Bickering over bona fides in Montana Senate race

HELENA, Mont. (AP) — Denny Rehberg often wears cowboy boots while campaigning for the U.S. Senate, telling stories about his ranching background and bashing the "death tax" and "Obamacare," characterizations popular with Montana's rural residents.

To Democratic Sen. Jon Tester, the Republican congressman who wants to take his place is all hat and no cattle.

Describing himself as a "dirt farmer," Tester says Rehberg hasn't rounded up his own cattle in years, but has spent his time subdividing and developing what used to be his family's ranch.

"Building houses and mansion ranching is not ranching," Tester said at their first debate this summer.

The razor-tight race may come down to who is "more Montana."

Rehberg's campaign acknowledges that Tester may spend more of his free time farming, but the challenger says the first-term Democrat's support for President Barack Obama's mandate that most everyone buy health insurance runs counter to Montanans' libertarian streak.

Rehberg cites his long roots in ranching prior to leasing out his land due to the demands of his congressional office. He says managing cows is different from farming and requires a full-time presence.

"Frankly I am sorry for the people of Montana that he is wasting so much time as a U.S. senator talking about what a great farmer he is," Rehberg said in an interview. "Maybe he ought to spend a little bit more time trying to help get people back to work and expand the economy because that is what I am focused on. I don't think the people of Montana would particularly want me sitting around the ranch trying to keep the cows in the fence and putting water in front of them and such."

Each candidate lays claim and blame over who's the least elite, most authentic and best able to represent the state's 1 million rural residents in Washington, a city they view with great distrust. Tester's two predecessors lost their populist appeal and re-election bids after becoming too identified with the city's Beltway interests.

The race, one of a few that will determine which party controls the Senate in 2013, is drawing millions of dollars in political money from out-of-state interest groups. Republicans need a net gain of four seats — three if GOP candidate Mitt Romney wins the presidency, because his vice president could break a tie vote — to regain control. Eleven weeks from the election, Missouri, Montana, Nebraska, North Dakota, Virginia and Wisconsin represent their best chances for pickups.

Tester's victory in 2006 helped Senate Democrats take over from Republicans. He won in a squeaker after arguing that three terms in Washington had corrupted incumbent Republican Sen. Conrad Burns, who was embroiled in the Jack Abramoff influence-peddling scandal. It helped that Tester, who has a flattop haircut and is missing a few fingers because of a butchering accident, looks every bit the dryland grain farmer he is, rumpled off-the-rack Sears suits and all.

Now that Tester is the incumbent, he's having to defend himself from attacks that he sold out to banks on debit card swipe fees and, perhaps more harmful, that he is a rubber stamp for Obama administration policies unpopular in Montana.

He is trying to distance himself from Obama by pointing out his opposition to new environmental regulations and proposed farm child labor rules that were considered but abandoned by the Labor Department. Tester also is pushing for the Keystone XL oil pipeline that runs from the Canadian oil fields south through Montana. Obama has postponed a decision on it until after the election.

But Tester wouldn't take back the politically harmful health care vote if he could do the first term over gain. Instead he said he wishes he had done more to stop the intervention in Afghanistan and bring the troops home, pointing to the maimed soldiers he's visited and the billions spent on the war.

Rehberg said he would take back the vote for the Bush administration's post-Sept. 11 program to secure driver's licenses. The Real ID act was intended to help thwart terrorists, but the congressman said that at the time of the vote, he did not know that many in his state would come to despite the program.

Montana State University political scientist David Parker says Republicans "are attacking Tester in ways that would push him away from that image as a Montana farmer: One, he is with Obama. Two, he is a nasty guy. And three, yeah, he makes and eats his own beef, but he votes against Montanans and their interests."

Parker said that Tester's connection to the land is his strongest asset, and he can't have Rehberg seen as a rancher, too, because that would obscure the differences between them.

The Tester campaign argues that Rehberg hasn't bought or sold cattle since at least 2000, citing state livestock inspection records. Some of the attacks deride Rehberg as a multimillionaire land developer.

While Rehberg is the challenger in the race, he has been in statewide politics much longer than Tester and is just as well-known. He was an ardent supporter of conservatives polices as a state legislator in the 1980s. He became lieutenant governor in 1991 and in 1996 he almost defeated veteran Democratic Sen. Max Baucus.

Rehberg isn't ceding the ranching background. He often talks about his family being forced to sell parts of the historic family ranch near Billings in order to pay inheritance taxes — the derided federal "death tax" — after his grandmother died in the 1970s. He managed the family ranch for several years before winning the state's lone U.S. House seat in 2000.

