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GREECE MEETING: Greece remains a key focus in financial markets as the new Greek government tries to forge a deal on the country's debts with its partners in the 19-country eurozone.
On Friday, it was confirmed that finance ministers of the so-called Eurogroup are to hold a special meeting next Wednesday to discuss Greece's debts, a day ahead of a summit of European Union leaders. Greek shares were down Friday amid ongoing jitters over how the discussions will pan out. The Athens stock index fell 3 percent.
OIL REBOUND: Oil prices extended their gains Friday, with the benchmark New York rate up $1.09 at $51.62 a barrel. Brent, the international standard, was up $1.60 at $58.19 a barrel.
BONDS: U.S. government bond prices fell and yields rose as investors anticipated that strong jobs report could mean higher interest rates and faster economic growth. The yield on the 10-year Treasury note rose to 1.89 percent from 1.81 percent
Meanwhile, the obedient faithful do their best to keep Hope alive while reaping the benefits of Change:
"Kids, I know you miss our annual trip to Walt Disney World but you understand how the Affordable Care Act means we have to use that money to pay our much higher health insurance premiums which are going to be higher every year from now on, even though we voted for President Obama twice. When they shut down the coal-fired power plant in a few months, your Uncle Steve will be out of work and we'll see bigger electric bills, maybe twice as much, but we all have to do our part to protect Mother Earth because the president's huge carbon footprint is our carbon footprint, too.
And don't forget that Dad's about to lose his job to an H-1B visa holder and Mom's already training the DREAMer who's going to replace her at work, even after we both took pay cuts to keep our jobs and help stimulate the recovery. This is what President Obama means when he says amnesty, comprehensive immigration reform and guest worker programs are good for the middle class, good for the economy and good for America. But like Nancy Pelosi reminds us: If your hours are cut at work, it's 'a liberation' and it gives you 'the freedom to pursue your happiness'. That means we'll have all the freedom we deserve!"
A little-noticed proposal in President Barack Obama's $4 trillion budget would eliminate the Overseas Private Investment Corporation, which has been the subject of an Associated Press investigation into its overseas loans, and merge it for efficiency with five other federal business and trade agencies
Under the proposal, the combined agencies would fold into a single new department with a name focused on economic growth and job development. It would affect the Commerce Department's core business and trade functions - the Small Business Administration, Office of the U.S. Trade Representative, the Export-Import Bank and U.S. Trade and Development Agency.
OPIC finances more than $3 billion a year in developments across the world, and was the subject of an AP investigation over projects in Liberia, Mexico and Chile.
An aborted $217 million power project in Liberia was marked by insider connections, questionable oversight, environmental damage and allegations by employees about sexual abuse and workplace hazards, the AP found.
OPIC has no independent internal watchdog, and its accountability office has issued reports on just five deals since 2005, a period when OPIC approved more than 530 projects worldwide.
OPIC, which focuses on foreign development, is different from the other agencies, which are mostly focused on trade. "There's always the danger of watering down the rules and policies of one institution when you merge it with others," he said.
DECISION DOWN UNDER: The Reserve Bank of Australia cut its benchmark interest rate by a quarter of a percentage point to a record low of 2.25 percent in an attempt to revive the country's economy, which is being weighed down by falling commodity prices.
Mexican remittances rebound in 2014, up 7.8 percent
MEXICO CITY (AP) - Remittances sent home by Mexicans living abroad rebounded by 7.8 percent last year after falling in 2013, Mexico's central bank said Tuesday. Mexicans abroad sent home $23.6 billion in 2014, up from about $21.9 billion the year before. Remittances had dropped 3.7 percent in 2013 from the previous year. Remittances are among Mexico's main sources of foreign income, along with oil exports. Almost all of the remittances come from the more than 11 million Mexicans living in the United States, making the health of that country's economy key to what is sent back to Mexico. "The remittances don't depend on the exchange rate, nor on business opportunities in Mexico, but rather completely on the condition of the U.S. economy," Alfredo Coutino, Latin America director for Moody's Analytics, said in an email.
(Bloomberg) -- Hedge funds are the most bullish on gold in more than two years, betting the metal's allure will strengthen as slowing economies in Europe and Asia threaten U.S. expansion.
Speculators increased their net-long position by 80 percent this year, U.S. government data show. The U.S. economy expanded at a slower-than-forecast pace in the fourth quarter and Federal Reserve officials acknowledged global risks at the end of their policy meeting last week.
