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AP - President Barack Obama takes his leave after speaking at a fundraiser for Sen. Chris Dodd, D-Conn., left, in ...

Legislation to establish President Barack Obama's proposed Consumer Financial Protection Agency cleared a key hurdle this week. But it's already been watered down from what Obama proposed and will likely become even weaker when it comes up against higher hurdles on the House floor and in the Senate. It may even die along the way.

Banks flatly oppose a new consumer agency, arguing their current regulators can handle the task. The U.S. Chamber of Commerce has weighed in with a $2 million ad campaign against the plan. And some industry claims, particularly those from bankers back home, have proved persuasive with many lawmakers.

Ahead lie enormous obstacles: potentially debilitating amendments on the House floor and, ultimately, a tougher Senate landscape, where Republican support is essential to passage of any new financial regulation scheme.

"If they are insisting on a separate agency, a stand alone agency, it's going to be difficult to do a bipartisan bill," Sen. Richard Shelby of Alabama, top Republican on the Senate banking committee, said in an interview. "I wouldn't be interested in a stand alone consumer agency."

The committee's Democratic chairman, Sen. Christopher Dodd of Connecticut, has championed the agency and voiced frustration over the industry criticism.

There are "all sorts of ways" to address consumer protection, Dodd said in a brief interview, and emphasized the need to re-regulate large financial institutions so they can't again trigger catastrophic failures that ripple throughout the economy.

"Of all the things we're doing, this fixation and this preoccupation with that one issue is a little misplaced," he said of attacks on the consumer agency.

Hints of looming pitfalls for a new consumer agency were evident in the debate this week before the House Financial Services Committee. Even there, where the president's party holds a 42-29 edge, Obama didn't get all he wanted. Up until the end, White House aides buttonholed individual members, fighting unsuccessfully against yet another exemption to the powers of the proposed consumer protection agency.

The panel's chairman, Massachusetts Rep. Barney Frank, acknowledged later that of all the aspects of financial regulation that he is contending with, the consumer agency was politically the most difficult. Indeed, consumer advocates applauded him for preserving as many consumer protections as he did.

Still, Travis Plunkett of the Consumer Federation of America called the bill "battered and bruised."

Obama had called for a robust agency to police the fine print of credit cards, mortgages and other services ranging from payday loans to auto financing. The president wanted to make banks offer standardized "plain vanilla" mortgages, simple no frills home loans that customers could compare to more elaborate mortgages. He wanted to make lenders communicate with their customers more clearly. And he wanted to invest the new agency with the power to examine bank books, along with the other regulators already checking banks for their safety and soundness.

As the legislation stands now, all those measures are gone or compromised.

The idea of standardized mortgages, which administration officials had held up as a key protection for consumers, proved hard to sell even to Democrats. In the end, it wasn't a matter of bowing to the big banking lobbies but rather lawmakers listening to business leaders back home -- the bankers, auto dealers and Rotarians who make up the fabric of local politics

Moderate committee Democrats succeeded in exempting thousands of banks from examination by the consumer agency, though they'd still have to abide by its rules. They argued that small community banks would be overburdened with regulators and hadn't been the cause of the financial crisis anyway. But the standard measure of a community bank is one that holds assets of $1 billion or less. There are about 7,500 such banks across the country.

The committee, however, decided to make any bank with assets under $10 billion off limits to the new consumer agency's examiners. There were also exemptions for retailers, title insurance providers, and, finally, auto dealers, although the scope of the latter is somewhat uncertain.

It was the auto dealers exception that the White House fought to no avail Thursday. While the agency would still regulate firms that provide auto financing themselves, consumer advocates say dealers are the ones who make the financing pitch no matter who actually makes the loan and should be equally covered.

The Obama administration also wanted states to have the right to write consumer laws that are tougher than federal regulations. Facing opposition from some moderate Democrats, the committee adopted a compromise that gives federal regulators the right to pre-empt state laws on a case-by-case basis.

In many instances, the changes had grudging support from most Democrats but passed by voice vote with the backing of committee Republicans. Ultimately, though, only one Republican voted for the final legislation.

"In the end," said committee Democrat Emanuel Cleaver of Missouri, "we have weakened legislation that the opposition is not going to support."

