NPR 2008-07-16

President Bush briefed reporters this morning on the economy. The president said the economy is strong and growing and that the administration's actions will keep the mortgage industry stable. NPR's Larry Abramson has more.

The Treasury 1 and Federal Reserve this week took steps to extend additional funds to Freddie Mac and Fannie Mae, which hold nearly half the mortgages in this country. In March, the government came to the rescue of investment giant Bear Stearns. The president was asked whether other institutions needed government help. "If your question is ‘Should the government bail 2 out private enterprise’, the answer is ‘No, it shouldn't.’ The shareholders 3 still own the company." The president also told depositors not to panic and reminded them that their savings 4 are insured by the government up to 100,000 dollars. The president also challenged Congress to open up off-shore drilling in order to increase the supply of oil. Larry Abramson, NPR News, Washington.

The head of the Federal Deposit Insurance Corporation, or the FDIC, is also trying to reassure 5 jittery 6 bank customers in the wake of the collapse 7 of IndyMac Bank. FDIC head Sheila Bair, in an interview with NPR, said while some depositors who had amounts over federally insured limits could lose some money, deposits of up to 100,000 dollars are insured. Bair also said the current crisis pales in comparison to the S&L Debacle of two decades ago. "There were over two thousand during the S&L Debacle, I think it peaked in 1987, we closed 534 banks. Ah, so, you know, the five banks thatwe've closed, really, it's so small in comparison to what was going on then." However, that may be little solace 8 for IndyMac customers, some of whom have been lining 9 up this week after a government takeover of the bank to withdraw their money. Police had to be called at one point today to deal with an angry crowd outside an IndyMac branch in Encino, California.

One of the men who helped establish interrogation policies after 9/11 defended himself on Capitol Hill. Former Pentagon official Douglas Feith rejected accusations 10 he helped pave the way for torture. NPR's Ari Shapiro has more.

Authors and human rights experts have argued that Feith was responsible for detainee abuse and violations 11 of international law at Guantanamo Bay. Feith vehemently 12 rejected those arguments. He said harsh interrogations were always humane 13, and he said they were key to preventing future attacks. “Giving POW status to undeserving terrorists would make it impossible to get intelligence from many of them. It was legal, furthermore, it was necessary and urgent that US officials interrogate 14 ‘war on terrorism’ detainees effectively.” Feith did not dispute government numbers that showed hundreds of detainees have been abused and in some cases, murdered. But he said people do bad things that are against law and against policy. Ari Shapiro, NPR News, Washington.

On Wall Street, the Dow Jones Industrial Average fell 92 points today, ending the session at 10,962. Decliners led advancers 3-1. The NASDAQ gained two points. The S&P 500 was down 13 points.

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The Senate has now followed the House's lead in overriding 15 a presidential veto of a bill that would have cut Medicare reimbursements 17 to insurers and blocked a scheduled pay cut for doctors who treat patients under the government's healthcare program for the elderly. The president said while he supports not reducing physician payments, he feels the 13 billion dollars in reimbursement 16 cuts to insurers would reduce planned choices for seniors. The administration has opposed any plan to trim payments to private health plans which were encouraged to develop programs to treat Medicare patients.

According to a California watchdog commission, the state's prison system for adults and juveniles 19 should be completely overhauled 20. As Steve Julian of member station KPCC reports, the recommendation is at odds 21 with the promise Arnold Schwarzenegger made when he ran for governor.

Schwarzenegger campaigned on a promise to blow up bureaucratic 22 boxes once he became governor. After he was elected, he combined the prison systems for adults and juveniles. But the Little Hoover Commission told the governor this week, it's unrealistic to believe the juvenile 18 division will get the attention it deserves. It wants most young offenders 23 placed in local juvenile halls and to hold only the most violent criminals in regional lock-ups run by counties. The current system, the report finds, does little to rehabilitate 24. Three out of four young offenders commit new crimes within three years of getting out of jail. Some national experts have called California's juvenile justice system “draconian”. The current system will leave taxpayers 25 with a 378-million-dollar bill next year to care for the state's 1,500 juvenile inmates 26. For NPR News, I'm Steve Julian in Los Angeles.

Commerce Department reports retail 27 sales were up just a scant 28 one-tenth of one percent last month, far weaker than the four-tenths of a percent analysts 29 had hoped for. Much of the weakness was a result of continued problems for the auto 30 industry.