Photograph by John Moore/Getty Images

A registered nurse checks out an elderly patient in Lakewood, Colorado.

The Obama White House has a take on the report today that the Medicare trust fund will last two years longer than previously projected — and, naturally, Obamacare figures in the equation.

“The Medicare Trustees reported some good news for seniors and taxpayers: The Medicare program will be solvent through 2026, nearly a decade longer than projected at the time of passage of the Affordable Care Act,” write Jeanne Lambrew,  deputy assistant to the president for health care, and Gene Sperling, director of the National Economic Council, on the White House’s blog. “This is 2 years longer than projected last year. ”

The report from the trustees “also shows that the long run actuarial deficit in the Hospital Insurance Trust Fund – a measure of its long-term fiscal health – has been cut by more than 70 percent since enactment of the health care law. The long-run Medicare deficit has fallen from 3.88 percent of taxable payroll in the 2009 Trustees Report to 1.11 percent in this report,” they write.

“These long-run gains are matched by short-term relief: the Trustees also project that the Part B premium will not increase between 2013 and 2014, keeping out-of-pocket costs for beneficiaries down. Medicare cost growth has remained at historically low levels over the past three years even as new benefits for preventive care and prescription drugs have helped tens of millions of beneficiaries access care at lower cost. ”

“The law reduces prescription drug costs by closing the donut hole, a policy that has already saved more than 6 million seniors more than $700 each. And more than 32 million seniors have accessed a free preventive service under the law, helping them stay healthy and avoid future illness,” they write.

This comes “on the heels of a string of reports of good news for Medicare, for seniors, and for overall health care costs. This morning, USA Today reported on how Affordable Care Act is driving innovation across the health industry by the creation of new care models, new payment incentives, and greater efficiency by health care providers – improvements that will benefit all health care consumers,” say they.

“The Medicare report demonstrates, once again, the importance of the Affordable Care Act, which has strengthened Medicare’s finances by reining in health care costs,”  Treasury Secretary Jacob. Lew, who is the managing Medicare trustee, said in a statement today.

Republicans have considered raising the Medicare eligibility age and switching to a system in which beneficiaries get subsidies to buy private insurance, instead of the government paying for their care. Obama has sought to mostly keep the current structure and instead find ways to boost efficiency of the program and reduce excess costs,partly through provisions in the 2010 health-care law he helped create.

See the full Bloomberg report on the Medicare report. 

Original post is Obamacare Bolstering Medicare: White House’s Take on Trustees by Political Capital.

Photograph by Justin Lane/EPA/Corbis

The National Debt Clock and an estimate of the Untied States’ national debt, as well as an estimate of each family’s share of that amount, on Dec. 31, 2012, in New York City.

That’s the U.S. debt ceiling as of Monday, according to the Treasury Department.

It’s the first number the Treasury has released since President Barack Obama signed a suspension of the limit in early February, Bloomberg’s Ian Katz and Kasia Klimasinska report. The ceiling was $16.394 trillion at the time and was suspended through May 18. It increased to account for deficits that accrued since February.

Treasury Secretary Jacob J. Lew said May 10 a one-time payment of $59.4 billion from Fannie Mae confirms that the U.S. won’t hit the cap until September.

He announced in a letter to lawmakers Monday new steps to keep the government running under the limit. The measures include a “debt-issuance suspension period” which frees up about $6.4 billion a month, Bloomberg’s Meera Louis reports.

The Treasury also can continue borrowing for several months by shifting money among government accounts.

Original post is Bloomberg by the Numbers: $16.699 Trillion by Political Capital.

Photograph by Scott Eells/Bloomberg

Traders work on the floor of the New York Stock Exchange (NYSE) as Ben S. Bernanke, chairman of the U.S. Federal Reserve, speaks on television in New York.

When the Federal Reserve announced it would purchase $45 billion a month of Treasury bonds to support the economy, it probably anticipated there’d be plenty to buy. After all, the Fed made its December announcement just a few months after the Treasury closed out the 2012 fiscal year with a $1.09 trillion deficit.

Yet last week the Congressional Budget Office estimated the deficit will shrink to $642 billion, the smallest shortfall in five years. Suddenly the Fed’s purchases, which work out to an annual pace of $540 billion, are poised to gobble up almost all the new debt the U.S. will issue next year.

That may be a winning situation for the Fed, where policy makers are seeking to eventually shrink their monthly purchases. A reduction would push up bond yields and raise borrowing costs across the economy.

“If the Treasury reduces supply as the Fed reduces purchases of Treasuries, then your net impact on yields should be left unchanged,” said Drew Matus, deputy chief U.S. economist for UBS Securities LLC in Stamford, Connecticut, and a former analyst on the New York Fed’s open market desk.