US unveils broad effort to limit executive pay and risk-taking that led to financial crisis

The Treasury Department ordered seven big companies that haven't repaid their government bailout money to cut their top executives' average total compensation -- salary and bonuses -- in half, starting in November. Under the plan, cash salaries for the top 25 highest-paid executives will be limited to $500,000 and, in most cases, perks will be capped at $25,000.

The Federal Reserve came at the issue from another direction. It proposed to monitor pay packages at thousands of banks -- even those that never received bailout money -- to ensure they don't encourage reckless gambles.

Neither plan, though, is expected to kill Wall Street's culture of lavish pay. The Fed proposal doesn't set specific limits on executive compensation, so it's unclear how it would actually affect pay. And the Treasury plan covers only 175 people, with the pay limits lasting only until the companies repay what they received from the $700 billion bailout fund.

For the already struggling companies, it also introduces a new concern: brain drain. The executives targeted by "pay czar" Kenneth Feinberg are among the most talented and productive at their companies.

"These people are considered the brains of the machine," said Steven Hall, who runs an executive compensation firm bearing his name. "They are who can pull you through the tough times. This will give them reason to leave."

The Treasury plan is limited to the seven bailed-out companies -- Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial. The Fed's proposal is much broader in scope, covering nearly 6,000 banks and a wider range of employees -- from executives to traders to loan officers.

Rather than set pay levels at specific banks, the Fed would review -- and could veto -- pay policies. The plan is subject to a 30-day public comment period.

David Yermack, a finance professor at the Stern School of Business at New York University, called Treasury's pay curbs a "symbolic" act.

"I think the government is trying to make examples of some banks and hoping others will follow," Yermack said. "I think that's naive. Wall Street bankers and traders are motivated by money, and they're going to work for whoever pays them the most."

He predicted the seven firms would find ways to bypass the curbs through implicit promises that aren't written in contracts.

"They could say to someone, 'I'll give you a really big bonus three or four years from now. Just be patient,'" Yermack said. "There's an understanding that if you play the game, you'll be taken care of. That's been going on as long as there have been businesses, and Feinberg isn't going to be able to stop that."

Feinberg restructured the pay packages for top executives to provide a base salary and a portion described as "stock salary." The employees must hold the stock for two years. They can then sell only one-third of the stock payment each year for three years.

Feinberg said his goal was to tie compensation more closely to the long-term performance of the company.

In one pay plan, the three highest earners at Citigroup will receive a base salary of $475,000. Each executive also will be paid between $5.6 million and $5.8 million in company stock to be redeemed beginning in 2011. The third category of long-term restricted stock will equal $3 million for each executive.

The Feinberg plan provides an escape clause that might let some executives avoid the restrictions: It says the rules allow for "exceptions where necessary to retain talent and protect taxpayer interests."

According to Feinberg, base salaries above $1 million were approved for the new CEO of AIG, and for two employees of Chrysler Financial.

Under a package approved by Feinberg over the summer, AIG CEO Robert Benmosche will get a pay package of about $10.5 million.

Feinberg became pay czar earlier this year as Congress was responding to outrage about huge bonuses being paid to AIG. Lawmakers amended the bailout law to require that executive compensation at companies getting exceptional assistance be curbed. Feinberg has been reviewing compensation packages since August.

President Barack Obama welcomed Treasury's decision and urged Congress to pass legislation to give shareholders a voice in executive pay packages.

"It does offend our values when executives of big financial firms that are struggling pay themselves huge bonuses even as they rely on extraordinary assistance to stay afloat," Obama said.

In an interview with CNBC, Feinberg was asked if he thought the restrictions would influence pay at other Wall Street firms outside his authority.

"I hope so, but that would be voluntary," he said. "It's not the government's business."

Some observers said the changes could have a broader influence on pay beyond the seven companies.

"It's going to put them in a position of having to be more aggressive in defending their arrangements now that you've got an alternative out there that's been blessed by the government," said Mark Borges, a principal with Compensia, a Northern California compensation consulting firm.

It's also possible the restrictions could help govern pay at the thousands of banks that would be affected by the Fed's plan, said Charles Elson, director of the University of Delaware's Weinberg Center for Corporate Governance.

