While Greece's budget shenanigans have been by far the most egregious, it turns out that Athens isn't the only European capital susceptible to fudging its economic forecasts and offering too few budget-cutting details to downplay the severity of its fiscal problems.The European Commission, the executive arm of the European Union, admonished the governments of Germany, France, the United Kingdom, Italy and Spain this week for using rosy scenarios to grease the skids toward fiscal prudence. "The growth assumptions underlying the budgetary projections are assessed as rather optimistic, implying that budgetary outcomes might be worse than targeted," the commission report concluded.As a result, it is less likely that these nations will be able to reduce their recession-enhanced budget deficits to 3 percent of gross domestic product (GDP), the EU threshold that governments are expected to meet in normal economic times.Most countries have committed to meet the deficit goal by 2013 or 2014.Higher-than-projected budget deficits will cause government debts to rise faster than forecast.Thus, the countries would also fail to make sufficient progress toward reining in their debt-to-GDP ratios -David M. Dickson/Washington Times

Europe’s rescue plan for Greece appears to be crumbling after the country threatened to call in the International Monetary Fund unless Brussels comes up with real money on acceptable terms within a week.The inability of the eurozone to put together a viable package after a month of talks has dismayed markets, which thought the terms of a deal had already been agreed.Greek Premier George Papandreou told the European Parliament that his country was running out of patience.It is in effect already subject to the full rigours of an IMF-style austerity plan but without enjoying any of the benefits.He said the savings from cost-cutting measures were vanishing into the pockets of bond-holders through higher interest rates.If Mr Papandreou is bluffing, his bluff is likely to be called since a German-led bloc of states is also warming to the IMF be the best way after all to maintain EMU discipline.Germany appears to have deeper objections to an EU bail-out, fearing that it would be the first step towards EU fiscal union and shared responsibility for debts -Ambrose Evans-Pritchard/Telegraph UK

China on Friday said it was sending an envoy to Washington to try to ease trade frictions as its currency regime comes under fire, warning that threats from U.S. legislators could stifle room for progress.The announcement, along with conciliatory comments by China's commerce ministry, appeared aimed at cooling an increasingly rancorous dispute which has U.S. senators threatening to slap duties on Chinese products if Beijing does not allow the yuan to rise. "Channels of communication between our two sides are open.All issues of concern to either side can be discussed through these channels," He Ning, head of the commerce ministry's North American division, told a media briefing.But China gave no indication it was ready to abandon its commitment to a stable yuan exchange rate, and market expectations of appreciation remained muted.He and other officials at the briefing stressed that the United States remains a key market for Chinese goods, and Beijing wants to douse risks of a backlash.Fruitful discussion was possible only if Washington checked politics and emotions at the door, said He

The purpose of the Census is that of counting the US population in order to apportion among the states the number of representatives in the US House of Representatives.That's it.Nothing more.Nothing less.There is nothing in the Constitution requiring or even suggesting questions regarding race, ethnicity, whether one owns or rents his or her home, income status, disability status, education, or anything of the sort.The only purpose of the Census is to count the US population.Anything beyond that is nothing more than an intrusive government prying and snooping into our lives: something the federal government is doing with greater and greater frequency and intensity these days.In the original Census of 1790, the information requested was simply the number of persons in each household and the name of the head of each family.That's it. Accordingly, when I filled out my Census form earlier this week, the only information I provided was my name (as the head of my household) and the number of people living in my home.The rest of it I left blank -Chuck Baldwin/NewsWithViews

The Pentagon official who allegedly boasted of running his own private team of “Jason Bournes” is finally speaking out.Early this week, the New York Times landed a curious scoop about a freelance spy ring in Afghanistan and Pakistan that is reportedly under criminal investigation by the Defense Department.Now the San Antonio Express-News has landed an interview with the man alleged to have been at the center of the operation.Reporter Guillermo Contreras tracked down Air Force official Michael Furlong at his San Antonio apartment.While the interview does little to clear things up, it offers a few tantalizing details.For starters, Furlong disputed the wildest claim made by the Times: That the program was actively involved in trying to target and kill militants.What’s more, Furlong said it helped avert the assassination of two Afghan government officials.As the story notes, it’s hard to verify this account; whether it crossed a line into intelligence activity; and whether funds were misused.According to Furlong’s account, the whole thing grew out of Gen. David McKiernan’s frustration after the battle of Wanat -Nathan Hodge/Wired

