

· Douglas County has been on the front lines in trying to develop and use renewable biomass projects, and the EPA’s stand, the 63 members of Congress claim, will inhibit projects to develop and use biomass—they say those efforts should play a larger role in the nation’s energy policy.

2. BP and the Obama administration face mounting complaints that they are ignoring foreign offers of equipment and making little use of the fishing boats and volunteers available to help clean up what may be the biggest spill ever in the Gulf of Mexico:

· The Coast Guard said that there have been 107 offers of help from 44 nations, ranging from technical advice to skimmer boats and booms—only a small number have been accepted and the vast majority are still under review, according to a list kept by the State Department.

3. The jobless rate fell to 9.5% in June, still far too high to signal a healthy economy, coming in slightly lower than the month before only because more than a half-million people gave up looking for work and were no longer counted as unemployed:

· The private sector added 83,000 jobs for the month, and added to a teetering housing market and falling factory orders, the recovery is limping along as it enters the second half of the year—and that is when the benefits of most of the government’s stimulus spending will begin to wear off.

4. Oregonians by the thousands are using up the last of their unemployment benefits, many after as long as two years:

· So far this year, more than 14,000 Oregonians have run out of jobless benefits, according to the State Employment Department, and that included about 3,000 people drawing benefits from a temporary state extension that ends the week of July 4^th—by November, the department said, more than 64,000 additional Oregonians face exhaustion of their benefits.

WEEK TWENTY FIVE

July 5, 2010

1. Oregon’s foreclosure rate unexpectedly jumped 20% in the first quarter, making it number three in the country:

· Oregon still ranks far behind long-time foreclosure leaders Nevada and Florida, but the rate of increase has put it in the top five—Oregon’s foreclosure hot spots are Crook, Deschutes, Jefferson, Josephine, Jackson, Klamath, Yamhill, Columbia, and Curry counties.

2. Secretary of State Hillary Clinton rebuked Russia for failing to live up to the cease-fire agreement it signed nearly two years ago to end the fighting in the former Soviet state of Georgia:

· Clinton asserted that Russia is occupying parts of Georgia and building permanent military bases in contravention of the truce—Russia wants to retain clout in the region as a counterweight to the eastward march of NATO, which in recent years has expanded its frontiers to include the former Soviet states of Latvia, Lithuania, and Estonia.

July 6, 2010

1. More than two months after oil from BP’s blown-out well first reached Louisiana, a bucket’s worth of tar balls that washed onto a Texas beach means the crude has now arrived in every Gulf state:

· The news of the spill’s reach comes at a time when most of the offshore skimming operations in the Gulf have been halted by choppy sea and high winds—skimming across the Gulf has scooped up about 235 million gallons of oil-fouled water so far, but officials say its impossible to know how much crude could have been sucked up in good weather because of the fluctuating number of boats and other variables.

2. The Obama administration launched a legal attack on Arizona’s new immigration law, arguing that only Washington can set the nation’s rules for arresting illegal immigrants:

· The lawsuit urges a federal judge in Phoenix to block Arizona’s law from taking effect later this month and adds new weight on the side of pending suits by immigrant-rights advocates, who say Arizona’s stepped-up enforcement would lead to racial profiling and harassment of Latinos.

3. President Obama and Israeli Prime Minister Benjamin Netanyahu pledged to work together to promote face-to-face Middle-East peace talks:

· Netanyahu went so far as to predict that direct peace negotiations could begin this summer and vowed “concrete steps” to move the process along in a “very robust way”.

4. The EPA proposed a new federal plan to reduce the pollution from electric power plants that wafts across state lines:

· The new rule would require pollution reductions in 31 states and the District of Columbia, most of the U.S. from Texas up to Minnesota and to the coast—the plan is one of the most significant steps the EPA has taken toward cleaning the air for millions of Americans who live in areas where the quality of the air does not meet national standards.

5. The service sector grew more slowly in June, according to an independent trade group, offering the latest sign that the economic recovery is weakening as the second half of the year begins:

· The Institute for Supply Management, a trade group of purchasing executives, said that its index tracking service-oriented companies slid to 53.8 last month from 55.4 in May, the highest point since the recovery began—a reading above 50 indicates expansion, and June’s reading is well above the 37.2 low in November, but far below the pre-recession high of 67.7 in 2004.

July 7, 2010

1. Oil from the ruptured well in the Gulf of Mexico is seeping into Lake Pontchartrain north of New Orleans, threatening another environmental disaster for the huge body of water that was rescued from pollution in the 1990s:

· The amount of oil infiltrating 600-square-mile Lake Pontchartrain appears small so far, however out in the Gulf, stormy weather kept skimmers from working and delayed the hookup of a big new ship intended to suck more crude from the blown-out well.

2. The government is preparing to issue new rules that will make it easier for veterans who have been found to have post-traumatic stress disorder (PTSD) to receive disability benefits for the illness, a change that could affect hundreds of thousands of veterans from the wars in Iraq, Afghanistan, and Vietnam:

· The regulations from the Department of Veterans’ Affairs, which will take effect as soon as July 12^th and cost as much as $5 billion over several years, according to congressional analysts, will essentially eliminate a requirement that veterans document specific events such as bomb blasts, fire fights, or mortar attacks that might have caused PTSD.

3. The Dow Jones climbed above 10,000 after investors apparently had second thoughts about the heavy selling in the stock market over the last two weeks:

· Stocks soared, and the Dow rose 275 points after a modest gain the day before—it was the first back-to-back advance since mid-June and the first close above the psychological benchmark of 10,000 since June 28^th, but analysts warn that it looks like simply a case of investors scooping up stocks that had become cheaper after heavy losses.

4. As Wall Street drags its feet on reining in bonuses, the European Union is forcing its banks—by law—to show some restraint:

· The European Parliament approved one of the world’s strictest crackdowns on exorbitant bank pay, going beyond some of the limits that many banks were pressed to adopt after the financial crisis.

July 8, 2010

1. The U.S. sealed an agreement to trade ten Russian agents arrested last month for four men imprisoned in Russia for alleged contacts with Western intelligence agencies, quickly concluding an episode that threatened to disrupt relations between the two countries:

· The swift end to the cases evoked memories of Cold War-style bargaining but underscored the new-era relationship between Washington and Moscow—President Obama has made the reset of Russian-U.S. relations a top foreign policy priority, and the quiet collaboration over the spy scandal indicates that the Kremlin likewise values the warmer relationship.

2. The federal law banning gay marriage is unconstitutional because it interferes with the right of a state to define the institution and therefore denies married gay couples some federal benefits, according to U.S. District Judge Joseph Tauro in Boston:

· The judge ruled in favor of gay couples in two separate challenges to the Defense of Marriage Act, a 1996 law that the Obama administration has argued for repeal—the rulings apply to Massachusetts but could have broader implications if upheld on appeal.

3. Kathleen Sebelius, secretary of Health and Human Services, said that she would provide an additional $25 million to help states buy life-saving medications for people with HIV or AIDS:

· Dr. Howard Koh, the HHS assistant secretary in charge of the program, refused to say where the money was coming from, but he said that the action “reflects the administration’s commitment to HIV treatment and care.”

4. Stocks rose for a third straight day on the Labor Department’s report of a larger than expected drop in the number of newly laid-off people seeking unemployment benefits:

· The Labor Department said that initial claims for jobless benefits fell to their lowest levels since early May—a drop to 454,000, better than the 465,000 forecast by economists polled by Thomson Reuters.

July 9, 2010

1. Congressional budget experts say a climate and energy bill now stalled in the Senate would reduce the federal deficit by about $19 billion over the next decade:

· The report by the non-partisan Congressional Budget Office was the second positive analysis of the bill by a government agency in a month, but is likely to carry more weight than a similar report issued by the EPA—in its report, the CBO said that the energy bill would increase federal revenues by about $751 billion from 2011 to 2020, mostly through the sale of carbon credits in a so-called cap-and-trade plan to be applied to utilities and other sectors of the economy.

July 10, 2010

1. Robotic submarines, working a mile under water, removed a leaking cap from the gushing Gulf oil well, starting a painful trade-off: millions more gallons of crude will flow freely into the sea for at least two days until a new seal can be mounted to capture all of it:

· It would be only a temporary solution to the catastrophe that the federal government estimates has poured between 87 million and 172 million gallons of oil into the Gulf—hope for permanently blocking the leak lies with two relief wells, the first of which should be finished by mid-August.

2. The Obama administration declined to cite China for manipulating its currency to gain unfair trade advantage against the U.S.:

· In its report that it is required to send Congress, the administration concluded that the Chinese currency is undervalued against the dollar, and Treasury Secretary Timothy Geithner said that the administration will be watching the currency changes closely in coming months—the administration is required to issue the currency report every six months.

WEEK TWENTY SIX

July 12, 2010

1. BP robots attached a new, tighter-fitting cap to the top of the gushing Gulf of Mexico oil leak, raising hopes, for the first time in nearly three months, that the crude could be kept from polluting the water:

· The next unknown is whether the 18-foot-high, 150,000-pound metal stack of pipes and valves will work—BP plans to start testing July 13^th, gradually shutting the valves to see if the oil stops or if it starts leaking from another part of the well.

July 13, 2010

1. President Obama is announcing a new national strategy for combating HIV and AIDS aimed at helping reduce the number of infections and providing those living with the virus high-quality care free from stigma or discrimination:

· The strategy calls for reducing the rate of new HIV infections by 25% over the next five years and for getting treatment to 85% of patients within three months of their diagnosis.

2. All but clearing the way for passage of financial regulations, conservative Democrat Sen. Ben Nelson of Nebraska said that he would vote for the sweeping overhaul of banking:

· His support ensures the legislation now has 60 votes to clear the Senate and land on President Obama’s desk for his signature—the House passed the bill last month.

3. In its monthly budget report, the Treasury Department said that through the first nine months of this budget year, the deficit totals $1 trillion—that’s down 7.6% from the $1.09 trillion deficit run up during the same period a year ago:

· Many private economists are forecasting that the deficit for the entire budget year, which ends September 30^th, will come in around $1.3 trillion—that would be the second-highest deficit on record, but it would be down slightly from last year’s high of $1.4 trillion.

4. The Obama administration rolled out an ambitious plan for moving doctors and hospitals to computerized medical records, promising lower costs and greater safety for patients:

· Starting next year, doctors’ offices and hospitals can get federal money to help defray the costs of the systems, which can run to millions of dollars for hospitals—providers who do not comply will face cuts in Medicare payments.

5. The White House sent a bill for $99.7 million to BP and other responsible parties for response and recovery operations relating to the Deepwater Horizon oil spill—three earlier bills totaled $122.3 million:

· BP owns part of the blown-out well that is spewing oil into the Gulf, but when it comes to paying for the cleanup, the British oil giants stands alone—a BP spokesman said that partner MDEX Offshore 2007 LLC refuses to pay a $111 million cleanup bill requested from it last month, and the other minority owner, Anadarko Petroleum Co., refused a $272 million bill from BP last week.

6. In a sign that Americans persist in buying more than they sell in the global economy, the U.S. trade deficit jumped unexpectedly in May to the highest level since November 2008:

· That prompted some analysts to cut back their forecasts of how much the economy would grow in the second quarter and to warn that the underlying imbalances posed a threat to the nation’s long-term prosperity and economic strength.

July 14, 2010

1. U.S. Rep. Earl Blumenauer is demanding that the Pentagon explain how war contractor Kellogg, Brown & Root may have been granted immunity related to the harming of any solder or civilian in Iraq:

· In a sharply worded letter, Blumenauer gave the secretary of defense five days to produce details of KBR’s claim of indemnification—the details of a secret agreement have emerged in a U.S. District Court case in Portland and were reported July 13^th in The Oregonian, and Blumenauer said that he plans to take his concerns to colleagues on the House Armed Services Committee.

2. From counseling for kids who struggle with their weight to cancer screenings for their parents, preventive healthcare soon will be available at no out-of-pocket costs under new rules the Obama administration unveiled:

· That means no co-pay, deductibles, or co-insurance for people whose health insurance plans are covered by the new requirements—the Obama administration estimates that 41 million Americans will benefit initially, with the number projected to grow to 88 million by 2013, but many large company plans, which usually offer solid preventive benefits, will be exempt from the requirements for the time being:

3. BP allayed last-minute governments fears of making the disaster in the Gulf of Mexico worse and began testing the new, tighter-fitting cap that finally could choke off the oil leak:

· Retired Coast Guard Adm. Thad Allen, the Obama administration’s point man on the disaster, said that the government gave the go-ahead after carefully reviewing the risks—Allen said that BP will monitor the results every six hours and end the tests after 48 hours to evaluate the findings.

4. A second straight month of declining retail spending will likely keep unemployment high and help to weaken the recovery:

· Consumer spending accounts for 70% of economic activity, and while it grew at a solid rate during the first three months of the year, consumers have held back in the past two months—those economic conditions prompted Federal Reserve officials to cut their forecasts for growth slightly for this year, according to minutes from the Fed’s June 22-23 meeting, revising their growth forecasts to between 3% and 3.5% this year, down from a forecast of 3.2% to 3.7% in April.

5. Oregon unveiled the details of a new insurance program for people denied coverage because of a health condition, one of the first offerings of the new federal health reform law:

· Eligibility is limited to citizens or legal residents of the U.S. who have been uninsured for the previous six months, and the coverage is spendy—monthly premiums range from $221 to $714, but it’s cheaper than Oregon’s so-called high-risk insurance, and it’s also meant to be a temporary fix because under the federal health reform law, insurance companies will be required to accept adults with pre-existing conditions in 2014 and sick children starting in September.

July 15, 2010

1. A sweeping crackdown on banking and high finance broke through a Senate Republican blockade, setting the stage for Congress to send the massive overhaul to President Obama:

· The vote to end debate was 60-38 (only three Senate Republicans voted with 55 Democrats and two Independents to end debate on the bill), the minimum needed to overcome a filibuster, but that ensured that the bill has the votes for final passage—at 2,300 pages, the legislation is designed to rein in big banks and protect consumers, with the aim of averting a repeat of the 2008 financial crisis.

2. The oil has stopped for now—after 85 days and up to 184 million gallons, BP finally gained control over the environmental catastrophe in the Gulf by placing a carefully fitted cap over the runaway geyser that has been gushing crude since early spring:

· If the cap holds, if the sea floor doesn’t crack, and if the relief wells being prepared are completed successfully, this could be the beginning of the end for the spill—the oil stopped flowing at 2:25 p.m. CDT when the last of three valves in the 75-ton cap was slowly throttled shut, setting up a 48-hour close watch for complications.

3. Republicans almost unanimously oppose spending $339 billion for extended unemployment benefits for the 2.5 million people who have lost them because they say it would increase federal budget deficits—at the same time, they are pushing a permanent extension of Bush administration tax cuts, especially for the wealthy, which could increase federal budget deficits by trillions of dollars over the next ten years:

· The money for jobless benefits is expected to win approval early next week after weeks of Republican-led extended debate, and the next big economic-policy fight in Congress will involve the tax cuts, most of which are set to expire December 31^st, meaning that taxes on income, capital gains, dividends and estates would go up next year, and the child care credit would be cut in half—to $500 per child.

July 16, 2010

1. More than 100 members of Congress, including all seven members of Oregon ’s congressional delegation, have called upon President Obama to include a long-term extension of the federal safety net in his next budget request to Congress:

· A four-year extension of the legislation originally signed into law in 2000 by President Bill Clinton is set to expire June 30, 2012—timber counties including Douglas County have already seen their safety net revenues decline by 10% this fiscal year and in the past two years, and in the new fiscal year that begins July 1, 2011, they will suffer a 35% loss in safety-net income.

2. BP said that its capped-off well appeared to be holding steady almost midway into a waiting period in which engineers watched the pressure gauges for signs of a leak:

· BP PLC vice president, Kent Wells, said on a conference call that results monitored from control rooms on ships at sea and hundreds of miles away at the company’s U.S. headquarters in Houston showed the oil staying inside the cap, rather than escaping through any undiscovered breaches—four underwater robots scoured the sea floor but also found no signs of new leaks.

3. Consumer prices fell for the third straight month, offering some bargains to American shoppers:

· The Labor Department reported that the Consumer Price Index, the government’s most closely watched inflation barometer, dipped 0.1% in June—so-called “core” consumer prices, which strip out volatile energy and food, rose 0.2% in June, which means core prices rose only 0.9% over the past year, below the Fed’s inflation target and has core prices holding at a 44-year low.

4. Authorities said that busts carried out this week in Miami, New York City, Detroit, Houston, and Baton Rouge, Louisiana, were the largest Medicare takedown in history—part of a massive overhaul in the way federal officials are preventing and prosecuting the crimes:

· In all, 94 people—including several doctors and nurses—were charged in scams totaling $251 million—federal authorities cautioned that the cases represent only a fraction of the estimated $60-90 billion in Medicare fraud absorbed by taxpayers each year.

5. Americans reacted to the economy by clamping down on their spending in May and June, and with unemployment at 9.5%, shoppers are likely to remain frugal—if they retrench sharply, businesses could cut back on hiring, and the economy could slip back into recession:

· The index of consumer sentiment sank to 66.5 in early July in the twice-monthly survey by the University of Michigan and Reuters—that’s the lowest since August 2009.

6. Relative to the rest of America, Oregon is getting poorer and has been getting poorer for decades, and the Great Recession has brought the state to a low point as Oregon now ranks 32^nd among the states in per capita personal income—Oregonians earn slightly more than 90% of the national average of the same measurement:

· These are the lowest figures for Oregon since the federal government started keeping the measurement at about the same time the stock market crashed in 1929, and the state is falling even further behind.

WEEK TWENTY SEVEN

July 18,2010

1. A federal watchdog found that the Treasury Department failed to consider the economic fallout when it told GM and Chrysler to quickly shutter many dealerships as part of government-led bankruptcies:

· The audit by Neil Barofsky, the official inspector general for the Troubled Asset Relief Program, the $787 billion stimulus program known as TARP, said that Treasury did not show why the cuts were “either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery”—investigators said that “Treasury made a series of decisions that may have substantially contributed to the accelerated shuttering of thousands of small businesses.”

2. The government’s point man for the oil well that has been spewing oil into the Gulf of Mexico, retired Coast Guard Adm. Thad Allen, said that a seep had been detected a distance from the busted oil well and demanded, in a sharply worded letter, that BP step up monitoring of the seabed:

· The concern all along—since pressure readings on the cap were not as high as expected—was a leak elsewhere in the well bore, meaning the cap may have to be reset to prevent the environmental disaster from becoming even worse and harder to fix.

July 19, 2010

1. The Washington Post reported that since the terror attacks of September 11^th, top-secret intelligence gathering by the government has grown so unwieldy and expensive that no one really knows what it costs or how many people are involved:

· A two-year investigation by the newspaper uncovered what it termed a “Top Secret America” that is mostly hidden from public view and largely lacking in oversight—in its first installment in a series of reports, the Post said that there are now more than 1,200 government organizations and more than 1,900 private companies working on counter-terrorism, homeland security, and intelligence in some 10,000 locations across the U.S.

2. The government and BP continue to monitor leaks that appeared during the weekend, but they have also renewed their focus on permanently capping the well:

· Thad Allen, the top federal official overseeing efforts to contain oil in the Gulf, said that for the first time, it is a possibility that a containment cap installed last week could remain in place to keep oil from flowing from the BP well until a relief well is completed.

3. National Guard troops will head to the U.S.-Mexico border August 1^st for a yearlong deployment to keep a lookout for illegal border crossers and smugglers and help in criminal investigations, federal officials said:

· Gen. Craig McKinley, chief of the National Guard Bureau, told a Pentagon news conference that the troops will be armed but can use their weapons only to protect themselves—the announcement provides details on how the government will implement President Obama’s May decision to bolster border security and comes as drug-related violence has escalated in Mexico.

4. The Obama administration announced a new national policy for strengthening the way the U.S. manages its oceans, its coasts, and the Great Lakes:

· The policy calls for creation of a new National Ocean Council that will coordinate the work of the many federal agencies involved in conservation and marine planning, but it creates no new restrictions or regulations and is not expected to have any short-term effect on offshore drilling.

5. U.S. Secretary of State Hillary Clinton unveiled development projects for Pakistan ranging from hydroelectric dams to hospital makeovers in hopes of reversing Pakistani perceptions that U.S. officials view their nation through the prism of fighting terrorism while ignoring some of its serious needs:

· The Obama administration has been working to dispel Pakistan’s deep mistrust of the U.S., a wariness rooted in how Washington treated Pakistan in the years after the Soviet withdrawal from Afghanistan in 1988-89.

6. Defense Secretary Robert Gates arrived in Seoul for a high-level show of unity expected to include the announcement of major military exercises by the U.S. and South Korea four months after the sinking of a South Korean warship:

· Gates will be joined in Seoul by Secretary of State Hillary Clinton to hold joint talks with South Korean counterparts—having Gates and Clinton together permits “high-level strategic decisions about the relationship between our two countries, cutting across military, diplomatic, and political trade issues, the whole range,” a U.S. defense official said.

7. Builder confidence in the new home market was shaken in July, slumping to its lowest level since the depths of the economic downturn last year as government stimulus programs for buyers ended and the economic recovery remained lackluster:

· The National Association of Home Builders’ housing market index dropped for the second month in a row in July to 14, its lowest level since April 2009—any number under 50 indicates that more builders view conditions as poor than view them as good.

July 20, 2010

1. Eliza Manningham-Buller, director of the M15 between 2002 and 2007, said that British and U.S. intelligence had no credible evidence of a link between Saddam Hussein and the September 22, 2001, attacks on the U.S. before the 2003 Iraq invasion, and nothing to connect the attacks to Baghdad was discovered ahead of the 2003 invasion of Iraq:

· Manningham-Buller, who is now a member of the House of Lords, acknowledged that the Iraq war vastly increased the terrorism threat to Britain and helped to radicalize “a whole generation of young people.”

July 21, 2010

1. The federal government’s spill chief said that a relief tunnel should finally reach BP’s broken Gulf of Mexico well by the weekend, meaning the three-month-old gusher could be snuffed for good within two weeks:

· After several days of concern about the well’s stability and the leaky cap keeping the oil mostly bottled up, retired Coast Guard Adm. Thad Allen said that engineers concluded the risk of a bigger blowout was minimal, and they were getting closer to pumping mud into the column to permanently seal it.

2. President Obama signed into law the most sweeping overhaul of financial regulations since the Great Depression, a package that aims to protect consumers and insure economic stability from Main Street to Wall Street:

· The law, pushed through mainly by Democrats in Washington’s deeply partisan environment, comes almost two years after the infamous near meltdown in the U.S. in 2008 that was felt around the globe—the legislation gives the government new powers to break up companies that threaten the economy, creating a new agency to guard consumers, and puts more light on the financial market that escaped the oversight of regulators:

3. The Senate approved legislation to extend unemployment benefits for 2.5 million jobless Americans, clearing the way for House passage and President Obama’s signature this week:

· Approval by the Senate, on a 59-39 vote, followed weeks of Republican efforts to block the bill, and once the bill is passed in the House and signed by Obama, aid will resume flowing to unemployed Americans whose benefits have lapsed and will then continue through November.

4. The Obama administration announced that it would impose further sanctions against North Korea, throwing legal weight behind a show of pressure on the North that included an unusual joint visit to the demilitarized zone by Secretary of State Hillary Clinton and Defense Secretary Robert Gates:

· The measure, announced in Seoul by Clinton after high-level talks with South Korean officials, take aim at counterfeiting, money laundering, and other dealings that she said the North Korean regime uses to generate hard currency to pay off cronies and cling to power.

5. Federal Reserve Chairman Ben Bernanke, saying the economic outlook was “unusually uncertain”, predicted that unemployment was likely to remain stubbornly high for several years, straining families and endangering the nation’s economic stability and competitiveness:

· While Bernanke, in his semiannual testimony in Congress, painted a bleak picture for the millions of jobless workers, he said that the U.S. economy was continuing to recover at a moderate pace, and he said that for now, the central bank was holding off on taking further actions to stimulate the economy.

July 22, 2010

1. The Department of Veterans’ Affairs is launching a Qarmat Ali registry to aggressively track and treat veterans exposed to a cancer-causing chemical in Iraq in 2003:

· The monitoring is a victory for nearly 300 Oregon Army National Guard members and for U.S. Sen. Ron Wyden (D-OR) who proposed such a registry March 22^nd after veterans with breathing and skin problems told him, at an emotional meeting in Portland, that V.A. staff did not understand the hazards of the assignment.

2. President Obama signed legislation extending unemployment benefits for 2.5 million jobless Americans, a hard-fought achievement his party will use to portray Republicans as callous to the needs of ordinary workers in a fall election campaign tied to the country’s economic fate:

· But Democrats continue to struggle over the next steps to improve the economy, confronting a 9.5% jobless rate and voters who are demanding jobs and pay checks, not just unemployment checks.

3. The effort to advance a major climate change bill through the Senate this summer has collapsed as Sen. Harry Reid (D-NV), the majority leader, said that the Senate would not take up legislation intended to reduce carbon emissions blamed as a cause for climate change, but would, instead, pursue a more limited measure focused on responding to the oil spill in the Gulf of Mexico and tightening energy efficiency standards:

· The decision was a major disappointment for conservation groups and lawmakers who had invested months in trying to negotiate such legislation—last year, the House passed a climate change bill, a proposal that has created a backlash for some politically vulnerable Democrats.

4. Democrats broke a Republican filibuster after a long day of debate and backroom negotiations involving an amendment by Sen. Jeff Merkley (D-OR) that would provide $30 billion in federal money to community banks to recycle as small-business loans:

· The vote was 60-37, with two Republicans joining Democrats to provide the 60 votes needed to end debate—the full bill is still pending, but Democratic leaders expressed confidence they could push it past any remaining GOP objections.

5. A federal task force said that major obstacles—from deep distrust to policies demanding protection of threatened species—still stand in the way of increasing logging in Western Oregon:

· The timber industry responded that the Obama administration was letting down rural timber towns with struggling economies—Interior Secretary Ken Salazar created the task force a year ago after dissolving the Bush administration’s plan to boost logging on BLM timber lands.

6. The Senate has passed an almost $60 billion bill funding President Obama’s troop surge in Afghanistan after stripping out more than $20 billion in domestic spending approved by the House:

· The move repels a long-shot bid by House Democrats early this month to resurrect their faltering jobs agenda with $10 billion in grants to school districts to avoid teacher layoffs, money for a summer jobs program, and improving security along the U.S.-Mexico border.

July 23, 2010

1. New estimates from the White House predict the budget deficit will reach a record $1.47 trillion this year—the government is now borrowing 41 cents of every dollar it spends:

· Economists agree that the most important measure of the deficit is against the size of the economy, and many economists say that a deficit of three percent of gross domestic product is sustainable since it would stabilize the overall debt when measured relative to the economy—the report put the deficit at 10% of GDP this year and 9.2% of GDP next year, and it would never reach the three percent figure under Obama’s predictions, which estimate war costs and depends on assumptions of tax hikes that may not materialize.

2. North Korea enflamed tensions over the deadly sinking of a South Korean war ship by threatening the U.S. and South Korea with a “physical response” if they carry out naval maneuvers this weekend—the U.S. refused to back down:

· North Korea’s official news agency followed up, referring to the country’s formal name, saying, “The army and people of the DPRK will legitimately counter, with their powerful nuclear deterrence, the largest ever nuclear war exercises to be staged by the U.S. and the South Korean puppet forces.”

3. State regulators seized control of Home Valley Bank, a five-branch institution in Grants Pass—it is the second Oregon bank and the 104^th nationally to fail this year, and the fifth Oregon bank to sink since the recession began in 2008:

· South Valley Bank & Trust of Klamath Falls entered into a deal with the FDIC to assume the $229.6 million in deposits at Home Valley, and Home Valley depositors will automatically become depositors of South Valley.

4. Kenneth Feinberg, the Obama administration’s pay czar announced that he would not try to recoup $1.6 billion in compensation given to top executives at bailed-out banks because he though shaming them was punishment enough:

· His decision to go easy on 17 banks that made “ill-advised payments to their executives is likely to fuel concerns about how he will oversee the $20 billion oil spill compensation fund created by BP—among the companies Feinberg did not pursue were two whose bailouts are expected to cost taxpayers more than $38 billion: AIG and CIT Group Inc.

WEEK TWENTY EIGHT

July 26, 2010

1. Current and former U.S. officials said that the publication of 90,000 classified U.S. military reports on the Afghanistan war could complicate the Obama administration’s strategy for ending the Taliban-led insurgency by hurting cooperation with Pakistan and throttling the flow of federal ground intelligence:

· Pentagon officials began combing through the materials published on the online WikiLeaks site to assess the damage to the U.S.-led counterinsurgency campaign, and while U.S. officials did not say how WikiLeaks obtained the documents, they said that anyone with a relatively low security clearance could have been the source.

2. Government data showed that U.S. sales of new homes scored a better-than-expected rebound in June after having plumbed record lows a month earlier:

· The Commerce Department reported that sales increased 23.6% in June to a seasonally adjusted annual rate of 330,000, and economists said that while the gain was not a sign of strength, it was welcome nonetheless, coming after a dismal May reading.

July 27, 2010

1. The House approved $33 billion for the troop surge in Afghanistan on a 308-114 vote, underscoring the increasing unpopularity of the war among Democrats—the number of Democrats voting against the package was three times higher than it was for a vote last year:

· Among Oregon lawmakers, only Republican Greg Walden voted for the funding, while Democrats Earl Blumenauer, David Wu, Kurt Schrader, and Peter DeFazio voted against it.

2. Senate Republicans beat back Democratic attempts to pass a bill that would impose stringent disclosure requirements on corporations, unions, and other independent groups that finance ads for political campaigns:

· Ignoring pleas for passage from President Obama, not a single Republican voted for a motion to limit debate and proceed toward final passage of the so-called Disclosure Act—without Republican support, the debate-limit motion failed 57-41 (both Oregon senators voted yes), falling short of the 60 votes required under Senate rules to shut off debate.

