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At Senate Hearing, Warren Comes Out Swinging

Elizabeth Warren’s distaste for Wall Street defined her tenure as a regulator and her subsequent campaign for the Senate.

So it was no surprise when her inaugural appearance as a Senate Banking Committee member featured a scathing critique of financial risk-taking.

At a hearing on Thursday examining the oversight of the Dodd-Frank Act, Ms. Warren grilled top banking regulators on their response to Wall Street wrongdoing. Ms. Warren, a Democrat from Massachusetts who helped create the Obama administration’s new consumer protection agency, pressed government officials to justify how they police big banks.

“If they can break the law and drag in billions in profits and then turn around and settle paying out of those profits, then the don’t have much incentive to follow the law,” she declared, receiving a smattering of applause from the gallery. “The question I really want to ask is about how tough you are.”

What followed was the Congressional equivalent of a “Ferris Bueller’s Day Off” moment. “Anyone” she asked, receiving silence in reply.

Thomas Curry, who as comptroller of the currency oversees many of the nation’s largest banks, finally spoke up. “We do not have to bring people to trial,” he explained, “to achieve our supervisory goals.”

His remarks failed to placate Ms. Warren. She then unleashed her bull-doggedness on Elisse B. Walter, chairwoman of the Securities and Exchange Commission. Ms. W! alter noted that her agency pushed for “additional authority” to crackdown on Wall Street.

“We truly believe that we have a very vigorous enforcement program,” Ms. Walter said.

But Ms. Warren countered with this: “Can you identify the last time you took the Wall Street banks to trial” Ms. Walter promised to “get back to you with the specific information,” adding that “we do litigate.”

Despite the acerbic style, there’s reason to think Ms. Warren was actually holding back. As the leader of the Consumer Financial Protection Bureau, she often faced off with Republican critics of the agency, including one episode where she was accused of lying.

She alluded to the dust-ups in her remarks on Thursday.

“I’ve sat where you sat,€ she said to the panel of regulators who testified. “It’s harder than it looks.”



Duke Energy Loan for Democrats\' Convention Remains Unpaid

When Duke Energy extended a $10 million line of credit to the committee organizing the Democratic convention in Charlotte, N.C., last summer, it seemed to be a sign that President Obama would not make good on his pledge to keep his party’s nominating festivities free of corporate favor banking.

The money would have to be paid back, organizers said.

Except that so far, it hasn’t been. The Los Angeles Times reports that the loan remains outstanding, with just a couple of weeks left until it is due to be paid back.

Democrats acknowledged over the summer that the president’s pledge had set a very high bar and that without corporate giving, they were having a hard time coming up with enough small-donor financing to fill the void. And the host committee had already begun to break the pledge by setting up a nonprofit corporation to collect corporate dollars for events outside of the convention hall - like a big welcome party for the news media showcasing Charlotte businesses and a Labor Day festival.

But the nonprofit corporation - called New American City and financed by companies including Duke and Bank of America - wound up paying $5 million for the convention hall itself at the Time Warner Cable Arena, as The Charlotte Observer reported last fall.

The newspaper also caught the first warning sign that the committee would default on the line of credit, noting that Duke had listed it as a loss in its third-quarter report.

Tom Williams, a spokesman for Duke, said that the loss of $1! 0 million was recorded as an accounting requirement and that the company was still hopeful the committee would repay the full loan before it comes due Feb. 28. “We still hope there’s some chance to recover part or all of that money in some fashion,” he said. But, he acknowledged, a company generally counts a loss on a loan “when you think there’s a real likelihood it may not be repaid.”

With a default, the loan would effectively become a donation â€" a fairly large one given that the total budget for the convention was roughly $31 million.

The Democratic National Committee had no comment.



Lautenberg Says He\'ll Step Down

Lautenberg, Oldest Member of Senate, Will Step Down

Senator Frank R. Lautenberg of New Jersey will retire rather than seek a sixth term next year, he said on Thursday.

Senator Frank Lautenberg spoke with reporters after a Democratic policy luncheon in January.

