House Rejects Balanced Budget Amendment

Rejecting the idea Congress can’t control its spending impulses, the House turned back a Republican proposal Friday to amend the Constitution to dam the rising flood of federal red ink. Democrats — and a few GOP lawmakers — said damage from the balanced-budget mandate would outweigh any benefits. The first House vote in 16 years on making federal deficits unconstitutional came as the separate bipartisan “supercommittee” appeared to be sputtering in its attempt to find at least $1.2 trillion in deficit reductions to head off major automatic cuts. The lead Republican on that panel said members were “painfully, painfully aware” of its Wednesday deadline for action and would work through the weekend.

Debt Panel Poised to Admit Failure

A special deficit-reduction supercommittee appears likely to admit failure on Monday, unable or unwilling to compromise on a mix of spending cuts and tax increases required to meet its assignment of saving taxpayers at least $1.2 trillion over the coming decade. The panel is sputtering to a close after two months of talks in which the members were never able to get close to bridging a fundamental divide over how much to raise taxes to address a budget deficit that forced the government to borrow 36 cents of every dollar it spent last year. Members of the bipartisan panel, formed during the summer crisis over raising the government’s borrowing limit, spent their time on Sunday in testy performances on television talk shows, blaming each other for the impasse. Not a single panelist seemed optimistic about any last-minute breakthrough. And it was clear that the two sides had never gotten particularly close.

  • A second, deeper recession is coming with Europe collapsing and the U.S. not far behind

Congress May Try Blocking Cuts if Debt Panel Fails

Failure by Congress’ debt-cutting Super Committee to recommend $1.2 trillion in savings by Wednesday is supposed to automatically trigger spending cuts in the same amount to accomplish that job. But the same legislators who concocted that budgetary booby trap just four months ago could end up spending the 2012 election year and beyond battling over defusing it. Senators. John McCain, R-Ariz., and Lindsey Graham, R-S.C., say they are writing legislation to prevent what they say would be devastating cuts to the military. House Republicans are exploring a similar move. Democrats maintain they won’t let domestic programs be the sole source of savings.

  • The debt committee was always a ruse, designed to buy more time while partisan politics continues to prevent any real progress

Numbers of ‘Near Poor’ Rise Dramatically

Down but not quite out, a diverse group of Americans are called the  “near poor” and sometimes simply ‘overlooked’ — and a new count suggests they are far more numerous than previously understood, the New York Times reports. They drive cars, but seldom new ones. They earn paychecks, but not big ones. Many own homes. Most pay taxes. Half are married, and nearly half live in the suburbs. None are poor, but many describe themselves as barely scraping by. Census data shows 51 million people with incomes less than 50 percent above the poverty line – 76 percent higher than the previous official count. All told, that places 100 million people — one in three Americans — either in poverty or in the fretful zone just above it. The size of the near-poor population took even the bureau’s number crunchers by surprise.

2/3 of Arizona Corporations Pay No Income Tax

Every year, about two of every three Arizona corporations pay almost no state income tax. The Arizona Republic examined 15 years of state corporate income tax data, legislative tax records, tax court cases, committee reports and figures on state business tax credits. Among the key findings: Each year, anywhere from just under two-thirds to nearly three-fourths of Arizona businesses that file state income tax returns pay only a token amount, the $50 minimum. Arizona’s corporate income tax rate is set to fall by 30 percent from 2014 to 2017 and could end up one of the lowest in the nation. The decrease will save businesses an estimated $270 million in taxes over the four years. That’s greater than the amount cut by lawmakers from K-12 education and Arizona State University in this year’s budget.

California Bleeding Badly

California’s revenues last month were $811 million below projections. Nearly a billion dollars in just one month. Fiscal year to date, state income is running $1.5 billion below projections while state expenditures are $1.7 billion above — a $3.2 billion gap – adding to an already huge debt load.

  • California will be the first state to become officially bankrupt – unofficially, they already are

Occupy Protests Continue Despite Crackdowns

District of Columbia police on Saturday evening arrested 11 protesters and planned to charge them with unlawful entry after officers entered and cleared an abandoned city-owned building that had been occupied by a group inspired by Occupy D.C. The group Free Franklin began occupying the four-story Franklin School on Saturday, protesting the lack of housing for homeless people. The historic building served as a homeless shelter until 2008. More than 60 supporters gathered in a park near the red-brick building and cheered the protesters. The building is two blocks from Occupy D.C.’s encampment.