The Treasury Department will sell less debt as surging tax revenue, automatic spending cuts and payments from mortgage-finance companies Fannie Mae and Freddie Mac narrow the budget gap. All else equal, that shrinking supply of Treasuries should put downward pressure on yields.

The Fed owned $1.86 trillion of Treasury securities as of May 15, according to its weekly balance sheet report. That’s about a sixth of the $11.4 trillion in total outstanding marketable U.S. debt. Much of that supply may be held by investors or institutions that don’t intend to sell their holdings.

While the falling supply of Treasuries could help when the Fed wants to slow its purchases, it could create a headache for the central bank if it instead wanted to continue the program. By buying so much U.S. debt, the Fed could dry up liquidity in the market.

Under the current bond-buying program, known as QE3 for the third round of quantitative easing, the Fed is purchasing $45 billion a month of Treasuries and $40 billion a month of mortgage-backed securities.

One reason for concern about the health of markets: In its first round of QE, when the Fed bought $1.25 trillion of mortgage bonds, the market for those bonds malfunctioned. The Fed bought so much that Wall Street was unable to complete an unprecedented amount of trades. Weekly failures to deliver or receive mortgage debt climbed above more than $1 trillion in 2010, compared with a weekly average of $150 billion in the five years through 2009, according to Fed data.

The open-ended nature of the current QE program could create a new shortage in the Treasury or mortgage market as the Fed’s balance sheet grows, said Stephen Stanley, the chief economist at Pierpont Securities LLC in Stamford, Connecticut.

“The longer QE goes on, the more likely it is to be more of a problem from a liquidity standpoint,” said Stanley, a former Richmond Fed economist.

If the Fed is happy with the economy’s progress, it may be an easy decision to slow their purchases. If they want to keep going full speed ahead, the falling deficits may present a challenge.

Original post is Shrinking Deficit Likely to Help Fed Reduce Bond Buys by Political Capital.

Photograph by STR/AFP via Getty Images

A vehicle and the surround buildings burn after they were set on fire inside the U.S. consulate compound in Benghazi late on September 11, 2012.

President Barack Obama, addressing a live television audience from the White House, said the commissioner in charge of the IRS has been removed following the agency’s targeted scrutiny of conservative groups.

“The misconduct uncovered is inexcuseable,” Obama said in a brief statement delivered from the East Room. “Americans have a right to be angry about it, and I am angry about it. I will not tolerate this kind of behavior at any agency, especially the IRS.”

“We’re going to hold the responsible parties accountable,” he said, announcing that Treasury Secretary Jack Lew had accepted the resignation of the acting IRS commissioner, Steven Miller.

The president said “new safeguards” will be put in place to ensure this doesn’t happen again, and he will cooperate with Congress in its oversight “to get this thing fixed.”

“I’ll do everything in my power to ensure that nothing like this happens again,” Obama said in remarks delivered in under three and a half minutes.

The White House has faced widespread criticism for not standing up more quickly to the questions emerging from the fatal attacks on a U.S. mission in Libya, the Internal Revenue Service’s handling of requests for tax exemptions from Tea Party-related groups and the Justice Department’s tracking of Associated Press reporters’ phone calls.

The White House rose to all three today:

– Obama faced the television cameras this evening after meeting with high-level Treasury officials at the White House today about what the IRS’s inspector general had called “ineffective management” in the screening of requests for tax-exempt status for groups organized under section 501(c)(4) of the U.S. tax code — groups that are supposed to have only limited political activity. IRS employees in Cincinnati screened for the words Tea Party in their scrutiny. The broadcast and cable networks lined up to carry his words live.

– The Obama White House this afternoon released almost 100 pages of e-mail traffic among officials at the White House, CIA and State Department. The e-mails show the Central Intelligence Agency made major revisions to administration talking points after the attack that killed the U.S. ambassador to Libya in Benghazi —as they were developed and before they were delivered to Congress and supplied to United Nations Ambassador Susan Rice. See the talking points here.

– This afternoon, the White House allowed that it had spoken with Sen. Chuck Schumer of New York about reintroducing a shield law to protect the confidential sources of reporters, following the revelation that the Justice Department had tracked the phone records of AP reporters citing an investigation into a leak with national security implications. The president supports the First Amendment, press secretary Jay Carney said today — a shield law should prove it.

In that scandal-industrial complex, that’s one busy day.

Original post is Charge of the Obama Brigade: IRS, Benghazi, Reporters by Political Capital.

