Senate Financial Regulatory Bill
On Thursday, Senator Bob Corker (R-TN) announced that he had agreed to work with Senate Banking Chairman Chris Dodd (D-CT) to draft a bipartisan financial reform bill. Despite giving Senate Minority Leader Mitch McConnell notice prior to the announcement, Corker surprised many in his own party since Banking Committee Ranking Member Richard Shelby (R-AL) broke off negotiations with Dodd over disagreements about a new consumer protection agency. Sources indicate Dodd sees Corker as an “honest broker” because of his work with Senator Mark Warner on resolution authority issues.
On Friday, Corker released a statement saying that a new Consumer Financial Protection Agency was a “non-starter” and he was only committing to “working towards a bipartisan agreement.” Corker also stated that the effort to prohibit commercial banks from having proprietary trading businesses by White House Economic Advisor Paul Volcker would not be the focus of his talks with Dodd.
FirstEnergy to Buy Allegheny Energy
On Friday, FirstEnergy announced it would buy Allegheny Energy for $4.7 billion in stock. The deal would create a company with 10 utilities and six million customers stretching across seven states. The companies will still have to get approval from numerous state regulators before the deal can close. The companies said merger savings could top $530 million by the fifth year. As part of the deal, FirstEnergy also would assume $3.8 billion of Allegheny’s debt.
Senate “Jobs” Bill
On Thursday, Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) circulated a $85 billion draft “jobs” bill that included many bipartisan items such as the much sought-after extension and creation of business tax credits. However, within a few hours, Senate Majority Leader Harry Reid (D-NV) announced he would instead offer his own scaled down $15 billion bill “jobs” bill that includes Build America bonds, a small-business tax program that allows quick expense write-offs, a one-year extension of highway construction funds and a new hires tax-credit which would waive the 6.2 percent Social Security tax for any employer who hires a worker who has been unemployed for at least 60 days. Senate Republicans were initially skeptical of Reid’s proposal and are likely to withhold their support.
Economic Report of the President
On Thursday, Christina Romer, Chair of the Administration’s Council of Economic Advisors, released the annual Economic Report of the President. Reflecting the country’s recession and the Administration’s policies to address the economic crisis, the report says the administration forecasts the economy will add an average of 95,000 jobs per month in 2010.
White House Meeting with Congressional Leaders
On Tuesday, President Obama hosted a closed door meeting with Congressional leaders. During the meeting, House Speaker Nancy Pelosi (D-CA) expressed skepticism over an administration proposal to offer tax breaks to businesses that create new jobs. White House economic advisers defended the administration’s proposal to give employers a $5,000 credit for each new worker they hire as well as help with Social Security taxes. Pelosi countered that she does not believe that the plan will actually lead to the creation of new jobs.
Thain Named CEO of CIT Group
On Monday, John Thain, former CEO of Merrill Lynch & Co., was named to lead CIT Group Inc.. The announcement concludes a four-month search and restores Thain to the top of a Wall Street concern. Thain lost his job at Merrill after his company was acquired by Bank of America during the 2008 financial crisis. CIT still operates under constraints tied to its federal bailout in 2008 and is prevented from operating in the commercial paper market.