"It's highly probable that the Fed could use this as a model in their own guidelines, and yes, I think that would have a significant impact on pay," he said.

Some analysts saw the potential for restrictions to backfire. Yermack said linking pay to long-term incentives like deferred stock can encourage more excessive risk-taking, not less.

"If you want people to take more risks, pay them more in stock," he said. "It holds out the possibility of very big gains in a way that fixed contracts do not."

Others said the restrictions reinforced what many financial observers see as a banking system divided between the haves and have-nots. They wondered whether pay caps could jeopardize taxpayer money by making it harder for bailed-out firms to retain and hire top talent.

"You have got the companies that are unencumbered and can offer anyone anything they want, and you've got the other companies that are stuck with what they have," said David Schmidt, a senior consultant on executive pay at James F. Reda & Associates. "It creates a bit of a dilemma in banks' efforts to repay taxpayers."

A Bank of America spokesman complained that the restrictions would hurt its competitiveness.

"Competitors not subject to the pay restrictions already are exploiting this situation by identifying our top performers and using pay concerns to recruit them away for fair market compensation," spokesman Scott Silvestri said.

GM said it will adopt the compensation changes outlined by Feinberg by shifting its pay packages toward non-cash compensation tied to company performance.

CEO Fritz Henderson's base salary was cut 30 percent to about $1.3 million earlier this year when GM accepted government loans. Henderson received compensation valued at about $8.7 million in 2008, but much of that included stock and options that now are nearly worthless due to GM's bankruptcy filing.

Chrysler Group LLC CEO Sergio Marchionne and other Fiat executives who work for both Chrysler and Fiat were exempted from the pay cuts as part of the agreement with the U.S. government to take over management control of Chrysler.

Executives who work solely for Chrysler could be affected, but many of the top earners under Chrysler's former owner have left the company.

Under the Fed proposal, the 28 biggest banks would develop their own plans to make sure compensation doesn't spur undue risk-taking. If the Fed approves, the plan would be adopted and bank supervisors would monitor compliance.

At smaller banks -- where compensation is typically less -- Fed supervisors will conduct reviews. Those banks don't have to submit plans.

The Fed refused to identify the 28 banks that will have to submit plans. But Citigroup, Bank of America and Wells Fargo & Co. are usually included on such lists. Nearly 6,000 banks regulated by the Fed would be covered.

Jacobs reported from New York. Associated Press Writers Daniel Wagner, Jeannine Aversa, Ken Thomas, Jim Kuhnhenn and Marcy Gordon in Washington, Ieva M. Augstums in Charlotte, N.C., and Tom Krisher in Detroit contributed to this report.

Belief in global warming is cooling, poll says, as Congress weighs limits on emissions

WASHINGTON (AP) -- Americans seem to be cooling toward global warming.

AP - Nobel Prize laureate 2007 and Chairman of the intergovernmental panel on Climate Change Rajendra K. Pachauri speaks during ...

Just 57 percent think there is solid evidence the world is getting warmer, down 20 points in just three years, a new poll says. And the share of people who believe pollution caused by humans is causing temperatures to rise has also taken a dip, even as the U.S. and world forums gear up for possible action against climate change.

In a poll of 1,500 adults by the Pew Research Center for the People & the Press, released Thursday, the number of people saying there is strong scientific evidence that the Earth has gotten warmer over the past few decades is down from 71 percent in April of last year and from 77 percent when Pew started asking the question in 2006. The number of people who see the situation as a serious problem also has declined.

The steepest drop has occurred during the past year, as Congress and the Obama administration have taken steps to control heat-trapping emissions for the first time and international negotiations for a new treaty to slow global warming have been under way. At the same time, there has been mounting scientific evidence of climate change -- from melting ice caps to the world's oceans hitting the highest monthly recorded temperatures this summer.

The poll was released a day after 18 scientific organizations wrote Congress to reaffirm the consensus behind global warming. A federal government report Thursday found that global warming is upsetting the Arctic's thermostat.

Only about a third, or 36 percent of the respondents, feel that human activities -- such as pollution from power plants, factories and automobiles -- are behind a temperature increase. That's down from 47 percent from 2006 through last year's poll.