Mr. Lautenberg, at 89 the oldest member of the Senate, was to officially announce his decision Friday in Paterson, where he grew up the son of poor immigrant parents.

“This is not the end of anything, but rather the beginning of a two-year mission to pass new gun safety laws, protect children from toxic chemicals, and create more opportunities for working families in New Jersey,” he said in a statement. “While I may not be seeking re-election, there is plenty of work to do before the end of this term, and I’m going to keep fighting as hard as ever for the people of New Jersey in the U.S. Senate.”

Mr. Lautenberg, a Democrat who earned his fortune as a founder of the huge payroll firm Automatic Data Processing, had left the Senate once before, in 2001, but hated retirement so much that he jumped at the chance to return when the state’s Democratic Party was looking for someone to replace Senator Robert Torricelli, facing an ethics investigation, on the ballot in 2002.

This time, Mr. Lautenberg’s decision has been on-again-off-again for several months. His office was initially considering announcing it at the annual dinner of the New Jersey Chamber of Commerce in Washington in January, but it had been complicated by Mayor Cory A. Booker of Newark, a Democrat who announced in December that he would seek the Senate seat â€" whether or not Mr. Lautenberg retired.

Mr. Lautenberg’s aides had been telling Mr. Booker that the senator was leaning toward retirement and that the decision was coming soon. When Mr. Booker declared his candidacy anyway, Mr. Lautenberg was openly upset, so much that the senator began talking about running again.

His family was pressing for his retirement, but Mr. Lautenberg was reluctant to step away from his work in Washington, particularly when the Senate historically had members who worked well into old age. Mr. Lautenberg counts as his biggest achievement the ban on smoking on airplanes, which set off the process in which many governments ultimately banned smoking in restaurants and other public spaces. He also led battles to lower the legal blood-alcohol limit to 0.08 percent; to raise the drinking age to 21; and to force companies to disclose what chemicals they emit into the air and the water.



Love Conquers All, Except the Partisan Divide

A new Fox News poll has found that when Americans look for someone to share Valentine’s Day with, odds are they are not casting their eyes across the political aisle.

A majority of registered voters in the poll, 55 percent, said that when choosing someone to be their Valentine, it was important to find someone with the same political views. But for all the James Carvilles out there looking for their Mary Matalins, rest assured - just 28 percent called shared political views “very” important.

About 6 in 10 women, 59 percent, said it was important to them that their Valentine shared their political views, compared with 50 percent of men who said the same. And while Republicans and Democrats may differ in their political opinions, the partisans agree that their Valentine should not - 62 percent of Republicans and 58 percent of Democrats said they wanted their Valentine to share their vews. Fewer independents, 41 percent, agreed.

The poll was conducted nationwide by land-line and cellular telephone Feb. 4-6 among 1,010 registered voters and had a margin of sampling error of plus or minus 3 percentage points.



David Leonhardt, Washington Bureau Chief, Answers Readers\' Questions

David Leonhardt, Washington bureau chief for The New York Times, will answer readers’ questions about the economic landscape and President Obama’s prospects to enact the ambitious legislative agenda he laid out in his State of the Union address.

Mr. Leonhardt is the author of the e-book “Here’s the Deal: How Washington Can Solve the Deficit and Spur Growth,” published by The Times and Byliner. Previously, he wrote the paper’s Economic Scene column.

Answers to selected readers’ questions will appear on NYTimes.com on Thursday afternoon.





As Troops Leave, an Uncertain Future for U.S. Aid in Afghanistan

Even weighed down by corruption and waste, it has given most of Afghanistan access to health care for the first time. It has drawn violent reprisals from the Taliban but educated a generation of Afghan girls. Accused of fostering a dependency culture, it has nonetheless provided the foundation for a functioning economy.

By some measures the most ambitious nation-building program undertaken to date by the United States - and no doubt the most scrutinized and second-guessed - the 12-year aid effort to modernize and stabilize Afghanistan is now starting to face questions about how, and how quickly, it should be brought to a close.

