Senate and House leaders have agreed on a $789 billion economic stimulus package aimed to save or create 3.6 million jobs. The bill will fund construction and infrastructure projects, provide tax relief to individuals and businesses, and extend unemployment benefits. It is the nation’s largest economic rescue program since Franklin Roosevelt launched the New Deal. Senate Majority Leader Harry Reid announced the deal on Wednesday.
Sen. Harry Reid: “The bills were really quite similar, and I’m pleased to announce that we’ve been able to bridge those differences. Like any negotiation, this involved give and take, and if you don’t mind my saying so, that’s an understatement.”
The final size of the package is less than what both the House and Senate originally passed and far smaller than what many economists say is needed. The final bill includes $507 billion in spending programs and $282 billion in tax relief. A deal was struck on Wednesday after several spending provisions were stripped from earlier versions of the bill. The final bill eliminated a $16 billion line item for school construction, $30 billion in aid to state governments to prevent reductions in social services to the poor and out of work. Lawmakers also removed $50 billion for loan guarantees for construction of new nuclear reactors and so-called “clean coal” plants. In addition, Congress stripped whistleblower protections for federal employees from the compromise stimulus bill.
Meanwhile, the CEOS of Bank of America, Citigroup, Goldman Sachs, and other major banks appeared on Capitol Hill Wednesday to testify before the House Financial Services Committee. The bank executives were repeatedly grilled over how they were spending the billions of dollars in taxpayer-funded bailouts and their role in the economic crisis.
Rep. Barney Frank: “I’ve said this the opposite of that terrible problem in warfare of collateral damage, when innocent people are injured in the course of trying to attain a military objective. One of the problems we have, gentlemen, is that you are the recipients of collateral benefit. That is, in an effort to get the credit system functioning, things will be done that will be to the benefit of the institutions over which you preside because there is no alternative. But you need to understand, as I think many of you do, how angry that makes people.”
James Dimon, the CEO of JPMorgan Chase, admitted some mistakes were made.
James Dimon: “Finally, it must be said that today’s economic crisis is the result of a lot of mistakes by a lot of people, and all of us who are here today, and many who are not here, bear some measure of responsibility for the current state of financial markets.”
Barney Frank also questioned the bank CEOs over why banking executives needed to receive enormous bonuses.
Barney Frank: “If in good times you were told you weren’t going to get a bonus, what part of your job would you not do? I mean, if you weren’t getting a bonus, would you, like, leave early on Wednesday, or would you take longer lunches? Would you bypass a certain class of investments?”
While the bank executives were testifying on Capitol Hill, New York Attorney General Andrew Cuomo disclosed new details about how Merrill Lynch paid out over $3 billion in bonuses last year just before the company was sold to Bank of America. 700 Merrill Lynch employees received bonuses of $1 million or more in 2008, even though the brokerage firm lost $27 billion. The top four bonus recipients received a total of $121 million in bonuses.
Treasury Secretary Timothy Geithner said Wednesday he would inform Congress as soon as possible if more taxpayer money were needed to bail out the banking sector as part of the effort to reinvigorate the economy. Geithner testified before the Senate Budget Committee one day after he sketched out his plan to spend as much as $2.5 trillion to aid banks, unfreeze consumer credit markets and stem the soaring foreclosure rate. This is part of his exchange with Republican Senator Lindsey Graham.
Sen. Lindsey Graham: “Will housing be fixed without any new money?”
Tim Geithner: “I don’t know that…uh —”
Graham: “On a scale of one to ten —- one, you won’t need any money; ten, you’re likely to need more money to fix housing -—”
Geithner: “For housing?”
Geithner: “Can’t tell you that at this point, but if we think there’s a good case for doing it, we’re going to come tell you how we’re going to do it.”
Graham: “OK, good. So, you have no clue.”
Geithner: “No, that’s not fair, Senator. Senator, what I will not do is, even if you are frustrated by the absence of details —”
Graham: “See, I just don’t believe that’s enough money to fix housing and banking. I just wish you would say that, because you’re going to come up here and ask us for more money. I know you will. Senator Conrad said on the floor. Let’s just get on with this thing. Let’s tell people some idea of what awaits them.”
In other economic news, the Office of Thrift Supervision has called for the mortgage lenders it regulates to halt foreclosures until the Obama administration unveils a program to help struggling homeowners.
Congressional investigators have revealed that the peanut processing company at the center of a salmonella outbreak, Peanut Corporation of America, did not await the results of contamination tests before shipping products to customers. Documents made public on Wednesday also show that the company stopped using a private laboratory, because too many tests done there had showed contamination. Salmonella poisoning has already killed at least eight people, sickened more than 500, half of them children. More than 1,900 consumer products have been pulled from the shelves in one of the FDA’s largest recalls ever. Congressman Henry Waxman spoke at a congressional hearing Wednesday.
