Front Row Washington

Just a few quick thoughts ahead of the Labor Day weekend. President Barack Obama plans to unveil a package of measures to stimulate hiring and the economy next week, although we are assured this will absolutely not be a second stimulus. I guess that means it won’t have a major price tag attached, in terms of its effect on the deficit. But you also have to wonder how much effect it will have on the economy, even if Obama manages to get any of it through Congress.

Some relief, then, that this week’s economic numbers have not been as grim as many had feared. The private sector is not dead and buried, if today’s payrolls report is anything to go by. But don’t expect growth or hiring to pick up nearly fast enough to save the Democrats from pain in November.

Finally, take a look at our special report on the Food and Drug Administration’s efforts to crack down on increasingly aggressive marketing tactics by drug companies. Critics accuse Big Pharma of pushing medicines on people which they often do not need, without fully disclosing the risks. Sadly, even the FDA admits it is outgunned, and lacks the resources to keep pace.

Here are our top stories from today…

Obama says to address new economic ideas next week

President Barack Obama will outline new measures next week to boost the economy after August data showed again that jobs — the central issue in November elections — were being created too slowly. Obama, speaking to reporters in the White House Rose Garden, greeted a better-than-expected August employment report that showed thousands of new private sector jobs were created as “positive news.”

For Alister Bull and Jeff Mason’s full story, click here.

Payrolls data offer ray of hope for recovery

Employment fell for a third straight month in August, but the drop was far less than expected and private hiring surprised on the upside, easing pressure on the Federal Reserve to prop up economic growth. Nonfarm payrolls fell 54,000, the Labor Department said, helping assuage fears of a double-dip recession in financial markets that had looked for a drop of 100,000 jobs.

For more of this story by Lucia Mutikani, read here.

Special Report: Outgunned FDA tries to get tough with drug ads

It wasn’t what you would call a casual get-together. In February 2009, a popular New York blogger attended a brunch with fellow “frazzled moms.” They took in tips from a style expert and listened to a nurse extol the virtues of Mirena, a birth control device sold by Bayer Healthcare. The nurse was on Bayer’s payroll. In a series of events organized with the help of a women’s website, Mom Central, the pharmaceutical company gathered a captive audience of young mothers. It provided the nurse with a script and had the women fill out a survey before they left. The sessions earned a stern rebuke from the U.S. Food and Drug Administration.

For more of this story by Susan Heavey and Lisa Richwine, read here.

Fed bond buying not big policy shift: Lockhart

The Federal Reserve’s decision to begin buying Treasuries again was a “precautionary” step, not the opening salvo in a new policy course, Atlanta Fed President Dennis Lockhart said. Lockhart said markets overreacted to the decision, reading a major worsening into the Fed’s view of the world that had not taken place.

For more of this story by Pedro Nicolaci da Costa, read here.

Clinton: time ticking for Israel-Palestinian peace

Secretary of State Hillary Clinton urged Israel and the Palestinians to overcome the final obstacles to peace, saying their new talks may be a last chance to end the conflict. Clinton, speaking to Israeli and Palestinian television one day after direct peace talks between the two sides were relaunched in Washington, said skepticism and suspicion cannot be allowed to derail the talks as has happened so many times in the past.

For more of this story by Andrew Quinn, read here.

Government probes Mariner platform fire

The government launched an investigation into Mariner Energy Inc’s Gulf of Mexico platform fire, and a light oil sheen spotted near the offshore facility was not believed to be a leak, according to the U.S. Coast Guard.

For more of this story by Bruce Nichols, read here. 

What we are blogging…

 It was just a game of golf!

Ever since he played golf with President Barack Obama last week, New York newspapers have been rife with speculation that Mayor Michael Bloomberg is being wooed by the administration to replace Timothy Geithner as Treasury Secretary. The White House dismissed the speculation as fantasy and Bloomberg dismissed the idea. But still as summer draws to an end, what else is there to talk about going into the Labor Day holiday weekend except the lackluster economy?

For Donna Smith’s full blog, click here.

Photo credit: Reuters/Arnd Wiegmann (vessel on Rhine floats past administration building of Bayer AG chemical company)

Ever since he played golf with President Barack Obama last week, New York newspapers have been rife with speculation that Mayor Michael Bloomberg is being wooed by the administration to replace Timothy Geithner as Treasury Secretary. 

The White House dismissed the speculation as fantasy and Bloomberg dismissed the idea. But still as summer draws to an end, what else is there to talk about going into the Labor Day holiday weekend except the lackluster U.S. economy?

More bad news for Obama on Friday with the unemployment rate rising to 9.6 percent. The economy is not creating jobs fast enough to reduce the unemployment rate and give Democrats more comfort going into the Nov. 2 congressional elections with their majority in Congress at stake.

Some pundits suggest the gossip may be less about  Bloomberg, who is serving a hard fought third term as mayor, and more about Geithner, who has come under fire from both the right and the left about his advice to Obama on the economy and the role he played in the 2008 government rescue of Wall Street.

As White House economic adviser Christina Romer leaves her post on Friday, following the departure of Peter Orszag as head of the Office of Management and Budget at the end of July, Obama so far is standing by his treasury secretary.

Would he really want to follow the advice of House Republican Leader John Boehner and fire Geithner and his National Economic Council Chairman Larry Summers just before an election that could put Republicans in charge of the House of Representatives?

Besides, some of the sourcing on the raft of speculation about Bloomberg has been thin as noted by a New York Magazine item pointing to a source used by another publication as ”one Democrat, who may or may not be the mayor’s hairstylist.”

Photo Credit: Reuters/Jason Reed  (President Obama and Treasury Secretary Timothy Geithner stand together at Rose Garden remarks on the economy, and Geithner talks on cellphone)

Well at least no-one walked out, as one Middle East veteran remarked to me after the meeting between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas today. In fact, as our chief blogger Toby Zakaria observed, the public atmospherics between the two men were not too bad.

Seventeen years ago, President Bill Clinton practically forced Israeli Prime Minister Yitzhak Rabin and Palestinian leader Yasser Arafat to shake hands at the White House while observers held their collective breath. No such nudges were needed this week. Not only were there several, lingering handshakes, but even a brief animated conversation and a whispered aside.

But before we get carried away, my colleague Matt Spetalnick reminded us of all the obstacles facing the latest effort to forge peace in the Middle East. In decades of halting peace efforts, rarely has an Israeli-Palestinian peace process started with lower expectations. There were soaring words in public about the need for difficult compromises, but behind closed doors, the biggest tangible achievement was apparently an agreement to talk again.

Entrenched differences, the long history of mistrust, the looming expiration of a partial Israeli freeze on settlement-building, the threat from hardliners, and, perhaps above all, the political dynamics both men face at home: all reasons a breakthrough seems unlikely. Indeed many experts believe Netanyahu and Abbas have only come to the negotiating table, at least in part, to avoid being seen by President Barack Obama as the spoiler.

