WASHINGTON — Finally, a lot fewer workers are hearing the dreaded words, "You’re fired.”
In the clearest sign yet that the recession is ending, layoffs slowed dramatically in July, the jobless rate dipped for the first time in 15 months and workers’ hours and pay edged upward.
Those are the kinds of figures that could give Americans the psychological boost necessary for recovery to take root after the worst recession since World War II.
A net total of 247,000 jobs were lost last month, the fewest in a year and a drastic improvement from the 443,000 jobs that vanished in June.
The Labor Department’s report Friday showed that the unemployment rate dropped a notch to 9.4 percent in July, from 9.5 percent the previous month. Together with slight increases in the average workweek and wages, the new figures suggested the economy is in a transition from recession to recovery.
"The worst may be behind us,” President Barack Obama declared. "Today, we’re pointed in the right direction.”
Still, the job market remains shaky.
A quarter-million lost jobs are a far cry from the employment growth needed to put the national economy on solid footing.
When the economy is healthy, employers need to add a net total of about 125,000 jobs a month to keep the unemployment rate stable. And to push the jobless rate down to a more normal 5 percent, it would take stronger growth — at least 200,000 new jobs a month. Economists say it might take until 2013 to drive down the unemployment rate to 5 percent.
Yet the improvements in July could give some businesses the confidence to hire again — or at least not to lay off more workers. And consumers, less anxious about losing jobs, could respond by spending more freely.
"If people and companies think the worst is behind them — and it probably is — their confidence will be restored,” said Richard Yamarone, economist at Argus Research. "That confidence can feed on itself.”
On Wall Street, the report propelled stocks higher. The Dow Jones industrial average jumped 114 points, and other stock averages also gained.
Analysts had been forecasting bleaker employment figures: more job losses and an increase in the unemployment rate to 9.6 percent.
The White House said the president still expects the rate to hit 10 percent this year. So do many economists and the Federal Reserve.
The worst may be behind us.”
President Barack Obama
by the associated press
AdBrite
AdBrite
Showing posts with label Barack Obama. Show all posts
Showing posts with label Barack Obama. Show all posts
Saturday, August 8, 2009
Wednesday, July 8, 2009
Obama’s Russian visit left questions
MOSCOW — For two days, President Barack Obama pressed the reset button with Russia.
The results: He got the expected agreement on deep cuts in nuclear arsenals, but he is leaving Moscow with few assurances of Kremlin help in solving other issues key to his foreign policy agenda.
He also is leaving behind a spark he hopes will blaze to life and thaw U.S. relations with a former superpower with a chip on its shoulder. But his two days of summitry produced no breakthroughs.
Throughout the meetings and speeches, Obama stayed on message: The United States and Russia have too many overlapping interests to move through the coming decades at odds. The time for confrontational Cold War thinking is well-past. America wants Russia to be "strong, peaceful and prosperous.”
Issues left on table
On several issues key to Obama foreign policy, the Russians were unbending, at least for now.
While they agreed to join the U.S. in reassessing the threat from Iran’s nuclear ambitions, there was no hoped-for Kremlin offer of direct intervention with Tehran.
On the flash point issue of Georgia, where the Russian army crushed the tiny country’s military a year ago, the Kremlin rejected U.S. complaints about Russian insistence that breakaway Abkhazia and South Ossetia remain free of Georgian control.
Nor did there appear to have been progress in the dispute over arms control.
The two sides did agree to far greater cooperation on Afghanistan, where Obama is bolstering U.S. troop strength in the fight against militants.
Negotiators also prepared a series of side agreements and established a commission nominally headed by Obama and Russian President Dmitry Medvedev. It is designed to quicken the pace of U.S.-Russian engagement on issues important to both countries.
by the associated press
The results: He got the expected agreement on deep cuts in nuclear arsenals, but he is leaving Moscow with few assurances of Kremlin help in solving other issues key to his foreign policy agenda.
He also is leaving behind a spark he hopes will blaze to life and thaw U.S. relations with a former superpower with a chip on its shoulder. But his two days of summitry produced no breakthroughs.
Throughout the meetings and speeches, Obama stayed on message: The United States and Russia have too many overlapping interests to move through the coming decades at odds. The time for confrontational Cold War thinking is well-past. America wants Russia to be "strong, peaceful and prosperous.”
Issues left on table
On several issues key to Obama foreign policy, the Russians were unbending, at least for now.
While they agreed to join the U.S. in reassessing the threat from Iran’s nuclear ambitions, there was no hoped-for Kremlin offer of direct intervention with Tehran.
On the flash point issue of Georgia, where the Russian army crushed the tiny country’s military a year ago, the Kremlin rejected U.S. complaints about Russian insistence that breakaway Abkhazia and South Ossetia remain free of Georgian control.
Nor did there appear to have been progress in the dispute over arms control.
The two sides did agree to far greater cooperation on Afghanistan, where Obama is bolstering U.S. troop strength in the fight against militants.
Negotiators also prepared a series of side agreements and established a commission nominally headed by Obama and Russian President Dmitry Medvedev. It is designed to quicken the pace of U.S.-Russian engagement on issues important to both countries.
by the associated press
Thursday, July 2, 2009
President Obama , urges movement on health care reform
WASHINGTON — With lawmakers on Capitol Hill struggling to reconcile clashing views on overhauling the nation’s health care system, President Obama made a new appeal to the public not to let Congress put off action on his top legislative priority.
"In order to make it happen, I’m going to need ordinary Americans to stand up and say, now’s the time,” Obama said Wednesday at a town hall-style forum at Northern Virginia Community College in the Washington suburb of Annandale, Va. "If Congress thinks that the American people don’t want to see change, frankly the lobbyists and the special interests will end up winning the day.” The president said lawmakers are often tempted to drop politically sensitive issues.
"For those who say, ‘Well, you know what, this is something that is very complicated, so we shouldn’t rush into it,’ that’s what happens in Congress all the time,” Obama said. "They have hearings, they write white papers, and then suddenly the lobbyists and the special interests start going at it. And next thing you know, another 10 years has gone by, and we still haven’t done anything.” Wednesday’s forum was the third in three weeks devoted to health care.
Debate over health care legislation is expected to move to center stage next week when lawmakers return to Washington from their July 4 recess.
But leading Republicans, including Senate Minority Leader Mitch McConnell, R-Ky., have begun to call for slower action. "We could target the things that are askew in the system and fix them without this kind of massive overhaul,” he recently said on Fox News Sunday.
Obama has said he hopes to sign a health care bill in the fall. Wednesday, he implored his audience not to let that timeline slip.
by the associated press
"In order to make it happen, I’m going to need ordinary Americans to stand up and say, now’s the time,” Obama said Wednesday at a town hall-style forum at Northern Virginia Community College in the Washington suburb of Annandale, Va. "If Congress thinks that the American people don’t want to see change, frankly the lobbyists and the special interests will end up winning the day.” The president said lawmakers are often tempted to drop politically sensitive issues.
"For those who say, ‘Well, you know what, this is something that is very complicated, so we shouldn’t rush into it,’ that’s what happens in Congress all the time,” Obama said. "They have hearings, they write white papers, and then suddenly the lobbyists and the special interests start going at it. And next thing you know, another 10 years has gone by, and we still haven’t done anything.” Wednesday’s forum was the third in three weeks devoted to health care.
Debate over health care legislation is expected to move to center stage next week when lawmakers return to Washington from their July 4 recess.
But leading Republicans, including Senate Minority Leader Mitch McConnell, R-Ky., have begun to call for slower action. "We could target the things that are askew in the system and fix them without this kind of massive overhaul,” he recently said on Fox News Sunday.
