Archive for May, 2010

Asian stocks climb after big Wall Street gains (AP)

Thursday, May 27th, 2010 | Finance News

TOKYO – Asian stock markets rose in early trading Friday after big gains on Wall Street and a stronger euro.

Japan's Nikkei 225 stock average climbed 1.5 percent to 9,779.49, South Korea's Kospi gained 0.8 percent to 1,620.34, and Australia's S&P/ASX 200 added 1.5 percent to 4,443.20.

Overnight in New York, the Dow Jones industrial average shot up 2.9 percent to 10,258.99 after China reassured investors it doesn't plan to sell the European debt it holds. The Standard & Poor's 500 index rose 3.3 percent to 1,103.06, and the Nasdaq composite index climbed 3.7 percent to 2,277.68.

In currencies, the dollar was trading at 91.28 yen from 90.98 yen. The euro slipped to $1.2313 from $1.2362. Against the Japanese currency, the euro jumped more than a yen from Thursday levels.

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Conservative Dems balk at jobless benefits package (AP)

Thursday, May 27th, 2010 | Finance News

WASHINGTON – The Senate moved forward Thursday with an almost $60 billion war funding bill, but anxiety over out-of-control budget deficits led House leaders to propose dropping more than $30 billion in spending from a catchall bill anchored by an extension of jobless benefits.

Confronted with a rebellion by Democratic moderates, House leaders proposed to dump overboard $24 billion in aid to states and allow generous health insurance subsidies for laid-off workers to expire. The changes were an effort to round up votes to extend unemployment benefits and renew more than 50 popular tax breaks that expired last year.

Help for doctors facing a big cut in Medicare reimbursements could also be dropped from the measure, aides and lobbyists said.

The steps by House leaders could reduce the deficit impact of the bill to as little as $30 billion or so in hopes of winning over moderate "Blue Dog" Democrats unhappy about adding to the deficit as the national debt is on the verge of topping $13 trillion. A version circulated last week would have added $134 billion to the deficit.

"They need to go back to the drawing board," said Rep. Henry Cuellar, D-Texas, a member of the conservative Blue Dog coalition. After the slimmed-down bill was revealed, Cuellar said he would probably vote for the bill.

Across the Capitol, Senate Democrats had far better success in advancing the war funding bill, which would pay for President Barack Obama's 30,000 troop increase in Afghanistan.

A dozen Republicans, including GOP leader Mitch McConnell of Kentucky, joined Democrats in a 69-29 test vote to limit debate. It set the stage for a final vote as early as Thursday night.

The bill includes $5 billion to replenish disaster aid accounts, and there's money for Haitian earthquake relief and aid to U.S. allies in the fight against terror.

The war funding measure has been kept relatively clean of add-ons that could draw GOP opposition — to the frustration of liberal Democrats such as Sen. Tom Harkin of Iowa, the top Senate sponsor of a $23 billion plan to help school districts avoid teacher layoffs as local revenues remain weak. Facing sure defeat, Harkin declined to offer the plan to the war funding bill.

Thousands of people are set to begin losing jobless benefits when an extension of unemployment insurance expires next week. A 65 percent subsidy for health insurance benefits for the unemployed under the COBRA program also expires.

The benefits extensions are part of a sweeping package of unfinished business that lawmakers hope to complete before their Memorial Day recess.

Democratic leaders cut the package of spending and tax cuts Wednesday by about $50 billion — to $143 billion — in an attempt to pick up votes. Thursday's moves could whack more than $50 billion more from the measure.

It's a tough vote for lawmakers who want to help constituents hit hard by the recession but are wary of being labeled big spenders. The economy is starting to pick up, but unemployment is still high as the nation continues to struggle from the loss of more than 8 million jobs. At the same time, angst over deficit spending is growing as midterm congressional elections near in November.

Senate Majority Leader Harry Reid, D-Nev., said that the Senate would not vote on the House tax and spending measure and announced the Senate would shortly adjourn for the Memorial Day recess.

The expanded jobless benefits provide up to 99 weeks of payments in many states, at a cost of nearly $40 billion. The benefits are part of a bill that includes a one-year extension of about 50 popular tax breaks that expired at the end of last year and a delay in scheduled cuts in Medicare payments to doctors.

The cost of the bill would be partially offset by tax increases on investment fund managers, oil companies and some international businesses. The tax increases total about $57 billion over the next decade. Changes giving underfunded pensions more time to improve their finances would raise $2 billion.

The original package unveiled last week would have extended unemployment benefits through December and delayed a 21 percent cut in Medicare payments until 2014. The pared-down bill would delay the Medicare cuts until 2012, when lawmakers would have to address the issue again.

Also in the House, Appropriations Committee Chairman David Obey, D-Wis., called off a vote on a far larger version of the war funding bill that added the $23 billion to help school districts avoid teacher layoffs, along with $6 billion to make up for a funding shortfall in grants for low-income college students. An Obey spokesman blamed the busy floor schedule and ongoing uncertainty over the jobless benefits bill. Appropriations panel Republicans had vowed to offer a raft of politically painful amendments.

(This version CORRECTS by deleting an erroneous reference to estimated $7 billion cost of extending benefits.)

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Money for favors? House ethics files go to Justice (AP)

Thursday, May 27th, 2010 | Finance News

WASHINGTON – The Office of Congressional Ethics is turning over evidence to the Justice Department that suggests some defense contractors thought their campaign donations were influencing the award of special-interest projects, the ethics office announced Thursday.

The move by the ethics office's board focused renewed attention on the politically sensitive subject of congressional earmarks. It also was a slap at the House Ethics Committee, which had concluded early this year that the evidence did not support a finding that any House member broke a law or regulation.

Since 2008, the Justice Department has been investigating members of the House Appropriations defense subcommittee who received a flood of campaign money over the years from the lobbying firm PMA and its defense contractor clients. The subcommittee had been chaired by Rep. John Murtha, D-Pa., who died in February. PMA went out of business after FBI agents raided its offices.

Conducting its own examination of Murtha and six other members of his subcommittee who took money from PMA's clients, the ethics office zeroed in on Reps. Pete Visclosky, D-Ind., and Todd Tiahrt, R-Kan.

The ethics office concluded there was reason to believe that Visclosky solicited contributions in exchange for official acts. The ethics office's investigation found that in Tiahrt's case, there were potential connections between appropriations requests from PMA clients and the clients' campaign donations to Tiahrt.

Visclosky was subpoenaed a year ago in the ongoing Justice Department probe, acknowledging that a federal grand jury had demanded documents from his office, some employees and his campaign committees.

The House Ethics Committee reviewed the evidence gathered by the congressional ethics office on Visclosky and Tiahrt and closed its inquiry without taking any action against either of them, nor against any of the other five subcommittee members.

The ethics committee's inaction seemed to be the end of the matter. However, Reps. Jeff Flake, R-Ariz., and Paul Hodes, D-N.H., asked the ethics office to publicly release its evidence. The ethics office board declined, saying to do so would undercut an ongoing criminal investigation. Instead, the ethics office voted to forward its material to the Justice Department for use in the criminal probe.

"The evidence pertains to a factual finding by the OCE board that certain persons and companies saw their campaign donations as affecting decisions about earmarks," the ethics office said in a statement that did not identify which members of Congress the evidence involved.



Congressional Ethics Office report:

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