darren gersh, "nightly business report," washington.

. >> susie: here's darren gersh. >> reporter: republicans and democrats remain where they were a day ago-- close, but not close enough. senate majority leader harry reid said policy issues still divided the two sides with republicans refusing to compromise on funding for family planning services. >> they can keep their word and significantly cut the federal deficit, or they can shut down america's government over women's access to health care. if that sounds ridiculous, it's because it is ridiculous. >> reporter: house speaker john boehner rejected that characterization. the speaker said almost all the policy issues have been worked out. the sticking point is still spending. >> we're not going to roll over and sell out the american people like it has been done time and time again here in washington. when we say we're serious about cutting spending, we're damn serious about it. >> reporter: talks continued behind closed doors this afternoon. senate majority leader harry reid said staff was also working on a one-week extension of government funding that would also pay the troops throug

darren gersh reports. >> reporter: farmers will feel the cuts. so will students and businesses building roads. the house republican budget touches almost everyone in the country. house budget committee chairman paul ryan, the plan's author, says there is no other choice. >> our budget is our plan to tackle this country's greatest problems. if we don't take on these fiscal challenges head on, we will not be able to do this under our own terms. >> reporter: to head off a debt- driven economic crisis, house republicans propose what they call a "path to prosperity." there are no tax increases; instead, deductions and loopholes are cut, bringing the top individual and corporate tax rate down to 25%. there are no new reductions in defense, but house republicans propose cuts of more than $900 billion over the next decade from the president's plans for education, clean energy, and other non-security spending. another $1.8 trillion in savings come from cuts to programs like food and housing assistance. but ryan's deepest reductions compared with the presi

darren gersh, "nightly business report," washington. >> tom: here are the stories in tonight's n.b.r. newswheel: ahead of the fed decision on rates, strong earnings and consumer optimism boosted stocks to multiyear highs. the dow jumped 115 points, the nasdaq added nearly 22 and the s&p 500 up 12. big board volume cleared 900 million shares while nasdaq volume climbed firmly above two billion shares. concerns about jobs and inflation eased somewhat this month, sending consumer confidence higher. the conference board's index edged up to 65.4 from 63.8 in march. it's still far from the reading of 90 that shows a healthy economy. we haven't seen that level since the recession began in december of 2007. >> susie: ford's earnings accelerated 22% in the first three months of this year, the automaker's best quarter in 13 years. it earned 62 cents a share, much higher than the 50 cents analysts were expecting. revenues surged 16% to 33 billion dollars, $3 billion more than estimates. earlier today, i talked with ford's c.e.o. alan mulally and i asked him whether the company can stay in the fa

darren gersh takes a look. >> reporter: in washington they call it the grand bargain-- a big deal to tackle federal deficits, a deal so large everything is on the table: taxes, defense-- even entitlement programs like medicare. washington analyst andy laperriere says investors are underestimating the odds of a major turning point in federal spending. >> i think what we are going to see over the next couple of years is policy changes that would be unthinkable today to a lot of people and were certainly unthinkable a couple of years ago. >> reporter: that means bigger tax increases and deeper spending cuts than most investors now expect. laperriere says it may not happen this year, but it's coming. >> i still think we need an intervening election before we make the hard decisions about how we are going to balance the budget, and so i'd bet against big changes in entitlements programs over the next year and a half, but i think they're possible. >> reporter: but others read the government shutdown cliffhanger as a warning sign. changing washington's political and fiscal habits is never e

but first, darren gersh looks at what a weak dollar could mean for you. >> reporter: if you couldn't afford to pop across the pond to celebrate today's wedding with kate and wills, don't feel bad. in fact, feel patriotic. by keeping your dollars here at home, you are doing exactly what the u.s. economy needs. the dollar is down almost 8% this year against the british pound and other currencies of major trading partners. that makes it more expensive to get to london and buy souvenirs. economist mark calabria says that also makes it more attractive to save and invest at home. >> and there's an extent to which, yes, you can't have that- - do whatever you want to do, whether it's go to the royal wedding or be the world's policeman. all of these things start to become very expensive when you no longer have currency that people will buy, will take in exchange for anything. >> reporter: the declining dollar makes u.s. exports cheaper, boosting manufacturing and agriculture. but it also makes oil imports more expensive and hurts wall street capital markets by reducing the returns to investme

