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White House budget plan features $17 billion in spending cuts; financial stocks perk up. Plus: House GOP still seeking answers on DHS memo.

White House: Budget Plan Outlines Major Cuts

• "President Obama's detailed budget plan calls for spending cuts next year totaling $17 billion, according to senior administration officials," The Hill reports. "About half of Obama's proposed savings would come from defense programs, while the other half would come from domestic programs."

• "Administration aides defended the proposed level of savings, which amounts to only about 0.5 percent of the $3.4 trillion budget Congress recently approved for FY10," CongressDailyAM (subscription) reports. "The figure, by 'anyone's accounting, is a significant amount of money; that is in one year alone,' one official said."


• "Faced with surging violence in Afghanistan and Pakistan," Obama "said Wednesday that leaders of both countries have reaffirmed their commitment to confronting extremism," the Wall Street Journal (subscription) reports. "The administration's push for greater cooperation against the insurgent threat comes against a backdrop of grim news from the region."

• The Washington Post profiles Obama's national security adviser, Jim Jones.

• "Obama will propose setting aside enough money for all 1,716 students in the District's voucher program to continue receiving grants for private school tuition until they graduate from high school, but he would allow no new students to join the program, administration officials said," the Washington Post reports.


Economy: Financial Stocks Up, Credit Risk Down

• "US financial stocks soared on Wednesday as investors expressed relief the capital shortfalls identified by the government's 'stress tests' at large banks such as Citigroup and Bank of America were not as big as some had feared," the Financial Times reports. "The bank rally occurred as news of the capital needs of the 19 banks involved in the tests leaked out during the day, ahead of the official release of the results" today.

• "The cost of protecting corporate bonds from default fell to the lowest since the collapse of Lehman Brothers Holdings Inc. on speculation banks will resume lending after withstanding Federal Reserve stress tests," Bloomberg News reports. "Credit markets froze when Lehman declared bankruptcy in September as banks hoarded cash to guard against losses on toxic debt assets."

• "General Motors Corp said it burned through $10.2 billion in the first quarter, operating under a federal bailout, as auto sales fell across the globe and it scrambled to cut costs," Reuters reports. "The automaker" today "posted a quarterly net loss of $6 billion, compared with a loss of $3.3 billion a year earlier."

National Security: DHS Discontinues Bio-Attack System

• "The Department of Homeland Security is dismantling a next-generation biological attack warning system in New York City subways because of technical problems, U.S. officials said," the Washington Post reports. "Robert Hooks, a deputy assistant secretary, said the department no longer believes it is necessary to expand the pilot program."


• "The Federal Bureau of Investigation is sometimes dangerously slow to add suspects to the nation's terrorist watch list, and even slower to remove those cleared of suspicion, an internal audit found," the Wall Street Journal (subscription) reports. "The report issued Wednesday by the Justice Department's inspector general, Glenn Fine, found lapses in the way the FBI managed its Terrorist Screening Center."

• "The eldest son of Pakistani pro- Taliban cleric Sufi Muhammad was killed by shelling from security forces in the northwestern Swat Valley as fighting intensified amid an exodus of refugees," Bloomberg News reports. "There is no hope of resuming peace talks," said the man's brother, Rizwanullah Farooq. "Nobody can talk when the operation is killing people and destroying houses."

Congress: Senate Votes To Help Homeowners

• "Trying to curb home foreclosures, the Senate voted on Wednesday to make it easier for homeowners with risky credit to switch to a lower-cost mortgage backed by the government," AP reports. "The bill, passed 91-5, also would give banks a break by encouraging reduced fees they must pay for the government to insure deposits."

• "With newspapers battered by recession and an online revolution, senators heard bleak assessments Wednesday of a future with much less watchdog journalism," the Dallas Morning News reports. "Newspaper advocates complained that Google and other news aggregators have unfairly -- even 'parasitically' -- hoarded revenue that publishers deserve and need. Lawmakers wrestled with how and whether government should step in."

Energy & Environment: Bill Still Eludes Waxman

• "As the clock ticks on a self-imposed deadline, Rep. Henry Waxman is facing fire from all sides over his landmark measure to curb carbon emissions," Politico reports. "After months of haggling, he still doesn't have a deal that moderates will support."

• "Democratic centrists are pressing House Speaker Nancy Pelosi to set aside a flagging climate change bill to focus on what they think is a more achievable goal: overhauling the nation's healthcare system," The Hill reports. "But those close to Pelosi (D-Calif.) say she is charging forward on cap-and-trade legislation, despite the potential defections of Democrats who represent states with industries that would be adversely affected by the bill."

