Thursday, June 18, 2009

Arms talks ahead of Obama visit "constructive": Russia

Arms talks ahead of Obama visit constructive: Russia
By Conor Sweeney
MOSCOW (Reuters) - Russia said on Thursday that talks with the United States on reducing vast arsenals of Cold War nuclear weapons were proceeding constructively ahead of a visit by U.S. President Barack Obama to Moscow in July.
Finding a replacement for the 1991 Strategic Arms Reduction Treaty (START I) before it expires on December 5 would mark a thaw in relations between the world's biggest two nuclear powers.
The two sides are seeking to narrow differences before Obama and Russian President Dmitry Medvedev meet in Moscow on July 6-8. Both countries have already stated their desire to "reset" relations, which deteriorated to near Cold War levels.
"There is an active negotiating process going on at the moment to work out an agreement that would replace the Strategic Arms Reduction Treaty," Russian Foreign Ministry spokesman Andrei Nesterenko told reporters at a weekly briefing.
"The negotiations are taking place in a constructive and business-like manner. We count on the presidents being able to make an announcement on interim results at the July summit," he said.
The next round of U.S.-Russia negotiations on START will take place June 23-24 in Geneva, he said. Two rounds of talks have already taken place.
Obama and Medvedev have said the new arms deal should cut stockpiles below those in the 2002 Strategic Offensive Reductions Treaty (SORT), under which both sides are to cut their arsenals to between 1,700 and 2,200 warheads by 2012.
Russia also wants to link the nuclear talks to U.S. plans to deploy an anti-missile shield in Europe and has pushed for the United States to put a limit on the number of delivery systems -- the rockets or other means that deliver weapons.
Nesterenko said the Summit agenda would concentrate on improving practical cooperation, for example on countering nuclear proliferation but would also discuss August's Afghan elections and broader political and economic ties.
"There is intensive preparation... and we hope for a highly productive Moscow summit," Nesterenko said.
A business forum attended by business leaders from both the United States and Russia will coincide with Obama's visit, Nesterenko said.
(Editing by Philippa Fletcher)

Source: Reuters

Polls find rising concern with Obama on key issues

Polls find rising concern with Obama on key issues
By JoAnne Allen
WASHINGTON (Reuters) - President Barack Obama faces growing concerns among voters over government spending, the auto industry bailout and other economic policies, according to two opinion polls released on Wednesday.
Obama, who took office in January, remains popular with Americans, although his overall job approval rating slipped to 56 percent, down 5 points from April, according to an NBC News/Wall Street Journal poll.
But 58 percent of respondents said Obama and Congress should focus on keeping the budget deficit down, even if takes longer for the economy to recover. The Congressional Budget Office estimates the federal deficit could top $1.8 trillion this fiscal year -- by far a record.
Nearly 70 percent said they had concerns about federal intervention in the economy, including Obama's decision to take an ownership stake in General Motors and the prospect of more government involvement in healthcare. Obama has made healthcare reform a top priority of his administration.
Just 37 percent of respondents said Obama was taking on too many issues and 60 percent said he had to focus on so many things because the United States was facing so many problems.
While Republican criticism of the Democratic president's policies may be scoring points with voters, the strategy does not appear to be benefiting the party.
A CBS News/New York Times poll also released on Wednesday found the Republican Party viewed favorably by only 28 percent of Americans, the lowest rating ever in the poll. In contrast, 57 percent had a favorable view of the Democratic Party.
The CBS/New York Times poll also found a distinct difference in Obama's overall standing and how Americans viewed his major initiatives.
Obama's job approval rating held steady at 63 percent from the previous poll last month, but fewer than half of respondents approved of how he was handling healthcare reform and efforts to save GM and Chrysler, according to the survey.
The poll also found that Americans were alarmed by the amount of money doled out to boost the economy and a majority thought the government should focus instead on reducing the federal deficit.
Both polls also found a majority of Americans opposing Obama's decision to close the U.S. military prison at Guantanamo Bay, Cuba.
The NBC/Wall Street Journal survey of 1,008 adults, conducted Friday to Monday, had a margin of error of plus or minus 3.1 percentage points.
The CBS/New York Times telephone poll of 895 adults was conducted Friday through Tuesday and had a margin of error of plus or minus 3 points.
(Reporting by Joanne Allen; Editing by Peter Cooney)

