Obama Housing Plan Falls - New Home Sales at lowest on Record

(AP) Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.

The bleak report from the Commerce Department is the first sign of how the end of federal tax credits could weigh on the nation's housing market.

The credits expired April 30. That's when a new-home buyer would have had to sign a contract to qualify.

"We fear that the appetite to buy a home has disappeared alongside the tax credit," Paul Dales, U.S. economist with Capital Economics," wrote in a note. "After all, unemployment remains high, job security is low and credit conditions are tight."

New-home sales in May fell from April to a seasonally adjusted annual sales pace of 300,000, the government said Wednesday. That was the slowest sales pace on records dating back to 1963. And it's the largest monthly drop on record. Sales have now sunk 78 percent from their peak in July 2005.

Analysts were startled by the depth of the sales drop. - CBS News Story

Home Sales Fall Again - Recovery?

(AP) Sales of previously occupied U.S. homes dipped 2.2 percent in May, suggesting that a boost from government home-buying incentives is winding down earlier than expected.

The National Association of Realtors says last month's sales fell to a seasonally adjusted annual rate of 5.66 million. April's results were revised upward to 5.79 million. Economists polled by Thomson Reuters had expected sales to rise to a rate of 6.12 million.

The federal government had boosted home sales by offering buyers tax credits of up to $8,000. The deadline to get a signed sales contract and still qualify was April 30. Buyers must close their purchases by end of this month. - CBS News Story

Obama's Border Policies Fail to Help Stop Illegal Activity

Mexican drug cartels have set up shop on American soil, maintaining lookout bases in strategic locations in the hills of southern Arizona from which their scouts can monitor every move made by law enforcement officials, federal agents tell Fox News.

The scouts are supplied by drivers who bring them food, water, batteries for radios -- all the items they need to stay in the wilderness for a long time.

Click here for more on this story from Adam Housley.

“To say that this area is out of control is an understatement," said an agent who patrols the area and asked not to be named. "We (federal border agents), as well as the Pima County Sheriff Office and the Bureau of Land Management, can attest to that.”

Much of the drug traffic originates in the Menagers Dam area, the Vekol Valley, Stanfield and around the Tohono O’odham Indian Reservation. It even follows a natural gas pipeline that runs from Mexico into Arizona.

In these areas, which are south and west of Tucson, sources said there are “cartel scouts galore” watching the movements of federal, state and local law enforcement, from the border all the way up to Interstate 8.

“Every night we’re getting beaten like a pinata at a birthday party by drug, alien smugglers," a second federal agent told Fox News by e-mail. "The danger is out there, with all the weapons being found coming northbound…. someone needs to know about this!”

The agents blame part of their plight on new policies from Washington, claiming it has put a majority of the U.S. agents on the border itself. One agent compared it to a short-yardage defense in football, explaining that once the smugglers and drug-runners break through the front line, they're home free.

“We are unable to work any traffic, because they have us forward deployed," the agent said. "We are unable to work the traffic coming out of the mountains. That traffic usually carries weapons and dope, too, again always using stolen vehicles.” - FOX News Story

Obama Has No Plan for Gulf Spill

A wide majority of Americans believe President Barack Obama does not have a blueprint to combat the BP oil spill off the Gulf Coast, according to a new CBS/New York Times poll out Tuesday.

Fifty-nine percent of 1,259 adults polled nationwide said the president does not have “clear plan” for combating the spill. Thirty-two percent said Obama does have a plan to fight the spill and 9 percent didn’t know.

Sixty-one percent say the president’s response to the spill was “too slow” compared to 32 percent who found his timing “just right” and 2 percent who think he was “too quick.”

Just as Obama gets low marks for his administration’s response to the spill, the poll shows that there is little confidence the spill will be plugged quickly or that Gulf Coast residents will get the help they need.

Nearly half of respondents, 48 percent, said it will take “several months” to plug the spill while only 18 percent believe the leak will stop in the next “few weeks or months.” Sixteen percent said the spill will take a “year or longer” to end and 7 percent think BP will “never” stop the spill. - Politico Story

Obama Upset With Top General about His Comments

The top commander in Afghanistan, Gen. Stanley McChrystal, has been summoned to the White House to explain biting and unflattering remarks he made to a freelance writer about President Barack Obama and others in the Obama administration.

