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Washington

The 9 Biggest Sequestration Lies

Though we've come to expect no better from our leaders in Washington, the sequestration lies rank among the most blatant whoppers ever to come out of the nation's capital.

Sequestration, of course, is the $85 billion in across-the-board spending cuts scheduled to go into effect at midnight Friday.

Instead of working together to come up with an alternative to replace the sequester, Republicans and Democrats have spent the past several weeks playing a maddening game of political chicken.

Both parties were counting on the fear of sequestration to force the other to cave before it happened.

Toward that end, leaders of both sides have tried to sway public opinion with exaggerations, obfuscations and outright lies.

Yes, business as usual in Washington, but an affront to U.S. citizens nonetheless.

Here are some of the biggest sequestration lies.

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Washington

The Sequestration Follies: How Washington Outsmarted Itself

It seems every politician in Washington is up in arms over sequestration, the devastating automatic budget cuts on track to take effect March 1.

For weeks, lawmakers on both sides have been calling sequestration a "bad idea" and criticizing any proposals put forth by the opposing party.

Politicians aren't happy that sequestration not only would cut billions of dollars in federal spending, it would also slash the budget indiscriminately with across-the-board cuts.

Just today (Tuesday), President Barack Obama urged Congress to delay sequestration for the rest of the year or risk damaging the U.S. economy.

"It won't help the economy. It won't create jobs. It will visit hardship on a whole lot of people," President Obama said. "If Congress allows this meat-cleaver approach to take place, it will jeopardize our military readiness; it will eviscerate job-creating investments in education and energy and medical research."

Listening to all the rhetoric, Americans with short memories might believe that those in Washington only have the best interests of the country at heart.

But the rest of us remember how this whole sequestration fiasco really happened. It was their idea – Republicans and Democrats, the White House and Congress. All guilty.

"The idea was that no sane person would allow such cuts to happen," Bob Schieffer, host of CBS News' "Face the Nation," said on that show Sunday. "Well, guess what. Even Washington managed to underestimate its own ineptitude."

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Energy investing

Will Environmentalists Kill the Keystone XL Pipeline?

For more than four years, the controversial Keystone XL pipeline has been at the center of a heated battle between opponents and supporters.

Those who favor the 1,700-mile extension of the pipeline see it as a step toward North American energy independence and a source of tens of thousands of jobs.

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Washington

State of the Union Speech to Disguise True Obama Agenda

In his State of the Union speech Tuesday night, U.S. President Barack Obama will risk the ire of Republicans by telling the nation the government needs to spend more money to restore economic prosperity.

President Obama will spend much of his fifth State of the Union address outlining several new initiatives aimed at bringing relief to middle-class Americans hard hit by the Great Recession, White House officials have told several major news organizations.

"Our single biggest remaining challenge is to get our economy in a place where the middle class is feeling less squeezed, where incomes sustain families," a senior administration official who had seen a draft of the speech told The Washington Post.

But while the U.S. economy will be the overriding theme of President Obama's State of the Union speech, many of the proposals will not coincidentally advance many of the president's other favorite issues, such as climate change and education.

According to those who have seen the speech, President Obama is expected to announce initiatives in education, infrastructure, clean energy and manufacturing. White House officials told The New York Times that the cost of these proposals would be offset by savings elsewhere in the budget – or new revenues.

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Washington

Will John Kerry Kill the Keystone XL Pipeline?

When new U.S. Secretary of State John Kerry met Friday with Canadian Foreign Minister John Baird in Washington, the talk turned to the fate of the controversial Keystone XL pipeline.

Kerry said the controversial $7 billion Keystone XL pipeline project would undergo a "fair and transparent review," adding he expects to make a decision "near-term" on whether to move forward with it. The State Department has final say over the pipeline because it traverses international borders.

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Top News

Government S&P Lawsuit: Who's Next?

A massive U.S. government S&P lawsuit has no doubt hurt the fortunes of Standard & Poor's parent company The McGraw-Hill Companies Inc. (NYSE: MHP), whose shares have dropped 25% since it was filed.

But the collateral damage could spell bad news for a number of parties and has implications even for the overall health of the U.S. economy.

The Justice Dept., joined by attorneys general from 16 states, unveiled a case accusing S&P of fudging its ratings of subprime mortgages to make the toxic securities appear better than they were.

The federal government is seeking $5 billion in penalties — more than five times what S&P made in 2011 — to cover losses to investors in federally insured banks and credit unions. Separate suits filed by individual states could more than double that figure.

It's the first time the government has taken action against a credit rating agency over illegal behavior tied to the recent financial crisis.