Obama has said he hopes to sign a health care bill in the fall. Wednesday, he implored his audience not to let that timeline slip.
by the associated press
Friday, June 26, 2009
Obama says , Washington can’t miss opportunity
WASHINGTON — President Barack Obama pushed urgently Thursday for passage of legislation to confront global warming, billing it as a job-creating machine rather than the costly "job killer” Republicans denounced.
Obama said Washington must not miss the opportunity to work on cleaning the air, creating new "green” energy jobs and moving the nation away from its reliance on fossil fuels such as oil, coal and natural gas.
The bipartisan Congressional Budget Office said while households on average would spend $770 more a year on energy in 2020, their annual net cost is likely to be $175 because of energy efficiency or money flowing back in form of direct relief or indirect allowances to businesses and local governments. It said poor households would save $40 a year.
A separate analysis by the Environmental Protection Agency said consumer utility bills would be 7 percent lower by 2020 because less energy will be used as a result of efficiency and other provisions in the bill. It estimated the bill’s impact on household energy costs at between $80 and $111 a year.
Under the bill, at least 85 percent of the allowances would be given away, especially to energy intensive sectors of the economy.
by the associated press
Obama said Washington must not miss the opportunity to work on cleaning the air, creating new "green” energy jobs and moving the nation away from its reliance on fossil fuels such as oil, coal and natural gas.
The bipartisan Congressional Budget Office said while households on average would spend $770 more a year on energy in 2020, their annual net cost is likely to be $175 because of energy efficiency or money flowing back in form of direct relief or indirect allowances to businesses and local governments. It said poor households would save $40 a year.
A separate analysis by the Environmental Protection Agency said consumer utility bills would be 7 percent lower by 2020 because less energy will be used as a result of efficiency and other provisions in the bill. It estimated the bill’s impact on household energy costs at between $80 and $111 a year.
Under the bill, at least 85 percent of the allowances would be given away, especially to energy intensive sectors of the economy.
by the associated press
Thursday, June 18, 2009
Obama's new financial system rules
WASHINGTON — President Barack Obama proposed sweeping new "rules of the road” for the nation’s financial system Wednesday, casting the changes as a critically important response to the economic crisis and the greatest regulatory transformation since the Great Depression.
Obama blamed the financial crisis on "a culture of irresponsibility” that he said had taken root from Wall Street to Washington to Main Street, and he said regulations crafted to deal with the depression of the 1930s had been "overwhelmed by the speed, scope and sophistication of a 21st century global economy.”
The Obama plan would give new powers to the Federal Reserve to oversee the entire financial system and would also create a new consumer protection agency to guard against credit and other abuses that played a big role in the current crisis.
With Obama’s proposal, the central bank hopefully will be able deal with the kinds of problems that were allowed to build to such an extent that they ended up overwhelming the system last year, resulting in the collapse of some of America’s largest financial institutions.
Two lawmakers whose committees will play a major role said they would move quickly.
"There will be maybe some debate … but I think we’re all seeking the same results,” said Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee.
He has advocated an alternative plan to strip the Federal Reserve of its regulatory role entirely and create a new consolidated bank regulator who would assume the roles that the Fed and Federal Deposit Insurance Corp. now play in helping regulate state-chartered banks.
"There’s not a lot of confidence in the Fed at this juncture,” Dodd said.
No other options
Asked about Dodd’s criticism of the Federal Reserve, Treasury Secretary Timothy Geithner told reporters at a briefing that the administration had looked at a range of alternatives to giving the Fed expanded powers as a systemic risk regulator and had come to the conclusion that "we do not believe there is a plausible alternative.”
Lawrence Summers, head of the president’s National Economic Council, said that those who believed this power should not reside with the Fed had the responsibility to make the case for some other agency.
The Federal Reserve’s expanded authority and the rest of the new rules would reach into currently unregulated regions of the financial markets such as hedge funds and exotic instruments like credit default swaps.
The plan, laid out in an 88-page white paper, was the result of extensive consultations with members of Congress, regulators and industry groups and represented a compromise from bolder ideas that the administration had examined but ended up abandoning because of heavy opposition.
The regulatory overhaul would eliminate only one agency, the Office of Thrift Supervision, generally considered a weak link among current banking regulators. The beleaguered OTS oversaw the American International Group, whose business insuring exotic securities blew up last fall, prompting a $182 billion federal bailout. OTS also oversaw other high-profile blowups like Countrywide Financial Corp., IndyMac Bank and Washington Mutual Inc.
by the associated press
Obama blamed the financial crisis on "a culture of irresponsibility” that he said had taken root from Wall Street to Washington to Main Street, and he said regulations crafted to deal with the depression of the 1930s had been "overwhelmed by the speed, scope and sophistication of a 21st century global economy.”
The Obama plan would give new powers to the Federal Reserve to oversee the entire financial system and would also create a new consumer protection agency to guard against credit and other abuses that played a big role in the current crisis.
With Obama’s proposal, the central bank hopefully will be able deal with the kinds of problems that were allowed to build to such an extent that they ended up overwhelming the system last year, resulting in the collapse of some of America’s largest financial institutions.
Two lawmakers whose committees will play a major role said they would move quickly.
"There will be maybe some debate … but I think we’re all seeking the same results,” said Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee.
He has advocated an alternative plan to strip the Federal Reserve of its regulatory role entirely and create a new consolidated bank regulator who would assume the roles that the Fed and Federal Deposit Insurance Corp. now play in helping regulate state-chartered banks.
"There’s not a lot of confidence in the Fed at this juncture,” Dodd said.
No other options
Asked about Dodd’s criticism of the Federal Reserve, Treasury Secretary Timothy Geithner told reporters at a briefing that the administration had looked at a range of alternatives to giving the Fed expanded powers as a systemic risk regulator and had come to the conclusion that "we do not believe there is a plausible alternative.”
Lawrence Summers, head of the president’s National Economic Council, said that those who believed this power should not reside with the Fed had the responsibility to make the case for some other agency.
The Federal Reserve’s expanded authority and the rest of the new rules would reach into currently unregulated regions of the financial markets such as hedge funds and exotic instruments like credit default swaps.
The plan, laid out in an 88-page white paper, was the result of extensive consultations with members of Congress, regulators and industry groups and represented a compromise from bolder ideas that the administration had examined but ended up abandoning because of heavy opposition.
The regulatory overhaul would eliminate only one agency, the Office of Thrift Supervision, generally considered a weak link among current banking regulators. The beleaguered OTS oversaw the American International Group, whose business insuring exotic securities blew up last fall, prompting a $182 billion federal bailout. OTS also oversaw other high-profile blowups like Countrywide Financial Corp., IndyMac Bank and Washington Mutual Inc.
by the associated press
Wednesday, June 17, 2009
Obama administration’s plan to revamp regulation
WASHINGTON — The Obama administration’s plan to revamp regulation and prevent any more crashes like those that felled AIG and Lehman Brothers includes a bold new idea: Empower the Federal Reserve to oversee the biggest financial players whose failure could threaten other institutions and the economy.
But some lawmakers and economists say making the Fed a "systemic risk regulator” would itself be a high-stakes risk that would distract from its core mission: reviving the economy.
They say the Fed shares blame for the financial crisis that erupted last fall. Along with other regulators, it failed to crack down on risky mortgages and lax lending standards that ignited the crisis.
Unless the Fed improved its oversight abilities, "giving the Fed more responsibility at this point is like a parent giving his son a bigger and faster car right after he crashed the family station wagon,” said Mark Williams, professor of finance and economics at Boston University and a former Fed bank examiner.
Eyes and ears
Treasury Secretary Timothy Geithner and Lawrence Summers, head of the White House’s National Economic Council, said in an opinion piece published Monday in The Washington Post that the Fed would become a "systemic risk regulator” for "large, interconnected firms whose failure could threaten the stability of the system.”
They also would create a council of regulators with "broader coordinating responsibility across the financial system,” Geithner and Summers wrote.
These regulators — which weren’t identified — would serve as extra eyes and ears to police risky financial products throughout the financial landscape.