. >> susie: the slowdown is a setback for the recovering economy, but as darren gersh reports, it's not to last. >> reporter: the year started off slowly with the economy dragged down by a sharp drop in construction. winter weather is one reason spending to build new factories and office buildings tumbled 22%. new home construction fell too. and government cutbacks didn't help either. defense spending down was 12%. economist stephen fuller says the economy is clearly not firing on all cylinders. >> the engine isn't running full speed yet, and as it begins to pick up speed in the private sector, the public sector is pulling back, and so those two countervailing forces are going to result in a very moderate growth rate. so if we do better than 3% in the next three years, it will be quite a success story. >> reporter: and those rising prices for food and energy also dragged down spending, though fuller expects consumers will find ways to adapt. >> with the internet and more readily available information on pricing than we had a generation ago, certainly, people are much smarter shoppers an

darren gersh looks at the issues holding up a budget deal. >> reporter: this morning, democrats and republicans seemed to be moving further apart. house republicans pushed forward a one-week extension of funding that the president promised to veto, and house speaker john boehner insisted on controversial policy changes. >> americans are also concerned about how much we're spending, but also how we are spending it. that's why we're working not just for the most spending cuts possible, but also "common sense" policy restrictions on how taxpayer dollars are spent. >> reporter: those restrictions would limit funding for abortion services in the district of columbia, and prevent the e.p.a. from regulating greenhouse gas emissions. senate majority leader harry reid rejected those changes. he said they should be made in law, not in a spending bill. >> so if this government shuts down-- and it looks like it is headed in that direction-- it's going to be based on my friends in the house of representatives, the leadership over there, focusing on ideological matters that have nothing to do with funding th

. >> tom: our washington bureau chief darren gersh was at that news conference and has the details. >> reporter: the moment was historic, but the news at this first-ever post-meeting federal reserve news conference was fairly subtle. chairman ben bernanke offered hints about what might come next and a strong defense of what has been done so far. his tone suggested the fed is approaching a turning point, with inflation concerns moving ahead of the long-running battle to bring down a still-painful unemployment rate. >> i think, purely from an employment perspective, if inflation were to become unmoored and inflation expectations were to rise significantly, that the cost of that in terms of employment loss in the future as we had to respond to that would be quite significant. >> reporter: the fed chairman called the recent increases in inflation temporary-- mostly due to higher oil prices. still, projections for price increases this year jumped sharply in the forecast the fed released today. reporters pressed several times on whether the fed's slightly lower forecast of growth shows the

darren gersh, "nightly business report," washington. >> susie: joining us now for more analysis on the president's plan, dean baker, co-director of the center for economic and policy research, and doug holz- eakin, president of the american action forum and former director of the congressional budget office. nice to have you back on the program again. >> thank you. >> susie: dean, let me dpin with you. the president today really addressing democrats, says doing nothing on the deficit is not an option. we have to do something. did he sell you on that? >> well, i'm afraid not. the point is the immediate problem facing the economy continues to be jobs. we still have 8.8% unemployment, 25 million people unemployed, under employed or given up looking for work. the deficit at the moment is not a problem. over the longer term it is a problem, as health care costs and everybody know this is. so i give a mixed bag here, it could have been worse, but he still isn't really addressing the immediate problem of the economy. >> susie: doug, how about you? what will your reaction, your take away on th

darren gersh reports. >> it is the peak tourist season in washington, a time when the nation's capitol puts on a show. but there will be no national cherry blossom festival parade if the government shuts down. and there will be more disruptions, according to senior government officials. roughly 800,000 federal employees will be furloughed. the i.r.s. will stop processing paper returns, which could delay tax refunds for one in three taxpayers. e-filers will be okay. the federal housing administration will stop issuing loans, and that could have a big impact. the f.h.a. now issues one out of every three mortgages. small business administration loans? those will be put on hold too. and while federal workers are likely to get back pay once a shutdown ends, senator barbara mikulski says private contractors working for the government won't be so lucky. >> many of them are veterans who started small- to medium-sized businesses. these people, if there is a government shutdown, will not get paid. hello! >> reporter: but house republicans are holding out for deeper budget cuts, in part to satisf

susie: president obama's speech at george washington university was tough and forceful, and as darren gersh reports, it laid out a veryatic, politically to put real pressure on the adoptee and stop the appalling murder of civilians. >> the prime minister feels that britain would be supplying the rebels with 1000 sets of body armor. both presidents are cozy and david cameron have agreed that there has to be an intensifying of military actions against colonel gaddafi's forces. mike the libyan leader be convinced that there is no way out? signs of strain were evident at a meeting of the international contact group on libya. there was agreement, but the libyan leader had to go. the german said that there was no military solution to the libyan crisis. other nations began pushing for the libyans to be given weapons. france has taken the lead role in the campaign. supporting countries remain strong. questions are being raised in france, too. what will bring this operation to an aunt? a stalemate might lead to an unacceptable compromise. >> they are worried that another country like turkey can come

