Category Archives: Politics
“WASHINGTON — In a significant setback for President Obama’s signature domestic initiative, the administration on Tuesday abruptly announced a one-year delay, until 2015, in his health care law’s mandate that larger employers provide coverage for their workers or pay penalties. The decision postpones the effective date beyond next year’s midterm elections.
Employer groups welcomed the news of the concession, which followed complaints from businesses and was posted late in the day on the White House and Treasury Web sites while the president was flying home from Africa. Republicans’ gleeful reactions made clear that they would not cease to make repeal of Obamacare a campaign issue for the third straight election cycle.
While the postponement technically does not affect other central provisions of the law — in particular those establishing health insurance marketplaces in the states, known as exchanges, where uninsured Americans can shop for policies — it threatens to throw into disarray the administration’s effort to put those provisions into effect by Jan. 1.
“I am utterly astounded,” said Sara Rosenbaum, a professor of health law and policy at George Washington University and an advocate of the law. “It boggles the mind. This step could significantly reduce the number of uninsured people who will gain coverage in 2014.”
At the White House, Tara McGuinness, a senior adviser on the law, disputed that.
“Nothing in the new guidance regarding employer reporting and responsibility will limit individuals’ eligibility for premium tax credits to buy insurance through the marketplaces that open on Oct. 1,” she said….”
“Sen. Bernard Sanders, I-Vt., told CNBC on Monday he’s “very disappointed” interest rates on federally subsidized Stafford student loans doubled overnight, soaring from 3.4 percent to 6.8 percent after Congress failed to reach a deal that would have prevented such an increase.
“I think that it is totally absurd for the middle class of this country and for our entireeconomy,” Sanders said of the student loan rate increase. “The idea of allowing rates to float up to 7 or 8 percent is preposterous.”
(Read More: Yet Another Drawback to Student loans)
Sanders said that to compete in the global marketplace, American youth must obtain a college education. Given the rising cost of higher education, though, Sanders said it’s become more difficult for students to afford college. Therefore, he said availability of a low interest rate loan is essential for the education of the low and middle classes….”
“Four large U.S. banks have failed to comply with key elements of a landmark $25 billion mortgage settlement, an independent monitor said Wednesday.
The report shows that lenders continue to bungle their dealings with struggling homeowners seven years after the bursting of a national housing bubble.
Bank of America Corp., BAC -0.61%J.P. Morgan Chase JPM -1.05% & Co.,Citigroup Inc. C -0.97% and Wells Fargo WFC -0.44% & Co. each failed to meet at least one of 29 standards for providing timely and accurate relief to homeowners at risk of foreclosure, Joseph A. Smith Jr., the independent monitor responsible for overseeing the settlement, said.
The bank lapses show that some homeowners still face challenges despite an improving housing market and a legal settlement designed to provide more transparency and accountability from lenders.
“Delays in the foreclosure process result in homeowners falling further behind,” said Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, during a Wednesday news conference. “This is unacceptable.”
Mr. Donovan warned that banks that fail to correct continued missteps will face “serious consequences,” including “hauling them back into court.” ….”
“The Swiss are not giving up bank secrecy without a fight.
The lower house of parliament voted Tuesday against a draft law that would have allowed the country’s banks to start sharing secret offshore account information with U.S. tax authorities.
The move keeps Switzerland’s famous bank secrecy rules intact for the foreseeable future, but creates a problem for hundreds of Swiss banks that are being barred, by law, from sharing account information.
The banks could face U.S. legal action if they continue withholding information and there is evidence proving they are helping Americans evade taxes via offshore accounts.
Switzerland is home to the world’s largest offshore banking industry with $2.2 trillion in deposits. Many account holders were attracted to its banks by the prospect of being able to hide their assets and avoid taxes in their home countries….”
“Japan’s parliament endorsed changes in legislation dealing with failed financial institutions as part of efforts by regulators worldwide to avoid a repeat of the global financial crisis.