Last week there was a flurry of pretend ethics on Capitol Hill. The subject matter was eliminating earmarks (pork) in spending bills.Some outside observers were foolish enough to take seriously the protestations from Democrats and Republicans that they would reduce the torrent of pork on Capitol Hill.Others, some of them the elite prognosticators of must-read newspapers, opined that it was all an ignorable tempest in a teapot; not to be given "a disproportionate amount of attention" opined one Congress-gazing Pooh-Bah on a national radio interview show.Far worse than the wishful thinkers expecting self-reform from either party in our current political system are those in a position to influence but fail to appreciate how thoroughly debased our political system has become.To understand why the latter are so misleading, we must first understand why the former are so foolish.The porkers on Capitol Hill are not going to reform themselves unless and until they get some adult supervision -Winslow T. Wheeler/CounterPunch

Democratic leaders pushing health care reform this year like to argue that a vast majority of the proposals represent uncontroversial changes backed by most Capitol Hill lawmakers.And while that might be true, it hasn’t prevented some sharp disagreements between House and Senate Democrats over a handful of high-profile reform provisions.Indeed, the House-passed reform bill strayed from the Senate proposal on a number of key issues, from children’s coverage to Medicaid payments to the creation of a public health insurance plan.Here’s how the reconciliation bill — which House leaders unveiled Thursday to address what they considered weaknesses in the Senate legislation — would tweak (or not) some of the most contentious provisions in the upper chamber’s bill.A central disagreement between House and Senate Democrats has been over how to cover the substantial costs associated with covering tens of millions of uninsured Americans -Mike Lillis/Washington Independent

The level of intense anger at Washington is heating up as several high-profile groups are calling on millions of Americans to slam Congress with phone calls, e-mails and faxes demanding that lawmakers vote "no" on the health-care bill.As WND reported, reforms pushed by President Obama and other Democrats may be approved without ever actually having a direct vote, but could be "deemed" to have been passed and then signed into law by Obama.The process is called the "Slaughter Strategy," named for Rep. Louise Slaughter, D-N.Y., who chairs the House Rules Committee.Liberty Counsel, a nonprofit group that focuses on constitutional litigation, has distributed a letter to every member of the House, showing that the proposed "Slaughter Strategy" is unconstitutional.Its members have slammed Congress with more than 250,000 faxes expressing outrage over the bill.Liberty Counsel warned that the Senate health-care bill funds abortion, rations care, limits freedom and will bankrupt America.Likewise, the American Family Association, or AFA, has joined the fight, sending out action alerts to its entire 2.5 million-member network -Chelsea Schilling/WorldNetDaily

Democrats plan to vote Sunday in the House of Representatives on a revamped health care overhaul bill aimed at insuring millions more Americans, providing more Medicare drug benefits and reducing federal budget deficits by $138 billion over the next 10 years.As of early Thursday evening, Obama had met with or called more than three dozen members of Congress to try to win their support, according to White House Press Secretary Robert Gibbs.Gibbs declined to confirm or deny lawmakers’ accounts that Obama considers the fate of his presidency at stake.Though they appeared still short of the votes they need, House Democratic leaders were increasingly confident that they’ll triumph.If the House approves the package, it will go to the Senate, where leaders hope to dodge procedural hurdles that Republicans are threatening and finish the bill next week.The House plans to consider the legislation in two stages Sunday, after allowing 72 hours for the new bill’s provisions to be reviewed.First, it’ll vote on the rule governing debate -McClatchy Newspapers

Two senators, a Democrat and a Republican, unveiled the outlines on Thursday of a proposal to overhaul the immigration system, which would require illegal immigrants to admit they broke the law before they could gain legal status and require all workers in the United States to carry a biometric identity card to prove that they are eligible to work.In carefully choreographed moves, the senators, Charles E. Schumer, Democrat of New York, and Lindsey Graham, Republican of South Carolina, described their proposal in an editorial posted at midafternoon on the Web site of The Washington Post.President Obama immediately responded with a statement saying it “should be the basis for moving forward,” and he pledged “to do everything in my power to forge a bipartisan consensus this year” around the bill.Those moves followed like clockwork plans that White House officials had laid out in recent days to the leaders of immigrant advocacy groups that have summoned many thousands of supporters to a march on Sunday in Washington.The plan calls for a big increase in immigration agents patrolling workplaces, and would require all workers, including legal immigrants and American citizens, to present a tamper-proof Social Security card when they apply for jobs.Biometric identity information would be stored on the card and not in any government database, according to an explanatory document from the senators -Julia Preston/NY Times

Facing a possible death sentence, a Chicago man agreed to plead guilty on Thursday to performing advance surveillance that helped lay the groundwork for the deadly 2008 terrorist attack on civilians in Mumbai, India.David Coleman Headley, a US citizen, could have been sentenced to death by lethal injection for his alleged involvement in the India attacks that left more than 164 dead, including six Americans.But with his guilty plea, prosecutors have agreed not to seek the death penalty or to extradite him to India, Pakistan, or Denmark.The agreement, announced in federal court in Chicago, is contingent on Mr. Headley’s full cooperation with US intelligence officials and prosecutors.Under sentencing guidelines he could receive a prison term of up to life in prison.But his prison time could be reduced based on the value of his cooperation.Headley’s plea agreement says he’s been cooperating with US officials since his arrest in October 2009, and that he has already provided “substantial assistance.” Headley was among four men named in a 12-count indictment returned by a Chicago grand jury in January for involvement in two plots: the 2008 Mumbai attack, and a separate plot to murder an editor and an illustrator at a Danish newspaper -Christian Science Monitor