On the economy, it was a similar story, a glass half full or half empty depending on your mood. True there was better news from the housing and jobs markets,  and from retailers, suggesting the economy might not after all be heading for a double dip recession.  Nor, though, are we out of the woods or enjoying a Summer of Recovery. Indeed, most economists think tomorrow’s all important monthly labor market report could make for more grim reading.

Here are our top stories from today…

Israelis and Palestinians agree to more peace meetings

Israeli and Palestinian leaders opened direct peace talks under U.S. auspices and agreed to meet every two weeks to try to forge a deal within a year to end a conflict that has boiled for six decades. Secretary of State Hillary Clinton, who hosted the talks between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, expressed confidence that this effort could succeed where so many others have failed.
Read Andrew Quinn and Jeffrey Heller full story here, and Matt Spetalnick’s analysis here.

U.S. data dampen fears of new recession

Pending sales of previously owned homes rebounded unexpectedly in July and new claims for jobless benefits fell last week, helping dampen fears the economy could face a double dip recession. The data, including sturdy sales from retailers last month, followed a report on Wednesday showing a surprising gain in manufacturing activity and suggested the economy retained some underlying strength.

For more of this story by Lucia Mutikani, read here.

Bernanke takes blame for muddling message on Lehman

Federal Reserve Chairman Ben Bernanke said he was partly to blame for leaving the wrong impression that the central bank could have saved Lehman Brothers from failure in 2008. Bernanke, testifying before a congressional commission examining the causes of the worst financial crisis in 80 years, said he thought it “very likely” the investment bank was insolvent and lacked sufficient collateral to borrow enough from the central bank to avert collapse.

For more of this story by Mark Felsenthal and Dave Clarke, read here.

‘Quote stuffing’ a focus in flash crash probe

Regulators probing the May flash crash are focusing on a trading practice known as “quote stuffing”, in which large numbers of rapid-fire orders to buy or sell stocks are placed and canceled almost immediately. CFTC commissioner Scott O’Malia told Reuters that the futures regulator was reviewing data from Nanex LLC, a trade database developer that issued a study suggesting that computer algorithms used quote stuffing to gain an edge during the May 6 crash.

For more of this story by Roberta Rampton, Rachelle Younglai and Jonathan Spicer, read here.

U.S. sues Arizona sheriff in immigration probe

The Justice Department sued an Arizona sheriff for refusing to cooperate with its investigation into allegations the sheriff discriminates against Hispanics in his program to crack down on illegal immigrants.

For more of this story by Jeremy Pelofsky, read here.

Workers see higher health costs, less care

Companies are cutting healthcare costs further amid a continuing sour economy, scaling back benefits and shifting a greater share of the expense to employees. The findings come as the congressional campaign heats up over the nation’s stagnant economic growth and whether recently passed healthcare reforms should be repealed.

For more of this story by Susan Heavey, read here.

What we are blogging…

Mideast peace veterans and handshake diplomacy

Secretary of State Hillary Clinton repeatedly referred to them as “veterans” of the Middle East peace process. That description is probably one thing everyone can agree on. The process to bring Israelis and Palestinians to a lasting peace agreement has been going on for decades and every U.S. president hopes he’s the one who will finally achieve what those before him tried and failed.

For Toby Zakaria’s full blog, click here.

From elsewhere…

God did not create the universe, says Hawking

God did not create the universe and the “Big Bang” was an inevitable consequence of the laws of physics, the eminent British theoretical physicist Stephen Hawking argues in a new book.

For the full story, click here.

Hurricane Earl bears down on East Coast

Hurricane Earl took aim at North Carolina and was on track to lash its barrier islands with dangerous winds and pounding surf before cutting a path up the East Coast to Canada.

For the full story, click here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo Credits: REUTERS/Jason Reed (Clinton (L) and George Mitchell, U.S. Special Envoy for Middle East Peace (2nd L),  Netanyahu (R), Abbas (2nd R) at the State Department)

Washington pundits questioned President Barack Obama’s decision to devote so much time this week to foreign policy with his Iraq speech on Tuesday and his foray on Wednesday into Middle East peacemaking at a time when Americans are preoccupied with the economy.

But Obama’s message next week seems like it will be heavily focused on jobs and the economy. He will mark Labor Day with a “Laborfest” event on Monday in Milwaukee and travel to Cleveland on Wednesday for an event on the economy.

On Friday, he will hold a news conference at the White House.

Could next week bring a decision on how he will fill two key jobs — chairman of the Council of Economic Advisers and the head of the new U.S. consumer agency?

White House spokesman Robert Gibbs won’t say. But he did advise that it was unlikely there would be a decision on either of those jobs this week.

Meanwhile, speculation is growing that Austan Goolsbee is the favorite to replace departing CEA chair Christina Romer and that Elizabeth Warren is likely to be tapped as head of the Consumer Financial Protection Bureau.

Talk that the White House might be getting ready to make an announcement on Warren grew on Thursday after The Washington Post reported that the Harvard law professor and outspoken consumer advocate will no longer be teaching a contracts class that had been on her schedule for the fall.

But a Harvard spokesman said she is still scheduled to teach another course.

Photo credit: Reuters/Jim Young (Treasury Secretary Timothy Geithner greeted by Elizabeth Warren, December 2009)

Secretary of State Hillary Clinton repeatedly referred to them as “veterans” of the Middle East peace process.

That description is probably one thing everyone can agree on. The process to bring Israelis and Palestinians to a lasting peace agreement has been going on for decades and every U.S. president hopes he’s the one who will finally achieve what those before him tried and failed.

President Barack Obama is the latest to take up the baton. He’s already won the Nobel Peace Prize, but will he be The One to triumph on Middle East Peace?

“We are under no illusions,” Obama said on Wednesday when he met with leaders ahead of today’s talks. “Passions run deep. Each side has legitimate and enduring interests. Years of mistrust will not disappear overnight.”

That last sentence is another thing that probably everyone can agree on.

But if the Israeli-Palestinian leaders’ handshakes over the years are any kind of indicator, perhaps there is a glimmer of hope.

Seventeen years ago in September 1993, President Bill Clinton practically forced Israeli Prime Minister Yitzhak Rabin and Palestinian leader Yasser Arafat to shake hands at the White House while observers held their collective breath wondering will they or won’t they?

No nudges needed this week, the handshakes flowed.

Before Wednesday evening’s White House dinner, my colleague Jeff Mason who was in the East Room observed that when Israeli Prime Minister Benjamin Netanyahu returned to his seat from the podium, Palestinian President Mahmoud Abbas was in the process of standing up when they had a lingering handshake.

When it came time for Abbas to return from the podium, he and Netanyahu had another brief, cordial handshake. And while they were seated, Netanyahu was observed whispering in Abbas’ ear, showing a smidgeon of rapport between the leaders.

This morning at the State Department, my colleague Jeffrey Heller tells me that both leaders shook hands and engaged in animated conversation for a few moments in what appeared to be a relaxed atmosphere.

