- - Wednesday, February 2, 2011


OMB’s Lew: Budget will plot deficit control

President Obama’s upcoming budget will lay out a credible plan to lower the U.S. deficit, but the funding gap will grow initially owing to the extension of tax cuts, Mr. Obama’s budget chief said Wednesday.

“The budget will show a very serious path of deficit reduction,” White House Office of Management and Budget Director Jack Lew told Reuters in an interview.

Mr. Obama is under pressure from Republicans to make deep cuts in government spending. Republicans have greater strength in the Senate and control of the House after winning big in November elections after a campaign built largely around fiscal austerity.

The president has received bipartisan recommendations for a bold overhaul of the U.S. tax code and government spending from a commission he appointed, and Lew said that items from that report will be reflected in the budget proposal.

But the president also wants investment to lift U.S. growth and steps that shield a fragile economic recovery. These include a tax package agreed with Republicans in December that will initially make the deficit numbers look worse.


Democrats object to Issa probe’s scope

Some Democrats in Congress objected Wednesday to early steps taken by the new Republican chairman of the House Oversight and Government Reform Committee to conduct a broad inquiry into President Obama’s promises to improve government transparency.

Reps. Elijah E. Cummings of Maryland, Gerald E. Connolly of Virginia and Peter Welch of Vermont complained in a letter to Rep. Darrell Issa, California Republican, that his investigation will burden federal agencies responsible for producing government records under the U.S. Freedom of Information Act requested by citizens, journalists, companies and others. Mr. Cummings is the senior Democrat on the House oversight committee.

Mr. Issa last week demanded details of every such request during the last five years, plus copies of all letters or e-mails between government workers and people with pending requests. He said the effort would make sure that “all federal agencies respond in a timely, substantive and nondiscriminatory manner” to requests for records under the information law. The five-year window would cover part of the Bush administration and the first two years of Mr. Obama’s presidency.

In their letter to Mr. Issa on Wednesday, the Democrats said the investigation would require government offices to turn over perhaps hundreds of thousands of documents.

“Without a defined focus, your inquiry will place a significant burden on FOIA offices and divert limited staff from processing requests from the public,” they wrote.


Storms expected to slow growth

The winter storms that buried the Midwest this week and are delivering yet another blow to the Northeast will likely slow the U.S. economy only modestly, analysts say.

“Annoying as it all is, the effect on [growth] is going to be on the smaller side,” says David Resler, chief U.S. economist at Nomura Global Economics.

Economists who were surveyed last month by the Associated Press estimated the economy would grow at an annual pace of 3.4 percent in the first three months of 2011, up from less than 3 percent last year. Most aren’t ready to revise their forecasts to reflect weather-related slowdown at airlines, retailers and other businesses.

Flight cancellations topped 5,000 for a second day as ice and snow slowed airport activity across much of the nation.

“There has to be a negative effect,” says Joseph LaVorgna, chief U.S. economist at Deutsche Bank. But he thinks the weather will be only a “temporary depressant” for a steadily strengthening economy.

The latest storm, called the worst in decades, barreled toward the Northeast on Wednesday. Up to 1 1/2 feet fell in Missouri. More than a foot dropped on northern Indiana and southeast Kansas, and Oklahoma saw up to a foot.

Deutsche Bank says it thinks severe weather last month hurt the job market in January. It predicts the government will report Friday that the economy generated a lackluster 125,000 jobs last month.


Wife of term-limited mayor enters race

LAS VEGAS | Sin City’s term-limited mayor might have found a way to stick around Las Vegas City Hall for a few more years.

Oscar Goodman’s wife, Carolyn, filed to run for mayor on Wednesday. City spokesman Jace Radke said Mr. Goodman joined Mrs. Goodman when she went to City Hall to make her candidacy official.

During his three terms as mayor, Mr. Goodman’s flashy style has attracted national attention. He can often be found at public events enjoying himself with a martini in hand, and he calls himself the happiest mayor in the universe.

At least nine other candidates have filed in the crowded race.


Judge raises voting questions

A federal judge is questioning whether a key component of the landmark Voting Rights Act is outdated.

At a hearing Wednesday in Washington, U.S. District Judge John Bates asked repeatedly about a section of the law that singles out mostly Southern states for additional election monitoring because they have histories of racial discrimination 40 or 50 years ago.

An Alabama county is suing the government over the law in a case that many predict will reach the Supreme Court.

Shelby County, with backing from conservative legal groups, maintains that it and other governments should no longer be forced to get federal approval before changing election procedures. The Justice Department and others counter that the localities are now using more subtle means to suppress minority votes.


Obama, McCain end long feud

President Obama and Sen. John McCain of Arizona, bitter rivals from the 2008 election campaign whose feud festered for two years, completed a thaw Wednesday when they sat down for Oval Office talks.

Mr. Obama’s defeat of Mr. McCain in the 2008 presidential election left sour feelings on both sides that lingered through Mr. Obama’s first two years in office.

Events surrounding the shooting a month ago of Democratic Rep. Gabrielle Giffords of Mr. McCain’s home state helped improve ties between the two leaders.

Mr. Obama’s appeal at a memorial service in Tucson, Ariz., for a renewed era of civility between politicians in Washington drew praise from Mr. McCain in an opinion column in The Washington Post.

“I disagree with many of the president’s policies, but I believe he is a patriot sincerely intent on using his time in office to advance our country’s cause,” Mr. McCain wrote in the article.

Mr. Obama invited Mr. McCain to the Oval Office as part of an effort to engage Republicans after they routed Democrats in congressional elections in November.



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