Economic Daily Outlook




Group Backs Simpson-Bowles Plan

A small bipartisan group of House lawmakers, bucking their Democratic and Republican leaders, is advancing a plan to reduce the federal budget deficit by more than $4 trillion over 10 years through a combination of spending cuts and tax increases.

A vote on the measure could come as soon as Wednesday. It is widely expected to fail, but the degree of support for the plan could prove a bellwether of whether Congress decides to pursue a broad bipartisan budget deal this election year.



Bill Easing IPO Rules Is Passed in House

Legislation to ease an array of business regulations, especially rules for initial public offerings, passed the House on Tuesday, the last step before it can be signed into law by the president. The vote was 380-41.

The measure marks a significant rollback of the 2002 Sarbanes-Oxley law, the revamp of accounting rules enacted in response to the Enron and WorldCom scandals, as well as the first major slackening of securities law since the Dodd-Frank financial overhaul.

President Barack Obama has signaled he will sign the bill.

Bankers Struggling with Rising Appraisal Backlog

Appraisals are costing bankers more money and, in some cases, business.

Recent regulation has altered the fee structure and required more independence between bankers and appraisers. As a result, scores of appraisers have abandoned their trade. Bankers, overwhelmed with a need for re-appraisals, are finding it more expensive and time-consuming to get valuations. In some cases, the changing landscape is costing bankers real estate loans.

“These rules have caused the appraisal industry to be buried with appraisal requests which, in effect, has lengthened the appraisal time period,” says Michael Jacobson, the president and chief executive of Nebraska Land National Bank in North Platte.



Candidates queasy on healthcare

Senate candidates on both sides of the aisle have avoided embracing their party’s signature healthcare reform policies, a sign that few want to campaign on such a controversial issue.

Many Democratic candidates have sought distance from President Obama’s healthcare overhaul and a number of Republicans have dodged taking a stance on Rep. Paul Ryan’s (R-Wis.) proposed Medicare reforms — even after Ryan and House GOP leaders tweaked those reforms to include bipartisan policies suggested by Sen. Ron Wyden (D-Ore.).

Mandate debate adds significance to court’s last day on healthcare

The Supreme Court will wrap up its historic healthcare arguments Wednesday, and the day’s debate could have new significance in the wake of the justices’ aggressive questioning on Tuesday.

The court will begin its final day with arguments over “severability” — how much of the healthcare law should fall if the justices decide that the individual mandate is unconstitutional.

ALSO IN HEALTHCARE: Supreme Court Hears Oral Arguments Severability (10AM-11:30AM) & Medicaid (1PM-2PM): Same-Day Audio on C-SPAN here and here.



Gas-Price Highs, Refiner’s Lows

Prices at the pump stand at 10-month highs. But even that isn’t enough to save some U.S. oil refiners, who are finding it a terrible time to be in the gasoline business.

U.S. drivers are losing their thirst for gas. The national average price of a gallon of regular unleaded gas climbed to $3.898 on Tuesday.

New Rules Limit Coal Plants

The Obama administration on Tuesday announced long-awaited rules to limit carbon-dioxide emissions from new power plants that will effectively block the construction of new coal-burning plants and make natural gas even more attractive as a fuel for generating electricity.

The rules, in the works since late 2009, will add more stress to the beleaguered coal-mining sector while encouraging development of renewable energy, and will add to Republicans’ complaints of regulatory overreach by the Obama administration ahead of the November elections.



SIG Effort Posts Promising Early Results

The billions of dollars that the federal government is pouring into turning around some of the nation’s lowest-performing schools appear to be showing preliminary promise, according to student-achievement data unveiled by U.S. Secretary of Education Arne Duncan last week.

The Department of Education has taken a look at 700 of the 850 schools that started carrying out a revised, highly controversial version of the School Improvement Grant program during the first year of its implementation, the 2010-11 school year. In all, 43 states were part of that analysis.



Assad Accepts Cease-Fire; Opponents Are Skeptical

Seeking to project an image of responsibility and reason, President Bashar al-Assad of Syria formally accepted a United Nations envoy’s cease-fire proposal on Tuesday and conducted a televised walking tour through the shell-shocked city of Homs, a center of the year-old uprising against him.

But his actions belied a new outbreak of bloodletting on the Syria-Lebanon border, where government troops clashed with rebels who had taken refuge there. And his political critics expressed strong skepticism that Mr. Assad, who has broken numerous pledges before in the Syrian conflict, would now honor a cease-fire with his opponents, whom he has described as terrorists and thugs.

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