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Federal News Digest — January 13, 2012

Washington Post

Obama to propose combining agencies to shrink federal government [President Obama, consolidation of government agencies] – David Nakamura and Ed O’Keefe preview the president’s announcement later today asking Congress for authority to consolidate trade and commerce functions of the Commerce Department, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency

Fed’s image tarnished by newly released documents [Federal Reserve] – Zachary A. Goldfarb reports that transcripts of Federal Reserve Board meetings in 2006 reveal that despite having all the economic indicators at their fingertips, including evidence of a slowing housing market, no one at the Fed – including current Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner – saw the impending financial crisis; former Fed Chairman Alan Greenspan, heralded at the time for his leadership, later admitted he was wrong to allow banks to operate with so little regulation

Obama asks Congress for debt limit hike [President Obama, federal debt ceiling] – David Nakamura reports that the president will ask Congress to increase the amount the federal government may borrow by $1.2 trillion in order to meet its obligations

Recess appointments constitutional, Justice Department says [Justice Dept. Office of Legal Counsel, Consumer Financial Protection Bureau, recess appointments] – Ed O’Keefe and Yian Q. Mui report that the Justice Department released a memorandum providing the legal support for the president’s recent recess appointments of the director of the Consumer Financial Protection Bureau and members of the National Labor Relations Board while the Senate was in pro forma session; Republicans have challenged the appointments as an unconstitutional power grab by the president

Cyber defense effort is mixed, study finds [Defense Dept., cyber-security] – Ellen Nakashima reports that an internal Defense Department study found weaknesses in a new  program intended to protect computer networks of defense contractors by using classified National Security Agency data

Study: simple measures could reduce global warming, save lives [NASA, global warming] – Brian Vastag and Juliet Eilperin report on a study by NASA’s Goddard Institute for Space Studies that finds reducing methane and soot in the atmosphere would slow global warming and simultaneously improve air quality; the report recommends specific measures that governments can take immediately, including “eliminating wood-burning stoves, dampening emissions from diesel vehicles and capturing methane released from coal mines”

U.S. probe relied heavily on firm’s own investigation, FBI memos show [Justice Dept., FBI, Securities and Exchange Commission] – David S. Hilzenrath reports that federal agencies – such as the Justice Department and Securities and Exchange Commission — whose budgets are stretched to the limit, allow targets of their investigations to investigate themselves; one case involved a whistleblower who claimed his company violated the Foreign Corrupt Practices Act by bribing Mexican officials

New York Times

Some lenders to students face greater U.S. scrutiny [Consumer Financial Protection Bureau, student loans] – Edward Wyatt reports that Richard Cordray, the new Director of the Consumer Financial Protection Bureau, said his agency will be scrutinizing lenders to students attending for-profit colleges; default rates at for-profit colleges have been as high as 50%

Court martial recommended in WikiLeaks case [Defense Dept., WikiLeaks] – Scott Shane reports that a military officer recommended Pfc. Bradley Manning face a court martial for his role in passing massive amounts of classified documents to WikiLeaks, which published the material online; senior military officers will now decide whether to follow the recommendation

Wall Street Journal

U.S. attempts to stem video outcry [Pentagon, Afghanistan] – Julian E. Barnes and Maria Abi-Habib report that Defense Secretary Panetta is doing damage control in the wake of a video showing U.S. Marines urinating on the dead bodies of Afghan Taliban; Panetta called Afghan President Karzai to express his outrage and he initiated investigations of the incident, which could result in criminal charges being brought against the soldiers

White House’s Kreuger warns of shrinking middle class [White House Council of Economic Advisors] – Damian Paletta covers the remarks of Alan Kreuger, Chair of the president’s Council of Economic Advisors, who spoke about income distribution in the U.S. since World War II, including a growing “unhealthy division” between income groups in recent decades

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