U.S. budget panel to look at ‘Gang of Six’ savings
By Richard CowanWASHINGTON, Oct 18 (Reuters) - A sweeping, bipartisan plan
developed earlier this year to cut $3.7 trillion from U.S.
deficits will be discussed on Wednesday by the special
congressional deficit-reduction panel, aides said on Tuesday.The wide-ranging deficit-reduction plan was crafted in the
U.S. Senate by the so-called “Gang of Six” several months ago.It called for tackling U.S. government budget deficits on
three main fronts: reducing security and non-security
discretionary spending; imposing some reforms on the costly
Medicare healthcare program for the elderly; and reforming the
U.S. tax code to capture at least $1 trillion in additional
revenues.Gang of Six members “are coming in to have a discussion”
with the “super committee” on deficit-reduction that is trying
to find at least $1.2 trillion in savings over the next 10
years, a committee aide told Reuters.The Gang of Six — three Democratic and three Republican
members of the Senate — got a lot of attention earlier this
year when it unveiled the outline of a plan to cut U.S.
deficits by around $3.7 trillion over 10 years.At the time, it was the only bipartisan deficit-reduction
plan composed in a bitterly divided Congress. A significant
part of its work was based on the findings in December of a
presidential deficit-reduction commission that called for about
$4 trillion in government savings over a decade with a mix of
spending cuts and revenue increases.But a contentious fight in the summer between Democratic
President Barack Obama and congressional Republicans over
increasing U.S. borrowing authority stopped the Gang of Six
dead in its tracks.SECOND LOOKNow, as the super committee races against a Nov. 23
deadline for a majority of the 12-member panel to find at least
$1.2 trillion in savings — on top of the $917 billion enacted
in early August — the Gang of Six ideas are getting a second
look.It was not clear whether the super committee was interested
in particular elements of the Gang of Six plan or whether it
wanted to “go big,” as some members of Congress have been
urging, by crafting a deficit-reduction plan that exceeds its
$1.2 trillion minimum.A larger budget-cutting plan would hearten Wall Street and
credit rating agencies. In August, Standard and Poor’s cut the
U.S. AAA credit rating one notch amid chaos in Washington over
budgets and the government debt limit.The super committee has been meeting in secret and some
budget watchers in the private sector have speculated that it
was having a difficult time coming up with even the $1.2
trillion.Since the summer, the Gang of Six has grown to around 40
senators from both political parties who have endorsed its
goals, according to one Senate aide.That represents a significant portion of the 100-member
Senate, where a simple majority will be needed by the end of
this year to pass any super committee plan.Among the major elements of the Gang of Six program are:
Spending caps on discretionary government programs through
2015, changing the measure of inflation to slow the growth of
Social Security benefits and cutting Medicare costs while
maintaining “the essential healthcare services that the poor
and elderly rely upon,” according to a summary.On taxes, the Gang of Six called for simplifying the tax
code by reducing the number of special tax breaks and by
setting three brackets with income tax rates of 8-12 percent,
14-22 percent and 23-29 percent.The Gang of Six also called for repealing the Alternative
Minimum Tax that initially was aimed at the wealthiest but
increasingly threatens to hit middle-class taxpayers.Corporate tax rates would be 23-29 percent, down from the
current 35 percent.
US STOCKS-Wall St on track for 2nd week gains after Google,data
NEW YORK Oct 14 (Reuters) - U.S. stocks advanced on
Friday, putting the S&P 500 on track for back-to-back weekly
gains for the first time since early July after
better-than-expected retail sales and results from Google .Increased optimism that a solution to the euro-zone crisis
would happen added to the positive mood.The benchmark S&P index is up 13 percent from the Oct. 4th
intraday low of 1,074.77, which had temporarily tipped it into
bear market territory.Google Inc led the Nasdaq higher as shares jumped
5.9 percent to $592.16, a day after its results blew past Wall
Street’s expectations, helped by strong advertising sales and
deft cost controls.Apple Inc rose 2.6 percent to $419.23 as the
newest version of its iPhone went on sale across the country.”There are these positive catalysts that may be in place
— earnings being one and a more formalized policy action out
of Europe, more clarity there,” said Natalie Trunow, chief
investment officer of equities at Calvert Investment
Management in Bethesda, Maryland, which manages about $14.8
billion.”To the extent earnings come through as expected or better
than expected, which we think is more likely to be the case,
then that will provide sufficient support for the equity
markets,” she said.The Dow Jones industrial average was up 105.01
points, or 0.91 percent, at 11,583.14. The Standard & Poor’s
500 Index was up 13.63 points, or 1.13 percent, at
1,217.29. The Nasdaq Composite Index was up 30.83
points, or 1.18 percent, at 2,651.07.French and German officials are trying to put flesh on the
bones of a crisis resolution plan in time for a European Union
summit on Oct. 23, overshadowing Standard and Poor’s cut of
Spain’s credit rating, a move that underlined the challenges
facing Europe’s finance ministers.Among U.S. economic data, September retail sales rose 1.1
percent from a month earlier, beating the median forecast in a
Reuters poll for a rise of 0.7 percent. Sales growth during
August was revised upward to 0.3 percent.
Weak markets hit Canada ETF assets in Sept-BlackRock
* ETF assets under management fell 1.8 pct in Q3TORONTO, Oct 12 (Reuters) - Assets managed in exchange
traded funds in Canada dropped by 3 percent to C$39.1 billion
($38.3 billion) in September due to slumping equity markets,
though inflows to the funds were positive, according to a
report released on Wednesday.Canadian ETFs overall had net inflows of C$1.1 billion in
September, said the monthly report from the Canadian ETF arm of
New York-based BlackRock , the world’s largest money
manager.ETFs are investment vehicles that own an array of stocks,
similar to mutual funds, but which have shares that are traded
on public exchanges.For the third quarter, ETF assets in Canada dropped 1.8
percent, largely due to a more than 12 percent slide on the
Toronto Stock Exchange’s main index.Net inflows into Canadian ETFs in the quarter were more
than C$2.5 billion, BlackRock said.A total of fifteen new ETF were introduced in the
three-month period, for a total of 213.Low fees and greater transparency have helped ETFs attract
strong investment inflows in recent years. Unlike mutual fund
shares, which are re-priced once a day, the price of an ETF is
publicly quoted and visible throughout the day.BlackRock’s Canadian iShares business had a market share of
68.4 percent in September, down 0.2 percentage points from its
August report. Its assets under management were C$26.7 billion,
compared with C$27.70 billion a month earlier.Claymore Investments’ market share held steady at 15.8
percent, with C$6.2 billion in ETF assets under management.Horizon ETF assets were at C$3.09 billion, down from C$3.19
billion, and Bank of Montreal’s fell to C$2.69 billion
from C$2.74 billion.Royal Bank of Canada was a new entrant in the Canadian ETF
market in the month, with C$32 million in assets. It joins
recent entries Invesco Trimark’s PowerShares, with C$340
million, up from C$315 million, and XTF Capital eXchange Traded
Funds, with C$50 million, down from C$56 million.Vanguard Group, one of the biggest mutual fund and ETF
managers in the United States, also plans to set up shop in
Canada.
