Obama proposes $1B for science, math teachers

WASHINGTON (AP) — The Obama administration unveiled plans Wednesday to create an elite corps of master teachers, a $1 billion effort to boost U.S. students' achievement in science, technology, engineering and math.

The program to reward high-performing teachers with salary stipends is part of a long-term effort by President Barack Obama to encourage education in high-demand areas that hold the key to future economic growth — and to close the achievement gap between American students and their international peers.

Teachers selected for the Master Teacher Corps will be paid an additional $20,000 a year and must commit to participate multiple years. The goal is to create a multiplier effect in which expert educators share their knowledge and skills with other teachers, improving the quality of education for all students.

Speaking at a rally for his re-election campaign in San Antonio on Tuesday, Obama framed his emphasis on expanded education funding as a point of contrast with Republican challenger Mitt Romney, whom he accused of prioritizing tax cuts for the wealthy over reinvestment in the nation.

"I'm running to make sure that America has the best education system on earth, from pre-K all the way to post-graduate," Obama said. "And that means hiring new teachers, especially in math and science."

The administration will make $100 million available immediately out of an existing fund to incentivize top-performing teachers. Over the longer term, the White House said it plans to launch the program with $1 billion included in Obama's budget request for fiscal year 2013.

But the House and Senate both voted down Obama's budget earlier in the year, making it far from certain that Obama will be able to get congressional approval to spend $1 billion on master teachers.

An aide to Rep. John Kline, R-Minn., chairman of the House Education and the Workforce Committee, noted that the federal government already has more than 80 teacher quality programs and said it would be foolish to pump money into programs that may be duplicative or unproductive.

"Republicans share the president's goal of getting better teachers in the classroom," said Kline spokeswoman Alexandra Sollberger. "However, we also value transparency and efficient use of taxpayer resources."

Education Secretary Arne Duncan said he expected the two parties to come together to support achievement in areas of high demand.

"This initiative has nothing to do with politics," Duncan said. "It's absolutely in our country's best long-term economic interest to do a much better job in this area."

A report released in February by the President's Council of Advisers on Science and Technology found that the U.S. must increase by 34 percent the number of students receiving degrees in science, math and related fields to keep up with economic demand.

The program will start with 2,500 teachers divided up among 50 different sites, the White House said, but will grow to include 10,000 teachers over the next four years. Obama, in partnership with a coalition of groups including the Carnegie Corporation of New York, has set a goal of producing 100,000 additional math and science teachers over the next 10 years.

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Reach Josh Lederman on Twitter at http://twitter.com/joshledermanAP

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FDIC proposes exemption for mortgage securities (AP)

WASHINGTON – Federal regulators are proposing to exempt certain mortgages from new rules aimed at getting banks to take on more risk when package and sell mortgage investments.

The Federal Deposit Insurance Corp. on Tuesday and the Federal Reserve a day earlier voted to advance the exemption from rules required under the new financial regulatory law. Under the rules, banks must hold at least 5 percent of the mortgage securities on their books.

Banks would not have to have so-called "skin in the game" for mortgage securities that contain loans for which buyers made a 20 percent down payment.

For banks to qualify for the exemption, they would also have to collect information from the borrower showing proof of income, credit history and ability to make monthly payments.

The new rule is designed to limit banks' exposure to risk and deter the kind of loans that brought on the 2008 financial crisis.

Ahead of the crisis, banks packaged and sold bundles of risky mortgages with teaser rates that increased after only a few years. Many borrowers ended up defaulting on the loans when the interest rates spiked. As a result, the value of the mortgage securities plummeted.

Experts say banks had very little of their own money invested in those mortgage securities, and that led them to take greater risks that contributed to the financial crisis.

The proposal has been awaited by Wall Street, which is looking to revive the market for mortgage securities. It has remained weak since the financial crisis, largely because investors are unsure about the quality of the loans. Other federal regulatory agencies are expected to back the proposal in the coming weeks. It could be adopted later this year.

FDIC Chairman Sheila Bair said the mortgages that qualify for exemption "will be a small slice" of the mortgage securities market overall.

Bair said many people have expressed concern that the requirements for exempting mortgages could limit the access to mortgages of low- and moderate-income borrowers. "We take these concerns very seriously and want to make sure they are fully addressed," she said before the vote.

The FDIC is seeking comments on the possible impact of the mortgage requirements on low- and moderate-income borrowers during the 60-day public comment period on the proposed rule.

Loans backed by government-controlled mortgage giants Fannie Mae and Freddie Mac and by the Federal Housing Administration would be exempt from the risk-sharing requirement. The two companies and the federal agency together stood behind about 9 in 10 new mortgages over the past year, and own or back more than $5 trillion worth of home loans.

The FDIC also voted to advance rules requiring financial institutions with $50 billion or more in assets to submit a plan detailing how they would wind down their operations if they experienced severe distress or failed. About 125 companies would be subject to the requirement.