3. According to a monthly survey, Americans’ confidence in the economy, amid job worries and skimpy wage growth, faded further in July:

· The Consumer Confidence Index came in at 50.4 in July, a steeper-than-expected decline from the revised 54.3 in June, and this decline follows last month’s decline of nearly ten points, from 62.7 in May, for the lowest point since February—it takes a reading of 90 to indicate a healthy economy, a level not seen since the recession began in December 2007.

July 28, 2010

1. The House passed a bill that would reduce the disparities between mandatory federal sentences for crack and powder cocaine violations, a step toward ending what legal experts say have been unfairly harsh punishments imposed mainly on blacks:

· The bill, which passed The Senate in March, was adopted by the House in a voice vote and now goes to President Obama for his signature—the Congressional Budget Office estimates that under the new law, shorter sentences for possessors of small amounts of crack cocaine will save the federal prison system about $42 million over the next five years.

2. Economic activity has slowed or held steady in parts of the country, revealing a choppy path back to health—a new survey released by the Federal Reserve found the U.S. economy growing this summer, even as risks mount:

· Of the 12 regions tracked by the Fed, the survey said that growth held steady in Cleveland and Kansas City but slowed in Atlanta and Chicago—economic activity elsewhere was described as modest.

3. John C. Williams, director of research for the Federal Bank of San Francisco—the branch of the Fed that oversees banks in Oregon—predicts the nation’s overall economic output will grow 2.5% this year and between 3.5 and 4% in 2011, suggesting job growth will return:

· He notes, however, that the unemployment rate is still too high, and he says that the true rate of unemployment and the duration of joblessness for some people is masked—“This broader measure of unemployment is 16.5%, enormously high by historical standards,” he said.

July 29, 2010

1. The estimate of possibly mishandled graves at Arlington National Cemetery soared into the thousands, and ousted cemetery officials conceded that they knew about problems at least five years ago:

· A Senate report said that 4,900 to 6,600 graves among the 330,000 veterans and others buried at Arlington may be unmarked, improperly marked, or mislabeled on cemetery maps—an Army survey released in June of three of the cemetery’s 70 sections revealed 211 mishandled graves, and the Senate report reached the larger figure by projecting the error rate onto the entire cemetery.

2. A U.S. Army report has concluded that at a time of record high military suicides, commanders are ignoring the mental health problems of U.S. soldiers and not winnowing out enough of those with records of substance abuse and crime:

· According to the Army, roughly 20 out of 100,000 soldiers have killed themselves, compared with 19 out of 100,000 for the civilian population—the report put a large part of the blame on commanders who either failed to recognize or disregarded high-risk behavior among their troops, and in addition, the report said that the pressure of two wars had forced a lowering of recruiting and retention standards.

3. New jobless claims fell last week for the third time in four weeks but remain elevated—the decline is a sign that the economy added jobs in July, although not enough to lower the nation’s high unemployment rate:

· The Labor Department said that first-time claims for unemployment insurance dropped by 11,000 to a seasonally adjusted 457,000.

4. President Obama’s election-year jobs agenda suffered a new setback when Senate Republicans blocked a bill creating a $30 billion government fund to help open up lending for credit-starved small businesses:

a. The fund would be available to community banks with less than $10 billion in assets to help them increase lending to small businesses—the bill would combine the fund with about $12 billion in tax breaks aimed at small businesses;

b. The vote was 58 to 42, with all 41 Republicans voting to continue the filibuster—Senate Majority Leader Harry Reid (D-NV) also voted to continue the filibuster, but only as a procedural step that allows him to call up the bill again.

July 30, 2010

1. The White House implored the web site WikiLeaks to stop posting secret Afghanistan war documents, and the Pentagon pressed its investigation of the leaks, bringing back to the U.S for trial a soldier charged with handing over classified information:

· Obama administration officials said the investigation into the release of the documents (76,911 so far) could extend beyond members of the military—White House spokesman Robert Gibbs said that posting the war logs on the Web jeopardized national security and put lives of Afghanistan informants and U.S. military personnel at risk.

2. The economic recovery lost momentum in the spring as growth slowed to a 2.4% pace, its most sluggish showing in nearly a year and too weak to drive down unemployment:

· Consumers spent less, companies slowed their restocking of shelves, and the nation’s trade deficit dragged more on the economy in the April-to-June quarter—in a separate report, the Commerce Department said that the recession was deeper than previously estimated.

3. Regulators took down two more struggling Northwest banks: Liberty Bank of Eugene, which celebrated its 25^th anniversary last year, and Cowlitz Bank of Longview, Washington, with three branches in the Portland area operating under the name, Bay Bank:

· Home Federal Bank of Nampa, Idaho, will assume the deposits of Liberty Bank, and Heritage Bank of Olympia will assume those of Cowlitz Bank—all branches of these banks will reopen Monday, August 2^nd, under the names of their assuming banks.

WEEK TWENTY NINE

August 2, 2010

1. Federal Reserve Chairman Ben Bernanke said that the nation faces a long road back to good economic health:

· Bernanke said that progress is being made after the deepest recession since the 1930s, the worst of the financial crisis is behind the nation, and the economy is growing again, but we have a considerable way to go to achieve a full recovery in our economy, and many Americans are still grappling with unemployment, foreclosure, and lost savings.

2. Scientists announced that the BP spill is by far the world’s largest accidental release of oil into marine waters, according to the most recent estimates:

a. Experts say that, all told, about 49 million barrels of oil, or about 205.8 million gallons, have gushed from BP’s well since the Deepwater Horizon exploded April 20^th—not all of that tainted the Gulf of Mexico, as containment efforts captured about 33 million gallons and funneled them to oil ships.

b. That amount outstrips the estimated 3.3 million barrels spilled into the Bay of Campeche by the Mexican rig, Ixtoc I, in 1979, previously believed to be the world’s largest accidental release.

3. The Obama administration lost an early legal skirmish over the new healthcare law when a federal judge declined to dismiss the state of Virginia’s lawsuit challenging a key part of the landmark legislation:

· U.S. District Judge Henry Hudson did not rule on the central issue in the lawsuit brought by Virginia Attorney General Kenneth Cuccinelli—the new law’s requirement that most Americans buy health insurance beginning in 2014—but the judge swept aside the Obama administration’s efforts to squash the legal contest in its infancy, ruling that the state of Virginia has the right to sue, opening the door to a potentially drawn-out legal battle over a core tenet of the health overhaul.

4. The Obama administration said that the new healthcare overhaul law is starting to produce savings for Medicare and eventually will add more than a decade of solvency to the program’s trust fund:

· The report said that Medicare will save about $8 billion by the end of next year and as much as $575 billion over the rest of the decade.

5. The nation’s manufacturing sector has now grown for a solid year, and more of its companies say they are ready to hire:

· The Institute for Supply Management said that its manufacturing index slipped in July, to 55.5 from 56.2 in June, but it was the 12^th straight month of readings above 50, which indicates expansion—at the depth of the recession, the index was closer to 30.

August 3, 2010

1. Crews hoped to begin pumping mud and perhaps cement down the throat of the blown-out oil well at the bottom of the Gulf of Mexico in what BP officials said could be the method of attack that finally snuffs the spill:

· Engineers planned to probe the busted blowout preventer with an oil-like liquid to determine whether it could handle the static kill—if the test is successful, they plan to spend today through August 5^th pumping the heavy mud down the well.

2. Leading Republicans are joining a push to reconsider the constitutional amendment that grants automatic citizenship to people born in the U.S.

· Senate Republican Leader Mitch McConnell of Kentucky said that he supports holding hearings on the 14^th amendment right, although he emphasized that Washington’s immigration focus should remain on border security.

3. BP claimed a key victory in the effort to plug its blown-out well when a government report said that much of the spilled oil is gone—although what’s left is still nearly five times the amount that poured from the Exxon Valdez:

· BP PLC reached what it called a significant milestone overnight when mud that was forced down the well held back the flow of crude—federal officials will not declare complete factory until they also pump in mud and then cement from the bottom of the well, and that will not happen for several weeks.

August 4, 2010

1. After months of failure, the Senate breached a Republican blockade that had prevented $26 billion in federal aid to cash-strapped states for teachers, low-income healthcare, and other services:

· The 61-38 vote came after Democrats reworked the legislation to insure that the spending was offset by taxes and by cuts elsewhere in the budget, and Oregon is expected to receive about $274 million—with the Senate poised to finish work on the bill, House Speaker Nancy Pelosi said that she would call the House back into session from the August recess next week so that the House can vote on the bill August 10^th, and President Obama can sign it into law quickly.

2. The Obama administration released $600 million to help unemployed homeowners in Oregon and four other states avoid foreclosures:

· Oregon, where one in every 76 homes is facing foreclosure, qualifies for $88 million—the money will be available to state housing authorities in Oregon, Ohio, South Carolina, Rhode Island, and North Carolina “to support local initiatives to assist struggling home owners in these five states that have high percentages of their population living in areas of economic distress due to unemployment,“ the Treasury Department said.

3. U.S. private-sector employment rose 42,000 in July for the sixth consecutive monthly gain, but the pace of hiring remains weak, according to the employment report from payroll-processing firm ADP:

· Over six months, increases have averaged a “modest” 37000, “with no evidence of acceleration”, according to Macroeconomic Advisors, which produces the report from anonymous payroll data supplied by ADP.

August 5, 2010

1. The Senate confirmed Elena Kagan as the 112^th justice of the U.S. Supreme Court—she becomes the fourth woman ever named to the court and will join two other women currently serving, including Justice Sonia Sotomayer, the first Obama administration nominee, who was confirmed almost exactly one year ago:

· But the 63-37 vote suggests that the bitter partisan divide that has plagued legislative efforts on Capitol Hill is increasingly affecting the high court’s nomination process—five Republicans crossed party lines to support Kagan, four fewer than those who last year voted to confirm Sotomayer, and as a result, the tally in Kagan’s favor ranks among the lowest among justices in recent history despite support from some prominent legal conservatives.

2. Medicare and Social Security continue to face serious financial challenges even though the new healthcare law may provide added stability to the two massive programs, according to the government’s annual review:

· This year, for the first time since 1983, Social Security is projected to pay out more in benefits than it collects in taxes—the report, released by the Social Security and Medicare trustees, estimated that the Social Security trust fund used to pay retiree benefits will remain solvent until 2037, the same outlook as last year.

3. Retailers around the country posted a sales increase from a year earlier of just 2.8% for July—the July figure, released by the International Council of Shopping Centers based on reports from 31 chains, was the fourth straight month of weak retail numbers, and, for the most part, economists were disappointed:

· The government will release its snapshot of the nation’s job market for July on August 6^th, and the overall figure is expected to show a loss of 65,000 jobs for July because of the end of temporary positions with the U.S. Census Bureau—unemployment is not expected to budge much from its current 9.5% and may actually rise.

August 6, 2010

1. In a 65^th anniversary event that organizers hope will bolster global efforts toward nuclear disarmament, a. U.S. representative participated for the first time in Japan’s annual commemoration of the American atomic bombing of Hiroshima:

· Hiroshima’s mayor welcomed Washington’s decision to send U.S. Ambassador John Roos to the commemoration, which began with an offering of water to the 140,000 who died in the first of two nuclear bombings that prompted Japan’s surrender in World War II.

2. Crews working to seal a blown-out oil well in the Gulf of Mexico were waiting for fresh cement that was pumped in to dry in one of the final steps of the so-called “static kill”:

· Engineers pumped the cement down the throat of the well August 5^th and planned to wait at least a day for it to dry—after the cement in the oil well dries, the last step begins: finishing the drilling of the last 100 feet of the relief well, which government officials said will be used to seal the underground reservoir from the bottom with mud and cement.

3. The government reported that the nation’s unemployment rate remained stuck at 9.5% last month as the economy sustained a net loss of 131,000 jobs—what’s more, revisions of the previous month revealed a much bigger job loss than originally reported: the nation lost 221,000 jobs in June, not 125,000:

· The persistently bleak employment picture, at a time when many companies are recording strong profits and accumulating billions of dollars in cash, marks a sharp change from the past—this time, even as the country emerged from the worst recession in more than half a century, and while corporations enjoyed surging profits and have sharply stepped up their capital spending, they have invested relatively little in job creation.

4. Alan Greenspan, the former Federal Reserve chairman and a self-described lifelong Republican libertarian, is calling for the complete repeal of the 2001 and 2003 tax cuts—“I’m in favor of tax cuts, but not with borrowed money. . . the problem we now face is the most extraordinary financial crisis that I have ever seen or read about:”

· Greenspan’s position is not only contrary to Republican orthodoxy, but also decidedly to the left of President Obama, and he said that while higher taxes in 2010 was a risky choice for the nascent recovery, “the choice of not doing so is far riskier.  It is the difference between bad and worse, but in neither case do I think the evidence suggests that it would be the tipping point for the economy.”

WEEK THIRTY

August 9, 2010

1. Defense Secretary Robert Gates said that tough economic times require that he shutter a major command that employs 5,000 people around Norfolk, Virginia, and begin to eliminate other jobs throughout the military:

· The announcement was the first major step by Gates to find $100 billion in savings over the next five years—Gates says that the money is needed elsewhere within the Defense Department to repair a force ravaged by years of war and to prepare troops for the next fight.

2. The Obama administration is investigating pay practices throughout the healthcare industry after finding that many hospitals and nursing homes do not pay proper overtime to nurses and other employees who work more than 40 hours a week:

· The Fair Labor Standards Act generally requires that employees be paid at least the federal minimum wage of $7.25 an hour, as well as 1½ times their regular rates of pay for hours worked beyond 40 a week.

August 10, 2010

1. Summoned back from summer break, the House pushed through an emergency $26 billion jobs bill that Democrats said would save 300,000 teachers, police, and others from election-year layoffs—President Obama immediately signed it into law:

· The legislation was approved mainly along party lines, 247-161, and the aid for the states will be paid for mostly by multinational corporations and by reducing food stamp benefits for the poor—the measure narrowly passed the Senate on August 5^th, after the House had begun its August break.

2. Downgrading its view of the economy, the Federal Reserve projected a “more modest” rate of recovery in the months ahead and announced that it will use proceeds from the mortgage bonds it owns to buy into Treasury debt in an effort to spark growth and investor confidence:

· The Fed left its benchmark federal funds lending rate at a range between zero and one-quarter percentage point, as expected, but given the flurry of data that show the U.S. recovery beginning to lose steam, financial markets were looking for a sign that the Fed would not just sit on the sidelines—so the Fed gave investors the sign they sought.

3. The productivity of U.S. non-farm businesses dropped in the second quarter at a 0.9% annual rate, the first decline after five quarters of strong growth, the Labor Department reported—the 0.9% fall in production was worse than the 0.4% forecast by economists surveyed by Market Watch:

· The reversal suggests that employers looking to increase output may need to hire more workers, a boon for the sluggish job market—in the second quarter, hours worked increased at a 3.6% annualized rate, the fastest since the first quarter of 2006, the government estimated—“The labor force is starting to get stretched,” said Gary Bigg, economist at Bank of America/Merrill Lynch, “One could argue this report is positive for employment growth going forward.”

August 11, 2010

1. The Treasury Department said that the deficit for July totaled $165 billion—that is down 7.7% from the same period last year, reflecting lower spending on emergency programs to combat the recession and stabilize the financial system:

· The Obama administration predicts that this year’s deficit will surpass 2009’s record imbalance of $1.42 trillion, and in a new forecast released in late July, the administration projected that the deficit will climb to $1.47 trillion in 2010 and fall only slightly to $911 billion in 2012—many private forecasters, however, believe the deficit for this year will come in lower, at around $1.3 trillion.

2. The trade deficit of nearly $50 billion for June is the largest in almost two years, and economists fear that economic growth for the second quarter, which came in at a sluggish rate of 2.4% in early estimates, may turn out to be only half of that:

· The Commerce Department reported that exports for June were down 1.3%, to $150.2 billion, while imports rose 3%, to just more than $200 billion—overall the trade deficit grew by 19% for the month.

August 12, 2010

1. Congress gave final approval to a $600 million border security package that President Obama sought to tighten the border with Mexico:

· The Senate gave quick final approval to the measure in an unusual special session that was arranged to rectify an earlier procedural glitch—the House had passed the bill without dissent on August 10^th, and Obama is expected to sign it on August 13^th.

2. First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000, the Labor Department said—that’s the highest total since February, and analysts had expected claims to fall:

· Initial claims have now risen in three of the past four weeks and are close to their high point for the year of 490,000, reached in late January—the four-week average, which smoothes volatility, soared by 14,250, to 473,500, also the highest since late February.

August 13, 2010

1. President Obama signed into law a $600 million border security measure that will put more agents and equipment along the Mexican border:

· The measure will fund the hiring of 1,000 new Border Patrol agents to be deployed at critical areas along the border, as well as more Immigration and Custom Enforcement agents—the bill is paid for by raising fees on foreign-based personnel companies that use U.S. visa programs.

2. The government’s point man on BP’s blown-out well said that it is not plugged to his satisfaction and that the drilling of the relief well—long regarded as the only way to ensure that the hole at the bottom of the Gulf of Mexico never leaks oil again—must go forward:

· Last week, BP plugged off the ruptured oil well from the top with mud and cement, and for a while, it appeared that the relief well BP has been drilling 2½ miles under the sea might not be necessary after all—but retired Coast Guard Admiral Thad Allen dashed those hopes after scientists conducted pressure tests.

3. The Commerce Department said that a busy month for car dealerships and higher gas prices lifted overall retail sales 0.4% last month, the first overall gain in three months—but most retailers reported declines:

· The Commerce Department also reported that inventories held by businesses rose for a sixth straight month in June, but business sales declined for a second month in a row, another sign of weak demand among consumers—economists note that the government revised activity in the previous two months to show slightly smaller decreases, but overall, the declines from retailers in July suggest the recovery is losing steam.

4. A federal appeals court cleared the way for logging to resume in an old-growth forest in Oregon to protect northern spotted owl habitat from being lost to wildfires:

· In a 2-1 decision by a three-judge panel, the Ninth U.S. Circuit Court of Appeals reversed a lower court ruling that had stopped the Five Buttes’ project in the Deschutes National Forest—the appeals court found the project was within the limits of the Northwestern Forest Plan, which set up a system of old-growth reserves in 1994 in Oregon, Washington, and northern California where logging was strictly limited to protect habitat for threatened species such as spotted owls and salmon.

WEEK THIRTY ONE

August 16, 2010

1. China has eclipsed Japan as the world’s second-largest economy after three decades of blistering growth that puts overtaking the U.S. in reach within ten years:

· After confirming that economic output fell behind its giant neighbor for the three months ending June 30^th, Japan is still richer per person—the news is more proof of China’s arrival as a force that is altering the global balance of commercial, political, and military power.

2. Home-builder confidence dropped for the third straight month in August as the struggling economy and a flood of cheap foreclosed properties kept people from buying new homes:

· The National Association of Home Builders said that its monthly index of builders’ sentiment about the housing market fell to 13, the lowest reading since March 2009—readings below 50 indicate negative sentiment about the market, and the most recent time the index was above 50 was in April 2006.

August 17, 2010

1. Officials have announced that a federal grant will allow the city of Sutherlin to begin construction on a new water-treatment plant at Cooper Creek reservoir next year:

· Stimulus funding from the U.S. Department of Agriculture will provide the city with $2.7 million toward replacing a 40-year-old facility—the department will lend the city another $4.6 million at 2.375% interest, and other loans available to the city would have come with interest rates above four percent, according to Sutherlin City Manager Robb Corbett.

2. Quarterly financial results from retailers showed that profits are rising because retailers are cutting costs and keeping their inventories lean, but with the economy slowing once again and consumer confidence falling, they expect less out of the rest of the year, and they already have to push harder to get shoppers to buy:

· Retail sales were improving earlier this year, helped in part by a rising stock market, but those have slowed since April, and during this critical back-to-school season, echoes of the recession still sound.

3. New government data offered a mixed picture of the economic recovery, as U.S. manufacturing activity grew in July at the fastest pace in nearly a year, while the outlook for the housing market remained dim:

· The recovery has weakened in recent months with consumers spending less and saving more—businesses are hiring fewer workers with an unemployment rate for July at 9.5%, and economists expect it to stay at that level for the rest of the year.

August 18, 2010

1. President Obama earned his lowest marks ever on his handling of the economy in a new Associated Press-GfK poll, which also found that an overwhelming majority of Americans now describe the nation’s economy as poor:

· Americans’ dim view of the economy grew even more pessimistic this summer as the nation’s unemployment rate stubbornly hovered near ten percent—that’s been a drag on both Obama and Democrats, who control Congress.

2. As the U.S. military prepares to leave Iraq by the end of 2011, the Obama administration is planning a remarkable civilian effort, buttressed by a small army of contractors to fill the void:

· By October 2011, the State Department will assume responsibility for training the Iraqi police, a task that will be largely carried out by contractors—with the Obama administration in campaign mode for the coming midterm elections, and Iraqi politicians yet to form a government, the question of what future military presence might be needed has been all but banished from public discussion.

3. General Motors filed to become a publicly traded company again, the first step in its plan to sell stock that would pay back billions of dollars of taxpayer support that allowed the automaker to rebuild itself after years of devastating losses:

· The federal government took a 61% stake in the company after it spent $52 billion to save GM—reducing the government’s huge investment in GM would be a boost to President Obama and congressional Democrats heading into the fall elections.

August 19, 2010

1. Employers appear to be laying off workers again as the economic recovery weakens—the number of people applying for unemployment benefits reached the half-million mark last week for the first time since November:

· It was the third straight week that first-time jobless claims rose—the upward trend suggests the private sector may report a net loss of jobs in August for the first time this year.

August 20, 2010

1. President Obama invited Israel and the Palestinians to try anew, in face-to-face talks, for a historic agreement to establish an independent Palestinian state and secure peace with Israel:

· Secretary of State Hillary Clinton said that negotiations shelved two years ago will resume September 2^nd in Washington where Obama will host the Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas for dinner the night before—the goal: a deal in a year’s time on the tough issues that have sunk previous negotiations, including the borders of a new Palestinian state and the fate of disputed Jerusalem, claimed as a holy capitol by both peoples.

2. Oregon’s 10.6 unemployment rate, boosted by heavy reliance on manufacturing, is the seventh highest in the nation—Oregon placed well below top-ranked Nevada’s record 14.3% unemployment rate in July, according to U.S. Bureau of Labor Statistics’ numbers, but joblessness in Oregon remains more than a percentage point above the nation’s 9.4% level, seasonally adjusted:

· Oregon has improved relative to other states since the depths of the recession—in April and May of 2009, Oregon was second only to Michigan in unemployment nationally, but Rhode Island edged out Oregon that June to become No. 2, and this July’s figures place Oregon below Michigan (13.1%), California (12.3%), Rhode Island (11.9%), Florida (11.4%), and South Carolina (10.8%).

3. Nearly half of the 1.3 million homeowners who enrolled in the Obama administration’s flagship mortgage-relief program have fallen out—the program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments, and economists say that this report from the Treasury Department suggests that the $75 billion government effort is failing to slow the tide of foreclosures in the U.S.:

· More than 2.3 million homes have fallen into foreclosure since the recession began in December 2007, according to foreclosure listing service RealtyTrac Inc., and economists expect the number of foreclosures to grow well into next year.

4. Members of Oregon’s congressional delegation and county commissioners from throughout the state urged Agriculture Secretary Tom Vilsack to support a ten-year extension of the timber-safety net, urging Vilsack, during a meeting in downtown Portland, to have President Obama include the reauthorization in his proposed 2012 budget:

· A four-year safety-net extension is scheduled to expire in June 2012, following a 35% reduction in safety net funding in the 2011-12 county fiscal year—Douglas County’s share is set to decrease from $28.6 million this year to $18.6 million next year.

WEEK THIRTY TWO

August 23, 2010

1. The Obama administration has told the U.N. that Americans’ human rights’ record is less than perfect but stressed that the U.S. political system has built-in safeguards that promote improvements:

· In its first report to the U.N Human Rights Council on conditions in the U.S., the State Department said that some Americans, notably minorities, are still victims of discrimination—despite success in reforming such inequities as slavery and the denial of women’s right to vote, the department said, considerable progress is still needed.

2. A federal judge, Chief Judge Royce Lamberth of the U.S. District Court for the District of Columbia, blocked President Obama’s 2009 executive order that expanded embryonic stem-cell research, saying it violated a ban on federal money being used to destroy embryos:

· The ruling came as a shock to scientists at the National Institute of Health and at U.S. universities, which had viewed the Obama administration’s new policy and the grants provided under it as settled law—scientists scrambled to assess the ruling’s immediate impact on their work.

3. In its single biggest repayment of bailout funds so far, AIG said that it’s paying back nearly $4 billion in taxpayer aid with proceeds from a recent debt sale:

· AIG will use more than $3.9 billion of the proceeds to repay the Federal Reserve Bank of New York, trimming the balances on those credit lines with the Fed to about $15 billion—the emergency credit line was part of a $182 billion federal bailout package that New York-based AIG received during the financial crisis to avoid collapse, and AIG has been selling off assets to pay back the aid.

August 24, 2010

1. The U.S. military said that the number of U.S. troops in Iraq has fallen below 50,000 for the first time since the 2003 U.S.-led invasion and ahead of the end-of-the-month deadline mandated by President Obama:

· The number is a watershed in the more than seven years that the U.S. has been at war in Iraq—under Obama’s plan, American forces will no longer conduct combat operations but are instead to focus on training Iraqi troops.

2. Home sales plunged 25.5% in July, below the level of a year ago, the National Association of Realtors said, as buyers lost the spur of a government tax credit—the steep descent surprised analysts and put the volume of single-family dwellings at the lowest level since 1995:

· No region was immune in July, with sales in the Northeast dropping 30%, the Midwest falling by a third, the South down 20%, and the West off 23%--the turmoil in housing, which is likely to lead to further price declines this winter, could send growth in the second half of the year below one percent, according to Joel L. Naroff, an economist: “It won’t be a double-dip recession, but it might feel like one.”

3. The government will quickly appeal a court ruling that undercut federally funded embryonic stem-cell research, the Obama administration said, but dozens of experiments aimed at fighting spinal-cord injuries, Parkinson’s disease, and other ailments will probably stop in the meantime:

· The White House and scientists said that the court ruling was broader than first thought because it would prohibit even the more restricted stem-cell research allowed for the past decade under President George W. Bush’s rules—the Justice Department said that an appeal is expected this week of the federal judge’s preliminary injunction that disrupted an entire field of science.

August 25, 2010

1. A coalition of civil rights and religious groups, as well as families of 9/11 victims, backed the proposed Islamic community center in Manhattan and said that they planned a candlelight vigil on the eve of next month’s anniversary of the terror attacks:

· The venue for the September 10^th vigil, aimed at making a statement about equality and religious freedom, has not been finalized, but organizers hope to draw hundreds, if not thousands, of supporters.

2. The government offered the latest dose of grim news about the economic recovery: companies cut back last month on their investments in equipment and machines, and Americans bought new homes at the weakest pace in nearly half a century:

· Earlier this week came news that sales of previously occupied homes fell last month to the lowest level in 15 years, and unemployment remains near double digits because job growth in the private sector has slowed—Mark Zandi, chief economist at Moody’s Analytics, said that the odds of a double dip recession are rising: “Nothing else can go wrong.  There is no cushion left.”

August 26, 2010

1. As the economy weakens, mortgage rates fell to the lowest level in decades for the ninth time in ten weeks:

· Mortgage buyer Freddie Mac said that the average rate for a 30-year fixed loan was 4.36% this week, down from 4.42% last week—that’s the lowest rate since Freddie Mac began tracking rates in 1971.

2. The American Bankers Association said that 9.9% of homeowners had missed at least one mortgage payment as of June 30^th, and the government’s efforts to help have had little impact on stemming the housing crisis as one in ten American households with a mortgage was at risk of foreclosure this summer:

· In a worrisome sign, the number of homeowners starting to have problems with their mortgages rose after down trending last year—more than 2.3 million homes have been repossessed by lenders since the recession began, and economists expect the number of foreclosures to grow well into next year.

August 27, 2010

1. Federal Reserve Chairman Ben Bernanke said that the Fed will consider making another large-scale purchase of securities if the slowing economy were to deteriorate significantly and signs of deflation were to flare:

· Fears are growing that the country could slip back into a recession, and Bernanke described the economic outlook as “inherently uncertain” and said that the economy “remains vulnerable to unexpected developments”

2. Numbers released by the National Center for Health Statistics of births fell 2.6% last year even as the population grew—the birth rate dropped for the second year in a row since the recession began in 2007:

· The birth rate, which takes into account changes in the population, fell to 13.5 births for every 1,000 people last year—that’s down from 14.3 in 2007, way down from 30 in 1909, and a striking turnabout from 2007, when more babies were born in the U.S. than any other year in the nation’s history.

3. Although they will not have any law-enforcement authority, the first of 532 National Guard troops are set to begin their mission August 31^st in the southern Arizona desert under President Obama’s plan to beef up U.S.-Mexico border security—authorities would not say how many troops would start August 31^st, but said waves of them will be deploying every Monday until all 532 are on the Arizona border, probably by the end of September:

· California Governor Arnold Schwarznegger said that the first of 224 National Guard troops allocated for his state are expected to be deployed to the state’s border September 2^nd—troops will also be stationed in New Mexico and Texas.

4. New figures show the economy struggled this spring, growing at a meager 1.6% annual pace—the initial estimate was 2.4%, and even that was anemic:

· Shortly after the government’s revision, Federal Reserve Chief Ben Bernanke said that the Fed was ready to take additional steps to prevent a second recession if the economy deteriorates further—several economists said that they expected the economy to keep growing slowly for the rest of the year, but that would almost certainly not be enough to bring down the jobless rate, already at 9.5%, and unemployment could actually increase.

WEEK THIRTY THREE

August 30, 2010

1. The Commerce Department reported that consumer spending rose 0.4% in July, with much of the strength coming from increased demand for autos—it was the best showing since March, but it followed three months when spending was essentially flat:

· Americans did earn a little more in July after seeing their incomes unchanged in July, but the 0.2% increase was mostly the result of small wage and salary gains that fell far below increases seen in more robust economic recoveries, economists said—for July, private wages and salaries rose at an annual rate of $23.3 billion, compared with a decline of $45 billion in July.

