Political Scene

BUDGET

Debt-panel chiefs paint gloomy picture

BOSTON | The heads of President Obama’s national debt commission are painting a gloomy picture as the nation struggles to get its spending under control.

Republican Alan Simpson and Democrat Erskine Bowles told a meeting of the National Governors Association on Sunday that everything needs to be considered - including curtailing such popular tax breaks as the home mortgage deduction.

“This debt is like a cancer,” Mr. Bowles said in a sober presentation nonetheless lightened by humorous asides between him and Mr. Simpson. “It is truly going to destroy the country from within.”

Mr. Simpson said the entirety of the nation’s current discretionary spending is consumed by the Medicare, Medicaid and Social Security programs.

“The rest of the federal government, including fighting two wars, homeland security, education, art, culture, you name it, veterans, the whole rest of the discretionary budget, is being financed by China and other countries,” Mr. Simpson said. China alone currently holds $920 billion in United States IOUs.

The 18-member commission Mr. Simpson and Mr. Bowles head is charged with coming up with a plan by Dec. 1 to reduce the government’s annual deficits to 3 percent of the national economy by 2015. The total federal debt next year is expected to exceed $14 trillion - about $47,000 for every U.S. resident.

FEC

Palin PAC donates $87,500 to hopefuls

JUNEAU, Alaska | Sarah Palin’s political action committee contributed at least $87,500 to candidates she has endorsed in the past few months, according to a report filed Sunday with the Federal Elections Commission.

Candidates receiving money from Mrs. Palin for the period covering April 1 to June 30 include former Gov. Terry Branstad, who won last month’s Republican gubernatorial primary in Iowa, and Joe Miller, who is challenging Sen. Lisa Murkowski of Alaska in the August Republican primary. Each received $5,000.

But SarahPAC’s financial disclosure also shows Mrs. Palin spending more than $210,000 on consulting.

Among Mrs. Palin’s other high-profile endorsements, Republican Carly Fiorina, who is running for the U.S. Senate from California, received $2,500. Sharron Angle, who is challenging U.S. Senate Majority Leader Harry Reid in Nevada, also got $2,500. South Carolina Republican gubernatorial candidate Nikki Haley, for whom Mrs. Palin personally campaigned, got no money, according to the filings.

Mrs. Palin has more than $1 million on hand to help campaigns this fall, PAC treasurer Tim Crawford said.

“We’re going to really help a lot of Republican candidates get a chance to win,” he said.

JUSTICE

Holder says Russians posed threat to U.S.

While they passed along no U.S. secrets, the 10 Russian sleeper agents involved in the spy swap posed a potential threat to the U.S. and received “hundreds of thousands of dollars” from Russia, Attorney General Eric H. Holder Jr. said.

“Russia considered these people as very important to their intelligence-gathering activities,” he told CBS’ “Face the Nation” in an interview broadcast Sunday.

He defended the decision to allow the 10 to return to Russia in exchange for the release of four Russian prisoners accused of spying for the West because the swap presented “an opportunity to get back … four people in whom we have a great deal of interest.”

White House press secretary Robert Gibbs, sidestepping the question of whether Russia’s espionage poses a threat to the U.S., said the swap came amid improved relations between the two countries.

“The economic discussions that President [Dmitry] Medvedev and President Obama had just recently and the progress that we’ve made in reducing nuclear weapons - and hopefully we’ll get a treaty through Senate this summer that will further reduce nuclear weapons - means our security is stronger and safer and our relationship is stronger,” Mr. Gibbs said on NBC’s “Meet the Press.”

VETERANS AFFAIRS

Obama: More stress help for vets

The government is taking what President Obama calls “a long overdue step” to aid veterans with post-traumatic stress disorder, making it easier for them receive federal benefits.

The changes that Veteran Affairs Secretary Eric Shinseki will announce Monday fulfill “a solemn responsibility to provide our veterans and wounded warriors with the care and benefits they’ve earned when they come home,” Mr. Obama said in his weekly radio and online address Saturday.

