Congress settles funding fight, for now (Reuters)

WASHINGTON (Reuters) – The House of Representatives on Tuesday passed a bill that puts the government on stable financial footing for six weeks but does nothing to resolve a battle over spending that is likely to flare again.

By a bipartisan vote of 352 to 66, the House passed a bill that funds government programs at their current levels through November 18. The measure, which passed the Senate last week, now heads to President Barack Obama to sign into law.

Budget battles have paralyzed Washington several times this year, leading to two near-shutdowns and a near-default that prompted a downgrade of the country's once-sterling debt rating.

The dispute could heat up again in the coming weeks as lawmakers try to finish work on the 12 spending bills that fund everything from weather satellites to foreign aid for the current fiscal year, which started on Saturday.

Democrats and Republicans agree on the total amount of money to be spent -- $1.043 trillion -- but differ sharply about how that money should be divided up.

House Republicans unveiled a bill last week that would deny funding for several signature Obama initiatives, including his landmark healthcare overhaul and his "Race to the Top" education program. That is likely to encounter fierce resistance from Democrats who control the Senate.

Disaster aid, normally a noncontroversial issue, could be a sticking point as well.

A fund to help victims of floods, tornadoes and other disasters nearly ran dry last week as Republicans and Democrats fought over whether the extra cost should be offset with spending cuts elsewhere.

That fund was replenished with $2.65 billion on Saturday, but the Federal Emergency Management Agency will likely have to ask Congress for more money in the coming months to help people affected by one of the most extreme years for weather in U.S. history.

The repeated brinkmanship has unnerved investors and consumers as the economy faces a renewed threat of recession. That uncertainty is likely to last through the end of the year, according to one analyst.

"The disaster aid fight demonstrated how delicate the process is an how little it takes to throw it off kilter," said Jim Dyer, a former Republican staff director for the House Appropriations Committee. "I think the threat of a shutdown is always there because we have so many people with strong positions."

(Editing by Vicki Allen)

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Google settles pharmacy charges for $500 million: report (Reuters)

SAN FRANCISCO (Reuters) – Google Inc will pay $500 million to settle government charges that it showed ads for pharmacies that operate illegally, regulators are expected to announce on Wednesday, according to a report in the New York Times.

The investigation by the United States Department of Justice was revealed by Google in May, when the company disclosed in a regulatory filing that it had set aside $500 million for a potential settlement of a federal investigation into its advertising practices.

Media reports at the time said the investigation concerned ads for online pharmacies that sold counterfeit drugs or that sold drugs to buyers who didn't have prescriptions.

Google did not immediately return a request for comment.

The United States Attorney's office in Rhode Island, which has led the investigation, is expected to make the announcement at a press conference on Wednesday, according to the New York Times.

(Reporting by Alexei Oreskovic; Editing by Derek Caney)

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JPMorgan settles muni bid-rigging case for $211 million (Reuters)

NEW YORK/WASHINGTON (Reuters) – JPMorgan Chase & Co said it agreed to pay $211 million to settle federal and state charges that its employees rigged bids for derivatives sold to at least 48 cities and not-for-profit organizations.

Bank employees allegedly submitted false, or sham bids, and communicated with competitors to fix prices, between 1999 and 2005, according to the U.S. Office of the Comptroller of the Currency.

Along the with the OCC, actions were brought against the bank by the Internal Revenue Service, the Securities and Exchange Commission, and 25 state attorneys general.

"This fraudulent conduct completely manipulated the playing field and left public entities like governments and nonprofits at a serious disadvantage," New York Attorney General Eric Schneiderman said in a statement.

JPMorgan said in its own statement that "the firm's policies -- both now and during the period in question -- expressly prohibit the conduct that gave rise to these proceedings."

The bank said it has tightened its supervision and set up new surveillance programs to ensure compliance with the law. It dissolved its municipal derivatives desk in 2008.

At least eight people from various banks, including JPMorgan, have pleaded guilty to criminal charges brought earlier in the cases.

(Reporting by Karey Wutkowski and David Pelofsky in Washington and David Henry and Joan Gralla in New York, editing by Matthew Lewis)

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BofA settles on mortgage repurchase claims (Reuters)

(Reuters) – Bank of America Corp settled nearly all of the claims related to the legacy Countrywide-issued first-lien residential mortgage-backed securitization (RMBS) repurchase exposure for $8.5 billion in cash .

The largest U.S. bank by assets said it intends to record an additional $5.5 billion provision to its representations and warranties liability for both Government-Sponsored Enterprises (GSE) and non-GSE exposures in the second quarter of 2011.

On Tuesday Reuters reported that Bank of America was close to a settlement agreement with a group of powerful group of investors that lost money on mortgage-backed securities.

(Reporting by Brenton Cordeiro; Editing by Savio D'Souza)

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