Administration of Mixed Minds Yesterday, the House Financial Services Committee approved a proposal by committee chair Rep. Barney Frank (D-MA) to permit the Federal Housing Administration to guarantee up to $300 billion in refinanced mortgages. !0 Republicans voted with the majority in the 46-21 bipartisan vote. The bill would require lenders to restructure the loans with an FHA-approved lender. Only loans on principal residencies made on or before Dec. 31, 2007, would qualify for the restructuring. Frank said:

WaPo published an op-ed Monday in which former senior Department of Defense officials Dov S. Zakheim and Lt. Gen. Ronald T. Kadish (Ret.) note a recent GAO report that finds massive cost and schedule overruns in weapons acquisitions by the Pentagon. The report implicates a degradation of competition between contracting firms resulting in, according to Zajheim and Kadish (ZK, hereafter), "a kind of 'design bureau' competition, similar to what the Soviet Union used." After complaining about an Air Force tanker project won by EADS, a European defense contractor, ZK conclude that what's really needed to curtail waste, fraud, and abuse in military contracting is increased competition in the defense market spurred by an increase in domestic defense firms. Without really explaining why, they also claim that "[m]ore regulations and bureaucratic restrictions on contractors are not the answer." Although the consolidations helped contractors survive the spending cuts, they now threaten to undermine the industry. That's because many in Congress and at the Pentagon want to impose stricter oversight and controls on weapons manufacturing and development while simultaneously demanding more competition -- driving the system to an immature and evolving "globalized" marketplace. Here's the thing though: Better oversight and better procurement practices may not "fix the problem," but because of the nature of the defense "market," it may be the government's only tool to increase acquisition value.

CQ is reporting that House Democratic leadership is going to move a war supplemental spending bill to the House floor next week. A Democratic aide says that the current strategy is to offer three votes: one war spending, one on domestic spending, and one on war policy. In the Senate, Senate Majority Leader Harry Reid (D-NV) is setting the state for floor action immediately following House passage.

The BEA will release 1st quarter GDP figures tomorrow, and the BLS will release employment data on Friday. To be sure, these will be carefully-watched figures as the nation holds its breath waiting to see if we're moving closer to the R-word. But these are national data, and it becomes easy to overlook the fact that some areas within the nation are currently in throes of economic turmoil. This morning's release of metropolitan employment data reminds us that, regardless of what happens in aggregate, many Americans are already living a recession.