- Created on 11 December 2013
Photo by Getty Images
For one happy week in January, Casey O'Connell and her husband, Gerry Ferguson, both had jobs.
Ferguson, an Iraq war vet, had been out of work 15 months when he landed employment with Pennsylvania's workforce development system. For two years, O'Connell had been working in customer service for a heating oil company.
"Great, now we can finally save up and buy a house," O'Connell, 28, remembered thinking at the moment they became a two-earner family. She said grown up in apartments and relished the opportunity to give her children a traditional home in this Philadelphia suburb.
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- Created on 11 December 2013
AP Photo/J. Scott Applewhite
WASHINGTON (AP) -- Top Republicans and President Barack Obama are lining up behind a modest but hard-won bipartisan budget agreement that seeks to replace a portion of tough spending cuts facing the Pentagon and domestic agencies.
The deal to ease those cuts for two years is aimed less at chipping away at the nation's $17 trillion national debt than it is at trying to help a dysfunctional Capitol stop lurching from crisis to crisis. It would set the stage for action in January on a $1 trillion-plus spending bill for the budget year that began in October.
The measure unveiled by House Budget Committee Chairman Paul Ryan, R-Wis., and his Senate counterpart, Patty Murray, D-Wash., blends $85 billion in spending cuts and revenue from new and extended fees - but no taxes or cuts to Medicare beneficiaries - to replace $63 billion in cuts to agency budgets over the coming two years.
The package would raise the Transportation Security Administration fee on a typical nonstop, round-trip airline ticket from $5 to $10; require newly hired federal workers to contribute 1.3 percentage points more of their salaries toward their pensions; and trim cost-of-living adjustments to the pensions of military retirees under the age of 62. Hospitals and other health care providers would have to absorb two additional years of a 2-percentage-point cut in their Medicare reimbursements.
The plan pales compared with earlier, failed attempts at a "grand bargain" that would trade tax hikes for structural curbs to ever-growing benefit programs like Medicare and Social Security. But it would at least bring some stability on the budget to an institution - Congress - whose approval ratings are in the gutter.
"Our deal puts jobs and economic growth first by rolling back ... harmful cuts to education, medical research, infrastructure investments and defense jobs for the next two years," Murray said.
Ryan is set to pitch the measure to skeptical conservatives at a closed-door GOP meeting on Wednesday. Democrats are set to discuss it as well, but the measure won an immediate endorsement from President Barack Obama if only tepid approval from top Capitol Hill Democrats like House Minority Leader Nancy Pelosi and Rep. Chris Van Hollen, ranking Democrat on the Budget Committee.
"Tonight's agreement represents a step toward enacting a budget for the American people and preventing further manufactured crises that only harm our economy, destroy jobs and weaken our middle class," Pelosi said in a statement.
"This agreement makes sure that we don't have a government shutdown scenario in January. It makes sure that we don't have another government shutdown scenario in October," Ryan said. "It makes sure that we don't lurch from crisis to crisis."
The budget deal was one of a few major measures left on Congress' to-do list near the end of a bruising year that has produced a partial government shutdown, a flirtation with a first-ever federal default and gridlock on Obama's agenda.
In a blow to Democrats, the agreement omits an extension of benefits for workers unemployed longer than 26 weeks. The program expires Dec. 28, when payments will be cut off for an estimated 1.3 million individuals. Senate Majority Leader Harry Reid, D-Nev., has agreed to stage a test vote on the measure this year, but it's not clear whether he'll get enough GOP support to advance it.
Aides predicted bipartisan approval in both houses in the next several days, despite grumbling from liberals over the omission of the unemployment extension and pressure from tea party-aligned groups that are pushing Republican conservatives to oppose the deal.
The agreement would increase the cap on so-called discretionary spending from the $967 billion mandated by Washington's failure to follow up a 2011 budget agreement with additional deficit cuts. The cap would rise to $1.012 trillion for the ongoing 2014 budget year and up to $1.014 trillion for 2015.
The relief to the Pentagon is relatively modest since the agency started out facing a cut of $20 billion below the harsh cuts it faced in 2013; the agreement replaces those cuts but doesn't bring the military's budget much above 2013 levels.
"While modest in scale, this agreement represents a positive step forward by replacing one-time spending cuts with permanent reforms to mandatory spending programs that will produce real, lasting savings," said Speaker John Boehner, R-Ohio.
Even before the deal was announced, conservative organizations were attacking the proposal as a betrayal of a 2011 agreement that reduced government spending and is counted as among the main accomplishments of tea party-aligned Republicans who came to power earlier the same year in the House.
Sen. Marco Rubio, R-Fla., issued a statement opposing the measure and Senate Minority Leader Mitch McConnell, R-Ky., was seen as likely to oppose it as well. But key Democrats lined up behind Obama, especially after Ryan eased demands on making federal workers contribute more to their pensions.
"This agreement isn't perfect, but it is certainly better than no agreement at all," said Van Hollen, the top House Budget Committee Democrat.
- Created on 10 December 2013
Photo by Bloomberg via Getty Images
U.S. regulators toughened key sections of the Volcker rule's crackdown on Wall Street's risky trades on Tuesday as they finalized one of the harshest reforms after the credit meltdown.
