• "Congress appeared Tuesday to be coalescing around an outline to allow the Treasury Department to purchase up to $700 billion of bad mortgage assets from troubled banks, despite political sniping throughout the day," CongressDailyAM (subscription) reports. "The challenge for lawmakers, especially House Financial Services Chairman Barney Frank and Senate Banking Chairman Christopher Dodd, will be to quickly turn their ideas into a bill before they adjourn, securing concessions from Treasury Secretary Henry Paulson Jr., picking up enough GOP support and tamping down red flags from their respective caucuses."
• "Fearing a political backlash against Democrats, Senate Majority Leader Harry Reid (D-Nev.) has told the White House that it must serve up support from Republican presidential nominee Sen. John McCain (Ariz.) if it hopes to ensure bipartisan backing for a massive economic bailout package by week's end," Roll Call (subscription) reports.
• "House Speaker Nancy Pelosi is telling Democrats that she will not support President Bush's $700 billion bailout of the financial sector unless there is significant Republican support for the controversial plan," The Hill reports.
• "The House is expected to take up a roughly $600 billion continuing resolution today that would fund the federal government through March 6 and includes three FY09 appropriations bills and up to $24 billion in disaster relief," CongressDailyAM (subscription) reports. "House Appropriations Chairman David Obey Tuesday said that leaders have decided to try to bring the must-pass CR to the House floor today and move a Democratic stimulus package and legislation requested by President Bush to bolster the financial markets separately this week."
• "Congressional Democrats bowed to political pressure" Tuesday "and agreed to let the ban on offshore oil drilling expire," the Washington Post reports. "Democrats said they gave in to White House demands rather than risk a showdown over the 'continuing resolution' Congress must pass to fund the federal government through March."
Economy: Buffett Invests Heavily In Goldman Sachs
• "Goldman Sachs Group Inc. said it will get a $5 billion investment from billionaire Warren Buffett's company, marking one of the biggest expressions of confidence in the financial system since the credit crisis intensified early this month," the Wall Street Journal reports.
• "William O. Perkins III says he turned a $1.25 million profit trading Goldman Sachs Group Inc. stock last week," the Wall Street Journal (subscription) reports. "You would think that would count as a pretty good paycheck for the Houston energy trader. Instead, the experience left him so angry about the demise of capitalism that he says he has decided to spend his profits on advertisements attacking President George W. Bush's planned $700 billion Wall Street bailout."
• "The Bush administration's $700 billion plan to bail out the financial industry is 'extremely faulty,' Former President Jimmy Carter said at a Tuesday night town hall-style meeting," the AP reports. "Carter said he believes action is necessary but is skeptical" of the current plan.
• "Lately, T. Boone Pickens would get better marks as a policy advocate and author than an energy investor," the Wall Street Journal (subscription) reports. "The downturn in energy has blindsided the industry veteran, leaving one of his hedge funds that focuses on energy stocks down almost 30% through August. A smaller commodity-focused fund is down 84%."
• "Federal regulators have subpoenaed recent trading records from several Nymex traders as part of a widening investigation into the sharp rise in oil prices on Monday," the New York Times reports. "The subpoenas are part of an examination announced by the Commodity Futures Trading Commission on Monday, soon after the price for an expiring futures contract on the Nymex surged in the last hour of trading, according to people briefed on the continuing investigation."
Washington: U.S. Government Offers Aid To Cuba
• "A pair of devastating storms have prompted new calls for the United States to end its long isolation of Cuba, including from hard-line exile groups that are pushing for the Bush administration to loosen restrictions they had long favored," the Washington Post reports. "For the first time in the 47-year history of the U.S. trade embargo against Cuba, Washington has offered direct aid to the island's Communist government."
• "The Federal Bureau of Investigation, under pressure to look at possible criminal activity in the financial markets, is expanding its corporate fraud inquiries in the wake of the tumult in the last 10 days, officials said Tuesday," the New York Times reports. "The F.B.I. has now opened preliminary investigations into possible fraud involving the four giant corporations at the center of the recent turmoil -- Fannie Mae and Freddie Mac, Lehman Brothers and the American International Group, The Associated Press reported."
• "A new government program aims to make it more difficult for terrorists to steal dangerous radioactive material from the nation's hospitals and medical research labs to make 'dirty bombs.'" USA Today reports. "About 1,300 machines in medical facilities will be fitted with new security measures by the end of next year that will make it much harder for anyone to steal the cesium chloride inside, officials at the Homeland Security and Energy departments said."
• "Medicare pays millions each year for medical supplies such as walkers and glucose test strips for patients who don't appear to need them, congressional investigators say in a report out today," USA Today reports. "Investigators reviewed bills submitted by medical suppliers from January 2001 to December 2006 for 18 different items and found questionable claims totaling more than $1 billion."
• Frank "denounced the Library of Congress (LOC) in a letter Tuesday and asked it not to appeal a recent court decision that found the national library guilty of sexual discrimination," The Hill reports. "The U.S. District Court for the District of Columbia ruled Friday that the LOC discriminated against Diane Schroer when it did not hire the former Army Special Forces commander, who is a transsexual."