The passed amendments, proposed by the Financial Services Agency, allow brokerages and insurers to join banks in being eligible for emergency capital from the state-run deposit insurance agency. The Upper House today also approved so-called bail-in rules that impose losses on investors of failing financial institutions to reduce taxpayers’ burden. The vote was broadcast live through the Internet.
The market meltdown following Lehman Brothers Holdings Inc.’s 2008 collapse prompted authorities around the world to bolster preparedness for financial turmoil. The Basel Committee on Banking Supervision, which sets international banking rules, has proposed that creditors contribute to shoring up firms’ finances before public money is used in the event of a crisis….”
“European Union regulators plan to request new powers to lower air-traffic charges and shorten flight routes in the bloc, challenging national controllers in a bid to offer relief for carriers.
The European Commission intends to present proposals today to tackle the national fragmentation of Europe’s airspace. The draft legislation would give the Brussels-based commission greater authority to enforce performance standards for air-traffic-control organizations and would open up their support services such as meteorology and data collection to competition…..”
“You may have heard that White House tours were cut due to across-the-board federal spending cuts known as the sequester. Or that Congress made sure to minimize disruptions to air travel. Or perhaps you know someone being furloughed as a result of the cuts.
But did you know a major fight is being waged over sequester cuts to some cancer drugs?
After Congress failed to pass a budget this spring, a 2 percent cut to Medicare chemotherapy drug reimbursements went into effect April 1 as part of the across-the-board federal spending cuts designed to save $85.4 billion this year.
Many doctors and patients are infuriated, and the issue has made its way into Congress, with a bill introduced in the House to help alleviate the burden being put on those in the cancer community.
Dr. John Cox, a community oncologist at Texas Oncology Methodist Cancer Centers in Dallas and a member of the American Society of Clinical Oncology (ASCO), told Yahoo News that the idea of treating Medicare patients differently from other patients goes against everything for which doctors stand.
“It makes all of us uneasy when we realize we are treating different populations in our practice differently,” Cox said.
The pressure put on doctors is significant. Oncologists are typically reimbursed the average sales price for chemotherapy drugs plus 6 percent to cover the cost of storing and administering these drugs. Because purchasing those drugs costs the same as it did before the sequester, many cancer doctors, especially community oncologists who operate in smaller, nonhospital settings—are now unable to keep up with the costs associated with treating Medicare cancer patients who are typically elderly and on fixed incomes….”
“Germany’s top court probably won’t intervene in the European Central Bank’s plan to buy bonds of crisis-torn countries, in line with previous cases involving the country’s integration with the European Union.
The ECB’s Outright Monetary Transactions program and the European Stability Mechanism will be reviewed by the Federal Constitutional Court in Karlsruhe at hearings this week. While the judges may voice doubts about the central bank’s plans, the court won’t stop it, said Christoph Ohler, a law professor at Jena University.
“It’s tough to say exactly how the court will handle this, but we can expect something close to the ’yes, but’ approach the judges have used before in European integration and euro-rescue operation cases,” said Ohler. “The court has never blocked anything on the European level, but in the ’strings-attached’ part unusual and surprising details can always pop up.”
The dispute will pit the ECB against Bundesbank President Jens Weidmann, who voted against the OMT, in a case that could underline the limitations the ECB faces in its crisis policy. The court last year allowed Germany to ratify the 500 billion-euro ($660 billion) ESM bailout facility and the EU fiscal pact while ruling the measures must include provisions that the country won’t be forced to assume higher liabilities without its consent.
The September ESM ruling was preliminary and didn’t cover the bond program. The plaintiffs, including an opposition political party and a lawmaker from Chancellor Angela Merkel’s CSU Bavarian sister party, can address the central bank and some remaining ESM issues at a two-day hearing that starts tomorrow.
“The U.K., defeated in a campaign to derail European Union curbs on banker bonuses, goes to the bloc’s top court tomorrow in a bid to overturn the powers of an EU agency to ban short selling.