President Barack Obama plans to unveil the regulatory plan today, with congressional hearings on Thursday.
Financial super cop
Even inside the Fed, there’s recognition that its examiners would need to improve their ability to detect risks if it was to be made a new financial supercop. Under Alan Greenspan, who led it for 18 years, the Fed and other agencies overlooked the risks of allowing exotic mortgages to go to financially shaky borrowers. And they resisted efforts to regulate risky and complex instruments such as derivatives.
"We must ensure that we continue to increase our expertise so it is properly matched with the problems and challenges we will face in both our bank supervisory role and in meeting our traditional financial stability mandate,” Fed Chairman Ben Bernanke acknowledged in a recent speech.
Some lawmakers and Wall Street analysts worry, too.
by the associated press
But some lawmakers and economists say making the Fed a "systemic risk regulator” would itself be a high-stakes risk that would distract from its core mission: reviving the economy.
They say the Fed shares blame for the financial crisis that erupted last fall. Along with other regulators, it failed to crack down on risky mortgages and lax lending standards that ignited the crisis.
Unless the Fed improved its oversight abilities, "giving the Fed more responsibility at this point is like a parent giving his son a bigger and faster car right after he crashed the family station wagon,” said Mark Williams, professor of finance and economics at Boston University and a former Fed bank examiner.
Eyes and ears
Treasury Secretary Timothy Geithner and Lawrence Summers, head of the White House’s National Economic Council, said in an opinion piece published Monday in The Washington Post that the Fed would become a "systemic risk regulator” for "large, interconnected firms whose failure could threaten the stability of the system.”
They also would create a council of regulators with "broader coordinating responsibility across the financial system,” Geithner and Summers wrote.
These regulators — which weren’t identified — would serve as extra eyes and ears to police risky financial products throughout the financial landscape.
President Barack Obama plans to unveil the regulatory plan today, with congressional hearings on Thursday.
Financial super cop
Even inside the Fed, there’s recognition that its examiners would need to improve their ability to detect risks if it was to be made a new financial supercop. Under Alan Greenspan, who led it for 18 years, the Fed and other agencies overlooked the risks of allowing exotic mortgages to go to financially shaky borrowers. And they resisted efforts to regulate risky and complex instruments such as derivatives.
"We must ensure that we continue to increase our expertise so it is properly matched with the problems and challenges we will face in both our bank supervisory role and in meeting our traditional financial stability mandate,” Fed Chairman Ben Bernanke acknowledged in a recent speech.
Some lawmakers and Wall Street analysts worry, too.
by the associated press
Monday, June 15, 2009
Obama's Administration wants a financial system make-over
WASHINGTON (AP) — Aiming for greater limits and more clarity in the nation's financial system, the Obama administration on Monday proposed adding muscle to the Federal Reserve and new restrictions on complex securities whose collapse choked lending and hit millions of American households.
At the same time, the administration gingerly sidestepped some regulatory changes, leaving aspects of the politically charged work for Congress, which must approve the proposed blueprint.
Treasury Secretary Timothy Geithner said the regulatory overhaul will eliminate "gaps" in the financial system that encouraged risky behavior leading up to the meltdown.
Under the administration's plan, all large institutions whose failure could threaten the stability of the financial system would be supervised by the Fed. That sets up a potential clash with some key lawmakers who believe the Fed is overtaxed and unaccountable to Congress.
"I just think we're heaping too much on the Federal Reserve," said Rep. Paul Kanjorski, D-Pa., a member of the House Financial Services Committee.
Obama's plan would create a council of regulators responsible for broad coordination across the financial system. Administration officials said it also would offer a stronger framework for investor protection. Industry officials expect the administration to propose a consumer protection entity to oversee products ranging from credit cards to annuities.
"We had a financial system that was fundamentally too unstable and fragile, and it did a bad job of basic protection of consumers and investors," Geithner said during an economic conference in New York hosted by Time Warner Inc. "Those are things we have to change."
The administration's regulatory proposals were previewed in an opinion piece by Geithner and Lawrence Summers, director of the president's National Economic Council, in Monday's Washington Post. Further details were obtained from Treasury and industry officials who have been discussing the regulatory overhaul with the administration. President Barack Obama will unveil the proposals in a speech Wednesday and Geithner will testify Thursday before Congress.
Obama appears to have backed away from a more extensive overhaul that would have consolidated all banking regulation into one agency. Supporters of this approach, including Sen. Charles Schumer, D-N.Y., have argued that the current system is inefficient.
Likewise, the Geithner-Summer's essay did not address regulation of the insurance sector. Insurance companies now are governed by state insurance commissions, and large insurance companies and some lawmakers have argued they need the option of a federal overseer to avoid the threat posed by insurance conglomerate American International Group Inc.
While several disputes over the proposal are likely to emerge as the legislation moves through Congress, the most high profile debate will center on the role of the Federal Reserve.
Kanjorski said the role of a risk regulator should be given to the Treasury Department. He said it would be a mistake to give the responsibility to an entity that isn't accountable to Congress or the president.
Sen. Christopher Dodd, D-Conn., has opposed giving the Fed such authority and has called for stripping some of the central bank's regulatory authority. Under Dodd's plan, the Fed would focus instead on its existing mission of setting monetary policy, establishing a payment system and being the "lender of last resort" if a bank fails.
The administration will propose tougher rules on transactions outside the banking system. Specifically targeted are mortgage- and other asset-backed securities that contributed to the credit crisis and now plague bank balance sheets.
For instance, the administration would require banks and other underwriters who sell bundled mortgages to Wall Street to retain 5 percent of a stake in the loans — an idea also contained in House-passed mortgage legislation.
Rep. Brad Miller, D-N.C., who sponsored the House proposal, said the 5 percent figure may not sound like much. But the requirement can add up quickly and become a "powerful disincentive" to lenders to issue risky loans, eliminating many of the "fly-by-night" loan operators.
Geithner said the administration would urge other countries to adopt similar financial regulatory changes. He said U.S. changes "will have little effect if we fail to raise international standards along with our own."
The concern is that without tougher international rules governing financial firms, U.S. banks with operations overseas could shift some of their riskier businesses to countries with weaker regulations, said Simon Johnson, a former chief economist at the International Monetary Fund.
by the associated press
At the same time, the administration gingerly sidestepped some regulatory changes, leaving aspects of the politically charged work for Congress, which must approve the proposed blueprint.
Treasury Secretary Timothy Geithner said the regulatory overhaul will eliminate "gaps" in the financial system that encouraged risky behavior leading up to the meltdown.
Under the administration's plan, all large institutions whose failure could threaten the stability of the financial system would be supervised by the Fed. That sets up a potential clash with some key lawmakers who believe the Fed is overtaxed and unaccountable to Congress.
"I just think we're heaping too much on the Federal Reserve," said Rep. Paul Kanjorski, D-Pa., a member of the House Financial Services Committee.
Obama's plan would create a council of regulators responsible for broad coordination across the financial system. Administration officials said it also would offer a stronger framework for investor protection. Industry officials expect the administration to propose a consumer protection entity to oversee products ranging from credit cards to annuities.
"We had a financial system that was fundamentally too unstable and fragile, and it did a bad job of basic protection of consumers and investors," Geithner said during an economic conference in New York hosted by Time Warner Inc. "Those are things we have to change."
The administration's regulatory proposals were previewed in an opinion piece by Geithner and Lawrence Summers, director of the president's National Economic Council, in Monday's Washington Post. Further details were obtained from Treasury and industry officials who have been discussing the regulatory overhaul with the administration. President Barack Obama will unveil the proposals in a speech Wednesday and Geithner will testify Thursday before Congress.
Obama appears to have backed away from a more extensive overhaul that would have consolidated all banking regulation into one agency. Supporters of this approach, including Sen. Charles Schumer, D-N.Y., have argued that the current system is inefficient.