Perhaps in addition to breaking bread, some ice was broken at last night’s dinner…

Photo credit: Reuters/Gary Hershorn (top) and Jim Young (combination photo of Bill Clinton, Rabin, and Arafat, contrasted with Hillary Clinton, Netanyahu and Abbas), Reuters/Jim Young (Netanyahu and Abbas at White House ), Reuters/Jason Reed (Netanyahu and Abbas reach to shake hands in front of Clinton)

So you think you know Sarah Palin?

There’s so much more to the former Alaska governor and possible 2012 presidential candidate than is on public view, according to a new and very lengthy “Vanity Fair” profile, which takes readers behind the scenes and into “the surreal new world Palin now inhabits.”

It’s not pretty. Indeed,  her supporters at Conservataives4Palin have gone on defense calling it “a hit piece.” And Palin tweets that it’s “yellow journalism.”

The article by  writer Michael Joseph Gross  goes on extensively about a lot of  things  that do not cast the former governor  in a nice light, including:

• Palin’s new vocation — “She keeps tight control of her pronouncements, speaking only in settings of her own choosing, with audiences of her own selection, and with reporters kept at bay.”
• Her temperament  — “As soon as she enters her property and the door closes, even the insects in that house cringe. She has a horrible temper, but she has gotten away with it because she is a pretty woman.” (attributed to a friend of the Palins’)
• Her image — “This whole hunter thing, for Sarah? That is the biggest fallacy,” says one longtime friend of the family. “That woman has never hunted.”
• Her tipping — Not so generous with the gratuities, according to maids and bellhops at a couple of hotels in the Midwest.
• And her underwear — Something about Spanx girdles and push-up bras.

There’s a reason they call them unmentionables.

The folks at Conservatives4Palin  point out that even some people  who aren’t  Palin fans agree that  mentioning the underwear was just wrong.

Among them, New York Times Op-Ed columnist Charles M. Blow who tweeted:  “When’s the last time you read a profile of a male politician that mentioned his underwear? This is the kind of thing that crosses the line.”

Photo Credits: REUTERS/Jonathan Ernst Palin greets the crowd at the Lincoln Memorial in Washington for TV commentator Glenn Beck’s “Restoring Honor” rally)

If rescuing the U.S. economy from the Slough of Despond wasn’t enough, President Barack Obama took a stab at finding peace in the Middle East today. Obama is determined to forge a new relationship with the Muslim world, and presumably would like to unquestionably earn the Nobel Peace Prize he was awarded last year. But getting embroiled in the Middle East is a risk for the president, not least because failure to reach an accord could set back his efforts to win over Muslims and achieve solidarity over Iran. Ordinary Israelis and Palestinians are not optimistic about this latest peace effort, and experts say the one-year deadline to reach a deal does not appear very realistic. Nevertheless, it is hard to argue with Obama’s opening remarks today, and his hope that “extremists and rejectionists” should not be allowed to derail the peace process.

It is often interesting when high-ranking officials leave office and get the chance to unburden themselves. White House economist Christina Romer was no exception today, issuing an impassioned plea for more economic stimulus measures, even if they push up the fiscal deficit in the short term. “The only sure-fire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less. In my view we should be moving forward on both fronts,” she said in a speech at the National Press Club. “I desperately hope that policymakers on both sides of the aisle will find a way to finish the job of economic recovery,” she added. WashingtonExtra won’t be holding its metaphorical breath.

Finally today, another win by a Tea Party favorite in Alaska this week underlines that the movement is not just a passing fad, and has the staying power to be  a significant factor in November’s Congressional elections. What’s more, Democratic hopes that radical Tea Party candidates will alienate moderate voters and energize Democrats are not being realized. In fact, Tea Party favorites are already ahead of Democratic rivals in the opinion polls in Colorado, Kentucky and Florida, and only slightly behind in Nevada.

Here are our top stories from today…

Obama opens Mideast peace summit, says U.S. resolute

President Barack Obama vowed that “extremists and rejectionists” would not derail the relaunch of Israeli-Palestinian negotiations as he opened a peace summit shadowed by Middle East violence. Wading into Middle East diplomacy in the face of deep skepticism over his chances for securing an elusive peace deal, Obama condemned as “senseless slaughter” a Hamas attack on Tuesday that killed four Jewish settlers in the occupied West Bank.

For more of this story by Matt Spetalnick and Jeffrey Heller, read here.

Romer: U.S. must find will for further stimulus

Departing White House economist Christina Romer said the United States needed to find the political will for more economic stimulus, even if it pushed up the fiscal deficit in the short run. “While we would all love to find the inexpensive magic bullet to our economic troubles, the truth is, it almost surely doesn’t exist,” Romer said in a speech at the National Press Club.

For the full story by Caren Bohan, click here.

Tea Party promises to be a force in November

With another win in a Senate Republican primary, this time in Alaska, the conservative Tea Party movement showed it is more than a political fad and has the staying power to be a significant force in November’s elections. Polls show Tea Party favorites leading or running nearly even with Democratic foes in a handful of high-profile Senate races that could shift the balance of power in Congress — or at least inject a potent new strain of anti-spending, anti-big government conservatism into the staid Senate.

For more of this story by John Whitesides, read here.

Gunman takes hostages at US Discovery Channel

A man carrying a gun and possibly with explosives strapped to his body took a small number of hostages in the Discovery Channel headquarters building in suburban Washington. “Right now we have an unconfirmed number of hostages, a small number of hostages that are with the suspect at this point,” Tom Manger, Montgomery County police chief, told reporters. The man entered the building wearing what appeared to be metallic canister devices on his front and back and he pulled out a hand gun, Manger said.
For the full story by Maggie Fox, click here.

Send Pakistan aid, not jobs, U.S. textile groups say

Textile groups and cotton farmers strongly objected to proposed new trade benefits for Pakistan, saying the United States should send aid to the flood-ravaged country, not U.S. jobs. The groups expressed their concern in a letter to Secretary of State Hillary Clinton and Trade Representative Ron Kirk, who were urged last week by the Chamber of Commerce, a leading U.S. business group, to press Congress for a generous package of U.S. textile tariff cuts to help Pakistan recover.

For more of this story by Doug Palmer, read here.

Crisis panel chair: Politics may have doomed Lehman

Officials appeared to have made a policy decision not to bail out Lehman Brothers, the head of a panel investigating the financial crisis said, challenging the view of regulators that they had no legal authority to help. The comments lent support to former Lehman Chairman Richard Fuld’s contention that the Federal Reserve and Treasury could have done more to prevent his firm’s 2008 bankruptcy, which hastened the worst global recession since World War Two.

For more of this story by David Lawder and Dave Clarke, read here.

Obama struggles with urgent task of fixing economy

President Barack Obama has declared fixing the economy his “central mission” but he has few tools to bring down nearly double-digit unemployment or jump-start the faltering recovery this year. To get a quick fix, he would need a big initiative, but the president stands almost no chance of getting Congress to pass any substantial legislation in the few weeks left before the mid-term elections — a stretch of time he calls the campaign “silly season.”

For more of this analysis by Caren Bohan, read here.

Manufacturing grows in August but private jobs cut

The manufacturing sector grew faster than expected in August, but private employers unexpectedly cut jobs, showing the economic recovery still faces headwinds.

