Politics: Daily Briefing: Sales growth at U.S. firms slows considerably

Published by: Clark Barrow on Tuesday September 11th, 2012

Clark Barrow

By CLARK BARROW - Sales growth slows for U.S. companies; Congress pursues another measure to keep budgetless government operating.

DAILY BRIEFING - SUMMARY

· SLOW DOWN - The rate of annual sales growth at private U.S. companies has slowed considerably since the beginning of 2102, according to data released by financial data firm Sageworks Inc.

· SEPTEMBER 11, 2001 - The U.S. will remember the roughly 3,000 people killed by the September 11, 2001, terrorist attacks on the World Trade Center and the Pentagon on Tuesday, an event never far from the minds of New Yorkers, Washingtonians and all Americans.

· CONGRESS - U.S. House appropriators have released the text of a bill to keep the government operating after the end of the fiscal year on Oct. 1. The bill increases the rate of spending to conform with the August 2011 debt ceiling deal, which set the 2013 rate at $1.047 trillion.

· DEFERRED INACTION - The flow of applications for a program allowing undocumented immigrants to remain in the U.S. and work legally has been slowed by concerns about what they must disclose and uncertainty about who will be the next president.

· CHICAGO - Teachers in the nation’s third-largest school district went on strike Monday morning after negotiations for a new contract collapsed, giving some 350,000 students an unexpected day off but leading to frustrations among parents and indications that a settlement may not be close.

· ISRAEL - Prime Minister Benjamin Netanyahu said Israel and the United States were in talks on setting a "clear red line" for Iran's nuclear program, but the two allies remained at odds on Monday over whether to spell out a clear threshold for military action against Iran.

· IRAN - Iran is set to unveil a “domestically produced” cruise missile capable of reaching Israel and being launched “from land, sea, and air,” according to Iranian media reports.

WHAT WE KNOW

ECONOMIC NEWS

· SLOW DOWN - The rate of annual sales growth at private U.S. companies has slowed considerably since the beginning of 2102, according to data released by financial data firm Sageworks Inc.

o The rate is currently at 5.4%, down from nearly 11% in January and down from about 8% at the same time last year, the study revealed. Sageworks said the figures were drawn from financial statements filed by the companies during the past three months.

o Sageworks said private companies drive “significantly more” than 50% of GDP and 65% of new job creation in the U.S. Consequently, private company financial performance is widely viewed as an important gauge of the health of the broader U.S. economy, the data firm said.

· The Dow Jones Industrial Average fell 52.35 points, or 0.4%, to 13,254.29.

· The S&P 500 lost 8.84 points, or 0.6%, to 1,429.08

· The Nasdaq Composite dropped 32.40 points, or 1.03%, to 3,104.02.

COMMODITIES

· The U.S. national average for a gallon of regular gasoline is $3.84.

o When President Obama was inaugurated, in January 2009, the U.S. national average for a gallon of regular gasoline was $1.85. Average gasoline prices are currently 107 percent higher than they were when Mr. Obama became president.

· Crude for October delivery added 12 cents, or 0.1%, to $96.54 a barrel on the New York Mercantile Exchange.

· Gold for December delivery declined $8.70, or 0.5%, to end at $1,731.80 an ounce on the Comex division of the New York Mercantile Exchange.

NEWS TO WATCH

· ELECTION - As of today, there are 56 days until the November 2012 presidential election.

· SEPTEMBER 11, 2001 - The U.S. will remember the roughly 3,000 people killed by the September 11, 2001, terrorist attacks on the World Trade Center and the Pentagon on Tuesday, an event never far from the minds of New Yorkers, Washingtonians and all Americans.

o Events planned to remember the 9/11 attacks on their 11th anniversary will take place around the world. Here are some highlights of the day’s plans:

§ NEW YORK CITY - New York City’s official memorial service will take place at the site of the World Trade Center attacks on Tuesday morning beginning at 8:30 a.m. Attendees will honor the dead with 4 minutes of silence beginning at 8:46, the moment of the first impact. Events will continue throughout the day, and tributes will wrap up at sunset when the city will relight the Tribute in Light at the site. The tribute consists of an arrangement of powerful spotlights in the shape of the two towers and arising from the site where they stood.

§ WASHINGTON, D.C. - At the Pentagon in Arlington, Virginia, where 184 lives were lost in the attack, special services will be held Tuesday morning at the permanent memorial on the grounds. President Obama is expected to attend.

§ SHANKSVILLE, PENNSYLVANIA - Vice President Biden is scheduled to speak at a memorial service Tuesday honoring the passengers and crew of United Flight 93 which crashed in the rural Pennsylvania community on 9/11 after those aboard the plane fought back against the terrorists.