August 31, 2010

1. The U.S. banking industry had its highest quarterly earnings in nearly three years, even as the number of troubled institutions grew by more than 50 in the second quarter:

· The FDIC says that banks overall made $21.6 billion in net income in the April-to-June quarter, and that was the highest quarterly level since 2007—overall, banks lost $4.4 billion in the second quarter of 2009.

2. Seven states—Arizona, Idaho, Indiana, Louisiana, Michigan, Nebraska, and Nevada—which are seeking to overturn President Obama’s healthcare law, are also claiming its subsidies for covering retired state government employees, according to a list released by the Obama administration:

· They are part of a group of 20 states that have challenged the law’s requirement for most Americans to carry health insurance or face fines from the IRS—they argue that government cannot order individuals to buy a particular product, but the administration counters that the requirements falls within the broad powers conferred on Congress to regulate interstate commerce.

3. According to the Standard & Poors/Case-Shiller home price index, home prices rose in June for a third straight month nationally—and the fifth in a row in the Portland area—as since-expired tax credits inspired a spurt of home buying, but economists worry that it won’t last:

· Eighteen states showed price gains on a monthly basis (prices in Seattle were unchanged while prices in Las Vegas fell)—nationally, prices have risen six percent from their April 2009 bottom, but they remain 28% below their July 2006 peak.

4. The Conference Board, a private research group, said that its Consumer Confidence Index rose to 53.5 from a revised 51.0 in July—economists surveyed by Thomson Reuters had expected 50.5, and the increase comes after two straight months of declines:

· The report indicates that Americans’ confidence in the economy improved slightly in August from July, but it’s still roughly as gloomy as a year ago—the downbeat sentiment underscores the challenges ahead for the shaky recovery and for retailers, with worries growing about the crucial holiday shopping season.

September 1, 2010

1. An analysis by the Pew Hispanic Center says that the number of illegal immigrants in the U.S. has dropped for the first time in 20 years as substantially fewer undocumented workers from Mexico, Latin America, and elsewhere cross the border in search of jobs:

· The study estimates that 11.1 million illegal immigrants lived in the U.S. in 2009—that represents a decrease of roughly one million, or eight percent, from a peak of 12 million in 2007, about where it was in 2005.

2. The Institute for Supply Management said that its manufacturing index rose to 56.3 in August from 55.5 in July: a reading above 50 indicates growth—the trade group’s index has surged since late 2009 and hit a six-year high in April:

· Manufacturing is growing in the U.S. and abroad, easing fears that the economy might be on the verge of a second recession—U.S. factories have seen rising demand for exports and from businesses that are investing in capital equipment and supplies, and that has given the economy a lift amid uncertainty for the recovery.

3. The unemployment rate rose in nearly half of the nation’s 372 largest metro areas in July as the pace of hiring slowed from earlier this year:

· The Labor Department says the rate rose in 176 areas, dropped in 152, and was unchanged in 44, but despite the weak showing, that is an improvement from June, when the jobless rate rose in about three-quarters of the metro areas.

4. According to a report from the National Employment Law Project, which used two data sets from the Bureau of Labor Statistics to examine the wages of growth industries, low-and middle-wage jobs have grown the fastest this year, indicating that even if employers pick up the pace in job creation, robust consumer spending may still be illusive:

· About 35% of the jobs lost in 2008 and 2009 were from industries that pay between $8.92 and $15 an hour, at the bottom two-fifths of the wage spectrum, the report says, but those jobs accounted for 76% of net growth in 2010.

September 2, 2010

1. The first Middle East peace talks in nearly two years got off to a quick start, with Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas agreeing to meet again in two weeks and to commence work on the blueprint for a peace treaty:

· Netanyahu and Abbas conferred alone for 90 minutes at the State Department following group meetings that included Secretary of State Hillary Clinton and U.S. special envoy George Mitchell—any sense of hope, however, was tempered by the many challenges facing the Israelis, Palestinians, and Americans and the risks of heightened violence and radicalism if they again fail to end the conflict.

2. According to August reports from major retail chains, this year’s back-to-school season is not as bad as last year’s, but it’s not great, either:

· Analysts expect that stores still need to keep discounting to get shoppers to spend this fall and for the holiday season while they grapple with job worries and tight credit—but reports did help to ease fears of another recession, which have been stoked in recent weeks by a barrage of negative economic reports, including slumping home sales.

3. The feeble economy exhibited a smidgeon of strength, with mildly positive reports on jobs, store sales, and housing:

· Figures released on unemployment claims, store sales, and home-buying contracts all trend in the right direction, tempering fears that the economy is on the brink of another downturn—still, growth remains anemic, and a report expected today is forecast to show that employers have yet to step up hiring.

September 3, 2010

1. Congress seems increasingly reluctant to let taxes go up, even on wealthier Americans, as, worried about the fragile economy and their own upcoming elections, a growing number of Democrats are joining the rock-solid Republican opposition to President Obama’s plans to let some of the Bush administration’s tax cuts expire:

· Democratic leaders in Congress still back Obama, but the willingness to raise taxes is waning among the rank and file as the stagnant economy threatens the party’s majority in the House and Senate.

2. The Labor Department said that private employers added a net total of 67,000 jobs in August, but the unemployment rate rose to 9.6% from 9.5% because the number of job seekers overwhelmed the number of openings:

· The unemployment rate has exceeded nine percent for 16 straight months and is all but sure to extend that streak into next year—if it does, it would break a record of 19 straight months above nine percent, set from 1982-83, after a severe recession.

WEEK THIRTY-FOUR

September 6, 2010

1. President Obama, looking to stimulate a sluggish economy and create jobs, called for Congress to approve major upgrades to the nation’s roads, rail lines, and runways—part of a six-year plan that costs tens of billions of dollars and creates a government-run bank to finance innovative transportation projects:

· The plan calls for a quick infusion of $50 billion in government spending that White House officials said could spur job growth as soon as next year if Congress approves—but while transportation bills usually garner bipartisan support, quick passage of Obama’s plan seems unlikely, given that Congress has only a few weeks of work left before lawmakers return to their districts to campaign and that Republicans are showing little interest in giving Democrats any pre-election victories.

September 7, 2010

1. The top U.S. and NATO commander in Afghanistan warned that an American church’s threat to burn copies of the Muslim holy book could endanger U.S. troops in that country and Americans worldwide:

· The comments by Gen. David Petraeus followed a protest on September 6^th by hundreds of Afghans over the plans by Gainesville, Florida-based Dove World Outreach Center—a small, evangelical Christian church that espouses anti-Islam philosophy—to burn copies of the Quran on church grounds to mark the September 11, 2001, terrorist attacks on the U.S. that provoked the Afghanistan war.

2. President Obama will call on Congress to pass new tax breaks that would allow businesses to write off 100% of their new capital investments through 2011, the latest in a series of proposals the White House is rolling out in hopes of spurring action on the economy ahead of the November elections:

· An administration official said that the tax breaks would save businesses $200 billion over two years, allowing companies to have more cash on hand, but the proposals would require congressional approval, which is highly uncertain given Washington’s partisan atmosphere.

September 8, 2010

1. Trying to convince voters that he has ideas to strengthen the weak economy, President Obama proposed major tax incentives for businesses and accused Republicans of stonewalling in a bid to “ride this fear and anger all the way to election day”:

· Obama combined a populist tax stand against the rich with a pitch for business-friendly tax breaks to put Republicans in Congress on the spot—exactly what many Democratic lawmakers have been pressing him to do: take off the gloves and frame the election as a choice between Democrats with a vision and Republicans who simply oppose everything Obama tries to do and who would roll back the clock to policies from the George W. Bush era.

2. U.S. Housing and Urban Development Secretary Shaun Donovan awarded $5 million to Oregon communities to redevelop blighted properties that have been through foreclosure—the $5 million in Neighborhood Stabilization Program funds are a result of the Wall Street Reform & Consumer Protection Act:

· The state and related agencies are in the process of purchasing 351 foreclosed or blighted housing properties and redeveloping them for resale in more than 45 Oregon communities—the new HUD money is separate from $137.2 million in federal foreclosure prevention funds awarded to Oregon Housing & Community Services earlier this summer.

3. The economy lost strength in late summer as factory production weakened in areas of the East Coast and Midwest—a survey released by the Federal Reserve found the slower growth spreading to more regions of the country:

· Of the 12 regions the Fed tracks, economic activity slowed or was mixed in five—New York, Philadelphia, Richmond, Atlanta, and Chicago—activity elsewhere was described as modest or pointed to positive development.

September 9, 2010

1. An anti-Islamic preacher backed off and then threatened to reconsider burning the Quran on the anniversary of the September 11^th attacks, angrily accusing Muslim leaders of lying to him with a promise to move an Islamic center and mosque away from New York’s ground zero—the imam planning the center denied there was ever such a deal:

· The Rev. Terry Jones generated an internal firestorm with his plan to burn the Quran on the ninth anniversary of the September 11, 2001, terrorist attacks, and he has been under intense pressure to give it up—President Obama urged him to listen to “those better angels” and give up his “stunt”, saying it would endanger U.S. troops and give Islamic terrorists recruiting tools, and Defense Secretary Robert Gates took the extraordinary step of calling Jones personally.

2. A federal judge declared the U.S. military’s ban on openly gay service members unconstitutional because it violates the First Amendment rights of gays and lesbians:

· U.S. District Judge Virginia Phillips granted a request for an injunction halting the government’s “don’t ask, don’t tell” policy for gays in the military—the lawsuit was the biggest legal test of the law in recent years and came amid promises by President Obama that he will work to repeal the policy.

3. President Obama’s top health official warned the insurance industry that the administration won’t tolerate blaming premium hikes on the new health overhaul: “There will be zero tolerance for this type of misinformation and unjustified rate increases,” Health and Human Services Secretary Kathleen Sibelius said in a letter to the insurance lobby:

· An HHS official said that the letter is a preemptive move, after the Department learned that several smaller carriers around the country are blaming the new law for rate increases this year—several new benefits go into effect starting later this month, and the administration estimates that those new benefits will raise premiums by no more than one to two percent.

4. A federal appeals court ruled that federal financing of embryonic cell research could continue while the court considers a judge’s order last month banning the government’s role in the research:

· The appeals court ruling could save research mice from being euthanized, cells in petri dishes from starving, and scores of scientists from facing a suspension of paychecks, according to arguments the Obama administration made in the case—it also could allow the National Institutes of Health to provide $78 million to 44 scientists whose research the agency had previously agreed to finance.

5. President Obama told ABC News that if people take a look at what Democrats’ stand for and what Republicans stand for, Democrats would win:

· Using the bully pulpit in the election home stretch, Obama is trying to convince voters that Democrats are working hard to get the economy moving and to get millions of jobless Americans back to work, while arguing that Republicans would return to the “failed policies” of George W. Bush—Obama transferred another $4.5 million from his Obama for America presidential campaign fund to the party’s top campaign committees to pay for advertising and to organize get-out-the-vote efforts, and the cash came in on top of $8 million he has already shelled out.

6. A fresh batch of economic data issued since summertime indicates that the economy might not be on the brink of another recession after all:

· Far fewer people applied for unemployment aid last week;

· The nation’s trade deficit narrowed in July, thanks to a bigger appetite overseas for American exports;

· Hiring by private companies over the summer turned out to be better than expected;

· Stock prices have staged a September rally and put the Dow Jones industrial average back about even for 2010;

· Drivers are benefiting from lower gas prices, which are expected to keep falling because the summer driving season has ended with plentiful supplies in storage;

· Shoppers are enjoying discounted prices in stores, and these prices have helped lift retail sales.

September 10, 2010

1. An expert panel said that the U.S. faces a more homegrown, hard-to-predict terrorist threat today than it did nine years ago, and the U.S. government is not well equipped to understand it:

· Last year proved to be a “watershed” in domestic terrorist attacks and plots, the report says, and the only common denominator “appears to be a newfound hatred for their native or adopted country, a degree of dangerous malleability, and a religious fervor” that they think justifies their violence.

WEEK THIRTY-FIVE

September 12, 2010

1. House Minority Leader John Boehner said that he would vote for President Obama’s plan to extend tax cuts only for middle-class earners, not the wealthy, if that were the only option available to House Republicans:

· The Obama administration is pushing for a permanent tax-cut for middle-class Americans, and last week, Obama singled out Boehner, of Ohio, for criticism during a speech in Parma, Ohio, saying that the Republican was following the “same philosophy that led to this mess in the first place: cut more taxes for millionaires, and cut more rules for corporations—Obama has also warned that extending tax cuts for the wealthy enacted under President George W. Bush would increase the budget deficit by $700 billion over the next ten years.

2. Banks will have to significantly increase their capital reserves under rules endorsed by the world’s major central banks, which are trying to prevent another financial collapse without impeding the fragile economic recovery:

· U.S. officials, including Federal Reserve Chairman Ben Bernanke, issued a joint statement calling the new standards a “significant step forward in reducing the incidence and severity of future financial crises”—the new global rules are expected to be endorsed by President Obama and other leaders of the Group of 20 major economies when they meet in November in Seoul, Korea.

September 13, 2010

1. Senate Republicans will oppose any effort to renew soon-to-expire Bush administration tax cuts if upper income taxpayers are excluded from the deductions, according to a spokesman for Senate GOP Leader Mitch McConnell:

· At issue is a year-end deadline to renew a variety of tax cuts enacted in 2001, when the federal government was running a surplus—Democrats are worried that November elections could hand the GOP control of the House and perhaps the Senate, and its Democratic allies hope to use the tax cut fight to showcase themselves as defenders of the middle class and Republicans as a party eager to revive the days of the still unpopular former President George W. Bush.

2. The federal government is on track to record the second-highest deficit of all time with one month left in the budget year:

· The Obama administration contends the record deficits were necessary to combat the most serious economic crisis since the Great Depression—about one-third of the higher deficits are a result of a drop in government tax revenue, and the other two-thirds of the deficit increase reflect higher government spending to stabilize the financial system and boost the economy.

3. The Obama administration is seeking a go-ahead from Congress to sell up to $60 billion worth of sophisticated war planes to Saudi Arabia and could add another $30 billion worth of naval arms in a deal designed to counter the rise of Iran as a regional power:

· Unlike some previous sales to Saudi Arabia, this one is not expected to be derailed by opposition in Congress or from U.S. backers of Israel, who have worried in the past about blunting Israel’s military edge over its Arab neighbors.

4. A U.S. government study found that Iraq has a budget surplus of $51 billion, with $11.8 billion readily available for spending on its security forces:

· The study by the Government Accountability Office, the investigative arm of Congress, comes as the Senate prepares to debate a $2 billion funding request from the White House for the Iraqi security forces—the House has approved the $2 billion request.

5. Some of the biggest names in business said that they see a bright future for the economy, with famed investor Warren Buffett declaring the country and the world will not fall back into the grip of recession:

· The likes of Buffett, Microsoft Chief Executive Steve Ballmer, and G.E. Chairman Jeff Immelt told the nearly 2,000 business leaders, government officials, aspiring entrepreneurs, and others at the summit that things are getting better and offered some ideas for what needs to be done.

September 14, 2010

1. In a win for President Obama and his political allies, Senate Democrats won a crucial vote to clear the way for a bill to create a $30 billion government fund to help open up lending for credit-starved small businesses:

· Democrats cracked a GOP filibuster of the bill with the help of two Republicans: Senators George Voinovich of Ohio and George Le Mieux of Florida—the 61-37 tally sets the stage for a final vote later this week to return the measure to the House, which is likely to approve it for Obama’s signature.

2. Retail sales rose in August by the largest amount in five months, adding to evidence that a late spring economic swoon was temporary and not the start of another recession:

· A separate Commerce Department report said that inventories held by businesses jumped in July by the largest amount in two years, while sales rebounded after two months of declines—even with the sales rebound in July and August, economists expect two percent growth in the second half of this year, better than the 1.6% growth rate in the April-to-June quarter, but well below the January-to-March quarter’s 3.7% growth rate.

3. Congressional Democrats wrestled over whether to abandon President Obama’s tax cut plan, with some House moderates joining Republicans in calling for a extension of Bush-era breaks for the wealthy as well as middle-income earners:

· But Senate Majority Leader Harry Reid of Nevada and House Speaker Nancy Pelosi remained solidly behind Obama’s proposal to allow tax cuts for upper-income people to expire as scheduled at the end of the year.

September 15, 2010

1. Despite coming under daily assault from Republicans over spending, the Obama administration is pushing a $20 billion-plus pre-election shopping list on its Democratic allies in Congress as they prepare must-pass legislation to prevent a government shutdown next month:

· Republicans are protesting the spending requests, which include $1.9 billion for grants to better-performing schools, financial help for the Postal Service, and more than $4 billion requested by the administration to finance settlements of long-standing lawsuits against the government, and Rep. Tom Latham, R-IA, predicts that the White House would get relatively little of what it is seeking.

2. The latest New York Times/CBS News poll finds that while voters rate the performance of Democrats negatively, they view Republicans as even worse, providing a potential opening for Democrats to make a last-ditch case for keeping their hold on power on Capitol Hill:

· While the public has a darker view of congressional Republicans than of Democrats, with 58% disapproving of Democrats and 68% disapproving of Republicans, with less than two months remaining until Election Day, there are few signs Democrats have made gains convincing Americans that they should keep control of Congress.

3. Taxpayer losses from the government seizure of failed housing-finance giants Fannie Mae and Freddie Mac could reach nearly $500 billion but likely won’t top that level as some had feared, according to the firms’ federal regulator:

· To offset some losses, the Federal Housing Finance Agency is seeking billions of dollars in repayment from banks that sold bad loans to the firms, acting director Edward J. De Marco said—some banks are balking, and the agency is considering tougher action, but De Marco did not specify what steps might be taken.

September 16, 2010

1. President Obama’s arms control treaty with Russia advanced to the Senate floor with bipartisan support, giving it a major boost toward ratification:

· The Senate Foreign Relations Committee voted 14-4 to approve the treaty known as New START, with three Republicans joining Democrats after negotiating an accompanying resolution addressing conservative concerns about missile defense and modernization of the nuclear arsenal—the vote was a rare instance in which Obama has won more than token Republican support for a signature initiative, but final approval on the Senate floor, under the Constitution, requires a two-thirds vote, meaning at least eight Republicans.

2. New Census Bureau data shows that the withering recession pushed the number of Americans who are living in poverty to 43.6 million—a 51-year high—in 2009, up from 39.8 million the year before, and a record 50.7 million people are without health insurance:

· Encompassing a near record rise in unemployment from 5.8% in 2008 to 9.3% in 2009, the Census Bureau’s annual income, poverty, and health insurance survey is the first to capture the social and human toll of the Great Recession at its height—among its findings, indicating that people of all incomes, races, and ages are suffering:

o The national poverty rate of 14.3%, up from 13.2% in 2008, was the highest since 1994;

o Median income—the amount at which half of U.S. household earn more or less—had fallen 4.2% by 2009 since the recession began in 2007.

3. Defense Secretary Robert Gates said that the Obama administration’s surge strategy is working in Afghanistan:

· Gates’ upbeat assessment of the Afghanistan war comes as the Obama administration faces growing skepticism over the progress and direction of the war—despite his overall optimism, Gates cautioned that the U.S., benefiting from lessons learned in Viet Nam and the Soviet occupation of Afghanistan, won’t make the mistake of predicting success too soon.

4. The Senate passed long-delayed legislation designed to open up credit to small businesses and award them other incentives to expand and hire workers:

· Joined by two Republicans, Democrats won a 61-38 vote to pass the legislation—the measure would establish a $30 billion government fund to help open up lending for credit-starved small businesses, cut their taxes, and boost Small Business Administration loan programs.

5. The Obama administration increased its criticisms of China’s economic policies, as Treasury Secretary Timothy Geithner told Congress that China has substantially undervalued its currency to gain an unfair trade advantage, tolerated theft of foreign technology, and created unreasonable barriers to U.S. imports:

· Dismay over China’s currency interventions (it buys about $1 billion a day to maintain the yuan’s peg to the dollar) has been a recurring theme for years—but now, with the U.S. in a stalled economic recovery and lawmakers facing a restive electorate, the administration is looking for ways to bring pressure to the Chinese.

September 17, 2010

1. Crews started pumping cement deep under the seafloor to permanently plug BP’s blown-out well in the Gulf of Mexico:

· BP expects the well to be completely sealed September 18^th—an April 20^th explosion killed 11 workers, sank a drilling rig, and led to the worst offshore oil spill in U.S. history.

2. With a director to be named later, Elizabeth Warren, the Harvard law professor who became a darling of the left for her championing of the Consumer Financial Protection Bureau, was appointed by President Obama to oversee the agency’s establishment by mid-2011:

· The appointment will allow Warren, “a janitor’s daughter”, as Obama called her in a Rose Garden introduction, to get the agency up and running without being subjected to a contentious battle in the Senate.

3. The Medford Mail Tribune says that statistics from the Western Wood Products Association show that 10.4 billion board feet of lumber were produced last year in 11 states, the lowest annual volume since figures were first compiled in the late 1940s—production in each of the states dropped by double digits from 2008:

· Southern Oregon Timber Industries Association spokesman Dave Schott told the newspaper that the 2010 total may be worse because of the continuing recession and poor housing market—Schott said that a record 2.15 million housing starts nationwide in 2005 dwindled to 554,000 in 2009, the lowest total since World War II.

4. The Federal Reserve said that net worth, the value of assets like homes and investments minus debts like mortgages and credit cards, fell 2.7% last quarter, or $1.5 trillion—it now stands at $53.5 trillion:

· That is above the bottom hit during the recession, $48.8 trillion in the first quarter of 2009, but it is far below the pre-recession peak in wealth of $65.8 trillion—the drop from April to June was the first quarterly decline in America’s wealth since early 2009.

5. The Labor Department said that consumer prices edged up 0.3% in August, matching the July increase—core inflation, which excludes food and energy, showed no increase:

· The 2007-2009 recession and the weak recovery since have banished inflation as an immediate threat—over the past 12 months, core inflation is up just 0.9%, matching the lowest 12-month gain in 44 years.

September 18, 2010

1. Oregon’s Klamath Basin is getting $10 million in federal aid for water conservation and drought relief efforts, according to Interior Secretary Ken Salazar who said the money will be provided through the Bureau of Reclamation to help save water for the Klamath Tribes and in areas served by the Klamath Reclamation Project—the Oregon basin is experiencing one of its worst droughts since the 1940s.

2. Oregon is getting more than $24 million from the U.S. Commerce Department for a number of projects, including a $15 million grant for the Pacific Coastal Salmon Recovery Fund—Senators Ron Wyden and Jeff Merkley said that the money will go to Oregon’s Watershed Enhancement Board to pay for projects that conserve threatened or endangered salmon and steelhead:

· Other grant money is going toward programs to help recreational, commercial, and tribal fishing, and to study weather and conduct ocean research.

WEEK THIRTY-SIX

September 20, 2010

1. Congressional Democrats’ plan to push key policy objectives, including a repeal of the ban on gays serving openly in the U.S. military and an immigration measure, by attaching them to a must-pass defense bill coming before lawmakers this week:

· The annual defense authorization bill provides a 1.4% pay raise for troops and $725 billion for the Pentagon, including $159 billion for the wars in Iraq and Afghanistan, and Democrats have added a provision that would abolish the military’s “don’t ask, don’t tell” policy and want to add an immigration measure called the DREAM Act, which would provide a route to citizenship for youths who are in the U.S. illegally—the vote to advance the bill is scheduled for September 21^st.

September 21, 2010

1. The Senate voted against taking up a major military bill that would allow the repeal of the “don’t ask, don’t tell” policy, disappointing advocates of allowing gay Americans to serve openly in the armed forces, but leaving open the likelihood of another vote later this year:

· Senate Republicans voted unanimously to block debate on the bill after the majority leader, Harry Reid of Nevada, said that he would attach a number of the Democrats’ election-year priorities to it while also moving to limit the amendments offered by Republicans—the vote was 56-43, with Democrats falling short of the 60 votes needed to overcome a filibuster and bring the bill to the floor.

2. More than half of U.S. states saw their unemployment rates rise in August, the largest number in six months, as hiring weakened across the country:

· The Labor Department said that the jobless rate increased in 27 states last month, fell in 13, and was unchanged in ten states and Washington D.C.—Oregon’s jobless rate held firm at 10.6% in August, the tenth consecutive month with an unemployment rate in the 10.5% to 10.7% range, and a full percentage point higher than the national rate.

September 22, 2010

1. The White House said that Lawrence Summers, director of the National Economic Council, would leave at the end of the year to return to Harvard University, and Herb Allison, the head of the government’s $700 billion financial bailout program announced that he would resign—he is the latest in a series of departures from President Obama’s economic team:

· Peter Orseg, Obama’s budget director, and Christina Romer, head of the president’s Council of Economic Advisors, departed in recent weeks, leaving Timothy Geithner as the only member of Obama’s top-tier economic advisors to remain with the administration.

2. The Federal Reserve says that a little more inflation might be just the thing to start a chain reaction that would ultimately create jobs—and avoid a spiral of falling prices that could damage the economy, avoiding directly mentioning the word, “deflation”, but signaling its concern that today’s very low inflation might lead to actual price drops:

· Overall, consumer prices—excluding food and energy prices—inched up 0.9% for the 12 months that ended in August, well below the Fed’s comfort zone for inflation, which ranges between 1.5% and 2% over a year.

3. Treasury Secretary Timothy Geithner said that U.S. banks are in a good position to meet new global capital standards because of the stress tests conducted in the U.S. last year:

· The new capital standards, Geithner said, “will significantly lower the probability and severity of future financial crises, and they will help protect taxpayers by limiting excessive risk-taking by financial institutions.”

September 23, 2010

1. Senate Democrats said that they would postpone a highly contentious floor fight over what to do about the expiring Bush-era tax cuts until after the November election, a decision that spares some politically vulnerable incumbents from casting a potentially difficult vote to let taxes rise for the rich:

· Democrats said that they would still fight to end the tax cuts for the wealthiest Americans when they return for a lame duck session, but the delay increases the likelihood of a compromise with Republicans who have insisted that the lower rates continue for everyone, at least temporarily, given the weak economy.

2. This year’s home sales are shaping up to be as dismal as last year, despite cheap home prices and mortgage rates that have fallen to the lowest levels in decades:

· Sales of previously occupied homes rose last month but not enough to keep this summer from being the slowest for home sales in more than a decade—about 3.4 million previously occupied homes have been sold in the U.S. through August, and most experts expect roughly five million to be sold through the entire year, in line with last year’s totals and just above sales for 2008, the worst since 1997.

3. Veterans’ Affairs Secretary Eric Shinseki defended an expensive proposal to extend disability payments to Vietnam veterans who get heart disease, saying studies show a significant link between the ailment and the toxic defoliant Agent Orange:

· The agency estimates that the additions, set to take effect next month, could cost up to $67 billion in the next decade—the average veteran getting benefits for heart disease would receive about $1,000 per month, with many also getting new healthcare benefits, and most lawmakers said that they would support the plan, but several raised concerns about covering common diseases and suggested the law be revised.

September 24, 2010

1. House Speaker Nancy Pelosi said that Democrats in her chamber may force a vote next week on the expiring Bush-era tax cuts even though their counterparts in the Senate have decided not to bring the issue to the floor until after the November elections:

· A decision to force such a vote would put a wham-bang finish on the brief fall congressional session, and it would test the resolve of the House Republican leader, John Boehner of Ohio, who has said that he would support a bill to extend only some of the tax cuts if Democrats gave him no other choice—the Senate’s plan means no law could win final approval until a lame-duck session, and if Congress does not act, all of the tax rates will expire December 31^st.

2. A new AP-GfK poll shows that Republicans are at least as unpopular as the Democrats struggling to defend their control of Congress, but GOP voters are more fired up, leaving the Democrats little more than a month to energize their supporters:

· Thirty-eight percent of the public approve of how congressional Democrats are handling their jobs, and 31% like how Republicans are doing theirs; 59% are unhappy with how Democrats are nursing the economy, and 64% are upset by the GOP’s work on the country’s top issue—more than half have negative views of each party.

3. A day after he said that the diplomatic door was open to Iran, President Obama sharply condemned President Mahmoud Ahmadinejad for his allegation that most Americans believe the U.S. fabricated the 9/11 terrorist attacks against New York and Washington:

· In an interview with BBC Persian news service, the president said, “It was offensive.  It was hateful”—the White House released an excerpt of the interview broadcast to the Iranian people in their language, Farsi.

4. U.S. companies last month invested in computers, communication equipment, and machinery, boosting capital goods orders for the third time in four months—the 4.1% increase to capital goods in August signaled a rebound in business spending after orders fell 5.3% in July, and it suggests that manufacturing, which has helped drive economic growth since the recession ended in June 2009, is still a bright spot in a weak recovery:

· In a separate report, the Commerce Department said that sales of new homes were unchanged from a month earlier at a seasonally adjusted annual sales pace of 288,000—the second-worst on records dating back to 1963, with the pace in May being the worst.

5. Citigroup, still partly owned by the government after a rescue during the financial meltdown, is giving raises to top executives that could amount to millions of dollars and using stock to get around a cap on cash pay at bailout banks:

· Citi, the hardest-hit U.S. bank during the credit crisis of 2008, received $45 billion in government bailout money under the Troubled Asset Relief Program (TARP), part of which was converted to stock last year—Citi is fighting to keep talented bankers from jumping ship to its rivals on Wall Street, all of whom have repaid their federal bailout money and are not under the same kinds of restrictions.

6. Secretary of State Hillary Clinton spent nearly half an hour meeting with Palestinian President Mahmoud Abbas as the Obama administration tried to prevent Israeli-Palestinian peace talks from collapsing:

· The Palestinians have threatened to walk out of the talks if Israel does not extend a slowdown in West Bank settlement activity that expires on September 26^th, and in a furious, last-minute round of diplomacy, the Obama administration is pressing Israel to extend the settlement slowdown, while urging Abbas not to make good on his threat to leave the negotiations—Israel Prime Minister Benjamin Netanyahu has said he does not intend to extend the slowdown, but some Israeli officials have hinted that a compromise could be reached.

