Good morning. Here’s what you need to know:
1. The Wall Street Journal reports: “President Barack Obama and congressional leaders agreed Thursday to strive for a blockbuster deficit-reduction deal and will spend the weekend determining whether political support is possible for a sweeping plan to curb entitlements and make major tax-code changes.”
2. House Speaker John Boehner (R-OH) endorsed President Obama’s call for a “big deal.” He told Republican Senators that the nation’s economic future requires bold action. The Speaker said he expects a deal to come together quickly — or to collapse under the weight of partisan resistance.
3. Democratic Congressional leaders said they were open to a “big deal, but warned President Obama that they would not support benefit reductions in Social Security and Medicare. The president is reportedly considering some “adjustments” to Social Security and Medicare benefits, eligibility and age requirements.
4. The New York Times reports that in 2008, “Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.” The details of this story are astonishing.
5. Admiral Mike Mullen yesterday accused Iran of shipping new supplies of deadly weapons to militias in Iraq. Adm. Mullen said that Tehran was hoping to take credit for forcing American troops to go home.
6. Syrian protests against the Assad regime continue to grow across the country. The Wall Street Journal reports: “Protests have built up into nightly affairs in Syria’s sprawling capital and activists are pressing boycotts against Syrian insiders, as action against the government moves closer to the political and administrative core of President Bashar al-Assad’s regime.”
7. Chinese trade policies with regards to, say, rare earth materials, are part of an economic strategy to leverage wealth creation. Clyde Prestowitz wonders why the US is not pursuing similar trade policies.
8. Simon Johnson, the former chief economist for the IMF, argues that tax reform is the key to addressing massive US federal deficits.
9. Former Minnesota Governor Tim Pawlenty is trying not to become the “FIFO” (first in, first out) 2012 GOP presidential candidate. He has now staked his entire campaign on the Iowa caucuses.
10. The Financial Times reports: “Fears that the plunge in US state tax revenues since the recession would lead to a spike in municipal bond defaults have eased. Not only that, but the mass exodus from funds specialising in “munis”, which has resulted in about $50bn of redemptions since last November, appears finally to have slowed.”
11. A report by a California Civil Grand Jury — aptly titled “Whoa! The State of Public Pensions In Los Angeles County” — found that at least 56 of L.A. County’s 88 cities have not funded retiree healthcare at all. That would be not one dollar set aside to pay contractually promised benefits.
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