Gold prices in January capped the biggest monthly gain in three years. Policy makers in Europe and Asia are adding to stimulus as they battle cooling growth, boosting the appeal of alternatives to currencies that are being revalued. Weaker foreign expansion has increased speculation among investors that the Fed will wait longer before raising U.S. interest rates.
Obama sends record $4 trillion budget to Congress: Tax hikes for rich, help for middle class
Obama's budget, which will set off months of wrangling in Congress, proposes spending $4 trillion - $3.999 trillion before rounding - in the 2016 budget year that begins Oct. 1. That's a 6.4 percent increase over estimated spending this year
In a message accompanying the massive budget books, Obama said his proposals are "practical, not partisan
"The president is advocating more spending, more taxes and more debt," said House Speaker John Boehner. "A proposal that never balances is not a serious plan for America's fiscal future."
The budget documents reveal that all the tax increases will total $2 trillion, including a number of proposals Obama has made before to limit deductions the wealthy can take to reduce their tax bill.
Wealthy people would only be able to take tax deductions at the 28 percent rate even if their income is taxed at 39.6 percent and would also see an increase in their maximum capital gains rate to 28 percent instead of 24.2 percent.
All told, Obama proposes higher receipts of about $2 trillion in his budget: about $1.5 trillion come from tax increases and almost $500 billion from fresh revenue as immigration changes lift the economy and provide new workers.
Among those benefiting from Obama's proposed tax cuts would be couples earning up to $120,000 a year who would qualify for a new "second earner" credit of up to $500 as well as a maximum $3,000 child care credit for two children, triple the current $1,000.
Not all of Obama's tax hikes would hit the wealthy. His budget also proposes to raise $95 billion over the next decade by hiking the tax on cigarettes from the current $1.01 per pack to $1.95.
Obama's spending plan would ease tight budget constraints imposed on the military and domestic programs back in 2011 when lawmakers were responding to the public outcry over deficits that were then topping $1 trillion a year.
Obama's budget calls these caps, known as sequestration, "mindless austerity." The elimination of the budget caps this will boost spending by $74 billion - divided between the military and domestic programs - in 2016 and would result in a spending increase over the remaining six years the caps were to have been in place of $362 billion.
Obama's budget projects a deficit of $583 billion in 2015, up significantly from last year's $485 billion imbalance. Obama's budget plan never reaches balance over the next decade and projects the deficit would rise to $687 billion in 2025.
Obama's budget also called also is calling for a $60 billion program for free community college for an estimated 9 million students if all states participate. It also proposes expanding child care to more than 1.1 million additional children under the age of 4 by 2025 and seeks to implement universal pre-school.
He also is trying to impose a 0.07 percent fee on the roughly 100 U.S. financial companies with assets of more than $50 billion.
The Obama budget calls for a stealth increase in the death tax rate from 40% to nearly 60%. Here's how it works:
Under current law, when you inherit an asset your basis in the asset is the higher of the fair market value at the time of death or the decedent's original basis. Almost always, the fair market value is higher.
Under the Obama proposal, when you inherit an asset your basis will simply be the decedent's original basis.
Example: Dad buys a house for $10,000. He dies and leaves it to you. The fair market value on the date of death is $100,000. You sell it for $120,000. Under current law, you have a capital gain of $20,000 (sales price of $120,000 less step up in basis of $100,000). Under the Obama plan, you have a capital gain of $110,000 (sales price of $120,000 less original basis of $10,000).
"The national death tax dates to World War I. Most states have abolished their state death tax. They know the death tax is simply yet another layer of taxation on the life savings of Americans," said Grover Norquist, president of Americans for Tax Reform. "Heck, Sweden abolished its death tax a decade ago. The world has learned from failure and moved on. Obama thinks he is being left-wing. He is just showing his age."
Read more: http://www.atr.org/obama-budget-creates-second-death-tax#ixzz3QcUOlnB9
Follow us: @taxreformer on Twitter
AGRICULTURE Up 3 percent A new food safety agency. Highlights:-The budget proposes consolidating the Agriculture Department's Food Safety and Inspection Service with the Food and Drug Administration's food safety oversight in a new agency under the Health and Human Services Department. If Congress goes along with the proposal, USDA would lose one of its main functions.- As in years past, the administration is proposing to cut money for farmers' crop insurance to pay for other agriculture programs.
