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News Wrap: House GOP Looks for Spending Cuts; Greece Struggles with Government

May 10, 2012 at 12:00 AM EDT

HARI SREENIVASAN: Republicans in the U.S. House pushed through a bill today to prevent a 10 percent cut in the defense budget. It’s set to take place at year’s end because Congress failed to agree last year on deficit reduction. The Republican bill maintains military spending by cutting $300 billion in food stamps, health care and federal pensions over 10 years.

The debate divided sharply down party lines.

REP. CHRIS VAN HOLLEN, D-Md.: I know it makes our Republican colleagues feel better when they pretend that these cuts don’t harm real people. The reality is, it will mean that 326,000 women will not get breast cancer screenings and 284,000 women will not get cervical cancer screenings.

REP. PAUL RYAN, R-Wis.: Should we measure our poverty-fighting efforts based on how much money we’re spending and how many programs we’re creating, or should we think about how many people are we getting out of poverty? Here’s the problem: These efforts aren’t working.

HARI SREENIVASAN: Democrats agreed on the need to prevent the military cuts, but they wanted to do it with more with tax increases. The measure now heads to the Senate, but the Democratic majority there has already said it’s a dead letter.

The struggle to form a new government in Greece entered a third round today, as the prospect of a new election loomed larger. The Socialists took their turn at trying to create a majority coalition. Two other parties who came in ahead of them in Sunday’s election have already failed.

EVANGELOS VENIZELOS, Greek Social Democrat leader (through translator): As you know, our proposal was and is to form a government of national unity, a government of wide collaboration of pro-European political forces, of responsibility, solidarity and development. That is feasible, even though the mandate of the Greek people has not been clear.

What is clear is that people want stability and they want to avoid another election.

HARI SREENIVASAN: Most of the votes in Sunday’s election went to anti-austerity parties, stoking fears that Greece will not keep its bailout commitments to the European Union. But, in Berlin today, German Chancellor Angela Merkel said austerity measures are still the only way European nations could recover. She dismissed calls to abandon or scale back the plans.

In Britain, thousands of police officers and other public sector workers staged a one-day national strike, protesting changes in their pensions. Union leaders estimated more than 400,000 civil servants joined a march that snaked through London. The government said it was 150,000.

We have a report from Tom Bradby of Independent Television News.

TOM BRADBY: If you were around in the ’60s or ’70s or ’80s, the word strike will carry a resonance that wasn’t entirely reflected in what have seen today. It hardly felt as if the country was grinding to a halt. But that doesn’t mean people weren’t angry.

WOMAN: Very angry, because I have worked all my life in the health service. And what’s more, I had free higher education year after year.

TOM BRADBY: The strike took in a cross-section of the public sector, NHS workers in Wales, police officers, immigration staff at Heathrow and elsewhere. Prison officers aren’t allowed to strike, but here in Warrington, they did.

These pension changes affect more than five million public sector workers. The new schemes vary significantly, but, typically, contributions will rise by 3.2 percent by 2015. The amount paid out will be based on average career earnings, not the higher final salary. And pensions will only rise in line with the consumer prices index, not the higher retail prices index.

Plus, the standard retirement age will eventually rise to 68. Ministers argued today that these strikes are fizzling out. If that isn’t quite true, they aren’t bringing the country to a halt either.

HARI SREENIVASAN: The head of Britain’s largest union warned there would be strikes during the Summer Olympics in London starting in July.

The U.S. Justice Department sued Arizona Sheriff Joe Arpaio today over allegations of racially profiling Latinos. The civil suit alleges that his department, encompassing Phoenix, disregarded basic civil rights and federal law. Arpaio has made a national name for himself aggressively targeting illegal immigrants. His office says the federal case is politically motivated.

Wall Street struggled to make headway again today. The Dow Jones industrial average gained nearly 20 points to close at 12,855. The Nasdaq fell one point to close at 2,933.

J.P. Morgan Chase announced today that it suffered $2 billion in losses in the last six weeks. The bank said the losses came in a portfolio of investments known as credit default swaps. Reports had swirled that a J.P. Morgan trader in London had left the bank heavily exposed. Chief executive Jamie Dimon said today these were egregious mistakes. He warned the losses could get even worse by the time the second quarter ends.

Those are some of the day’s major stories.