WEEK THIRTY-SEVEN

September 26. 2010

1. The White House and Democratic leaders in Congress said that they would find a way to extend middle-class tax cuts after the November elections if they are unable to secure GOP backing before lawmakers break to campaign:

· Both parties are using the delay in a vote on the fate of these George W. Bush-era cuts at a time of record deficits as political ammunition this election season.

September 27, 2010

1. The New York Times reported that broad new regulations being drafted by the Obama administration would make it easier for law enforcement and national security officials to eavesdrop on Internet and e-mail communications like social networking sites and Black Berries:

· The newspaper said that the White House plans to submit a bill next year that would require all online services that enable communications to be technically equipped to comply with wiretapping orders—federal law enforcement and national security officials say the new regulations are needed because terrorists and criminals are increasingly giving up their phones and instead, communicating online.

2. President Obama called for a longer school year and said that the worst-performing teachers have “got to go” if they do not improve quickly:

· In a nationally broadcast interview, Obama sought to reinvigorate his education agenda, but at the same time, the president acknowledged that many poor schools do not have the money they need, and he defended federal aid for them—he also said that money alone will not fix the problems in problem schools, saying higher standards must be set and achieved.

3. Under grilling by a presidential commission on the oil spill, BP’s top official for oil production said that he could not explain why the oil industry did not develop technologies to shut down a deep-water spill:

· The oil spill commission must report to President Obama in January about what caused the Deepwater Horizon rig to explode in April and set off the worst U.S. oil spill ever and how to prevent another disaster on the oil rigs off America’s continental shelf—among other things, it could demand government help develop new ways of dealing with deep-water disasters and that the oil industry pay for this work.

4. In a prized political victory five weeks before the November elections, President Obama signed a bill to help small businesses expand and hire by cutting their taxes and creating a $30 billion loan fund:

· The legislation also includes about $12 billion in tax breaks for small businesses—eight separate tax cuts that take effect October 4^th, and one such provision increases to $500,000 the amount of investments that businesses would be allowed to write off this year and next.

September 28, 2010

1. According to newly released census figures, the income gap between the richest and poorest Americans grew last year to its widest amount on record—the top-earning 20 percent of Americans, those making more than $100,000 each year, received 49.4% of all income generated in the U.S. compared with the 3.4% earned by those below the poverty line:

· At the top, the wealthiest five percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, census data show—families at the $50,000 median level slipped lower.

2. President Obama says it would be “inexcusable” and “irresponsible” for unenthusiastic Democratic voters to sit out the mid-term elections, warning that the consequences could be a squandered agenda for years:

· The mid-term elections are in five weeks and polling shows that Republicans, out of power at the White House and on Capitol Hill, have a much more excited base of supporters than Democrats—Obama, campaigning this week in four states, is in a sprint to restore the voter passion that helped him win office.

3. A stop-gap spending bill that is needed to avert a government shutdown on October 1^st advanced in the Senate as lawmakers prepared to leave for the mid-term elections—the measure easily advanced, 83-15, on a procedural vote that puts it on track to pass the Senate September 29^th, and the House could clear it for President Obama before the budget year ends at midnight September 30^th:

· To speed the measure through, lawmakers ignored administration pleas for aid on such things as $1.9 billion for “Race to the Top” grants to better-performing schools, more than $4 billion to finance settlements of long-standing lawsuits by black farmers and American Indians against the government, and a bid to use the measure to keep alive a grant program from last year’s economic stimulus bill that many states are using to subsidize hiring of the unemployed.

4. U.S. companies that close domestic plants and open new ones overseas would see their taxes increase under a bill Democrats are bringing before the Senate October 5^th as part of the majority party’s closing argument of the mid-term elections:

· The legislation, which stands little chance of surviving a procedural vote, would also give companies that import jobs to the U.S. new tax breaks—Republicans and possibly a few Democrats are expected to block the bill, they say the tax increases would make U.S. companies less competitive.

5. Government-funded research on embryonic stem cells can continue, a U.S. Appeals Court said, while lawyers appeal a lower court decision that found such research illegal:

· This action extends a September 9^th decision by a three-judge panel of the U.S. court of appeals for the District of Columbia that temporarily lifted a U.S. District Court judge’s ban on the controversial research—the appeals court wasted little time in lifting the order, and it has now decided to allow the research to continue until the legal case is finally resolved, and it could take a year or more for the appeals court to decide the matter.

6. President Obama endorsed a plan to rehabilitate the Gulf of Mexico with some of the billions of dollars in water pollution fines expected from the companies responsible for the worst offshore oil spill in U.S. history:

· Navy Secretary Ray Mabus, the government’s point person on Gulf Coast restoration, also said some of the money could be used to repair sections of the Gulf ravaged by events other than the spill—dedicating fines levied against BP and other companies involved in the Deepwater Horizon accident to restoration and directly to Gulf states, which the Mabus plan calls for, will require a change in law since currently, Clean Water Act fines go into a trust fund to pay for oil spill cleanup.

7. Americans’ view of the economy fell to the lowest point since February, raising more fears about the tenuous U.S. economic recovery and further underscoring the disconnect between Wall Street and Main Street:

· The Conference Board, based in New York, said that its monthly Consumer Confidence Index now stands at 48.5, down from the revised 53.2 in August—economists surveyed by Thomson Reuters were expecting 52.5, and a reading of 90 is necessary to indicate a healthy economy.

September 29, 2010

1. Ready to leave for the campaign trail, the House and Senate convened just long enough to vote on a “continuing resolution”, a stopgap measure to keep the government in operating funds for the next two months and avoid a pre-election federal shutdown:

· With their House and Senate majorities on the line, Democratic leaders called off votes and even debates on all controversial matters—postponement means no major fight over taxes, two embarrassing ethics cases, and other political hot potatoes until angry and frustrated voters render their verdict in the November 2^nd elections.

September 30, 2010

1. AIG, which became a lightning rod for criticism over government bailouts, said that it had reached a deal to repay billions of dollars it received during the credit crisis—the plan could return a profit to taxpayers who footed the bill for AIG’s near collapse in September 2008:

· The announcement provides a clearer strategy to repay AIG’s debt to the government because, to this point, AIG was primarily repaying the government as it took in money from asset sales, but there was no timeline for repayment.

2. According to law makers and other officials briefed on the proposals, the Obama administration is trying to cajole the Israeli government into a 60-day renewal of the freeze on Jewish settlement building by offering it security guarantees, ranging from military hardware to support for a long-term Israeli presence in the strategically sensitive Jordan Valley:

· But with Prime Minister Benjamin Netanyahu resisting the administration’s interests, the U.S. also is weighing a fallback plan, officials said, that could involve reaching out to the Palestinians with a pledge to formally endorse one of their central demands for the borders of a future Palestinian state.

3. Despite the economic doldrums, the stock market put together an 11 percent return over the past three months, including its best September since 1939—for a time, the Dow Jones industrial average appeared headed for 11,000:

· But the gains are deceptive, market analysts say, because although news about the economy has improved, there is no reason to believe it’s roaring back—in other words, few are calling it the beginning of the next bull market, not with unemployment still near ten percent and stocks bound in what market technicians call a trading range.

4. Applications for jobless benefits dropped last week for the third time in four weeks, a sign that employers are cutting fewer jobs:

· New claims for jobless benefits fell by 16,000 to a seasonally adjusted 453,000, the Labor Department said—the claims’ figures are “mildly encouraging” and “moving in the right direction”, said Michael Gapen, senior U.S. economist at Barclays Capital, but he said that they need to fall between 400,000 and 425,000 to indicate that hiring is picking up.

October 1, 2010

1. President Obama said goodbye to his chief of staff Rahm Emanuel, and elevated a quiet and seasoned advisor, Pete Rouse, to the most important gate-keeping job in American politics:

· Emanuel is departing after nearly two years to run for Chicago mayor, and what he leaves behind is the most demanding and influential position in the White House—save for Obama’s.

2. The government presented the potential range it’s considering for fuel efficiency standards for new cars and trucks starting in 2017:

· The Transportation Department and the EPA said that the fleet of new vehicles may need to meet a standard set somewhere from 47 mpg to 62 mpg by 2025—the mileage gains would be the equivalent of an annual decrease in carbon dioxide emissions per mile of three to six percent.

3. According to a White House report, the multi-billion dollar economic stimulus package has been successful in creating or preserving jobs and is on target and on time:

a. About $551 billion, or 70 percent of the initially estimated $787 billion, has been spent, and the money was obligated quickly with little fraud—the stimulus, which was initially estimated to cost $787 billion, will actually cost about $814 billion, according to a Congressional Budget Office revised estimate in August;

b. The goal of the package was to create or preserve 3.5 million jobs, and the report, citing Budget Office numbers from the summer, said that 3.3 million jobs have been created or preserved as the program added about $400 billion to the size of the $14.3 trillion U.S. economy.

4. Under a new federal law, the behemoth Medicare bureaucracy will have to act more like a credit card company in flagging suspicious bills:

· The anti-fraud provision, tucked into the Small Business Lending Act that became law September 7^th, would force Medicare to end its 45-year-old policy of paying claims quickly without verifying them—the antiquated billing system, designed to keep the wheels of public healthcare spending going at full speed, has led to an estimated $60 billion-plus a year in Medicare fraud.

5. A government audit has found that millions of dollars in U.S. taxpayer funds may have been paid to Taliban fighters in southern Afghanistan to provide security for U.S. development projects:

· The report released September 30^th by the inspector general of the U.S. Agency for International Development said that subcontractors hired to protect a development project near Jalalabad may have paid more than $5 million to local authorities who probably included Taliban militants—allegations have often been made about such payments, but the report is a rare investigation by the government into a specific case.

6. Pentagon officials said that they have approved eight Oregon and Washington wind-energy projects with 1,128 turbines after concluding that the risk of the turbines interfering with a military radar station near Fossil is “manageable”:

· The decision gives the national security green light to six projects with 869 turbines in Oregon, including Iberdrala Renewables’ 225-turbine Montague project in north-central Oregon, which had been placed on hold by the Pentagon.

October 2, 2010

1. American and European officials told the Associated Press that the Obama administration will warn U.S. citizens to be vigilant as they travel in Europe, providing updated guidance prompted by al-Qaida threats:

· Officials have called the threat credible but not specific—officials have been concerned that terrorists may be plotting attacks in Europe with assault weapons in public places, similar to the deadly 2008 shooting spree in Mumbai, India.

2. A coalition of progressive and civil rights groups marched by the thousands on the Lincoln Memorial and pledged to support Democrats struggling to keep power on Capitol Hill:

· More than 400 organizations (ranging from labor unions to faith, environmental, and gay rights groups) partnered for the event, which comes one month after conservative commentator Glenn Beck packed the same space with conservative and tea party-style activists—organizers claimed that they had as many participants as Beck’s rally, but the crowds were less dense and did not reach as far to the edges as they did during Beck’s rally.

WEEK THIRTY-EIGHT

October 4, 2010

1. President Obama is set to announce a program that pairs top companies and community colleges in hopes of ramping up America’s job skills:

a. The partnership plan is a recommendation of the president’s Economic Recovery Advisory Board, which will meet today with Obama at the White House;

b. The White House says that the “Skills for America’s Future” initiative will dramatically boost workforce training and job-placement, and it’s backed by companies like Gap Inc., McDonalds, and Accenture—the meeting comes on the eve of a White House summit on community colleges.

2. The Democratic National Committee said that it raised more than $16 million in September, its best fundraising month in a congressional election cycle that has proved to be challenging for Democrats in every way but financially:

· Eighty percent of the money came from low-dollar donors online and through the mail, as opposed to big contributors at fundraising events, according to Brad Woodhouse, spokesman for the Democratic Party—President Obama also headlined four DNC fundraisers during the month, helping make it the highest mid-term election haul since 2002 when Congress imposed new limits on party fundraising.

3. The insurance industry is pouring money into Republican campaign coffers in hopes of scaling back wide-ranging regulations on the new healthcare law but preserving the mandate that Americans buy coverage:

· Since January, the nation’s five largest insurers and the industry’s Washington-based lobbying arm have given three times more money to Republican lawmakers and political action committees than to Democratic politicians and organizations—that’s a marked change from 2009, when the industry largely split its political donations between the two parties, according to federal election filings.

4. Transportation Secretary Ray LaHood announced that TriMet, Oregon’s largest transit agency, would receive a $6 million grant to help replace 14 of its aging buses:

· TriMet was one of 152 agencies that received $776 million in grants from the Department of Transportation—other Oregon agencies and projects to receive grant funding: $64,000 for transit radio replacement for the City of Corvallis; $5 million for transit vehicle replacement for Lane Transit District; and $3 million for Oregon DOT for vehicle replacement in rural transit districts.

5. Orders for capital goods rebounded in August and pending sales of existing homes climbed for a second month, showing the recovery is stabilizing after a second-quarter slowdown:

· The increase in capital goods orders, excluding defense and aircraft, exceeded the 4.1% gain the Commerce Department estimated in last month’s durable goods report, and orders for machinery, computers, and communications gear all improved in August, the report showed.

October 5, 2010

1. A Pew Hispanic Center study finds that just over half of Latino registered voters say they will vote in November’s elections and two-thirds say that they will vote Democratic in their congressional races:

· Pew Hispanic estimates that about 19.3 million Latinos are eligible to vote—two of every three live in California, Texas, Florida, or New York.

2. The White House plans to install solar panels atop the president’s living quarters by spring 2011 and will use them to heat water for the first family and supply some electricity:

· The decision, perhaps, has more import now after legislation to reduce global warming pollution died in the Senate, despite the White House’s support—Obama has vowed to try again on a smaller scale.

3. President Obama used a special White House conference to tout the nation’s community colleges as offering a path to the American dream for underprivileged citizens and as essential centers for training the 21^st century workforce, but he glossed over the serious funding challenges that these institutions face:

· The opening ceremony featured the unveiling of a $35 million grant from the Bill and Melinda Gates Foundation—that donation will set up a grant program for five years with a goal of reversing a trend in which roughly half of community college students fail to achieve certificates or associate’s degrees.

4. The Interior Department approved the first solar projects on federal public land, a move aimed at shifting the type of energy development on federal property in the years to come:

· The two ventures approved in the California desert—the Imperial Valley and Chevron Lucerne Valley solar projects—could provide energy for hundreds of thousands of homes though neither would start generating electricity for more than a year at the earliest.

5. The U.S. service sector, the nation’s predominant employer, expanded in September for a ninth straight month, although the growth has not been consistent enough to dent the high unemployment rate:

· The Institution for Supply Management said that its service-sector index rose last month to 53.2 from 51.5 in August—readings above 50 signal growth.

6. The $700 billion financial bailout will cost about $50 billion, the Treasury Department said:

· The price tag was included in a report on the two-year program and is lower than earlier projections—including a $66 billion estimate this summer by the Congressional Budget Office.

October 6, 2010

1. The Obama administration failed to act upon or fully inform the public of its own worst-case estimates of the amount of oil gushing from the blown-out BP well, slowing response efforts and keeping the American people in the dark for weeks about the size of the disaster, according to preliminary reports from the staff of the presidential commission investigating the accident:

· The White House responded vigorously to the assertions, saying it never concealed its most dire estimates of the spill and quickly threw everything the government had at the problem—the reports make clear that the president-appointed panel does not intend to spare the administration as it prepares a final report, to be delivered to the White House early next year.

2. More than 392,000 illegal immigrants were deported from the U.S. in fiscal year 2010, the highest number in the country’s history, Department of Homeland Security Secretary Janet Napolitano said:

· Napolitano and U.S. Immigration and Customs Enforcement Director John Morton attributed the high number to increased border and workplace enforcement and an expansion of the department’s Secure Communities program—Napolitano also said that since January 2009, ICE has audited more than 3,200 employers suspected of hiring illegal labor, debarred 225 companies and individuals, and imposed about $50 million in financial sanctions (more than the total amount of audits and debarments during the entire previous administration).

October 7, 2010

1. Retailers are reporting surprisingly solid gains for September, boosted by back-to-school shopping:

· The results give hope for a positive holiday shopping season, although Americans are still dealing with an uncertain economy and high unemployment—the news came as the Labor Department reported applications for unemployment benefits fell last week for the fourth time in five weeks, a sign that layoffs are declining, but claims remain at an elevated level consistent with weak job growth.

2. A federal judge upheld the authority of the federal government to require everyone to have health insurance, dealing a setback to groups seeking to block the new national healthcare plan:

· In Florida, a federal judge is overseeing a lawsuit filed by 20 states who say the law is unconstitutional and claim it would force states to absorb higher Medicaid costs, and a decision on whether to dismiss this case is expected by October 14^th—there is also another lawsuit pending in Virginia.

3. The federal deficit for the just-finished 2010 budget year was a little under $1.3 trillion, the Congressional Budget Office estimated:

· The CBO puts the deficit about $125 billion below the $1.42 trillion record posted for 2009—the decline in the deficit from last year’s record is due to $108 billion in repayments and other revenues from the unpopular Troubled Assets Relief Program, the 2008 bailout of the financial sector.

4. Fears of a full-blown currency war flared as the dollar fell to an eight-month low against the euro and the U.S. stepped up pressure on China to let its currency rise:

· The flare-up comes as investors are anticipating the U.S. Federal Reserve will pump billions more into the U.S. economy, weakening the value of the dollar against the euro, which has surged—an undervalued Chinese yuan has weakened U.S. exports while making Chinese goods attractive to U.S. consumers, and the imbalance has weakened U.S. economic growth while China’s economy has soared.

October 8, 2010

1. The U.S. Forest Service is mulling a range of alternatives for the 2.3 million-acre Wallowa-Whitman National Forest that calls for limiting motor vehicle access on anywhere from 2,202 to 6,707 miles of roads—that means no passenger cars, four-wheel drive rigs, ATVs, or dirt bikes, only hikers, bicycles, and horseback riders—the plan does not address snowmobiles:

· So far, more than 6,000 people have signed petitions urging that the Wallowa-Whitman’s roads remain open, and opponents have also posted prominent protest signs in Wallowa County—the unfinished plan would close thousands of miles of roads in Oregon’s biggest national forest as the federal government cracks down on damage to land and wildlife from off-road vehicles.

2. Gen. James Jones, national security advisor, announced his departure after a tenure marked by ambitious foreign policy changes and undercurrents of corrosive turf battles—Jones will be replaced by his chief deputy, Tom Donilon, a former Democratic political operative and lobbyist:

· In a Rose Garden ceremony, President Obama described the transition as expected and seamless—Donilon, 55, has played a leading role in the policy-making process that tees up the national security decisions for the president, and he is known for bringing an understanding of domestic policy and politics to the job.

3. Bank of America agreed to a temporary nationwide halt on foreclosures, including Oregon, because of widespread allegations that lenders and their agents have not followed proper procedure in seizing homes from defaulted borrowers—Bank of America, JP Morgan Chase & Co., Ally Financial Inc., and PNC Financial Services have already frozen foreclosures in as many as 23 states where lenders are required to go to court to foreclose:

· Authorities in seven states have launched investigations, but according to Patrick McManemin, a partner at Patton Boggs LLP, a Washington D.C.-based law firm that represents banks, loan servicers, and financial institutions, industry lawyers are expecting a more widespread investigation: “We are aware of, or involved in, a large number of investigations that led us to believe there are in the neighborhood of 40 state attorneys general who have initiated or expressed an interest”—Oregon Attorney General John Kroger is apparently not one of them, but a spokesman from his office said that they are keeping a close eye on developments.

4. The FDIC has authorized lawsuits against more than 50 officers and directors of failed banks as the agency aims to recoup more than $1 billion in losses stemming from the credit crisis:

· FDIC Chairwoman Sheila Bair said that 2010 will be the peak year for failures as so far this year, 129 failed banks have been shut down and seized by the FDIC at a cost to the deposit insurance fund of about $20 billion—the insurance fund fell into the red last year with a deficit of $20.7 billion as of June 30^th.

5. The U.S. economy shed a worse-than-expected 95,000 jobs in September, leaving the unemployment rate unchanged at 9.6%:

a. President Obama tried to put a good face on the job numbers: “We have now seen nine straight months of private-sector job growth. We have to do everything we can to accelerate this economy;”

b. Some signs of economic life emerged from the otherwise bleak reports: healthcare added 24,000 jobs, the leisure and hospitality sector gained 34,000 jobs, and temporary jobs increased by 16,900, usually a first step toward full-time hiring.

6. The U.S. Department of Energy offered support for a major wind-energy project planned for the Columbia Plateau in eastern Oregon:

· Energy Secretary Steven Chu announced the department was offering to guarantee $1.3 billion of the financing for the $2 billion Caithness Energy LLC Shepherds Flat project: “This project is part of the administration’s commitment to doubling our renewable energy generation by 2012, while putting Americans to work in communities across the country”—Sen. Ron Wyden said that the loan guarantee removed the last major obstacle to the project and the jobs it will bring: “Projects like this reinforce Oregon’s reputation as a leader in wind energy,” he said.

WEEK THIRTY-NINE

October 11, 2010

1. President Obama made a new pitch for his $50 billion “roads, railways, and runways” program, selling his latest economic plan with an emphasis on a key voter concern—the loss of American jobs:

· Earlier in the day, the administration issued a new report estimating the spending program would create middle-class jobs in manufacturing, construction, and retail, and thereby help boost the economy—more than half of the new jobs would come in construction, a sector where almost one in five workers is out of a job.

2. Defense Secretary Robert Gates met in Hanoi with his Chinese counterpart to make a case for restoring military-to-military relations broken up by Beijing in retaliation for U.S. weapons sales to Taiwan:

· Restoring communication between the Chinese and U.S. militaries is an urgent need, Gates said, because “having greater clarity and understanding of each other is essential to preventing mistrust, miscalculations, and mistakes”—in his public comments, Gates again showed that he was trying to balance a desire to restore military relations with China while restating Washington’s unwavering support for its partners, allies, and the internationally recognized rights of passage.

3. Top forecasters say that the economy, weakened by governments and consumers spending less so they can pay down debt, will grow this year and next at a slower pace than previously thought:

· The economists expect the economy will add jobs through the end of 2011, but not enough to bring down the unemployment rate to less than 9.2%—they do not see home prices rising much or the nation’s soaring deficit falling much.

October 12, 2010

1. The Obama administration lifted the deepwater oil-drilling moratorium that the government imposed in the Gulf of Mexico in the wake of the disastrous BP oil spill:

· While the temporary ban on exploratory oil and gas drilling is lifted immediately, drilling is unlikely to resume immediately because drilling companies must meet a host of new safety regulations before they can resume operations, officials said—a federal report said that the moratorium likely caused a temporary loss of 8,000 to 12,000 jobs in the Gulf region.

2. A federal judge ordered the U.S. military to immediately stop enforcing the “don’t ask, don’t tell” law that prohibits openly gay and bisexual soldiers from military service:

· Judge Virginia Phillips of U.S. District Court for the Central District of California wrote that the 17-year-old policy “infringes the fundamental rights of U.S. service members and prospective service members” and violates their rights of due process and freedom of speech—she issued an injunction banning enforcement of the law and ordered the military “to suspend and discontinue” immediately any investigations or proceedings to dismiss members of the armed services.

October 13, 2010

1. Calling education an “economic imperative”, President Obama asked Congress to make permanent a $2,500 college-tuition credit that is scheduled to expire at the end of the year:

· Obama said that this new tax credit, part of the $814 billion economic stimulus bill he signed shortly after taking office in 2009, would help middle-class families afford to invest in their children’s future—the tax credit is available only for the 2009 and 2010 tax years, and making it permanent means that families could claim it during all four years of college, for a maximum of $10,000 per student.

2. The Obama administration says that gas stations can start selling fuel with more ethanol—a mixture up to 15%—but it is only recommended for cars and trucks built since 2007:

· The ethanol industry has maintained that there is sufficient evidence to show that a 15% ethanol blend in motor fuel will not harm engine performance and that increased consumption of the renewable fuel creates jobs and replaces imported oil.

October 14, 2010

1. More people applied for unemployment benefits last week, the first rise in three weeks and evidence that companies are reluctant to hire in a slow economy:

· Initial claims for unemployment aid rose by 13,000 to a seasonally adjusted 462,000, the Labor Department said, only the second rise in two months.

2. House Speaker Nancy Pelosi said that the House will vote in November on a bill to provide $250 payments to Social Security recipients to make up for the lack of a cost-of-living increase for next year:

· The Social Security Administration is expected to announce on October 15^th that more than 58 million retirees and disabled Americans will go a second consecutive year without an increase in benefits—but even if Pelosi can get the House to approve a second payment, the proposal faces opposition in the Senate.

3. In a foreboding ruling for the Obama administration, a federal judge in Florida decreed that a legal challenge to the new healthcare law by officials from 20 states can move forward and warned that he would have to be persuaded that its keystone provision, a requirement that most Americans obtain insurance, is constitutional:

· Roger Vinson, a senior judge of the U.S. District Court in Pensacola, Florida, who was nominated by President Ronald Reagan, indicated last month that he would let the case proceed—in his opinion, he formally rejected the federal government’s motion to dismiss the lawsuit, which proceeds to a full hearing on the constitutional issues on December 16^th.

4. Saying that it will appeal a ruling striking down the law that bans gay men and lesbians from serving openly in the U.S. military, the Obama administration asked the federal judge who issued the ruling for an emergency stay of her decision:

· In a 48-page court filing, Clifford Stanley, the undersecretary of defense for personnel and readiness, said that the injunction would disrupt efforts to prepare for a more orderly repeal of the policy.

5. The dollar keeps falling around the world, tumbling against other major currencies because investors expect the Federal Reserve to pump more money into the economy next month to try to stimulate growth:

· When you total it all up, the U.S. economy is so weak right now that the Fed considers a weaker dollar to be a good thing, and that’s especially true when a low dollar is accompanied by super-low interest rates—those cheaper rates, on mortgages, corporate debt, and other loans, could help rejuvenate the economy.

October 15, 2010

1. The White House said that President Obama would press Congress to send a one-time payment of $250 to senior citizens to help them get through another year without an increase in their Social Security benefits:

· Every year, the government automatically adjusts Social Security payments based on the nation’s inflation rate, and for an increase in payments to occur, consumer prices must be higher than when the last increase was awarded, according to the Social Security Administration—this is the second consecutive year without an adjustment, unprecedented in the 35-year history of the automatically adjusted payments.

2. The Obama administration said that the federal deficit hit a near-record $1.3 trillion for the just-completed budget year:

· That means the government had to borrow 37 cents out of every dollar it spent, and while expected, the eye-popping deficit numbers provide Republican critics of President Obama’s fiscal stewardship with fresh ammunition less than three weeks ahead of the midterm congressional elections—the administration projects that the deficit for the 2011 budget year, which began on October 1^st, will climb to $1.4 trillion and will certainly be an issue in the 2012 presidential race.

3. Attorney General Eric Holder said that the federal government would enforce its marijuana laws in California even if voters make the state the first in the nation to legalize the drug:

· Under federal law, marijuana is still strictly illegal, and the Supreme Court has ruled that the federal government has the right to enforce its ban regardless of state law.

4. Commanding General David Petraeus confirmed that coalition forces have allowed Taliban representatives to travel to Kabul for peace discussions with the Afghan government, but a Taliban spokesman said that all such talk is only propaganda, designed to lower the morale of the movement’s fighters:

· U.S., Afghan, and Taliban sources all declined to give details of the contacts—if they are taking place at all.

5. Governor Ted Kulongoski announced that the state has received a $2 million federal grant to put up as many as two dozen electric-vehicle “fast-charge” stations in northwest Oregon:

· The announced chargers number only two dozen, but they are relatively rare Level 3 units with enough power to provide an 80% recharge in 20 to 30 minutes—the 480-volt chargers will be spread into rural areas off the Interstate 5 corridor, and these fast chargers are designed to eliminate so-called range anxiety that motorists can feel as their batteries run down.

6. The Labor Department said that consumer prices, excluding energy, were flat in September for the second straight month, edging up 0.1% after a 0.3% rise in August:

· In the past 12 months, core prices rose by only 0.8%, the smallest yearly gain in more than 49 years—that’s below the Federal Reserve preferred range of 1.5 to 2%, and it heightened expectations among economists that the central bank will take additional steps next month to spur economic growth.

 

WEEK FORTY

October 17, 2010

1. A senior official said that the Obama administration has concluded that Chinese firms are helping Iran improve its missile technology and develop nuclear weapons, and it has asked China to stop such activity:

· A delegation to Beijing last month, led by Robert Einhorn, the State Department’s official advisor for nonproliferation and arms control, handed a “significant list” of companies and banks to their Chinese counterparts, according to the senior U.S. official, who spoke on condition of anonymity, and he said that the Obama administration thinks that the companies are violating U.N. sanctions but that China did not authorize their activities.

October 18, 2010

1. The session of Congress now drawing to a close was the most productive in nearly half a century, “at least on a par with the 89^th Congress” of 1965-1966, according to Norman Ornstein, a scholar at the American Enterprise Institute:

· Some of the pieces of legislation of significance:

a. An $814 billion economic stimulus package passed shortly after President Obama took office, tapping a staggering sum of money to avoid a full-blown depression;

b. Healthcare overhaul, a giant step toward universal coverage that has eluded presidents back to Franklin Roosevelt;

c. The Wall Street accountability act;

d. Making college loans more affordable;

e. The Cash for Clunkers program that helped rejuvenate the auto industry;

f. New consumer protection for credit card users;

g. Making it easier for women to challenge pay discrimination;

h. Increasing federal regulation of tobacco production;

i. Cracking down on waste in Pentagon weapons acquisition;

j. Making attacks based on sexual orientation a federal hate crime;

k. Giving businesses tax incentives to hire unemployed workers;

l. Tax credits for first-time home owners.

2. The National Association of Home Builders said that its monthly index of builders’ sentiment rose in October to 16, the first increase in five months—the index had been at 13 for the past two months, the lowest level since March 2009:

· Readings below 50 indicate negative sentiment about the market—the last time the index was above 50 was in April 2006.