Britain will argue at the Luxembourg-based EU Court of Justice that the European Securities and Markets Authority’s decision-making ability comes at the expense of national supervisors, in the latest skirmish against the EU’s growing powers over financial services.
“The Brits have a tradition of objecting to more power being given to the European Commission or EU agencies,” said Karel Lannoo, chief executive officer of the Centre for European Policy Studies in Brussels. If ESMA has been handed the powers to “avoid a bad functioning of the single market, then there’s nothing against this” in the bloc’s rules, he said.
Prime Minister David Cameron has promised to seek a new settlement with the EU, amid a rising tide of opposition that saw the U.K. Independence Party, which advocates a divorce from the bloc, gains seats in local elections last month. While Cameron has said he plans a referendum on EU membership by the end of 2017, this has failed to quell calls from members of his Conservative Party for Britain’s European destiny to be put to the people sooner.
“WASHINGTON — The U.S. Senate on Thursday rejected student loan proposals that would have either temporarily helped only a small subset of new borrowers or been likely to aid borrowers who take out federal loans just for the next few years, as debt-strapped households continue to wait for far-reaching solutions.
Policymakers and financial regulators caution that economic growth and the health of the U.S. banking system is at risk as borrowers with a cumulative $1.1 trillion in student debt, many of whom are paying record relative interest rates on their government loans and enriching the Treasury with unparalleled profits, are likely to curb consumption, big purchases, and new borrowing due to overwhelming debt loads.
Despite increasing warnings, Congressional Democrats are focused on saving the typical undergraduate borrower less than $10 a month on an average 12-year-loan, while promising to take additional steps in the coming months to help the vast majority of new and existing borrowers. Their bill failed to attract the necessary 60 votes, securing just 51 votes instead.
Republicans aim to replace the current system of rates on all government loans being set by Congress to one dictated by the government’s cost to borrow, with apparently little regard to the fact that the government’s borrowing costs are forecast to double in three years. The Republicans could muster just 40 votes….”
“WASHINGTON (Reuters) – The Obama administration on Thursday defended its collection of the telephone records of millions of Americans as part of U.S. counterterrorism efforts, re-igniting a fierce debate over privacy even as it called the program critical to warding off an attack.
The admission came after Britain’s Guardian newspaper published on Wednesday a secret court order authorizing the collection of phone records generated by millions of Verizon Communicationscustomers.
Privacy advocates blasted the order as unconstitutional government surveillance and called for a review of the program amid renewed concerns about intelligence-gathering efforts launched after the September 11, 2001, attacks on the United States.
The revelation also put a spotlight on the handling of intelligence and privacy issues by President Barack Obama’s administration, which already is under fire for searching the telephone records of Associated Press journalists and the emails and phone records of a Fox News Channel reporter as part of its inquiries into leaked government information.
“The United States should not be accumulating phone records on tens of millions of innocent Americans. That is not what democracy is about. That is not what freedom is about,” said Senator Bernie Sanders, an independent from Vermont….”
“BRUSSELS (Reuters) – Banks under the watch of the ECB that run into difficulty could be shut by a European agency, under a proposal that is set to rouse opposition in euro zone capitals.
European officials are seeking to design a scheme to close troubled banks to complement a contentious new system of supervision in the euro zone led by the European Central Bank.
The first leg of this banking union is due to be completed next year when the ECB takes on the supervision of banks. Now negotiations are under way to build the second leg – an agency to close banks with a central fund to cover the costs involved.
The European Commission is drafting the plan and, on Wednesday, commissioners from each of theEuropean Union’s 27 members met to discuss an early outline of the blueprint seen by Reuters.
In it, officials suggest giving the European Commission and a newly-created agency powers to close banks were the ECB to spot a problem and, in the words of one person close to the matter, “ring the bell”….”
“The Securities and Exchange Commission voted in favor of overhauling the $2.6 trillion money-market mutual fund industry, targeting the types of funds seen as most prone to investor runs during the financial crisis.