Likewise, the Geithner-Summer's essay did not address regulation of the insurance sector. Insurance companies now are governed by state insurance commissions, and large insurance companies and some lawmakers have argued they need the option of a federal overseer to avoid the threat posed by insurance conglomerate American International Group Inc.
While several disputes over the proposal are likely to emerge as the legislation moves through Congress, the most high profile debate will center on the role of the Federal Reserve.
Kanjorski said the role of a risk regulator should be given to the Treasury Department. He said it would be a mistake to give the responsibility to an entity that isn't accountable to Congress or the president.
Sen. Christopher Dodd, D-Conn., has opposed giving the Fed such authority and has called for stripping some of the central bank's regulatory authority. Under Dodd's plan, the Fed would focus instead on its existing mission of setting monetary policy, establishing a payment system and being the "lender of last resort" if a bank fails.
The administration will propose tougher rules on transactions outside the banking system. Specifically targeted are mortgage- and other asset-backed securities that contributed to the credit crisis and now plague bank balance sheets.
For instance, the administration would require banks and other underwriters who sell bundled mortgages to Wall Street to retain 5 percent of a stake in the loans — an idea also contained in House-passed mortgage legislation.
Rep. Brad Miller, D-N.C., who sponsored the House proposal, said the 5 percent figure may not sound like much. But the requirement can add up quickly and become a "powerful disincentive" to lenders to issue risky loans, eliminating many of the "fly-by-night" loan operators.
Geithner said the administration would urge other countries to adopt similar financial regulatory changes. He said U.S. changes "will have little effect if we fail to raise international standards along with our own."
The concern is that without tougher international rules governing financial firms, U.S. banks with operations overseas could shift some of their riskier businesses to countries with weaker regulations, said Simon Johnson, a former chief economist at the International Monetary Fund.
by the associated press
Thursday, June 11, 2009
Obama administration discuss corporate pay
WASHINGTON — Talking tough but stepping gently, the Obama administration rejected direct intervention in corporate pay decisions Wednesday even as officials argued that excessive compensation in the private sector contributed to the nation’s financial crisis.
Instead, the administration plans to seek legislation that would try to tame compensation through shareholder pressure and less management influence on pay decisions.
The administration also drew a distinction between the corporate world and those institutions that have tapped the government’s $700 billion Troubled Asset Relief Program.
The administration is ready to issue new regulations governing pay at companies that receive TARP assistance, with the toughest restrictions aimed at recipients of "exceptional assistance,” such as Citigroup, Bank of America, General Motors and American International Group. The regulations, which follow legislation already passed by Congress, would limit top executives at publicly assisted firms to bonuses no greater than one-third of their annual salaries.
The administration has named Kenneth Feinberg, a lawyer who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks, as a "special master” with power to reject pay plans he deems excessive at companies with the biggest injections of public money.
With one set of policies for taxpayer-assisted firms and a more hands-off approach to the rest of the corporate sector, Obama is straddling what has been an explosive issue with the public and in Congress. Executive pay burst as an issue earlier this year amid disclosures that AIG, the insurance conglomerate, had paid bonuses of $165 million even as it accepted billions from the government.
AIG is among the companies whose pay schemes the government will now oversee. But outside in the broader private sector, the administration chose to use public pressure and the potential for embarrassment, rather than direct pay restrictions.
Treasury Secretary Timothy Geithner said the administration will ask Congress to give shareholders a nonbinding voice on executive pay and to require corporate compensation committees to be independent from company management. That second provision would give the Securities and Exchange Commission authority to strengthen the independence of panels that set executive pay.
by the associated press
Instead, the administration plans to seek legislation that would try to tame compensation through shareholder pressure and less management influence on pay decisions.
The administration also drew a distinction between the corporate world and those institutions that have tapped the government’s $700 billion Troubled Asset Relief Program.
The administration is ready to issue new regulations governing pay at companies that receive TARP assistance, with the toughest restrictions aimed at recipients of "exceptional assistance,” such as Citigroup, Bank of America, General Motors and American International Group. The regulations, which follow legislation already passed by Congress, would limit top executives at publicly assisted firms to bonuses no greater than one-third of their annual salaries.
The administration has named Kenneth Feinberg, a lawyer who oversaw payments to families of victims of the Sept. 11, 2001, terrorist attacks, as a "special master” with power to reject pay plans he deems excessive at companies with the biggest injections of public money.
With one set of policies for taxpayer-assisted firms and a more hands-off approach to the rest of the corporate sector, Obama is straddling what has been an explosive issue with the public and in Congress. Executive pay burst as an issue earlier this year amid disclosures that AIG, the insurance conglomerate, had paid bonuses of $165 million even as it accepted billions from the government.
AIG is among the companies whose pay schemes the government will now oversee. But outside in the broader private sector, the administration chose to use public pressure and the potential for embarrassment, rather than direct pay restrictions.
Treasury Secretary Timothy Geithner said the administration will ask Congress to give shareholders a nonbinding voice on executive pay and to require corporate compensation committees to be independent from company management. That second provision would give the Securities and Exchange Commission authority to strengthen the independence of panels that set executive pay.
by the associated press
Monday, June 1, 2009
President Obama , put a 31-Year-Old in Charge of Dismantling G.M.
It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.
But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.
Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.
“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”
But now, according to those who joined him in the middle of his crash course about the automakers’ downward spiral, he has emerged as one of the most influential voices in what may become President Obama’s biggest experiment yet in federal economic intervention.
While far more prominent members of the administration are making the big decisions about Detroit, it is Mr. Deese who is often narrowing their options.
A month ago, when the administration was divided over whether to support Fiat’s bid to take over much of Chrysler, it was Mr. Deese who spoke out strongly against simply letting the company go into liquidation, according to several people who were present for the debate.
“Brian grasps both the economics and the politics about as quickly as I’ve seen anyone do this,” said Lawrence H. Summers, the head of the National Economic Council who is not known for being patient whenever he believes an analysis is sub-par — or disagrees with his own. “And there he was in the Roosevelt Room, speaking up vigorously to make the point that the costs we were going to incur giving Fiat a chance were no greater than some of the hidden costs of liquidation.”
Mr. Deese was not the only one favoring the Fiat deal, but his lengthy memorandum on how liquidation would increase Medicaid costs, unemployment insurance and municipal bankruptcies ended the debate. The administration supported the deal, and it seems likely to become a reality on Monday, if a federal judge handling the high-speed bankruptcy proceeding approves the sale of Chrysler’s best assets to the Italian carmaker.
Mr. Deese’s role is unusual for someone who is neither a formally trained economist nor a business school graduate, and who never spent much time flipping through the endless studies about the future of the American and Japanese auto industries.
He lives a dual life these days. He starts the day at a desk wedged just outside of Mr. Summers’s office, where he can hear what young members of the economic team have come to know as “the Summers bellow.” From there, he can make it quickly to the press office to help devise explanations for why taxpayers are spending more than $50 billion on what polls show is a very unpopular bailout of the auto industry.
Several times a day he speed-walks to Treasury, taking a shortcut through the tunnel under the colonnade, near the kitchens. The other day he talked about how sharply perceptions of the industry’s future changed after Mr. Obama’s election.
“At the first meeting with Rick Wagoner,” he said, referring to G.M.’s recently deposed chief executive, “they were in a very different place. He said publicly that bankruptcy was not a viable option. It’s been a long process getting everyone to look at the options differently.”
In fact, from before Inauguration Day, few in Mr. Obama’s circle saw any other choice. Every time Mr. Deese ran the numbers on G.M. and Chrysler, he came back with the now-obvious conclusion that neither was a viable business, and that their plans to revive themselves did not address the erosion of their revenues. But it took the support of Mr. Rattner and Ron Bloom, senior advisers to the task force charged with restructuring the automobile industry, to help turn Mr. Deese’s positions into policy.
