Inside Politics; Cruz says GOP has leverage in debt-ceiling fight

Sen. Ted Cruz said Republicans came out on the short end of the “fiscal cliff” fight because President Obama had a stronger position — but the new Texas lawmaker expects a different outcome in the upcoming debt-ceiling negotiations.

“Whoever owns the default — whoever wins if nothing is done — is in the strongest position. And Obama was in the strongest position” in the fiscal cliff showdown, Mr. Cruz told Fox News’ Sean Hannity.

“With respect to the debt ceiling, [fiscal conservatives] have the default. If fiscal conservatives stand together, we can force substantial reforms.”

The freshman senator, who has quickly become one of the most prominent fiscal hawks on Capitol Hill since his tea-party-fueled November win in Texas, said Republicans need to make it clear that a failure to reach a deal on the debt ceiling will not create a U.S. government default.

SUPREME COURT

Justices weigh warrantless blood tests in DUI cases

The Supreme Court is considering whether police must get a warrant before ordering a blood test on an unwilling drunken-driving suspect.

The justices heard arguments Wednesday in a case involving a disputed blood test in Missouri. Police stopped a speeding, swerving car and the driver, who had two previous drunken-driving convictions, refused to submit to a breath test to measure the alcohol level in his body.

The justices appeared to struggle with whether the dissipation of alcohol in the blood over time is reason enough for police to call for a blood test without first getting a warrant.

In siding with defendant Tyler McNeely, the Missouri Supreme Court said police need a warrant to take a suspect’s blood except when a delay could threaten a life or destroy potential evidence.

SEC

Director who led efforts to penalize banks resigns

Robert Khuzami is leaving the Securities and Exchange Commission after leading the agency’s efforts to penalize the nation’s largest banks for actions that triggered the 2008 financial crisis.

The SEC announced Mr. Khuzami’s resignation Wednesday. He was named enforcement director in February 2009, just months after the crisis peaked. In his four years at the helm, he spearheaded investigations that accused banks of misleading investors about risky mortgage securities.

His efforts drew historic SEC settlements. Goldman Sachs agreed in July 2010 to pay $550 million to settle civil charges — the largest penalties paid by a bank in a fraud case. Similar deals followed with Citigroup Inc., JPMorgan Chase & Co. and others.

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