Washington Extra-A moratorium on moratoriums

WASHINGTON, Oct 12 (BestGrowthStock) – This is a daily newsletter
about politics and economics in Washington, compiled by Bureau
Chief Simon Denyer and sent to subscribers by email late in the
day. To be added to the mailing list, please email us at
[email protected]

It’s official. Moratoriums are out (as are moratoria if you
prefer the Latin plural). On the day the White House rejected
calls for a nationwide moratorium on home foreclosures, it also
lifted its own moratorium on deepwater drilling for oil and
gas. Some Democrats, especially those like Harry Reid facing
tough election races in November, had been calling for a
foreclosure ban. But President Barack Obama, who doesn’t face
voters directly for a couple more years, has accepted the
longer-term argument that a broad halt to evictions would slow
a recovery in the housing market and the economy.

Nevertheless, the scandal over how banks and other
companies processed foreclosure documents and the uncertainty
surrounding it is going to hang over the market, especially
with 40 state attorneys general (many of whom are up for
re-election) expected to announce their own investigation into
the issue.

Obama, of course, rejected a similar economic argument when
he imposed the deepwater drilling ban back in May, this time
for the greater environmental good. Now, the White House says
it can lift the ban on drilling because stricter rules are in
place to prevent a repeat of BP’s massive spill in the Gulf of
Mexico. Again, even without the ban, the drilling business will
be slow to bounce back as companies adapt to the new
safeguards.

As usual, some will blame Obama for hobbling business with
excessive regulation. Others will say that unfettered business
was exactly what led to the financial crisis and the oil spill.
The choice is yours on November 2.

Talking of choices, the voters of Wisconsin seem almost
ready to make theirs. According to our latest Reuters/Ipsos
poll, veteran Democratic Senator Russ Feingold is trailing his
Republican challenger Ron Johnson by seven points.

Interestingly, it is not so much Feingold’s vote for
healthcare legislation that has hurt him (as some have
suggested) but his failure to create enough jobs, the poll
found.

Finally today, and while we are on the subject of
regulation, our poll of financial analysts, money managers and
trading firms found surprisingly little support for the idea of
scrapping the Dodd-Frank financial reform law. Just three of
the 53 respondents put that among their top two priorities for
the next Congress, with extending tax cuts and lifting growth
topping the list. But then, maybe they are hoping the courts
will do their work for them. TCF Financial Corp filed a lawsuit
today against a section of Dodd-Frank, while the Chamber of
Commerce is planning more legal challenges after winning Round
One against the Securities and Exchange Commission earlier this
month.

Here are our top stories from Washington today:

U.S. Senate Democrat struggles in Wisconsin

Veteran Democratic Senator Russ Feingold is struggling in
his bid for re-election in Wisconsin, due in part to concerns
about his ability to help create jobs, a Reuters-Ipsos poll
found. [ID:nN12200800]

White House rejects foreclosure moratorium

The Obama administration rejected calls for a nationwide
moratorium on housing foreclosures amid fears that such a move
could cripple recovery of the housing market. [ID:nN12185906]

U.S. ends deepwater drilling ban, sets new rules

The Obama administration lifted its deepwater drilling ban
seven weeks ahead of schedule, saying new rules cut the risk of
a repeat of the BP spill. [ID:nN12173911]

Wall Street stresses jobs, taxes after election

Wall Street is more worried about high unemployment than
the makeup of Congress or the Federal Reserve’s next move. That
said, extending tax cuts and lifting growth should be the top
priorities of the new Congress, according to a poll of 53
financial analysts, money managers and trading firms.
[ID:nN12185372]

To view the poll results, click here. [ID:nN12177354]

Markets pricing in split Congress, gains under GOP

This November, the bulls are looking for elephants.
Republican control of at least the House of Representatives
after the mid-term elections could increase the prospect of
legislative gridlock and push stock prices higher.
[ID:nLDE69B1SO]

For a graphic on markets and mid-term elections, click
here. http://link.reuters.com/jyz97p

Elections could pressure Pentagon spending

Significant Republican gains in November elections could
fuel pressure to cut weapons funding despite a huge push by top
Pentagon officials to keep the defense budget stable.
[ID:nN11125879]

Scenarios: Possible permutations in Congress vote

The November 2 elections are likely to put a lot more
Republicans in Congress, but it’s uncertain if Republicans will
win control of either house — or if Democrats will stun the
nation and hang on to both chambers. [ID:nN12112272]

TCF Financial sues over U.S. financial reform law

Financial reform is facing another legal challenge in a
sign that the courts could become an increasingly important
battleground over how the industry is regulated. TCF Financial
Corp said its banking unit is challenging a section that limits
the fees banks can receive when their debit cards are used.
[ID:nSGE69B0I7]

What we are blogging:

Bachmann says her “high-profile” congressional race
targeted by top Democrats

Michele Bachmann, who started the “Tea Party Caucus” in the
House of Representatives this summer, says her “high-profile”
congressional race is being targeted by some very high-profile
Democrats.

For Tabassum Zakaria’s full post, click here.
http://blogs.reuters.com/frontrow/2010/10/12/bachmann-says-her-high-profile-congressional-race-targeted-by-top-democrats/

Washington Extra-A moratorium on moratoriums