An online sales tax bill heads to the US House of Representatives after Senate passage, as brick-and-mortar shops call for a “level playing field”.
See the original post: Senate backs online sales tax plan
Senate candidate Gomez shouldn’t take ‘private’ equity so literally.
Excerpt from: Gabriel Gomez’s private equity past
A Senate report on the London Whale trading losses shows that J.P. Morgan needs to make major shifts at the top to move past this mess.
Read the rest here: J.P. Morgan: It’s time for some real change
Category : Business, World News
US bank JPMorgan Chase is accused by a US Senate panel of hiding its huge “London whale” trading losses, worth $6.2bn (£4.1bn).
Visit link: JP Morgan accused of hiding losses
The Senate’s investigation into the risk taking and trades behind the London Whale losses show a culture of dangerous risk taking and active ignorance by federal regulators.
See the original post: Senate on London Whale: Worse than we thought
WASHINGTON — The Senate’s Republican leader says the automatic spending cuts that just started to kick in are modest and a step toward curing Washington of its “spending addiction.”
Sen. Mitch McConnell says the across-the-board cuts are not as devastating as some predicted. The Kentucky Republican also says families have had to trim their budgets and can appreciate Washington’s step to curb spending.
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Read more from the original source: McConnell: Spending Cuts Are Modest
Category : Business
Jack Lew is poised to become the next US Treasury Secretary after gaining approval from the Senate’s influential finance committee.
See the original post: Lew approved by Senate committee
As he revels in his second public inauguration, the president knows his legacy lies at the end of a number of perilous paths
Barack Obama was officially sworn in as president for a second term at noon on Sunday, in a White House ceremony that was relatively quiet, compared with the one that will take place with hundreds of thousands lining the Mall on Monday.
It would have been a major disappointment in November for many Americans, not least African-Americans, if the first black president had only been given one term. The breakthrough in racial relations would have been tainted by rejection. Instead, Obama has been given a chance to build his legacy and to be remembered for more than being just the first black president.
While Republicans decry his first term as a disaster, his supporters claim he has already built a formidable legacy. Obama helped guide America out of its worst economic recession since the 1930s and introduced legislation that had defeated his Democratic predecessors, at least since LBJ – a significant move towards universal healthcare.
On top of that, he ended the Bush-era sanctioning of torture, recognised the rights of gays to openly serve in the military and to marry, and provided legal cover for a young undocumented workers.
Ross Baker, a politics professor at Rutgers who has served on the staffs of both Democratic and Republican senators, sees Obama as having done enough to achieve inclusion on the list of great presidents – if not up with the great greats, such as Lincoln or FDR, then high in the second tier, better than Kennedy or Clinton.
The challenge facing Obama in a second term? “He will strive to rekindle the excitement of the first term which is a difficult objective to achieve,” Baker said. “His first term is a difficult act to follow. I could not imagine anything of the magnitude of Obamacare or Dodd-Frank [the legislation on financial regulation]. He would do well to get over the debt [and] spending obstacles with his dignity intact.”
So what should we expect on Monday? Is Obama, having disappointed with his inaugural speech in January 2009, going to mark the start of his second term with some of the soaring rhetoric that is his trademark? Having tried to dampen expectations last time around, is he now going to try to raise them?
Gun control
This was not even on the agenda in the November election. In spite of a series of shooting sprees in Obama’s first term, it took the Newtown school shooting, in which 20 young children and six adults were killed, to persuade the president to make gun control a second-term priority.
Last Wednesday, Obama called on Congress to pass as a matter of urgency legislation to ban automatic weapons, reduce the size of magazines to 10 bullets and tighten up background checks for buyers.
The chances of getting through an automatic weapons ban or a reduction in the size of magazines are remote, given that the Republicans control the House. Even in the Senate, which the Democrats hold, enthusiasm for gun control is weak. The Democratic leader in the Senate, Harry Reid, risks his own seat in Nevada if he backs significant restrictions, as well as the seats of about half a dozen of his colleagues, effectively costing the Democrats their majority.
The likelihood is that Congress will back tightening up rules on gun buyers. Along with the executive actions Obama made this week to increase research into gun violence and appoint a new head of the federal firearms bureau, the White House might have to settle for this.