• "New federal greenhouse gas emission regulation could expose a raft of smaller emitters to litigation, a nominee for a key post in the Environmental Protection Agency told lawmakers Thursday," the Wall Street Journal reports. "The potential for smaller emitters to be regulated under the Clean Air Act is one reason why business groups warn that EPA regulation of greenhouse gases could create a cascade of legal and regulatory challenges across a much broader array of sectors. The Obama administration has said that isn't their intent."

• "The executives pleaded their case at a 2 1/2-hour dinner with California Sen. Dianne Feinstein at the Source, Washington's hottest new restaurant. They discussed strategy with Sen. Barbara Boxer, who arranged a special meeting with President Obama's top economic adviser, Larry Summers, that lasted nearly an hour," the San Francisco Chronicle reports. "And the Silicon Valley executives made clear to all that Obama's hunt for revenue to finance his ambitious agenda, from green energy to health care, should leave them alone."

Health Care: Rangel Won't Consider Taxing Benefits

• "The top tax-writer in the House of Representatives said Wednesday that there was 'no way' he would support taxing employer-provided health benefits, Americans' leading source of coverage," the New York Times reports. "The comment came from Representative Charles B. Rangel, chairman of the House Ways and Means Committee, after a committee hearing with the new secretary of health and human services, Kathleen Sebelius."

• "One of the first things Margaret (Peggy) Hamburg says she will do if confirmed as FDA commissioner is review the agency's recent work on the H1N1 flu situation, according to testimony she will deliver today at her confirmation hearing before the Senate Health, Education, Labor and Pensions Committee," CongressDailyAM (subscription) reports.

• "Health and Human Services Secretary Sebelius told a House panel Wednesday that a government-run health care plan is needed to keep in check the private insurance industry, which she says wields too much power and often fails to best serve the public," the Washington Times reports.

Politics: House GOP Still Probing DHS Memo

• "House Republicans demanded Wednesday that Homeland Security Secretary Janet Napolitano detail how the controversial 'right-wing extremism' report was compiled, using a rare legislative maneuver that ensures that the Democrats must take a public stand -- one way or another," the Washington Times reports. "The request asks Ms. Napolitano to release information on how the report was compiled."

• "For many Republicans, including Republican National Committee Chairman Michael Steele, the reaction to" Pennsylvania Sen. Arlen Specter's "party switch was unequivocal: good riddance," Politico reports. "Yet even as his jilted former party slams the door behind him, the GOP is quietly pursuing a 2010 strategy that relies heavily on candidates nearly identical to Specter."

• "The recent run of states legalizing gay marriage -- punctuated Wednesday by Maine becoming the fifth state to do so -- has increased the likelihood that California voters will face another ballot measure on the issue as early as next year, according to strategists on both sides," the Los Angeles Times reports. "The California Supreme Court is expected to uphold Proposition 8, November's ballot measure banning same-sex marriage, with a decision coming in the next few weeks."

• "Obama -- who has said he opposes same-sex marriage as a Christian but describes himself as a 'fierce advocate of equality' for gay men and lesbians -- is under pressure to engage on a variety of gay issues that are coming to the fore amid a dizzying pace of social, political, legal and legislative change," the New York Times reports.

Lobbying: Recalled Helmets Linked To PMA Group

• "The Army has issued a recall of more than 34,000 advanced-combat helmets that failed ballistics tests, a move certain to attract scrutiny on Capitol Hill," The Hill reports. "But an added element of intrigue that may also catch lawmakers' attention is the firm that lobbied on behalf of the helmet's manufacturer: the PMA Group."

• "You can check off David Rehr from the unofficial K Street watch list of endangered GOP association heads," Roll Call (subscription) reports. "The Republican lobbyist, best known for his hard-charging approach, abruptly resigned his post Wednesday at the helm of the National Association of Broadcasters."

Technology: Critics Blast New DHS Tech Guru

• "Depending on who you ask, the Obama administration's controversial pick to be the Department of Homeland Security's geek-in-chief is either a leading authority on the deadliest terror threats -- or a biowar chicken little, dangerously out of touch with reality," Wired reports.

• "The agency charged with consumer protection and preventing unfair business practices may take a more active role in the next wave of debate over whether new rules are required to ensure access to Internet content, FTC Chairman Jon Leibowitz said Wednesday," CongressDailyAM (subscription) reports.

• "The Web site for tracking spending under the economic stimulus law has enough money, but is pressed for time, according to the chairman of the site's oversight board," Federal Computer Week reports.

Commentary: Probing The Palins

• In Earlybird's Pundits & Editorials section, commentators take issue with Alaska Gov. Sarah Palin (R) and her daughter Bristol over abstinence education.

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