In the House, Rehberg carefully has maintained his conservative credentials even while sometimes turning on Republicans, such as when he backed the 2009 expansion of the Children's Health Insurance Program. Last year, he was one of just three other Republicans in the House to oppose Rep. Paul Ryan's budget proposal that would transform Medicare.

Rehberg holds an advantage in the more rural parts of the state, and even expects to carry Choteau County that is home to Tester's Big Sandy farm and about 6,000 people. Those voters largely went for Burns in 2006.

Tester reminds voters why they picked him in the first place. He was first a music teacher and a farmer, then a state legislator and farmer. If he loses the election, he said he will happily return to just farming.

He spent free time in late July and early August harvesting his crops — or at least those that survived what Tester called one of the worst hail storms to his farm in 35 years. "I take my vacation on the combine and tractor. I am not bitchin' either, I like it that way," he told The Associated Press in an interview.

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Connecticut Senate votes to repeal death penalty

HARTFORD, Connecticut (Reuters) - The Connecticut Senate voted on Thursday to repeal the state's death penalty, moving it one step closer to becoming the fifth U.S. state in five years to abandon capital punishment.

The Democratic-controlled Senate voted 20-16 to repeal the death penalty in an early morning vote after 10 hours of debate, and the measure now moves to the state House of Representatives, where it was seen as having strong support.

Democratic Governor Dannel Malloy has promised to sign the bill into law.

The measure would replace the death penalty with life in prison without the possibility of parole. An amendment added on Tuesday provided that future felons, convicted of life sentences without parole, would be subject to the same harsh conditions as those inmates currently on Death Row.

"Does a moral society execute people?" asked Democratic state Senator Gayle Slossberg on the day of the vote. "Haven't we then become the evil we're trying to eliminate? I want my public policy to be better than me."

But the bill to repeal the death penalty is "prospective," meaning that it would only apply to future sentences. The 11 men currently on Connecticut's Death Row would still face execution.

Several legal experts have said that despite the "prospective" wording, defense attorneys for current Death Row inmates could use the repeal measure to win life sentences for their clients.

Illinois, New Mexico and New Jersey have all voted to abolish the death penalty in recent years, while New York's death penalty law was declared unconstitutional in 2004. That state's legislature has repeatedly rejected attempts to reinstate capital punishment.

Other state legislatures are considering bills to abolish the death penalty as well, and Oregon's governor has said he would allow no more executions on his watch.

"As significant concerns about executing the innocent, the high cost of the death penalty and its unfair application continue to grow, more states are turning to alternative punishments," said Richard Dieter, executive director of the Death Penalty Information Center.

A similar bill was defeated last year in Connecticut, just as the high-profile trial of Joshua Komisarjevsky was getting underway for his role in a 2007 home invasion in Cheshire in which a mother and her two daughters were brutalized and killed.

Komisarjevsky and another man are now on Death Row for the murders. The only survivor of the Cheshire attack, Dr. William Petit Jr. - the husband of the murdered woman and the father of the murdered girls - has spoken out against repeal.

Republican State Senator Leonard Fasano of East Haven said he opposed the bill, saying it denies justice to the families of murder victims.

"I would rather tell those two guys (Komisarjevsky and his accomplice) they are going to die rather than tell Dr. Petit they won't die," he said.

Connecticut has executed only one person, in 2005, since the death penalty was reinstated in the United States in 1976, according to the Death Penalty Information Center. The man executed, Michael Ross, had abandoned his appeals.

(Reporting By Mary Ellen Godin; Editing by Cynthia Johnston)

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NM Senate approves corporate income tax change (AP)

SANTA FE, N.M. – The Senate has approved a proposal to lower New Mexico's corporate income tax rate but change the tax treatment of large corporations with income from operations nationwide.

The measure passed the Senate on a 28-13 vote on Monday and was sent to the House.

Sen. Peter Wirth, D-Santa Fe, says the legislation will help stop "big box retailers" from avoiding taxes by shifting part of their income to out-of-state subsidiaries. The proposal will require certain corporations to combine the income from their nationwide operations in determining how much is subject to taxation in New Mexico.

Opponents say the change will increase taxes on large chain retailers and could cause them to reduce their New Mexico operations.

The bill lowers the corporate tax rate to 7.5 percent from 7.6 percent.

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Senate backs plan to help Americans buy homes (Reuters)

WASHINGTON (Reuters) – The Senate on Thursday backed a measure to help bolster the housing market by making it easier for people to afford a home in wealthier neighborhoods.