United Nations Secretary General Ban Ki-moon is expected to make an unambiguous demand that Jerusalem take immediate steps to improve living conditions in Gaza during his visit to Israel next week, high-level sources at UN headquarters said yesterday.While the U.S. government hinted yesterday that it was beginning to move past this week's diplomatic crisis and tone down criticism of Israel, Ban will arrive here with the express goal of raising humanitarian assistance to Gazans and emphasizing Israel's responsibility for their plight.A high-level UN official told Haaretz that Ban intends to speak bluntly to Israeli leaders during his visit. "It won't be a friendly trip," he said.On Wednesday, U.S. journalists were surprised to hear the harsh wording with which Ban recently described Israeli policy.Ban is currently in Moscow for today's meeting of the Quartet for Mideast peace.He will land in Israel Saturday, then immediately travel to Ramallah for meetings with Palestinian officials before returning to Israel for a meeting with President Shimon Peres.On Sunday he will visit Gaza, then return for talks with Defense Minister Ehud Barak and Prime Minister Benjamin Netanyahu -Shlomo Shamir/Haaretz IL

Israeli Ambassador to the U.S. Michael Oren channeled Netanyahu's anticipated response to U.S. demands to the Washington Post's Jackson Diehl earlier Thursday.It would involve Netanyahu assuring Obama that the 1,600 new houses in the East Jerusalem neighborhood will not be constructed any time soon, what Diehl and one Israeli journalist described as "Don't Ask, Don't Tell." Diehl: "The Israeli hope is that rather than continue to press this self-defeating demand, Obama will accept Israeli assurances that the new neighborhood will not be constructed anytime soon; it is, in fact, two or three years from groundbreaking.Coupled to that would be an Israeli pledge to avoid publicizing further construction decisions in Jerusalem.The result would not be a freeze, but something like a “don’t ask, don’t tell” policy for settlements. It’s not clear whether Obama will accept such a fudge.But Israeli ambassador Michael Oren, who has been deeply engaged in back channel talks between the two governments, told me Thursday morning that “the goal of both sides at this point is to put this behind us, and go forward with the proximity talks as quickly as possible.” So, good enough? "Only if Obama doesn't care about his street cred," veteran U.S. Middle East negotiator Aaron David Miller told me this afternoon -Laura Rozen/Politico

IAF aircraft struck six targets in the Gaza Strip overnight Thursday, in response to a Kassam attack that killed a foreign worker in Netiv Ha’asara earlier in the day.The army said it struck three smuggling tunnels on the Egyptian border, a weapons production facility and two tunnels intended for infiltration into Israel to carry out attacks.Two Palestinians were reportedly wounded in the strikes.IDF sources said that the rocket was not fired by Hamas, and by Thursday evening the terrorist group was reportedly rounding up suspects behind the attack for interrogations. “It is currently not in Hamas’s interest to attack Israel,” one senior officer said, noting that while Hamas has attacked IDF border patrols since Operation Cast Lead last year, it has refrained from firing rockets into Israel. “Hamas’s current policy is to keep the situation quiet so it can continue to build up its military infrastructure ahead of a future conflict with Israel,” the officer said. “This is the third rocket attack that has directly targeted an Israeli community in the past 24 hours,” Israel Police spokesman Micky Rosenfeld said -Yaakov Lappin & Yaakov Katz/Jerusalem Post IL

The Obama administration announced Thursday that its Middle East peace envoy is headed to the region this weekend to resume consultations, a visit that had been postponed earlier in the week over a diplomatic dispute with Israel.The news of the trip by envoy George J. Mitchell indicated possible progress in talks between U.S. and Israeli officials after a conflict over Israel's announcement last week of a new housing project in disputed East Jerusalem -- as Vice President Joe Biden was visiting the country to promote peace talks with Palestinians.The announcement about Mitchell's trip followed a phone call Thursday between U.S. Secretary of State Hillary Rodham Clinton and Israel's prime minister, Benjamin Netanyahu.Philip Crowley, the chief State Department spokesman, did not provide details of the call -Paul Richter/LA Times