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AP Economics Writer Jeannine Aversa contributed to this report.

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FDIC proposes exemption for mortgage securities (AP)

WASHINGTON – Federal regulators are proposing to exempt certain mortgages from new rules aimed at getting banks to take on more risk when package and sell mortgage investments.

The Federal Deposit Insurance Corp. on Tuesday and the Federal Reserve a day earlier voted to advance the exemption from rules required under the new financial regulatory law. Under the rules, banks must hold at least 5 percent of the mortgage securities on their books.

Banks would not have to have so-called "skin in the game" for mortgage securities that contain loans for which buyers made a 20 percent down payment.

For banks to qualify for the exemption, they would also have to collect information from the borrower showing proof of income, credit history and ability to make monthly payments.

The new rule is designed to limit banks' exposure to risk and deter the kind of loans that brought on the 2008 financial crisis.

Ahead of the crisis, banks packaged and sold bundles of risky mortgages with teaser rates that increased after only a few years. Many borrowers ended up defaulting on the loans when the interest rates spiked. As a result, the value of the mortgage securities plummeted.

Experts say banks had very little of their own money invested in those mortgage securities, and that led them to take greater risks that contributed to the financial crisis.

The proposal has been awaited by Wall Street, which is looking to revive the market for mortgage securities. It has remained weak since the financial crisis, largely because investors are unsure about the quality of the loans. Other federal regulatory agencies are expected to back the proposal in the coming weeks. It could be adopted later this year.

FDIC Chairman Sheila Bair said the mortgages that qualify for exemption "will be a small slice" of the mortgage securities market overall.

Bair said many people have expressed concern that the requirements for exempting mortgages could limit the access to mortgages of low- and moderate-income borrowers. "We take these concerns very seriously and want to make sure they are fully addressed," she said before the vote.

The FDIC is seeking comments on the possible impact of the mortgage requirements on low- and moderate-income borrowers during the 60-day public comment period on the proposed rule.

Loans backed by government-controlled mortgage giants Fannie Mae and Freddie Mac and by the Federal Housing Administration would be exempt from the risk-sharing requirement. The two companies and the federal agency together stood behind about 9 in 10 new mortgages over the past year, and own or back more than $5 trillion worth of home loans.

The FDIC also voted to advance rules requiring financial institutions with $50 billion or more in assets to submit a plan detailing how they would wind down their operations if they experienced severe distress or failed. About 125 companies would be subject to the requirement.

--

AP Economics Writer Jeannine Aversa contributed to this report.

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FDIC proposes exemption for mortgage securities (AP)

WASHINGTON – Federal regulators are proposing to exempt certain mortgages from new rules aimed at getting banks to take on more risk when they package and sell mortgage investments.

Critics say the proposal could hurt low- and moderate-income borrowers by limiting their access to mortgages.

The Federal Deposit Insurance Corp. and the Federal Reserve voted Tuesday to advance the proposal. It would define an exemption to rules required by the new financial regulatory law. Under those rules, banks must hold at least 5 percent of the mortgage securities on their books. But lawmakers left it to regulators to define that exemption.

Under the definition regulators have proposed, banks wouldn't have to have so-called "skin in the game" for mortgage securities that contain loans for which buyers made at least a 20 percent down payment.

For banks to qualify for the exemption, they would also have to collect information from borrowers showing proof of income, credit history and ability to make payments.

The new rule is designed to deter the kind of loans that helped cause the 2008 financial crisis.

Ahead of the crisis, banks packaged and sold bundles of risky mortgages that offered teaser rates that increased after only a few years. Once the interest rates on the mortgages spiked, many borrowers ended up defaulting. As a result, the value of securities that contained those mortgages plummeted.

Experts say banks had very little of their own money invested in those mortgage securities, and that led them to take greater risks that contributed to the financial crisis.

The proposal has been awaited by Wall Street, which is looking to revive the market for mortgage securities. It has remained weak since the financial crisis, largely because investors are unsure about the quality of the loans. Other federal regulatory agencies are expected to back the proposal in the coming weeks. It could be adopted later this year.

FDIC Chairman Sheila Bair said the mortgages that qualify for exemption "will be a small slice" of the mortgage securities market overall.

Bair said many people have expressed concern that the requirements for exempting mortgages could reduce the availability of mortgages for low- and moderate-income borrowers.

"We take these concerns very seriously and want to make sure they are fully addressed," she said before the vote.

The FDIC is seeking comments on the possible impact of the mortgage requirements on low- and moderate-income borrowers during the 60-day public comment period on the proposed rule.

The FDIC also voted to advance rules requiring financial institutions with $50 billion or more in assets to submit a plan detailing how they would wind down their operations if they experienced severe distress or failed. About 125 companies would be subject to the requirement.

--

AP Economics Writer Jeannine Aversa contributed to this report.

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