· CONGRESS - U.S. House appropriators have released the text of a bill to keep the government operating after the end of the fiscal year on Oct. 1. The bill increases the rate of spending to conform with the August 2011 debt ceiling deal, which set the 2013 rate at $1.047 trillion.

o That is $19 billion more than U.S. House Republicans wanted next year and at least some conservatives can be expected to vote against the continuing resolution. The bill, the product of a U.S. House-Senate negotiation with input from the White House, contains no policy riders and House Democrats can be expected to support the bill along with House GOP leaders.

o In April 2011, U.S. House Republicans used the threat of a government shutdown to gain a cut in budget authority for the year of $38.5 billion. In its detail, the bill includes a nearly across-the-board spending increase of 0.6 percent, more than $6 billion. The overseas wars are funded at the Pentagon requested level of $88.5 billion.

· CONGRESS - Seeking to encourage Republican backing, two Democrats dropped controversial provisions in a bill they have pending that would allow a broader group of borrowers to employ an Obama administration program to refinance and save money on their mortgage.

o The bill, introduced by Sen. Robert Menendez, Democrat of New Jersey, and Barbara Boxer, Democrat of California, on Monday is unlikely to be approved by Congress but Democrats could try to make it a political issue in states hit hardest by the housing crisis.

o The revised bill seeks to help borrowers who are not underwater on their mortgage and have more than 20% equity in their homes to refinance employing the Obama administration program, known as the Home Affordable Refinance Program, or HARP. The HARP program currently seeks to help borrowers with no or little equity in their homes. It cuts fees and lowers administrative costs for refinancing, as long as the borrowers loans were sold to government-controlled housing giants Fannie Mae and Freddie Mac by May 31, 2009. The bill also seeks to eliminate appraisal costs for all borrowers and seeks to remove barriers to competition.

· WHITE HOUSE - After missing last week’s deadline to produce plans on how it would implement deep, automatic across-the-board cuts to defense spending early next year, the White House now says it will produce the report by Friday.

o The Office of Management and Budget owed a report to Congress last Thursday on the effects of the budget restrictions known as “sequestration,” which hawks have warned would be devastating to national defense. But President Obama missed the deadline as he prepared to deliver his acceptance speech at the Democratic National Convention in Charlotte, N.C.

o The White House has blown off several budget deadlines and having the defense cuts outlined during the convention would have marred the Democratic narrative on the final day of the convention.

PRESIDENT’S SCHEDULE

· In the morning, President Obama, with Mrs. Obama, will gather on the South Lawn of the White House to observe a moment of silence to mark the 11th anniversary of the September 11, 2011 attacks.

· Later in the morning, the president, with Mrs. Obama, will attend a September 11th Observance Ceremony at the Pentagon Memorial in Arlington, Virginia.

· In the afternoon, the president will visit with wounded warriors and their families at Walter Reed National Military Medical Center in Bethesda, Maryland.

· In the evening, the president will meet with U.S. Defense Secretary Panetta at the White House.

HAPPENING IN THE U.S. CONGRESS

U.S. SENATE

· The U.S. Senate is in session today.

U.S. HOUSE OF REPRESENTATIVES

· The U.S. House is in session today

TOPICS OF INTEREST

NATIONAL SECURITY

· DEFERRED INACTION - The flow of applications for a program allowing undocumented immigrants to remain in the U.S. and work legally has been slowed by concerns about what they must disclose and uncertainty about who will be the next president.

o During the first three weeks that the government accepted requests for "Deferred Action for Childhood Arrivals," as the program is known, nearly 40,000 individuals submitted applications, according to government officials and others familiar with the situation. The government began accepting requests on August 15.

o Administration officials said they had expected a flood of requests, creating in turn a large caseload for U.S. Citizenship and Immigration Services, a unit of the Department of Homeland Security. President Barack Obama announced the immigration policy shift, a significant exercise of executive authority, after failing to convince Congress to pass an overhaul of the immigration system, which risked alienating Hispanic voters who will be crucial to his re-election. His administration has deported record numbers of illegal immigrants.

FEDERAL GOVERNMENT

· DEFICIT - The U.S. federal deficit topped $1 trillion in the first 11 months of fiscal year 2012, according to the U.S. Congressional Budget Office, reaching $1.17 trillion, exceeding CBO’s August projections.

o “CBO estimates that the Treasury Department will report a deficit of $1.17 trillion for the first 11 months of fiscal year 2012,” CBO said Monday. The $1.17 trillion figure was $70 billion less than at the same point in fiscal year 2011, CBO noted, driven mostly on higher federal revenues

o The government ran a $1.3 trillion deficit in fiscal year 2011, a figure the government could once again reach if its September deficit is as large as its August deficit. The U.S. annual deficit has been more than $1.0 trillion for the last four consecutive years.

