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News Wrap: Federal Reserve Lowers Economic Growth Forecast

July 14, 2010 at 12:00 AM EST


HARI SREENIVASAN: The Federal Reserve’s economic outlook has turned a bit dimmer. The estimate today said growth will be slightly lower than its April forecast.

At the same time, White House officials projected the president’s economic stimulus program has created or saved 2.5 million to more than 3.5 million jobs.

Christina Romer of the Council of Economic Advisers and Vice President Biden presented the estimates in Washington.

CHRISTINA ROMER, chairwoman, Council of Economic Advisers: Now, there’s obviously a lot of uncertainty about any jobs estimate, and I suspect that the true effects of the act will not be fully analyzed or fully appreciated for many years.

But our compendium of outside estimates shows that respected analysts across the ideological spectrum, as well as the nonpartisan Congressional Budget Office, agree that the act has had a significant beneficial effect on employment and output over the past year.

HARI SREENIVASAN: President Obama also called in former President Clinton today to encourage business leaders to invest and create jobs.

But Republicans dismissed the administration’s economic efforts. Senate Minority Leader Mitch McConnell said — quote — “The fastest- growing parts of this Democrat economy aren’t jobs. They’re the crushing burden of the national debt and the size of the federal government.”

Wall Street lost its recent momentum after the Fed issued its weaker economic forecast. Stocks were mostly higher, but not by much. The Dow Jones industrial average added less than four points to close at 10366. The Nasdaq rose seven points to close above 2249.

BP got word late today to proceed with testing a new cap on that gushing oil well in the Gulf of Mexico. The effort had been in doubt much of the day, after federal officials asked the company to delay the test.

Oil spewed unabated from the blown-out wellhead, after the operation to test a new cap was put on hold. BP and top government officials called off the crucial test last night, citing a need for further analysis.

Kent Wells, a BP senior vice president, defended the move today.

KENT WELLS, senior vice president, BP: This test is so important that a decision was taken to give them another 24 hours to make sure that this was the best possible test procedure we could — we could execute.

HARI SREENIVASAN: News accounts said Energy Secretary Steven Chu and others were concerned about how the well would stand the pressure when valves on the 75-ton cap are closed to halt the flow of oil and gas. In a worst-case scenario, the pressure might break through the well shaft and create new leaks.

But, after a long day of waiting, retired Coast Guard Admiral Thad Allen announced the company now has a green light to proceed.

ADMIRAL THAD ALLEN (RET.), national incident commander: We will start to increase the pressure in the capping stack, and we will do this in six-hour intervals. And, at each six-hour interval, we will stop, and we will consider pressure data. We will look at information that we are gaining from sonar, any acoustic data, any remote visual data we have from remotely operated vehicles.

HARI SREENIVASAN: BP also temporarily stopped drilling two relief wells designed to choke off the damaged well until it’s clear how the new cap is going to affect the situation.

Meanwhile, marine scientists reported the oil spill is starting to affect the food chain at sea. The crude has killed organisms that endangered sea turtles usually feed on. Oil is showing up in the shells of young crabs that fish and shorebirds rely on for food.

An Iranian nuclear scientist who surfaced in Washington yesterday has left for Iran. Shahram Amiri disappeared a year ago in Saudi Arabia. Yesterday, he turned up at the Pakistani Embassy in Washington and said he wanted to go home.

In an interview that aired on Iranian TV, he repeated claims that Americans abducted him last year and tried to force him to talk.

SHAHRAM AMIRI, Iranian nuclear scientist (through translator): They gave me a lot of psychological pressure. There was no physical torture, but the psychological torture was a hundred times worse than physical torture would have been.

The most important thing was some documents and a laptop which the U.S. wanted me to go to the media with and say I left Iran on my own free will with this document and applied for asylum. I refused to accept, so the U.S. started offering me money.

HARI SREENIVASAN: The United States has dismissed Amiri’s abduction claim.

And, at the State Department today, spokesman P.J. Crowley said anything Amiri says now should be viewed with caution.

P.J. CROWLEY, U.S. assistant secretary of state for public affairs: Because he had, you know, conflicting information and perspective on whether he was here of his own volition or not, from the United States standpoint, I can tell you he was here of his own volition. Nobody coerced him to come here and no one coerced him to leave.

But, once he gets back to Iran, I suspect that he will have a variety of things to say. And my advice would be, take what he says with a grain of salt.

HARI SREENIVASAN: Amiri flew today to Iran via Qatar. An official welcome is planned for him at Tehran’s International Airport tomorrow.

Those are some of the day’s major stories — now back to Gwen.