Rep. Henry Waxman: “Even after FDA began investigating in January and forced the company to recall some products, PCA’s first concerns were financial. This company cared more about its financial bottom line than it did about the safety of its customers.”
Stewart Parnell, president of the Peanut Corporation, appeared at the hearing but refused to answer questions.
Stewart Parnell: “Mr. Chairman and members of the committee, on the advice of my counsel, I respectively decline to answer your question based on the protection afforded me under the United States Constitution.”
The Pakistani government has admitted for the first time that the Mumbai attacks in which 179 people died were partly planned in Pakistan. Pakistan’s interior ministry chief Rehman Malik said Pakistan has registered a criminal case against six men held in custody and two others still at large, formally paving the way for a police investigation into November’s attack. Malik said, “Some part of the conspiracy has taken place in Pakistan and according to the available information, most of [the conspirators] are in our custody.”
A new federal report has revealed the US military has failed to properly track about 87,000 weapons that the Pentagon shipped to Afghan security forces, leaving the arms at risk of being stolen or sold to the Taliban. The arms include thousands of AK-47 assault rifles, as well as mortars, machine guns and rocket-propelled grenade launchers. The situation is similar in Iraq, where the US military lost track of some 190,000 pistols and automatic rifles supplied to security forces in 2004 and 2005.
The International Criminal Court has reportedly decided to issue a warrant for the arrest of Sudanese President Omar Hassan al-Bashir on charges of war crimes and crimes against humanity in Sudan’s Darfur region. Bashir would become the first sitting head of state to be charged by the Hague-based court with war crimes. The official decision is expected to be announced within two weeks. Sudan’s UN ambassador said that the charges are politically motivated and that his government will never surrender Bashir for prosecution.
In other news from Africa, Zimbabwe’s newly sworn-in Prime Minister Morgan Tsvangirai addressed thousands of his Movement for Democratic Change party supporters at a rally in Harare Wednesday. He assured them that the country was embarking on a new challenging road ahead.
Morgan Tsvangirai: “My fellow Zimbabweans, I ask you to support me as your prime minister and the full cabinet of the transitional government and the efforts of our new transitional government. I ask you to share my vision for our country, to work with me, to rebuild our nation, to walk with me on this promising phase of our journey to a true and lasting democracy.”
The District of Columbia is one step closer to getting representation in the US House. On Wednesday, the Senate Homeland Security and Governmental Affairs Committee voted eleven-to-one to support the DC Housing Voting Rights bill. Senator John McCain cast the sole opposing vote. The bill would permanently expand the 435-member House by two seats. One seat would go to Washington, D.C., and the other to Utah.
In other news from Capitol Hill, the Senate has confirmed William Lynn to be Deputy Defense Secretary. Lynn is a former top lobbyist for the military contractor Raytheon. In his new post, Lynn will be in charge of day-to-day operations at the Pentagon. Senate committees also voted Wednesday to support the nominations of Leon Panetta to head the CIA and Congresswoman Hilda Solis to become Labor Secretary.
President Obama is expected to soon nominate Seattle police chief Gil Kerlikowske to be the nation’s new drug czar.
A commission led by three former Latin American heads of state has blasted the US-led drug war for pushing Latin American societies to the breaking point. Former Brazilian president Fernando Henrique Cardoso said, “The available evidence indicates that the war on drugs is a failed war.” The Wall Street Journal reports the commission’s report warned that the US-style anti-drug strategy was putting the region’s fragile democratic institutions at risk.
In news from Venezuela, President Hugo Chavez says his government has arrested some active-duty soldiers believed to be plotting a coup. In a television interview, Chavez said, “We’ve arrested some active-duty soldiers who were in contact with a soldier on the run in the United States…sending messages about a so-called 'operation independence.'” The alleged coup attempt comes days ahead of Sunday’s referendum on constitutional reform to lift term limits for the president and all elected officials.
Newly released data shows New York City police officers made a record 530,000 stop-and-frisks last year. The city’s data shows over 80 percent of the people stopped and frisked were black or Latino. Only about ten percent of stops were of whites, who comprise 44 percent of the city’s population. Last year, the Center for Constitutional Rights sued the city, charging that it has a policy of conducting unconstitutional stop-and-frisks and singles out ethnic minorities.
In California, the Fresno Police Department has launched an internal investigation after a video was aired showing two Fresno police officers beating a homeless man. The video shows a police officer hitting the homeless man four times in the face while he was restrained on the ground.
The Board of Trustees at Hampshire College has agreed to divest from six companies because of their involvement in the Israeli occupation of the West Bank and Gaza. Hampshire is believed to be the first US college or university to divest from companies tied to the Israeli military. The companies are Caterpillar, United Technologies, General Electric, ITT Corporation, Motorola and Terex. The board agreed to the divestment following a two-year campaign by the campus group Students for Justice in Palestine. Thirty-two years ago, Hampshire College became the first school to divest from apartheid South Africa.