- The Washington Times - Tuesday, September 22, 2009

WHITE HOUSE

Obama greets governor’s rival

TROY, N.Y. | President Obama called New York Gov. David A. Paterson “a wonderful man” Monday, a day after apparently throwing him into a fight for his political career. But he saved the heartiest greeting for Mr. Paterson’s chief rival for the job: state Attorney General Andrew M. Cuomo.

The president was in the Albany area to deliver economic remarks at Hudson Valley Community College in Troy. The visit closely followed weekend reports that Washington Democrats, some saying they were acting on behalf of Mr. Obama, urged Mr. Paterson to drop out of the race.

Such a move would pave the way for Mr. Cuomo to win the Democratic nomination.

The embattled governor was subdued Monday before the economic address, at which Mr. Obama heaped praise on Mr. Paterson.

“A wonderful man, the governor of the great state of New York, David Paterson, is in the house,” he said before delivering his address at the college in Troy, across the Hudson River from New York’s capital.

Mr. Obama then introduced the attorney general as a close ally and joked with the hard-charging, headline-grabbing Mr. Cuomo, calling him “your shy and retiring attorney general.”

“Andrew’s doing great work enforcing the laws that need to be enforced,” Mr. Obama said as he cast a smile toward Mr. Cuomo and the two made eye contact. Mr. Obama didn’t look at Mr. Paterson in his introduction.

HOUSE

Jobless benefits set for extension

With the jobless rate rising even as the recession eases its grip, the House is expected to pass a bill this week to extend unemployment benefits for those who risk exhausting them.

The House is scheduled to vote Tuesday on the measure to extend jobless benefits for 13 more weeks in hard-hit states, according to a schedule released by House Majority Leader Steny H. Hoyer, Maryland Democrat.

Mr. Hoyer scheduled the vote under special rules reserved for noncontroversial bills, a sign that it is expected to pass easily.

Senate leaders have said they also intend to extend unemployment benefits, but it was not immediately clear when that chamber would act.

The unemployment rate rose to 9.7 percent in August, the highest figure since 1983. It is expected to remain high into next year, even as the economy recovers from the worst economic downturn since the Great Depression of the 1930s.

About 6 million people were collecting long-term unemployment benefits at the end of August, and about 1.5 million could exhaust those benefits by the end of the year.

IRS

Amnesty program extended for cheats

Tax dodgers who hid assets overseas will get a few extra weeks to apply for an amnesty program that has been flooded with applications ahead of the Wednesday deadline.

The Internal Revenue Service said Monday that the deadline would be extended until Oct. 15.

More than 3,000 Americans have applied for the program, which promises no jail time and reduced penalties for tax cheats who come forward, said a government official who spoke on the condition of anonymity because he was not authorized to speak on the record ahead of the public announcement.

The IRS is extending the Wednesday deadline to give applicants more time to prepare their paperwork

The IRS long has had a policy that certain tax evaders who come forward before they are contacted by the agency usually can avoid jail time as long as they agree to pay back taxes, interest and hefty penalties. Drug dealers and money launderers need not apply. But if the money was earned legally, tax evaders can usually avoid criminal prosecution.

Fewer than 100 people apply for the program in a typical year, in part because the penalties can far exceed the value of the hidden account, depending on how long the account holder has evaded U.S. taxes.

CONGRESS

Judge: Jefferson won’t get new trial

A federal judge has denied the request for a new trial by a former Louisiana congressman convicted on corruption charges.

U.S. District Judge T.S. Ellis III ruled against a motion by former Rep. William Jefferson on Friday in Alexandria. Jefferson was convicted Aug. 5 on 11 of 16 federal counts for using his influence to broker business deals in Africa. Federal agents had found cash in his freezer.

A jury ruled Jefferson must forfeit about $470,000. He later filed for Chapter 7 bankruptcy liquidation.

In his request, Jefferson argued he should have been allowed to use information about a sexual relationship between a cooperating witness and an FBI agent at trial. Judge Ellis said the relationship was irrelevant and could not be used as evidence at trial.

CIA

Report: CIA probe harmed inmates

A new scientific paper asserts that the CIA’s harsh interrogation program likely damaged the brain and memory functions of terrorism suspects, diminishing their ability to provide the detailed information the spy agency sought.

The paper, published Monday in the scientific journal Trends in Cognitive Science: Science and Society, said the harsh techniques used by the CIA during the George W. Bush administration were biologically counterproductive to eliciting quality information.

The report said extreme stress, the kind caused by the extended use of waterboarding - a form of simulated drowning used on three CIA prisoners - can also cause suspects to make up and believe false memories, a phenomena known as confabulation.

SENATE

Federal Reserve role could be diminished

Consensus is building in the Senate for legislation that would significantly weaken the Federal Reserve by stripping its power to oversee banks and assigning that job to a single federal bank regulator.

The proposal by Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd, Connecticut Democrat, to merge federal oversight into a single regulator differs from a plan by President Obama. But it’s gaining traction among Mr. Dodd’s colleagues, who think the Fed didn’t do enough to prevent the financial crisis of the past year.

“If you look at the record here of the failure of the regulatory bodies, all roads seem to lead to the Federal Reserve,” said Sen. Richard C. Shelby of Alabama, the top Republican on the banking panel.

Since its creation almost a century ago, the Fed has grown into a major power broker and guardian of the financial system. It plays various roles on the government’s behalf in protecting the economy, including the supervision of banks to ensure the “safety and soundness” of the financial system and enforcement of rules to protect consumers.

But the Fed’s primary mission is thought to be its role as the nation’s central bank.

As part of a sweeping reform effort in response to last year’s financial crisis, Mr. Obama has proposed empowering the Fed further by tasking it with deciding whether a financial institution has grown so big and over-leveraged that its failure could bring down the entire economy.

From wire dispatches and staff reports

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