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Washington

The Real Cost of Obamacare

Like it or not, in less than a year – January 2014 – the core of U.S. President Barack Obama's healthcare reform goes into effect – and recent data show the cost of Obamacare will be quite high.

The statistics are startling, seeing as the intent of Obamacare was to reduce overall medical costs in the country – one big reason government spending is running wild – by improving access to treatment for Americans. An additional 30 million Americans are expected to be covered under Obamacare.

But new reports estimate the new healthcare system could cost about $1.3 trillion over the next 10 years.

That means the original outcome – which President Obama said would be to "cut the cost of a typical family's premium by up to $2,500 a year" – is far from reality.

Here's a breakdown of what Obamacare will really cost you – and your job could be included.

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Top News

Why Did the U.S. Government Sue Standard & Poor's?

The U.S. Justice Department slapped Standard & Poor's Rating Services with a lawsuit claiming the agency sidestepped its own standards when rating mortgage bonds that collapsed during the financial crisis, resulting in billions of dollars in losses for investors.

U.S. Attorney General Eric Holder's civil charges, filed late Monday against S&P, are the first federal enforcement charges against a credit rating firm over the financial crisis.

Reports say the government is going after S&P to the tune of more than $1 billion.

Following a report in The Wall Street Journal Monday afternoon that the government planned to file the suit, S&P acknowledged it was expecting the action and claimed the firm was being wrongly punished by the U.S. government for "failing to predict" the housing meltdown or financial crisis.

New York-based S&P, one of the three major rating firms, has denied any wrongdoing. The firm said in a statement before the government filed the suit that it would be "entirely without factual or legal merit."

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Washington

Mary Jo White: SEC Pick Compromised By Links to Wall Street

When President Barack Obama nominated Mary Jo White to be the next head of the SEC, he said he wanted someone who would be tough on Wall Street, but her past ties to many of the big banks will make that difficult, if not impossible.

President Obama nominated White to be the next chairwoman of the Securities and Exchange Commission Thursday, emphasizing her storied background as a New York prosecutor in the 1990s.

"She helped prosecute white-collar criminals and money launderers," the president said. "In the early 1990s, she brought down John Gotti, the head of the Gambino crime syndicate. You don't want to mess with Mary Jo."

Getting less attention from President Obama was how White has spent the most recent decade – as a defense attorney for Debevoise & Plimpton LLP. There, she hasn't been going after Wall Street's transgressors – she's been defending them.

Her former clients include former Bank of America (NYSE: BAC) CEO Ken Lewis, who was involved in a civil fraud suit over his company's acquisition of Merrill Lynch.

White has also defended JPMorgan Chase (NYSE: JPM) in several cases related to the 2008 financial crisis and News Corp. (Nasdaq: NWS) in its phone-hacking scandal.

White was a member of the legal team that helped Goldman Sachs (NYSE: GS) board member Rajat Gupta fight insider trading charges and has done work for Morgan Stanley (NYSE: MS).

"[She's been] Wall Street's protector-in-chief," former SEC investigator Gary Aguirre told The Wall Street Journal.

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Debt Ceiling

Debt Ceiling Bill Intensifies Budget Pressure on Congress

The debt-ceiling showdown took center stage on Capitol Hill today (Wednesday) as a crucial vote on a Republican bill gave the Treasury the green light to borrow a fresh stash of cash until May 19.

The Republican-controlled House passed the bill by a 284-144 margin.

It now moves on to the Senate, where it is expected to pass quickly without any changes.

Senate Democrats are expected to back the plan even though they have been hesitant to support any short-term debt ceiling fix, maintaining it creates additional uncertainty for businesses and families.

"I'm very glad that (House Republicans) are going to send us a clean debt-ceiling bill," said Senate Majority Leader Harry Reid, D-NV.

The measure would go from the Senate to U.S. President Barack Obama, who has repeatedly said he will not wrangle over the debt ceiling and will sign the bill when it reaches his desk.

Pleased with the results, the White House added a "but," saying it would have liked a longer- term solution.

While the legislation looked extremely likely to make it to the Oval Office, there is still a chance it could get tangled up in Congress, given a controversial provision in the bill.

The legislation includes a divisive rider aimed at coercing Senate Democrats to ink a long-term budget deal. The "no budget- no pay" provision would withhold pay for members of Congress until a sustainable deal is agreed upon.

"It's not a slam dunk. But the main thing is that the Republicans will cave on the debt ceiling. So we're now just arguing over the details," Greg Valliere, chief political strategist for Potomac Research Group, told CNN Money ahead of the voting.

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