Immigration
This would be a huge change for America, which has an estimated 11 million undocumented workers, the majority from Central and South America. Although essential to the economy and doing much of the low-paid work others decline to do, illegal immigrants are still denounced by some Americans for having broken the law by entering the country without papers. Many such critics hint darkly about mass deportations, even though this is privately acknowledged as impractical.
Having won in November with the support of two-thirds of Latino voters, Obama has to try to deliver on immigration reform, not least to cement the Latino population to the Democratic party for years to come.
The Republicans killed proposed Ted Kennedy-John McCain reforms in the Bush era and the 2010 Dream Act that would have created a path to citizenship. After Mitt Romney’s defeat in November, though, they seem finally to have acknowledged the realities of changing demographics. One of the GOP’s rising stars, Marco Rubio, who is of Cuban descent, has backed a plan that has some similarities to that being proposed by Obama.
Republicans will find it hard to swallow the idea of rewarding people who moved to the US illegally, however. Citizenship measures will struggle to get through the House. But there is enough common ground – and political self-interest – for Democrats and Republicans to unite behind some reform.
Health
Although the “Obamacare” legislation was passed in 2010 and some measures have been implemented, the changes are not scheduled to start until 2014. If Obama had not been elected, the legislation faced being slowly dismantled. Obama now has the chance to embed it.
The president has told supporters that he regards Obamacare as his biggest legacy, taking away the fear of being unable to pay for treatment for millions more people and making a major step in the battle against poverty.
From 2014, people previously without any health insurance will have to participate or pay a penalty.
Economy
Obama does not want his second term to be dominated by showdown after showdown with House Republicans. Buoyed by his second election win and polls showing a rise in his approval ratings, however, he appears more willing to take on the Republicans than he was first time round.
Against this background, he warned the Republicans after the fiscal cliff crisis in December and early January that he would not negotiate over the debt-ceiling limit, the next potential crisis which was due to hit in February or early March. He gave them an ultimatum: either pass it or take the blame for closing the government down.
The Republicans seem to have blinked, proposing a bill to go before Congress in the coming days that will extend the debt limit for a further three months.
Obama also appears prepared to do a deal with the Republicans on spending cuts to reduce the deficit and is open to Republican proposals for cutting back welfare benefits, even in the face of Democratic opposition.
Political legacy
It is in Obama’s interest to heap the blame for much of what is wrong in Washington on to the House Republicans. If he can achieve this, the Democrats have a hope of winning back the House in 2014.
With both the House and Senate in Democratic hands, Obama would be well placed in his final two years – even at a time when the focus traditionally switches to the presidential race and his potential successors – to secure further legislative changes.
But it is just as likely that something unexpected will surface – an economic downturn or a foreign policy disaster – causing Obama’s present ratings to plummet and taking with it the Democrats’ chances in 2014 and for the White House in 2016.
Foreign policy
Obama’s biggest foreign policy challenge remains Iran. There is the risk that in the next four years the issue will come to a head, with Iran either achieving a nuclear weapons capability or Israel, no longer willing to take the risk, launching air strikes.
But there are alternatives. The US could enter into direct talks with the Iranians; Tehran might decide to stop just short of a nuclear weapons capability; or sanctions might force the Iranian government into compromise.
By at least the end of 2014, most American combat troops will have left Afghanistan, so the two wars Obama inherited from George W Bush will be over, at least from a US perspective. Although that will still leave Pakistan and the controversial drone attacks.
And will Obama finally commit time and political capital to trying to resolve the Israeli-Palestinian conflict? That could be one for his new secretary of state, the Democratic senator John Kerry, assuming he passes through the Senate nomination hearings unscathed, as seems likely. Former Republican Chuck Hagel as defense secretary faces a tougher time but, with the backing of Democrats, he should also make it through.
The president’s hopes of an easy nomination process have been dashed by senators vowing to block Jack Lew’s appointment
Barack Obama urged the US Senate to quickly confirm Jack Lew as the new US treasury secretary on Thursday, describing him as a man capable of forging bipartisan compromises.
But the overture was immediately rebuffed by Jeff Sessions, the most senior Republican on the Senate budget committee, who accused Lew of being dishonest and promised an “aggressive” campaign against his nomination.