The president’s instruction to us was that we had to come up with a solution that would work on a commercial basis, that didn’t involve indefinite federal financing,” Mr. Deese said. “But we didn’t want liquidation, which would have even worse effects. So the question was how do you design a very substantial restructuring, and do it fast.”
Mr. Deese’s route to the auto table at the White House was anything but a straight line. He is the son of a political science professor at Boston College (his father) and an engineer who works in renewable energy (his mother). He grew up in the Boston suburb of Belmont and attended Middlebury College in Vermont. He went to Washington to work on aid issues and was quickly hired by Nancy Birdsall, a widely respected authority on the effectiveness of international aid and the founder of the Center for Global Development.
But he wanted to learn domestic issues as well, and soon ended up working as an assistant for Gene Sperling, who 17 years ago in the Clinton White House played a similar role as economic policy prodigy. Eventually, Mr. Deese headed to Yale for his law degree. But his e-mail box was constantly filled with messages from friends in Washington who were signing up to work for the Obama or Hillary Rodham Clinton campaigns. Mr. Deese chose Senator Clinton’s.
“He was pretty quickly functioning as the top economic policy staffer through her campaign,” Mr. Sperling said. “He could blend the policy needs and the political needs pretty seamlessly.” On the day that the Clinton campaign ended, Mr. Deese left her concession speech and received a message on his BlackBerry from a friend in the Obama campaign urging him to sign on immediately to Mr. Obama’s team.
He resumed his policy work there, and found himself stuck in Chicago — unable to fly to Washington with his dog — as the economic crisis deepened. Finally, one night, he decided to get into his car with his dog and just started driving back to Washington. Tired, he pulled over to catch some sleep in the car.
“I slept in the parking lot of the G. M. plant in Lordstown, Ohio,” he recalled. The giant plant, opened during G.M.’s heyday in the mid-1960s, is where the Pontiac G5 is produced. Under the plan Mr. Deese worked on when he arrived in Washington, Pontiac will disappear.
“I guess that was prophetic,” he said, shaking his head.
by the new york times
But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.
Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.
“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”
But now, according to those who joined him in the middle of his crash course about the automakers’ downward spiral, he has emerged as one of the most influential voices in what may become President Obama’s biggest experiment yet in federal economic intervention.
While far more prominent members of the administration are making the big decisions about Detroit, it is Mr. Deese who is often narrowing their options.
A month ago, when the administration was divided over whether to support Fiat’s bid to take over much of Chrysler, it was Mr. Deese who spoke out strongly against simply letting the company go into liquidation, according to several people who were present for the debate.
“Brian grasps both the economics and the politics about as quickly as I’ve seen anyone do this,” said Lawrence H. Summers, the head of the National Economic Council who is not known for being patient whenever he believes an analysis is sub-par — or disagrees with his own. “And there he was in the Roosevelt Room, speaking up vigorously to make the point that the costs we were going to incur giving Fiat a chance were no greater than some of the hidden costs of liquidation.”
Mr. Deese was not the only one favoring the Fiat deal, but his lengthy memorandum on how liquidation would increase Medicaid costs, unemployment insurance and municipal bankruptcies ended the debate. The administration supported the deal, and it seems likely to become a reality on Monday, if a federal judge handling the high-speed bankruptcy proceeding approves the sale of Chrysler’s best assets to the Italian carmaker.
Mr. Deese’s role is unusual for someone who is neither a formally trained economist nor a business school graduate, and who never spent much time flipping through the endless studies about the future of the American and Japanese auto industries.
He lives a dual life these days. He starts the day at a desk wedged just outside of Mr. Summers’s office, where he can hear what young members of the economic team have come to know as “the Summers bellow.” From there, he can make it quickly to the press office to help devise explanations for why taxpayers are spending more than $50 billion on what polls show is a very unpopular bailout of the auto industry.
Several times a day he speed-walks to Treasury, taking a shortcut through the tunnel under the colonnade, near the kitchens. The other day he talked about how sharply perceptions of the industry’s future changed after Mr. Obama’s election.
“At the first meeting with Rick Wagoner,” he said, referring to G.M.’s recently deposed chief executive, “they were in a very different place. He said publicly that bankruptcy was not a viable option. It’s been a long process getting everyone to look at the options differently.”
In fact, from before Inauguration Day, few in Mr. Obama’s circle saw any other choice. Every time Mr. Deese ran the numbers on G.M. and Chrysler, he came back with the now-obvious conclusion that neither was a viable business, and that their plans to revive themselves did not address the erosion of their revenues. But it took the support of Mr. Rattner and Ron Bloom, senior advisers to the task force charged with restructuring the automobile industry, to help turn Mr. Deese’s positions into policy.
The president’s instruction to us was that we had to come up with a solution that would work on a commercial basis, that didn’t involve indefinite federal financing,” Mr. Deese said. “But we didn’t want liquidation, which would have even worse effects. So the question was how do you design a very substantial restructuring, and do it fast.”
Mr. Deese’s route to the auto table at the White House was anything but a straight line. He is the son of a political science professor at Boston College (his father) and an engineer who works in renewable energy (his mother). He grew up in the Boston suburb of Belmont and attended Middlebury College in Vermont. He went to Washington to work on aid issues and was quickly hired by Nancy Birdsall, a widely respected authority on the effectiveness of international aid and the founder of the Center for Global Development.
But he wanted to learn domestic issues as well, and soon ended up working as an assistant for Gene Sperling, who 17 years ago in the Clinton White House played a similar role as economic policy prodigy. Eventually, Mr. Deese headed to Yale for his law degree. But his e-mail box was constantly filled with messages from friends in Washington who were signing up to work for the Obama or Hillary Rodham Clinton campaigns. Mr. Deese chose Senator Clinton’s.
“He was pretty quickly functioning as the top economic policy staffer through her campaign,” Mr. Sperling said. “He could blend the policy needs and the political needs pretty seamlessly.” On the day that the Clinton campaign ended, Mr. Deese left her concession speech and received a message on his BlackBerry from a friend in the Obama campaign urging him to sign on immediately to Mr. Obama’s team.
He resumed his policy work there, and found himself stuck in Chicago — unable to fly to Washington with his dog — as the economic crisis deepened. Finally, one night, he decided to get into his car with his dog and just started driving back to Washington. Tired, he pulled over to catch some sleep in the car.
“I slept in the parking lot of the G. M. plant in Lordstown, Ohio,” he recalled. The giant plant, opened during G.M.’s heyday in the mid-1960s, is where the Pontiac G5 is produced. Under the plan Mr. Deese worked on when he arrived in Washington, Pontiac will disappear.
“I guess that was prophetic,” he said, shaking his head.
by the new york times
Saturday, May 30, 2009
Bullet train peaks Obama and U.S. interest
MADRID — Spain showed off its bullet train system Friday, giving the U.S. transportation secretary a firsthand glimpse of the high-speed rail grid that President Barack Obama has praised as a model for America.
U.S. Transportation Secretary Ray LaHood boarded a train at Madrid’s Atocha station along with Spanish Development Minister Jose Blanco for an hour-and-a-quarter trip to Zaragoza, a stop on the line heading to Barcelona.
LaHood has been touring Europe this week, riding a TGV bullet-train in France and attending a transportation conference in Germany that also featured officials from the German railway system, Deutsche Bahn.
Obama last month unveiled an $8 billion plan to build a high-speed rail network in the U.S. and upgrade existing services. The U.S. president cited Spain, France, China and Japan as countries with systems for his nation to emulate.
LaHood also was to tour a railway control center in Zaragoza, then return to Madrid, where he meets Saturday with Spanish business leaders and Prime Minister Jose Luis Rodriguez Zapatero.