Photograph by Simon Dawson/Bloomberg

Jacob “Jack” Lew, U.S. treasury secretary, arrives to attend the Group of Seven (G-7) finance ministers and central bank governors meeting at Hartwell House in Aylesbury, U.K., on May 10, 2013.

U.S. Treasury Secretary Jacob J. Lew took his plea for stronger global economic growth to a British country house hotel where Louis XVIII, the exiled king of France, stayed for five years.

Lew is urging Group of Seven finance ministers to emphasize growth over austerity and is facing some resistance. The U.S. position is fostering ambiguity just as the G-7 should be recommitting to debt reduction plans, Canadian Finance Minister Jim Flaherty said today.

Unlike Group of 20 meetings, which are larger and normally held in cities, this session is taking place at Hartwell House & Spa at Buckinghamshire near the town of Aylesbury, in an area of rolling green hills and grazing cows, about 45 miles northwest of London.

Lew and other top finance officials are staying at the Hartwell. The Hartwell’s website says the house dates back almost 1,000 years to the reign of Edward the Confessor and that Louis XVIII was there from 1809 to 1814.

Most U.S. Treasury officials are lodging at a Holiday Inn about five miles away. Mark Sobel, a deputy assistant secretary and negotiator for the Treasury, was spotted leaving the hotel this morning, wearing a suit and lugging his backpack over his shoulder. (Read Bloomberg’s profile of Sobel, Treasury’s “bad cop,” here.)

Journalists are covering the event mainly from a white tent on the Hartwell grounds. Most of the announcements for the press from the British organizers have to do with the schedule for a shuttle bus running between Hartwell and the Haddenham and Thame Parkway rail station about 10 minutes away.

Original post is Lew Urges G-7 to Focus on Growth by Political Capital.

Photograph by Andrew Harrer/Bloomberg

The U.S. Department of the Treasury building in Washington, D.C.

That’s how much government debt the Treasury Department projects it will pay down in this year’s second quarter.

That would mark the first net decline in debt since 2007, before the deepest recession since the Great Depression took hold. The federal debt is about $16.8 trillion.

The projection comes amid cutbacks in federal spending, including the automatic across-the-board cuts known as sequestration, and tax receipts exceeding forecasts.

Bloomberg’s Meera Louis has more here.

Original post is Bloomberg by the Numbers: $35 Bln by Political Capital.

Photograph by Chip Somodevilla/Getty Images

JP Morgan Chase CEO Jamie Dimon, left, and Goldman Sachs CEO Lloyd Blankfein leave the White House after they and 13 other bank heads met with President Barack Obama on March 27, 2009 in Washington, DC.

President Barack Obama will meet with the heads of the world’s biggest banks, including Goldman Sachs Group Inc.’s Lloyd C. Blankfein and JPMorgan Chase & Co.’s Jamie Dimon, seeking to strengthen ties that have been strained by new U.S. curbs on fees and trading.

The NTSB begins public meetings on the Boeing 787 lithium battery fire.

In the Senate, a cloture vote will determine whether lawmakers consider a bill to expand the background checks on gun purchases.

Bloomberg View Columnist Amity Shlaes joins a Cato Institute discussion on tax reform under President Calvin Coolidge.

Speaking of taxes, eliminating most deductions, lowering overall tax rates would be a “good idea,” voters say 47 percent to 35 percent, while 55 percent say the rich pay less than their fair share, according to a Quinnipiac University poll released today. Almost two-thirds of American voters have someone else prepare their tax return.

Treasury Secretary Jacob Lew and Acting OMB Director Jeffrey Zients head to Capitol Hill to sell the Obama administration’s budget to hearings of House and Senate committees, while the House Appropriations panel hears from Acting Commerce Secretary Rebecca Blank on her agency’s spending plans.

The House Armed Services Committee hears from Defense Secretary Chuck Hagel and Joint Chiefs Chairman Martin Dempsey on the Pentagon’s budget request. The House Select Intelligence Committee holds a hearing on threats to the U.S. with witnesses including Director of National Intelligence James Clapper, CIA Director John Brennan and FBI Director Robert Mueller. The Atlantic Council holds a discussion of the future of the Air Force, with topics including budget cuts, competitor nations and new technologies.

A House Energy and Commerce panel, chaired by Rep. John Shimkus, an Illinois Republican, holds a hearing on the Coal Ash Recycling and Oversight Act of 2013 as the Senate Environment Committee hears from EPA head nominee Gina McCarthy at her confirmation hearing. NOAA holds a conference call on its Drought Task Force.

The rebound in homebuilding after a six-year slump should generate as many as 500,000 jobs this year and 700,000 in 2014, including related services, estimates Russell Price, a senior economist at Ameriprise Financial. Price is the top forecaster of employment over the past two years, according to data compiled by Bloomberg.