President Obama’s announcement on Tuesday that he would bring home more than half the remaining troops in Afghanistan over the next year, with nearly all the rest out by the end of 2014, put new focus on the future of aid programs in Afghanistan as the military presence thre diminishes. With foreign aid also facing budget-cutting pressure in Congress and much of Washington out of patience with the Karzai government’s record on corruption, defenders of the development effort are warning against too precipitous a cutoff of funding from the United States and its allies.

“Because we have so many of our own constraints economically right now, there’s a huge possibility that Congress will say we’re not going to provide $2.5 billion a year indefinitely,” said Caroline Wadhams, a senior fellow at the Center for American Progress, the liberal research group.

The administration and other advocates of aid are trying to maintain support for an international plan to scale back aid gradually, and do so in a way that gives the Afghan government and other institutions plenty of time to adapt.

“Our record of creating really significant gains in Afghanistan over the last decade is what is going to enable us to continue to con! vince Congress and the American people that these investments are worth continuing to make,” said Alex Thier, who heads the United States Agency for International Development’s efforts in Afghanistan and Pakistan.

At stake, advocates of aid and other experts say, is Afghanistan’s ability to navigate through the next few critical years, when the Afghan government will have to wean its economy, budget and social programs from the flow of foreign aid even as it takes over responsibility for fighting the Taliban. In a recent speech, John F. Sopko, the inspector general who monitors the cost-effectiveness of the reconstruction effort, said United States officials in Afghanistan are keenly aware that the two transitions are linked to one another.

“I think it’s fair to say that the success or failure of our entire investment in Afghanistan is teetering on whether these two intrrelated and ambitious goals can be met,” he said.

By the broadest measure of accounting for the costs of the effort, the United States has spent $90 billion on aid and reconstruction in Afghanistan since 2002, a figure that includes programs run by the United States military and the costs of providing security for the effort, according to Mr. Sopko’s agency, the Special Inspector General for Afghanistan Reconstruction.

By the narrowest measure - money funneled through the United States Agency for International Development, the arm of the State Department that has taken the lead in the civilian aid program - the total is $15 billion since 2002. Mr. Obama likely to seek an additional $2 billion to $2.5 billion for each of the next several years to meet the commitments for continued assistance made by the United States at an international donors conference last year in Tokyo.

On a practical level, aid programs are already being constrained by the military pullback. With fewer base! s scatter! ed around Afghanistan, fewer troops on the ground and fewer helicopters available for shuttling people in and out of towns and villages, the military has less capacity to provide the necessary security for development teams.

More generally, some critics of the administration’s approach say, there is no credible plan for improving ethics and accountability in the Afghan government and insufficient assurance that aid programs can continue to function effectively as the international presence in Afghanistan diminishes - especially given all the other calls on taxpayer money and proliferating threats elsewhere.

Maintaining an effective and durable civilian presence in Afghanistan “requires a clear case from the president that the result over the next decade will be worth more than putting resources into Asia, a Middle East in turmoil, a truly international counterterrorism effort or dealing with our domestic financial crisis,” said a recent report by Anthony H. Cordesman, a scholar at the Center for Strategic and International Studies. “No one in the administration has even begun to make this case, and it desperately needs to be made if we are to stay.”

Congress will not take up the issue in earnest until later this year. But proponents of maintaining relatively robust aid appear to be benefiting from an alliance of Democrats and Republicans eager to avoid giving up the fragile stability gained by a dozen years of military presence in Afghanistan and concerned with protecting women and girls in particular from a Taliban resurgence.

“It’s not going to be easy, but it is possible to make a strong case for strategic investments so that our soldiers will not have died in vain,” said Senator Mary L. Landrieu, Democrat of Louisiana, who is a member of the appropriations subcommittee that allocates money for foreign aid.

Given the vulnerability of! Afghan w! omen and girls, support for continued aid from women senators on both sides of the aisle can be “a bulwark against the natural tendency to retrench,” she said.

