AP Sources: Obama wants Fed to be finance supercopWASHINGTON – The White House told industry officials on Friday that it is leaning toward recommending that the Federal Reserve become the supercop for "too big to fail" companies capable of causing another financial meltdown.
According to officials who attended a private one-hour meeting between President Barack Obama's economic advisers and representatives from about a dozen banks, hedge funds and other financial groups, the administration made it clear it was not inclined to divide the job among various regulators as has been suggested by industry and some federal regulators.
"The idea of having a council of regulators was pretty much vetoed," said one participant.
Treasury Secretary Timothy Geithner, who briefly attended the meeting but did not identify the Fed specifically as his top choice, told the group that one organization needs to be held responsible for monitoring systemwide risk. He said such a regulator should be given better visibility into all institutions that pose a risk to the financial system, regardless of what business they are in.
"Committees don't make decisions," Geithner told the group, according to another participant.
Officials from the Treasury Department and National Economic Council, which hosted the meeting, told participants that the Fed was considered the most likely candidate for the job, according to several officials who attended or were briefed on the discussions.
The administration officials said a legislative proposal would likely be sent to Capitol Hill in June with the expectation that the House Financial Services Committee, led by Rep. Barney Frank, D-Mass., would consider the measure before the July 4th recess.
The officials requested anonymity because the meeting had not been publicly announced and they were not authorized to discuss it.
A Treasury Department statement provided to The Associated Press on Friday confirmed Geithner's position that he wants a "single independent regulator with responsibility for systemically important firms and critical payment and settlement systems."
A spokesman said Geithner also is open to creating a council to "coordinate among the various regulators, including the systemic risk regulator."
Industry officials say such a council would likely serve as advisers and would not be given the authority that a "systemic risk regulator" would.
The Fed itself hasn't taken a position on whether it should have the job, although Chairman Ben Bernanke has said the Fed would have to be involved in any effort to identify and resolve systemwide risk.
Geithner said Friday the administration plans an "aggressive" package of reforms for the financial system including proposals to fundamentally overhaul how financial institutions pay their senior executives. Critics have charged that the bonus system used at many major institutions encouraged excessive risk taking.
"We had a financial system that did a terrible job of protecting consumers, of building a strong, stable financial system less prone to crisis and we are going to have to fix that," Geithner said in an interview on PBS' "Newshour." "You will see this president, this administration bringing sweeping reforms to our financial system."
In a speech Thursday, Bernanke said that huge, globally interconnected financial firms whose failure could endanger the U.S. economy should be subject to "a robust framework for consolidated supervision."
Naming the Fed as a kind of super regulator is likely to run into at least some resistance by other federal regulators and in Congress.
Mary Schapiro, the head of the Securities and Exchange Commission, said Friday that she was inclined to support the idea floated this week by the head of the Federal Deposit Insurance Corp. for a new "systemic risk council" to monitor large institutions against financial threats. The council would include the Treasury Department, Federal Reserve, FDIC and SEC, according to the proposal by FDIC Chairman Sheila Bair.
Speaking to the Investment Company Institute, the mutual fund industry's biggest trade group, Schapiro said she is concerned about an "excessive concentration of power" over financial risk in a single agency.
Lawmakers are divided on whether the Fed alone should assume the role of systemic regulator. Some say the Fed failed to prevent the current economic crisis and shouldn't be trusted with such a big responsibility. Others say the Fed should stay focused on its primary duty of setting monetary policy.
Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, said this week he is "more attracted to the council idea" than having a single regulator play that role.
Unlike other regulatory agencies, the Fed does not rely on appropriations from Congress for its operating funds. It finances itself through its investments.
Fed Gov. Daniel Tarullo told Congress in March that the extent to which the new responsibility for systemic risk should fall to the central bank "depends a great deal on precisely how the Congress defines the role and responsibilities of the authority."
"Any systemic risk authority would need a sophisticated, comprehensive and multidisciplinary approach to systemic risk," he testified. "Such an authority likely would require knowledge and experience across a wide range of financial institutions and markets."
Rudd Government will end the private health insurance rebate | Federal Budget 2009 | News.com.auRudd Government will end the private health insurance rebate
A new sliding scale for the private health insurance rebate will cut out at $120,000 for singles/ File.
* Government to end rebate from next July
* Sliding scale for health insurance rebates
* Top earners get no rebate, pay more Medicare
THE Rudd Government faces another Senate blockade if it pushes ahead with budget plans to claw back $1.9 billion in private health insurance cuts, with both the Coalition and key crossbencher Nick Xenophon accusing the Government of breaking an election promise.
The Government plans to slash the 30 per cent private health insurance rebates in Tuesday's Budget.
Independent Senator Nick Xenophon, who shares the upper house balance of power with the Greens and Family First Senator Steve Fielding, slammed the proposal as “a significant breach of trust” by the Government, which had long promised to retain the rebate.