Food stamps alone are estimated to cost $83.7 billion for the 2016 budget year. Though fewer people are expected to apply for food stamps in the coming years, food prices are expected to keep the cost higher.The numbers:Total spending: $156 billion, including spending on farm subsidies and nutrition programs already required by law.Spending that needs Congress' annual approval: $24.4 billion_
COMMERCE Down 12.8 percent
Obama's Commerce Department budget proposes a new Scale-Up Fund, designed to help new startup companies develop technologies that can be manufactured in the U.S.-Obama would expand a network of manufacturing institutes around the country from nine to 45. The institutes are designed to coordinate the federal government's work with local companies and schools to develop technologies that the U.S. can produce.-
Census Bureau ramps up slightly as the agency prepares for its once-every-decade count of America's population.
Total spending: $12.4 billion. While programs approved annually by Congress would grow by 11 percent, other Commerce spending shows a decline, including funds that get money from the Federal Communications Commission's sales of space on the electronic spectrum.
DEFENSE Up or down? Up 4.4 percent What's new? The highest base budget in history, and the lowest spending on war costs since 2002.Highlights:-Military leaders say they are still reeling from the sharp budget cuts and flat spending of the last several years, which curtailed training, and maintenance and forced deep cuts in the size of the Army.-The proposed budget calls for investment in a broad range of weapons systems, aircraft and ships, along with increased spending on cybersecurity, and other advanced technologies, such as high-energy lasers. The plans include $10.6 billion for 57 Joint Strike Fighters, $11.6 billion for nine new ships; $1.4 billion for submarine development, $1.2 billion for a new long-range bomber and $3.4 billion for 16 P-8 Poseidons, which conduct anti-submarine warfare.-Warning of a maturing long-range missile threat from North Korea and the potential threat from Iran, the Pentagon is asking for $9.6 billion for missile defense.-The budget includes a 1.3 percent raise for service members and department civilians, but seeks changes in health care costs, including requiring retirees who are 65 or older to pay a small annual health care fee.-The war funding would pay for continued counterterrorism operations in Afghanistan and efforts to advise Afghan forces. It also would fund counter-insurgency operations in Iraq, Syria and other hot spots around the globe.-Despite persistent opposition from Congress, the Pentagon is seeking another round of military base closings in 2017 and is asking to retire the A-10 Warthog attack aircraft. The numbers: Total spending: $585 billion. The request calls for a base budget of $534 billion, an increase of 7.7 percent over this year. The war funding request of nearly $51 billion is a 21 percent decrease.
EDUCATION Up or down? Down 24.3 percent. A proposal for free community college. Highlights:-Obama wants to make two years of community college free and as easy to access as high school. To do so, he would give grants to states that agree to make tuition free to students who meet certain conditions, if those states contribute to the effort and seek to improve the quality of their community colleges. The budget seeks $1.4 billion for the effort. Overall, the program is estimated to cost $60 billion over 10 years. The proposal has received a cold reception from many Republicans on Capitol Hill, however.-Obama has long emphasized expanding and improving early education programs. One effort is to use a tobacco tax increase to make preschool available to all low-and moderate-income 4-year-olds at a cost of $1.3 billion next year, or $75 billion over 10 years. The budget also seeks $750 million for preschool development grants to states to expand access and improve quality of early education programs, meant to lay the groundwork for universal pre-K. Such a grant program is already assisting 18 states with the effort, but the budget seeks $500 million more.- Obama also seeks $1.5 billion in new spending by the Health and Human Services Department for Head Start programs - money that would help make Head Start available for a full day and all year for some children and expand services for expecting parents and very young children. Congressional Republicans, however, have pushed to improve existing federally funded early childhood programs before dramatically expanding them.- The budget would provide a $1 billion increase in Title 1 funding, meant to close inequities in education.The numbers:Total spending: $73.8 billion.