For more of this story by Lucia Mutikani and Burton Frierson, read here.

U.S. delays controversial decision on Web traffic rules

U.S. communications regulators on Wednesday put off a controversial decision on Internet traffic rules, giving industry and consumer groups a chance to forge a compromise while avoiding a politically sensitive issue ahead of the November elections.

For more of this story by John Poirier, read here.

What we are blogging…

Republican “Young Guns” take aim at Democratic-led Washington

Republican Representatives Eric Cantor, Paul Ryan and Kevin McCarthy are all in their 40’s. Yet with many of their colleagues far older — in their 60’s, 70’s and 80’s — they call themselves the “Young Guns,” part of a new breed of Republicans ready to challenge their Grand Old Party and take on Democratic-led Washington.

For Thomas Ferraro’s full blog, click here.

The World Bank’s $6 billion man on climate change

As the special envoy on climate change for the World Bank, Andrew Steer might be thought of as the $6 billion man of environmental finance. He oversees more than that amount for projects to fight the effects of global warming.

For Deborah Zabarenko’s full blog, click here.

From elsewhere…

Apple takes wraps off new lineup of iPods

Apple Inc unveiled a snazzier line of its iPod, with new designs for every model of the popular media device in hopes of kick-starting holiday sales. “We’ve gone wild,” Apple co-founder Steve Jobs said. “It’s the biggest change in the iPod lineup ever.” At a presentation to reporters and investors, Jobs said that to date the company has sold 275 million iPods.

For the full story, click here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo Credit: REUTERS/Jason Reed (Obama speaks to the media about the Middle East Peace talks staged at the White House , alongside Secretary of State Hillary Clinton (L) and George Mitchell, U.S. Special Envoy for Middle East Peace)

Republican U.S. Representatives Eric Cantor, Paul Ryan and Kevin McCarthy are all in their 40’s.

Yet with many of their colleagues far older — in their 60’s, 70’s and 80’s — see themselves as “Young Guns,” part of a new breed of Republicans ready to challenge their Grand Old Party and take on Democratic-led Washington.

“Young Guns: A New Generation of Conservative Leaders,” is the title of their book.

Published by Simon & Schuster, it’s to be on book shelves on September 14 in advance in advance of the Nov. 2 election that may see Republicans win control of the House from President Barack Obama’s Democrats.

“We’ve seen both parties ignore the needs of Americans while they concentrate on doing favors for the special interests that get them elected,” Cantor writes in his section of the book.

“Don’t get me wrong. We’re proud Republicans,” Cantor adds. “We just believe that our party has at times lost sight of the things we believe in, ideas like economic freedom, limited government, the sanctity of life, and putting families first.”

Ryan makes a plug for his “Roadmap for America’s Future.” Embraced so far by relatively few House Republicans, it includes gradually raising the retirement age to 70, reducing future Social Security benefits for the rich and putting Medicare and Medicaid recipients in private insurance plans.

With the U.S. facing record deficits, Ryan writes, “The problem, in a nutshell is this. Medicare, Medicaid and Social Security — three giant entitlements — are out of control.”

McCarthy introduces readers to a number of  ”Young Gun” House Republican candidates who he says are ready to “stand for solutions based on American principles.”

Cantor, Ryan and McCarthy are members House Republican leadership. Ryan is the top Republican on the House Budget Committee while McCarthy is House minority chief deputy whip.

As House minority whip, Cantor is the chamber’s number two Republican, behind House Minority Leader John Boehner.

There are few mentions of Boehner in the nearly 200-page book, which is certain to stir discussion among House Republicans.

Boehner is line to be elected House speaker if Republicans take the chamber. But in the book’s foreword, Fred Barnes, editor of The Weekly Standard, writes Cantor may get the job.

“I’m convinced Eric Cantor will be speaker or majority leader the next time Republicans control the House,” writes Barnes, who first dubbed Cantor, Ryan and McCarthy as the “Young Guns” in a 2007 profile of them.

Joe Scarborough, a former House Republican turned MSNBC talk show host, ripped into the three on air on Wednesday for embracing the “Young Guns” moniker.  Laughing, he noted they are all middle aged.

A spokesman for the three brushed off such criticism, saying, “Young Guns is not about age, it’s about a concept and a long-term vision for a new generation of conservatives.”

Photo Credit: REUTERS/Larry Downing (U.S. House Republican Leader John Boehner and Republican Whip Eric Cantor walk through the Capitol)

The reviews are in on President Barack Obama’s newly redecorated Oval Office. And they are, like the earth tones of the custom-made sofas, mostly muted.

The morning after the spiffed-up office was unveiled — during Tuesday night’s presidential address to the nation, with Obama sitting behind the Resolute Desk — the Washington Post splashed its impressions on the front page of the much-read Style section, complete with graphics and commentary. “Very American and very appropriate,” said Margaret Russell of Architectural Digest; “tasteful and … very safe,” was interior designer Celerie Kemble’s assessment, both reported in the Post.

The New York Daily News stressed the provenance of many of the new furnishings, noting that the hand-painted striped wallpaper was made in the Hamptons on Long Island. NBC’s “Today” show and ABC’s “Good Morning America” both had spots on the White House makeover. ABC’s George Stephanopoulos — a former aide to President Bill Clinton, and so presumably fairly familiar with the space — disclosed he’s friends with the decorator, Michael S. Smith of Los Angeles.

Maureen Dowd, the stiletto-penned columnist for The New York Times, recalled Oval Offices past, including what she called the Belle Watling style adopted during the Clinton administration. Dowd went on to riff about the quotations from former presidents and Martin Luther King Jr. that were chosen for the new carpet’s border, and suggested some alternate ones, such as, “It’s the economy, stupid!”

There was some tut-tutting about the advisability of rolling out a new decorating scheme with the country in the economy doldrums, and the White House was quick to point out that no taxpayer dollars were spent on the project, which features products made in the U.S.A. Some critics said it looks like a den, a man cave or a hotel lobby.

American presidents redecorate the Oval Office to put their personal stamp on the place. What do you think this renovation says about Obama?

Photo credit: REUTERS/Jonathan Ernst (News photographers document the Oval Office makeover, August 31, 2010)

REUTERS/STR New (undated recent file photo of cave in southwestern France where archaeologists discovered signs of human civilisations dating back 50,000 years)

As the special envoy on climate change for the World Bank, Andrew Steer might be thought of as the $6 billion man of environmental finance. He oversees more than that amount for projects to fight the effects of global warming.

"More funds flow through us to help adaptation and mitigation than anyone else," Steer said in a conversation at the bank's Washington headquarters. Named to the newly created position in June, Steer said one of his priorities is to marshall more than $6 billion in the organization's Climate Investment Funds to move from smaller pilot projects to large-scale efforts.

While the World Bank is not a party to global climate talks set for Cancun, Mexico, later this year, it is deeply engaged in this issue, Steer said. Acknowledging that an international agreement on climate change is a long shot this year, he said there are still opportunities to make changes to cut the greenhouse gas emissions that spur climate change.