In his latest weekly New York Times column, Nobel Prize-winning economist Paul Krugman put forward arguments that were so nonsensical that the award committee should ask for its medal back.Recent rhetoric from Washington has put the economic relationship between the U.S. and China squarely on the front burner, and Krugman is demanding that we crank up the flame.This week 130 members of Congress sent a letter to Treasury Secretary Timothy Geithner demanding that the Obama administration designate China as a "currency manipulator".Following that, a bipartisan group of senators introduced a bill that looks to force the Obama administration's hand.For its own part, Beijing invites criticism by continuing to deny its utterly obvious currency agenda.As these tensions escalate, most economists urge Washington to tread lightly because of the negative fallout for America if China were to begin selling its enormous cache of U.S. Treasury bonds.Krugman pushes back.According to Krugman, our secret weapon of economic invincibility is the Fed's ability to print dollars endlessly -Peter Schiff/Gold Seek

Idaho is leading the charge in a states'-rights push to defeat a proposal in Congress that would require people to buy health insurance, a key reform pushed by President Obama.Gov. C.L. "Butch" Otter, a Republican, used a ceremony Wednesday afternoon to become the first governor to sign into law a measure requiring the state attorney general to sue the federal government over any such insurance mandates.Similar legislation is pending in 37 other states, a point Mr. Otter stressed when asked if the bill he signed can succeed, given constitutional law experts are already saying federal laws would supersede those of states in a U.S. District Court fight. "The ivory tower folks will tell you, 'No, they're not going anywhere,'" he told reporters. "But I'll tell you what -- you get 36 states, that's a critical mass. That's a constitutional mass." The measures working their ways through statehouses from Missouri to South Carolina reflect a growing frustration with Mr. Obama's health care overhaul, especially in Republican-dominated regions

Democratic leaders are staunchly defending their possible use of a parliamentary maneuver to avoid a traditional vote on health care.Are they also getting ready to abandon a promise that lawmakers would have at least 72 hours to read and evaluate the language of the health care bill? House Democrats are moving ahead with a package of budget reconciliation changes to the Senate bill that would let members enact the Senate bill by reference.A Democratic staffer tells me House leaders tentatively plan to ignore or blur the 72-hour rule when the long-delayed final analysis is delivered to them sometime this afternoon.The Rules Committee will meet on Saturday to set the rules for debate. Following the letter of the 72-hour rule would mean no vote before late Sunday, but Democrats have allowed themselves an out. "The Democratic leadership has declared 'martial law,'" Poltico.com reports, "allowing leaders to bring legislation straight to the floor on the same legislative day." That could mean a vote as early as Saturday, with a floor debate of just four hours.The public and members of Congress would have only 48 hours or even less to examine the bill.Democrats are in a rush for two reasons -John Fund/Wall Street Journal

Democrats got a boost in their effort to enact the most sweeping U.S. health-care legislation in four decades when congressional budget experts said the $940 billion bill would cut the federal deficit.The report by the Congressional Budget Office will help clear the way for a vote by the U.S. House as early as March 21.To help offset the cost of the measure, Democrats plan a 3.8 percent Medicare tax on unearned income, a leadership aide said. Overall, the bill will cut the deficit by $138 billion in the first decade and reduce the shortfall further in the next 10 years, the nonpartisan budget office said.Republicans are universally opposed to the plan.They argue that Democrats use budgeting “gimmicks” because much of the expansion of insurance coverage comes later in the life of the bill and say it costs too much. (LA Times reports: "Polls show Americans opposing the bill, though favoring many of its key components") -Laura Litvan & James Rowley/Bloomberg

As Europe struggles to emerge from its fiscal crisis, a notion long considered taboo is gaining currency: could countries be kicked out of the euro or be given an easy way to leave? Germany's leader this week called for new rules that would allow for expulsion, and many people in debt-ridden countries like Italy and Greece are increasingly blaming the euro for their woes.But monetary independence could be more curse than cure: against dreams of devaluing to cheapen exports and boost economic growth may be a starker reality of catastrophic capital flight and paralyzing administrative headaches.And for Greece, an abandonment of the euro may actually make repaying the debt harder still: it's denominated in euros already, which means they would have to buy euros with a new - and likely to be weak - drachma to pay it off.On Wednesday, German Chancellor Angela Merkel broached the subject of a shrunken eurozone, backing proposals that a member state could be forced out of the club for consistently failing to abide by its rules

Iraq's electoral body said it would review all data in the recent general election, delaying yet again the declaration of a result that was expected and is thought to narrowly favour the coalition of the prime minister, Nouri al-Maliki, over his secular rival, Iyad Allawi.The review falls short of the full recount demanded by Maliki's State of Law bloc, but adds another layer of uncertainty to a painstaking 11-day count that has been riddled with delays and claims of vote rigging.It also follows conflicting accounts of who is the frontrunner, with Allawi's entourage still maintaining they are within striking distance of the lead, with 80% of the national vote counted.Ahead of what was expected to be a watershed in post-Saddam Iraq, the potential kingmakers gave the first indications of their demands during the horse-trading that will follow a winner being declared -Martin Chulov/Guardian UK