ENERGY Up or down? Up 13.8 Calls for reforming nuclear waste disposal by establishing an interim disposal site. Highlights:- Obama proposes a new approach to deal with the nation's nuclear waste storage at power plants by starting what would be a decade-long, roughly $5.7 billion effort. The plan would establish an interim storage site for the waste now distributed at 72 commercial nuclear power plants across the country. Republicans are already gearing up to revive Yucca Mountain, a long-term storage site in former Majority Leader Harry Reid's home state of Nevada that was tabled by the administration. In 2010, the Energy Department withdrew its application to the Nuclear Regulatory Commission, prompting lawsuits and congressional inquiries that it was out of compliance with the law.- Obama proposes across-the-board increases in the research and development of renewable energy sources, including solar, wind and geothermal energy, and advanced vehicle technologies such as electric cars and advanced batteries.- Adds $38 million toward development of carbon capture and storage, a technology that will be essential to meeting the Obama administration's proposed requirements to cut carbon dioxide emissions from new power plants.- Establishes a new program aimed at developing technologies to reduce and to monitor emissions of methane in natural gas production, a potent greenhouse gas.- The Energy Information Administration, responding to the changing energy landscape, would increase the data it assembles, including monthly movements of crude oil transported by rail and monthly estimates of electricity generated by small-scale renewable energy sources, such as solar panels on homes and buildings.The numbers:Total spending: $29.2 billion
ENVIRONMENTAL PROTECTION AGENCY Up or down? Up 55.6 percent A $4 billion fund for use by states that cut the pollution blamed for global warming from power plants deeper and faster than required. Highlights:- After cutting the Environmental Protection Agency's budget for years, Obama is proposing the largest increase to the agency's budget of his presidency, as he doubles down on plans to curb the pollution blamed for global warming. But look for Republicans, now in control of Congress, to whack the EPA budget.- Obama's proposal includes $239 million for the EPA to address climate change, including the marquee rules due this summer to cut heat-trapping pollution from new and existing power plants. About $25 million is set aside for states to help them draft plans to meet the power plant rules. Numerous states have already sued the agency over its plans, and have complained that meeting the proposal will be complicated and burdensome.- For the first time, the EPA budget establishes a $4 billion fund for use by states that cut pollution blamed for global warming at power plants deeper or faster than required. But that proposal would require Congress to find an offset to pay for it. That's unlikely with congressional Republicans aiming to dismantle the EPA's climate efforts.- With several chemical, coal and oil spills tainting water supplies recently, Obama's budget also includes $50 million for the EPA to help assist states, tribes and private companies to upgrade drinking water and sewer systems. The budget also calls for $2.3 billion in low-interest loans and grants to communities to make improvements in drinking water and sewage treatment and infrastructure.
HEALTH AND HUMAN SERVICES Up or down? Up 4.3 percent Medicare could negotiate prices for cutting-edge drugs.
HOMELAND SECURITY Up or down? Up 9.1 percent An extra $8.2 million to improve White House security.- The request for new spending for security improvements at the White House.
Obama also seeks to spend up to $162 million more next year to help handle potential increases in the number of unaccompanied children caught crossing the border from Mexico illegally. Customs and Border Protection would get up to $134.5 million more, depending on how many children are caught crossing illegally. Immigration and Customs Enforcement, which transports children caught crossing the border illegally, would get up to a $27.6 million increase.-The proposed CBP budget also includes $373 million to buy and maintain technology and tactical infrastructure along the Southwest border. Improving border security remains a sticking point for Republican lawmakers amid the ongoing debate over changing the country's complicated immigration laws.
