Economic Agenda: March 25, 2010

Mike Shepard
Thursday, March 25, 2010; 7:23 AM

Key Events

8:30 a.m.: The Labor Department releases weekly jobless claims.

10:00 a.m.: Federal Reserve Chairman Ben S. Bernanke appears before the House Financial Services Committee to discuss the central bank's plans to unwind the extraordinary support of the financial system.

10:00 a.m.: The House Energy and Commerce Committee holds a hearing on the Federal Communications Commission's national broadband plan. All five FCC commissioners are expected to testify.

10:00 a.m.: The House Oversight and Government Reform Committee holds a hearing on the government's foreclosure prevention program.

A panel of judges in San Diego will consider whether to combine more than 100 lawsuits filed against Toyota over incidents of runaway acceleration. Read the Los Angeles Times account of a meeting of lawyers on Wednesday to discuss strategies for suing the Japanese automaker.

In Today's Washington Post

Bank of America launches a new program that could reduce the mortgage balances of as many as 45,000 homeowners who owe more on their loans than their houses are worth. The move puts the nation's largest mortgage lender squarely in the debate over what to do about millions of borrowers who are underwater on their homes and at greater risk of foreclosure.

A Baltimore-based subsidiary of Citigroup has agreed to pay $1.25 million in penalties in a settlement with state regulators over its failure to fully report mortgage transactions to the federal government as required under housing laws.

GoDaddy.com, a major U.S.-based seller of Internet domain names, says that it will stop registering new domains in China over a new policy from Beijing requiring far more information about the owners of new Web sites bearing the .cn suffix. The firm's decisions mark the latest escalation in the growing conflict between Chinese authorities and Western business interests.

An overhaul of financial regulation is likely to pass Congress this year, according to two key Republican senators, who say they still have strong reservations about elements of the regulatory-reform bill that cleared the Senate banking committee earlier this week.

An IRS plan to hold 1,000 open houses nationwide to help struggling taxpayers deserved a better outreach campaign by the agency, writes Color of Money columnist Michelle Singletary. And, apparently, the IRS has taken heed.

Beijing's brushback pitch: During a visit to Washington, a senior Chinese official says that U.S. pressure on Beijing to increase the value of the yuan would be counterproductive to achieving the Obama administration's stated goal of boosting American exports, Bloomberg News reports.

Mortgage giants find it's not easy going green: Fannie Mae and Freddie Mac are pushing back against an Obama administration proposal designed to help homeowners get financing for energy improvements to their homes, according to the Wall Street Journal. The mortgage giants are objecting because the energy-improvement debt would be senior to the home loans they back. That means if a homeowner goes into foreclosure, Fannie and Freddie are not longer first in line to get paid back.

Citi's slow sell-off: For Citigroup, unloading billions of dollars in unwanted assets has proven to be a drawn-out, painful process that has frustrated the banking giant's return to profitability, the Wall Street Journal reports. Hampering the bank's efforts, of course, is an acute recession that has caused interest in consumer-finance businesses to dry up.

New pay rules roil divorce: On Wall Street, breaking up just got harder to do thanks to a wave of new restrictions on executive pay that have made the already messy process of divorce even worse, according to Bloomberg News. Family law specialists say that reduced cash payments and increased focus on long-term incentive awards are complicating negotiations of divorce settlements.

Unions and banks: Labor groups have played a leading role in efforts to hold the financial industry accountable for the risky business practices that led to the 2008 market meltdown, in large part because the economic well-being of the unions' Main Street membership is inextricably linked to what happens on Wall Street.

For Social Security, a wave of red ink: Social Security is expected to cross the Rubicon in 2010, paying out more in benefits than it receives in taxes, according to the New York Times, which spoke with the system's chief actuary. That's far sooner than previous projections from the Congressional Budget Office, which had expected the shift to happen in 2016. For more on the subject, read this Allan Sloan column from back in February in which he calculated that Social Security would cross this unsettling threshold some time this year. And if you're really into reading about entitlement programs, check out Sloan's longer take on Social Security from August.

Meet Elizabeth Warren: The consumer financial watchdog proposed by the Obama administration and codified in a regulatory overhaul bill now under Senate consideration counts as its chief advocate a 60-year-old bankruptcy expert from Harvard Law School who has made it her unofficial mission to look out for middle-class families' interests. Read the New York Times profile of Elizabeth Warren, who also heads the Congressional oversight panel monitoring the government's bailout programs.

All graft is not created equal: The Rio Tinto bribery case in China highlights an uncomfortable truth about the economies of many countries: a relatively benign style of graft has not only coexisted with stellar economic growth but contributed to that progress, argues Columbia University professor Ray Fisman in a posting at Foreignpolicy.com.

Caught Our Eye

Flash bullying: The once-cute phenomenon of "flash mobs" has taken an ugly turn in Philadelphia and a few other cities, the New York Times reports. The flash mobs, which use text-messaging and social network tools to bring together people for impromptu public gatherings, have turned aggressive and devolved into mass bullying exercises, police say.

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