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Inside Washington (12/01/2010)
* WASHINGTON (12/2/10)--The final report from President Barack Obama’s fiscal commission released on Wednesday includes more politically sensitive issues for Americans, including cuts in military spending, a higher retirement age and tax reform (The Washington Post (Dec. 1). But so far, commission chairs—former U.S. Sen. Alan K. Simpson, a Republican, and Erskine B. Bowles, a Democrat and former White House Chief of Staff under President Bill Clinton--have been unable to garner support from the panel’s elected officials, an indication of the potential for political backlash that such issues hold (New York Times Dec. 1). A final vote by the panel’s 18 members had been delayed until Friday. The proposal includes cutting $1.6 trillion from Obama's proposed budgets by 2020 and reducing overall government spending to less than 22% of the nation's gross domestic product. The plan also proposes raising taxes by nearly $1 trillion by 2020 through reforms that could cost the average taxpayer $1,700 annually. While the report names tax expenditures as one debt decreasing measure, the credit union tax exemption is not specifically cited. Still, both Credit Union National Association President/CEO Bill Cheney and National Credit Union Administration Chairman Debbie Matz have addressed the tax issue, noting that removing credit unions’ tax exemption would be a grave mistake. Among the reforms on the table are elimination or reductions of the deduction for home mortgage interest; the tax-free treatment of employer-paid health insurance; and preferred rates for capital gains and dividends … * WASHINGTON (12/2/10)--Federal Reserve Bank of St. Louis President James Bullard on Monday voiced concern for funding of a consumer protection office established under regulatory reform laws, saying it was not based on a careful assessment of the bureau’s needs (Bloomberg.com Dec. 1). The Consumer Financial Protection Bureau is to be funded and housed within the central bank with an independent leader. The bureau has been given responsibility for writing consumer protection rules and regulations that apply to all banking institutions. The bureau’s rule-writing authority will extend to institutions that have not historically fallen under federal oversight. These institutions will include check cashers, payday lenders, money transmitters, pawn shops and other entities that are viewed as part of the “shadow” network of consumer credit. Harvard law professor Elizabeth Warren has been named by President Barack Obama as an adviser to help shape the new consumer agency. In a press release from the district bank, Bullard said the Fed’s only interaction with the new bureau is to fund it. He also expressed concern that a mechanism does not exist for changing the amount of funding in the future … * WASHINGTON (12/2/10)--Bentley University on Tuesday won the seventh annual national College Fed Challenge, a competition that encourages students to learn about the U.S. economy, monetary policymaking, and the role of the Federal Reserve System in the economy. The team from Waltham, Mass., represented the First Federal Reserve District and included Christina J. Harstad, Satyajeet Jadhavrao, Pranay Kumar Jain, Peter Jurik, David Norrish, Victoria Tran, and faculty advisors David Gulley and Aaron Jackson. The finals were held in the boardroom at the Board of Governors in Washington D.C. as the climax to district competitions in which more than 100 teams competed throughout the country. Other nation finalists were: second place, Lafayette College; third place, Northwestern University; fourth place, Rutgers University at Newark; and fifth place, Virginia Commonwealth University. The College Fed Challenge is a team competition for undergraduate students. Teams play the role of members of the Federal Open Market Committee, the Fed’s monetary policymaking body …


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