"We do see there are opportunities," Steer said. "The mistake would be if it's sort of all or nothing." The bank is strongly supporting action to limit deforestation, offer quick financing to start climate projects and reform carbon markets to extend them to countries that have been left out so far.

Even though the World Bank won't be at the negotiating table in Cancun, its members will be there, and 80 percent of them want the bank to focus on climate change, Steer said. It's all part of a what he sees as a fundamental shift in the international attitude toward dealing with this problem.

"There is a new revolution that's going on now," he said . "It's not only driven by personal commitment, like it would have been 15 years ago ... Now it's driven by just the sheer logic ... If you care about long-term poverty reduction, you simply cannot avoid this issue."

Photo credits: REUTERS/Supri Supri (Andrew Steer (right) then the World Bank's Indonesia country director, with World Health Organization's Georg Peterson at a news conference in Jakarta, August 24, 2006)

REUTERS/Mariana Bazo (Deforestation near a gold mine along Interoceanic highway section linking Peru and Brazil in the Amazon region of Madre de Dios, August 20, 2010)

The Iraq war ended where it began — at the president’s desk in the White House Oval Office.

President Barack Obama declared the end of U.S. combat operations in Iraq with his hands folded on the desk where 7-1/2 years earlier President George W. Bush announced the beginning of military operations.

“Much has changed since that night,” Obama said in the second Oval Office prime-time televised address of his presidency.

Obama  in his 19-minute speech praised the former president’s patriotism. But he did not do what Republicans had wanted –  credit Bush’s troop surge, which Obama had opposed, with leading to the end of combat operations.

Instead, Obama spoke about the ”rough waters” endured during one of America’s longest wars that divided the country and turned increasingly unpopular.

“A war to disarm a state became a fight against an insurgency,” Obama said, referring to the original justification for the war – that Iraq possessed weapons of mass destruction which never surfaced.

“Terrorism and sectarian warfare threatened to tear Iraq apart.  Thousands of Americans gave their lives; tens of thousands have been wounded.  Our relations abroad were strained.  Our unity at home was tested,” Obama said.

He said it was time “to turn the page” on the divisiveness of the war at home, and in the next breath mentioned that he had spoken with Bush that afternoon.

“It’s well known that he and I disagreed about the war from its outset. Yet no one can doubt President Bush’s support for our troops, or his love of country and commitment to our security,” Obama said.

“As I’ve said, there were patriots who supported this war, and patriots who opposed it.  And all of us are united in appreciation for our servicemen and women, and our hopes for Iraqis’ future,” he said.

Obama sounded emotional when he spoke of the “over 4,400 Americans who have given their lives in Iraq.”

And he kept a campaign promise when he declared: “So tonight, I am announcing that the American combat mission in Iraq has ended.”

Photo credit: Reuters/Jim Young (Obama addresses the nation about end of U.S. combat mission), Reuters/Kevin Lamarque (Bush announces start of Iraq war on March 19, 2003)

President Barack Obama will not be running a “victory lap” when he addresses the nation on Iraq this evening. Quite rightly, he points out that there is still a lot of work to be done to make sure Iraq “is an effective partner for us.”

There are several other reasons why tonight’s speech cannot be a victory lap. The first, Republicans argue, is that Obama is trying to take credit for the achievements of his predecessor George W. Bush, and specifically the “surge” in troop numbers (a policy Obama opposed at the time). The second, as the White House well knows, is that a victory lap might seem inappropriate in light of the nation’s economic woes. Indeed, Obama will be talking about the economy tonight, and the need to refocus resources back home.

 A third reason, perhaps, is that it could sound disingenuous to triumphantly declare the end of combat operations in Iraq while 50,000 armed American troops remain in the country. Not all of them will be working as trainers or instructors, and it is obvious that the troops will still be ready for combat if that should prove necessary.

Today’s other top story is our Reuters/Ipsos poll from Pennsylvania, where Republican Pat Toomey has opened a 10-point lead over Democrat Joe Sestak among likely voters in the race for Arlen Specter’s Senate seat. Specter first won this seat as a Republican 30 years ago before turning Democrat in 2009 and subsequently losing the Democratic primary, despite Obama’s endorsement. This was never going to be an easy seat for Democrats to hold, but defeat would be a disappointment after the state voted for Obama in 2008. Interestingly, nearly one in five Democrats said they were more likely to vote for Sestak because Obama had endorsed his rival in the Democratic primary.

Finally, a couple of stories to bring to your attention if fashion and decor are your thing. Read about the battle between a patent lawyer with a penchant for bow ties and Brooks Brothers, over the company’s exquisitely named “Adjustolox” bow ties. Or take a look at the newly upholstered and repainted Oval Office, pictured here. Less yellow, less blue, and lots more beige.  

Here are our top stories from today…

POLL-Republican leads Senate race in Pennsylvania

Republican Pat Toomey has opened a 10-point lead over Democrat Joe Sestak among likely voters in a Senate race in Pennsylvania dominated by economic worries, according to a Reuters/Ipsos poll. Toomey, a conservative former congressman, leads Sestak, a former admiral elected to Congress in 2006, by 47 percent to 37 percent barely two months before the Nov. 2 election to replace Democrat Arlen Specter.

For the full story by John Whitesides, click here.

Obama: No Iraq victory lap as combat mission ends

President Barack Obama declared the U.S. combat mission in Iraq officially over but said he would not take a “victory lap” because a lot more work remained to be done inside the country. Obama, thanking troops in Texas before delivering an evening address to the nation, said Iraq now had the opportunity to create a better future for itself, and the United States, as a result, was more secure.

For more of this story by Caren Bohan, read here.

Banks’ troubled loans decline: FDIC

Troubled loans held by banks declined for the first time in more than four years, pushing bank industry earnings up to $21.6 billion in the second quarter. The Federal Deposit Insurance Corp’s latest quarterly report showed banks putting away less money to cover expected loan losses, relieving an important drag on industry profits.

For more of this story Dave Clarke and Karey Wutkowski, read here.

Fed mulls stimulus if outlook worsens appreciably

The outlook for the economy would have to deteriorate “appreciably” to spur fresh support from the Federal Reserve, according to minutes of the central bank’s last policy meeting released said.

For more of this story by Mark Felsenthal and Glenn Somerville, read here.

Obama adviser warns against tax cuts for wealthy

An economic adviser to President Barack Obama said there was a worry that even a temporary extension of lower tax rates for the wealthy would be a “foot in the door” to permanent extension. Jason Furman, deputy assistant to Obama for economic policy, backed on the president’s stance to extend lower tax rates enacted under former President George W. Bush for lower- and middle-income groups only — and not for wealthier Americans.

For more of this story by Kim Dixon, read here.

Clinton confers with leaders on Mideast peace push

Secretary of State Hillary Clinton launched a U.S. push for Mideast peace, holding talks with Israeli and Palestinian leaders before they begin direct negotiations on Thursday. Clinton met Palestinian President Mahmoud Abbas at his hotel near Washington on Tuesday. She was also set to see Israeli Prime Minister Benjamin Netanyahu, who arrived following news of a shooting attack that killed four Israelis in the occupied West Bank.