Source: Reuters

Obama team tries to regain momentum on healthcare

Obama team tries to regain momentum on healthcare
By David Alexander and Donna Smith
WASHINGTON (Reuters) - President Barack Obama's administration sought to regain momentum on healthcare reform on Wednesday as lawmakers, stunned by the trillion dollar price tag, delayed the legislative timetable for the program.
Health and Human Services Secretary Kathleen Sebelius, echoing Obama's own calls for speedy reforms, told an audience of Democratic activists that there was no time to waste on the administration's chief domestic policy priority.
"The cost of doing nothing will render us a second-rank nation on into the future," Sebelius told the centrist Democratic Leadership Council. "Our businesses can't afford it, our families can't afford it and, frankly, we can't sustain it."
Soaring healthcare costs undermine the competitiveness of U.S. businesses, strain state and federal budgets and drive many Americans into bankruptcy, even as 46 million Americans remain with no health insurance.
Republicans and others are stepping up criticism of parts of the healthcare overhaul package being hammered out in Congress, from the cost of the changes to the question of whether to create a new government-run insurance program to compete with private insurers.
The nonpartisan Congressional Budget Office has estimated that reforms proposed in a Senate Finance Committee bill would cost $1.6 trillion over 10 years -- a price that senators on the panel say is more than they want to spend.
Senators on Wednesday moved to delay announcing the bill until its costs could be brought closer to the nearly $1 trillion that Obama has proposed in budget cuts and savings to pay for the measure.
Senate Finance Committee Chairman Max Baucus said earlier this week he expected a draft bill by Wednesday and a finished proposal by Friday. It now appears likely the bill will not be ready until next week and the amendment process might not start until after the July 4 holiday recess.
"We will have a mark (a bill) when we are ready," Baucus said. "It's too early at this point to know when it will be ready."
Despite the delay, Baucus said he expected to send a bill to the full Senate for passage by the time lawmakers break for a monthlong recess in August.
Democratic Senator Kent Conrad told reporters it was a good idea to slow down the legislation. He said one of the main expenses was tax subsidies to help people who do not have employer-sponsored insurance, and a small adjustment of this could change the overall cost substantially.
"We have to get the policy right," Conrad said. "We need more time to evaluate options."
The Finance Committee is one of two Senate panels working on the legislation. The Senate Health, Education, Labor and Pensions Committee on Wednesday began amending its version of the Democratic-written bill amid Republican criticism that it was too expensive and would still leave millions uninsured.
Healthcare reform is Obama's top legislative priority, one of several he believes are needed to put the U.S. economy back on sound footing as it emerges from the current recession. Continued...
Source: Reuters

Obama extends benefits, promises more for gays

Obama extends benefits, promises more for gays
By Andy Sullivan
WASHINGTON (Reuters) - President Barack Obama on Wednesday extended limited job benefits to gay partners of U.S. government workers in what he called a first step to end discrimination against gays and lesbians.
Under pressure from gay rights groups, Obama urged Congress to pass legislation that would extend full healthcare and retirement benefits to gay families in the 1.9 million-strong federal workforce, as many U.S. businesses already do.
"Many of our government's hardworking and dedicated and patriotic public servants have long been denied basic rights that their colleagues enjoyed for one simple reason: the people that they love are of the same sex," Obama said before signing an order to extend benefits for federal workers' gay partners.
"It's a day that marks a historic step toward the changes we seek, but I think we all have to acknowledge this is only one step."
Obama's announcement showed that his administration may focus more on incremental, tangible gains for gays and lesbians, rather than wading directly into the divisive gay marriage debate that has played out at the state level.
Gay rights groups called Wednesday's move a welcome first step and said they understood that the president had been busy trying to shore up the economy and lay the groundwork for landmark healthcare and climate-change legislation.
But they said they would continue to press the administration to outlaw workplace discrimination and extend benefits for same-sex couples.
"Those things should happen today, should have happened yesterday and they haven't and until they do there's going to be a frustration," said Joe Solomonese, president of the Human Rights Campaign, a gay-rights group.
Obama did not back gay marriage during the 2008 campaign, but he did promise to repeal a 1996 law that prevents the government from recognizing same-sex marriages.
The administration will work with Congress to repeal that law, the Defense of Marriage Act, and extend workplace-discrimination laws to cover gays, said John Berry, head of the U.S. Office of Personnel Management.
The administration will also try to overturn the "Don't Ask, Don't Tell" policy that allows the U.S. military to expel troops that are openly gay, Berry said.
The outlook in Congress is unclear as a divisive debate over gay rights could interfere with Democrats' goals to pass landmark legislation covering climate change, healthcare and financial regulation.
Lawmakers are still weighing whether to try to repeal the entire Defense of Marriage Act or simply target sections that prevent the government from offering healthcare and retirement benefits to the same-sex partners of federal employees.
"Our goal is to come up with a strategy that is more effective to restoring equal rights to gay Americans," said Ilan Kayatsky, a spokesman for New York Democratic Rep. Jerrold Nadler. Continued...
Source: Reuters

