The WonkLine: August 6, 2009

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According to a Wall Street Journal analysis, “Wall Street banks and lawyers could collect nearly $1 billion in fees from the Federal Reserve Bank of New York and American International Group Inc. to help manage and break apart the insurer.”

Analysts at Deutsche Bank predict that 48 percent of homeowners with a mortgage “are likely to owe more than their properties are worth before the housing recession ends,” while University of Utah analysts estimate that the rate of homeownership will “drop to about 63.5% by 2020 — the lowest since 1985.”

The Washington Post reports that “the Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home-loan market.”


Today, the Obama Administration will unveil a plan to overhaul the highly criticized U.S. detention system by creating more centralized authority and eliminating the current “patchwork of jail and prison cells.”

The number of petitions for US green cards from employers trying to permanently hire foreign workers has plummeted from 235,000 in 2007 to 36,000 in 2009 due to the shrinking job market, long application processing times, and mass layoffs.

A new report by the University of Virginia shows a 36% decline in aggravated assaults after Prince William County local police officers were given the power to enforce immigration laws, though only 3% of those arrested for aggravated assault were undocumented immigrants

Health Care

“Pressed by industry lobbyists, White House officials on Wednesday assured drug makers that the administration stood by a behind-the-scenes deal to block any Congressional effort to extract cost savings from them beyond an agreed-upon $80 billion.” This suggests that the White House will not support a deal between the Progressive Caucus and the Blue Dog Democrats to allow Medicare to negotiate drug prices.

Rep. Brad Miller (D-NC) is not holding any town hall meetings this recess because “his offices have received threatening phone calls, including at least one direct threat against his life.”

Massachusetts is going to try to kill off fee-for-service.

Climate Change

“In a victory for environmentalists, the United States Court of Appeals for the Ninth Circuit, in San Francisco, reaffirmed a lower-court decision to reinstate a Clinton-era rule that substantially limited development of roads on national forest lands.”

The National Association of Clean Air Agencies — “state and local clean air regulators” — “sent a letter yesterday to every U.S. senator urging them to use the House bill as a baseline and to build upon several key provisions to improve the climate program.”

Coal and natural-gas lobbying groups have formed a “circular firing squad,” as America’s Natural Gas Alliance runs ads about coal’s high pollution and the National Mining Association counters with ads about natural gas’s high cost.

National Security

Former President Bill Clinton urged North Korea to free detained South Koreans and make progress on the issue of abducted Japanese citizens, South Korean and Japanese officials said Thursday. Clinton made the requests to North Korean leader Kim Jong Il during a rare meeting in Pyongyang earlier this week that secured the freedom of two U.S. journalists detained for 140 days for allegedly entering the North illegally, the officials said.

Iranian President Mahmoud Ahmadinejad began work on Thursday to set up his new government, facing unrelenting protests over his re-election and divisions even within his own hardline support base.

Indicating support for the International Criminal Court, Secretary of State Hillary Rodham Clinton said Thursday it was “a great regret” that the United States was not a member of the court, an institution that has long been treated warily by the Pentagon.