Nation: California's Economic Troubles Not Over, Report Says
• "Housing prices will hit bottom some time next year, but the California economy will be in distress for months to come, according to a closely followed UCLA economic report scheduled to be released today," the Los Angeles Times reports. "In a series of dire predictions echoed by experts throughout the state, the UCLA Anderson Forecast says that unemployment will continue to increase, consumer spending will decline and tax revenues will plummet."
• "Gov. Arnold Schwarzenegger signed the state's tardiest budget on record Tuesday after eliminating $510 million in spending, including financial aid for elderly renters and homeowners and a program he championed to lower prescription drug prices for low-income Californians," the Los Angeles Times reports. "His signature allows more than 80,000 state vendors' outstanding bills to be paid."
• "Google and T-Mobile unveiled their answer to the iPhone on Tuesday, pulling the wraps off a slick mobile device that combines a touch screen and a keyboard and is aimed at putting the Internet in the pockets of millions of cellphone users," the New York Times reports. "The T-Mobile G1, which will be available in the United States on Oct. 22, is the first mobile phone to be powered by Google's Android operating system."
• "After seeming to fall behind in the race for alternative-fuel vehicles, Chrysler said on Tuesday that it would produce an electric car for sale in 2010 and follow it up with a broad lineup of battery-powered vehicles," the New York Times reports. "Chrysler, the smallest of Detroit's three automakers, showed off three electric models, including a minivan, a sport utility vehicle and a two-seat sports car."
Iraq: Negotiations Over Security Pact To Resume
• "US officials negotiating a controversial security pact with Iraq have returned to Baghdad to resume discussions which have been deadlocked since early September, a US official said on Wednesday," Agence France-Presse reports. "Washington and Baghdad are trying to hammer out a deal that would lay the framework for the future of US forces in the violence-wracked country after 2008 when a UN mandate governing their presence expires."
• "At a checkpoint consisting of a wooden shack wrapped in steel sheets, five young Iraqis with AK-47 rifles have the task of stopping al Qaeda bombers striking the ancient city of Samarra," Reuters reports. "Such guards have been vital in helping cut violence across Iraq, but many say they now fear being abandoned as the Shi'ite-led government prepares to take control of them from the U.S. military in the coming months."
• "Jordan received 11,000 barrels of Iraqi oil by road on Wednesday, the first delivery under a new agreement which revises the subsidy the kingdom receives in the light of spiralling world prices, Energy Minister Khaldun Qteishat said," Agence France-Presse reports.
• "Shell has become the first western oil company to win significant access to the energy sector in Iraq since the 1970s, in a $4bn move," the London Guardian reports. "The deal has angered anti-war campaigners and senior Iraqi figures who complained" Tuesday "that there was no competitive tendering for the contract."
World: North Korea Expels Monitors From Atom Bomb Plant
• "North Korea has expelled U.N. monitors from its plutonium-making nuclear plant, officials said on Wednesday, accelerating moves to restart an atom bomb project it had renounced under a disarmament-for-aid deal," Reuters reports. "The Stalinist state had said on Friday it was working to reactivate the sprawling Yongbyon reactor complex, which it had been dismantling since last November under a disarmament-for-aid deal with five powers that has gone awry."
• "A suspected U.S. pilotless drone has crashed in the northwestern Pakistani region of South Waziristan after a spate of missile attacks by unmanned U.S. aircraft in Pakistan strained ties between the allies," Reuters reports. "Pakistan has said U.S. missile attacks and one U.S. ground assault are a violation of its sovereignty and the army has vowed to defend Pakistani territory."
• "Three policemen were killed by a land mine planted by Taliban insurgents in a police post in the Afghan capital on Wednesday, a police official said," Reuters reports. "The blast occurred as a group of officers were investigating the killing of three other policemen at the post in an overnight Taliban attack, he told Reuters on condition of anonymity."
• "Afghanistan's president, who addresses the U.N. General Assembly on Wednesday, is urging the next American leader to send money, planes and equipment to strengthen the Afghan army," the AP reports.
• "President Bush challenged the United Nations on Tuesday to stop terrorism, punish Iran and North Korea for their nuclear programs and see Russia's invasion of Georgia as a violation of the U.N.'s charter," USA Today reports. "Speaking in sharp terms for the last time to the 63rd General Assembly, Bush said the U.N. must offer greater support to peaceful democracies and hand out tougher punishments to tyrannies that sponsor terrorism."
Campaigns: Faltering Economy Boosts Obama
• Wall Street's meltdown is bolstering Barack Obama's numbers in several swing states. Earlybird's Campaign News section has more.
Commentary: Wall Street Woes Go Global
• In Earlybird's Pundits & Editorials section, commentators pit Russia's $100 billion bailout plan against the Treasury's $700 billion proposal and highlight the long-term benefits foreign investors could see in the U.S.