For more of this story by Andrew Quinn and Jeffrey Heller, read here.

Obama administration appeals stem cell injunction

The Obama administration appealed a ruling that blocked federal funding of human embryonic stem cell research, asking the judge who issued the injunction to put it on hold pending the appeal.

For more of this story by Jeremy Pelofsky, read here.

U.S. turns down China currency probes in two cases

The Commerce Department, in a decision that could provoke congressional action, said it did not see strong enough legal grounds to investigate if China’s currency practices subsidize its exports.

For more of this story by Doug Palmer, read here.

From what we are blogging…

Iraqi political haggling a big headache for American spies

What keeps U.S. spies awake at night? Iran. Al Qaeda. The bickering of Iraqi politicians. With the United States officially ending its combat role in Iraq, one senior American spy said he was more worried about the lack of political reconciliation in Baghdad than whether Iran gets more meddlesome in Iraq or al Qaeda’s Iraqi affiliate makes a new, violent push there.

For Susan Cornwell’s full blog, click here.

From elsewhere…

Consumer confidence and home prices edge up

Consumer confidence rose modestly in August and homes prices gained more than expected in June, easing some worries the economy is headed for another downturn soon. Another report showed the pace of growth in business activity in the Midwest slowed in August, but economists said the data overall did not present new worries about the path of the economy.

For the full story, click here.

Photo credit: Reuters/Jason Reed (Obama thanks troops at Fort Bliss)

What keeps U.S. spies awake at night? Iran. Al Qaeda. The bickering of Iraqi politicians.

With the United States officially ending its combat role in Iraq, one senior American spy said he was more worried about the lack of political reconciliation in Baghdad than whether Iran gets more meddlesome in Iraq or al Qaeda’s Iraqi affiliate makes a new, violent push there.

“I’m more concerned about the internal (Iraqi) situation than Iranian influence or the long arm of al Qaeda, which really doesn’t exist,” the senior intelligence official told reporters. He asked not to be named (as spies do).

Tehran could be expected to try to influence Iraq, because that has been its attitude historically,  he noted.

As for Al Qaeda in Iraq, it  has been “substantially degraded.”  It has  only about 10 percent of the manpower that it had at its peak in 2006 and 2007. And it is only “loosely” affiliated with al Qaeda elements outside the country, he said.

But the fact that coalition-building talks between Iraqi Prime Minister Nuri al-Maliki and former premier Iyad Allawi have stalled repeatedly: that is a bigger worry.

“For me personally, the greater concern is the political reconciliation,” the senior intelligence official said. The stalemate “can’t drag on indefinitely,” because people might “take things into their own hands.” Violence already has mounted as insurgents seek to exploit the political vacuum.

The intelligence official thought Vice President Joe Biden’s intercessions had been helpful in Iraq. But a political deadlock remains, six months after an inconclusive election.

Biden, who is President Barack Obama’s point man for Iraq, has been to Baghdad half-a-dozen times since becoming vice president, usually when political squabbling threatens to escalate to crisis levels.

The 50,000 U.S. soldiers remaining in Iraq are to complete their withdrawal by the end of next year. Asked if a year is long enough, the senior intelligence official said: “It’s gotta be. It would be up to the Iraqi government, if they want to ask us to stay.”

Photo credit: Reuters/Thaier Al-Sudani (Biden greeted by al-Maliki in Baghdad Aug. 31)

The first family had a little redecorating done back at the White House while they were on vacation last week, just in time for President Barack Obama to make only his second nationally televised address from the imposing — and newly redone — Oval Office.

The presidential sanctum has been decked with new and reupholstered furniture, fresh paint and new, hand-painted striped  wallpaper and a new wheat, cream and blue rug made of 25 percent recycled wool, the White House said.

In front of the fireplace, there are two mahogany armchairs that were used by President George W. Bush, but have been reupholstered in caramel-colored leather. The brown leather desk chair is new, as is the coffee table, made out of American walnut and mica. The somewhat casual-looking couches were custom-made in New York and covered with custom-made light brown cotton fabric with red, white and blue threads running through it. There are also two new table lamps with blue ceramic bases.

The rug, made and donated by the Scott Group, a U.S. carpet maker based in Grand Rapids, Michigan, is of course Oval, with the presidential seal in the center. It features five quotations important to Obama. And, fittingly for a president who campaigned promising bi-partisanship, they come from a Republican president as well as three Democrats, as well as the civil rights leader Martin Luther King Jr.

They are:

* ”The only thing we have to fear is fear itself,” from President Franklin Roosevelt

* “The arc of the moral universe is long, but it bends towards justice,” from King

*  ”Government of the people, by the people, for the people,” from President Abraham Lincoln

* “No problem of human destiny is beyond human beings,” from President John Kennedy, and

* ”The welfare of each of us is dependent fundamentally upon the welfare of all of us,” from President Theodore Roosevelt, a Republican.

The White House wouldn’t say how much the refurb cost, but said it was in line with what the last two presidents spent on their Oval redesigns, and noted that it was financed with funds from Obama’s inauguration committee and the White House Historical Association.

Photo credit: The redecorated Oval Office of U.S. President Barack Obama has new carpeting, wallpaper and sofas at the White House in Washington, August 31, 2010. REUTERS/Jonathan Ernst

Republicans have the momentum going into Election Day for the U.S. Senate seat held by Arlen Specter for three decades in Pennsylvania.

A Reuters/Ipsos poll  of likely voters showed Republican Pat Toomey with a 10-point lead, 47-37 percent, over Democrat Joe Sestak. That gap narrowed among a broader pool of registered voters to 40-37 percent.

Sestak beat Specter in the Democratic primary after the senior senator from Pennsylvania turned Democrat in April 2009 ahead of his battle for re-election to the Senate seat he first won as a Republican 30 years ago. President Barack Obama had backed Specter.

The poll shows it wouldn’t have made  any difference if Specter had won the Democratic primary, with likely voters in Pennsylvania  supporting Toomey over Specter 52-40 percent.

“This suggests that the GOP has genuine momentum here outside of the identities of individual candidates and isn’t necessarily just benefiting from the fallout from the Democratic Primary,” Ipsos pollsters say.

Did the president influence Pennsylvania voters? Fifty-nine percent of registered voters said Obama’s endorsement of Specter over Sestak made no difference in their decision on how to vote.

The Republican candidate also leads in the Pennsylvania governor’s race — Tom Corbett has 15 points over Democrat Dan Onorato, 49-34 percent, among likely voters. That gap narrowed in a broader pool of registered voters to 43-37 percent.

See here for Reuters Election 2010 coverage.

Photo credit: Reuters/Jason Reed (Senator Specter walks across tarmac at Andrews Air Force Base in June)

Things were looking good for President Barack Obama’s statement on the U.S. economy in the White House Rose Garden: the sun was shining in a bright blue late-August sky.