He also questioned the logic of pursuing more cuts before the Government’s promised Productivity Commission inquiry into the public/private health mix reported, and so soon after last year’s controversial decision to raise the Medicare levy surcharge.
The Coalition, which voted against last year’s Medicare levy surcharge threshold change, called the proposal a "huge broken promise" that would push up health fund premiums and force hundreds of thousands of people onto the public system.
Rebate out, Medicare to rise
The Government plans for the private health insurance rebate to be scaled back from July next year.
The Government will also lift penalties for well-off taxpayers who refuse to buy private insurance - boosting their Medicare levy surcharges by up to 50 per cent.
The Australian understands single people earning more than $74,000 a year and couples on more than $150,000 a year will watch their insurance rebates melt away on a sliding scale.
The payments will cut out completely at incomes of $120,000 for singles and $240,000 for couples - leaving the wealthy to pay for their own insurance in its entirety.
Confirmation of the crackdown provides a glimpse of the scale of the savings task facing the Government as it battles to counter the $200 billion, four-year collapse in the size of its revenue stream caused by the global recession.
An average health insurance package for a family costs about $2600 a year.
The Howard Government gave all insured taxpayers an annual rebate worth 30 per cent of their premiums, with those aged 65 and older eligible for a refund of up to 40per cent.
Currently, uninsured singles earning more than $70,000 a year and couples on more than $140,000 (plus $1500 for each dependent child) face a Medicare levy surcharge worth an extra 1 per cent of their income.
Tuesday's Budget will repudiate Mr Howard's non-means-tested approach.
The new arrangements, taking effect from July next year, will not affect singles earning less than $74,000 a year and couples on less than $150,000 a year.
But the subsidy will tumble from 30 per cent to 20 per cent for singles earning between $74,000 and $90,000 a year and couples earning between $150,000 and $180,000 a year.
It will fall again to 10 per cent for singles earning between $90,000 and $120,000 and couples earning between $180,000 and $240,000 a year.
Singles earning more than $120,000 a year and couples on more than $240,000 will no longer receive subsidies.
However, if they refuse to take out insurance, their Medicare levy surcharge will rise to 1.5 per cent, which would lift the exposure of a couple earning $240,000 a year from $2400 a year to $3600 a year.
Mr Rudd's push to squeeze savings at the expense of middle- and high-income earners raises the possibility of further strikes against middle-class welfare next week, possibly through means tests on rebates for child-care rebates.
Read more in The Australian.
Breastfeeding debate revived after death of British mother Katy Isden | Health & Lifestyle | News.com.auT was anything but the Hallmark moment she had been expecting.
Sitting among the flowers and cards, clutching her first-born child, my sister Lia could do nothing but sob.
Left alone in her hospital room and attempting to breastfeed her new daughter for the first time on her own, she felt her anxiety skyrocket, the mother guilt take over.
A broken emergency buzzer didn't help, nor post-birth hormones and lack of sleep.
But almost two hours after she'd begun trying to attach her baby's small mouth to her painfully engorged breasts, my niece was screaming and so was her struggling mum.
So consumed by getting it right and worked into a frenzy by the ordeal, it's still not clear exactly when it was that Lia lost control of the muscles on one side of her face.
Within hours doctors diagnosed her with Bell's Palsy, a paralysis of the facial muscles which some believe is triggered by environmental, emotional or physical stress.
In this case, the stress of feeding her child.
Instead of enjoying what was meant to be the happiest time in her life, my beautiful sister was left feeling like a failure and believing herself the Elephant Man.
Her experiences with the births of her next two children were equally traumatic, marred by a recurrent sense of inadequacy and in the case of her third, mastitis so bad she was forced to temporarily relinquish care of her family to seek medical help.
News, then, of the death of 30-year-old British mother Katy Isden, who fell to her death from a New York apartment block after becoming depressed over her bid to breastfeed, should well shock the world but will not surprise mothers with tales like my sister's.
"I'm surprised there are not more mothers like this poor woman," Lia said yesterday.
"The pressure to breastfeed, the anxiety to be this super person, is just no way to live."
The coroner said that although Mrs Isden had been depressed when she died, it was not clear if she fell or jumped. He therefore recorded an open verdict.
Meanwhile, the issue of breastfeeding rages once more.
The research about the benefits of feeding babies "naturally" - delivering vital nutrients and a bond between mother and child - appears black and white.
But for many it's anything but a natural experience; rather a grey area of conflicting advice and a trauma that can torture women.
While some advocacy groups stand accused of adding to the anxiety in the battle between breast or bottle, there is no doubt support is the key to relieving the pressure.
Extra funding for the Australian Breastfeeding Association's national helpline resulted in a 30 per cent increase in those seeking help since March, with more than 28,328 calls taken between October and April.
Carey Wood, a mother of four and ABA volunteer for 10 years, endorses breastfeeding as a valuable "learned skill" but says there's much more to mothering.
"So many of us have issues," she said. "This is a matter of seeking assistance, not being left to feel like a failure.