The face-to-face comes as pundits are already calling for McChrystal to resign for insubordination.

McChrystal has been instructed to fly from Kabul to Washington today to attend Obama’s regular monthly security team meeting tomorrow at the White House.

An administration official says McChrystal was asked to attend in person rather than by secure video teleconference, “where he will have to explain to the Pentagon and the commander in chief his quotes about his colleagues in the piece.”

Both Defense Secretary Robert Gates and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, have spoken with McChrystal. Capt. John Kirby, a spokesman for Mullen, said “the chairman spoke to General McChrystal last night and expressed his deep disappointment with the article and with the comments expressed therein.”

McChrystal and his top aides appeared to let their guard down during a series of interviews and visits with Michael Hastings, a freelance writer for the magazine Rolling Stone.

The article, titled “The Runaway General,” appears in the magazine later this week. It contains a number of jabs by McChrystal and his staff aimed not only at the President but at Vice President Biden, special envoy Richard Holbrooke, Karl Eikenberry, the ambassador to Afghanistan, and others.

McChrystal described his first meeting with Obama as disappointing and said that Obama was unprepared for the meeting. - Politico Story

Jobless Claims Rise Again

WASHINGTON -- The number of people filing new claims for jobless benefits jumped last week after three straight declines, another sign that the pace of layoffs has not slowed.

Initial claims for jobless benefits rose by 12,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. It was the highest level in a month.

First-time jobless claims have hovered near 450,000 since the beginning of the year after falling steadily in the second half of 2009. That has raised concerns that hiring is lackluster and could slow the recovery.

Still, the four-week average for unemployment claims, which smooths volatility, dipped slightly to 463,500. That's down by 3,750 from the start of January.

In a separate Labor report, consumer prices fell for the second straight month. The 0.2 decline in the Consumer Price Index was pulled down falling energy prices -- most notably a 5.2 percent drop in gasoline prices. Declining energy bills were the main factor pulling down prices. - FOX News Story

Obama Speech Draws Fire from Both Sides

President Barack Obama’s Oval Office address on the Gulf Coast catastrophe is being greeted with a barrage of criticism from commentators and political analysts across the ideological spectrum — the most intense negative reaction to any major public appearance he has given as president.

If the goal was to change the widespread Washington storyline that Obama is not rising to the occasion for the BP debacle, it became clear within moments that the 18-minute speech was an emphatic failure — and not just among conservatives who predictably root for the president to fail.

“Junk Shot,” blared the headline at Huffington Post. Salon took a similar theme: “Just words: Oval Office speech fizzles.”

Generally sympathetic commentators Keith Olbermann and Chris Matthews likewise honked with critical reviews on MSNBC. Voices on the right, not surprisingly, were even more critical.

The White House said before the speech the president’s goal was to speak more broadly to the American people and frame the oil spill in a larger context about the need for a new national energy policy. There was scant polling by Wednesday morning to measure his success.

But the withering reviews from the commenting class were so widespread that they created a new problem for a White House that already has a plateful. Common themes were that Obama did not project a sense of executive command and was too light on details about both the cleanup and the energy legislation he is pushing in the wake of the disaster.

“It was a great speech if you were on another planet for the last 57 days,” said Olbermann on his show’s recap of the speech. - Politico Story

Obama Admin Changing Views on Terror?

(AP) A Virginia man said Wednesday he has been stuck in limbo in Egypt for the last six weeks, living in a cheap hotel and surviving on fast food after his name was placed on a U.S. no-fly list because of a trip to Yemen.

Yahya Wehelie, a 26-year-old Muslim who was born in Fairfax, Virginia to Somali parents, said he spent 18 months studying in Yemen and left in early May. The U.S. has been scrutinizing citizens who study in Yemen more closely since the man who tried to blow up a U.S.-bound airliner on Christmas was linked to an al Qaeda offshoot in Yemen.

Special Report: The Christmas Day Terror Attack

Wehelie was returning to the U.S. with his brother Yusuf via Egypt on May 5 when Egyptian authorities stopped him from boarding his flight to New York. They told him the FBI wanted to speak with him.