October 19, 2010

1. The military is accepting openly gay recruits for the first time in the nation’s history, even as it tries in the courts to slow the movement to abolish its “don’t ask, don’t tell” policy:

· Meanwhile, the federal judge in California who overturned the 17-year-old policy last week rejected the government’s latest effort to halt her order, telling the military to stop enforcing the law—government lawyers will likely appeal.

2. President Obama signed an executive order intended to boost Latino educational achievement, a key voting block two weeks ahead of midterm elections:

· The measure is intended to widen the scope of a long-standing White House initiative on Latino education by increasing partnerships with the private sector and soliciting more input from the community.

October 20, 2010

1. The government is offering American Indian firms who say they were denied farm loans a $680 million settlement:

· The two sides agreed on the deal after more than ten months of negotiations—the agreement also includes $80 million in farm debt forgiveness for the Indian plaintiffs and a series of initiatives to try and alleviate racism against American Indians and other minorities in rural farm loan offices.

2. The U.S. economy grew unevenly in early fall, with more than half the regions of the country expanding while others struggled to grow:

· A survey by the Federal Reserve found that three of the Fed’s 12 regions—Philadelphia, Richmond, and Cleveland—described economic activity as mixed or steady, and only two regions—Atlanta and Dallas—suggested economic growth was slow.

October 21, 2010

1. The most expensive rescue of the financial crisis will end up costing tax payers as much as $259 billion for mortgage buyers Fannie Mae and Freddie Mac—that figure would be nearly twice the amount Fannie and Freddie have received so far:

· By contrast, the combined bailouts of financial companies and the auto industry have cost tax payers roughly $50 billion according to the Treasury Department’s latest projections—and the bailouts of Wall Street banks alone have so far brought tax payers a $16 billion return.

2. Climate scientists reported that the temperature is rising again in the Arctic, with the sea ice extent dropping to one of the lowest levels on record:

· There was a slowdown in Arctic warming in 2009, but in the first half of 2010, warming has been near a record pace, with monthly readings over 7.2 degrees Fahrenheit above normal in northern Canada, according to the report card released by the National Oceanic and Atmospheric Administration—the report card, prepared by 69 researchers in eight countries, is issued annually by NOAA.

3. The Obama administration plans to refuse to train or equip about a half dozen Pakistani army units that are thought to have killed unarmed civilians during recent offensives against the Taliban, according to senior administration and congressional officials:

· The cutoff of funds is an unusual rebuke to a wartime ally, and it illustrates the growing tensions with a country that is seen as a pivotal partner, and sometimes an impediment, in a campaign to root out al-Qaida and other militant groups—once strictures are in place, the government will have inspections to make sure that the sanctioned units do not receive U.S. training or equipment.

October 22, 2010

1. The Defense Department has declared that “don’t ask, don’t tell” is once again the law of the land, but it has set up a new system that could make it tougher to get kicked out of the service for being openly gay:

· Defense Secretary Robert Gates ordered that all dismissals over the 1993 law must now be decided by one of the four service secretaries in consultation with the military’s general counsel and his personnel chief—the move puts the question of who can be discharged for being openly gay in the hands of just six people, all of them civilian political appointees who work for an administration that thinks the law is unjust.

2. The Homeland Security Department is close to a decision on what’s next for a costly, problem-plagued “virtual fence” ordered by Congress four years ago to help secure the U.S.-Mexico border:

· What was supposed to be a fence of integrated technology to keep watch on most of the nearly 2,000-mile border has ended up in use on only 53 miles of the Arizona-Mexico border at a cost of at least $15 million a mile—this past week, the Government Accountability Office said that DHA has committed $1.2 billion for the project, known as SBInet, and has inadequately managed it.

3. Rising sales at companies from Boeing to chipmaker Intel and railroad CSX show businesses are growing even before the predicted next round of Federal Reserve monetary easing:

· About 85% of companies in the Standard & Poor’s 500 Index have exceeded analysts’ per-share profit estimates so far in third-quarter reports—the earnings and market enthusiasm run counter to pessimism about the economy ahead of November 2^nd congressional elections in which Republicans are projected to gain seats from President Obama’s Democrats.

WEEK FORTY-ONE

October 25, 2010

1.     Sales of previously occupied homes rose last month after the worst summer for the housing market in more than a decade:

The National Association of Realtors said that sales grew ten percent in September to a seasonally adjusted annual rate of 4.53 million—most experts expect roughly five million homes to be sold through the entire year, and that would be in line with last year’s totals and just above sales for 2008, the worst year since 1997.

2.     The Transportation Department notified lawmakers that it would release billions of dollars in federal funds for high-speed rail projects from New Hampshire to California:

The biggest winners of an estimated $2.5 billion pot of money were California and Florida—the Transportation Department plans a formal announcement for October 28th.

3.     The U.S. Citizenship and Immigration Services launched a redesigned certificate of naturalization aimed at reducing fraud:

The certificates given to new citizens will include embedded photographs and signatures and a color-shifting ink pattern on the background—the agency estimated that it would issue more than 600,000 of the new certificates in the next year.

October 26, 2010

1.     The U.S. Geological Survey announced that recent drilling results indicate that the National Petroleum Reserve-Alaska contains roughly a tenth of the oil that federal scientists had previously estimated:

The research findings do not portend well for future oil exploration in vast swaths of the reserve—in fact, the results show that one of the most promising places for oil exploration in the reserve is in one of its most environmentally sensitive areas, near Teshekpuk Lake.

2.     Americans’ confidence in the economy stayed stuck in gloomy territory in October—the confidence report, released by the Conference Board, a private research group, said that its Consumer Confidence Index rose to 50.2 from a revised 48.6 in September:

September’s reading was the index’s lowest point since February—an index of 90 indicates a healthy economy, and that has not been approached since the recession began in December 2007.

3.     Less than halfway through his first term, President Obama has appointed more openly gay officials than any other president in history—gay activists say the estimate of more than 150 appointments so far, from agency heads and commission members to policy officials and senior staffers, surpass the previous high of about 140 reached during the full two terms of President Bill Clinton:

White House spokesman Shin Inouye confirmed the record number, saying that Obama has hired more gay officials than the Clinton and George W. Bush administrations combined—he said that Obama “is proud that his appointments reflect the diversity of the American public.”

October 27, 2010

1.     Sales of new homes improved last month after the worst summer in nearly five decades, but not enough to lift the struggling economy—the Commerce Department says new home sales in September grew 6.6% from a month earlier to a seasonally adjusted annual sales pace of 307,000, but even with the increase, the past five months have been the worst for new home sales on records dating back to 1963.

New home sales have risen nine percent from the bottom in May but are still 78% from their peak sales pace of nearly 1.4 million homes in July 2005—the September sales figures were driven by a 61% monthly surge in the Midwest, sales grew about three percent in the south and Northeast, and they fell by nearly ten percent in the West.

2.     The U.S. government has awarded nearly $18 billion in contracts for rebuilding Afghanistan over the past three years, but it cannot account for spending before 2007:

Susan Phalen, spokeswoman with the inspector general, said, “Data got better from 2007 on, but it remains to be seen whether we’ll ever know how much U.S. agencies spent overall”—a handful of companies received a majority of the contracts from the Pentagon for Afghanistan, 44 of them received more than half the military’s business there, and one contractor, DynCorp International, accounted for about 75% of all the contracts for Afghanistan that two State Department bureaus awarded.

October 28, 2010

1.     Fewer people applied for unemployment benefits last week, the second drop in a row and a hopeful sign the job market could be improving:

The Labor Department says that initial claims for jobless benefits dropped by 21,000 to a seasonally adjusted 434,000 in the week that ended October 23rd—that’s the smallest number of claims since early July, and Wall Street analysts had expected a tiny increase.

2.     According to an Associated Press survey of leading economists, the job market and the economy will improve only slightly next year:

            a.     The latest quarterly AP Economy Survey shows economists are pushing back their estimates of when key barometers of health—hiring, spending, and economic growth—will signal strength;

            b.     The economists the AP surveyed still expect the economy to sidestep some threats that had raised concerns in recent months—they dismiss the likelihood of a second recession, for example, and they think the risk of deflation is remote.

3.     The presidential commission investigating the fatal explosion of the BP well in the Gulf of Mexico said that Halliburton officials knew weeks before the explosion that the cement mixture they planned to use to seal the bottom of the well was unstable but still went ahead with the job:

In the first official finding of responsibility for the blowout, which killed 11 workers and led to the biggest offshore spill in U.S. history, the commission staff determined Halliburton had conducted three laboratory tests that indicated the cement mixture did not meet industry standards—the panel’s lead investigator, Fred Bartlit Jr., said in a letter delivered to the commission that the results of at least one of those tests, which BP failed to act upon, was given to BP on March 8th, but Bartlit said, “There is no indication that Halliburton highlighted to BP the significance of the foam stability data or that BP personnel raised any questions about it.”

4.     The government announced that it had spent $80.1 billion on intelligence activities over the past 12 months, disclosing for the first time not only the amount spent by civilian intelligence agencies but also by the military:

The disclosure was a record high and an increase of nearly seven percent over the year before, and it led to immediate calls for fiscal restraint on Capitol Hill—Rep. Silvestre Reyes (D-TX), chairman of the House Permanent Select Committee on Intelligence, joined Dianne Feinstein (D-CA), chair of the Senate Select Committee on Intelligence, in calling for fiscal restraint on the part of the intelligence community.

5.     The U.S. Commission on Civil Rights concluded in a draft report that the Justice Department has tried to hide the involvement of high-level political officials in the dismissal of a controversial voter-intimidation lawsuit against members of the New Black Panther Party:

The commission said that the department’s reversal in the case indicates that its Civil Rights Division is failing to protect white voters and is “at war with its core mission of guaranteeing equal protection of the law for all Americans”—the Justice Department denied the allegations.

6.     Opening a seven-country tour of Asia shadowed by fears about China’s rising influence, Secretary of State Hillary Clinton declared that the U.S. was not bent on containing China:

“There are some in both countries who believe that China’s interests and ours are fundamentally at odds, but that is not our view,” she said, “in the 21st century, it is not in anyone’s interest for the U.S. and China to see each other as adversaries”—mixing conciliatory words with hints of a firmer U.S. stance, Clinton said that China must be a partner of the U.S. on issues ranging from climate change to North Korea’s nuclear program.

7.     Nearly two-thirds of Latinos in the U.S. think they are being discriminated against, and a plurality believe the backlash over illegal immigration is the central driver of such bias, according to a nationwide survey released by the Pew Hispanic Center:

Significantly more Latinos than in past surveys say that illegal immigrants are having a negative impact on Latinos, a measure of how the issue is simultaneously stirring and dividing the community—an overwhelming majority of Latinos (86%) say that illegal immigrants should be placed on a path to citizenship once they pass background checks, pay a fine, and show they are employed, and only 13% of Latinos believe illegal immigrants should be deported.

October 29, 2010

1.     Hundreds of cities and counties across the country are raising taxes—an Associated Press review of local election results found these entities had boosted taxes to help pay for schools, public safety, and other services they believe are essential to their communities:

The AP analysis looked at 39 states, representing a cross-section of the country, and the review found 2,387 revenue measures in 22 states where they appeared on local primary and special-election ballots—voters in 19 states (or 86% of those holding such elections) passed 50% or more of the local tax initiatives that came before them.

2.     Two packages containing explosives, shipped from Yemen and addressed to synagogues in Chicago, were intercepted in Britain and Dubai, setting off a broad terrorism scare that included the scrambling of fighter jets to accompany a passenger flight as it landed safely in New York:

The discovery of the explosives, packed in toner cartridges for computer printers, and based on a tip from Saudi intelligence officials, began a hunt for other suspicious packages in the U.S. and other countries—cargo planes were moved to secure areas of airports in Philadelphia and Newark, New Jersey, for searches, and a UPS truck in New York was stopped and inspected, but no additional explosives had been discovered by late October 29th.

3.     Signaling another partisan fight over immigration enforcement after the midterm elections, all seven Republican senators on the Judiciary Committee signed a letter asking the Department of Homeland Security how much money it needs to deport every illegal immigrant the government encounters:

The Obama administration, which set a record for deportations by the U.S. in its first full year in office, wants to continue its policy of focusing law enforcement resources on securing the border, bolstering the Border Patrol, and deporting dangerous and violent offenders who are in the U.S. illegally—at the same time, President Obama supports legislative reforms that would create a path to legal status for long-time residents who meet specific criteria.

4.     A senior Pentagon official, Michael Furlong, broke Defense Department rules and “deliberately misled” senior generals when he set up a network of private contractors to spy in Afghanistan and Pakistan beginning last year, according to the results of an internal government investigation:

Defense Secretary Robert Gates ordered the investigation after The New York Times reported on the existence of the network in March—the results of the Pentagon investigation are classified.

5.     Iran offered to negotiate with six world powers about its disputed nuclear program in a new bid to end growing concern that it could be used to produce weapons:

The move, following a hiatus of more than a year, was anticipated in the wake of an invitation to the Iranian leadership last month by chief European Union envoy Catherine Ashton and following recent statements by Tehran officials that they were ready for talks—still, officials from the main countries trying to engage Iran expressed little hope of a breakthrough.

6.     Russian counter-narcotic agents took part in an operation to eradicate several drug laboratories in Afghanistan this week, joining Afghanistan and U.S. anti-drug forces in what officials here said marked an advance in relations between Moscow and Washington:

The operation, in which four opium refining laboratories and more than 2,000 pounds of high-quality heroin were destroyed, was the first to include Russian agents—it also indicated a tentative willingness among Russian officials to become more deeply involved in Afghanistan two decades after U.S.-backed Afghanistan fighters defeated the Soviet military there.

7.     The U.S. economy is showing a little improvement, the government reported, but not enough extra energy to help bring down high unemployment or put the country on the road to sustained and widespread prosperity:

The Commerce Department said that the nation’s gross domestic product—the total value of all goods and services produced inside U.S. borders—grew at a modest annual rate of two percent in the third quarter, up from 1.7% in the second quarter.

WEEK FORTY-TWO

November 1, 2010

1.     The U.S. and allied governments tightened their scrutiny of air cargoes and shipped packages as investigators tried to trace bomb parts and scanned for more mail bombs, possibly sent from Yemen:

An official Arab Emirates security source said that authorities are tracing the serial numbers of a mobile phone circuit board and computer printer used in a mail bomb sent from Yemen and found in Dubai last week—major cargo firms have already suspended shipments from Yemen, and Germany’s aviation authority said that their country has extended its ban on cargo aircraft from Yemen to include passenger flights amid the current terrorist threat.

2.     Americans slowed their spending in September to the weakest pace in three months, and their incomes fell for the first time in 14 months:
Many economists believe that growth in the current quarter will be little changed from the third quarter—consumer spending had helped boost third-quarter growth, the best showing since a 4.1% rise in consumer spending at the end of 2006, before a severe recession hit.

November 2, 2010

1.     A divided three-judge panel of the Ninth Circuit Court of Appeals granted the government’s request and indefinitely extended its freeze on a judge’s order halting enforcement of the government’s “don’t ask, don’t tell” policy, heightening pressure on the Obama administration to persuade the Senate to repeal the law before a new Congress is sworn in:

This decision means gay Americans who disclose their sexual orientations still cannot enlist in the armed forces and can be investigated and ultimately discharged if they are already serving—President Obama has said repeatedly that he favors ending “don’t ask, don’t tell” legislatively instead of through the courts.

2.     The bipartisan commission that President Obama created eight months ago will begin meeting privately soon after the November 2nd elections, with just three weeks to try to agree on cutbacks to Americans’ favorite tax breaks and benefit programs:

The group, which has a December 1st deadline for recommending how to reduce annual deficits swelling the federal debt, has purposely done little to date beyond public hearings, and it has decided nothing lest any decisions leak and blow up in the flammable mix of a campaign year with control of Congress in the balance—advocates’ best hope seems to be that the co-chairmen, Erskine Bowles, president of the University of North Carolina system and a former chief of staff to President Bill Clinton, and Alan Simpson, a former Senate Republican from Wyoming, can negotiate a package that attracts a sizeable majority of the ten Democrats and eight Republicans in the group and provides a framework for future bipartisan action.

3.     Two federal courts have ruled that the Obama administration is using overly strict standards to determine whether older Americans are entitled to Medicare coverage of skilled nursing home care and home healthcare:

The courts said that Medicare will pay for those services if they are needed to maintain a person’s ability to perform routine activities of daily life or to prevent deterioration of the person’s condition, and Medicare beneficiaries do not have to prove that their condition will improve, as the government sometimes contends—the government has not said whether it intends to appeal either decision.

4.     AIG said that it raised nearly $37 billion from the divestment of two foreign insurance units and will use that money to repay a government bailout:

The sale of the two units fits into AIG’s previously announced plan to repay the government’s bailout in full—the repayment will include the government taking a bigger stake in the company and eventually needing to sell common stock in AIG to recoup its money, similar to what it’s doing now with its Citigroup Inc. shares.

November 2, 2010

1.     Republicans won control of the House, but Democrats retained control of the Senate, with Harry Reid, the majority leader beating back a tea party challenge from Sharron Angle:

Democrats retained control of the Senate by winning hard-fought contests in California, Delaware, Connecticut, West Virginia, and Nevada, while Republicans secured gains in at least five states and held control of several states, sending Marco Rubio of Florida and Rand Paul of Kentucky, two candidates initially shunned by the Republican establishment but popular with the tea party movement, to Washington.

2.     The nation’s home ownership rate remained at its lowest in more than a decade, hampered by a rise in foreclosures and weak demand for housing:

The percentage of households that owned their homes was unchanged at 66.9% in the July-September quarter, the Census Bureau said—that’s the same as the April-June quarter, and the last time the rate was lower was 66.7% in 1999.

November 3, 2010

1.     The Obama administration upset liberals as well as the president’s two Supreme Court appointees by arguing that ordinary citizens have no legal right to go to court to challenge the government if it uses tax money to fund religious schools:

            a.     At issue is the constitutionality of an unusual 13-year-old Arizona law that allows taxpayers to direct a $500 tax credit to a private organization, which in turn pays tuition for students in private schools—more than 90% of the money goes to religious schools, according to the challengers;

            b.     Acting U.S. Solicitor General Neal Katyal joined Arizona in defense of the law, but he went further and argued no one had the legal standing to challenge it in court since no citizen could prove that “a cent . . . of his money goes to fund religion—Justice Ruth Bader Ginsburg, Stephen Breyer, and Elena Kagan objected, and Justice Sonia Sotomayer appeared to agree—a ruling in the Arizona case has the potential to be far-reaching if the court were to agree with Katyal and broadly shield the government from legal claims that it is wrongly diverting public money to aid religion.

2.     The Federal Reserve announced the purchase of $600 billion in Treasury bonds through next June in an effort to spur greater investment, risk-taking, and activity in the U.S. economy:

The rate-setting Federal Open Market Committee concluded a two-day meeting with a statement that outlined its aggressive new approach to lower long-term interest rates across the economy—the Fed also said that it would review its earnings from previously purchased debt, raising its total sum of coming action to a range as high as $900 billion.

3.     Federal regulators approved new requirements for brokerage firms aimed at curbing risks posed by their trading customers that get split-second access to markets to buy or sell stocks:

The Securities and Exchange Commission adopted the new rules in a 5-0 vote, and they effectively prohibit brokerages from providing customers with “unfiltered” or “naked” access to exchanges or trading systems—the new rules take effect in about two months, and brokerage firms will have six months to comply.

November 4, 2010

1.     President Obama said that he would look for ways to control global-warming pollution other than Congress placing a ceiling on it:

Legislation to put a limit on heat-trapping greenhouse gases and then allowing companies to buy and sell pollution permits under that ceiling narrowly passed the House in 2009 as a centerpiece of Obama’s domestic agenda, but it stalled in the Senate—the new battle in Congress over global warming will target the EPA, which is poised to regulate greenhouse gases for the first time, after the Supreme Court ruled in 2007 that it could treat heat-trapping gases as pollutants.

2.     President Obama invited Republican and Democratic congressional leaders for talks, and he challenged his Cabinet to make Washington work better:

The November meeting will be closely watched for any sign of elusive progress between Obama and incoming House Speaker John Boehner and Senate Minority Leader Mitch McConnell, and they will be joined by the top Democrats in Congress, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid—the gap between the announcement of an Obama-held leadership meeting and the session itself (two weeks from now) is due to Obama’s foreign travels as he will be on a four-country trip to Asia from November 5th through the 14th.

3.     Sen. Mitch McConnell, the minority leader, said during a speech at the Heritage Foundation (a conservative group in Washington) that the only way his party will succeed in advancing its agenda is to insure that President Obama is defeated in two years:

Jim Manley, a spokesman for Sen. Harry Reid, said, “It looks like Senate Republicans have already set the terms of this new legislative session: it is our way or the highway”—the White House response was given by Robert Gibbs, the White House press secretary: “The message of Tuesday’s election was the American people want both political parties to work together,” and he added (after noting that the president had just invited McConnell and other congressional leaders to dinner), “I hope that Sen. McConnell comes to the White House with that in mind in a couple of weeks.”

4.     Global stock markets staged an explosive rally, embracing a move by the Federal Reserve to try to rejuvenate the U.S. economy by buying $600 billion in Treasury bonds:

            a.     The Dow Jones reached its highest point in more than two years, and stocks surged from Tokyo to London—elsewhere around the world, economic dominoes began to fall: the dollar sank, oil prices surged, and Asian countries raised fears that their currencies would rise relative to the dollar, making their exports more expensive;

            b.     Two developments, in particular, seemed to cheer investors: the Fed left the door open to further action later, and Fed Chairman Ben Bernanke, in a opinion piece published November 4th, envisioned higher stock prices as part of “a virtuous circle.”

November 5, 2010

1.     Employers added the most jobs in five months in October, with the education and healthcare sectors leading the way:

The Labor Department said that its survey of employers showed a net gain of 151,000 jobs last month, the most since May—so far this year, the economy has added 874,000 jobs and over a million in the private sector, but that comes after the nation lost eight million jobs in 2008 and 2009.

2.     Newly empowered Republicans want spending cuts of $5 to $6 billion a month as a condition for extending emergency unemployment benefits that are scheduled to expire next month for millions of Americans:

Up to two million people could lose their benefits, which average $310 a week nationwide, during the holiday season if the still Democratic-controlled Congress does not act in the post election lame-duck session, and the expiration could affect as many as five million by the end of February.

November 6, 2010

1.    President Obama embraced India as the next job-creating giant for Americans, not a cheap-labor rival that out-sources opportunity from the U.S.:

By the end of his first three days in India, the president was promoting $10 billion in trade deals (completed in time for his visit) that the White House says will create about 54,000 jobs at home—that’s a modest gain compared with the extent of the enduring jobless crisis in the U.S. since economists say it would require on the level of 300,000 new jobs a month to put a real dent in an unemployment rate stuck near ten percent.

November 7, 2010

1.    In a speech to Australian university students in Melbourne, Secretary of State Hillary Clinton lashed out at Myanmar’s military rulers, calling their weekend elections deeply flawed and a sign of “heartbreaking” repression in that country:

She said that she hoped Myanmar’s election (the first in 20 years) could produce a few new leaders who might change the country’s direction, but she stressed that the U.S. would continue to support an international inquiry into human rights abuses in that country (also known as Burma)—Clinton is in Australia on the last foreign stop of a seven-nation Asia-Pacific tour, and on November 8th, she and Secretary of Defense Robert Gates will meet with their Australian counterparts to discuss expanding defense and security cooperation.

WEEK FORTY-THREE

November 7, 2010

1.     Republican leaders in the House and the Senate said that there would be no compromise with Democrats on whether to extend Bush-era tax cuts for the nation’s wealthiest taxpayers:

President Obama has said that he wants to extend the tax cuts for taxpayers with a combined annual income of less than $250,000, but that the cuts should be eliminated for people making more than that—he has suggested there might be room for compromise in discussions with Republicans on other tax matters.

2.     Republican Senate Leader Mitch McConnell said that banning pork barrel projects known as “earmarks” from congressional legislation is more complicated than it appears, but that he is willing to consider such a ban:

McConnell said that Republicans are ready to cut federal spending, but he said that banning earmarks is not a realistic way to do that.

November 8, 2010

1.     President Obama backed India for a permanent seat on the U.N. Security Council in a speech to India’s parliament—India has sought permanent Security Council membership for years:

The announcement was more of a diplomatic gesture than a concrete step and does not mean that India will join the five permanent Security Council members anytime soon—the U.S. is backing India’s membership only in the context of unspecified reforms to the Council that could take years to bring about.

2.     Investigators on a special presidential commission said that the BP oil explosion and spill was not about anyone purposely trading money for safety, but instead was more about seemingly acceptable risks adding up to disaster:

Investigators outlined more than a dozen decisions that seemed questionable at the time but also explainable, and it was how those cascaded and crashed together that fueled catastrophe—critics, including a top academic, a congressman, and people on the temporarily polluted bayou, are balking at what they see as something close to a free pass for BP’s history of cost cutting.

3.     Trying to seal security gaps exposed by the Yemen bomb plot, the U.S. expanded a ban on air cargo coming from Yemen to include Somalia and announced that printer cartridges weighing more than six ounces will not be allowed on domestic and U.S.-bound international passenger flights:

As part of a stepped-up cargo screen, the Department of Homeland Security is also asking shipping companies to provide DHS with sender and destination data on cargo shipments sooner than the current requirement of four hours before landing on U.S. soil—that information, combined with terrorism tracking data stored in the DHS, could help identify packages that intelligence shows are “high-risk” before they are loaded onto planes.

November 9, 2010

1.     According to a report by the Labor Department, employers posted fewer job vacancies in September than the previous month, the second month of declines, and a survey of small business owners showed they are more optimistic but still are reluctant to add many new workers:

The National Federation of Industrial Businesses, a leading small business group, said that its optimism index rose to 91.7, the highest level in five months and second highest in two years—economists welcomed the report, which has consistently shown the small business sector struggling as large companies recover at a healthier pace.

2.     Administration and military officials have told McClatchy Newspapers that in an effort to de-emphasize President Obama’s pledge that he would begin withdrawing U.S. forces in July 2011, the Obama administration has decided to begin publicly walking away from what it once touted as key deadlines in the war in Afghanistan:

The new policy will be on display next week during a conference of NATO countries in Lisbon, where the administration hopes to introduce a timeline that calls for the withdrawal of U.S. and NATO forces from Afghanistan by 2014, the year when Afghan President Hamid Karzai once said Afghanistan troops could provide their own security—the Pentagon also has decided not to announce specific dates for handing security responsibility for several Afghanistan provinces to local officials, and instead, intends to work out a more vague definition of transition when it meets with its NATO allies.

3.     The Justice Department said that the CIA officers who destroyed videotapes of harsh interrogations will not be charged with crimes, but a special prosecutor continues to investigate whether treatment of al-Qaida detainees crossed the legal line:

In a statement, the Justice Department said that after a three-year investigation into whether destroying the tapes amounted to a crime, Special Prosecutor John Durham decided not to file charges—documents made public through an ACLU Freedom of Information Act lawsuit showed that the videotapes were destroyed five years ago November 9th, meaning the statute of limitations for the act expires this week, the ACLU said in a statement.

4.     Congressional leaders from both parties vowed to spare more than 21 million taxpayers from significant tax increases when they file their returns next spring by adjusting the alternative minimum tax before year’s end:

The tax was enacted in 1969 to insure that higher-income taxpayers could not use deductions and credits to avoid paying any federal income tax, but the income limits were not indexed for inflation, so Congress fixes the AMT each year to spare millions of middle-income taxpayers from tax increases that would average about $3,900—without a fix, taxes would go up for individuals making as little as $33,700 and married couples making as little as $45,000.

November 10, 2010

1.     President Obama issued a strikingly personal appeal to the Muslim world to join the West in an unrelenting battle to defeat al-Qaida and violent extremism:

In Indonesia, the world’s most populous Muslim nation, Obama acknowledged the fraying that continues in U.S.-Islamic relations despite his best efforts at repair, and he urged both sides to look beyond “suspicion and mistrust” to forge common ground against terrorism—after his speech in Jakarta, Obama flew to South Korea and a meeting of the Group of 20 major economic powers in Seoul.

2.     The chairmen of President Obama’s bipartisan deficit commission, Democrat Erskine Bowles and Republican Alan Simpson, outlined stark resolutions they say are necessary to secure the nation’s fiscal standing, including reforms of the tax code and entitlement programs that would likely spark opposition from lawmakers and special interest groups:

a.     The document makes five basic recommendations:

“Enact tough discretionary spending caps” and find $200 billion in savings by 2015;

Enact tax reform that “dramatically reduces rates, simplifies the code, broadens the base and reduces the deficit;”

Address reforms of the healthcare system;

Enact mandatory savings from farm subsidies and civilian and military retirement costs;

Enact reforms to Social Security to ensure its solvency “while reducing poverty among seniors;”

b.     The chairmen say these steps could reduce the deficit to 2.2% of gross domestic product by 2015 and achieve $4 trillion in deficit reduction by 2020—it’s unclear whether these recommendations will go beyond the drawing board, particularly if the members of Congress who occupy a majority of seats fail to agree on core recommendations.

3.     Pressing ahead with plans to reduce greenhouse gas emissions, despite a congressional stalemate over global warming, the EPA issued guidelines that give states considerable discretion in regulating carbon dioxide emissions from large industrial facilities such as power plants, refineries, and factories:

On January 2nd, the country’s largest emitters of greenhouse gases will have to show state regulators how they plan to curb such emissions when they build new facilities or make major changes in existing facilities that result in increased discharges of the gases that most scientists link to climate change and global warming.

4.     The U.S. trade deficit narrowed in September, with U.S. exports at their highest level in the past two years, according to government figures:
The deficit with China remained the largest, although it shrank slightly from the previous month—while a weak dollar has helped U.S. exports, concerns have been rising within the Obama administration about China’s trade dominance and its effect on the global economic recovery.

November 11, 2010

1.     The Federal Reserve’s plan to buy more Treasury bonds has incited critics at home to complain of inevitable high inflation and financial turmoil, and many foreigners say that the Fed’s $600 billion program is a scheme to give U.S. exporters an unfair edge—one that endangers the global economy:
Already, the finger-pointing threatens to wreck this week’s summit of world leaders in Seoul, where the Fed’s plan has set off vociferous debate—President Obama was forced to defend U.S. policies at the summit, saying, “The most important thing that the U.S. can do for the world economy is to grow.”