The SEC’s proposal would require “prime” funds catering to large institutional investors to abandon their fixed $1 share price, allowing the funds’ prices to float like other mutual funds, according to a fact sheet distributed ahead of the vote. Prime funds invest in short-term corporate debt; less-risky funds buy only government securities.
The SEC’s five commissioners supported the proposal unanimously.
Resolving long-standing concerns about money funds is a priority for Mary Jo White, the SEC’s new chairman, who is under pressure from U.S. and global regulators to address risks in the cash-like investments. An overhaul proposal favored by former SEC Chairman Mary Schapiro faltered last year.
In targeting prime institutional funds, the SEC believes it is targeting the part of the industry most likely to lead to trouble. Institutional investors’ concerns about prime funds’ exposure to Lehman Brothers debt caused them to withdraw about $300 billion from the funds in the week after the firm collapsed in September 2008.
Supporters say switching to a floating share price would make prime funds less susceptible to runs because investors would know the current share price and wouldn’t race to sell in anticipation that it could fall below $1, as happened during the crisis.
The industry is divided on the issue, however, with many firms warning a floating share price will turn off investors. Some former regulators who back additional rules worry the SEC’s proposal may leave retail investors unprotected. Retail funds would be allowed to maintain a stable share price.
Under Wednesday’s proposal, funds also would have to release immediately the detailed information about their portfolio holdings that they provide to the SEC each month. Currently, such data is subject to a 60-day delay before it is made public….”
“The European Union imposed tariffs as high as 67.9 percent on solar panels from China in the largest EU commercial dispute of its kind, seeking to help revive a withering industry in Europe.
The duties punish Chinese manufacturers of solar panels for allegedly selling them in the 27-nation EU below cost, a practice known as dumping. Yingli Green Energy Holding Co., Wuxi Suntech Power Co. and Changzhou Trina Solar Energy Co. are among the more than 100 companies targeted.
EU producers such as Solarworld AG (SWV), Germany’s No. 1 maker of the renewable-energy technology, have suffered “material injury” as a result of dumped imports from China, the European Commission, the bloc’s trade authority in Brussels, said today in the Official Journal. The commission said 25,000 jobs in EU solar production would likely be lost without theimport taxes.
The EU’s action “is an emergency measure to give life-saving oxygen to a business sector in Europe that is suffering badly from this dumping,” European Trade Commissioner Karel De Gucht told reporters. The levies, due to take effect tomorrow at an initial lower rate of 11.8 percent, will be for six months and may be prolonged for five years.
The trade protection covers EU imports of crystalline silicon photovoltaic modules or panels, and cells and wafers used in them — shipments valued at 21 billion euros ($27.4 billion) in 2011. European companies including Solarworld have demanded punitive levies to counter growing competition fromChina following similar U.S. trade protection.
“The European Commission is seeking to give itself the power to shut down failing euro-area banks as part of a draft crisis blueprint that defies German calls for a more decentralized approach.
The Brussels-based authority is set to propose that decisions to force losses on crisis-hit lenders’ creditors, as well as other steps to prevent a disorderly collapse, should be taken largely out of national hands, according to a document obtained by Bloomberg News. While the system would include a “newly-created central resolution body,” final decisions would be taken by the commission itself.
“Among EU institutions, the commission is best placed to play this role, bolstered by its experience of bank restructuring during the crisis under state-aid control, and given the need to ensure expeditious and effective decision-making,” according to the document.
The move puts the commission at odds with Germany (GDBR10), which has said that a centralized approach to bank resolution in the euro area should only come once the bloc has taken further steps toward common fiscal and economic policies. German Finance MinisterWolfgang Schaeuble has warned that a strong single authority couldn’t be set up under the EU’s current treaties, and that the euro area should opt in the first instance for a networked approach that is reliant on national regulators.
Both the European Central Bank and the commission have, instead, urged rapid progress toward a centralized system in a bid to bolster confidence in the bloc’s banks, and break the financial link between lenders and sovereigns.
“European Union governments gave the go-ahead for weapons sales to the Syrian opposition, seeking to increase pressure on Bashar al-Assad’s regime after two years of civil war.