Spain has become a leader in high-speed rail travel since inaugurating its first AVE line in 1992, from Madrid to Seville. The route has been a huge success, largely replacing road and air travel to the largest city in the southern Andalusia region.
The line to Barcelona, the latest to be completed, gets travelers to Spain’s second-largest city in less than three hours compared to a drive of about six hours. By plane, the trip takes about an hour, not including time to get to the airport and go through security.
Before the high speed rail service began in February 2008, air travelers to Barcelona surpassed train passengers by more than seven to one, but as of this January, the two groups were roughly equal in number, according to government statistics.
by the associated press
U.S. Transportation Secretary Ray LaHood boarded a train at Madrid’s Atocha station along with Spanish Development Minister Jose Blanco for an hour-and-a-quarter trip to Zaragoza, a stop on the line heading to Barcelona.
LaHood has been touring Europe this week, riding a TGV bullet-train in France and attending a transportation conference in Germany that also featured officials from the German railway system, Deutsche Bahn.
Obama last month unveiled an $8 billion plan to build a high-speed rail network in the U.S. and upgrade existing services. The U.S. president cited Spain, France, China and Japan as countries with systems for his nation to emulate.
LaHood also was to tour a railway control center in Zaragoza, then return to Madrid, where he meets Saturday with Spanish business leaders and Prime Minister Jose Luis Rodriguez Zapatero.
Spain has become a leader in high-speed rail travel since inaugurating its first AVE line in 1992, from Madrid to Seville. The route has been a huge success, largely replacing road and air travel to the largest city in the southern Andalusia region.
The line to Barcelona, the latest to be completed, gets travelers to Spain’s second-largest city in less than three hours compared to a drive of about six hours. By plane, the trip takes about an hour, not including time to get to the airport and go through security.
Before the high speed rail service began in February 2008, air travelers to Barcelona surpassed train passengers by more than seven to one, but as of this January, the two groups were roughly equal in number, according to government statistics.
by the associated press
Saturday, May 23, 2009
President Obama signs credit card fee law
WASHINGTON — President Barack Obama warned overeager shoppers and greedy credit card companies alike on Friday to act responsibly as he signed into law a bill designed to protect debt-ridden consumers from surprise charges.
The White House staged a signing ceremony in the Rose Garden, an indication of the legislation’s importance to Obama. Though the bill was opposed by many financial companies, it cleared Congress with broad support.
Obama made clear that he didn’t champion the changes with the intention of helping those who buy more than they can afford through "reckless spending or wishful thinking.”
"Some get in over their heads by not using their heads,” the president said. "I want to be clear: We do not excuse or condone folks who’ve acted irresponsibly.”
And yet, he said, for many of the millions of Americans, trying to get out of debt has been made difficult and bewildering by credit card companies.
Gun amendment
Nearly 80 percent of Americans have credit cards and half of those carry a balance, according to the White House. The Federal Reserve estimates the nation is some $2.5 trillion in debt, a figure that does not include home mortgages.
Obama said many people have gotten "trapped” because of the economy. But, he said, "part of it is the practices of the credit card companies.”
He criticized such policies that allowed for confusing fine print; the sudden appearance of unexplained fees on bills; unannounced shifts in payment deadlines, interest charges or rate increases even when payments aren’t late; and payments directed to balances with the lowest interest rates rather than the highest.
One part of the bill Obama did not celebrate at the signing, a gun amendment. The measure by Sen. Tom Coburn, R-Muskogee, allows people to bring loaded guns into national parks and wildlife refuges.
The addition of the amendment to the bill — and Obama’s acceptance of it — was viewed as a bitter disappointment for gun-control advocates.
They watched gun-rights supporters gain a victory from a Democratic-controlled Congress and a Democratic president that they couldn’t achieve under a Republican Congress and president. Many blamed the National Rifle Association, which pushed hard for the gun law.
Democrats lawmakers and aides said they didn’t have enough time to send the bill to the House-Senate conference committee and still get the bill to Obama by the Memorial Day weekend as he requested.
by the associated press
The White House staged a signing ceremony in the Rose Garden, an indication of the legislation’s importance to Obama. Though the bill was opposed by many financial companies, it cleared Congress with broad support.
Obama made clear that he didn’t champion the changes with the intention of helping those who buy more than they can afford through "reckless spending or wishful thinking.”
"Some get in over their heads by not using their heads,” the president said. "I want to be clear: We do not excuse or condone folks who’ve acted irresponsibly.”
And yet, he said, for many of the millions of Americans, trying to get out of debt has been made difficult and bewildering by credit card companies.
Gun amendment
Nearly 80 percent of Americans have credit cards and half of those carry a balance, according to the White House. The Federal Reserve estimates the nation is some $2.5 trillion in debt, a figure that does not include home mortgages.
Obama said many people have gotten "trapped” because of the economy. But, he said, "part of it is the practices of the credit card companies.”
He criticized such policies that allowed for confusing fine print; the sudden appearance of unexplained fees on bills; unannounced shifts in payment deadlines, interest charges or rate increases even when payments aren’t late; and payments directed to balances with the lowest interest rates rather than the highest.
One part of the bill Obama did not celebrate at the signing, a gun amendment. The measure by Sen. Tom Coburn, R-Muskogee, allows people to bring loaded guns into national parks and wildlife refuges.
The addition of the amendment to the bill — and Obama’s acceptance of it — was viewed as a bitter disappointment for gun-control advocates.
They watched gun-rights supporters gain a victory from a Democratic-controlled Congress and a Democratic president that they couldn’t achieve under a Republican Congress and president. Many blamed the National Rifle Association, which pushed hard for the gun law.
Democrats lawmakers and aides said they didn’t have enough time to send the bill to the House-Senate conference committee and still get the bill to Obama by the Memorial Day weekend as he requested.
by the associated press
Thursday, May 21, 2009
Obama signs mortgage legislation bill
WASHINGTON — President Barack Obama has signed into law legislation that encourages banks to spare homeowners from foreclosure.
Obama signed the bill Wednesday in the White House’s East Room. He says it protects homeowners and cracks down on lenders who take advantage of them.
The law expands an existing $300 billion program that encourages lenders to adjust a mortgage if the homeowner agrees to pay an insurance premium.
The bill also extends through 2013 an increase in deposit insurance by the FDIC from $100,000 to $250,000.
The lending industry helped scuttle a tougher measure that would have forced lenders to reduce the monthly payments of owners in bankruptcy.
by the associated press
Obama signed the bill Wednesday in the White House’s East Room. He says it protects homeowners and cracks down on lenders who take advantage of them.
The law expands an existing $300 billion program that encourages lenders to adjust a mortgage if the homeowner agrees to pay an insurance premium.
The bill also extends through 2013 an increase in deposit insurance by the FDIC from $100,000 to $250,000.
The lending industry helped scuttle a tougher measure that would have forced lenders to reduce the monthly payments of owners in bankruptcy.
by the associated press
Obama’s watchdog plan may not hunt
WASHINGTON — The head of the Securities and Exchange Commission is objecting to a plan being weighed by the Obama administration to create a financial watchdog for consumers that would assume oversight of mutual funds.
The SEC chief’s split with the administration shows how hard it may be for a broad overhaul of financial rules to overcome turf wars among various regulators and for a consensus to be reached on Capitol Hill.
SEC Chairman Mary Schapiro on Wednesday said she opposed the plan discussed Tuesday night by Treasury Secretary Timothy Geithner and other administration officials that would chip away at the SEC’s own powers. She said giving any new entity authority over mutual funds would lessen the government’s protection of investors — her agency’s core mission.
Many of the SEC’s responsibilities — companies’ financial disclosures, shareholder rights, stock trading, brokerage firm practices and mutual funds — involve investor protection, Schapiro said.
"So it’s not a discrete thing that gets moved away without really damaging the fabric of the entire investor protection regime,” she said.