2.     Secretary of State Hillary Clinton and Israeli Prime Minister Benjamin Netanyahu held talks but failed to break an impasse that has stalled Mideast peace negotiations:

After multiple meetings over seven hours, Clinton and Netanyahu said in a joint statement that they had “a friendly and productive exchange of views” and “agreed on the importance of continuing direct negotiations to achieve our goals”—but there was no sign that the talks, which have been on hold since mid-September in a dispute over Israeli settlement building, might resume soon.

3.     The world’s economies stand on the brink of a trade war as leaders of rich and emerging nations gather in Seoul:

A dispute over whether China and the U.S. are manipulating their currencies threatens to resurrect destructive protectionist policies like those that worsened the Great Depression—the biggest fear is that trade barriers will send the global economy back into recession.

4.     South Korea and the U.S. failed to secure a breakthrough on a long-standing free trade agreement and will keep negotiating, their presidents said, in a sharp setback to hopes of speedily ratifying the ambitious accord:

The two sides held negotiations this week to jump-start the deal (signed in 2007 when a previous administration was in power) to slash tariffs and other barriers to trade—it remains unratified by lawmakers in both countries.

November 12, 2010

1.     President Obama claimed a stronger hand on the world stage despite electoral defeats at home—failing to get a free-trade agreement with South Korea and lackluster international support for his get-tough policy with China on trade and currency disputes:

The president headed to Japan without the coveted trade pact with South Korea or a united front with other countries against China’s currency policy—he also endured criticism from other countries about a decision by the U.S. central bank to pump $600 billion into the U.S. economy, something China, Germany, and others believe could weaken the dollar and lead to inflation.

2.     Leaders of 20 major economies refused to endorse a U.S. push to get China to let its currency rise, keeping alive a dispute that has raised the specter of a global trade war amid criticism that cheap Chinese exports are costing American jobs:

The crux of the dispute is Washington’s allegations that Beijing is artificially keeping its currency, the yuan, weak to gain a trade advantage—but the U.S. position has been undermined by its own recent policy of printing money to boost a sluggish economy, which is weakening the dollar.

3.     The Supreme Court allowed the “don’t ask, don’t tell” policy on gays in the military to remain in place while a federal appeals court considers the issue:

The court did not comment in denying a request from the Log Cabin Republicans, a gay rights group, to step into the ongoing federal court review of “don’t ask, don’t tell”—the Obama administration urged the court not to get involved at this point.

4.     The financially troubled U.S. Postal Service reported an $8.5 billion loss in the fiscal year that ended in September, and it said that it would run out of money in 2011 if economic conditions do not improve and Congress does not act:

The historic losses occurred despite more than $9 billion in cost cuts over the past two years, including the elimination of about 105,000 full-time jobs, “more than any other organization, anywhere,” in an effort to de-emphasize President Obama’s pledge that he would begin withdrawing U.S. forces in July 2011 according to the U.S.P.S. Chief Financial Officer.

WEEK FORTY FOUR

November 15, 2010

1.     The White House and Republican lawmakers set the terms for a looming tax debate, coalescing around a possible temporary extension of existing income tax rates that would protect middle-class and wealthy Americans from sharp tax increases next year:

A compromise would put off fundamental questions about taxes for the time being, virtually guaranteeing their prominence as campaign issues heading into the 2012 presidential election—that debate also would dovetail with a more profound discussion over how to rein in deficits and reduce the nation’s escalating debt.

2.     A surge in auto purchases helped lift retail sales in October by the largest amount in seven months, but excluding autos, retail sales rose more modestly:

October marked the fourth straight increase in retail sales after declines in May and June—those drops had raised fears about the economic recovery, but economists say that consumers probably are not spending enough to lift sales growth above the lackluster pace of the past six months.

November 16, 2010

1.     Republicans are expected to formally back a moratorium on “earmarks”, the thousands of local projects that add up to billions of federal dollars into pending legislation—with a fresh boost from GOP leader Mitch McConnell of Kentucky who had previously been skeptical of such a ban, Republicans are expected to endorse banning the practice, and Republicans in the House also plan to vote on a ban this week:

President Obama said, “I welcome Sen. McConnell’s decision to join me and members of both parties who support cracking down on wasteful earmark spending, which we cannot accept during these tough economic times—he added: “but we cannot stop with earmarks, as they only represent part of the problem . . . I look forward to working with Democrats and Republicans to not only end earmark spending, but to find other ways to bring down the deficits for our children.

2.     Israeli defense officials urged the government to accept a new U.S.-drafted deal to freeze Jewish settlement building temporarily in exchange for a $3 billion military package, including a U.S. gift of 20 F-35 stealth fighter jets:

The deal also requires the U.S. to support Israel’s position at the U.N., and, according to Israeli news reports, to block recognition of any unilateral Palestinian move to declare independence—in exchange, Israel would halt construction of Jewish settlements for 90 days, excluding Jerusalem, enabling it to continue to build in a place that Palestinians hope will be the capitol of a new Palestinian state.

3.     Some of the best-known names in corporate America are scooping up smaller companies, finally putting up the piles of cash they have been sitting on, and positioning themselves for a stronger economic recovery:

The volume of mergers and acquisitions is still running well below what it was in 2007 before the big recession, but the burst in activity is a sign of economic vitality and show that companies are starting to shake off some of their caution—mergers and acquisitions’ volume reached $2.24 trillion in the first ten months of the year, a 28% increase over last year, with August the highest month on record, with $307 billion in deals, more than doubling August 2009, according to Dealogic, which tracks such data.

4.     According to government figures, sales at the nation’s retailers and service establishments rose in October, providing hope that consumer spending was set to improve in the fourth quarter:

The Commerce Department said that retail sales in October were up 1.2% from September, higher than economists’ predictions of 0.7% and 7.3% higher than October of last year.

November 16, 2010

1.     Treasury Secretary Timothy Geithner said that the administration remains opposed to a permanent extension of tax cuts for the wealthiest of Americans, something strongly favored by Republicans:

Geithner said that the administration wants to see a permanent extension of the 2001 and 2003 tax cuts for families making less than $250,000 annually, but that a permanent extension of tax cuts for households making above that amount would be very expensive—but during an appearance at a forum for corporate executives, Geithner seemed to leave the door open for a temporary extension of tax cuts for the wealthy.

2.     The Republican point man on nuclear arms’ issues said that he would not support a quick Senate vote on the New START treaty with Russia, dealing a major blow to the Obama administration’s hopes for the weapons’ pact and potentially its improved relations with Russia:

Republican Sen. Jon Kyl of Arizona said that, despite aggressive administration lobbying to win GOP support for a quick vote, there is too little time left in the Senate lame-duck session to weigh the complicated issues covered in the treaty—President Obama has said recently that U.S. ratification of the treaty was a top priority for the remainder of the year, and administration and Democratic leaders were surprised and angered by Kyl’s announcement and said that they would continue pushing Republicans to agree to a vote.

November 17, 2010

1.     BP and its contractors missed and ignored warning signs prior to the massive oil well blowout in the Gulf of Mexico, showing an “insufficient consideration of risk” and raising questions about the know-how of key personnel, according to an independent panel convened by the National Academy of Engineering:

The panel’s findings are still in progress, but they echo much of what has been discovered in prior investigations by BP, lawmakers, and the presidential oil spill commission—Interior Secretary Ken Salazar asked for an investigation by the academy in May, saying that he wanted “an independent, science-based understanding of what happened,” and a final report is due in June 2011.

2.     President Obama signed off on what the White House says are significant improvements to federally funded partnerships between the government and religious-based and neighborhood organizations:

A religious watchdog group, Americans United for the Separation of Church and State, welcomed both Obama’s decision to require federal agencies to provide alternatives for people who do not want to receive social services at a religious charity and a process to make these partnerships more open and transparent by requiring that organizations that accept federal funding be listed on government web sites, but the organization said that it was disappointed that Obama’s executive order will allow public money to go directly to houses of worship and permit publicly funded, faith-based charities to display religious art, icons, scriptures, and other symbols.

3.     President Obama’s deficit commission debated a plan to gradually turn Medicare from a system in which the government pays most beneficiaries’ medical bills into a program in which seniors would buy health insurance with government-issued vouchers:

The plan by Republican Paul Ryan (R-WI) and Democratic economist Alice Rivlin of the panel would seem to face steep odds with most other panel Democrats.

4.     A top NATO official, Mark Sedwill (the senior civilian representative in Afghanistan), said that a complete handover of security to Afghan forces by 2014 is “realistic, but not guaranteed,” adding that the transition could last into 2015 “or beyond”:

In a classified campaign plan that Sedwill and the military commander, U.S. Gen. David Petraeus, submitted in advance of the summit, the Afghan army and police assume control of security in most Afghan provinces four years from now—the process is supposed to begin in the first half of 2011.

5.     Foreclosure-fraud class-action lawsuits are starting to pile up against major banks across the country, threatening a besieged industry with billions more in potential losses:

Bank executives are on Capitol Hill this week to defend themselves against multiple foreclosure-related investigations, including one by all 50 state attorneys general—a congressional watchdog said in a report issued November 16th that the foreclosure document debacle could threaten major banks with billions of dollars in losses, further prolonging the housing depression and damaging the government’s efforts to keep people in their homes.

November 18, 2010

1.     After meeting with President Obama, Democratic leaders in Congress said that they plan to hold a series of politically charged votes to extend middle-class tax cuts while letting tax cuts for the wealthy expire:

Republicans are expected to block the plan, leaving both sides back at square one as they try to negotiate a deal to spare families at every income level from a big tax increase in January—Democratic officials said that Obama did not embrace a particular approach to the tax cuts in his Oval Office meeting with Democratic leaders and instead had indicated that he wanted to wait for a meeting with Democratic and Republican leaders on November 30th before staking out a position.

2.     A 23% reduction in payment rates for physicians in the Medicare program will be delayed until January under a bipartisan plan approved by U.S. senators:

Under the plan, announced by Sen. Max Baucus (D-MT), Senate Finance Committee chair, and Sen. Charles Grassley of Iowa, the committee’s senior Republican, the one-month postponement will cost $1 billion, paid for with savings from planned cuts in Medicare reimbursement for therapy services—while it’s been approved by the Senate, it must still be passed by the House.

3.     The Russians cannot quite believe that the U.S. Senate might fail to ratify the nuclear arms treaty, and the list of possible harmful affects they cite from such a failure encompasses a minefield of global concerns: no more cooperation on Iran, a setback for progressive tendencies in Russia, new hurdles for Russian membership in the World Trade Organization, a terrible example for nuclear countries such as China and India, prospects for better NATO relations—and to top it all off, the U.S. and its president would look ridiculous:

Igor Ivanov, a former Russian foreign minister, said that if the two great nuclear powers cannot come to terms, nonproliferation efforts worldwide would be seriously damaged—“this is a well thought out and balanced document,” good for both countries’ security, Ivanov said.

4.     The Conference Board, a private research group, says that its index of leading economic indicators increased 0.5% last month, suggesting the economy may slowly start picking up early next year:

The latest increases are the fastest since May—the index had grown steeply since April 2009 on the strength of the stock market, record-low interest rates, and a rebound in manufacturing, but the rate of expansion had tapered off this summer as U.S. economic growth slowed.

November 19, 2010

1.     A $60 billion arms deal with Saudi Arabia that raised eyebrows among pro-Israeli lawmakers is expected to be a done deal at midnight:

The Defense Department notified Congress of the plan last month, and lawmakers had 30 days to try to block or amend the deal—the ten-year deal is one of the largest-ever single U.S. arms’ sales, intended to strengthen Saudi defense forces as a counter to Iran’s growing power in the Gulf region.

2.     Jobless benefits will run out for two million people during the holiday season unless they are renewed by a Congress that is focusing more attention on a quarrel over preserving tax cuts for people making more than $200,000 a year:

An extension of jobless benefits enacted this summer expires December 1st, and on November 18th, a bill to extend them for three months failed in the House—Democrats brought the bill to the floor under fast-track rules that require a two-thirds vote to pass, so the measure failed despite winning a 258-154 majority.

3.     New satellite images show construction underway at North Korea’s main atomic complex, apparent proof that Pyongyang is making good on its pledge to build a nuclear power reactor, according to the Washington-based Institute for Science and International Security:

North Korea is pursuing an arsenal of atomic weapons, so all its nuclear projects are of intense interest to its neighbors and to the U.S.—it carried out nuclear tests in 2006 and 2009, drawing international condemnation and U.N. sanctions.

4.     NATO leaders agreed to establish a missile defense shield that would cover all NATO member states, and they expect Russia to agree to discuss the possibility of cooperating on the system’s development:

President Obama, who has promoted a less costly, more flexible missile system that will have components in Europe and at sea, praised the day’s work, saying that for the first time, “We have agreed to develop a missile defense capability that is strong enough to cover all NATO European territory and populations as well as the U.S.”—Russia will be formally invited to take part in the missile defense system, especially with intelligence and radar sharing, and Moscow has indicated that it’s interested but has questions and wants to ensure that the system is not aimed at countering Russian missiles.

5.     The Senate has approved almost $4.6 billion to settle long-standing claims against the government brought by American Indians and African American farmers:

The money has been held up for months in the Senate as Democrats and Republicans squabbled over how to pay for the two class-action lawsuits filed over a decade ago—the legislation was approved in the Senate by voice vote and sent to the House.

6.     Working under extraordinary secrecy over the past year, the U.S. and Kazakh governments have moved more than 770 bombs from a location feared vulnerable to terrorist attack to a new high-security facility:

In the largest such operation ever mounted, U.S. and Kazakh officials transferred 11 tons of highly enriched uranium and three tons of plutonium some 1,890 miles by rail and road across the Central Asian country—the last of 12 shipments arrived November 15th at the new state-of-the-art storage facility in remote northeast Kazakhstan, near its border with Russia and China.

7.     The National Federation of Independent Businesses, which assesses the optimism of its members each month, said that the average employment change per company was zero in October—in other words, small businesses overall were not cutting jobs:

Since April 2007, there have been only two quarters when the NFIB employment change was positive, and that means that except for those two quarters, small businesses have been laying off workers—the NFIB noted that while its index of business owner optimism rose 2.7 points last month to 91.7, “the index remains in recession territory.”

WEEK FORTY FIVE

November 21, 2010

1.     Moving to contain fears of a debt crisis in Europe, the International Monetary Fund and the European Union agreed to support an emergency bailout for near-bankrupt Ireland after the desperate government abruptly requested a lifeline after days of denying it needed help:

Ireland will become the second European nation in six months to require a multibillion-dollar financial rescue—Ireland’s woes underscore how the global financial crisis still reverberates worldwide two years after the collapse of Lehman Brothers in the U.S.

2.     Billionaire Warren Buffett said that rich people should pay more in taxes and that Bush-era tax cuts for top earners should be allowed to expire at the end of December:

In an interview with ABC scheduled to air later this week, Buffett said, “If anything, taxes for the lowest and middle class and maybe even the upper middle class should even probably be cut further, but I think that people at the high end, people like myself, should be paying a lot more in taxes. We have it better than we have ever had it.”

3.     For only the second time, the U.S. government has approved research on a treatment using embryonic stem cells, this time for a rare disease that causes serious vision loss:

The research will be performed at medical centers in Oregon, Massachusetts, and New Jersey, according to Advanced Cell Technology, a biotechnology company based in Santa Monica, California, and the research will focus on Stargardt disease, which affects 300,000 Americans.

November 22, 2010

1.     The Health and Human Services Department called for insurance companies to spend at least 80 cents of the premium dollar on medical care and quality, and for employer plans covering more than 50 people, the requirement is 85 cents—insurers that fall short of the mark will have to issue their consumers a rebate:

Part of the new healthcare law, the rule is meant to give consumers a better deal—administration officials said that it will prevent insurers from wasting valuable premiums on administration, marketing, and executive bonuses.

2.     A study released by Project Vote, a nonpartisan, nonprofit group, found that the elderly and the wealthy helped to sweep the Republicans to power, and the balance of women’s votes also shifted to the GOP:

Turnouts by pro-Democratic blocks such as African Americans, young people, and Latinos dropped sharply from 2008, leaving a lop-sided pro-Republican electorate to dominate the national landscape—most of these trends are normal in non-presidential campaigns, and in most ways, turnout in 2010 was similar to the last midterm election in 2006.

3.     The staff of the presidential commission probing the Deepwater Horizon oil spill in the Gulf of Mexico reported that underestimates of the amount of oil flowing from the blown-out Macondo well “impeded” attempts by BP and the government to contain the gusher, and it also cast the government and the oil industry as ill-prepared to tackle a deepwater blowout:

In their reports, commission staffers recommended that the government require industry to put new diagnostic tools on blowout preventers and other devices at the wellhead “that would provide more information in the case of a blowout”—they also said that oil companies should be able to prove that they can contain similar disasters, which was not the case when the Deepwater Horizon drilling rig exploded April 20th.

November 23, 2010

1.     North Korea fired a barrage of shots at a South Korean island lying within sight of North Korea’s shores—for weeks, North Korea has been angling for credit for reaching out to the U.S. and South Korea, and Pyongyang had warned that the cool response would come at a cost:

As the rest of the communist bloc has crumbled, North Korea has remained staunch in its “juche” policy of self-reliance, continuing to build up a nuclear program that has earned it pariah status with the West—drawing South Korean troops into a skirmish on an island populated by civilians was a pointed escalation that emphasized that Pyongyang is prepared to play tough.

2.     Transportation Security Administrator John Pistole says that the agency is asking government security experts if there is a way to make the security pat-down less invasive but just as thorough:

Undercover tests by government security experts factored into the Obama administration’s decision to use a more thorough pat-down so that screeners can catch a bomb hidden in a traveler’s underwear.

3.     A revised report by federal analysts indicated that an early assessment of the weight of the oil from the BP spill in the Gulf of Mexico that was criticized as overly optimistic by some industry scientists was largely accurate:

The report also concluded that by early August, about 39% of the oil from the spill had naturally dispersed, evaporated, or dissolved, down from 41% in the initial estimate, and the amount of residual oil still at large in the Gulf of Mexico by late summer was revised downward to 23% from 26%--more than 99% of federal waters in the Gulf also have been reopened to fishing, due to the absence of visible oil or evidence of oil contamination in seafood.

4.     Businesses and other employers added jobs in 41 states in October, the best showing in five months, the Labor Department said:

The figures indicate the job market is picking up a bit in most parts of the country, as even the nation’s hardest-hit states, Nevada and Michigan, showed declines in their unemployment rates—while the gains were not enough to broadly reduce unemployment rates, the Labor Department said that the jobless rate fell last month in 19 states, remained the same in 17, and rose in 14.

5.     The Treasury Department says that it has received $11.7 billion from the sale of 358.5 million shares of GM stock:
Treasury officials said that the government could receive an additional $1.8 billion, assuming the bankers exercise options to purchase an additional 538 million shares of GM common stock within 30 days of the initial stock offering.

November 24, 2010

1.     The Homeland Security Department is looking to scrap the five-tiered, color-coded terror warning system in favor of a streamlined one with as few as two alerts:

One option is to go to two threat levels instead of five: elevated and imminent—U.S. officials confirmed that the recommendation for a change had been made to President Obama, who has the final say in the matter.

2.     The Obama administration is setting aside 187,000 square miles in Alaska as a “critical habitat” for polar bears, an action that could add restrictions to future offshore drilling for oil and gas:

The total, which includes areas of sea ice off the Alaskan coast, is about 13,000 acres less than in a preliminary plan released last year—Tom Strickland, assistant Interior Department secretary for fish, wildlife, and parks, said that the designation would help polar bears stave off extinction, recognizing that their greatest threat is the melting of Arctic sea ice caused by climate change.

3.     Americans earned more and spent more last month, and the number of people applying for unemployment benefits dropped last week to the lowest level in more than two years:

All told, the latest government data, released the day before Thanksgiving, suggest an improving economy—analysts question whether incomes can continue to grow at a consistent pace and keep consumers spending enough to invigorate the economy.

November 25, 2010

1.     A State Department spokesman said that U.S. embassies around the world are warning allies that WikiLeaks might be poised to release classified cables that could negatively affect relations by revealing sensitive assessments and exposing U.S. sources.

Spokesman P. J. Crowley said that the State Department does not know “exactly what WikiLeaks has or what they plan to do,” but the consequences to U.S. interests could be severe—the cables, for instance, could reveal that senior government officials in other countries are the sources of embarrassing information about the inner workings of those governments, thus making it more difficult for the State Department to obtain such intelligence in the future.

November 26, 2010

1.     North Korea warned that U.S.-South Korean plans for military maneuvers put the peninsula on the brink of war, and it appeared to launch its own artillery drills within sight of an island it had showered with a deadly barrage this week:

Washington and Seoul have pressed China to use its influence on Pyongyang to ease tensions amid worries of all-out war, and a dispatch from Chinese state media said that Beijing’s foreign minister had met with the North Korean ambassador—the U.S., meanwhile, is preparing to send a nuclear-powered aircraft carrier to South Korean waters for joint military drills in the Yellow Sea starting November 28th.

WEEK FORTY-SIX

November 28, 2010

1.     A cache of a quarter-million confidential U.S. diplomatic cables, most of them from the past three years, provides an unprecedented look at backroom bargaining by embassies around the world, brutally candid views of foreign leaders, and frank assessments of nuclear and terrorist threats:

•   Some of the cables, made available to The New York Times and several other news organizations, were written as recently as late February, revealing the Obama administration’s exchanges over crises and conflicts—Secretary of State Hillary Clinton and U.S. ambassadors around the world have been contacting foreign officials in recent days to alert them to the expected disclosures.

2.     China called for an emergency international meeting to ease tension on the Korean Peninsula, but the U.S. and South Korea, engaged in large-scale war games nearby, appeared initially cool to the idea:

•   The proposal followed a rare burst of shuttle diplomacy by the Chinese, who have been stung by accusations that they have failed to rein in their ally, North Korea—despite the diplomacy, the scene off the western coast of the Korean Peninsula was about the show of force as joint U.S.-South Korean naval exercises are to take place over four days, led by the nuclear-powered aircraft carrier George Washington.

 
November 29, 2010

1.     Bristling over the unauthorized release of more than a quarter-million classified State Department documents, the Obama White House ordered a government-wide review of how agencies safeguard sensitive information:

•   The director of the White House Office of Management and Budget, Jacob Lew, said in ordering the agency-wide assessment that the disclosures are unacceptable and will not be tolerated—the U.S. cables contained raw comments normally muffled by diplomatic politesse, such as Saudi Arabia’s King Abdullah pressing the U.S. to “cut off the head of the snake” by taking action against Iran’s nuclear program.

2.     President Obama will announce a two-year pay freeze for federal employees that the White House says is necessary to put the country on sound fiscal footing:

•   The White House said that the freeze would apply to all civilian federal employees, including those working at the Department of Defense, but did not affect military personnel—the freeze will save $2 billion during fiscal year 2011, according to the White House.

3.     Mohamed Osman Mohemud’s defense lawyers suggested that undercover FBI operatives might have entrapped their 19-year-old client, grooming him for a foiled bomb plot that prosecutors timed for maximum media exposure:

•   Mohemud is accused of plotting to ignite what he thought was a van-load of explosives at the downtown square in Portland, Oregon, but the weapon was a dummy device secretly prepared by federal agents and presented to him by undercover operatives who had spent months posing as his terrorist associates—U.S. Attorney General Eric Holder dismissed such accusations, saying that the six-month investigation and sting were “part of a forward-leaning way in which the Justice Department, the FBI, and our law enforcement partners at the state and local level are trying to find people who are bound and determined to harm Americans and American interests around the world.”

4.     Striking back, the Obama administration branded the WikiLeaks release of more than a quarter-million sensitive files an attack on the U.S. and raised the possibility of criminal prosecution in connection with the exposure:

•   Secretary of State Hillary Clinton asserted that WikiLeaks acted illegally in posting the material—she said that the administration was taking “aggressive” steps to hold responsible those who stole this information, and Attorney General Eric Holder said that the government was mounting a criminal investigation and that the Pentagon was tightening access to information.

 
November 30, 2010

1.     House and Senate leaders sat down for their first post-election meeting with President Obama in an atmosphere charged with tension over taxes and a new nuclear arms treaty with Russia:

a.     Republicans set the tone for the session early, declaring steadfast opposition to any tax increases when the Bush-era tax cuts expire at the end of the year—at the same time, a couple of Republican senators signaled possible movement on the START treaty which would reduce nuclear weapon arsenals in the U.S. and Russia;

b.     Obama has said that he would oppose a permanent extension of the Bush tax cuts for tax payers earning more than $200,000 as individuals and $250,000 as couples, and he has made approval of the new START treaty this year a top national security goal—today’s meeting, scheduled for one hour, was the first small sit-down among the president and the bipartisan leadership since the GOP recaptured control of the House and narrowed the Democratic majority in the Senate in the November elections.

2.     A monthly survey by the Conference Board shows Americans’ confidence in the economy rose in November to the highest level in five months amid more hopeful signs:

•   The Board says that its Consumer Confidence Index now stands at 54.1, up from a revised 49.9 in October—analysts were expecting 52.0, and November’s reading marks the highest point since June’s 54.3.

3.     A new Associated Press-CNBC poll shows that, in order to ease surging budget deficits, Americans prefer cutting federal services to raising taxes by nearly two to one:

•   Yet there is little consensus on specific, meaningful steps, as well as wariness about touching two gargantuan programs, Social Security and Medicare—Republicans lean heavily toward service reductions, while Democrats, usually staunch advocates of federal spending, were about evenly split between the two alternatives.

4.     A U.S. intelligence assessment concludes that Iran has received advanced North Korean missiles capable of targeting Western European capitols and giving the Islamic Republic’s arsenal a significantly further reach than previously disclosed:

•   The suspected shipment, mentioned among the flood of classified State Department memos obtained by WikiLeaks, could also give Iran an important boost toward joining the powerful group of nations with intercontinental ballistic missiles, defense experts said—U.S. suspicions reinforce international fears about the possibility of closer nuclear cooperation between Iran and North Korean engineers, who have already staged atomic tests.

5.     With two million jobless workers set to lose unemployment benefits this month, analysts say that the consequences could be serious for the U.S. economy:

a.     Among the consequences they envision over the next year:

•        Annual economic growth could fall by one half to nearly one percentage point;
•        Up to one million more people could lose their jobs;
•        Hundreds of thousands would fall into poverty;

b.     The average weekly payment for the roughly 8.5 million people receiving unemployment benefits is $302.90, and the money ripples through the economy, into supermarkets, gas stations, utilities, and convenience stores—the Congressional Budget Office says that every dollar spent on unemployment benefits generates up to $1.90 in economic growth, and the program is the most effective for generating growth among 11 options the CBO has analyzed.

6.     A Pentagon study predicts there would be little negative long-term effect from repealing a 17-year-old law prohibiting gays from serving openly in the military, though there could be “limited and isolated disruption” in some units:

• While the report may strengthen those in Congress seeking to overturn the statute, with only a few weeks left in this year’s post-election congressional session, prospects for repealing of the law this year remain uncertain.

7.     President Obama met for about two hours with congressional leaders from both parties at the White House, the first time they have met since Republicans won control of the House and gained six Senate seats on November 2nd:

• The two sides emerged full of praise for one another and agreed to immediate Capitol Hill tax cut negotiations between Treasury Secretary Timothy Geithner, Budget Director Jacob Lew, and four key members of Congress—they also seemed ready to tone down the harsh rhetoric that have characterized White House-congressional relations since Obama became president 22 months ago.

8.     The Senate voted to let lawmakers keep sprinkling bills with home-state projects like roads, bridges, water treatment plants, grants to local police departments, and special interest tax breaks:

•  Most Democrats and a handful of Republicans joined in a 56-39 majority to reject a ban on funding for home-state projects not included in the budget that the president submits to Congress each year—both Oregon senators voted yes on the bill, and a “yes” vote was a vote to prohibit earmarks.

9.     For the second time in two months, a federal judge has upheld the constitutionality of the new healthcare law, ruling that the requirement that most Americans obtain medical coverage falls within Congress’ authority to regulate interstate commerce:

• The judge, Norman Moon of U.S. District Court, who sits in Lynchburg, Virginia, issued a 54-page ruling that granted the government’s request to dismiss a lawsuit brought by Liberty University, the private college funded by the Rev. Jerry Falwell—two other federal judges are expected to rule in similar cases in the next few months.

December 1, 2010

1.     Lane County officials have received a $2 million federal transportation grant to fix up one of the state’s best-known covered bridges:

• The Register-Guard reports that the Goodpasture covered bridge near Vida has been limited to vehicles of under15 tons since engineers discovered broken and deteriorated sections in its timer trusses and substructure—the grant will pay to fix those problems, allowing normal traffic of up to 40 tons.

2.     According to documents released by Rep. Earl Blumenauer, while the Pentagon legally covers dozens of contractors doing dangerous jobs at home, such as making anthrax vaccine or disposing of mustard gas, the immunity from harm granted KBR in Iraq appears to be far broader—and potentially costlier to taxpayers:

•  A deposition signed last summer in U.S. District Court in Portland revealed that on the eve of the Iraq invasion, a KBR attorney won a secret concession insuring that U.S. taxpayers, and not KBR, would pay in the event of any death or injury, and in September, Democratic Reps. Blumenauer and Kurt Schrader and Sen. Ron Wyden and Jeff Merkley introduced a bill in both houses to boost congressional oversight of defense contracts.

3.     A package of spending cuts and tax increases drew sharp challenges from both the left and right on President Obama’s deficit commission, putting approval in doubt:

• However, both parties’ Senate budget point men embraced the plan, and even opponents called it a starting point for next year to control the nation’s ballooning debt—the 18-member bipartisan commission scheduled a vote on the plan for December 3rd, but the co-chairmen, Democrat ErskineBowles and Republican Alan Simpson, face a difficult chore in rounding up the 14 votes needed to officially send the plan to Congress for consideration.