Summers: Offshore tax will be part of broad U.S. reform

By Kim Dixon
WASHINGTON (Reuters) - The Obama administration will tackle international tax reform in the context of a broad overhaul of the tax system, a top Obama economic adviser said on Wednesday.
That admission should relieve corporate America, which has been lobbying furiously against a plan to raise $210 billion over a decade by tightening rules for accounting for income earned by U.S. multinational companies abroad.
"We very much want to work with others to make sure that we have a spare, as pro-American a tax system for corporations as we possibly can, and it'll be looked at in the context of overall ... corporate tax reform, I'm sure," Lawrence Summers, head of the National Economic Council, told CNBC.
The administration has said its plan would save or create jobs overseas, but even Democratic-leaning think tanks have begged to differ, arguing that tax policy has little influence on jobs.
U.S. multinationals say the proposals, which include limiting interest deductions, will in fact encourage them to locate capital and labor overseas.
They are quick to note that the United States has among the highest top corporate tax rate at 35 percent among its industrialized peers.
"What he said is a helpful recognition of the reality that international tax changes should only occur in a larger corporate tax reform context," said Clint Stretch, managing principal for tax policy at Deloitte in Washington, who advises Fortune 500 companies and others.
"If the White House keeps saying that, clients will start breathing again," he added.
In addition to business opposition, Obama's international tax proposals have gotten a cool reception from members of Congress, even within his own party.
"I'd say that it is a helpful signal and consistent with some of the messages that leading tax writers in Congress have been saying," said Drew Lyon, a principal with PricewaterhouseCoopers in Washington.
"The business community in particular has pointed out that the changes the administration are proposing are so far reaching that if they were adopted without other changes they'd put U.S. companies at a distinct disadvantage."
Representative Charlie Rangel, the Democratic chairman of the tax-writing Ways and Means panel in the U.S. House, proposed many of the same changes to international tax in a 2007 bill.
But he included a key difference. Rangel's bill had a sweetener for business: cutting the corporate tax rate from 35 to about 30 percent. Obama has not talked about such a cut thus far.
Congress is now debating a healthcare reform bill with a price tag at $1 trillion or more over a decade, and business is still concerned they could become a revenue source.
"There is still a significant concern with the discussion of the $1 trillion to $1.6 trillion healthcare legislation out there," Lyon said.
(Editing by Kenneth Barry)

Source: Reuters

Spreads on Calif GOs reflect budget anxieties

Spreads on Calif GOs reflect budget anxieties
By Jim Christie
SAN FRANCISCO (Reuters) - Spreads on California's general obligation bonds have widened as its budget crisis worsened and may widen further with Governor Arnold Schwarzenegger and lawmakers debating how to plug a $24.3 billion shortfall, analysts said on Wednesday.
The rising spreads reflect the effect of a steady stream of negative news on the municipal debt market's view on how the government of the most populous U.S. state is facing up to the challenge of balance its books amid its worst slide in revenues since the Great Depression.
In recent weeks estimates of the state budget's gap have been revised up, the state controller has warned the state is nearly out of cash, and Democratic and Republican lawmakers clashed over spending cuts and revenue increases.
And this week, Standard & Poor's placed $67.1 billion of California's debt on alert for a possible credit ratings cut, which could complicate the state's bond plans and increase its borrowing costs.
California, already the lowest rated U.S. state, plans to sell short-term debt -- $7 billion to $9 billion in revenue anticipation notes, according to the state treasurer's office -- once a budget is signed for the fiscal year beginning on July 1.
Rising spreads underscore anxiety, said analyst Domenic Vonella at Thomson Reuters MMD, a municipal market data service: "Folks are in a wait-and-see mode. There is little market players can do right now. They're just hoping for the best."
"Every time bad news comes out, the front end of the curve gets hit hardest," Vonella added, noting California's fiscal crisis and its need for short-term debt has cast a gloom over sentiment about the near-term prospects for stability taking hold on state finances.
"There is a fear of excess short-term supply, that revenue anticipation notes would create pressure in that area of the curve and then there are short-term risk factors, which require more return in that sector of the curve," Vonella said.
Since May 1, the yield on the five-year California GO scale is up 92 basis points, compared with a rise of 41 basis points for the five-year benchmark MMD triple-A scale and a 16 basis point increase in the yield on the five-year GOs of New York state, which also has some of the nation's worst financial problems.
California's yield rise reflects the risk premium for the state's debt in light of its budget woes, Vonella said.
California's budget problems are affecting the muni market in other ways as well, said Dennis Ciocca, a senior managing director at public finance banker Sutter Securities Inc.
Concern that the state may resort to borrowing money from local governments is weighing on local issuers' budget and financial plans, including their debt plans, Ciocca said.
"It's a pretty nasty situation," Ciocca said "It's why issuance is so small in California right now ... There is so much uncertainty as to what the financial situation is going to be at the local level."
Ciocca is advising local issuer clients to stay on the sidelines: "If you don't absolutely need the money, you shouldn't be going to the market right now."
Meanwhile, the state government faces the prospect of steep costs to sell short-term debt once it has a budget. Continued...
Source: Reuters