About the plan
The plan the administration is weighing would centralize the enforcement of laws that protect consumers of financial products like credit cards, mortgages and mutual funds. That mission is now spread across a patchwork of federal and state agencies, including the SEC, Federal Reserve and Federal Trade Commission.
Any changes to the nation’s financial oversight would require congressional action. And it’s unclear whether lawmakers will unite behind a single approach this year.
Schapiro’s comments marked her first sharp public breach with the administration over an overhaul of rules designed to prevent another financial crisis. Schapiro in recent weeks has told Congress, which is debating the changes, that she thinks the SEC must play a key role as an independent watchdog protecting investors in any new regulatory system.
By contrast, the White House leans toward recommending that the Fed alone become a new supercop for financial companies that could set off another meltdown.
Schapiro says she’s concerned about an "excessive concentration of power” over financial risk in any single agency.
Lawmakers are divided.
by the associated press
The SEC chief’s split with the administration shows how hard it may be for a broad overhaul of financial rules to overcome turf wars among various regulators and for a consensus to be reached on Capitol Hill.
SEC Chairman Mary Schapiro on Wednesday said she opposed the plan discussed Tuesday night by Treasury Secretary Timothy Geithner and other administration officials that would chip away at the SEC’s own powers. She said giving any new entity authority over mutual funds would lessen the government’s protection of investors — her agency’s core mission.
Many of the SEC’s responsibilities — companies’ financial disclosures, shareholder rights, stock trading, brokerage firm practices and mutual funds — involve investor protection, Schapiro said.
"So it’s not a discrete thing that gets moved away without really damaging the fabric of the entire investor protection regime,” she said.
About the plan
The plan the administration is weighing would centralize the enforcement of laws that protect consumers of financial products like credit cards, mortgages and mutual funds. That mission is now spread across a patchwork of federal and state agencies, including the SEC, Federal Reserve and Federal Trade Commission.
Any changes to the nation’s financial oversight would require congressional action. And it’s unclear whether lawmakers will unite behind a single approach this year.
Schapiro’s comments marked her first sharp public breach with the administration over an overhaul of rules designed to prevent another financial crisis. Schapiro in recent weeks has told Congress, which is debating the changes, that she thinks the SEC must play a key role as an independent watchdog protecting investors in any new regulatory system.
By contrast, the White House leans toward recommending that the Fed alone become a new supercop for financial companies that could set off another meltdown.
Schapiro says she’s concerned about an "excessive concentration of power” over financial risk in any single agency.
Lawmakers are divided.
by the associated press
Wednesday, May 20, 2009
Credit card's change their charges , per Obama
WASHINGTON — The Senate voted overwhelmingly Tuesday to rein in credit card rate increases and excessive fees, hoping to give voters some breathing room amid a recession that has left hundreds of thousands of Americans jobless or facing foreclosure.
The House was on track to pass the measure as early as today, paving the way for President Barack Obama to see the bill on his desk by week’s end.
"This is a victory for every American consumer who has ever suffered at the hands of a credit card company,” said Sen. Christopher Dodd, D-Conn., chairman of the Banking Committee. The bill passed the Senate 90-5.
What would happen?
If enacted into law as expected, the credit card industry would have nine months to change the way it does business: Lenders would have to post their credit card agreements on the Internet and let customers pay their bills online or by phone without an added fee. They’d also have to give consumers a chance to spare themselves from over-the-limit fees and provide 45 days notice and an explanation before interest rates are increased.
Some of these changes are already on track to take effect in July 2010, under new rules being imposed by the Federal Reserve.
For example, the Senate bill requires those under 21 to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.
More flexibility
The legislation would not cap interest rates as some lawmakers had hoped. It also wouldn’t prevent lenders from finding new ways to drain customers’ bank accounts or keep consumers from spending money they don’t have.
But it would give spenders more flexibility and outlaw many of the surprise costs associated with credit cards at a time when money is tight in most households. For example, under the bill, a cardholder would have to opt to be allowed to go over a credit limit. If customers don’t agree and the bank authorizes a charge that would push them over their limit, the lender couldn’t levy an over-limit fee.
The banking industry opposed the overall measure and said it could restrict credit at a time when Americans need it most. Banking officials defended their existing interest rates and fees on grounds that their business is very risky.
‘Universal default’
Another boon for consumers in the pending credit card bill is limiting a practice known as "universal default,” when a lender sharply increases a cardholder’s interest rate on an existing balance because the customer is late paying that bill or other, unrelated bills. Under the new legislation, a customer would have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance.
Even then, the credit card company would be required to restore the previous, lower rate after six months if the cardholder pays the minimum balance on time.
by the associated press
The House was on track to pass the measure as early as today, paving the way for President Barack Obama to see the bill on his desk by week’s end.
"This is a victory for every American consumer who has ever suffered at the hands of a credit card company,” said Sen. Christopher Dodd, D-Conn., chairman of the Banking Committee. The bill passed the Senate 90-5.
What would happen?
If enacted into law as expected, the credit card industry would have nine months to change the way it does business: Lenders would have to post their credit card agreements on the Internet and let customers pay their bills online or by phone without an added fee. They’d also have to give consumers a chance to spare themselves from over-the-limit fees and provide 45 days notice and an explanation before interest rates are increased.
Some of these changes are already on track to take effect in July 2010, under new rules being imposed by the Federal Reserve.
For example, the Senate bill requires those under 21 to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.
More flexibility
The legislation would not cap interest rates as some lawmakers had hoped. It also wouldn’t prevent lenders from finding new ways to drain customers’ bank accounts or keep consumers from spending money they don’t have.
But it would give spenders more flexibility and outlaw many of the surprise costs associated with credit cards at a time when money is tight in most households. For example, under the bill, a cardholder would have to opt to be allowed to go over a credit limit. If customers don’t agree and the bank authorizes a charge that would push them over their limit, the lender couldn’t levy an over-limit fee.
The banking industry opposed the overall measure and said it could restrict credit at a time when Americans need it most. Banking officials defended their existing interest rates and fees on grounds that their business is very risky.
‘Universal default’
Another boon for consumers in the pending credit card bill is limiting a practice known as "universal default,” when a lender sharply increases a cardholder’s interest rate on an existing balance because the customer is late paying that bill or other, unrelated bills. Under the new legislation, a customer would have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance.
Even then, the credit card company would be required to restore the previous, lower rate after six months if the cardholder pays the minimum balance on time.
by the associated press
Obama changes state of American driving
DETROIT — Some soccer moms will have to give up hulking SUVs. Carpenters still will haul materials around in pickups, but they will cost more. Nearly everybody else will drive smaller vehicles, and more of them will be powered by electricity.
The higher mileage and emissions standards set by the Obama administration Tuesday, which will begin to take effect in 2012 and are to be achieved by 2016, will transform the American car and truck fleet.
The new rules would bring new cars and trucks sold in the United States to an average of 35.5 miles per gallon, about 10 mpg more than today’s standards. Passenger cars will be required to get 39 mpg and light trucks 30 mpg.
That means cars and trucks on American roads will have to become smaller, lighter and more efficient.
Will drivers buy it?
Eric Fedewa, vice president of global powertrain forecasting for the auto consulting firm CSM Worldwide in Northville, Mich., said the changes will make pickups so much more expensive that they will be used almost exclusively for work.
And instead of a minivan or sport utility vehicle, more parents will haul their families in much smaller vehicles with three rows of seats — something more like the Mazda 5 small van, he said. The Mazda 5 gets about 28 mpg on the highway. "I think what you’ll see is a lot more creativity in interior packaging,” Fedewa said. "You’ll get more rows of seats where you traditionally had cargo space.”
Already on Tuesday, some drivers were skeptical. Dixie Bishop, who runs a plumbing business in San Antonio that uses vans, worries the new requirements will drive up her costs at a time when customers are cutting back on having repairs done.