The rule - named after former Federal Reserve Chairman Paul Volcker, who championed the reform - generally bans banks from proprietary trading, or speculative trading for their own profits.
The final rule includes strictly defined carve-outs for trades executed to serve clients' interests or to protect against market risks, and forces banks to show regulators that they are not trying to pass off speculative bets as legitimate trades.
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- Created on 10 December 2013
AP Photo/Connie Zhou
WASHINGTON (AP) -- Silicon Valley is escalating pressure on President Barack Obama to curb the U.S. government surveillance programs that vacuum personal information off the Internet and threaten the technology industry's financial livelihood.
A coalition that includes Google, Apple, Yahoo, Facebook and Microsoft lashed out in an open letter printed Monday in major newspapers and a new website, HTTP://REFORMGOVERNMENTSURVEILLANCE.COM .
The crusade united eight companies that often compete fiercely against each other, but now find themselves banding together to limit the potential damage from revelations about the National Security Agency's snooping on Web surfers.
Twitter Inc., LinkedIn Corp. and AOL Inc. joined Google Inc., Apple Inc., Yahoo Inc., Facebook Inc. and Microsoft Corp. in the push for tighter controls over electronic espionage. The group is immersed in the lives of just about everyone who uses the Internet or a computing device.
As the companies' services and products have become more deeply ingrained in society, they have become integral cogs in the economy. Their prosperity also provides them with the cash to pay for lobbyists and fund campaign contributions that sway public policy.
Monday's public relations offensive is a by-product of documents leaked over the past six months by former NSA contractor Edward Snowden. The records reveal that the NSA has been obtaining emails and other personal data from major tech companies under secret court orders for the past five years and scooping up other data through unauthorized hacking into data centers.
Silicon Valley has been fighting back in the courts and in Congress as they seek reforms that would allow them to disclose more information about secret court orders. Several of the companies are also introducing more encryption technology to shield their users' data from government spies and other prying eyes.
Monday's letter and the new anti-snooping website represent the technology industry's latest salvo in an attempt to counter any perception that they voluntarily give the government access to users' email and other sensitive information.
Although the campaign is ostensibly directed at governments around the world, the U.S. is clearly the main target.
"The balance in many countries has tipped too far in favor of the state and away from the rights of the individual - rights that are enshrined in our Constitution," the letter said. "This undermines the freedoms we all cherish. It's time for a change."
Civil liberties aren't the only thing at stake. One of the reasons the technology companies have become a rich vein for crime-fighting authorities is that they routinely store vast amounts of personal data as part of their efforts to tailor services and target advertising.
By analyzing search requests, Web-surfing habits, social networking posts and even the content of emails, the companies are able to determine, for instance, the type of digital ads to show individual users. The NSA revelations have raised fears that people might shy away from some Internet services or share less information about themselves. Such a shift would make it more difficult for companies to increase their ad revenue and, ultimately, boost their stock prices.
In a statement, Yahoo CEO Marissa Mayer said the NSA disclosures had "shaken the trust of our users."
Google CEO Larry Page and Facebook CEO Mark Zuckerberg, two of the richest people in the world, also chimed with statements urging the U.S. to adopt reforms to protect personal information.
U.S. intelligence officials have staunchly defended the electronic espionage, contending the NSA's tactics have helped disrupt terror attacks. Officials also insist that the agency takes care not to look at the content of conversations or messages by U.S. citizens.
Obama has asked a panel of hand-picked advisers to report on the spying issue this month and recently said he'll propose the NSA use "some self-restraint" in handling data.
White House spokeswoman Caitlin Hayden indicated the administration expects to address many of the concerns raised in Monday's letter after Obama's advisers complete their review. "As we have said repeatedly, we are committed to conducting intelligence activities with appropriate constraints, oversight, transparency and accountability," she said.
Monday's letter goes farther than the companies' previous statements in favor of overhauling surveillance practices, according to Kevin Bankston, policy director of the New America Foundation's Open Technology Institute. He notes that the new principles put forward by the companies include "an unambiguous condemnation" of bulk data collection as conducted by the NSA.
It was a shrewd move for the companies to disseminate the open letter through newspaper ads, said Daniel Castro, a senior analyst for the Information Technology and Innovation Foundation, a Washington, D.C. think tank.
By virtue of connecting directly with a massive proportion of the U.S. population, the companies "have a huge reach," Castro said. "They want people to be supporting and rallying around this effort."
The Silicon Valley companies also are waging an attack in the Foreign Intelligence Surveillance Court, where they are fighting to be allowed to reveal more details about how frequently the NSA has been seeking user data. U.S. law currently prevents the recipients of national security orders from breaking down the number of demands they get under the Patriot Act. The companies contend that restriction fuels the erroneous perception that the government has a direct pipeline to their users' data.
The government countered with a motion on Friday arguing that it should be able to redact, or withhold from publication, parts of its justifications to the courts for barring such detailed reporting by the companies.
Technology companies are also concerned that governments outside the U.S., such as the European Union, might set tougher rules for businesses to protect the privacy of their citizens, according to Joss Wright, a research fellow of the Oxford Internet Institute.
"It's potentially huge," Wright said. "Other countries around the world could make it harder for (the companies) to carry on with unrestricted data gluttony."