Some of the country’s most powerful unions are providing the infrastructure and amenities to keep the Occupy D.C. encampment fortified going into the winter. The camp’s portable toilets are being provided by the Service Employees International Union, the 2.1-million-member organization that helped Barack Obama win the presidency and recently backed his re-election bid. The estimated 100 demonstrators staying each night in McPherson Square, just blocks from the White House, take a hot shower at the AFL-CIO headquarters on 16th Street Northwest

Half of Congress Enjoys Millionaire Status

Who are the 1%? A new study shows about half the lawmakers in Congress are millionaires, and that their net worth has risen steadily since 2008 despite the financial crash. The analysis by the Center for Responsive Politics found that 250 members of Congress have an estimated net worth of at least $1 million. Though some members of Congress have tried to cozy up to the Occupy Wall Street protests and their message of representing 99 percent of America, assets of more than $1 million would easily put those lawmakers in the top 1 percent. And as it turns out, wealth knows no party. According to the report, 37 Senate Democrats and 30 Senate Republicans are worth more than $1 million. In the House, 110 Republicans and 73 Democrats enjoy the same status. The Senate is more flush with funds than the House. In the upper chamber, the median net worth of a senator is $2.63 million. For a House member, it’s about $757,000. Those figures are up 16 and 17 percent, respectively, from 2008.

Economic News

The Conference Board reported Friday that its index of leading economic indicators rose 0.9% last month, significantly faster than the revised 0.1% rise in September and the 0.3% increase in August. The economy, after growing at an anemic pace of just 0.9% in the first six months of the year, grew at a 2.5% rate in the July-September quarter.

The government’s mortgage insurer is coming dangerously close to holding no excess cash reserves for loan losses. An annual independent actuarial report puts the FHA’s loan loss reserves at 0.24% of its $1.1 trillion dollars in insured mortgages. Congress mandates that the FHA’s reserves must be at least 2% of its total insurance in force, but it hasn’t been at that level for a few years now. The FHA’s estimated reserves stand at $2.6 billion as of September 30th, according to the report, down 45% from $4.7 billion last year. The FHA, which does not originate loans, but insures them, has gone from less than 5% market share at the height of the housing boom to now more than 30 percent.

A $1 billion federal program to help distressed homeowners in much of the country mainly helped people in just three states. Almost half the homeowners aided by the Emergency Homeowners’ Loan Program are in Pennsylvania, Maryland and Connecticut. As previously reported, the program closed to applicants on Sept. 30 with more than half of its $1 billion unspent. Leftover funds return to the U.S. Treasury  Fewer than 12,000 applicants were approved before the program expired, short of the 30,000 target..

Stansberry’s Digest reports that, “Most of Europe’s major banks are insolvent. But only in the last week have they lost most of their access to additional funding. Their key source of funding has been U.S. money-market funds. But these funds are bailing out of Europe as quickly as they can. The result is a run on Europe’s banks. This crisis is now past the point where the authorities can hope to control the situation. We are now days (not weeks or months) away from the first major bank failures.”

Spain

Spanish voters kicked out the Socialist government Sunday in elections seen as a referendum on the handling of the European debt crisis, which has left Spain buckling under soaring unemployment, burgeoning debt and cuts in public benefits. It was the fifth European government – after Portugal, Ireland, Greece and Italy – to be brought down in the past year because of the debt crisis and the Socialists’ worst result since Spain held its first democratic election in 1977 after a 40-year-long dictatorship. Mariano Rajoy, the conservative leader of Spain’s opposition People’s Party, won 44% of the vote with just over half the total votes counted. President Rodriguez Zapatero’s handpicked Socialist Party candidate, Alfredo Pérez Rubalcaba, garnered 29%.

Middle East

Hamas terrorists continue to launch dozens of missiles and rockets from Gaza, the land that Israel gave up for peace – including one missile earlier this week that demolished a kindergarten for Jewish students. Thankfully the children had already left for the day, but the evil of this attack is not lessened because there were no victims. The Qassam rockets favored by Hamas are unguided missiles; they are not aimed at specific targets but just launched in a general direction in hopes of killing or injuring Jewish people living in southern Israel.

Iran

North Korean nuclear and missile experts have been sent to Iran to help Tehran’s nuclear weapons development program, according to a diplomatic source. “Hundreds of North Korean nuclear and missile engineers have been working at more than 10 sites [in Iran], including Natanz and Qom,” the source told South Korea’s Yonhap News Agency. The North Korean experts are from the country’s so-called Room 99, which is directly supervised by the North’s ruling Workers’ Party Munitions Industry Department.” Room 99 “is widely believed to be engaged in exports of weapons and military technology.”

Intelligence sources have reported that according to a closed meeting of Jewish leaders, the window of opportunity to stop Iran from attaining a nuclear weapon will close by late March 2012. The intelligence reaching President Obama is that by April, Iran will have five nuclear bombs or warheads and military action would generate a dangerous level of radioactive contamination across the region. After meeting with Russian and Chinese leaders, President Obama said that both leaders share the goal of keeping a bomb out of Iran’s hands.