The U.K., the prime mover behind the EU decision, said it wouldn’t immediately start to supply the rebels with arms and that other economic sanctions will be prolonged by 12 months.
“It was a difficult decision for some countries, but it was necessary and right to reinforce international efforts to reach a diplomatic solution to the conflict in Syria,” U.K. Foreign Secretary William Hague said in a statement late yesterday after 13 hours of wrangling among foreign ministers in Brussels. “It was important for Europe to send a clear signal to the Assad regime that it has to negotiate seriously, and that all options remain on the table if it refuses to do so.”
Also backed by France, the arms-sales authorization was intended to narrow the options of Assad, who has clung to power throughout the civil war that has claimed at least 80,000 lives and flooded neighboring countries with refugees.
Austria led the resistance to a change in European policy, saying that sending military hardware would undermine efforts to promote a negotiated solution and betray the principles that earned the EU the Nobel Peace Prize last year.
“We just won the peace prize,” Austrian Foreign Minister Michael Spindelegger said. “The people in Syria being killed in this conflict wouldn’t benefit if we ship weapons. It would result in an arms race.”
“The U.S. regulator overseeing the derivatives market is set to retreat from an ambitious proposal that would have increased competition in the swaps market, handing victory to large banks including JPMorgan Chase and Goldman Sachs.
The Commodity Futures Trading Commission will vote Thursday on final rules that will govern a large portion of transactions in the $633 trillion swaps market. Some derivatives are known as swaps because they “swap” risk from one party to another.
The impending regulations will determine how many prices buyers of swaps must solicit when trying to enter into a derivatives contract, the minimum size of large transactions that can be traded outside transparent trading platforms, and how trades can occur on derivatives marketplaces known as “swap execution facilities,” according to officials and agency documents.
Roughly five years after previously unregulated derivatives helped fuel the downfall of large financial institutions and led to a global financial crisis, the rules to be voted on by the five-member commission, led by Gary Gensler, Democratic chairman, represent a big portion of the government’s response to rein in risky activities under the Dodd-Frank overhaul of U.S. financial regulation, while also helping to determine the profitability of swaps trading for dealers such as Citigroup and Bank of America.
After failing to persuade a majority of his commission, Gensler conceded on the price solicitation proposal, known as “requests for quote,” or RFQ, officials said. Gensler had originally proposed that buyers of swaps such as institutional investors solicit a minimum of five quotes before entering into a swap.
But the largest global banks, including Deutsche Bank, Barclays and Morgan Stanley, fiercely objected to the five-quote minimum, according to comment letters filed with the agency. The proposal was intended to increase price transparency and encourage wider participation beyond the small number of dominant dealers in a bid to diffuse risk and lower prices for institutional investors and companies that purchase swaps to offset risk…..”
Group of Seven finance chiefs indicated they will tolerate a sliding yen for now as they intensified their focus on Japan’s recovery strategy.
Finance ministers and central bankers reaffirmed their February commitment to “not target exchange rates” at a meeting in Aylesbury, near London, U.K. Chancellor of the Exchequer George Osborne told reporters May 11.
The Bank of Japan “can and should ease again if the current measure does not seem to be working,” Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo, said in an e-mailed response to questions.
While signaling acceptance of the yen’s decline through 100 per dollar for the first time since 2009, G-7 policy makers said they examined Japan’s strategy and that they will monitor its impact on currencies. The yen has fallen 15 percent against the dollar this year and 13 percent versus the euro as the Bank of Japan stepped up monetary stimulus.
“Everybody watches exchange rate developments,” German Finance Minister Wolfgang Schaeuble said after the meeting. “We had a very intense discussion about Japan with our Japanese colleagues.”
The yen weakened past 102 per dollar for the first time since October 2008 today. It dropped 0.2 percent to 101.87 a dollar as of 10:12 a.m. in Tokyo after losing 2.6 percent last week, the most in five weeks. It fell to 102.15 earlier.