Sessions appeared to dash hopes of an easy nomination process. “Jack Lew must never be secretary of treasury,” he said. Sessions said comments made by Lew two years ago, when he claimed that Obama’s budget plans would steer the US to a position where “we’re not adding to the debt any more”, were “outrageous and false”.
Lew had been widely expected to sail through the nominating process but the Sessions warning reflects the deeply polarised nature of Washington, especially over budget and tax issues. Obama formally announced at a press conference at the White House that Lew, his chief of staff, would be his nominee to replace Tim Geithner. Lew and Geithner flanked the president as he gave a statement praising both men.
Lew, a long-time Democrat, has been involved in budget battles going back to the early 1980s, through the Clinton years and in the Obama administration. In spite of Republicans having frequently emerged bruised from the encounters, describing him as uncompromising, the commonly held view in Washington was that he was well-enough liked to make it through the nomination process unscathed.
Obama, in his statement, anticipated the coming battles with Republicans in Congress, beginning with a showdown over the $16.4tn (£10.2tn) debt ceiling late next month and further battles over deep spending cuts. The president claimed Lew was well qualified for the job of balancing the budget. He said: “Under President Clinton, he presided over three budget surpluses in a row.” In words aimed at Republicans in Congress, he added: “So for all the talk out there about deficit reduction, making sure our books are balanced this is the guy who did it. Three times.”
He described Lew as low-key, more interested in a discussion with other policymakers rather than appearing on television. “Over the years he has built a reputation as a master of policy who can work with members of both parties and forge principled compromises.”
The Republicans want cuts in welfare programmes, but the Obama administration wants to protect key elements, such as healthcare for the elderly, Medicare, and for the poor, Medicaid, and would rather cut defence spending. The Obama administration also wants tax revenue raising measures included in the mix.
With this in mind, Obama said of Lew: “Maybe most importantly, as the son of a Polish immigrant, a man of deep and devout faith, Jack knows that every number on the page, every dollar we budget every decision we make, has to be an expression of who we wish to be as a nation, our values, the values that says everyone gets a fair shot at opportunity and says we expect all of us to fulfil our obligations as citizens in return.”
Obama added: “Jack has my complete trust … So I hope the Senate will confirm him as quickly as possible.”
This completes the top trio of cabinet appointments, Obama having already nominated John Kerry as secretary of state and Chuck Hagel as defence secretary. Obama praised Geithner for helping to restore the economy after its collapse.
The Republicans want Obama to begin cutting federal spending in return for raising the $16.4 trillion borrowing limit, a potential re-run of a standoff that almost saw the federal government close down in 2011. Obama said earlier this month that raising the debt ceiling should be routine for Congress and he will not engage with Congress this time.
As Treasury secretary, Lew’s signature will appear on currency. His series of loops has started speculation over whether he will try for a more readable signature, as did Geithner. Obama joked that if Lew did not make at least one of his loops legible, he wound rescind his nomination.
Hopes of avoiding tax rises for majority of Americans reside with Republicans as prospect of Tea Party rebellion lingers
The fate of a deal to resolve America’s fiscal cliff crisis hung in the balance on Tuesday, in spite of an overwhelming vote in the Senate hours earlier in favour of a compromise bill aimed at ending the long-running saga.
President Barack Obama hailed the Senate vote and called on the House of Representatives to act “without delay”. But senior figures in the House, where the Republicans have a majority, expressed dissatisfaction with the deal and it was unclear on Tuesday what its fate would be.
Obama was looking for a deal to be in place to calm Wall Street before it re-opened on Wednesday. But the office of the Republican House speaker, John Boehner, could not confirm whether he would even schedule a vote on the bill. Boehner, in theory, should be able to push the bill through with a combination of moderate Republicans and Democrats, even in the face of a revolt by Tea Party-backed members of Congress.
Eric Cantor, the Republican leader in the House, said he did not support the bill, further raising questions about how Congress will address automatic spending cuts and tax increases that began to take effect just after midnight.
Both Republicans and Democrats expressed unhappiness with the bill. Democrats accused Obama of giving too much ground to the Republicans, setting too high a threshold for tax increases to kick in. Republicans claimed the deal failed to address America’s burgeoning deficit.