Iraq

Despite the Obama Administration’s “rose-colored glasses” assessment of Iraq’s future as a democratic haven in a sea of radical Islamist despots, political thugs and monarchs, Iraq appears open to befriending its neighbor Iran. The Iraqi military and their Iranian counterparts are already meeting in anticipation of the December withdrawal of all U.S. forces in an effort to thwart Iraq’s internal enemies. General Babaker Zebari Chief of Staff of the Iraqi Joint Forces, during his visit to Iran, has called for the military cooperation between Tehran and Baghdad, Iran’s government-controlled news service reported. The Iraqi general told his Iranian counterpart that Iraq continues to endure security threats from elements such as al-Qaeda in Iraq, radical clergy al-Sadr’s followers, etc., and Baghdad needs the help of a powerful country such as Iran, especially in the area of national security.

  • While difficult to overcome the Shia’ Sunni divide, Iran seeks to expand its influence in the Middle East, a dangerous sign for Israel

Afghanistan

A traditional Afghan national assembly on Saturday endorsed President Hamid Karzai’s decision to negotiate a long-term security pact with the U.S. but imposed some conditions, including an end to unpopular night raids by military forces searching for insurgents. The nonbinding resolution backed an initiative from the president to negotiate a pact that will govern the presence of U.S. troops after 2014, when most international forces are to have left or moved into support roles. More than 1,000 university students blocked a main highway in eastern Afghanistan on Sunday as they protested against any agreement that would allow U.S. troops to stay in Afghanistan after a planned transfer of authority in 2014.

Syria

Residents in the Syrian capital awoke to two loud explosions Sunday amid reports from activists that the Damascus headquarters of the ruling Baath party had been hit by several rocket-propelled grenades. Assad, meanwhile, vowed to continue with a security crackdown to crush “militants” who he says are massacring Syrians on a daily basis. Syrian troops stormed a central town and a northwestern region Saturday in search of opponents of the government as pressure on Damascus intensified to end an eight-month crisis that has left thousands of people dead. The attacks on the town of Shezar in the central province of Hama and the restive Jabal al-Zawiya region near the Turkish border came a day after Syria agreed in principle to allow Arab observers into the country to oversee a peace plan proposed by the 22-member Arab League.

Russian warships entered Syrian territorial waters Friday in an aggressive move designed to prevent any NATO-led attack on the country under the guise of a “humanitarian intervention,” according to a Syrian news agency. Russia has stepped up efforts to defend Syria in recent days, with Foreign Minister Sergei Lavrov keen to frame the violence in the country as a civil war in defiance of claims by western powers that President Bashar al-Assad has overseen a bloody crackdown on innocent protesters.

Egypt

Police are clashing for a third day Monday in Cairo’s central Tahrir Square with stone-throwing protesters demanding the country’s military rulers quickly transfer power to a civilian government. About 3,000 protesters are still on the square, facing off with hundreds of black-clad riot police firing tear gas and rubber bullets. Egyptian soldiers and police set fire to protest tents and fired tear gas and rubber bullets in a major assault Sunday. At least 20 protesters have been killed since Saturday. Tens of thousands of Islamists and young activists massed in Tahrir Square on Friday, confronting Egypt’s ruling military council’s ‘dictatorship.’The  rally represented the beginning of a new battle between Egypt’s two most powerful political forces, the military and the once-outlawed Muslim Brotherhood.

Lebanon

The CIA’s operations in Lebanon have been badly damaged after Hezbollah identified and captured a number of U.S. spies recently. The intelligence debacle is particularly troubling because the CIA saw it coming. Hezbollah’s longtime leader, Sheik Hassan Nasrallah, boasted on television in June that he had rooted out at least two CIA spies who had infiltrated the ranks of Hezbollah, which the U.S. considers a terrorist group closely allied with Iran. Though the U.S. Embassy in Lebanon officially denied the accusation, current and former officials concede that it happened and the damage has spread even further. In recent months, CIA officials have secretly been scrambling to protect their remaining spies — foreign assets or agents working for the agency — before Hezbollah can find them.

Brazil

More than 2,600 barrels of oil may have spilled into the Atlantic ocean because of a leak at an offshore Chevron drilling site, Brazil’s environmental protection agency said Friday. Officials think 200 to 330 barrels of oil leaked each day from Nov. 8 through Tuesday. Officials are still investigating the exact cause of the leak, which has been almost entirely contained.

Wildfires

The estimated number of homes destroyed in a wind-fueled wildfire reached at least 32, but Nevada Gov. Brian Sandoval said it’s a miracle scores more weren’t lost. The unusual, out-of-season blaze spread by gale-force winds ripped through the Sierra foothills early Friday, forcing the evacuation of nearly 10,000 people. Most started returning to their homes Saturday afternoon. “This was not only a wild land, urban-interface type fire, it was also a metro fire where we had homes that were actively burning in densely populated areas,” Reno Fire Chief MikeHernandez said.

Weather

Remarkable temperature contrasts – from bitter cold in the Northwest and northern Plains to spring-like warmth in the southern Plains and the Southeast – was the main weather story across the USA this past weekend.

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