Political Scene

CONGRESS

White House sends spending wish list

The Obama administration is pushing a pre-election shopping list on its Democratic allies in Congress as they prepare must-pass legislation to prevent a government shutdown next month.

Republicans are protesting the spending requests, which include $1.9 billion for school grants, financial help for the Postal Service and more than $4 billion to finance settlements of long-standing lawsuits against the government.

The administration also wants to renew parts of last year’s economic-stimulus measure, including $800 million for child care grants to states.

They’re all tacked onto a bill to continue funding the government past the Sept. 30 end of the fiscal year. Such bills typically don’t carry controversial legislation.

SENATE

Poll: Rubio clear leader in race

Republican candidate Marco Rubio has opened a clear lead in the Florida Senate race, becoming the latest “tea party” favorite to benefit from voter anger at Washington, a Reuters/Ipsos poll found Wednesday.

Six weeks ahead of Nov. 2 congressional elections, Mr. Rubio leads state Gov. Charlie Crist, a Republican-turned-independent, by 40 percent to 26 percent among likely voters, the poll found. Democrat Kendrick B. Meek trails at 21 percent.

The conservative tea party roiled Republican politics when a little-known candidate backed by the movement beat a veteran lawmaker in Delaware on Tuesday in the race to decide the Republican nominee for Senate in the November election.

The tea party is a loose-knit group of mostly Republicans concerned about reducing government spending and debt who are strong critics of President Obama. The group is gaining support this election season.

Florida, like other states, has a large “enthusiasm gap” with Republicans far more motivated to vote in November than Democrats. The poll said 82 percent of Republicans said they are certain to vote, compared with 61 percent of Democrats.

Mr. Crist and Mr. Meek are likely splitting Democratic votes, according to the poll.

When voters were asked their choice between Mr. Rubio and Mr. Crist if Mr. Meek was not in the race, the contest is essentially tied - Mr. Rubio at 46 percent and Mr. Crist at 45 percent.

HOUSING

Banks should share bailout costs

The nation’s largest banks have an obligation to pay some of the cost for bailing out mortgage buyers Fannie Mae and Freddie Mac because they sold them bad mortgages, a government regulator said Wednesday.

Edward DeMarco, the acting director for the Federal Housing Finance Agency, said the banks this summer have refused to take back $11 billion in bad loans sold to the two government-controlled companies, in written testimony submitted for a House subcommittee hearing Wednesday. A third of those requests have been outstanding for at least three months.

Mr. DeMarco said the banks have a legal obligation to buy back the loans and called the delays “a significant concern.” He said the government may take new steps to force those buybacks if “discussions do not yield reasonable outcomes soon.”

In an interview with reporters after the hearing, Mr. DeMarco declined to give further details on what the government might do next. He said only that “we’re looking for contractual obligations to be fulfilled.”

Fannie and Freddie buy mortgages and package them into securities with a guarantee against default.

The two mortgage giants nearly collapsed two years ago when the housing market went bust. The government stepped in to rescue them, and it has cost taxpayers about $148 billion so far. The rescue is on track to be the most expensive piece of stabilizing the financial system.

TRANSPORTATION

After blast, more oversight sought

The Obama administration wants Congress to tighten oversight of the nation’s pipelines and more than double penalties for some safety violations in response to a deadly gas explosion in California and a major oil spill in Michigan.

Legislation sent to Congress on Wednesday would increase from $1 million to $2.5 million the maximum fine for the most serious pipeline violations involving deaths, injuries or major environmental harm, the Department of Transportation said. It also would pay for an additional 40 inspectors and safety regulators over the next four years.

The proposal follows several accidents, including last week’s huge gas explosion in suburban San Francisco, that have called attention to the nation’s aging pipelines and how they are monitored. Transportation Secretary Ray LaHood said his department “needs stronger authority to ensure the continued safety and reliability of our nation’s pipeline network.”

Congress is expected to recess for midterm elections in the next few weeks, making it unlikely a bill can be enacted within the next two months. Rep. James L. Oberstar, Minnesota Democrat, chairman of the House Transportation and Infrastructure Committee, which was holding a hearing Wednesday on the Michigan oil spill, said he wants to “scrub” the proposal with the help of administration officials and lawmakers from both parties before the recess so that a bill can at least clear the pipeline subcommittee by then.

ARMY

Cemetery finds misplaced bodies

Arlington National Cemetery has discovered three people buried in the wrong graves.

The Army said Wednesday that officials opened three burial sites last month and found that the remains in each had been interred in mismarked graves.

The discovery follows an investigation into bookkeeping problems and burial mix-ups at Arlington, one of the nation’s most hallowed sites.

At the request of his father, the grave and casket of Marine Pfc. Heath Warner of Canton, Ohio, was opened on Wednesday. That grave was found to hold the remains of Warner, who was killed in Iraq in 2006.

Army spokesman Gary Tallman says he’s not aware of any other family requests for exhumations.

Officials say up to 6,600 graves might be unmarked or mislabeled on cemetery maps.

WHITE HOUSE

Obama urges action on tax cuts

President Obama is applauding two Republican senators who voted for a small-business bill and says he’d welcome that kind of cooperation on the divisive issue of extending tax cuts for the middle class.

Mr. Obama thanked Republican Sens. George V. Voinovich of Ohio and George LeMieux of Florida for voting to move the bill closer to final passage. Speaking in the Rose Garden after a Cabinet meeting Wednesday, Mr. Obama urged lawmakers to approve an extension of Bush-era tax cuts for middle-class families making less than $250,000 a year.

Mr. Obama says Republicans should stop holding those tax cuts “hostage.”

Republicans are insisting that tax cuts be extended for higher-income wage earners, too. Taxes for everyone will increase next year unless Congress acts.

JUSTICE

Drug company pays over Celexa

Forest Pharmaceuticals Inc. has agreed to pay more than $313 million and to plead guilty to obstruction of justice, distribution of the then-unapproved drug Levothroid and illegal promotion of Celexa for use in treating children and adolescents suffering from depression.

Forest Pharmaceuticals also will settle allegations that it caused false claims to be submitted to federal health care programs for the drug Lexapro as well as for Levothroid and Celexa, the Justice Department said Wednesday.

Forest Pharmaceuticals, headquartered near St. Louis, is a wholly owned subsidiary of New York-based Forest Laboratories Inc. Celexa and Lexapro are antidepressants; Levothroid is used to treat thyroid deficiency.

Court papers in the case say that Forest Pharmaceuticals began distributing Levothroid in the early 1990s without first obtaining approval from federal regulators.

Regarding Celexa, Forest Pharmaceuticals promoted the drug for pediatric use despite limited approval only for adult depression, the court papers state.

From wire dispatches and staff reports