"Are they going to take my horsepower down?” she asked. "I have to be able to carry old water heaters and toilets. It’s not beneficial for me to haul one water heater at a time. We need the power to pull these heavy items.”
What will change?
The changes will start with smaller cars and trucks and improvements to the internal combustion engine, Fedewa said. Automakers already are working on new technology, including direct fuel injection and high compression of the air-fuel mixture, that will make cars and trucks more efficient.
Car companies are rewiring vehicles so components such as air conditioners and power-steering pumps are powered by electricity rather than by the engine, saving fuel.
And they’re developing computer-controlled transmissions with six or more gears, improving efficiency, and rolling out more gas-electric hybrids — among the few vehicles sold today that meet the 2016 standards.
Of course, developing the technology will cost money — billions of dollars — and automakers probably will pass those costs on to their customers.
The Obama administration says the changes mean the average vehicle would cost about $1,300 more, although some private analysts say the increase will be much heftier. The administration says gas savings will make up the difference in.
by the associated press
The higher mileage and emissions standards set by the Obama administration Tuesday, which will begin to take effect in 2012 and are to be achieved by 2016, will transform the American car and truck fleet.
The new rules would bring new cars and trucks sold in the United States to an average of 35.5 miles per gallon, about 10 mpg more than today’s standards. Passenger cars will be required to get 39 mpg and light trucks 30 mpg.
That means cars and trucks on American roads will have to become smaller, lighter and more efficient.
Will drivers buy it?
Eric Fedewa, vice president of global powertrain forecasting for the auto consulting firm CSM Worldwide in Northville, Mich., said the changes will make pickups so much more expensive that they will be used almost exclusively for work.
And instead of a minivan or sport utility vehicle, more parents will haul their families in much smaller vehicles with three rows of seats — something more like the Mazda 5 small van, he said. The Mazda 5 gets about 28 mpg on the highway. "I think what you’ll see is a lot more creativity in interior packaging,” Fedewa said. "You’ll get more rows of seats where you traditionally had cargo space.”
Already on Tuesday, some drivers were skeptical. Dixie Bishop, who runs a plumbing business in San Antonio that uses vans, worries the new requirements will drive up her costs at a time when customers are cutting back on having repairs done.
"Are they going to take my horsepower down?” she asked. "I have to be able to carry old water heaters and toilets. It’s not beneficial for me to haul one water heater at a time. We need the power to pull these heavy items.”
What will change?
The changes will start with smaller cars and trucks and improvements to the internal combustion engine, Fedewa said. Automakers already are working on new technology, including direct fuel injection and high compression of the air-fuel mixture, that will make cars and trucks more efficient.
Car companies are rewiring vehicles so components such as air conditioners and power-steering pumps are powered by electricity rather than by the engine, saving fuel.
And they’re developing computer-controlled transmissions with six or more gears, improving efficiency, and rolling out more gas-electric hybrids — among the few vehicles sold today that meet the 2016 standards.
Of course, developing the technology will cost money — billions of dollars — and automakers probably will pass those costs on to their customers.
The Obama administration says the changes mean the average vehicle would cost about $1,300 more, although some private analysts say the increase will be much heftier. The administration says gas savings will make up the difference in.
by the associated press
Thursday, May 14, 2009
Energy pushed to explain role
HOUSTON — The U.S. oil and gas industry, facing greater regulation and heavier taxes at home, must do a better job of explaining its vital role in the global economy’s future, the chief of the nation’s third-largest oil company said Wednesday. Jim Mulva, speaking at ConocoPhillips’ annual shareholder meeting, said he understands the emphasis on renewable energy as President Barack Obama shapes his energy roadmap.
But making it more difficult for companies such as Conoco to find and produce new sources of crude and natural gas doesn’t make sense, he said. Mulva noted that fossil fuels will provide 80 percent of the world’s energy needs for years.
wire reports
But making it more difficult for companies such as Conoco to find and produce new sources of crude and natural gas doesn’t make sense, he said. Mulva noted that fossil fuels will provide 80 percent of the world’s energy needs for years.
wire reports
Tuesday, May 12, 2009
Obastands behind stimulus claim
WASHINGTON — The Obama administration is defending its claim that the $787 billion economic stimulus plan will save or create 3.5 million jobs before 2011 even while conceding that unemployment will likely continue to rise beyond its earlier predictions.
A report Monday by the White House Council of Economic Advisers said the projections were based on conservative estimates and widely accepted assumptions.
The 3.5 million job estimate remains valid, the report said, now that stimulus money is starting to pay for various projects throughout the nation.
The assessment was the same as what Obama’s economists forecast in January, when they predicted that the economic stimulus would prevent unemployment from rising above 8 percent. But unemployment reached 8.9 percent in April and the chairwoman of the Council of Economic Advisers, Christina Romer, said over the weekend that current predictions that unemployment would reach 9.5 percent were "pretty realistic".
by the associated press
A report Monday by the White House Council of Economic Advisers said the projections were based on conservative estimates and widely accepted assumptions.
The 3.5 million job estimate remains valid, the report said, now that stimulus money is starting to pay for various projects throughout the nation.
The assessment was the same as what Obama’s economists forecast in January, when they predicted that the economic stimulus would prevent unemployment from rising above 8 percent. But unemployment reached 8.9 percent in April and the chairwoman of the Council of Economic Advisers, Christina Romer, said over the weekend that current predictions that unemployment would reach 9.5 percent were "pretty realistic".
by the associated press
Sunday, May 10, 2009
Meltdown
WASHINGTON — The White House told industry officials Friday that it is leaning toward recommending that the Federal Reserve become the supercop for "too big to fail” companies capable of causing another financial meltdown.
The officials said the administration made it clear in a recent meeting that it was not inclined to divide the job among various regulators
as has been suggested by industry and some federal regulators.
by the associated press
The officials said the administration made it clear in a recent meeting that it was not inclined to divide the job among various regulators
as has been suggested by industry and some federal regulators.
by the associated press
Saturday, May 9, 2009
Changes will affect unemployment checks, education
WASHINGTON — President Barack Obama wants unemployment insurance to become a stepping stone for future work by making it easier to enroll in school or job training.
Whether he succeeds will depend on the willingness of states and colleges to change the rules.
People who have been laid off and want to go back to school often have to give up their monthly unemployment checks.
If the unemployed people decide to return to school, they often don’t qualify for federal aid because eligibility is based upon the previous year’s income.
Under rule changes Obama outlined Friday, the Labor Department will ask states to make exceptions during economic downturns so that the unemployed can keep their benefits if they go to community college or pursue other education or training.
State governments, not Washington, decide who is eligible for unemployment, and they generally require anyone collecting assistance to be actively looking for work. That can complicate plans to attend school.
The Education Department, meanwhile, will encourage colleges to factor in the financial situation of an unemployed person applying for Pell Grants or other education and job training aid. Starting in July, the maximum Pell Grant, which helps low-income students afford college, will receive a $500 boost to $5,350.
by the associated press
Whether he succeeds will depend on the willingness of states and colleges to change the rules.
People who have been laid off and want to go back to school often have to give up their monthly unemployment checks.
If the unemployed people decide to return to school, they often don’t qualify for federal aid because eligibility is based upon the previous year’s income.
Under rule changes Obama outlined Friday, the Labor Department will ask states to make exceptions during economic downturns so that the unemployed can keep their benefits if they go to community college or pursue other education or training.
State governments, not Washington, decide who is eligible for unemployment, and they generally require anyone collecting assistance to be actively looking for work. That can complicate plans to attend school.
The Education Department, meanwhile, will encourage colleges to factor in the financial situation of an unemployed person applying for Pell Grants or other education and job training aid. Starting in July, the maximum Pell Grant, which helps low-income students afford college, will receive a $500 boost to $5,350.
by the associated press
Subscribe to:
Posts (Atom)