Friday PM June 25th, 2010

BP says relief well completion on target for mid-August…Congress agree on rewrite of financial regulations…G-8 economic conference begins in Toronto…


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BP says it’s on target for mid-August completion of a relief well, the best hope of stopping the oil gushing into the Gulf of Mexico. BP spokesman Bill Salvin says the crew drilling the first of two wells ran a procedure called a ranging run this week to confirm they’re drilling on the correct path. He says it showed the crews are where they thought they were. They started drilling the first relief well on May 2nd and now they’ve reached a depth of 16,725 feet. They need to drill about 3,000 feet deeper so they can intercept and relieve the pressure on the well that blew out when the drilling rig Deepwater Horizon exploded April 20th, killing 11 workers. Salvin says the well remains on pace to be completed during the first half of August.

A ship billed as the world’s largest oil-skimming vessel is making a Virginia port-of-call before heading to the Deepwater Horizon oil spill in the Gulf of Mexico. The oil-gulping ship “a whale” arrived at Norfolk International Terminal and is sailing to the Gulf. Owners of the 1,100-foot Liberian-flagged ship say they haven’t received government approvals to participate in the cleanup. But they’re hopeful that can be achieved during the three-day sail to the Gulf. The Asia-based TMT Group said its ship has the capacity to draw as much as 500,000 barrels of oily water over eight to 10 hours–many times the skimming capacity of fishing boats now working the Gulf.

The Internal Revenue Service wants its cut from oil spill victims who receive BP payments for lost wages. The agency says that under current law, BP payments for lost wages are taxable–just like the lost wages would have been. The IRS says payments for physical injuries or property loss are generally tax free. BP officials have agreed to create a $20 billion fund for spill victims, as well as a $100 million fund to support displaced oil rig workers. The IRS is planning to hold forums in seven cities in the Gulf region on July 17th to help oil spill victims with tax troubles or questions.

It took all night, but House and Senate negotiators have agreed on the most ambitious rewrite of financial regulations since the Great Depression. The legislation touches on a broad range of financial transactions, from the debit card swipe at a supermarket to complex securities deals cut on Wall Street. The bill now heads for final votes in both houses. Lawmakers hope to get it to the president by July 4th. The legislation, a priority of the president, sets up a warning system for financial risks and creates a consumer financial protection bureau to police lending. It forces large failing firms to liquidate and sets new rules for financial instruments that have been largely unregulated.

President Barack Obama says he’s “gratified” by the deal that Congress has worked out on overhauling Wall Street rules. The president says a compromise reached overnight includes about 90 percent of what he wanted. Obama made his remarks as he was leaving the White House to attend a summit of world leaders in Canada. He says he’ll discuss financial rules at the summit because the recent financial crisis proves that the world’s economies are linked.

World leaders are having serious differences over the best way to nurture a fragile global economic recovery, so much so that they are agreeing to disagree in a variety of key areas to move on to other subjects. Three days of talks began at a lakeside resort north of Toronto. The G-8 countries–the United States, Japan, Germany, France, Britain, Italy, Canada and Russia–will discuss proposals to increase support for maternal and child health care in poor nations and hold an outreach meeting with leaders of seven African nations. The G-8 will also spend time exchanging views on hot-button issues, such as Iran’s nuclear program and possible sanctions on North Korea following the sinking of a South Korean warship.

The government lowered its estimate of how much the economy grew in the first quarter of the year, noting that consumers spent less than it previously thought. The Commerce Department says that gross domestic product rose by 2.7 percent in the January-to-March period, less than the three percent estimate for the quarter that the government released last month. It was also much slower than the 5.6 percent pace in the previous quarter. The department’s report is the third of three estimates it makes for each quarter’s GDP, the broadest measure of the nation’s economic output. The first quarter’s growth rate declined from earlier reports because consumers spent less than previously estimated, while the nation imported more goods from overseas.

President Barack Obama has signed a bill that temporarily spares doctors from a 21 percent cut in Medicare payments. The measure delays cuts through the end of November while lawmakers work on a more permanent solution. There was some urgency to approve the $6.5 billion bill. Medicare officials announced last week that the program would begin processing claims it had already received for June at the lower rate. The money had been part of a larger bill to extend unemployment benefits for laid-off workers and provide states with billions of dollars to avert layoffs. That bill has been blocked by Senate Republicans because of the cost.

Congressional Democrats are looking for ways to salvage their election-year jobs agenda after the Senate failed to pass a bill extending unemployment payments. Senate Democrats cut billions from the bill to attract enough Republican votes, but they fell three votes short of the 60 required to crack a GOP filibuster. The demise of the bill means unemployment benefits will phase out for more than 200,000 people a week. Governors who had been counting on federal aid will now have to consider a fresh round of budget cuts, tax increases and layoffs of state workers.

The iPhone 4 has arrived, but for some people the wait continues as Apple sprints to keep up with fierce demand for its latest gadget. From Tokyo to San Francisco, some stores started selling out of Apple’s newest iPhone just hours after it went on sale yesterday. Some would-be buyers walked away disappointed. Tensions grew at Apple stores that hadn’t run out. An Apple spokeswoman says demand is “off the charts,” and that the company is working hard to get phones into customers’ hands as quickly as possible.

India’s cabinet has approved pushing for the former head of Union Carbide to be extradited over the toxic gas leak in 1984 that killed an estimated 15,000 people. Public ire over the world’s worst industrial disaster in the Indian city of Bhopal resurfaced this month after a court convicted seven former employees of “death by negligence.” India will renew an extradition request with U.S. authorities for former Union Carbide chief Warren Anderson. His wife says her elderly husband is in poor health, and has been haunted by the Bhopal disaster.

Austin leaders have voted to spend $100,000 to study how to pay for a proposed $1.3 billion urban rail system. The Austin City Council also approved a plan pushing back a possible light rail line bond election by a year, to 2012. The rail finance study by Public Financial Management, Austin, is expected to be completed this fall. The proposal includes rail service to Austin-Bergstrom International Airport. A commuter line, Capital Metro’s Metrorail, opened in March with service connecting Leander and downtown Austin.

Experts say grocery stores are closing in rural areas across the U.S., forcing many residents to drive long distances to get food and sapping communities of their vitality and sales tax revenue. Lois Wright Morton studies rural communities at Iowa State University. She says one reason local markets fail is that many residents prefer to drive to larger cities with a Walmart or other large store that offers lower prices and a larger inventory. But closings create hardships for elderly and poor residents who can’t make the drive. To address the problem, the federal government plans to spend $400 million a year to bring groceries to urban and rural areas without them. The goal is to wipe out so-called food deserts within seven years.

The federal government’s top antitrust investigator says the Department of Justice is keeping a watchful eye on the nation’s dairy industry. Assistant Attorney General Christine Varney said at a hearing in Madison on antitrust issues that the Department of Justice wants to promote fairness in the dairy industry. She says the department knows that dairy farmers are concerned about lagging prices and consolidation in the industry. U.S. Agriculture Secretary Tom Vilsack says the purpose of the daylong hearing is to gather information about whether the playing field is fair in the dairy industry.

More than two dozen proposed specialty license plates for Texas are up for public comment through July 1st. The Vendor, via, is seeking input on plates ranging from Ford, to critters from the Fort Worth Zoo, to sunflowers, to Mighty Fine Burgers. If approved by the state, my plates hopes to have as many as 28 new designs available in late August. Prices range from $55 to $195 for a specialty one-year plate.

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