HOUSING AND URBAN DEVELOPMENT Up or down? Up 10.3 percent An unusually large jump in spending would restore about 67,000 vouchers used by the poor to pay for housing. HUD has been among the federal departments hardest hit by spending cuts in recent years. Highlights:- Seeks $500 million for a new program designed to help communities hit by hurricanes, flooding or other natural disasters to become more resilient to future disasters.- Seeks to more than double spending to $248 million for "choice neighborhood grants," which communities can use to improve housing stock, transportation and other services for distressed neighborhoods with high rates of poverty.- Seeks about $2.5 billion for a wide range of programs dedicated to helping the homeless. The proposed funding would continue what has been a steady increase in resources geared to getting the chronically homeless into permanent housing.- Seeks a reduction in mortgage insurance premiums that would enable 250,000 new homebuyers over a three-year period.The numbers:Total spending: $48.35 billion, including $7.3 billion in spending already required by law.Spending that needs Congress' annual approval: $41 billion._
INTERIOR Up or down? Up 21.9 percent More than $1 billion to mark the centennial of the National Park ServiceHighlights:- The budget includes $859 million in new spending to mark the centennial of the National Park Service in 2016 by upgrading services and facilities at national parks throughout the country. It also proposes $150 million for "challenge grants" to leverage private donations to parks.-The budget again floats new fees and other regulatory reforms to increase revenue from oil and gas production on federal lands and waters. Officials say the reforms would generate $5.6 billion over 10 years and expedite drilling on public lands and water, but the ideas are strongly opposed by industry and have made little headway in Congress
JUSTICE Up or down? Basically flat Purchasing body-worn cameras for local, state and tribal law enforcement.Highlights:- The proposed budget includes $15 million for programs and research aimed at countering violent extremism, an initiative the Justice Department has tied to mounting concerns about the flow of foreign terrorist fighters to Iraq and Syria. The proposal would create a new grant program and fund partnerships between law enforcement agencies, residents and community groups. Attorney General Eric Holder says the effort is necessary both to break up potential terror plots and to understand the root causes of radical ideologies.-The budget also calls for spending to address a problematic backlog of immigration cases. It would provide $482 million to hire 55 immigration judge teams and also provide legal representation to more than 30,000 unaccompanied minors.- The budget would invest $146 million to expand re-entry and recidivism programs in the Bureau of Prisons, including increasing mental health staff and providing cognitive behavioral treatment.- The budget would expand pre-trial diversion programs for non-violent offenders in keeping with Holder's "Smart on Crime" initiative.
SEC and CFTCUp or down? Both go up More staff to administer post-crisis financial regulations. Highlights:- The Securities and Exchange Commission's budget would increase by 15 percent, and the Commodity Futures Trading Commission's budget would rise 29 percent.- The large increases reflect attempts by the Obama administration to fund financial industry regulatory reforms put in place after the 2008 financial crisis. But it's far from certain the agencies will see all that money - similar increases requested in the past were only partially approved by Congress.- Both agencies say they lack the staff to implement the full range of financial regulations mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and both would devote much of their increased resources to adding personnel. The CFTC alone would add 169 employees.-The CFTC, which is charged with policing the market for hundreds of trillions of dollars' worth of futures, derivatives and other complex financial products, would increase its information technology budget from $50 million to $79 million. Major banks far outstrip that, spending tens of billions of dollars each year on technology.
TRANSPORTATIONUp or down? Up 31 percent A plan to tackle an estimated $2 trillion in deferred maintenance for the nation's aging infrastructure by boosting highway and transit spending to $478 billion over six years. Highlights:- The six-year highway and transit plan would get a one-time $238 billion infusion from the general treasury. Some of the money would be offset by taxing the profits of U.S. companies that haven't been paying taxes on income made overseas. That infusion comes on top of the $35 billion a year that normally comes from gasoline and diesel taxes and other transportation fees.- The proposal also includes tax incentives to encourage private investment in infrastructure, and an infrastructure investment bank to help finance major transportation projects.- The new infrastructure investment would be front-loaded. The budget proposes to spend the money over six years and pay for the programs over 10 years.- The proposal also includes a new Interagency Infrastructure Permitting Improvement Center to coordinate efforts across nearly 20 federal agencies and bureaus to speed up the permitting process. For example, the Coast Guard, Corps of Engineers and Transportation Department are trying to synchronize their reviews of projects such as bridges that cross navigation channels.
VETERANS AFFAIRSUp or down? Up 3.3 percent Billions in new spending to improve veterans' medical care. Highlights:-The budget includes $60 billion to improve veterans' medical care, a 7.4 percent increase over current spending. The additional money was authorized by the 2014 Veterans Access, Choice and Accountability Act, adopted by Congress and signed by the president in response to a scandal over long wait times at VA medical centers and false appointment records to cover up the delays. VA health care enrollment is projected to reach 9.4 million in 2016, up from 9.3 million this year.- Continues a department-wide reorganization known as MyVA, an effort to refocus the agency around the needs of veterans.- Includes $7 billion to expand and improve mental health services.-
_Associated Press writers Mary Clare Jalonick, Alan Fram, Lolita Baldor, Kimberly Hefling, Dina Cappiello, Eric Tucker, Ricardo Alonso-Zaldivar, Alicia Caldwell, Kevin Freking, Matthew Daly, Seth Borenstein, Jeff Horwitz, Joan Lowy and Connie Cass contributed to this report.
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