It was a chance to show that he was paying close attention to the issue most on the minds of Americans. The statement came just after he ended a 10-day vacation trip to the pricey resort island of Martha’s Vineyard, and before he launched into a week largely devoted to foreign policy, with an Iraq speech and Mideast peace talks on the agenda.

But everything wasn’t cooperating. Obama had to start his remarks three times because of technical problems with the White House sound system.

“It’s been nearly two years since that terrible September when our economy teetered on the brink of collapse.  And at the time, no one knew just how deep the recession would go, or the havoc that it would wreak on families and businesses across this country.  What we did know was that it took nearly a decade…” Obama said, and then stopped himself mid-sentence, to ask: “How we doing on sound, guys?”

He then started again: “What we did know was that it was going to take nearly a decade in order…” And then he stopped again, and asked, “Can you guys still hear us? OK. Let me try this one more time.”

The third time was the charm, as he continued and finished a 5-minute statement, saying his economic team is hard at work coming up with new efforts to boost the economy, and calling on Congress to pass legislation meant to boost small businesses.

Was the sputtering sound system a metaphor, perhaps, for the economy?

Photo credit: Obama taps his microphone to check the sound as he speaks about the economy from the Rose Garden of the White House in Washington on August 30, 2010. (REUTERS/Jason Reed).

In the past few days we have seen the president and the chairman of the Federal Reserve both standing up and insisting they had more cards at their disposal to rescue the faltering American economy. In truth, though, both men look like they are holding weak hands, and are reduced, for the time being, to putting a brave face on things.

With short-term interest rates already at zero, Ben Bernanke has few cards he can play, and none of them feel like sure-fire winners. One is to restart an aggressive program of purchasing government securities to drive long-term interest rates down still further, another is to cut the interest rate on reserves, and a third, desperate measure would be to raise the inflation target. None of those cards are likely to be played unless things get significantly worse.

In theory President Barack Obama has more options at his disposal, but it is far from clear what he can actually get through Congress in election season. Today Obama promised that his economic team was “hard at work in identifying additional measures” to support the economy and boost hiring. But he had few new ideas to offer, besides extending tax cuts for the middle class that are set to expire this year, increasing government support for clean energy development, and rebuilding more U.S. infrastructure.

Obama did say he was considering “further tax cuts to encourage businesses to put their capital to work creating jobs here in the United States,” and he also appealed to Senate Republicans to drop their “blockade” of a bill meant to make credit more easily available for small businesses. More details of his proposals are promised in the days and weeks ahead, and we will be watching to see if he unveils anything that feels like more than a band-aid.

Finally a plug. If you would like to receive the Reuters Washington Extra newsletter by email every weekday, please drop us a line at washingtonextra@thomsonreuters.com or simon.denyer@thomsonreuters.com and we’ll add you to the mailing list.

Here are our top stories from today…

Obama says discussing new steps on economy

President Barack Obama, under pressure to bolster the economy, said he and his economic advisers are discussing additional steps to generate job growth such as more tax cuts for businesses. Obama, just back from a 10-day vacation, appeared in the White House Rose Garden to show his concern about the economy, which some experts believe is in danger of slipping into a double-dip recession.

For the full story by Steve Holland, click here.

Consumer spending offers hope on economy

Consumer spending rose at the strongest pace in four months in July, supported by a small gain in incomes that offered hope consumers will be able to keep contributing to a modest economic recovery. Analysts said the 0.4 percent increase in spending reported by the Commerce Department was a relief after a raft of weak data for July and helped ease fears the economy was sliding back into recession.

For the full story by Lucia Mutikani, click here.

Obama widens sanctions on North Korea

President Barack Obama broadened financial sanctions on North Korea and froze the U.S. assets of four North Korean citizens and eight firms in part to punish it for the sinking of a South Korea warship. Obama signed an executive order that allows the United States to block the assets of North Korea entities that trade in conventional arms or luxury products, counterfeit currency or engage in money laundering, drug smuggling or other “illicit economic activity” that supports the government or its leaders.

For the full story by Arshad Mohammed, click here.

U.S. to decide on genetically altered fish

Health officials are set to rule on whether a faster-growing, genetically engineered fish is safe to eat, in a decision that could deliver the first altered animal food to consumers’ dinner plates.  The fish, made by Aqua Bounty Technologies Inc, is manipulated to grow twice as fast as traditional Atlantic salmon, something the company says could boost the nation’s fish sector and reduce pressure on the environment.  But consumer advocates and food safety experts are worried that splicing and dicing fish genes may have the opposite effect, leading to more industrial farming and potential escapes into the wild.

For the full story by Susan Heavey click here.

U.S. to propose labeling greenhouse gases from cars

The United States will propose new labels for passenger vehicles, detailing for the first time their greenhouse gas emissions while also changing measurements of fuel economy. The labeling proposed by the Environmental Protection Agency and the Department of Transportation would allow consumers to compare cars in terms of emissions blamed for warming the planet and to see how far they could drive on new technologies and traditional gasoline engines.

For the full story, click here.

Defense trade reform to boost jobs, security: Obama

Streamlining export restrictions on defense goods and high-technology products will help create manufacturing jobs while boosting national security, President Barack Obama said.

To read more of this story by Doug Palmer, click here.

Roger Clemens pleads not guilty to lying charges

Former baseball pitching star Roger Clemens pleaded not guilty to six counts that he lied and obstructed a congressional investigation about whether he used banned substances to enhance his performance.

For the full story by Tabassum Zakaria, click here.

Folksy Warren is symbol in debate over Wall Street

Elizabeth Warren is folksy and plain-spoken and favors cardigans over Washington power suits. Many on Wall Street view her as their worst nightmare but she is a hero to liberal activists and consumer groups. This autumn, Warren, a contender to become the top consumer financial regulator, could become a focal point in a political debate over how far government should go to rein in the financial sector and other corporate interests.

For the full story by Caren Bohan, click here.

Some opinion from one of our editors…

China’s economic model isn’t the answer for the U.S.

Forget the “Ground Zero mosque,” Michelle Obama’s Spanish holiday and even the oil spill in the Gulf of Mexico. When future historians look back to the summer of 2010, the event they are most likely to focus on is China’s emergence as the world’s second-largest economy.

For the full piece by Chrystia Freeland, click here.

And from elsewhere…

Earl becomes major hurricane, could swipe east

Hurricane Earl turned into a major Category 3 storm as it lashed northeast Caribbean islands on a track that could see it swiping the East Coast in the next few days, the National Hurricane Center said. But the Miami-based center said it was too early to say what part of the eastern seaboard might take a direct impact from Earl, the second major hurricane of the 2010 Atlantic season.

To read more of this story, click here.

Factbox: Primetime Emmy nominees in key categories

The 62nd Primetime Emmy Awards, television’s highest honors, took place in Los Angeles this weekend.

To read a list of Emmy winners in the major categories, click here.

Photo Credits: REUTERS/Price Chambers (Federal Reserve Chairman Ben Bernanke enters the Jackson Hole Economic Symposium in Grand Teton National Park, Aug. 28, 2010)  REUTERS/Jason Reed (Obama speaks about the economy from the Rose Garden)

Just a friendly chat between two commanders in chief over a 7-1/2 year Iraq war…

President Barack Obama plans to call former President George W. Bush and discuss Iraq where he is ending combat operations that his  predecessor began.