Turkey's prime minister has threatened to expel 100,000 Armenian immigrants after the US and Sweden agreed to describe first world war killings of Armenians by Ottoman Turks as genocide.Earlier this month, the US House committee on foreign affairs voted by 23-22 that the massacre of around 1.5 million Armenians in 1915 should be classified as genocide.Turkey, a Nato member and candidate to join the European Union, withdrew its ambassador from the US in the wake of the vote, as it did from Sweden days later, when the Swedish parliament also agreed the slaughter should be described as genocide.Turkey warned the decisions could undermine efforts at reconciliation with Armenia after decades of hostility, and yesterday, Prime Minister Tayyip Erdogan gave a clear warning what the consequences would be if the votes, which are non-binding, were ratified. "There are currently 170,000 Armenians living in our country. Only 70,000 of them are Turkish citizens, but we are tolerating the remaining 100,000," he told the BBC Turkish service. "If necessary, I may have to tell these 100,000 to go back to their country because they are not my citizens.I don't have to keep them in my country." -Adam Gabbatt/Guardian UK

In a tart public clash over Iran, Secretary of State Hillary Rodham Clinton said here Thursday that the planned opening this summer of a Russian-built nuclear power plant in Iran would send the wrong signal at a time when the West was trying to curb Iran’s nuclear ambitions.Prime Minister Vladimir V. Putin said the much delayed plant, near the Iranian city of Bushehr, would go into operation this summer, though he did not give a date.His comments, made at a meeting of nuclear officials, came on the day that Mrs. Clinton arrived here for talks with Russian leaders about an arms control agreement, Iran, the Middle East, and other issues. “We think it would be premature to go forward with any project at this time, because we want to send an unequivocal message to the Iranians,” Mrs. Clinton said at a news conference after meeting with Russia’s foreign minister, Sergey V. Lavrov.Mrs. Clinton became the second top American official in two weeks to be surprised by unwelcome news on foreign soil.A senior American official played down the clash over Iran in Russia, saying he did not believe Mr. Putin intended to embarrass Mrs. Clinton.Although an arms deal could theoretically be announced while Mrs. Clinton is in Moscow, the months of tortuous negotiations have made administration officials extremely leery of predicting the end of a process they had once claimed would be wrapped up by the end of last year -Mark Landler/NY Times

President Barack Obama on Thursday scrapped his trip to Indonesia and Australia scheduled for next week to focus on the final push for a U.S. healthcare overhaul, the White House said. "The president greatly regrets the delay," White House spokesman Robert Gibbs told reporters, saying the Indonesia visit would be reset for June.Obama had intended to use the March 21-26 trip, his first foreign travel of the year, to deepen U.S. ties in the Asia-Pacific region in the face of rising Chinese influence there.He said Obama, who had been due to leave on Sunday on his first foreign travel of the year, had called Indonesian President Susilo Bambang Yudhoyono and would to phone Australian Prime Minister Kevin Rudd to tell them of the change in plans.Obama had already put off his departure by three days to try to win congressional approval of healthcare reform

A Palestinian rocket fired from the Gaza Strip into Israel Thursday claimed the first fatality in Israel since it launched the Gaza war last year to shut down Hamas rocket attacks.The attack killed a Thai guest worker in the agricultural village of Netiv Haasarah, which is just north of the border with the Gaza Strip.The fatality will put pressure on Israel for a stepped-up military response in Gaza.The attack comes two days after the worst Palestinian-Israeli clashes in Jerusalem in years.Hamas, which controls Gaza, called on Palestinians to initiate a new uprising and to take up arms against Israel in response to allegations of a plot to destroy Muslim holy sites in Jerusalem's Old City.The attack was launched while the European Union's foreign policy chief, Catherine Ashton, was paying a diplomatic visit to the Gaza Strip.In the upcoming days, United Nations Secretary General Ban Ki-moon is also scheduled to visit Gaza -Joshua Mitnick/Christian Science Monitor

If you want to know how brutally Pakistan treats its people, you should meet Amina Janjua.An intelligent painter and interior designer, she sits on the vast sofa of her living room in Rawalpindi – a room that somehow accentuates her loneliness – scarf wound tightly round her head, serving tea and biscuits like the middle-class woman she is.And although neither a soldier nor a policeman has ever laid a hand on her, she is a victim of her country's cruel oppression.Because, five years ago, her husband Masood became one of Pakistan's "disappeared".It is a scandal and a disgrace and, of course, a crime against humanity.Ask not where Masood Janjua has gone – Amina does ask, of course, all the way up to the President – for he has entered that dark world wherein dwell up to 8,000 of Pakistan's missing citizens, men, for the most part, seized from their homes or from the streets by cops and soldiers on the orders of spies and intelligence agents and Americans since 11 September, 2001.In Lahore alone, there are 120 "torture houses" just for the missing of the Punjab.Their shrieks of pain from the basements could be heard by residents – who complained only that the buildings might provoke bomb attacks -Robert Fisk/Independent UK