One of the conservative House Republicans, Michele Bachmann, indicated she would vote against, saying the bill increased revenue without dealing with spending. “It is a cynical, planned move by the president,” she told Congress.
Republicans scheduled at least two closed-door meetings on Tuesday to discuss the issues with their leadership. The White House dispatched vice-president Joe Biden to Congress to persuade liberal Democrats in the House to back the bill.
Democrats in the House emerged from the briefing with Biden pledging support, and urging Republican colleagues to accept the bill unamended.
Minority House leader Nancy Pelosi said the legislation sent from the Senate represented a “historic” bi-partisan compromise. She also piled pressure on Boehner to allow the measures to go to a vote in the House, noting that he had previously suggested that any bill from the Senate would be put in front of representatives.
“That is what he said, that is what we expect. That is what the American people deserve,” Pelosi said.
The bill passed by the Senate, with 89 senators in favour and eight against, is a messy, short-term deal that raises taxes on the wealthiest but postpones for two months any consideration of spending cuts. The vote came at 2am on Tuesday, too late to prevent the country breaching the midnight fiscal cliff deadline. Taxes for all Americans automatically went up on 1 January and all federal programmes, from defence to welfare, faced deep spending cuts.
To reverse this, the House must also vote for the bill, which confines tax rises to individuals earning $400,000 or more a year and households earning $450,000 or more. It postpones spending cuts for two months, to allow further negotiations. Estate tax also rises, to 40% from 35%, but inheritances below $5m are exempted from the increase. Benefits for the unemployed are extended for another year.
The House presents a much bigger hurdle than the Senate, not only because the Republicans have a majority but because of the presence of a bloc of Tea Party-backed Republicans. The Republicans have 241 members to the Democrats’ 191.
Boehner’s instinct is towards compromise but he has had trouble keeping the Tea Party bloc under control. Theoretically, he has enough votes to push a bill through, but he is coming up for re-election as Speaker and will not want to alienate conservative Republicans.
The deal was thrashed out in the past few days between Biden and the Republican leader in the Senate, Mitch McConnell. It partly fulfills one of Obama’s election campaign promises: to raise taxes on the wealthiest. But Obama was forced to compromise: he wanted higher taxes to kick in at $250,000 a year.
In a statement, the White House welcomed the compromise: “For the first time in 20 years, Congress will have acted on a bipartisan basis to vote for significant new revenue. This means millionaires and billionaires will pay their fair share to reduce the deficit through a combination of permanent tax rate increases and reduced tax benefits.”
The statement added that 98% of families would not face tax rises, assuming the House also voted for the deal.
Obama had wanted, as part of a deal, an assurance from the Republicans that they would not mount another showdown in a few months’ time, when he has to raise the debt ceiling. But he failed to get this, ensuring yet another confronation between the White House and Repubicans in Congress in late February and early March.
The Republican senator John McCain, who voted for the deal, said: “Despite my disappointment with many aspects of this agreement, I cannot in good conscience stand by and watch taxes go up on all Americans.
“However, it should be embarrassing to all of us that it took until the last hours of the last day of the year to address an issue we should have dealt with months ago. This marks another sad chapter in what has been the least productive Congress since 1947.”
Details of the deal
• Taxes will rise for individuals earning more than $400,000 and households that make more then $450,000, with the rate rising to a maximum of 39.6% from the current 35%. Capital gains and dividends in excess of those amounts would be taxed at 20%, up from 15%
• Estate tax will rise to 40% on the portion of estates exceeding $5m in value. At the insistence of Republicans, the $5m threshold would rise each year with inflation.
• Tax breaks will be maintained for families with children, for low-earning taxpayers and for those with a child in college. The alternative minimum tax, which was due to expand to affect an estimated 28 million households for the first time in 2013, with an average increase of more than $3,000, remains at its present level.
• The deal leaves untouched a scheduled 2 percentage point increase in the payroll tax, ending a temporary reduction enacted two years ago to help revive the economy.
• Benefits for the long-term unemployed, which were about to expire for an estimated two million jobless Americans, will be extended for a year.
• A 27% cut in fees for doctors who treat Medicare patients will be postponed for a year. Also included in the deal is a provision to prevent a threatened spike in milk prices.