4.     The Atlantic Coast and the eastern Gulf of Mexico will remain closed to offshore oil and gas drilling for now in what is considered a major recalibration of the nation’s offshore drilling priorities after last summer’s BP oil spill in the Gulf of Mexico:

• As the government continues to develop new, stricter safety and environmental standards, according to Ken Salazar, Secretary of the Interior, the administration will focus offshore drilling activities on areas that are already leased for drilling, rather than open up new sectors for exploration—the western and central Gulf will continue to be considered for lease sales, and the Cook Inlet and the Chukchi and Beaufort Seas in the Arctic also will be studied, but there are no planned lease sales there.

5.     President Obama rallied support from former Secretary of State Colin Powell for a stalled nuclear treaty as Republican lawmakers indicated a greater willingness to ratify the agreement with Russiaby the end of the year:

• Both Obama and Powell warned of grave consequences if the Senate fails to ratify the New START pact which would reduce how many strategic warheads the U.S. and Russiacould hold and would set up a system so each could inspect and verify the other’s arsenal.

6.     House Republicans have temporarily blocked legislation to feed nutritious meals to thousands more hungry children:

• Republicans used a procedural maneuver to try to amend the $4.5 billion bill, but House Democrats said the amendment, which would have required background checks for childcare workers, was an effort to kill the bill and delayed a final vote on the legislation rather than vote on the amendment.

 
December 2, 2010

1.     In a vain attempt to make good on one of President Obama’ssignature campaign promises, House Democrats voted to continue the lowered income tax rates enacted under President George W. Bush for families they described as middle class—the approval came even as the White House was in tense talks on a plan that would accede to Republican demands for an extension of the lower rates at all income levels:

• The vote for the so-called middle-class tax package was 234-188, with just three Republicans joining 231 Democrats in favor, while 20 Democrats and 168 Republicans were opposed—the bill has no chance of passage in the Senate, where even some Democrats say that the low rates should be extended for everyone, at least temporarily, given the continued weakness in the economy.

2.     The Senate has sent a stopgap-spending bill, needed to prevent a government shutdown, to President Obama:

• The bill passed by a voice vote, and it gives negotiators in the lame-duck Congress two more weeks to try to pass a bill funding the government for the rest of the budget year, which ends September 30th—if that fails, lawmakers would have to pass another stopgap measure to fund agencies’ budgets into next year, when Republicans will control the House.

3.     The House voted to send President Obama a bill that would enable more poor children to receive free meals at school, raise the nutritional quality of cafeteria fare, and reduce the junk food and sugary beverages found in school vending machines:

• The bill, which cleared the Senate in the summer, won House approval on a 264-157 vote with 17 Republicans breaking party ranks to join Democrats in favor of the bill, to which four Democrats were opposed—Oregon’s Blumenaur,Scrader, and Wu all voted yes, DeFazio did not vote, and Walden (Oregon’s only Republican) voted no.

 
December 3, 2010

1.     President Obama’s deficit commission failed to garner enough support to spur quick congressional action on its austere spending blueprint, but the plan will live on because a bipartisan majority on the panel embraced it:

• The plan, which was unveiled December 1st, elicited cat calls from advocates on the left—over cuts to Social Security and other programs—and from conservatives who opposed its estimated $1 trillion or so in higher tax revenues over the coming decade.

2.     The nation’s unemployment rate climbed to 9.8% in November, a seven-month high, as hiring slowed:

• Employers added only 39,000 jobs last month, and many economists had predicted the addition of 150,000 jobs—the report was a reminder that the economic recovery is proceeding more slowly and fitfully than many economists had expected, and it’s likely to push lawmakers to pass an extension of long-term unemployment benefits, which expired this week.

3.     BP is mounting a new challenge to the government’s estimates of how much oil flowed from the runaway well in the Gulf of Mexico, a move that could reduce by billions of dollars the federal pollution fines it faces for the largest offshore oil spill in history:

• Staffers working for the presidential oil spill commission said that BP’s lawyers are arguing that the government overstated the spill by 20 to 50%--under the Clean Water Act, BP, which owned and operated the well, faces fines of up to $1,100 for each barrel of oil spilt, and if BP were found to have committed gross or willful misconduct, the fines could be up to $4,300 per barrel, resulting in fines of $5.4 billion to $21.1 billion based on the government’s estimate of 206 million gallons.

4.     The top military leaders of the Air Force, Army, and Marine Corps warned Congress that repealing “don’t ask, don’t tell” now would hurt the military’s ability to fight the war in Afghanistan:

• The service chiefs put themselves squarely opposed to their civilian bosses on one of President Obama’s top legislative priorities—their testimony before the Senate Armed Services Commission was likely to bolster congressional opposition to the change.

5.     The U.S. and South Korea have reached an agreement on America’s largest trade pact in more than a decade, a highly coveted deal that the Obama administration hopes will boost U.S. exports and create tens of thousands of jobs at home:

• Lawmakers in both countries must still ratify the agreement—the deal has been widely supported by those in the private sector and by the U.S. Chamber of Commerce, which has criticized other administration policies as anti-business.

 
December 4, 2010

1.     Senate Republicans derailed legislation to extend expiring tax cuts at all but the highest income levels in a political showdown that paradoxically clears a path for a compromise with the White House on steps to boost the economy:

a.     In the Senate, a bill to enact Obama’s original position—to let cuts expire above incomes of $200,000 for individuals and $250,000 for couples—was blocked on a vote of 53-36, seven votes short of the 60 needed to advance—Republicans were unanimous in their opposition and were joined by Democratic Senators Russell Feingold of Wisconsin, JoeManchin of West Virginia, Ben Nelson of Nebraska, Jim Webb of Virginia, and Independent Senator Joseph Leiberman of Connecticut;

b.     The second measure would have let taxes rise on incomes over $1 million, and it was blocked on a vote of 53-37, also seven votes short of the 60 needed, and a slightly different lineup of Democrats sided with Republicans, including Senators Dick Durbin of Illinois, Tom Harkin of Iowa, Jay Rockefeller of West Virginia, and Feingold andLeiberman—the White House also opposed the second-measure bill;

c.      Senate Majority Leader Harry Reid (D-NV) said that he hoped for an agreement by the middle or end of next week on legislation that would combine an extension of tax cuts with a renewal of expiring jobless benefits for the long-term unemployed.

2.     Iran’s state TV reported that Iran’s intelligence minister had accused the U.N. nuclear watchdog agency of sending spies in the guise of inspectors to collect information about Iran’s nuclear activities:

• The U.S. and its allies suspect Iran’s nuclear work is aimed at producing weapons, but Iran says it only wants to enrich uranium to make fuel for power and not to process it to the higher levels needed to make weapons.

WEEK FORTY-SEVEN

December 5, 2010

1.      Iran said that it would begin to use domestically produced uranium concentrates, known as yellowcake, at its uranium facility, meaning it could assert that it would no longer need imports:

• a.     The announcement suggested Iran has no interest in halting its nuclear activities, and it came two days after U.S. Secretary of State Hillary Clinton directly challenged an Iranian delegation at a security forum in Bahrain to engage seriously at the talks;

• b.     Iran and major world powers will meet in Geneva on December 6^th for the first talks in 14 months, amid low expectations and public posturing on both sides on Iran’s nuclear ambitions—the two sides have not even agreed on an agenda for the meetings, and Iran publicly insists it has no interest in discussing the enrichment program that has led to four rounds of U.N. Security Council sanctions, and Western diplomats do not even know whether Iran is prepared to stay for the second planned day of talks.

 

December 6, 2010

1.     President Obama announced a tentative deal with congressional Republicans to extend the Bush-era tax cuts at all income levels for two years as part of a package that would also cover benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year, and take other steps to bolster the economy:

• Congressional Democrats pointedly noted that they had yet to agree to any deal, even as many Republicans signaled that they would go along—Obama said that he did not like some elements of the framework, but he had agreed to it to avoid having taxes increase for middle class Americans at the end of the year.

2.     Democrats controlling the House are proposing to freeze the Pentagon’s budget in a massive $1 trillion-plus measure that would wrap most of Congress’ unfinished budget business into a single catchall spending bill:

• The House is expected to pass the measure as early as this week—it combines the annual operating budgets for every federal department or agency since, in an unprecedented collapse of the federal budget process, none of the 12 annual spending bills has passed Congress.

3.     Stocks spent most of the day in a funk brought on by cautious comments about the economy from Federal Reserve Chairman Ben Bernanke, but hopes for a compromise on extending Bush-era tax cuts and unemployment benefits erased some of the losses:

• The Dow Jones industrial average ended down 20 points, breaking a three-day winning streak—stock indices traded in a tight range all day, and volume was light.

 

December 7, 2010

1.     The Treasury Department said that it had struck a deal to sell its remaining holdings in Citigroup common stock, about 2.4 billion shares—with the proceeds of the sale, priced at $4.35 a share, the government will have realized $57 billion on its bailout package for the big bank:

• Treasury said that with the pricing of the last 2.4 billion shares of common stock, it would receive $31.8 billion from the sale of common stock plus another $2.9 billion in interest and dividends—the Treasury said that it sold the last of its Citigroup stock to private investors, raising $10.5 billion.

2.     Three pharmaceutical companies agreed to pay more than $421 million to settle claims of defrauding Medicare and Medicaid—the latest in a string of large healthcare fraud settlements announced by the Justice Department:

• Authorities said that the drug companies charged one set of prices to doctors and pharmacies but reported another set of inflated figures that were used as benchmarks by government insurers reimbursing healthcare providers—since January 2009, healthcare settlements have accounted for more than $5 billion out of nine million recovered-fraud cases of all kinds brought by federal prosecutors, according to Tony West, assistant attorney general for the Justice Department’s civil division.

3.     Six world powers’ long-awaited meeting with Iran on its disputed nuclear program ended without visible progress, dealing a setback to an Obama administration strategy built on patient diplomacy and tough economic sanctions:

• Iran agreed to meet again next month but showed no interest in curbing its nuclear research—and it rebuffed a U.S. invitation to a formal bilateral meeting with U.S. officials.

4.     President Obama has abandoned attempts to persuade Israel to slow West Bank settlement activities, officials said, dealing a major blow to the resumption of Israeli-Palestinian peace talks and one of the President’s top foreign policy initiatives:

•  After months of trying to broker a formula under which Israel would impose a temporary settlement freeze in return for U.S. promises and incentives, two U.S. officials said that the administration has concluded that course won’t work.

5.     Job openings are at their highest level in two years, according to new government data—and a private-sector survey predicts the next few months will be the best time for hiring since the financial crisis erupted:

•  Overall, the number of advertised jobs has increased by about one million, or 44%, since the low point of July 2009, a month after the recession ended—but openings are still far below the 4.4 million advertised in December 2007, when the recession began.

6.     Lawmakers scrambling to stave off a scheduled 25% cut in doctors’ Medicare pay on January 1^st plan to tap financing for the healthcare overhaul to keep Medicare from breaking down:

• The $19 billion will help pay doctors at current rates for another year—it will come mostly from tightening the rules on tax credits in the healthcare law that make premiums more affordable, according to a deal reached by Senate leaders of both parties.

 

December 8, 2010

1.     The tax accord forged by President Obama and congressional leaders would give Americans a substantial income boost, regardless of their tax bracket—critics say it would increase the national debt and includes an unnecessary giveaway to the rich, while supporters say that the cuts are much needed fuel for the economy:

•           It is a broad package that would include much more than a two-year extension of the Bush tax cuts:
•        Unemployment benefits would be extended through the end of 2011;
•        Wage-earning Americans at all income levels would gain from the one-year payroll tax cut, from 6.2% of income to 4.2%;
•        Under this week’s deal, the estate tax would not end, nor would it revert back to 55%, but it would, instead, tax estates at a 35% rate, with a $5 million exemption;
•        The tax-cut package includes several breaks to encourage investment by corporations and small firms;
•        The extension of the Bush tax cuts would reduce taxes paid by low-income, middle-class, and high-income taxpayers.

2.     The House passed legislation to give hundreds of thousands of foreign-born youngsters brought to this country illegally a shot at legal status—a fleeting victory for an effort that appears doomed in the Senate:

• The so-called Dream Act, which passed the House 216-198, would give hundreds of thousands of young illegal immigrants brought to the U.S. before the age of 16, and who have been here for five years and graduated from high school or gained an equivalency degree, a chance to gain legal status if they joined the military or attended college—Oregon Democrats Blumenauer and DeFazio voted yes; Scrader (D), along with Walden (R), voted no; and Wu (D) did not vote.

3.     House and Senate Republicans succeeded in blocking a measure supported by the White House and Democrats that would have given a one-time check of $250 to senior citizens who are facing a second straight year in 2011 without a Social Security cost-of-living increase:

•  Democrats argued that the consumer price formula that determines cost-of-living increases is unfair to seniors facing high medical and housing costs, but Republicans said that the $14 billion price tag for the payment to 58 million Social Security beneficiaries was too high a cost in an age of mounting federal deficits.

4.     The top U.S. military officer criticized China for what he called its failure to intervene diplomatically with North Korea, as he met with his South Korean counterpart to discuss possible armed responses to further provocations like the North’s November shelling of a South Korean island:

•  Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, after meeting with Gen. Han Minkoo, chairman of the South Korean Chiefs, said that it was time for Beijing to step up to their responsibility and guide the North, “and indeed the whole region, to a better future.”

5.     A pilot-logging project in a federal forest near Canyonville could provide a model for protecting the environment while opening logging on 2.4 million acres of Oregon and California railroad lands, according to participants in a forest summit in Washington, D.C.

• The project was discussed during a day-long series of meetings and panel discussions between Interior Secretary Ken Salazar and environmentalists—the aim of the projects is to enhance habitat for the threatened spotted owl and for salmon while yielding logs for mills that have seen supply from federal forests cut by more than half over the past two decades.

  December 9, 2010

1.     Applications for unemployment benefits dropped last week to the second-lowest level this year, fresh evidence that companies are cutting fewer jobs:

•  First-time claims for jobless aid fell by 17,000 to a seasonally adjusted 421,000 in the week ending December 4^th, the Labor Department said—claims have fallen steadily in the past two months, and they have been below 450,000 for the past five weeks, raising hopes that companies will soon accelerate hiring.

2.     House Democrats, led by Oregon Rep. Peter DeFazio, emphatically rejected the tax deal that President Obama forged with Republicans, insisting that it’s fatally flawed and that no votes be taken on the package until it’s substantially changed:

•  The resolution passed by a near unanimous voice vote during an early-morning, closed meeting of House Democrats—while the vote is not binding and is not likely to kill the agreement, it poses a problem for a White House that hoped to move the deal quickly.

3.     The Senate blocked a bid to repeal the “don’t ask, don’t tell” policy toward gays in the military, a vote likely to doom the effort this year:

• The 57-40 vote to cut off a Republican-led filibuster fell three votes short of what the Senate rules require—Sen. Susan Collins (R-ME) joined 56 Democrats to vote yes, while 39 Republicans and Sen. Joe Manchin (D-WV) voted no.

4.     Senate Republicans derailed a bill to aid people who got sick after exposure to dust from the World Trade Center’s collapse in the September 11, 2001, attack:

• Supporters were three votes short of the 60 needed to proceed to debate and a final vote on the bill, which would have provided as much as $7.4 billion in healthcare and compensation to 9/11 responders and survivors—the bill failed on a test vote, 57-42.

5.     The Senate moved to delay a politically charged showdown vote on legislation carving out a path to legal status for foreign-born youths brought to this country illegally:

• Facing GOP objections, Democrats put aside the Dream Act and said that they would try again to advance it before year’s end—they are short of the 60 votes needed to do so, however, and critics in both parties quickly said they will not change their minds in the waning days of the Democrat-controlled Congress.

6.     According to estimates released by Zillow.com, an online real estate marketplace, homes in the U.S. will have lost $1.7 trillion in value in 2010 by the time the year is through:

• That’s 63% more than the $1 trillion in value that homes lost last year, the report said—fewer than one-fourth of the 129 markets tracked by Zillow showed a gain in home values in 2010, and they include Boston, where values gained $10.8 billion over the year, and San Diego, where values gained $10.2 billion.

7.     In an interview with NPR, President Obama said that despite a rebellion by many Democrats against his tax deal, it would pass because “nobody—Democrat or Republican—wants to see peoples’ pay checks smaller on January 1^st because Congress did not act:”

• The measure appears headed for Senate approval after negotiators added a few sweeteners to promote ethanol and other forms of alternative energy—there is no precise timetable for passage in the Senate, but a test vote was set for December 13^th that appears likely to demonstrate overwhelming support for the legislation.

 

December 10, 2010

1.     The U.S. trade deficit fell to its lowest level in nine months, as growing demand for American goods overseas and a falling dollar pushed exports to their highest level in more than two years:

•  Economists had forecast that the deficit would rise as the U.S. economy recovered, but the hope is that strong global demand will boost sales of exports and offset some of the decrease in imports.

2.     The Treasury Department says that the federal budget deficit rose to $150.4 billion last month, the largest November gap on record, and the government deficits are set to climb higher if Congress passes a tax-cut plan that’s estimated to cost $855 billion over two years:

•  Though the tax-cut package will further swell budget deficits, economists expect it to boost economic growth—Nariman Behravesh, chief economist at HIS Global Insight, said that he thinks the tax cuts would boost overall growth, as measured by the gross domestic product, to three percent in 2011, and that’s up from an HIS forecast before the tax deal of 2.4% growth.

3.     According to cables released by WikiLeaks last week, the U.S.:

• Provided Saudi Arabia with satellite imagery to help direct air strikes against Shiite rebels after earlier strikes resulted in civilian casualties;
• Collaborated with Algerian forces in 2006 and 2007 to capture militants allegedly bound for Iraq and, more recently, obtained permission to fly U.S. surveillance planes through Algerian airspace to hunt suspected al-Qaida members;
•  Killed a militant Islamist leader in a 2008 air strike in Somalia and, later, fielded requests from Somali officials to “take out” more suspected leaders.

WEEK FORTY-EIGHT

December 13, 2010

1.     A federal judge declared the Obama administration’s healthcare law unconstitutional, siding with Virginia’s attorney general in a dispute that both sides agree will ultimately be decided by the U.S. Supreme Court:

•  U.S. District Judge Henry E. Hudson is the first federal judge to strike down the law, which has been upheld by two others in Virginia and Michigan—several other lawsuits have been dismissed and still others are pending, including one filed in Florida by 20 other states.

2.     The Senate overwhelmingly advanced President Obama’s $858 billion tax-cut package in a test vote that heightened pressure on reluctant House Democrats and enhanced the likelihood of congressional approval of the compromise:

• The Senate could send the package to the House by mid-week and turn to remaining legislative priorities, including a nuclear arms reduction treaty with Russia, a repeal of the ban on openly gay military personnel, and a youth immigration bill—still, House Democrats have yet to relent in their opposition to the tax-cut deal between the White House and Republican leaders and are expected to demand changes to the bill’s estate tax provision, which liberal lawmakers charge was skewed to the wealthy.

 

December 14, 2010

1.     According to the National Intelligence Estimates on Afghanistan and Pakistan, which represent the collective view of more than a dozen intelligence agencies, much of Afghanistan remains at risk of falling to the Taliban, and Pakistan is unwilling to stop its secret support for militants who mount attacks from its tribal areas:

• The gloomy analysis of the situation in Afghanistan and Pakistan in the estimates contrasts with recent remarks by U.S. officials, including Defense Secretary Robert Gates, who said, after visiting the region last week, that he is convinced the war strategy is working.

2.     A broad range of 2009 census data found a mixed economic picture, with the poverty rate swinging wildly among U.S. counties from four percent to more than 40 percent as the nation grapples with a housing boom and bust—just three U.S. localities reported median household income of more than $100,000, down from seven in 2000:

• The information also showed that America’s neighborhoods took large strides toward racial integration in the last decade as African Americans and whites chose to live near each other at the highest levels in a century—still, segregation in many parts of the U.S. persisted, with Hispanics, in particular, turning away from whites.

3.     A strong start to the holiday season is raising confidence that the consumer is back and that 2011 could be a better year for the economy than expected:

• Retail sales are rising, boosted by the best month for department stores in two years, while inflation remains tame, and a survey of chief executives at America’s biggest companies suggests hiring will pick up in the next six months—the latest government data, combined with an emerging package of tax cuts and long-term unemployment benefits, are prompting economists to ramp up their forecasts for growth in the months ahead.

 

December 15, 2010

1.     The White House insisted that the implementation of President Obama’s landmark healthcare law will not be affected by a negative federal court ruling, and the Justice Department said that it would appeal:

• Obama administration officials noted that consultations with states on implementing the law were moving forward, and later this week, officials from all but a handful of states are expected to travel to Washington to meet with the Health and Human Services Department to discuss setting up the state-based insurance marketplace, called exchanges—central provisions of the law, including the exchanges and the requirement for everyone to be insured, do not take effect until 2014, and by then, the Supreme Court will likely have weighed in with the final verdict on the health law.

2.     The U.N. Security Council lifted sanctions that prohibit Iraq from pursuing a civilian nuclear program, in a symbolic step to restore the country to the international standing it held before Saddam Hussein’s 1990 invasion of Kuwait:

• Iraq’s constitution bans the country from acquiring weapons of mass destruction, and the country is a party to the main nuclear, chemical, biological, and missile treaties—the resolution, adopted unanimously, also lifted sanctions that banned Iraq from acquiring nuclear, chemical, or biological weapons and long-range missiles and returned control of Iraq’s oil and natural gas revenue to the government as of June 30, 2011, and terminated all remaining activities of the oil-for-food program which ran from 1996-2003 and helped ordinary Iraqis cope with sanctions.

3.     The Senate approved the $858 billion tax plan negotiated by the White House and Republican leaders, and House Democrats said that they expected to pass the bill December 16^th after a final, and seemingly futile, effort to change a provision that benefits wealthy estates:

• The Senate vote was 81-19 (both Oregon senators voted against the bill) as Democrats yielded in their long push to end the Bush-era lowered tax rates for high-income taxpayers—Republicans agreed to back a huge economic stimulus package, including an extension of jobless benefits for the long-term unemployed and a one-year payroll-tax cut for most workers, with the entire cost added to the federal deficit.

4.     For the second time this year, the House voted to dismantle the military’s “don’t ask, don’t tell” policy, giving the Senate a final shot, in the waning days of this Congress, at changing a law requiring thousands of uniformed gays to hide their sexual identity:

• The 250-175 House vote propels the issue to the Senate, where supporters of a repeal say that they have the votes, but perhaps not the time, to get the bill to the floor—for Oregon, all representatives, with the exception of Walden (Oregon’s lone Republican), voted yes.

5.     Senate Democrats secured the backing of a significant number of Republicans in a crucial test vote on a new U.S.-Russia arms control treaty—President Obama’s top foreign policy priority:

• The 66-32 vote to take up the treaty bolstered White House and Democratic assertions that they will have the two-thirds majority needed to ratify it before Congress adjourns for the holiday, even though a majority of Republicans prefer waiting until next year—nine Republicans, including Sen. John McCain of Arizona, supported moving ahead on the treaty now.

6.     President Obama has signed legislation to prevent advertisers from abruptly raising the volume on TV commercials, making them louder than regular programming:

• The new legislation goes into effect a year after the FCC adopts industry standards coordinating ad decibel levels to those of regular programming—the FCC has been receiving complaints since the 1960s about jarring sound bursts when commercials come on.

7.     The Obama administration filed a civil complaint against BP and eight other companies for the Gulf of Mexico oil spill earlier this year, setting up a lengthy, contentious, and complex legal battle to recoup a potential pot of billions of dollars in penalties and cleanup costs for the worst offshore disaster in U.S. history:

• The complaint, filed in U.S. District Court in New Orleans, alleges a series of violations of federal safety and operational regulations that began with the April 20^th explosion and fire on the Deepwater Horizon drilling rig in the Gulf and charged that the companies “failed to use the best available and safest drilling technology” in the Gulf waters.

8.     Hoping to mend fences with business leaders and spur more hiring, President Obama spent more than four hours with chief executives of 20 major companies in a “working meeting” that both sides said paved the way for better cooperation:

• The session was another step in Obama’s move toward the political center after big Republican gains in the midterm election—a year after referring to the Wall Street executives as “fat-cat bankers”, Obama is taking a less confrontational approach.

 

December 16, 2010

1.     President Obama has told Native American leaders that he is working hard to help them meet the challenges facing tribal nations:

• The president described his efforts on their behalf at a conference of tribal nations attended by more than 500 people representing 320-plus tribes—Obama says that his administration’s efforts will make “a huge difference.”

2.     According to his own government’s review, President Obama’s expansion of the war in Afghanistan has eroded the power of the al-Qaida terrorists who attacked America in 2001 and the resurgent Taliban militants who gave them cover—the findings insure that Obama will stay the course, with U.S. forces to remain at war through 2014:

• U.S. troops will begin to leave Afghanistan in July, according to the report, the same timeline that Obama promised one year ago and has consistently upheld in recent weeks—but the scope and pace of that withdrawal remains unclear, and both are expected to be modest, given the enormity of the security and governance challenges in Afghanistan.

3.     Congress approved the most significant tax bill in nearly a decade, overcoming liberal resistance to continue for two more years tax breaks that were enacted under President George W. Bush and to provide a fresh boost of federal support to the tepid economic recovery:

• The package angered many Democrats, who have long argued that the Bush tax cuts are skewed to benefit the wealthy, but their last-minute campaign to scale back the bill’s benefits for taxpayers at the highest income levels failed as the bill passed 277-148.

4.     Left for near dead last week, the effort to allow gays to serve openly in the military gained significant momentum with three more Republican senators agreeing to vote to end the “don’t ask, don’t tell” policy:

• The repeal measure, approved December 15^th by the House, was originally tucked into a broader military policy bill, which failed when Senate Democrats found themselves unable to break a Republican filibuster last week—returning quickly with a stand-alone bill seeking repeal, those supporters framed the new measure as a narrow civil rights matter and essentially challenged opponents to impede a vote.

5.     Buoyed by a string of hopeful government reports on layoffs, factory production, and consumer spending, economists are predicting that hiring, and even housing, will pick up, making 2011 a better year after all:

• The Labor Department reported that 3,000 fewer people applied for first-time unemployment benefits last week, and even the beleaguered housing market is looking a little better with housing starts increasing slightly in November after two months of decline.

 

December 17, 2011

1.     The House overwhelmingly passed a defense bill authorizing the Pentagon to spend nearly $160 billion on the wars in Iraq and Afghanistan this budget year without major restrictions on the conduct of operations—the Senate has yet to act upon the measure:

• The House also passed a stopgap measure to fund the government through December 21^st—without such a bill, government spending was set to expire at midnight December 18^th.

2.     The CIA yanked its top spy out of Pakistan after his cover was blown and his life threatened, and 54 suspected militants were killed in a U.S. drone missile attack in stark new signs of the troubled relationship between allies locked in a war on terrorist groups:

• The station chief’s outing has spurred questions about whether Pakistan’s spy service might have leaked the information, and, while CIA air strikes in Pakistan have eliminated terrorist leaders, they also have led to accusations that the strikes kill innocent civilians—the U.S. does not acknowledge the missile attacks, but there have been more than 100 this year, more than double last year’s total.

3.     A gauge of future economic activity rose in November at the fastest pace since March, suggesting the nation’s economy will strengthen early next year:

• The Conference Board said that its index of leading economic indicators went up 1.1% last month, the biggest increase since March—the index has risen for five straight months.

4.     The top U.S. military officer, while on a visit to Kabul, said, “the enemy is losing” in Afghanistan, but conceded that the Taliban will continue to have a sanctuary in Pakistan until that nation decides to fully tackle Islamist insurgents on its soil:

• Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, and other U.S. officials in the region, provided an upbeat assessment of the war effort while echoing President Obama’s statements on the importance of securing meaningful cooperation from Pakistan to build on what the admiral calls “fragile” security gains.

5.     Congress sent President Obama a bill that would significantly reduce exposures to lead in drinking water:

• The House approved the bill on a 226-109 vote (the Senate had approved it earlier on a voice vote)—the bill would set federal standards for levels of permissible lead in plumbing fixtures that carry drinking water, with allowable lead content going from the current federal level of as much as eight percent to 0.25% and the measure also limits the amount of lead that can leach from plumbing into drinking water.

 

December 18, 2010

1.     In a historic vote for gay rights, the Senate agreed to do away with the military’s 17-year ban on openly gay troops and sent President Obama legislation to overturn the Clinton-era policy known as “don’t ask, don’t tell”:

•  Obama is expected to sign the bill into law next week, although changes to military policy probably would not take effect for at least several months—repeal would mean that, for the first time in American history, gays would be openly accepted by the armed forces and could acknowledge their sexual orientation without fear of being kicked out (more than 13,500 service members have been dismissed under the 1993 law).

2.     Senate Republicans doomed an effort that would have given hundreds of thousands of young, illegal immigrants a path to legal status if they enrolled in college or joined the military:

• Sponsors of the Dream Act fell five votes short of the 60 needed to break through largely GOP opposition and win its enactment before Republicans take over the House and narrow Democrats’ majority in the Senate next month—three Republicans, Robert Bennett of Utah, Lisa Murkowski of Alaska, and Richard Lugar of Indiana, joined 50 Democrats and the Senate’s two Independents in voting for the bill, and five Democrats, Max Baucus and Jon Tester of Montana, Kay Hagan of North Carolina, Ben Nelson of Nebraska, and Mark Pryor of Arkansas, joined 36 Republicans in blocking it, meanwhile, not voting were Republican Sens. Jim Bunning of Kentucky, Orrin Hatch of Utah, and Judd Gregg of New Hampshire, as well as Democratic Sen. Joe Manchin of West Virginia.

WEEK FORTY-NINE

December 20, 2010

1.     South Korea’s military staged live-fire drills from an island just miles from rival North Korea’s shores, but Pyongyang said that it would not strike back despite earlier threats to retaliate for the maneuvers:

•  North Korea called the drills a “reckless military provocation” but said after they ended that it was holding its fire because Seoul had changed its firing zones—South Korean Joint Chiefs of Staff said that its artillery was fired in the same direction as during last month’s maneuvers: toward waters southwest of the island, not toward the North.