Ernst & Young LLP, the Big Four auditor that failed to keep Lehman Brothers from misleading investors about its financial condition, still can’t get its facts straight.Last week, after Lehman’s bankruptcy examiner accused E&Y of malpractice in a report on the investment bank’s collapse, the accounting firm issued a brief statement standing by its audit work and offering up its best defense. “After an exhaustive investigation, the examiner made no findings in his report that Lehman’s assets or liabilities were improperly valued or accounted for incorrectly in Lehman’s November 30, 2007, financial statements,” E&Y said, referring to the last fiscal year for which it performed a full-fledged audit of Lehman’s books.Part of that statement is a half-truth. The other part stretches the truth past the breaking point.It’s true the examiner, Anton Valukas, didn’t find that Lehman’s assets or liabilities were improperly valued at the end of 2007.One thing E&Y left out: Valukas did find evidence that Lehman used unreasonable asset values for the first and second quarters of 2008, including one investment he said was overvalued by as much as $500 million.E&Y’s worst offense may be that the firm knew about the Repo 105 deals before Lehman imploded and failed to tell the directors on Lehman’s audit committee -Jonathan Weil/Bloomberg

U.S. Securities and Exchange Commission Chairman Mary Schapiro on Wednesday acknowledged that the agency's oversight of Lehman Brothers Holdings may have been inadequate during a critical period when the company may have masked its losses.The SEC wasn't aware of an accounting method, dubbed Repo 105, that allegedly allowed Lehman to hide some of the risks it took before collapsing in 2008, Ms. Schapiro told the House Appropriations Subcommittee on Financial Services.The House Financial Services Committee, meanwhile, announced Wednesday that it will hold a hearing on the recent report from a bankruptcy court accusing Lehman of routinely hiding $50 billion in debt from the public.The SEC was the consolidated supervisor of Lehman during 2007 and 2008 as a result of Lehman's participation in a voluntary oversight program that existed under former SEC Chairman Christopher Cox.That program was dismantled about a year and a half ago, Ms. Schapiro said.Ms. Schapiro took the helm of the SEC just over a year ago -Fawn Johnson/Wall Street Journal

Federal Reserve Chairman Ben Bernanke warned Wednesday that a Senate proposal to end the Fed's oversight of smaller banks would unwisely narrow the central bank's focus to the nation's largest financial institutions.A proposal by Senate Banking Committee Chairman Chris Dodd (D., Conn.) would make the Fed the supervisor of the roughly 35 bank holding companies with assets greater than $50 billion.Mr. Bernanke said Fed officials are "quite concerned" by the latest proposal because they need insight into the entire banking system to understand how regulation affects banks and the credit problems of banks of all sizes. "Smaller and medium-size banks are very valuable to us." Former Fed Chairman Paul Volcker, also testifying Wednesday, warned of the risks involved in separating out those firms.Mr. Bernanke was challenged by long-time Fed critic Rep. Ron Paul (R., Texas), who argued the Fed was responsible for the recent financial crisis by leaving rates too low for too long.Mr. Paul asked Mr. Bernanke what damage could come from ultra-low rates another time. "One possibility is that...you get inflation," Mr. Bernanke replied -Sudeep Reddy/Wall Street Journal

I have good news.A personalized email from Info@BarackObama says... "Mike -- I wanted to take a moment to thank you directly for the outstanding work you've been doing as part of Organizing for America's Final March for Reform.I can tell you that your voice is heard in Washington every day..." On behalf of President Obama I wish to continue "the outstanding work I've been doing" to kill the bill.So I again remind people that the President needs lesson in Math.Inquiring minds are listening to President Obama proclaim Health Care Premiums Will Decrease 3000%.This is not FantasyLand, the Twilight Zone, or Bizarro World where health care has a negative cost and providers pay you to take coverage.Therefore, president Obama is either disingenuous or in serious need of remedial math lessons.A friend just pinged me to remind everyone that the president also needs remedial education in regards to upholding the constitution -Mike "Mish" Shedlock