"The solution is for the community to get behind mothers rather than patronising them with the 'breast is best' slogan. It's what's best for you and your baby that counts, not breastfeeding at any cost."
$3.25m payout to Andrew Mallard for wrongful jailing | National News | News.com.au$3.25m payout to Andrew Mallard for wrongful jailing
By staff writers
The Sunday Times
A WEST Australian man has expressed his "extreme disappointment" at being awarded $3.25m compensation for more than 12 years in jail following his wrongful conviction for murder.
.Andrew Mallard was convicted of the 1994 murder of Mosman Park jeweller Pamela Lawrence.
PerthNow reports that WA Attorney General Christian Porter today announced that the Government had settled with Mr Mallard after lengthy negotiations.
Mr Mallard said he was "extremely disappointed" with the figure.
"I will be conferring with my lawyers," Mr Mallard told Fairfax.
Labor MP John Quigley, a close friend of Mr Mallard who fought for his release from prison, said $7.5 million was being sought following independent legal advice Mr Mallard had received.
"One thing I can say with absolute confidence about this offer - Premier Barnett and Christian Porter wouldn't accept this in return for 12 years jail and the destruction of their life," Mr Quigley said.
"Why should Andrew's life be valued at a lesser rate than Colin Barnett's or Christian Porter's?
"In fact this sum equates to approximately to what Colin Barnett will get from the parliamentary super scheme when he retires."
Initially, he had asked for $10 million in compensation for the 12 years he spent behind bars for a crime he didn't commit - the 1994 murder of Mosman Park jeweller Pamela Lawrence.
Mr Quigley said Attorney-General Christian Porter had indicated he was preparing to offer a multimillion-dollar ex-gratia payout to Mr Mallard.
He said the police and some individual officers would be sued if Mr Mallard was short-changed.
Mr Quigley said Mr Mallard endured emotional and physical trauma during his time in prison.
"Andrew, because he wouldn't admit his guilt in prison, was shipped off to a psychiatric hospital and injected with drugs principally because he refused to admit his guilt,'' he said.
Scott of Hobart Posted at 8:16pm today
In the UK, people who have been wrongly incarcerated have room and board costs deducted from any compensation payment they may be awarded.. This happened only a few weeks ago, when Sean Hodgson was released after 27 years in prison. His lawyers estimate 100,000 pounds as a figure. Google it if you think it can't be true!
Cory of Perth Posted at 8:14pm today
Wow this is really much much less than I expected. Although they have said that he can continue civil action in a court of law, and that this is sort of a pre-payment. So if he is awarded more in the court he would get (Amount Awarded - 3.25M). PS for those of you who say $300k is a lot of money for a "job" every year, most of us don't work 24 hours a day, 365 days a week, for 12 years in any job! It works out to LESS THAN $31 PER HOUR IN PRISON!
Rich to pay for pension rises in federal Budget | Federal Budget 2009 | News.com.auPENSIONERS will receive up to $30 a week extra in a Federal Budget that will target Australia's biggest earners.
The rich will have their superannuation tax breaks slashed in half to fund the pension increase, with next Tuesday's Budget expected to boast the largest deficit in Australian history.
The deficit could be as high as $70 billion - a $90 billion turnaround over last year's projected $22.4 billion surplus, the Herald Sun reports.
The Budget will not return to surplus until 2015.
To claw the Budget back into the black, the government is expected to announce a raft of painful spending cuts.
One such measure - that will save $2.7 billion over four years - is understood to be a plan to cut in half the amount wealthy people can salary sacrifice into superannuation.
Related Coverage
* Swan: 'Debt is sustainable'
The maximum that high-income earners can salary sacrifice will be halved from $100,000 to $50,000 for people aged over 50, and from $50,000 to $25,000 for those under 50.
The change means wealthy people will have more of their income taxed at 46.5 per cent rather than the concessional rate of 15 per cent when they make super contributions.
Under current arrangements someone salary sacrificing on an annual income of $57,000 receives reduction in tax of $880, compared with someone on $295,000 who gets a $24,000 reduction.
According to government sources the measure will hit those on average annual incomes of about $220,000, but not affect 98 per cent of people who sacrifice pay into super.
It will be sold as a way of funding the government's promise to increase the single rate of the age pension. It is under pressure to raise it from $284.90 to almost $314 a week.
Those in line for a pay rise include 2.1 million age pensioners, 740,000 disability pensioners, 140,000 carers and 300,000 veterans.
Treasurer Wayne Swan refused to comment on the Budget super hit yesterday, but conceded there would be unpopular decisions.
"These are needed to make room to deliver our commitment to pensioners and to continue supporting jobs and investing in our recovery," Mr Swan said.
Opposition Leader Malcolm Turnbull said deficits until 2015-16 underlined the recklessness of recent stimulus spending by the government.
"What were they thinking? Piling billion upon billion of new debt, regardless of the consequences," Mr Turnbull's spokesman said.
