- The Washington Times - Wednesday, January 27, 2010

BAILOUTS

Paulson, Geithner to address AIG bailout

A House panel probing the bailout of American International Group Inc. is sharpening its questions for two Treasury secretaries and a federal investigator who thinks the Federal Reserve withheld documents.

Rep. Edolphus Towns, New York Democrat, said Tuesday that former Treasury Secretary Henry M. Paulson Jr. will appear at Wednesday’s hearing, along with current Treasury Secretary Timothy F. Geithner, special inspector general for the Troubled Asset Relief Program Neil Barofsky and officials from the Federal Reserve Bank of New York. Mr. Towns is chairman of the House Committee on Oversight and Government Reform.

The committee is pressing for details about deals that sent billions from AIG’s bailout to big banks including Goldman Sachs Group Inc. Lawmakers want to know why the New York Fed pressed AIG to be more secretive about the “backdoor bailouts” and other aspects of AIG’s management.

Mr. Geithner approved the deals, which may have cost taxpayers billions more than necessary because he did not demand concessions from banks AIG did business with, according to Mr. Barofsky’s earlier audit.

Rep. Darrell Issa, California Republican, also wants Mr. Geithner to describe Treasury’s conversations with labor unions in connection with the bailouts of automakers General Motors and Chrysler.

FLORIDA

Rubio grabs lead in primary race

TALLAHASSEE, Fla. | Former Florida legislator Marco Rubio has closed the gap in the race for the state’s Republican U.S. Senate nomination and is in a virtual dead heat with Gov. Charlie Crist, according to a poll released Tuesday.

Mr. Rubio, a lawyer who served as speaker of the House, was once considered a long shot against Mr. Crist, who has widespread name recognition and a significant fundraising lead. But with Florida’s primary seven months away, Mr. Rubio was favored by 47 percent compared with 44 percent who preferred Mr. Crist — statistically a tie in the Quinnipiac University poll that has a margin of error of 3.8 percentage points.

The random telephone survey, which included 673 GOP voters, was conducted Jan. 20-24.

“The horse race numbers are not a fluke,” said Peter Brown, assistant polling director for Quinnipiac in Connecticut. “Rubio’s grass roots campaigning among Republican activists around the state clearly has paid off.”

The latest survey marks a stunning turnaround for the 38-year-old Mr. Rubio, a conservative who trailed Mr. Crist by 31 points in a Quinnipiac survey taken in June.

IRS

Firms must report iffy tax breaks

The Internal Revenue Service plans to start requiring large corporations to disclose on their tax returns whether they are taking tax breaks that might be unacceptable to the IRS.

Large corporate tax filings are often complex, with some firms taking tax breaks that fall into a gray area of tax law. IRS Commissioner Douglas Shulman said Tuesday that requiring firms to flag those “uncertain tax positions” for IRS examiners would improve enforcement.

Firms must already set aside money to pay additional taxes when they take such positions. The new rules — they are delayed until at least the 2010 tax year — would require corporations to report the total amount of taxes they would owe if the tax breaks are not allowed, essentially waving a red flag at auditors when taxpayers take big money deductions.

The new requirements would be limited to firms with assets of at least $10 million.

Robert Willens, a corporate tax accountant in New York, said the new rules would “fundamentally change the balance of power” when the IRS examines corporate returns.

Examiners would no longer have to spend hours scanning returns in an attempt to find questionable deductions. Instead, they would be listed on returns, with a brief explanation.

MICHIGAN

Stupak won’t seek governor’s post

U.S. Rep. Bart Stupak says he won’t seek the Democratic nomination for Michigan governor this year and instead will run for re-election.

Mr. Stupak said in a statement Tuesday that he thinks he can best serve the people of Michigan in Congress.

The former state trooper and a gun-rights advocate holds powerful committee assignments. He has been deeply involved in negotiations over the health care overhaul bill and language restricting how abortions are covered by insurance.

The 57-year-old Mr. Stupak has held the 1st District seat in northern Michigan since 1993.

Michigan Lt. Gov. John Cherry, the presumptive Democratic front-runner in the gubernatorial race, withdrew his name earlier this month, opening up the race and drawing the attention of other Democrats.

INDIANA

Pence won’t run for Senate seat

INDIANAPOLIS | Rep. Mike Pence, Indiana Republican, says he won’t run this year for the U.S. Senate seat now held by Democrat Evan Bayh.

Mr. Pence had been considering a run and a possible showdown with Mr. Bayh, who has twice won election to the Senate.

But the third-ranking House Republican says he’s running for re-election to a seat representing much of eastern Indiana that he first won in 2000. He said Tuesday he made his decision in part because he’s been given responsibility to shape a GOP comeback as chairman of the House Republican Conference.

Those who have announced they will seek the Republican nomination are former U.S. Rep. John Hostettler, state Sen. Marlin Stutzman of Howe, Richmond financial adviser Don Bates Jr. and Fishers businessman Richard Behney.

From wire dispatches and staff reports

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