EDUCATION

· CHICAGO - Teachers in the nation’s third-largest school district went on strike Monday morning after negotiations for a new contract collapsed, giving some 350,000 students an unexpected day off but leading to frustrations among parents and indications that a settlement may not be close. The strike comes after more than a year of slow negotiations over teacher salary, health benefits and job security.

o The school board’s last offer to the teacher union included a 3 percent raise the first year and 2 percent raises the next three years. The package, which would cost $400 million and would keep increases for experience and credentials with some modifications. Overall, the proposed contract amounted to a 16 percent raise over four years for the average teacher.

o An analysis of salary figures provided by the Chicago Public Schools found that the Chicago teachers have the highest average salary of any city in the nation. But the Chicago Teachers Union said Chicago teachers rank second behind New York City educators.

o City officials promised to keep 400,000 students safe during the strike. The walkout in the nation's third-largest school district posed a tricky test for Mayor Rahm Emanuel and his city, as parents and school officials begin the task of trying to ensure nearly 400,000 students are kept safe.

o Meanwhile, the U.S. Department of Education said 79 percent of the 8th graders in the Chicago Public Schools are not grade-level proficient in reading while 80 percent are not grade-level proficient in math.

FOREIGN POLICY

MIDDLE EAST

· ISRAEL - Prime Minister Benjamin Netanyahu said Israel and the United States were in talks on setting a "clear red line" for Iran's nuclear program, but the two allies remained at odds on Monday over whether to spell out a clear threshold for military action against Iran.

o The Israeli leader, who has been pressing President Obama for a tougher line against Iran, again signaled that a sharper U.S. ultimatum for Iran could deter it from developing nuclear weapons and mitigate the need for a military response.

o Netanyahu's recent calls for world powers to set clear markers that would show they were determined to stop Iran's nuclear drive has suggested a growing impatience with the United States, Israel's main ally.

o The U.S., which has resisted the idea of laying down red lines for Iran in the past, has urged the Israeli leader to give diplomacy and sanctions imposed on the Islamic Republic more time to work to rein in Iran's nuclear work peacefully. But Obama has not ruled out military action if all else fails.

· IRAN - Iran is set to unveil a “domestically produced” cruise missile capable of reaching Israel and being launched “from land, sea, and air,” according to Iranian media reports.

o With a range of 2,000 kilometers, or 1,242 miles, the missile could easily reach Israeli cities, including Jerusalem.

o Meanwhile, the U.S. is “not setting deadlines” for Iran and still considers negotiations as “by far the best approach” to prevent Iran from developing nuclear weapons, U.S. Secretary of State Hillary Clinton said.

o While Clinton said in an interview yesterday that economic sanctions are building pressure on Iran, Israeli Prime Minister Benjamin Netanyahu said last week the sanctions aren’t slowing Iran’s nuclear advances “because it doesn’t see a clear red line from the international community.”

· SYRIA - The U.N. High Commissioner for Human Rights blamed on Monday both sides in the Syrian conflict for human rights violations and said that justice would eventually catch up with them.

o Addressing the 47-member U.N. Human Rights Council in Geneva, Navi Pillay reiterated that the Syrian government's actions might amount to war crimes and crimes against humanity.

o But Pillay also said he was concerned equally concerned about violations by anti-government forces, including murder, extrajudicial execution and torture, as well as the recently increased use of improvised explosive devices. Both government forces and militants had also deployed snipers who targeted civilians, she said.

· YEMEN - Security forces in Yemen have killed Said al-Shihri, described as the second-in-command of a regional branch of Al Qaeda, senior U.S. and Yemeni officials say. Al-Shihri's death is a major blow to the militant group.

o Al-Shihri is a former inmate of Guantánamo Bay who was released to Saudi Arabia in 2007 and put through a Saudi rehabilitation program for militants, according to the Guardian.

o Al Qaeda's Yemen branch took advantage of the political vacuum during unrest inspired by the Arab Spring last year to take control of large swaths of land in the south. But the Yemeni military has launched a broad U.S.-backed offensive and driven the movement from several towns.

AFRICA

· EGYPT - President Obama’s deputies are negotiating a $1 billion aid package with Egypt’s new Islamist government, even as Egypt’s cash-strapped military revealed that it is trying to buy $1 billion worth of German submarines that could threaten Israel’s fast-growing offshore energy projects.

o The German government has pointedly declined to deny the incendiary revelation about Egypt’s request to buy the two submarines.

o Instead, the German government offered vague support for Israel, which is facing renewed threats from Iran’s nuclear program and the Muslim Brotherhood’s rise to power in Egypt.

ASIA

· AFGHANISTAN - President Hamid Karzai welcomed Monday's handover of the main American-run prison to Afghan forces as a victory for Afghan sovereignty, though he and U.S. officials remain locked in a dispute over the fate of hundreds of Taliban and terror suspects behind bars.

o The United States is withholding the transfer of scores of inmates, reportedly out of concern that Afghan authorities may simply let some detainees go and no longer hold dangerous prisoners without charge.

o American irritation was apparent at the ceremony at the prison, about 25 miles north of Kabul. No higher ranking American officers attended, although the Afghan government sent its defense minister, army chief of staff and other officials.