Quiet signing of abortion bill fulfills deal on new healthcare law

In the aftermath of the frantic dealmaking that consumed Washington the past few weeks, U.S. President Barack Obama quietly signed an executive order barring federal funding for elective abortions in a concession to anti-abortion Democrats who voted for the health-care overhaul. Rep. Bart Stupak (D-Michigan), leader of an anti-abortion bloc in the House of Representatives whose support was crucial for the approval of the sweeping health-care proposal, according to the New York Times. Obama signed the bill into law on Tuesday in an elaborate White House ceremony. In contrast, Wednesday's signing of the executive order was done in the Oval Office with no fanfare in front of a few invited lawmakers, with no media present. Pro-choice lawmakers did not object to the order because it merely complied with existing federal law, the Times said. Meanwhile, on Capitol Hill, Senate Democrats rejected a host of amendments and moved toward passage of a companion health-care reform bill that would raise subsidies for senior and low-income citizens and take the nation's banks out of the student loan business. The bill would turn the federal government into the direct lender for student loans, instead of the guarantor as it is now, and increase the maximum dollar amount students can receive in federal Pell grants. The move is expected to cost the banking industry -- including federal lending giant Sallie Mae -- billions of dollars in revenue. Citigroup, JPMorgan Chase and Bank of America, banking giants that received billions of dollars in assistance from the government as part of the financial system bailout, have traditionally been the largest beneficiaries of the student loan program, the Times said.

Lessons learned? Federal Reserve asks for some of its billions back

Here we go again! News that the U.S. Federal Reserve had asked some banks to repay money they got from last year's $700 billion financial system bailout would seem to be good news, since it means those institutions have recovered. But what many U.S. banks who are trying to repay the Troubled Asset Relief Program really want is to escape the tighter oversight imposed by the federal government as a condition of receiving taxpayer funds, the Reuters international news service reported Tuesday. Citing an unnamed source, Reuters said nine of the 10 banks that were among the 19 stress-tested in May and found to need additional capital are now clamoring to leave the program, which provided billions in capital to more than 500 banks and a few struggling industrial companies. But the nine, including Bank of America Corp., Citigroup, Wells Fargo & Co. and Fifth Third Bancorp, began to prosper again in no small part due to the restrictions imposed by the program. Requirements for participation included perfectly sensible limits on executive compensation, dividend payouts and share buybacks. If those banks are released from the program, they also get released from those requirements. What is to prevent them from doing the same things that got them into so much trouble? Sure, there are regulators, but there were regulators before and the financial collapse still happened. The 10th bank, GMAC Corp., is not expected to be able to raise capital anytime soon. The 10 banks that passed the June test repaid the government in June and have already left the program, including JPMorgan Chase & Co., and Goldman Sachs Group Inc. Citigroup's situation is different from the other stress-tested banks because the federal government invested billions of dollars in shares of the bank's common stock and trust-preferred securities in an effort to keep it solvent.