Whether or not Obama will mention Bush in his primetime Oval Office television address at 8 p.m. Tuesday is unclear. But White House spokesman Robert Gibbs said the ex-president will be among the people Obama calls before giving the speech.

Republicans have criticized Obama for what they say is a failure to acknowledge the success of  Bush’s troop surge in bringing down violence in Iraq.

Gibbs was pressed during a briefing with reporters on whether Obama, who opposed the Iraq troop increase, now believes it worked.

Gibbs said additional troops were one element that contributed to the reduction in violence, but there were a “host of factors” that also played a role, such as the Sunni Awakening and an improved political environment.

“The president always believed that you would change part of the security situation by vastly increasing the number of troops,” Gibbs said.

But he said Obama’s view was that “we were not going to accomplish all of what needed to be done in Iraq simply militarily, that there had to be a political accommodation.”

Photo credit: Reuters/Jason Reed (Obama leaves Walter Reed Army Medical Center after private meeting with injured troops)

An “American miracle” or an “exercise in self-aggrandizement on a Napoleonic scale”?

 No, I am not talking about Reuters Washington Extra, but Glenn Beck’s Restoring Honor rally which is due to take place on the steps of the Lincoln Memorial on Saturday. Beck, never one to hide his light under a bushel, has described tomorrow’s event as “a defibrillator to the heart of America”, “the Woodstock of the next generation”, and “the turning point” in American history. Eugene Robinson in today’s Washington Post was less optimistic about the rally and its “egomaniacal” host, who will be speaking a few steps down from where Martin Luther King gave his “I Have a Dream” speech on the same day in 1963. Washington Extra is not taking sides.

Ben Bernanke’s speech at the Federal Reserve conference in Jackson Hole was considerably less dramatic than Beck’s is likely to be, but does merit a quick mention too. The Fed chairman said the economic recovery had weakened more than expected but downplayed concerns that it might slip back into recession. The Fed, he said, was ready to act if needed to spur growth and said the central bank still had ammunition left. He at least is not reaching for the defibrillator yet.

Finally, commiserations to all you Nationals fans after the news that rookie pitcher Stephen Strasburg could miss at least a year and perhaps the whole 2011 season with a significant ligament tear in his right elbow. I will be wearing my Nationals T-shirt this weekend in sympathy.

Here are our top stories from today…

Bernanke says recovery softer, Fed to act if needed

Federal Reserve Chairman Ben Bernanke said the economic recovery has weakened more than expected and the Fed stands ready to act if needed to spur slowing growth. Bernanke downplayed concerns that the economy might slip back into recession, predicting a modest expansion in the second half of this year with the pace picking up in 2011.

  
For the full story by Mark Felsenthal, click here.

Imports stifle second quarter growth, spending up

Economic growth was revised down to a 1.6 percent annual rate in the second quarter, pointing to an even softer performance in the third quarter. The Commerce Department report showed gross domestic product, the measure of total goods and services output within U.S. borders, was dampened by the largest increase in imports in 26 years. Nonetheless, growth was not quite as weak as anticipated.

For more of this story by Lucia Mutikani, read here.

Panel offers Obama ideas on tax overhaul

An expert panel named by President Barack Obama spelled out ideas to simplify the byzantine tax code, including pre-filled-out returns for some individuals and reducing the corporate tax rate while cutting loopholes. The panel’s report stops short of specific recommendations but will likely play into an already bitter tax debate in Washington ahead of the November elections.

For more of this story by Kim Dixon, read here.

Strasburg could need major surgery on ligament tear

Washington Nationals rookie pitcher Stephen Strasburg has a significant ligament tear in his right elbow and will probably need major surgery that could sideline him for a year, the team said on Friday. The promising right-hander will seek a second opinion before the Nationals make a final decision on whether surgery is needed, the team said on its website.

For more of this story, read here.

And for what we are blogging…

Laura Bush says every president faces unfair criticism

Former first lady Laura Bush says every president is unfairly criticized and it comes from both friends and foes.

For Toby Zakaria’s full blog, click here.

From elsewhere…

Economy giving women pause about motherhood?

U.S. birth rates in 2009 declined for the second straight year, a sign the economy may be causing some women to think twice about having children, health officials said.

Estimates from the Centers for Disease Control and Prevention show 4,136,000 children were born in 2009, down 2.6 percent from the 2008 estimate.

For the full story, click here.

 For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo credit: Reuters/Chris Keane (Beck at an NRA meeting in Charlotte May 15)

A Washington rally that will be hosted by Fox TV’s Glenn Beck and feature conservative power broker Sarah Palin drew the wrath on Friday of the chairman of the House Democratic campaign committee.

Chris Van Hollen rejected organizers’ assurances that the “Restoring Honor Rally” — expected to draw thousands of members of the conservative Tea Party movement — would be “non-political.”

In fact, Van Hollen predicted the rally would be partisan and could turn off many voters.

The event, to be held on Saturday on the National Mall — between the U.S. Capitol and Lincoln Memorial — is billed as an opportunity to “celebrate America by honoring our heroes, our heritage, our future.”

But with Beck and Palin on stage before a crush of enthusiastic followers, the rally seems ripe for partisan bashing.

“Let’s call it what it is. It’s a blatant political effort,” Van Hollen told reporters at the National Press Club where he also said his party would prove many analysts wrong and retain control of the House in the Nov. 2 election.

“You’ve seen Glenn Beck and a lot of the talk show hosts on Fox News out there talking about this election for the last 15 months,” Van Hollen said.

“Since the day President Obama was elected president, we’ve had a constant a tirade against the president, against the Democratic efforts to get the economy turned around.”

Van Hollen said such talk can backfire.

“Americans are going to be turned off by the sort of just outrageous rhetoric on the right — conspiracy theories, rants,” Van Hollen said.

“There’s certainly an element of the electorate that is charged up by that,” Van Hollen said. “But again, I think it’s a turnoff to the sensible center and the people who constitute the key independent voters in these swing districts” who will be crucial on Election Day.

Van Hollen brushed off as “premature” reports of the demise of House Democrats and the return to power of House Republicans, who he said are already popping champagne bottles in celebration.

“It is very clear that that Democrats will retain a majority in the House,” Van Hollen insisted.

He said Democrats are better financed and, compared to Republicans, have mainstream rather than far-right candidates.

Van Hollen also said Americans voters want to keep moving ahead and not return to Republican policies that he said put the nation in an economic hole.

While public opinion polls show Republicans heading toward big gains in the House, perhaps enough to take control, Van Hollen said it’s still early.

“Most of the activity in the campaign is going to happen in the next nine and one-half weeks,” he said.

For more Reuters political news, please click here.

Photo credits: Reuters/Kevin Lamarque (Tea Party supporter stakes out a spot for Saturday’s “Restoring Honor” rally); Reuters/Chris Keane (Beck at an NRA meeting in Charlotte May 15)