But as the debate plays out, some advocates of aid say they are concerned that the problems that have surrounded aid efforts in the midst of United States military operations will taint the whole concept of civilian assistance at a time when foreign aid - while a tiny slice of government spending - is again in the sights of budget cutters.

“I’ve often worried that the lesson from Iraq and Afghanistan - and especially Afghanistan - is that we don’t know how to do foreign aid and therefore we shouldn’t continue to provide aid at the levels we have been,” Ms. Wadhams said.

Follow Richard W. Stevenson on Twitter at @dickstevenson.



The Early Word: On the Road

In Today’s Times:

  • President Obama traveled to North Carolina Wednesday to highlight the resurgence in American manufacturing, which he emphasized in his State of the Union address. But while he was out promoting his plans, lawmakers questioned whether the ambitious agenda he laid out Tuesday could materialize, Mark Landler and Jonathan Weisman report.
  • Mr. Obama’s call for free trade between the United States and the European Union is raising hopes for a pact that could not only raise economic growth but also lower prices for consumers and give new impetus to a long static relationship, Nicholas Kulish and Jackie Calmes report.
  • As senators gathered Wednesday for the first hearing on the proposals to overhaul immigration law they said Mr. Obama’s nonconfrontational tone during his State of the Union address was a strategic choice to give lawmakers more room to navigate the delicate issue, Ashley Parker reports.
  • The president’s nominee for Treasury secretary, Jacob J. Lew, calmly faced tough questioning from members of the Senate Finance Committee Wednesday, many of whom seemed intent on ruffling him for political points, Annie Lowrey reports.
  • As Republicans demanded more information before voting on Chuck Hagel’s nomination to be secretary of defense, Senate Democrats accused them of obstructionism and moved Wednesday ! to force a vote by the weekend, Jeremy W. Peters and Mark Mazzetti report.

Washington Happenings:

  • Mr. Obama will visit a prekindergarten class in Decatur, Ga., on Thursday before speaking at a community center about his plan to make high-quality preschool available to every child. Later, he will participate in a “Fireside Hangout” using Google Plus to talk about his State of the Union address.
  • Vice President Joseph R. Biden Jr. will have lunch with President Giorgio Napolitano of Italy.
  • Secretary of State John Kerry is scheduled to have bilateral meetings with Ban Ki-moon, secretary general of the United Nations, and then with Catherine Ashton, the European Union’s foreign policy chief.
  • The Senate Appropriations Committee will hold a hearing on “The Impacts of Sequestration,” featuring testimony from Arne Duncan, secretary of education; Janet Napolitano, secretary of homeland security; Shaun Donovan, secretay of housing and urban development; and Ashton B. Carter, deputy secretary of defense.
  • The Senate Finance Committee will receive a progress report on the insurance exchanges established under the new health care law.


Tip of the Week: Adjusting Facebook Photo Previews

Hate the way Facebook seems to arbitrarily crop photos you post on your Timeline to fit the square preview windows On the desktop version, you can change which part of the picture shows in the preview when you’re using Facebook through your Web browser.

To do so, pass the cursor over the image and then click the pencil icon that appears in the top right corner of the post. On the menu that appears, choose Reposition Photo. Click the cursor onto the photo and drag the image until you have the crop you desire for the preview window. Click the Save button. Even though you have now made the photo more appealing for friends browsing your Timeline page, the original image remains uncropped and expands into the full view when someone clicks on the preview window.



Tip of the Week: Adjusting Facebook Photo Previews

Hate the way Facebook seems to arbitrarily crop photos you post on your Timeline to fit the square preview windows On the desktop version, you can change which part of the picture shows in the preview when you’re using Facebook through your Web browser.

To do so, pass the cursor over the image and then click the pencil icon that appears in the top right corner of the post. On the menu that appears, choose Reposition Photo. Click the cursor onto the photo and drag the image until you have the crop you desire for the preview window. Click the Save button. Even though you have now made the photo more appealing for friends browsing your Timeline page, the original image remains uncropped and expands into the full view when someone clicks on the preview window.