News Wrap: Fed to hold interest rates steady, keep up stimulus efforts
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GWEN IFILL: The Federal Reserve announced today it’s keeping short-term interest rates at a record low, and continuing its stimulus efforts for now. But the Central Bank didn’t repeat last month’s warning that higher mortgage rates could hurt economic growth. The statement made no reference to the economic impact of last month’s 16-day government shutdown.
Wall Street pulled back after the Fed’s assessment that the economy is growing, but only moderately. The Dow Jones industrial average lost 61 points to close at 15,618. The Nasdaq fell more than 21 points to close at 3,930.
House and Senate negotiators opened budget talks today aimed at easing automatic across-the-board spending cuts. The two budget committee chairs, Republican Congressman Paul Ryan and Democratic Senator Patty Murray, said they hoped to get a deal, but the prospect of raising taxes remains a sticking point.
REP. PAUL RYAN, R-Wis.: Simply taking more from the hardworking families of America just isn’t the answer. I know my Republican colleagues feel the same.
So I want to say this from the get-go. If we look at this conference as an argument about taxes, we’re not going to get anywhere. The way to raise revenue from our perspective is to grow the economy, is to get people back to work.
SEN. PATTY MURRAY, D-Wash.: Compromise runs both ways. While we scour programs to find responsible savings, Republicans are also going to have to work with us to scour the bloated tax code and close some wasteful tax loopholes and special interest subsidies, because it is unfair and unacceptable to ask seniors and families to bear this burden alone.
GWEN IFILL: The committee has until December 13 to hammer out an agreement. Otherwise, the next round of cuts will kick in next year. We will have more on this later in the program.
The federal deficit ran $680 billion in the fiscal year that ended last month. It’s the first time the red ink has fallen below a trillion dollars in five years. Today’s report said revenues rose by 13 percent, while spending fell nearly 2.5 percent.
There’s word that the National Security Agency is routinely intercepting e-mail traffic between Yahoo! and Google data centers. The Washington Post reported today it’s being done jointly with British intelligence, and involves millions of records every day. The NSA director, Army General Keith Alexander, challenged the report, which surfaced from more material leaked by Edward Snowden. Alexander said, to his knowledge, the agency has not tapped the company’s servers.
Two top German officials were in Washington today, pursuing reports that the NSA monitored Chancellor Angela Merkel’s cell phone. And, in Madrid, Spanish Prime Minister Mariano Rajoy went before his Parliament to address allegations that Spain, too, was a target of U.S. surveillance.
PRIME MINISTER MARIANO RAJOY, Spain (through interpreter): The key is to clarify what happened and generate confidence, because, without that, it is very difficult to work for the rights, liberties and security of our citizens. I hope we will get this. We have already requested the appearance of the head of Spain’s intelligence services, and he will appear in this chamber as soon as possible.
GWEN IFILL: The government of China also weighed in, announcing today it will strengthen information security to guard against outside surveillance.
Chinese police say they have arrested five people in a suicide car crash this week in Beijing. On Monday, an SUV sped down a crowded sidewalk and exploded into flames across from Tiananmen Square at the entrance to the Forbidden City. Five people died. Scores were hurt. State television today identified the suspects as ethnic Uighurs, a restive Muslim minority in Northwestern China.
WOMAN (through interpreter): The October 28 incident was a carefully premeditated and organized violent terrorist attack. The police found petrol inside the vehicle, as well as receptacles for petrol, two machetes, and iron bars. Inside the car, they also found a banner with extreme religious content printed on it.
GWEN IFILL: The attack was the first in Beijing in the city’s recent history.
In Iraq, a pair of suicide bombings killed at least 20 people overnight. Nearly two dozen others were wounded. One of the bombings targeted soldiers and militiamen in the town of Tarmiyah, north of Baghdad. The other took place at a checkpoint outside a police station near Mosul. The latest violence came as Iraqi Prime Minister Nouri al-Maliki traveled to Washington in search of additional military aid.
Beginning next week, the town of Sanford, Florida, will no longer allow neighborhood watch volunteers to carry guns. The decision follows the July acquittal of neighborhood watch organizer George Zimmerman, who shot and killed unarmed teenager Trayvon Martin last year. Sanford police say they want to return to having civilian patrols report what they see to authorities, but to do nothing more.
Social Security benefits will go up just 1.5 percent next year, an average of about $19 a month. The annual cost-of-living adjustment, announced today, is one of the smallest since 1975, when the automatic hikes began. It’s because consumer prices stayed in check in this year. The increase affects nearly 58 million Americans.