As they whip for the health care bill, Democratic leaders pack a mean one-two punch of populist rhetoric and the hefty financial backing of the drug industry.In the heated yearlong health fight, President Obama has often accused his opponents of willful misrepresentation, even as he and his allies have endlessly repeated the biggest whopper of all — that the bill would rein in the special interests.The Obama team regularly dismisses opponents as industry lackeys. The Democratic National Committee blasted out e-mails this week warning that "for every member of Congress, there are eight anti-reform lobbyists swarming Capitol Hill" and "Congress is under attack from insurance lobbyists." But drug industry lobbyists, according to Politico, spent the weekend "huddled with Democratic staffers" who needed the drug lobby to "sign off" on proposals before moving ahead.Meanwhile, we learn that the drug lobby is buying millions of dollars of ads in 43 districts where a Democratic candidate stands to suffer for supporting the bill.The doctors' lobby and the hospitals' lobby are also on board with the Senate bill -Timothy P. Carney/Washington Examiner

Democrats picked up support Wednesday for their health care overhaul from some important quarters — a congressman who'd opposed the bill, an influential anti-abortion lawmaker and a coalition of Catholic nuns — but they still appeared to be short of the number needed to pass the legislation in the House of Representatives.House Democratic leaders were buoyed by the backing of Rep. Dennis Kucinich, D-Ohio, who'd voted against the bill in November, and of Rep. Dale Kildee, D-Mich., who explained, "I am a staunch pro-life member of Congress, both for the born and the unborn." The nuns' group sent a letter saying, "We urge you to vote 'yes' for life by voting yes for health care reform." House Democratic leaders hope for a vote on the legislation by the weekend, but they've been unable to douse a series of political brush fires, including controversies over cost, abortion and political risk.The House is expected to take two votes on the health care overhaul.Under the most widely discussed scenario, it would vote first on the rule governing debate, which would include a provision "deeming" the Senate's version of the health bill passed once the rule is adopted.If that's approved, a second vote would occur on a package of changes to the Senate health legislation, or "reconciliation." Before any of that happens, though, the House needs an analysis of those proposed changes by the nonpartisan Congressional Budget Office -David Lightman/McClatchy Newspapers

The havoc wrought by Godzilla and King Kong is no match for the housing damage being done by Fannie and Freddie.In Hollywood a good box-office monster is never permanently killed; it reemerges in a sequel to wreak havoc once more on the citizenry.American taxpayers will soon have the same feeling of horror: Fannie Mae and Freddie Mac are climbing out of the swamps.The economy and taxpayers' wallets will once again be hit up.Fannie and Freddie, of course, crashed in 2008, after guaranteeing some $1.5 trillion in junk mortgages.They are still hemorrhaging red ink today, which is why the Obama Administration on Christmas Eve removed the ceiling on cash that these two so-called government-sponsored entities (GSEs) can receive from Uncle Sam.Taxpayers might have thought that given their spectacular collapse--and the accounting scandals preceding it--these entities would disappear into the night.Think again -Steve Forbes

Frustrated at the White House and Congress, immigrant advocates are rolling out a series of pressure tactics to push forward legalization for illegal immigrants and other reforms.Tens of thousands of people are expected to march Sunday in Washington D.C., urging officials to act on legislative reforms or face the consequences -- including a possible Latino voter backlash in November.Activists plan to launch texting and "tacos for justice" campaigns Friday to raise money for the reform campaign. And next week, leaders from nine national Latino organizations plan to unveil their first-ever score card on congressional immigration votes.In recent months, activists have grown increasingly critical of the Obama administration and Democratic legislative leaders for failing to uphold campaign promises to legalize most of the nation's estimated 12 million undocumented immigrants, provide more family visas and enact other reforms -Teresa Watanabe/LA Times

The Senate Wednesday passed by a 68-29 margin a $17.6 billion measure intended to spur hiring nationwide, sending the bill to the White House for the president's expected signature.Once the bill becomes law, it would mark the first significant piece of job-creation legislation to pass since President Barack Obama and the Democratic Congress earlier this year declared that they would "pivot" and focus on reversing widespread unemployment.The bill would grant employers an exemption from their 6.2 percent Social Security payroll contribution for every new employee hired through the rest of the year, as long as that employee had been out of work for at least 60 days.There would also be an additional $1,000 income tax credit for every new employee kept on the payroll for 52 weeks.Experts are split as to whether the payroll tax holiday will boost hiring.The measure would also make it easier for businesses to write off equipment purchases and would pump billions into federal highway and mass-transit funding programs, which Democrats hope will jump-start construction projects.The bill's cost is offset by tax code modifications -James Oilphant/LA Times

As if the world economy wasn't fragile enough, politicians in the U.S. and China seem intent on fighting an old-fashioned currency war.The U.S. is more wrong than China here, and it's important to understand why, lest the two countries send the world back to the dark age of beggar-thy-neighbor currency protectionism.The battle concerns China's decision to peg its currency, the yuan, to a fixed rate of roughly 6.83 to one U.S. dollar.To hear the American political and business establishment tell it, this single price is the source of all global economic problems.The peg keeps the yuan "undervalued" in this telling, fueling China's exports and harming the U.S., Europe and everyone else.At the core of this argument is a basic misunderstanding of monetary policy.There is no free market in currencies, as there is in wheat or bananas.Currencies trade in global markets, but their supply is controlled by a cartel of central banks, which have a monopoly on money creation -Wall Street Journal

