Economic Daily Outlook




OECD Sees Europe, U.S. Drifting Apart

The economies of Europe and North America will diverge in the first half of this year, with European budget cuts dragging on demand while the U.S. economic recovery picking up steam, the Organization for Economic Cooperation and Development said in a report published Thursday.

In its latest assessment of the global outlook, the Paris-based think tank raised its forecast for the U.S. economy, which it said should grow at an annualized rate of 2.9% this quarter and 2.8% next. Japan is also forecast to grow more than the OECD economists had thought in November, with an annualized growth rate of 3.4% in the first three months of the year and 1.4% in the April-June period.

Ryan budget plan poised to pass House, giving GOP needed boost

The House on Thursday is poised to approve Rep. Paul Ryan’s (R-Wis.) budget measure, which would give Republicans a much-needed lift after months of intra-party squabbling.

Ryan’s blueprint — which cuts $5.3 trillion in spending compared to President Obama’s budget proposal — has been gaining traction among Republicans in recent days. Yet, conservative deficit hawks have called for deeper cuts, while some GOP appropriators have grumbled about the spending caps in the budget resolution.



OPINION: The Volcker Rule Needs a Back-to-Basics Makeover

Federal regulators ought to start over on the Volcker Rule, and get back to basics.

Policymakers could meet the July 21 effective date if they stripped the plan down to its essence.

“We need to state the principle and put it back on the boards and managers to have the appropriate policies in place that you can approve and transaction test when the examiners go in,” said Sheila Bair, the former FDIC chair who is now a senior advisor at the Pew Charitable Trusts.



Effort to Pay Hospitals Based on Quality Didn’t Cut Death Rates, Study Finds

Medicare’s largest effort to pay hospitals based on how they perform — an inspiration for key parts of the health care law — did not lead to fewer deaths, a new study has found.

The study casts doubt on a central premise of the health law’s effort to rework the financial incentives for hospitals with the aim of saving money while improving patient care. This fall, Medicare is going to start altering its payments to more than 3,000 hospitals based on how patients rate their stays and how completely hospitals follow a handful of clinical guidelines for basic care.

Parties Brace for Fallout in Court’s Ruling on Health Care

The law professor side of President Obama is highly intrigued by the Supreme Court hearings over the constitutionality of his health care law. He studied a summary of the arguments aboard Air Force One as he flew back from a nuclear summit meeting in South Korea.

The political side of the president may need to draw upon his judicial patience as he awaits a ruling that will help shape the final stages of the presidential race.



Obama urges Congress to end tax breaks to oil companies

President Barack Obama is renewing his call for Congress to end tax breaks to oil companies.

In a Rose Garden speech Thursday, Obama will urge Congress to vote to end what the White House calls “the billions in taxpayer dollars handed out to oil companies every year.”

The address comes before a Senate procedural vote on a bill to repeal oil tax subsidies. Obama is also expected to suggest how the money could be spent on clean energy.



OPINION: Questions about NAEP benchmarks (James Harvey)

I’m sure it must have troubled David Driscoll, chairman of the National Assessment Governing Board, which administers the National Assessment of Educational Progress, to read my assertion that “NAEP’s benchmarks, including the proficiency standard, evolved out of a process only marginally better than throwing darts at the wall” (The Answer Sheet, Nov. 4, 2011). I’d be upset too if someone criticized an activity into which I put a lot of professional effort, even if I wasn’t responsible for creating the benchmarks in question.

Still, Mr. Driscoll should have read the rest of my guest column before responding (The Answer Sheet, Feb. 17, 2012). He’d have found that I acknowledged it wasn’t entirely fair to compare NAGB’s process to throwing darts at the wall, although I do believe the “modified Angoff procedure” in use by NAGB is little more than educated guesswork.



For Group of 5 Nations, Acronym is Easy, but Common Ground Is Hard

As the shock waves of the global recession convulsed Europe and the United States three years ago, the leaders of Brazil, Russia, India and China gathered for a meeting that seemed to signal a new era. They had global buzz as rising economic powers, a catchy acronym, BRIC, and an ambitious agenda to remake an international monetary system long dominated by the West.

The new BRIC era has yet to arrive.

When the group’s leaders meet in New Delhi on Thursday, their biggest achievement will have been adding an S: they took on South Africa last year. The five BRICS nations still rank among the fastest-growing economies in the world, and, even if growth has slowed, individually, their global influence continues to rise. But they have struggled to find the common ground necessary to act as a unified geopolitical alliance.


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