2.     Automakers and engine manufacturers are suing the EPA under a plan to allow the sale of gasoline containing 15 percent ethanol:

•  The Obama administration ruled in October that gas stations could start selling the corn-based ethanol blend for vehicles built since the 2007 model year—automakers say that they are worried the EPA decision would eventually lead to motorists unknowingly filling up their older cars and trucks with E15 and hurting their engines.

3.     After a months-long blockade, Senate Republicans have agreed to let at least 19 of President Obama’s noncontroversial judicial nominees win confirmation in the waning days of the congressional session in exchange for a commitment by Democrats not to seek votes on four others, according to officials familiar with the deal:

•  Among the four is Goodwin Liw, a law school dean seen as a potential future Supreme Court pick, whose nomination to the Ninth U.S. Circuit Court of Appeals in San Francisco has sparked strong criticism from Republicans—the agreement was worked out between Senate Majority Leader Harry Reid (D-NV) and his Republican counterpart, Sen. Mitch McConnell of Kentucky, with the knowledge of the White House, officials said.

4.     Congressional Republicans are coming under growing criticism for their opposition to a bill that would provide medical care for September 11^th attack responders and survivors, including police officers and fire fighters:

• Further eroding the GOP’s political position has been support for the legislation from prominent Republican leaders, including former New York Mayor Rudy Giuliani and former Arkansas Governor Mike Huckabee—New York’s senators now say they have the votes to overcome a Republican filibuster in a vote that may be held as early as December 21^st.

5.     The world’s biggest gas-guzzling nation has limits after all:

•  After seven decades of mostly uninterrupted growth, U.S. gasoline demand is at the start of a long-term decline—by 2030, Americans are projected to burn at least 20 percent less gasoline than today, experts say, even as millions of more cars clog the roads.

 

December 21, 2010

1.     The Census Bureau announced that the nation’s population on April 1^st was 308,745,538, up from 281.4 million a decade ago—the growth rate for the past decade was 9.7%, a slower pace than the 13.2% population increase from 1990 to 2000:

• a.     Only one state, Michigan, lost population during the past decade, while Nevada, with a 35 percent increase, was the fastest-growing state—the new numbers are a boon for Republicans, with Texas leading the way among GOP-leaning states that will gain seats at the Rust Belt’s expense;
• b.     Texas will gain four new House seats, Florida will gain two, and Arizona, Georgia, Nevada, South Carolina, Utah, and Washington will each gain one—Ohio and New York will lose two seats each, and Illinois, Iowa, Louisiana, Massachusetts, Michigan, Missouri, New Jersey, and Pennsylvania will each lose one;
• c.      Florida will now have 27 seats, as many U.S. House members as New York; California will still have 53 seats; and Texas will climb to 36—each House district represents an electoral vote in the presidential election process, meaning the political map for the 2012 election will tilt somewhat more Republican.

2.     Moving to restrain skyrocketing insurance premiums, the Obama administration is proposing new rules requiring insurers to justify increases of more than ten percent a year in 2011:

•  At the same time, administration officials are planning to step up federal review of premiums as state regulators cannot adequately protect consumers, a move cheered by many leading consumer advocates—the increased oversight comes as consumers nationwide struggle with rate hikes that have exceeded 30 percent in some places, even as insurance industry profits have swelled.

3.     The Obama administration is preparing an executive order that would formalize indefinite detention without trial for some detainees at the U.S. military prison at Guantanamo Bay, Cuba, but allow those detainees and their lawyers to challenge the basis for continued incarceration, U.S. officials said:

• The administration has long signaled that the use of prolonged detention, preferably at a facility in the U.S., was one element of its plan to close Guantanamo—an interagency task force found that 48 of the 174 detainees remaining at the facility would have to be held in what the administration calls prolonged detention.

4.     House Democrats scrambled to salvage legislation that would bar federal agencies from punishing employees who report corruption, waste, and mismanagement after Republicans linked the bill to the WikiLeaks’ scandal:

• In hopes of securing GOP support, Democrats offered to strip from the bill provisions that extend whistle-blowing protection to workers at U.S. intelligence agencies—seen as a major concession by backers of the bill—but even that concession may not be enough to sway House Republicans, who see no reason to rush the legislation before Congress adjourns for the year.

December 22, 2010

1.     The economy grew at a modest pace last summer, reflecting stronger spending by businesses to replenish stockpiles—more recent barometers suggest the economy is gaining momentum in the final months of the year:

• Many analysts predict the economy will have strengthened in the October-December quarter, and they think the economy is growing at a 3.5% pace or better mainly because consumers are spending more freely again—and expectations are even higher for 2011, but even if the analysts are right, the economy still will not be growing quickly enough to make a noticeable dent in unemployment.

2.     The Senate ratified the new arms control treaty with Russia, called New START, a vital step “because everything we do in the future, starting with halting the Iranian nuclear program, requires working with Russia and showing that we are serious about bringing our own nuclear stockpiles down,” according to William Perry, the secretary of defense during the Clinton administration and one of the four former Cold Warriors who helped formulate the “Global Zero” agenda that Obama has embraced:

• The list of former Cold Warriors who supported New START jumped out from the front pages of the Cold War and the George W. Bush administration: Henry Kissinger, George Schultz, and Condaleeza Rice, and President George H. W. Bush, who signed the START II treaty in 1993 with President Boris N. Yeltsin of Russia, issued a brief statement of support—both Oregon senators voted for the treaty, with Sen. Ron Wyden appearing on the Senate floor to cast his yes vote only two days after undergoing surgery for prostate cancer.

3.     After a last-minute compromise, Congress passed legislation to provide up to $4.2 billion in new aid to survivors of the 9/11 terrorist attack on the World Trade Center and to responders who became ill working in its ruins:

• The House passed the bill 206-60 (Oregon Democrats Blumenauer, DeFazio, Schrader, and Wu did not vote, and Walden, Oregon’s lone Republican, voted no) about two hours after the Senate cleared it on a voice vote—the package provides $1.5 billion to monitor the health of rescue and cleanup workers and to treat illnesses related to ground zero, and it reopens a victims’ compensation fund with $2.7 billion.

4.     The 111^th Congress made more law affecting more Americans than any since the “Great Society” legislation of the 1960s:

• a.     For the first time since President Theodore Roosevelt began the quest for a national healthcare system more than 100 years ago, the Democratic-led House and Senate took the biggest step toward achieving that goal by giving 32 million Americans access to insurance;
• b.     Congress rewrote the rules for Wall Street in the most comprehensive way since the Great Depression;
• c.      Congress spent more than $1.67 trillion to revive an economy on the verge of depression, including tax cuts for most Americans, jobs for more than three million Americans, construction of roads and bridges, and investment in alternative energy;
• d.     Congress ended an almost two-decade long ban against openly gay men and women serving in the military; and
• e.     It ratified a nuclear arms reduction treaty with Russia.

5.     In a move that many fear will provoke an already testy North Korea, Seoul officials announced the start of massive new live-fire drills involving troops, tanks, fighter jets, and anti-aircraft guns—as well as six naval ships and Lynx anti-submarine helicopters:

•  In Washington, a Pentagon spokesman, Col. Dave Lapan, termed the latest drills as “routine”, and White House spokesman Robert Gibbs discounted the possibility that the drills would lead to a North Korean retaliation.

6.     Government officials expressed alarm about what they described as Iran’s unexplained ban on fuel exports to Afghanistan, asserting that at least 1,400 loaded tankers were parked on Iran’s side of three border crossings:

• Iranian authorities started halting tankers bound for Afghanistan ten days ago, said Abdul Karim Baraheve, the governor of Nimroz province in western Afghanistan—“We really do not know the exact cause of the ban,” he said, and now both the Interior and Commerce ministers, as well as Pres. Hamid Karzais’ office, “are trying to sort out this problem with Iran.”

7.     Six banks have repaid government bailouts worth a combined $2.66 billion, the Treasury Department said:

•  Huntington Bancshares, First Horizon National Corp., Wintrust Financial Corp., Susquehanna Bancshares Inc., Heritage Financial Corp., and the Bank of Kentucky Financial Corp. have all paid back the taxpayer money they received in the aftermath of the 2008 financial crisis.

8.     The Obama administration filed a case against China before the World Trade Organization, accusing Beijing of providing unfair government subsidies to Chinese energy companies:

• Bringing allegations before the Geneva-based organization that overseas global trade adds tension to already strained U.S.–China relations—the two superpowers are fighting on a number of other trade fronts, from China’s currency regime to barriers China still maintains against U.S. beef imports.

 

December 23, 2010

1.     North and South Korea beat the drums of war, each threatening the other with immediate retaliation if attacked:

•  Seoul has staged days of military drills in a show of force meant to deter North Korea, including live-fire exercises earlier this week on a front-line island shelled by the North last month—angered by the exercises, North Korea threatened it would launch a “sacred” nuclear war if Seoul hit it and warned that even the smallest intrusion on its territory would bring a devastating response.

2.     The EPA announced a timetable to curtail greenhouse gas emissions from two major sources of the pollution linked by scientists to global warming—power plants and oil refineries:

• Under the new plan, the EPA would issue proposed standards for power plants in July 2011, going through a public comment and revision period and announcing final standards in May 2012—for the nation’s refineries, proposed standards would come out in December 2011 and final standards in November 2012.

WEEK FIFTY

December 27, 2010

1.     Revenue for the holiday season is on track to grow at its strongest rate since 2006, and total spending for November and December could exceed 2007 sales—the best season on record:

•  Spending has been strong since the start of the holiday shopping season in November, and it continued through Christmas Eve, a surprising sign of strength for the economy—consumer spending accounts for about 70 percent of U.S. economic activity.

2.     Oregon is getting about $15 million from the federal government as a bonus for making significant progress in enrolling uninsured children covered under Medicaid:

•  The U.S. Department of Health and Human Services announced that Oregon is receiving the biggest share of  $206 million distributed to 15 states—the money is part of a joint state and federal program.

 

December 28, 2010

1.     Consumer confidence slipped this month as more people worried that the job market is worsening—the latest survey from the Conference Board showed a decline even though people increased their holiday spending at the biggest rate in four years:

• The declines come even as other economic indicators suggest layoffs are slowing, businesses are buying more goods, and consumers are spending more money—economists have raised their growth forecasts for the final months of the year and for 2011.

2.     The Economic Policy Institute, a Washington think tank, says that American companies have created 1.4 million jobs overseas this year, compared with fewer than one million in the U.S.—the additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9%, according to Robert Scott, the Institute’s senior international economist:

•  The trend helps to explain why unemployment remains high in the U.S., edging up to 9.8% last month, even though companies are performing well—all but four percent of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

 

December 29, 2010

1.     A new Associated Press-GfK poll finds that baby boomers believe, by a ratio of two-to-one, that they will not be able to rely on the giant health insurance plan, Medicare, throughout their retirement—43 percent say that they do not expect to be able to depend on Medicare forever, while only 20 percent think their Medicare is secure, and the rest have mixed feelings:

•  Yet the survey also shows a surprising willingness among adults of all ages to sacrifice to preserve Medicare benefits that most Americans say that they deserve after years of paying taxes into the system at work—when the survey forced boomers in the poll to choose between raising the age of eligibility or cutting benefits, 59 percent said to raise the age and keep the benefits.

2.     In an unexpected diplomatic overture that could lead to the resumption of negotiations with North Korea, the president of South Korea said that he would endorse restarting the six-nation talks aimed at dismantling the North’s nuclear weapons’ program:

•  The participants in the six-nation talks are the two Koreas, China, the U.S., Japan, and Russia—hosted in the past by Beijing, the talks broke down in April 2009 when the North withdrew from the process and ejected inspectors from the International Atomic Energy Agency, the U.N. nuclear watchdog.

3.     Stocks finished higher as the market continued on pace for its best December in nearly 20 years—the Standard and Poor’s 500-stock index, the market measure used by most professional investors, has gained 6.7% this month:

•  Strong corporate profits have helped push stocks higher for much of 2010—Philip Dow, director of equity strategy at RBC Wealth Management in Minnesota, said, “As we enter into 2011, my hope and belief is that we move from recovery to expansion and a self-sustaining economy.”

 

December 30, 2010

1.     Despite a strong showing during the lame-duck session of Congress, President Obama closes out his second year in office with a slightly lower approval rating than at the end of 2009, according to a Gallup tracking poll:

•  The poll found that Obama’s approval rating was 47 percent, down slightly from his post-midterm-election position of 49 percent but close to his average of 46 percent during that period.

2.     A raft of data has reinforced evidence of the economy’s gradual stabilization:

• a.     Initial claims for regular state unemployment insurance benefits hit their lowest level since July 2008, according to a report by the Labor Department;

• b.     The National Association of Realtors said that pending home sales notched a 3.5% increase in November;

• c.      The Institute for Supply Management’s survey of purchasing managers showed the highest production levels since October 2004, new orders at their highest levels since 2005, the best employment levels in more than five years, and the highest prices paid since July 2008.

3.     For the first time in two years, the average price for gas in the U.S. is higher than $3 a gallon, taking money from drivers’ pockets and, experts worry, possibly hampering the economic rebound:

•   Prices are not expected to improve significantly anytime soon, and at least one analyst said that prices could hit $5 a gallon by the end of 2012—oil is trading above $90 a barrel for the first time since 2008, which experts say is driven by increased demand, a stagnant supply, speculative trading, a weak dollar, and an explosion of new automobiles in Asia.

 

December 31, 2010

1.    In a secret operation to secure nuclear material, the U.S. has helped Ukraine send to Russia enough uranium to build two atomic bombs, according to details provided to the Associated Press by the National Nuclear Safety Administration:

•  This week’s removal of more than 110 pounds of highly enriched uranium followed a pledge by Ukrainian President Viktor Yanukovych to get rid of all of his country’s highly enriched uranium by April 2012—Yanukovych agreed to give up the uranium in a deal announced at a nuclear security summit hosted by President Obama in April, and as an incentive, the U.S. is providing replacement low-enriched uranium that can be used for Ukraine’s research reactors.

 

WEEK FIFTY ONE

January 4, 2011

1.     President Obama is set to sign a $1.4 billion overhaul of the food safety system, giving Washington new power to increase inspections at food processing facilities and to force companies to recall tainted products

• Congress passed the bill at the end of last year to respond to several serious outbreaks of E.coli and salmonella poisonings in peanuts, eggs, and produce in the past few years—the law will be the first major overhaul of the U.S. food safety system since the 1930s.
  

2.     According to two senior U.S. officials, the top Pentagon job overseeing the secret official operations war on terrorist groups has been offered to former U.S. counter-terrorism ambassador, Michael Sheehan:

• Increasingly, the sensitive operations Sheehan would oversee are performed by personnel from a number of different agencies, including the U.S. military’s elite Joint Official Operations Command, the CIA , and other members of the defense, intelligence, and law enforcement community—official operations personnel assigned to JSOC include Navy SEALS, U.S. Army Rangers, and Green Berets.

3.     As they prepare to take power, Republican leaders are scaling back the $100 billion figure they touted as a campaign promise by as much as half, aides say, because the current fiscal year, which began October 1^st, will be nearly half over before spending cuts could become law:

a.     Now aides say that the $100 billion figure was hypothetical and that the objective is to get annual spending for programs other than those for the military, veterans, and domestic security back to the levels of 2008, before Democrats approved stimulus spending to end the recession;

                b.     Yet . . .

• “A Pledge to America ”, the manifesto House Republicans published in September, included the promise: “We will roll back government spending to pre-stimulus, pre-bailout levels, saving us at least $100 billion in the first year alone;”
• The website for Republican John Boehner, incoming House speaker, included a link to his national radio address on the Saturday before the midterm elections, in which he said, “We are ready to cut spending to pre-stimulus, pre-election levels, saving roughly $100 billion almost immediately;”
• Rep. Paul Ryan, the Wisconsin Republican who will become the chairman of the House Budget Committee, said in December that the goal was to cut “a good $100 billion”.

4.     Republicans took control of the House and installed John Boehner of Ohio as the new speaker before pushing through an overhaul of the House rules intended to ease their drive to dismantle the new healthcare law, cut federal spending, and provide the tax cuts they see as a way to jumpstart the economy:

• In order to reverse what they say is a congressional process tilted toward spending increases, the Republican majority in the House—under strong Democratic objections—approved rules that require spending increases to be directly offset with cuts elsewhere, but the rules would allow future tax cuts to be enacted without offset spending reductions and would permit repeal of the healthcare legislation, which was estimated to save the government more than $140 billion over ten years, without any requirement that those revenue losses be made up elsewhere.

5.     A White House official said that, reversing a potentially controversial decision, the Obama administration will drop references to end-of-life counseling from the ground rules for Medicare’s new annual checkup:

• The decision is not likely to have much impact on patients and doctors already discussing options for care in the last stages of life—Medicare coverage for voluntary end-of-life planning was part of the original House version of the overhaul legislation in 2009, but it was dropped after Sarah Palin and other Republicans raised the specter of “death panels” deciding the fate of vulnerable seniors.

6.     The ADP National Employment Report showed that private-sector employment rose by 297,000 in December—the highest monthly gain since the report’s inception in 2000 and double or triple what was expected by mainstream economists:

•  Job gains that high are what’s needed to knock down the stubbornly high unemployment rate, which has been stuck at just under ten percent for more than a year—also, an index of purchasing managers released a report indicating the service sector expanded in December for the 12^th straight month and at an accelerated pace.

 

January 6, 2011

1.     The nonpartisan Congressional Budget Office has concluded, undercutting GOP efforts to seize the mantle of fiscal responsibility, that the Republican plan to repeal the healthcare law would drive up federal deficits by $230 billion by 2021 and leave 32 million more Americans without health coverage:

•  And although health insurance premiums would be lower in some cases, the analysts estimated that without the law, consumers would get skimpier coverage and many would pay more because they would lose insurance subsidies included in the new law—House Republican leaders quickly dismissed the new projection from the CBO as unrealistic.

2.     President Obama has recast his White House team for the second half of his term, giving top jobs to two Clinton-era veterans in a signal to business leaders and independent voters that he is resolved to steer a more centrist course after two years of intense partisan clashes:

• Obama announced that he is installing William Daley as his new chief of staff, and he will name Gene Sperling as his chief economic advisor to replace Lawrence Summers who is returning to Harvard University.

3.     For the first time in more than a decade defined by costly wars in Iraq and Afghanistan, the Pentagon announced plans to freeze its ballooning budget, forcing the military to shrink the Army and Marines and increase healthcare premiums for troops and their families:

• The plan is aimed at helping the nation whittle away at its massive deficit, but the proposal, which requires $78 billion in spending cuts and relies on an additional $100 billion in cost-saving moves to cover urgent requirements, is tied to two assumptions: that the war in Afghanistan will end on time and that Congress will agree to plans to cancel popular job-making programs and charge military families more for healthcare—the last time the Pentagon’s budget went down was in 1998.

4.     The federal government could run out of money as soon as March 31^st, the Treasury Department warned, if the Republican-led House of Representatives resists allowing federal debt to rise further without first ensuring serious cuts in government spending:

• Treasury Secretary Timothy Geithner warned that holding the debt ceiling hostage to spending showdowns is dangerous—failure to raise the debt ceiling could create a financial panic worse than the devastating chaos of 2008 and 2009, Geithner warned.
  

5.     The Defense and Homeland Security departments delivered some year-end good news to a pair of Oregon companies, awarding them federal contracts worth up to $124.6 million to provide products and services:

a.     The biggest chunk of the work is to Wilsonville-based Flir Systems to provide surveillance equipment and technology to U.S. Customs and Border Protection to help stiffen the border between Mexico and the U.S.—also this week, the Defense Department said that it has awarded Flir a $15.9 million, one-year contract to provide 36 night-vision systems and training classes to the Army Aviation and Missile Command, and the Defense Department said that work will be performed in Wilsonville;

b.     In Bend, n-Link Corporation, an information technology contractor, founded and run by Sandra Green, entered the second option year of a five-year, $34 million contract to provide computer network systems and services to military installations worldwide—the current year’s contract is valued at $6.75 million, some of which will go to n-Link contractors.

6.     The number of people applying for unemployment benefits over the past month has reached its lowest point since July 2008, raising hopes that hiring is about to accelerate:

• The drop in applications is the latest sign that the economy is improving, and economists expect the employment report for December to show a solid gain in jobs.

 

January 7, 2011

1.     House Republicans wasted no time in trying to block the Obama administration from acting to stem global warming:

a.     On their second day in power, GOP lawmakers introduced several bills that would hamstring the EPA from moving forward with regulations to reduce heat-trapping pollution from factories and other sources that they say contribute to global warming—the bills are part of an effort by House Republicans to reverse what they consider to be job-killing policies of the administration;

b.     A 2007 Supreme Court decision said that the EPA had the authority to regulate carbon dioxide and other global warming gases under the statute—the top Democrat on environmental issues in the Senate, Sen. Barbara Boxer of California, said that she would use every tool to block the Republicans’ efforts and to ensure that the EPA was allowed to follow the law.

2.     As America’s top defense official visits China next week, its growing military capabilities are redrawing the security landscape in Asia, putting the country with the largest standing army on a potential collision course with the U.S.:

•  U.S. Defense Secretary Robert Gates, who arrives late January 9^th for a five-day visit, will formally restore military-to-military exchanges, cut off a year ago by Beijing over U.S. arms’ sales to Taiwan—his visit makes the first to China by a serving defense secretary since William Cohen’s in 2000.

3.     House Republicans voted to begin the process of repealing President Obama’s healthcare law in an effort to deliver on a top campaign promise to conservative voters who propelled them into office, but GOP leaders appeared to skirt another pledge, for a more open legislative process—Republicans said the American public is so overwhelmingly against the health law that it needs to be abolished without giving Democrats an opportunity to offer amendments to a repeal measure:

•  Polls show voters have mixed views of the healthcare law, and any repeal bill must also pass the Senate, which is controlled by Democrats—that makes the upcoming House vote primarily an exercise in messaging for the new GOP majority and a nod to the tea party activists who aided their rise to power.

4.     President Obama reluctantly signed into law a military funding bill that limits him from transferring terrorism detainees from Guantanamo Bay, Cuba, to the U.S. or foreign countries, but he signaled that he may get past the restrictions by using non-Pentagon resources to get the job done:

• Even as he reserved that right, it was not immediately clear to what degree the president may still capitulate to political pressure between now and his 2012 re-election campaign to keep detainees off U.S. soil and out of civilian courts.

5.     The dominant trend in the government’s December report on employment show that the economy is continuing to recover slowly and to add jobs slowly, and analysts agree that 2011 looks more promising than 2010:

• But analysts think that as the recovery gains traction, the unemployment rate is likely to rise anew, as jobless workers who had given up looking plunge anew into the job market and thus get counted as looking for work.

 

WEEK FIFTY TWO

January 10, 2011

1.     The U.S. government is counting on a U.S. contractor with a record of cost overruns and missed deadlines to handle a critical component of Gen. David Petraeus’ plan to stabilize volatile southern Afghanistan: to quickly deliver more electricity to the power-starved region:

• The U.S. Agency for International Development awarded Black & Veatch Corporation of Overland Park, Kansas, a no-bid contract worth $26.6 million last month to pump more power into Kandahar and Helmand provinces—officials say that expanding electrical access will allow businesses to open and improve the quality of life for Afghans, undercutting the influence of the Taliban-led insurgency.

2.     U.S. Secretary of State Hillary Clinton said that sanctions have slowed Iran’s efforts to develop atomic weapons, and she accused Iran of trying to foment new conflict in the Middle East to distract attention from its nuclear ambitions:

• On the first stop of a three-nation tour of the Persian Gulf, Clinton said that the Arab world in particular should act to sharpen enforcement of the sanctions and reject attempts to stoke mid-east tensions.

3.     The Ford Motor Company said that it will hire more than 7,000 workers in the next two years—the announcement came during a presentation at the North American International Auto Show in Detroit:

• The new hires would increase Ford’s hourly payroll in the U.S. by about 15 percent, but it would represent only a small fraction of the jobs eliminated in recent years—the company has about 42,000 workers at its American plants, down from 103,000 a decade ago.

4.     The Federal Reserve is paying a record $78.4 billion in earnings to the U.S. government, reflecting gains from the central bank’s unconventional efforts to lift the economy:

• The payment to the Treasury Department for 2010 is the largest since the Fed began operating in 1914, although critics in Congress had expressed concerns that the Fed’s purchases could put taxpayers at risk by reducing the amount turned over to Treasury—the Fed is not funded by Congress.

 

January 11, 2011

1.     Vice President Joe Biden said that America will not cut and run in 2014 when the U.S.-led military coalition plans to hand over control of security to Afghan forces:

• Speaking after a meeting with Afghan President Hamid Karzai, Biden said that training and aid will continue even after responsibility for security is handed over—if “the Afghan people want it, we will not leave in 2014,” the vice president said a day after arriving in the country for a surprise visit.

2.     Just three days after a bullet passed through Rep. Gabrielle Gifford’s brain and one day before the president was scheduled to go to Tucson to address the shooting rampage in which she was wounded, doctors said that Gifford’s chances of survival were certain—what her recovery will look like, however, and how long it will take remain unclear:

•  President Obama will delivery a speech at Tucson the evening of January 12^th at a memorial service for the victims of the attack—his aides said that he would avoid the debate about whether Arizona’s political climate might have played a role in the tragedy, but, instead, he will call for unity among Americans, while trying to hold up the lives of the victims, including their service to government, as an example to all Americans.

3.     The panel investigating the 2010 oil spill in the Gulf of Mexico recommended that Congress approve substantial new spending and sweeping new regulations for offshore oil operations at a time when the appetite for both is low:

• Releasing its final report, the commission found that the Deepwater Horizon explosion and subsequent oil spill arose from a preventable series of corporate and regulatory failures—it warned that unless industry practices and government regulation improved, another such accident was inevitable.

 

January 12, 2011

1.     Speaking at a memorial at the University of Arizona in Tucson, following the shooting rampage that left six people dead and 13 others wounded, President Obama implored Americans to honor those slain and injured by becoming better people, telling a polarized citizenry that it’s time to talk with each other “in a way that helps, not in a way that wounds:”

•  As finger pointing emerged in Washington and beyond over whether harsh political rhetoric played a role in creating motivation for the attack, Obama sought to calm the rhetoric—“Bad things happen,” he said, “and we must guard against simple explanations in the aftermath.”

2.     Sarah Palin lashed out at her critics, saying it was a “blood libel” when some in the media and on the left said that she had contributed to an atmosphere of violence that may have pushed an Arizona gunman into shooting Rep. Gabrielle Gifford:

a.     “If you do not like a person’s vision for the country, you are free to debate that vision . . . but especially within hours of a tragedy unfolding, journalists and pundits should not manufacture a blood libel that serves only to invite the very hatred and violence they purport to condemn,” she said in a video posted to the Internet;

b.     In using the term, “blood libel”, though, Palin inadvertently created more controversy—the term refers to the false accusation that Jews murdered Christian babies for their blood, and Palin’s use of it drew instant criticism from Jewish groups.

3.     The U.S. economy ended last year on an encouraging note, with all parts of the country showing improvement—factories produced more, shoppers spent more, and companies hired more, pointing to a stronger economy in 2011:

• That is the picture that emerged from the Federal Reserve’s survey of economic conditions, but risks still loom—the survey said that declining home prices and millions of foreclosures are depressing housing markets around the country, and companies are paying more for materials, including oil, food products, steel, textiles, and chemicals that competitive pressure have currently prevented them from passing on to customers in the form of higher prices.

 

January 13, 2011

1.     Vice President Joe Biden told officials in Baghdad that the U.S. remained committed to the agreement calling for all troops to leave Iraq by the end of the year:

• Biden was visiting Baghdad for the first time since Iraq seated its new government and for the seventh time as President Obama’s point man on Iraq—even with his visit this week, much remains unresolved about Iraq’s new government and the factor of U.S. involvement there.

2.     Rising wholesale prices for food and energy are putting pressure on manufacturers and retailers to pass higher costs on to customers, a trend that could raise inflation in the U.S. and slow economies in Asia and Latin America:

• Some economists expect prices to rise faster this year than last, although not fast enough to cause policy changes at the Federal Reserve, which has the power to raise interest rates to keep inflation in check—and though the higher prices could be a drag on consumer spending, economists say that they should not derail the overall economy.

3.     The U.S. trade deficit unexpectedly shrank in November as growing global demand and a weaker dollar helped boost overseas sales of everything from aircraft to cotton:

•  A ten percent drop in the dollar since March 2009 is making American goods more competitive abroad, lifting demand at companies like G.E. and Boeing, and propelling the factory-led economic recovery.

4.     Two major credit-rating agencies warned that the U.S. might tarnish its Triple-A credit rate if its national debt keeps growing:

• Many economists say that the reckoning, if it comes, is still years or even decades away—for other critics, however, the dangers seem more imminent, reflecting a fear the U.S. could lose the confidence of our foreign investors in as little as two years.

 

January 14, 2011

1.     The Department of Homeland Security cancelled a project to build a technology-based “virtual fence” across the U.S.-Mexico border, saying that the effort—on which $1 billion has already been spent—was ineffective and too costly:

• Homeland Security Secretary Janet Napolitano’s decision brought a long-expected close to the five-year-old project, known as SB1-Net, originally estimated to cost more than $7 billion to cover the 2,000-mile length of the border and the object of more than a dozen scathing reports by the Government Accountability Office—in a pilot program in Arizona, it cost about $1 billion to build the system across 53 miles of the state’s border.

2.     The Obama administration moved to make it easier for U.S. schools, churches, and cultural groups to visit Cuba and to boost the U.S. dollars that can be sent there to support the island’s growing private economy:

• The changes restore, and increase to $2,000 annually, the amount of money that any American can send to any Cuban—more than the level it was before former President George W. Bush tightened sanctions against Cuba.

3.     The government will wind down its largest and most complex rescue from the 2008 financial crisis, a $182 billion package to save insurer AIG, by selling stock over the next two years—the plan could net taxpayers billions in profits:

• AIG paid its outstanding $21 billion balance to the New York branch of the Federal Reserve and converted stock owned by the Treasury Department into more than 1.6 billion shares of common stock that can be sold in the open market.