The World Bank recommended higher interest rates and a stronger currency for China on Wednesday, as it raised growth forecasts for the country.China’s rapid economic growth has led to expectations of rising inflation and concerns that a bubble is building in the property industry.In its quarterly assessment of China, which is poised to overtake Japan this year as the world’s second-largest economy after the United States, the World Bank raised its forecast to 9.5 percent growth for 2010 from the 8.7 percent it projected in November.It also estimated that growth would slow somewhat next year, to 8.7 percent.Separately, the managing director of the International Monetary Fund, Dominique Strauss-Kahn, also said the renminbi’s exchange rate was too low. “Some currencies in Asia are undervalued, especially the renminbi,” Mr. Strauss-Kahn told a committee of the European Parliament in Brussels.A huge stimulus package and ample lending by China’s government-controlled banks helped its economy avoid a recession last year.China grew 8.7 percent in 2009, less than in previous years but still a huge gain -Bettina Wassener/NY Times

President Barack Obama is rejecting talk that U.S.-Israel relations are in a meltdown. Relations have been strained since administration officials delivered rare harsh public rebukes after an Israeli announcement of approval of new housing units in East Jerusalem during Vice President Joseph Biden’s visit there last week.Asked in a Fox News interview Wednesday whether the falling out amounted to a “crisis,” Obama said flatly, “No.” “Israel’s one of our closest allies and we and the Israeli people have a special bond that’s not going to go away.But friends are going to disagree sometimes,” the president said. “There is a disagreement in terms of how we can move this peace process forward…The actions that were taken by the Interior Minister in Israel weren’t helpful to that process, Prime Minister Netanyahu acknowledged as much and apologized for it.” Obama insisted that despite the highly-public criticism of Israel by various U.S. officials, including Biden and Secretary of State Hillary Clinton, the U.S. is being fair to both sides -Josh Gerstein/Politico

Israeli Prime Minister Benjamin Netanyahu expressed "deep appreciation" for President Obama on Wednesday, distancing himself from his brother-in-law's characterization of Mr. Obama as an anti-Semite, as his government tried to ease tensions with Washington.However, Mr. Netanyahu did not call Secretary of State Hillary Rodham Clinton with a response to her Friday demands that he prove his commitment to the peace process, as the State Department expected.Diplomats said the delay was most likely owing to the Israeli leader's intention to reject at least part of those demands.Israeli officials said he called Vice President Joseph R. Biden Jr. late Tuesday, but declined to discuss the content of the conversation.Mr. Netanyahu's failure so far to respond to Mrs. Clinton's demands were cited by the State Department as the reason for canceling U.S. Middle East envoy George J. Mitchell's planned trip to the region this week.Israeli Foreign Minister Avigdor Lieberman said Wednesday the "demand to forbid Jews from building in East Jerusalem is totally unreasonable." -Nicholas Kralev/Washington Times

Perhaps the most surprising aspect of Senate Banking Committee Chairman Christopher Dodd's (D-CT) proposed financial reform bill was the role of the Federal Reserve.In his original draft from November, Dodd mostly stayed away from increasing the power of the Fed, seeking to establish a new systemic risk regulator, rather than provide that duty to the Fed like the House version.This week's new proposal, however, mostly fits in the House's mold.But he ultimately provides the Fed with even more power, by putting the Consumer Financial Protection Bureau under its umbrella.When I think of someone opinionated about the Federal Reserve, Congressman Ron Paul (R-TX) comes to mind.He also happens to be a rock star of the GOP, fresh off his 2012 Presidential straw poll win at the annual Conservative Political Action Conference last month.So I thought it might be interesting to get his thoughts on some of the more controversial aspects of Dodd's bill that involve the Fed -Daniel Indiviglio/The Atlantic

Veteran military and foreign affairs analyst and author Mark Perry reports that CENTCOM commander General David Petraeus dispatched a team of senior military officers in January to brief Joint Chiefs of Staff chairman Admiral Michael Mullen on the Israeli-Palestinian conflict.Perry reports that the briefers told Mullen that “Israeli intransigence on the Israeli-Palestinian conflict was jeopardizing US standing in the region.” Perry’s piece is called “The Petraeus Briefing: Biden’s Embarrassment Is Not the Whole Story.” He’s also author of the new book Talking to Terrorists: Why America Must Engage with its Enemies.Mark Perry joins us now from Washington, DC. -Democracy Now