The SEC’s Dodd-Frank Investor Advisory Committee meets today. A Senate Banking panel holds a hearing on the role of regulators and consultants in the scrapped multibillion dollar settlement over mishandled foreclosures. A House Financial Services panel on capital markets holds a hearing on derivatives provisions of the Dodd-Frank Act.

The Washington International Trade Association holds the third in a four-part series of discussions on Trans-Pacific Partnership negotiations, this one on U.S. priorities and objectives. Bloomberg Government’s Robert Litan and Navigant Economics Managing Director Hal Singer discuss how FCC policies affect investment in telecommunications at ITIF.

And this evening, filmmakers Ken Burns and David McMahon discuss their film “The Central Park Five” after a screening at the National Press Club.

Original post is Washington Daybook: Banks, Budgets and Guns by Political Capital.

Photograph by Drew Angerer/Getty Images

Attorney General Eric Holder in Washington, DC.

Attorney General Eric Holder looks like he’s ready to follow President Barack Obama’s lead on sequestration.

Holder, in an interview today on the Tom Joyner Morning Show, said the president did the right thing when he announced yesterday that he would return 5 percent of his salary to the U.S. Treasury in a show of solidarity with furloughed government workers.

If furloughs occur “in the Justice Department that is certainly something that I will consider,” Holder said when asked if he would follow Obama’s lead. “But we’re working to try to make sure that our workforce does not have to be furloughed.”

If Holder does have to furlough employees, he will deduct from his pay the maximum number of days any employee may be furloughed, which would likely be 14, according to a Justice Department official.

In a memo to department employees last week, Holder said he would put off any furlough decisions until mid-April as the department works through the final funding levels established by Congress.

“I fully understand you may be anxious about the possibility of furloughs in your component; however, the Department needs more time to determine if we can avoid furloughs this fiscal year,” Holder said in the March 28 memo to the department’s employees.

Original post is Holder Willing to Hold Pay, if Needed by Political Capital.

Photograph by Scott Eells/Bloomberg

Timothy Geithner and his wife Carole Sonnenfeld Geithner, attend the U.S. presidential inauguration in Washington on Jan. 21, 2013.

Updated March 22 at 1:30 pm:

It takes a Treasury secretary to turn a good investment.

Former Treasury Secretary Tim Geithner is looking for a modest return on his Bethesda, Maryland, home.

Geithner and his wife Carole bought the 2,537 square foot house in 2009 for $950,00 and have listed it for $995,000.

Bloomberg’s  John Gittelsohn reported today that there is a contract on the place, after jut a week of listing.

Here’s a virtual tour of the place. 

Geithner, who finished his term as  Treasury secretary in January, has found a buyer for his house, under contract now with some contingencies, but isn’t dependent on a buyer selling a current house to close the deal, according to the Web-site of brokerage Redfin Corp. It was listed March 14.

That would make it a post-bubble purchase that has held up fairly well — though only in  economically isolated enclaves like suburban Washington does 2,500 square feet fetch close to $1 million.

The rambler-style home has four bedrooms and 2.5 baths. The kitchen has had some upgrades since its 1954 construction.

“No war rooms for planning world domination that we could find, but there is a deck overlooking a large backyard,” Curbed.com notes.

Geithner has been replaced by Treasury Secretary Jacob (Jack) Lew., who already worked at the White House, his housing needs unchanged.

Original post is Geithner’s Profit: Asking for $45,000 — Update: Contract by Political Capital.

Photograph by Andrew Harrer/Bloomberg

People walk through the Internal Revenue Service (IRS) building in Washington.

There are some 311,566 federal workers and retirees delinquent in their federal taxes.

They owe the government $3.5 billion, according to the Internal Revenue Service.

That was as of 2011.

The number of delinquents was up by 11.5 percent.

Still, some 97 percent of all federal workers and retirees are up to date on their taxes.

The delinquency rate rose from 2.85 percent to 3.17 percent — an 11.5 percent increase.

Among large executive branch agencies, the Department of Housing and Urban Development had the highest percentage of delinquent workers at 4.42 percent.

The Treasury Department, which includes the IRS, had the lowest, at 1.08 percent — whew.

Employees of the Board of Governors of the Federal Reserve System had a 5.55 percent delinquency rate, while active-duty military had a 2.02 percent rate.

That $3.5 billion owed wouldn’t make much of a dent in the $16 trillion federal debt.

See the full report at Bloomberg.com.

Original post is Federal Worker Tax-Delinquency Up — Federal Reserve Above Average by Political Capital.