our darren gersh recently talked with ken feinberg, the administrator of b.p.'s $20 billion fund. darren began by asking if there's a problem with the way the fund pays out claims. >> well, there's a problem. first of all, one problem is the sheer magnitude of the number of claims. we have received in the past nine months 800,000 claims in just ninth months for all over 50 states. so there may be some businesses that rebate getting the type of tailored, individualized treatment they expect. that's a mistake. we try to minimize the number of those. we have taken great steps in the past two months to solve that problem. >> reporter: i know you don't comment on specific claims, but can you give us sort of an example of why somebody who might submit a $500,000 claim would get $4,000 and not much explapgz about that? why might that happen? >> it will happen. if the $500,000 claim ant provides a tax return that shows they reported $4,000 worth of profit in income. i mean, the big problem i've got in the gulf, between the objective of the claimant in some cases asking for $500,000 and onl

darren gersh spoke with one of those leaders, world bank president robert zoellick. darren began by asking zoellick how high energy prices around the world are impacting the global economy. >> it puts more stress on everybody's economy because oil and energy is an input throughout. what we're also concerned about is the link between energy and food prices, is much tighter than it was 10 years ago. so you combine the higher energy prices with higher food prices, and it puts more social stress on. if you take some of the countries in north africa where you have revolutionary movements, a lot of the countries are major food im porters. so it adds to the stress. >> there is unprecedented amount of money flowing in from oil revenues. and yet, we're not seeing youth unemployment come down or development. what's the disconnect there? >> well, in some countries -- you're seeing the revenues, in egypt and tunisia, that hasn't been a big source. but if you take a country such as algeria or libya, you're right. that's what some people call the energy and the natural resources as

for more on the administration's reaction, darren gersh spoke with austan goolsbee, the chairman of the president's council of economic advisers. darren started by asking goolsbee to describe the job market now. >> first three months of this year we added more than half a million jobs. and if you look at the private sector, the last one year and one month, we've added 1.8 million jobs, the biggest drop in the unemployment rate over four months that we've seen in 27 years. so i'd say overall, this is the definitely the right trend, though we've still got a lot of work to do. >> how soon do you think we'll get back to something approaching normal? >> i don't know. we make an official forecast, and it shows that the unemployment rate-- our forecast is that it will be coming down pretty steadily. but we've got a long way to go. i mean, this was the deepest hole since 1929, and we're making good progress coming out of it but it's going to take a while. >> some states have been cutting back on unemployment benefits and reducing the amount of time that workers can be on unemployment. is this t

darren gersh talked to the chairman of that senate panel, senator carl levin, and began by asking why the investigation concluded that goldman deceived investors. >> there's hundreds of pages of evidence to support t for instance their marketing materials represented the people who might buy their securities, that goldman was on the same side of the deal as the customers they were trying to sell. as a matter of fact, something called-- a $2 billion security, goldman sachs secretly was on the opposite side of the deal. they were betting against the deal. they were going short. that was secret. but their marketing materials said that our interests are aligned. if you buy this security, that we have the same interest financially in it as you do. no, it was the opposite interest. >> let me ask you, you are going to recommend that your committee make a referral to the department of justice. i just want to be very clear s that going to have specific recommendations of criminal charges against mr. blankfein and other goldman executives? >> we don't it that way. we would send the report to th

washington bureau chief darren gersh sat down with afl-cio president richard trumka and began by asking about the timing of the rallies. >> well w martin luther king was actually tranning up for workers without had been denied not only the right to bargain but their dignity. they wore banners that said, i am a man. he stood up and said they should have the dignity and rights to come with the collective bargaining with the union. he gave his life for that he died there. so we thought it was fitting that on this day we should have a national day of action. >> but across the country you have many bills have been introduced around the country to strip out collective bargaining rights. so what's your strategy to push that back? >> first of all it's pretty simple in ohio. the governor signed the bill will now do a citizen's veto. we'll put it in front of the citizens. and we believe that a vast majority of eye eyean citizens say that is wrong. he you shouldn't take away people's rights to get into the middle class. that is not what we put you there for. we put threw to create jobs, to the des