Washington, D.C., United States (AHN) – The U.S. Federal Reserve would likely keep the record-low interest rates, Treasury markets indicate.

According to a Federal Bank of Cleveland study, the U.S. economy is forecast to grow by only 1.1 percent in the 12 months ending June 2012. That rate is less than half of the central bank’s current forecast and would likely result in delaying any key lending rate increase.

The Fed has held benchmark interest rates from zero to 25 basis points since December 2008.

Given the slower growth of the American economy, analysts said that the Fed is not likely to hike interest rate until June next year. That would make it the longest period that the central bank has held on to a low key lending rate since the 1940s when the Fed was forced to buy Treasuries.

From 1937 through 1947, the Fed kept its rediscount rate at 1 percent. It was the last time the American central bank maintained a prolonged monetary support for the ailing U.S. economy.

Another restraint to the expansion of the U.S. economy would be spending cuts to be agreed by U.S. President Barack Obama and Congress before the Aug. 2 deadline to hike Washington’s debt limit of $14.3 trillion.

However, analyst said the biggest hindrance to raising the overnight lending rate from almost zero would be the U.S. economy’s failure to create more jobs. The recession and the global financial crisis led to the loss of 8.7 million jobs in the U.S. in 2008 and 2009. In 2010, only 1.7 million jobs were created, resulting to national unemployment rate rising to 9.2 percent in June from 8.8 percent in March.

Fed Chairman Ben Bernanke placed a condition of sustained period of strong job creation as a basis for declaring an economy recovery. That translates into a gross domestic product growth rate between 2.7 to 2.8 percent.

View full post on Interest Rate Stories

WASHINGTON (UPDATED: 2:40 p.m. ET, 6/8/11)-CUNA President/CEO Bill Cheney said that the Senate’s failure to delay implementing the Federal Reserve’s interchange debit fee cap will “create a train wreck that will affect every consumer with a debit card.”

View full post on Credit Union Stories

Washington, DC, United States (KaiserHealth) – Medicaid will stop paying for about two dozen “never events” in hospitals, such as operations on the wrong body part and certain surgical-site infections, federal officials said today.

Currently, about 21 states have such a nonpayment policy. The 2010 federal health law, in effect, expands the ban nationwide. The rule published today gives states until July 2012 to implement it.

Medicaid is a joint state-federal program for the poor and disabled. Under the rule, Medicaid funds can’t be used to pay doctors and hospitals for services that “result from certain preventable health care-acquired illnesses or injuries,” the officials said.

A similar regulation has been in place for Medicare, the federal health program for the elderly, since 2008.

“These steps will encourage health professionals and hospitals to reduce preventable infections, and eliminate serious medical errors,” said Donald Berwick, administrator of the Centers for Medicare and Medicaid Services. “As we reduce the frequency of these conditions, we will improve care for patients and bring down costs at the same time.”

Some physician groups have concerns about the new policy. “Simply not paying for complications or conditions, that, while extremely regrettable, are not entirely preventable, is a blunt approach that is not effective or wise for patients or the Medicare or Medicaid program,” Dr. Michael Maves, CEO of the American Medical Association, said in written comments to CMS in March.

He said the medical association has “grave concerns” about states extending the non-payment policy beyond the conditions considered by Medicare. The American Hospital Association expressed similar reservations.

Cindy Mann, deputy director of CMS and director of Medicaid, said the rule gives states the option to expand the nonpayment policy to health care settings besides hospitals and to add other types of “never events.”

She said the policy would help improve patient care and drive down costs in the $364 billion program. “All (health care) payers are looking to gain better value for the dollars they spend and Medicaid is no different,” she said.

But the costs savings from the change is relatively modest. According to the proposed rule, Medicaid would save about $35 million over the next five years from stopping pay for such medical mistakes. Medicare has saved about $20 million a year under its policy.

“It’s a welcome first step into the national debate on quality,” said Matt Salo, executive director of the National Association of Medicaid Directors. “Clearly many states have already moved ahead, although that should never be taken as rationale for forcing the rest of them to do … well, anything. But improving quality in a coordinated fashion between Medicare and Medicaid is important.”

This is list of preventable conditions that Medicaid will no longer pay for:

• Foreign Object Retained After Surgery
• Air Embolism
• Blood Incompatibility
• Stage III and IV Pressure Ulcers
• Falls and Trauma
• Fractures
• Dislocations
• Intracranial Injuries
• Crushing Injuries
• Burns
• Electric Shock
• Catheter-Associated Urinary Tract Infection (UTI)
• Vascular Catheter-Associated Infection
• Manifestations of Poor Glycemic Control
  • Diabetic Ketoacidosis
  • Nonketotic Hyperosmolar Coma
  • Hypoglycemic Coma
  • Secondary Diabetes with Ketoacidosis
  • Secondary Diabetes with Hyperosmolarity
• Surgical Site Infection Following:
  • Coronary Artery Bypass Graft (CABG) – Mediastinitis
  • Bariatric Surgery
  • Laparoscopic Gastric Bypass
  • Gastroenterostomy
  • Laparoscopic Gastric Restrictive Surgery
• Orthopedic Procedures
  • Spine
  • Neck
  • Shoulder
  • Elbow
• Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE) Following Total Knee Replacement or Hip Replacement – with pediatric and obstetric exceptions
• Surgery on the wrong patient,
• wrong surgery on a patient, and
• wrong site surgery

Source: CMS

pgalewitz@kff.org

– Provided by Kaiser Health News.

