Economic Daily Outlook




Obama Goes on Offensive Over Taxes on Wealthy

All but certain now that his Republican opponent will be Mitt Romney, President Obama has made his proposed “Buffett Rule” minimum tax for the wealthiest Americans like Mr. Romney a centerpiece of his re-election campaign, defying the political risk of being seen as a tax-and-spender by wary voters.

With a rousing speech on Tuesday to a receptive university audience of about 5,000 in this battleground state, Mr. Obama defined the coming contest as a clash of philosophies: His argument that tax fairness and the common good demand the richest Americans pay at least as much as middle-income taxpayers do, contrasted with Republicans’ opposition to any tax increases as job killers and class warfare, even at the cost of deep cuts in domestic programs.



Fed’s Tarullo Moves to Calm Bank Fears on Stress Tests

A top Federal Reserve Board official on Tuesday sought to allay concerns by the largest banks over the central bank’s recent stress testing exercise, signaling a willingness to make improvements before the next round.

Fed Gov. Daniel Tarullo said that while it was clear from the tests that all banks required additional work on their annual capital planning processes, there was also ample room for the Fed to augment its own procedures.



EDITORIAL: Double Dose of Harm

House Republicans combined two ill-conceived health care measures into a single bill and passed it on a largely party-line vote last month. One measure repealed an independent board that is one of the major cost-control measures in the health care reform law. The other imposed restrictions on medical malpractice awards that would limit the ability of patients who have been grievously harmed to receive fair compensation for their injuries.



Energy Boom in U.S. Upends Expectations

The reversal of fortune in America’s energy supplies in recent years holds the promise of abundant and cheaper fuel, and it could have profound effects on what people drive, domestic manufacturing and America’s foreign policy.

Cheaper fuel produced domestically could reduce the cost of shipping and manufacturing, trim heating and cooling bills, improve the auto market and provide tens of thousands of new jobs.



Pre-K funding drops nationally, report says

Funding for state-funded pre-kindergarten programs across the country dropped by a total of almost $60 million during the 2010-11 school year despite extensive research showing the benefits of quality early education, according to a newly released report.

The drop marked the second consecutive year of state funding decline for early education, despite the use of federal economic recovery funds to bolster these programs. State early education funding had already dropped $30 million during 2009-10.



Afghan officials stress need for U.S. security presence beyond 2014 withdrawal

A long-term security partnership and the presence of U.S. forces beyond the end of 2014 will be needed to ensure Afghanistan’s stability and “give the right messages” to both its population and its enemies, Afghan Defense Minister Abdul Rahim Wardak said Tuesday.

“The number itself is not that much important,” Wardak said of the size of the U.S. force. “The strategic implications will be more important than the physical number of troops.”