He said he was then told by FBI agents in Egypt that his name was on a no-fly list because of people he met in Yemen and he could not board a U.S. airline or enter American airspace. His passport was canceled and a new one issued only for travel to the United States, which expires on Sept. 12. He does not have Somali citizenship.

Wehelie said his brother Yusuf was allowed to return home, but only after he was detained for three days by Egyptian police on suspicion of carrying weapon. He said his brother was shackled to a jail wall and interrogated by a man who claimed to work for the CIA. He was then dumped in the street outside the prison when he feigned illness.

Wehelie said he had no dealings with a terrorist organization while in Yemen and does not see himself as a particularly observant Muslim. He said he was studying information technology at the Lebanese International University in the capital San'a and only visited a mosque a handful of times. He said he had also studied a little Arabic.

"It's amazing how the U.S. government can do something like this," he told The Associated Press from his ramshackle hotel in downtown Cairo.

"I'm cool with all their fighting terrorism and all that, I'm cool with that. I like that, more power to them," he said in American-accented English, wearing baggy basketball shorts and a long white T-shirt.

"My home is America and I don't know why I can't go back there," he said, adding that he even suggested to the FBI to "put me ... in an airplane with a bunch of U.S. marshals or whatever, in handcuffs. Just get me back home."

While in Yemen, Wehelie married a Somali woman whose family had close ties to his own. She remains in Yemen and was to have joined him when he returned home.

His family said Wehelie was never physically abused but subjected to enormous psychological pressure and denied access to an American lawyer his family hired for him. - CBS News Story

Taxpayers Pick up Tab for Pelosi's new $18,736 a Month Office

San Francisco is a high-rent city. Just ask Nancy Pelosi.

The House Speaker's district office in the new federal building in San Francisco costs a whopping $18,736 a month -- the highest rental paid by any member of the House -- or, more precisely, the highest rental paid by taxpayers on behalf of a member of the House. The rental price was reported by Roll Call on Monday.

The Democratic congresswoman moved last fall from her old office in the Burton Federal Building, which she occupied for 20 years, to a "greener" space in the city's new federal building -- a move and a high price that her spokesman, Drew Hammill, says was amply justified.

Hammill cited the new building's increased security measures and the new office's larger size as reasons for the move -- and the expense. "The new office space is 3,075 square feet, nearly a third larger than the old space, which was of inadequate size," he told FoxNews.com.

"As speaker, the security needs are different," he said. "The new San Francisco Federal Building offers enhanced security features, which were a major factor in the decision to move offices." - FOX News Story

Obama Team in Full PR Mode

In advance of the president's speech to the nation this evening about the government's and BP's response to the catastrophic oil spill in the Gulf of Mexico, White House press secretary Robert Gibbs confirmed that, one way or another, BP will no longer be directly responsible for processing claims from those affected by the disaster.

When asked on CBS' "The Early Show" this morning on how President Obama can prevail upon BP to expedite or streamline the process for Gulf Coast businesses and residents, Gibbs said, "The best way to prevail on BP is to take the claims process away from BP.

"The president possesses the legal authority and will use it to make this claims process independent, to take it away from BP, and to ensure that those who have been harmed economically have their claims processed quickly, efficiently, transparently, and that they're made whole again for the disaster caused by BP," Gibbs said.

"So that's going to happen?" asked anchor Harry Smith.

"That will happen," Gibbs replied. "The president will either legally compel them or come to an agreement with BP to get out of the claims process [and] give that to an independent entity, so that the people that have been damaged can get the money that they deserve quickly."

Mr. Obama is on the second day of his fourth trip to the Gulf. Yesterday he met with local businessmen in Gulfport, Miss., and toured an Alabama facility where workers clean dirty boom. On Tuesday he will visit beaches damaged by oil in Pensacola, Fla.

Acknowledging the anger and frustration among those in the region, Mr. Obama said promised yesterday that "things are going to return to normal."

Gibbs rejected a suggestion that the federal government has not been doing enough, or has superseded local and state officials in their response efforts. He also rejected criticism from Florida Senator Bill Nelson, who said last week, ""The decisions are not timely. The resources are not produced, and as a result, you have a big mess, with no command and control." - CBS News Story