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Federal News Digest — November 3, 2011

Washington Post

Fed downgrades growth forecasts, sees high unemployment for years ahead [Federal Reserve] – Neil Irwin reports on the Federal Reserve’s latest assessment of the U.S. economy – that unemployment will abate slower than previously predicted due to a stagnant housing market and high consumer debt, but he reports that the Fed decided not to take any new action

New snow policy for federal workers: ‘Shelter in place’ [Office of Personnel Management, federal workers] – Lisa Rein reports on proposed changes in weather-related leave policies announced by the Office of Personnel Management: announcing government office closings earlier and letting workers stay at the office until dangerous weather conditions pass rather than dismissing them all at once

Former HUD official details lapses in housing-construction fund for poor [Dept. of Housing and Urban Development] – Debbie Cenziper reports that according to former and current officials in the Housing and Urban Development’s Office of Inspector General, lax oversight of HUD’s HOME Investment Partnerships Program, that funnels funds to state and local government for affordable housing projects, led to fraud; HUD Secretary Donohue recommends that Congress give the department authority to monitor local construction projects that receive HOME funding

Energy Department couldn’t manage stimulus money [Energy Dept., Labor Dept., Solyndra] – Ed O’Keefe reports on the Energy Dept.’s Inspector General’s testimony to Congress summarizing more than 100 investigations conducted by his office into the Energy Dept.’s stimulus spending – the department was charged with spending $32.5 billion, an amount $8 billion greater than its budget  – and he concluded that the rush to spend funds in order to stimulate job growth combined with the inability of state and local governments to allocate the funds resulted in poor outcomes, like the Solyndra debacle

Budget cuts will mean troop cuts, chiefs say [Defense Dept., Joint Chiefs of Staff, federal budget] – Walter Pincus reports that the members of the Joint Chiefs of Staff told Congress that the required $465 billion in cuts to defense spending over ten years will result in reducing forces in every one of the four services – Army, Marines, Navy and Air Force

MF Global brokerage has customer shortfall of $600 million, CFTC says [Commodity Futures Trading Commission, MF Global] – Linda Sandler and Tiffany Kary report on the bankruptcy proceedings of the broker-dealer firm MF Global – led by former senator and governor of New Jersey, Jon Corzine – including more details about the firm’s use of customers’ funds to cover the firm’s losses

New York Times

Having the watchdogs to tea [Federal Election Commission] – The Times argues that Congress should now reform the highly politicized Federal Election Commission, which is responsible for enforcing campaign laws, especially as the country enters “the most money-drenched campaign in history”

Georgia men held in plot to attack government [FBI, Internal Revenue Service, Bureau of Alcohol, Tobacco, Firearms and Explosives, domestic terrorism] – Kim Severson and Robbie Brown report that FBI informants uncovered a plot by four senior citizens, including a Navy veteran, who were members of a fringe militia group to blow up government buildings and kill federal employees

Wall Street Journal

Glaxo settles with U.S. for $3 billion [Justice Dept., Food and Drug Administration, prescription drugs] Jeanne Whalen reports that drug-maker GlaxoSmithKline has agreed to pay $3 billion to settle civil and criminal charges by the Justice Dept. that Glaxo illegally marketed the diabetes drug Avandia for off-label use and defrauded Medicaid; the settlement is the largest of any drug manufacturer for illegal marketing practices

Regulators enter the MF fray [Securities and Exchange Commission, Commodity Futures Trading Commission, MF Global] – Jean Eaglesham, Aaron Lucchette and Jacob Bunge report that the Securities and Exchange Commission is investigating whether the now-bankrupt brokerage firm MF Global made misleading statements to the SEC; meanwhile questions are also being raised about regulators’ failure to detect problems leading up to the firm’s collapse

Feds shift tracking defense [Justice Dept. cellphone-tracking] – Jennifer Valentino-Devries reports that the Justice Dept. has reversed itself in a case involving a “stingray” – a device that can track a cellphone even when it is not in use – now saying that use of the device in this particular case does constitute a “search;” the about-face is seen as an effort to avoid disclosing details about the device

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