The Senate voted 60-38 to attach the proposal to a spending bill that the chamber will consider later this year. It would restore the size of the loans the government buys or insures to a maximum of $729,500 from the previous cap of $625,500.

The cap, known as the "conforming loan limit," determines the maximum size of loans the Federal Housing Administration and the government's mortgage buyers, Fannie Mae and Freddie Mac, can buy or guarantee.

The higher loan limit expired at the end of September and was touted as one of the Obama administration's short-term plans to shrink the government's role in the mortgage market.

But with the housing sector hurting the country's economic recovery, lawmakers and the administration are looking for solutions.

"Getting our housing market moving again is one of the most important tasks facing the country," said Robert Menendez, a Democrat from New Jersey who introduced the bill amendment.

The majority of Senators agreed that the lower loan limit was making a weak housing market even weaker. "It makes it harder for middle class homebuyers to get credit when credit is tight," Menendez said.

It is unclear what will ultimately happen to the provision, given the deep divisions within the Democratic-led Senate and Republican-controlled House of Representatives. It would have to pass both chambers before President Barack Obama, a Democrat, could sign it into law.

Republican Senator Richard Shelby said the measure would help homebuyers who "do not need federal subsidies." "This is not a good use of taxpayer dollars," he said.

Republicans in the House have been trying to quickly unwind Fannie Mae and Freddie Mac, which were seized by the government at the height of the financial crisis and now back the bulk of the mortgage market. But the administration has cautioned against removing the government's support before the housing sector starts to stabilize.

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Goldman may seek to counter Senate findings: report (Reuters)

(Reuters) – Goldman Sachs Group Inc could release documents to counter a Senate subcommittee report that said the bank misled clients about mortgage-linked securities, the Wall Street Journal reported, citing people familiar with the matter.

Goldman, facing probes by several government authorities into derivatives trades it executed in 2006 and 2007, could release documents about its mortgage bets to show the analysis by the subcommittee was inaccurate and incomplete, the paper said.

The information could be released soon on Goldman's website, though a decision has not been made yet, the paper added.

Goldman Sachs did not immediately respond to requests seeking comment.

The subcommittee, headed by Democrat Carl Levin, said Goldman offloaded much of its subprime mortgage exposure to unsuspecting clients when the market for such securities was starting to tank.

Last week, Goldman received a subpoena from the Manhattan district attorney, who joined the Justice Department and the Securities and Exchange Commission in examining Goldman's actions.

(Reporting by Renju Jose in Bangalore; Editing by David Holmes)

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Senate report to reveal mortgage crisis details: WSJ (AFP)

WASHINGTON (AFP) – The Senate will soon issue findings of a probe of the US mortgage meltdown that fueled the global financial crisis, with Goldman Sachs likely to face fresh embarrassment over its role, the Wall Street Journal reported Sunday.

The Senate Permanent Subcommittee on Investigations, whose high-profile inquiry commission subpoenaed Goldman's and other executives last year, is due to release its report on the subprime implosion of 2007 and 2008.

The paper, citing people familiar with the matter, said the report was expected to release emails from securities firms that developed or sold subprime mortgages and financial vehicles including collaterized debt obligations (CDO).

CDOs were used to help Wall Street firms bet against the housing market. When the housing bubble burst, several of the top CDOs were downgraded to "junk" status, and their values plunged.

Goldman, the Journal reported, created CDOs in 2006 and 2007 to shield its exposure to the US housing market, and has been accused of making large bets against the market while selling bullish positions to group that were not expecting the market to fall.

People familiar with the matter said Goldman and Deutsche Bank -- both of which have been criticized for misleading investors in the housing market -- were expected to draw particular scrutiny in the report, the Journal said.

In January, Goldman said it was renewing its commitment to the "primacy" of client interests, and laid out 39 recommendations stressing greater transparency in how the company does business, especially with regard to its own private trading and potential conflicts of interest.

The Journal said the Senate investigation's findings would likely expose bad blood between Goldman and Morgan Stanley, another Wall Street giant, over their roles in a deal involving a CDO called Hudson Mezzanine Funding 2006-1.

According to the Journal, Goldman had sold insurance on the CDO, allowing the company to make money if and when the loans backing the deal began to default.

The Senate report was expected to disclose that Morgan Stanley was a key counterparty in the Hudson deal, said the paper.

It said Morgan Stanley's involvement in the deal was one of the company's bad mortgage bets that contributed to its $9.0-billion trading loss in 2007, while Goldman's mortgage division lost some $1.2 billion in 2007 and 2008, the worst years of the crisis.

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