View full post on All Stories

Washington, D.C., United States (AHN) – The Obama administration has found an unexpected ally in a ratings agency in the White House’s battle with Republican legislators over spending cuts and hiking the federal debt limit. On Thursday, Moody’s warned that it may downgrade Washington’s credit rating if the U.S. debt ceiling is not hiked soon.

Moody’s said that the U.S. credit rating could downgraded because of a very small, but increasing risk of a short-lived default, which would likely translate into higher interest rates at a time when the country’s recovery is again on the slow lane.

The ratings agency anticipated there would be a political battle between the Obama administration and Republican legislators before the debt ceiling would be lifted, but Moody’s said that it failed to consider the worsening conflicting positions between the two parties. Washington wanted to raise the debt limit to $16.7 trillion from the current $14.3 trillion, but with no major spending cuts.

Moody’s warning came on the heels of a lower outlook by Standard & Poor’s of the AAA U.S. debt rating to negative from stable because of the political wrangling.

The House voted on Tuesday not to hike the federal debt limit without major spending cuts. At the Wednesday White House meeting of Republican legislators with U.S. President Barack Obama, the legislators asked the administration for a detailed plan on budget cuts to solve the impasse.

House Speaker John Boehner justified the lower house’s refusal to give in to Obama’s request because raising the debt limit beyond spending cuts would cost jobs for Americans. Obama, however, warned that failure to hike the debt limit soon would lead to dire consequences for the fragile, but recovering U.S. economy.

View full post on All Stories

Washington, D.C., United States (AHN) – First time jobless claims dropped by 6,000 during the week ending May 28, but still remained above 400,000 mark, signaling continued weakness in the employment sector of the economy.

The advance figure for seasonally adjusted initial unemployment compensation insurance claims was 422,000, down from the previous week’s revised figure of 428,000, according to the U.S. Department of Labor.

Economists say that initial unemployment claims must drop below the 400,000 mark and stay there for the labor market to recover from the massive job losses of the recent recession.

However, bringing the unemployment rate down might not happen anytime soon, since first time claims for unemployment compensation have stubbornly remained above the 400,000 mark for the past eight weeks.

News was no better for the less volatile 4-week moving average, which was 425,500, down by 14,000 from the previous week’s revised average of 439,500.

In addition, the advance seasonally adjusted insured unemployment rate at 3.0 percent for the week ending May 21 was unchanged from the previous week.

However, the total number of people claiming jobless benefits in all programs for the week ending May 14, the latest week for which such data is available, did drop. That number was 7,682,830, down by 56,742 from the prior week.

The largest increases in initial claims for the week ending May 21 were:

• California (+7,053)
• Massachusetts (+1,948)
• South Carolina (+1,066)
• Wisconsin (+1,019)
• Pennsylvania (+959)

View full post on Economy, Business And Finance Stories

Washington, D.C., United States (AHN) – The Republican-dominated U.S. House of Representatives, as expected, rejected a proposal to increase the federal debt limit without budget cuts on Tuesday.

On a 318-97 vote, the House turned down a proposal from the Obama administration to increase Washington’s debt limit to $16.7 trillion from the current $14.3 trillion.

All Republican legislators voted against the measure that would have hiked the federal debt limit to an amount enough to cover government bills until the end of 2012.

In rejecting the measure, the GOP said they would push for sharp spending cuts and binding budget process reforms, House Majority Leader Eric Cantor said.

Cantor cited survey results that majority of American voters do not favor increasing the debt limit without spending cuts. The legislator said American families and businesses want the federal government to live like the rest of the country does – that is to tighten their belts and step relying on credit.

Even some Democrats voted against the measure after some party members criticized the bill as a Republic political strategy because the Republic leaders brought the bill to a vote and then asked caucus members to vote against it.

The defeat of the measure was imminent despite the warning by the U.S. Treasury Department that the U.S. faces defaulting on its debt if Congress does not allow the federal government to borrow more by August.

View full post on All Stories

Washington, DC, United States (KaiserHealth) – Trying to spur enrollment in a key new benefit of the 2010 health law, the Obama administration announced today it is slashing premiums for new high-risk insurance plans and no longer requiring applicants to submit a rejection letter from private insurers.

Since the plans were introduced in most states last summer, enrollment has fallen far short of expectations; only about 18,000 people have signed up. The Congressional Budget Office had estimated that as many as 4 million uninsured Americans would be eligible and that 200,000 would be enrolled by 2013. The government set aside $5 billion to fund the plans.