The new rules will apply not only to veterans of the Iraq and Afghanistan wars, but also to those who served in previous conflicts.

No longer will veterans have to prove what caused their illness. Instead, they will have to show that the conditions surrounding the time and place of their service could have contributed to their illness.

“I don’t think our troops on the battlefield should have to take notes to keep for a claims application,” the president said. “And I’ve met enough veterans to know that you don’t have to engage in a firefight to endure the trauma of war.”

Veterans advocates and some lawmakers have argued that it sometimes could be impossible for veterans to find records of a firefight or bomb blast.

DNC

Iowa again to have lead political role

Iowa and New Hampshire should keep their lead roles in the Democratic presidential nominating process in 2012, say party officials preparing for President Obama’s expected re-election bid.

While some states have chafed at the pre-eminent role played by the two states, the Democratic National Committee is proposing to stick with tradition.

The party said Saturday that Democratic caucuses in Iowa would be held Feb. 6 - about a month later than in 2008 - under a plan adopted by the party’s Rules and Bylaws Committee.

New Hampshire’s Democratic primary would be held on Feb. 14, Nevada Democrats would vote on Feb. 18, and South Carolina Democrats on Feb. 28. The recommendations will be voted on by the DNC membership at its August meeting in St. Louis.

Republican officials have yet to solidify their early primary dates but seem likely to stick with the same order of states.

SENATE

Finish line in sight for financial overhaul

Big changes are in store for the financial world from a government crackdown more than a year in the making.

Democratic leaders in the Senate are trying to secure the final votes needed to pass legislation this coming week that would impose the most sweeping rules on banks and Wall Street since the Great Depression.

Banks might see their bottom lines suffer. Lenders will have to disclose more information. Borrowers will have to prove their ability to repay. The masters of high finance will find it harder to sidestep regulations. Government watchdogs will be under orders to look more suspiciously at risky behavior.

Not all the changes will occur overnight once Congress gets the legislation to President Obama.

NGA

Leader of governors group focuses on grads

BOSTON | The incoming head of the National Governors Association said Sunday he will make increasing the number of students who complete college his focus during his scheduled yearlong tenure.

West Virginia Gov. Joe Manchin III, a Democrat, assumed the chairmanship of the NGA on Sunday from Vermont Gov. Jim Douglas, a Republican. Nebraska Gov. Dave Heineman, a Republican, replaced Mr. Manchin as vice chairman.

Mr. Manchin said he will work to unite governors, higher education officials, campus leaders and corporate chief executives behind the college initiative he calls “Complete to Compete.”

“If we don’t improve college completion rates in this country, our children will be less educated than we are,” he told reporters. “That will be the first time in the history of the United States of America that will have happened. That should be the most alarming statistic to get you motivated to make changes than anything else we can do.”

Whether Mr. Manchin will be there to see the effort to fruition is a question. He has said it’s “highly likely” he will announce Monday he is running this fall for the Senate seat vacated by the death of Democratic Sen. Robert C. Byrd.

FDA

New weight loss drugs ready for review

Dieters, doctors and investors get their first extensive look at the first of a trio of new weight-loss drugs this week. The hope is that the new drugs can succeed where many others have failed: delivering significant weight loss without risky side effects.

With U.S. obesity rates nearing 35 percent of the adult population, expectations are high for the first new prescription drug therapies to emerge in more than a decade. Even a modestly effective drug has blockbuster potential.

None of the three medicines represents a breakthrough in research. Drugmakers have made little headway in understanding and treating the causes of overeating. Two of the drugs submitted for approval simply combine existing drugs - an anticonvulsant and an amphetamine - but have worrying side effects. The third, a new medication, is safer but less effective.

The quest for a blockbuster weight loss drug has been plagued for decades by safety issues. The most notable was Wyeth’s diet pill drug combination fen-phen, which was pulled off the market in 1997 due to links to heart valve damage and lung problems.