Citing the low enrollment, some Republicans including Rep. Fred Upton, R-Mich, have criticized the administration’s handling of the program. Twenty-seven states run their own plans; the federal government operates them in 23 states and the District of Columbia. The changes, which occur July 1, affect only federally run plans. The plans are intended to serve as a bridge to help people with medical conditions until insurance market reforms required by the law are implemented in 2014. At that time, insurers will no longer be able to deny coverage or charge higher rates for people with pre-existing conditions, a major benefit of the law.

To be eligible for the plans, applicants have to be uninsured for at least six months and have a pre-existing condition.

In the states where the plans are run by the federal government, applicants will no longer have to prove they were denied coverage by an insurance company. Instead, they can provide a doctor’s letter stating that they have a medical condition. At least a dozen state-run plans do not ask for a denial letter from an insurer. The premiums will drop as much as 40 percent in 17 states plus the District where the federally administered plans operates, the administration estimates. These decreases will help bring premiums closer to the rates in each state’s individual insurance market. In the six states where high-risk plan premiums were already similar to what healthy people pay for individual plans, premiums will remain the same. States that will see a 40 percent drop in premiums are Alabama, Arizona, Delaware, Florida, Kentucky and Virginia. In other states, premium reductions range from 2.1 percent in Mississippi to 38.3 percent in Minnesota.

In Florida, where 770 people have enrolled, a person 55 and over who subscribes to the so-called standard plan will see his or her monthly premium for the standard plan fall by $150 to $376.

To further generate interest in the plans, HHS this fall will begin paying insurance agents and brokers for signing up people.

“These changes will decrease costs and help insure more Americans,” said Health and Human Services Secretary Kathleen Sebelius. The administration released a chart showing changes to premiums in states with federally administered plans.

pgalewitz@kff.org

– Provided by Kaiser Health News.

View full post on All Stories

Washington, DC, United States (AHN) – The U.S. State Department on Tuesday barred seven firms from trading with the U.S. because they supplied oil to Iran in violation of 1996 sanctions against the Islamic country.

Sanctioned were Venezuela’s state oil company, Petróleos de Venezuela, Ofer Brothers Group of Israel, Petrochemical Commercial Company International (PCCI) of the United Kingdom, Royal Oyster Group and Speedy Ship of the United Arab Emirates, Tanker Pacific of Singapore and Associated Shipbroking of Monaco.

Petroleos was found to have delivered $50 million worth of petroleum products to Iran between December 2010 and March this year.

Under the sanctions, the firms cannot bid for government contracts, obtain export licenses, and obtain export-import financing.

The department also sanctioned more than 15 people and companies in China, Iran, North Korea, Syria and elsewhere for illicitly trading in missile technology and weapons of mass destruction. They were banned from vying for U.S. government contracts and from buying and selling U.S. defense articles.

View full post on Economy, Business And Finance Stories

Washington, DC, United States (AHN) – President Barack Obama’s proposal for a resolution to the stalemate in Israel was rejected by Israeli Prime Minister Benjamin Netanyahu and Hamas, while being welcomed by Europe and receiving a mixed response in the Middle East.

Israel immediately rejected Obama’s suggestion that Israel return to its 1967 borders as an outline for peace negotiations with Palestinians. Obama further suggested that any land swaps deviating from those borders be mutually agreed upon by both Israel and the Palestinians.

Although international law does not allow a nation to keep or occupy territory it seizes in war, Israel does not recognize international law on this point. And Israel maintains it has a right to occupy, build upon and keep the territories of the West Bank and Gaza that it seized from Palestinians in the 1967 war.

Ahead of a planned meeting with Netanyahu, Obama said in a speech Thursday that Palestinians needed to know the basic shape of their territory and that Israel needed to know it was secure.

But Netanyahu rejected the proposal to return to its internationally recognized 1967 borders, saying that giving up territory seized in war would render its borders indefensible.

Hamas officials also rejected the plan. Hamas is the militant political party elected to govern the Gaza Strip. However, many nations, including the U.S. and Israel, classify Hamas as a terrorist organization.

View full post on All Stories

Washington, D.C., United States (AHN) – U.S. House Speaker John Boehner acknowledged on Monday that Washington needs to raise its debt limit. He made the admission on a radio interview on the day that the U.S. federal government reached its $14.3 trillion debt limit.

Boehner said Congress, at some point, will have to hike the debt ceiling but will do it in a way that would address the country’s long-term fiscal challenges. House Republicans favored combining $2 trillion spending cuts and no tax hikes to support a higher debt limit.

Treasury Secretary Timothy Geithner said on Monday that because Washington reached the debt ceiling on May 16, he would suspend investments in federal retirement funds until Aug. 2 while Washington continues borrowing in the debt markets.

Geithner assured federal retirees and employees that the measure would not affect their pensions because the funds will be made whole once Washington’s debt limit is increased. The secretary asked Congress to hike the legal borrowing limit to protect the full faith and credit of the U.S. and avoid consequences on Americans.

Boehner said that while he agreed with President Barack Obama’s call to raise the debt ceiling, raising it without dealing with the problem would be an irresponsible move on the part of Congress.

Obama favored a tax hike along with the increase in debt ceiling. But the president resisted making cuts in some areas such as medical research, infrastructure or college loans for needy students.

View full post on All Stories