"The priority that people give to pollution and environmental concerns and a whole host of other issues is down because of the economy and because of the focus on other things," suggested Andrew Kohut, the director of the research center, which conducted the poll from Sept. 30 to Oct. 4. "When the focus is on other things, people forget and see these issues as less grave."

Andrew Weaver, a professor of climate analysis at the University of Victoria in British Columbia, said politics could be drowning out scientific awareness.

"It's a combination of poor communication by scientists, a lousy summer in the Eastern United States, people mixing up weather and climate and a full-court press by public relations firms and lobby groups trying to instill a sense of uncertainty and confusion in the public," he said.

Political breakdowns in the survey underscore how tough it could be to enact a law limiting pollution emissions blamed for warming. While three-quarters of Democrats believe the evidence of a warming planet is solid, and nearly half believe the problem is serious, far fewer conservative and moderate Democrats see the problem as grave. Fifty-seven percent of Republicans say there is no solid evidence of global warming, up from 31 percent in early 2007.

Though there are exceptions, the vast majority of scientists agree that global warming is occurring and that the primary cause is a buildup of greenhouse gases in the atmosphere from the burning of fossil fuels, such as oil and coal.

Jane Lubchenco, head the National Oceanic and Atmospheric Administration, told a business group meeting at the White House Thursday: "The science is pretty clear that the climate challenge before us is very real. We're already seeing impacts of climate change in our own backyards."

Despite misgivings about the science, half the respondents still say they support limits on greenhouse gases, even if they could lead to higher energy prices. And a majority -- 56 percent -- feel the United States should join other countries in setting standards to address global climate change.

But many of the supporters of reducing pollution have heard little to nothing about cap-and-trade, the main mechanism for reducing greenhouse gases favored by the White House and central to legislation passed by the House and a bill the Senate will take up next week.

Under cap-and-trade, a price is put on each ton of pollution, and businesses can buy and sell permits to meet emissions limits.

"Perhaps the most interesting finding in this poll ... is that the more Americans learn about cap-and-trade, the more they oppose cap-and-trade," said Sen. James Inhofe, R-Okla., who opposes the Senate bill and has questioned global warming science.

Regional as well as political differences were detected in the polling.

People living in the Midwest and mountainous areas of the West are far less likely to view global warming as a serious problem and to support limits on greenhouse gases than those in the Northeast and on the West Coast. Both the House and Senate bills have been drafted by Democratic lawmakers from Massachusetts and California.

One of those lawmakers, Sen. Barbara Boxer of California, told reporters Thursday that she was happy with the results, given the interests and industry groups fighting the bill.

"Today, to get 57 percent saying that the climate is warming is good, because today everybody is grumpy about everything," Boxer said. "Science will win the day in America. Science always wins the day."

Earlier polls, from different organizations, have not detected a growing skepticism about the science behind global warming.

Since 1997, the percentage of Americans that believe the Earth is heating up has remained constant -- at around 80 percent -- in polling done by Jon Krosnick of Stanford University. Krosnick, who has been conducting surveys on attitudes about global warming since 1993, was surprised by the Pew results.

He described the decline in the Pew results as "implausible," saying there is nothing that could have caused it.

The poll's margin of error was plus or minus 3 percentage points.

Associated Press writers Seth Borenstein and Kevin Freking contributed to this report.

IMF says it is committed to giving more voting power to developing countries

ISTANBUL (AP) -- A key panel of the International Monetary Fund said Sunday that it supports giving more voting power to emerging market and developing countries, warning that the legitimacy of the institution was at stake.

AP - Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, IMF, speaks during a news conference in Istanbul, Turkey, ...

The group's International Monetary and Financial Committee said it backs a shift of at least 5 percent of voting power from countries with ample representation to those with little influence. The move would seek to reflect changes in the global economy, with strong growth in countries that once lagged far behind the elite club of rich nations.

"Quota reform is crucial for increasing the legitimacy and effectiveness of the Fund," the committee said in a statement. It planned to review progress at its next meeting in Washington on April 24, and sought an agreement on the voting shift by January 2011. The change would then be subject to approval by the legislatures of some member countries.

"This is a process that will take time. It won't happen overnight," said committee chairman Youssef Boutros-Ghali. "We are reforming an organization that is complex, sophisticated and reaching every corner of the world economy."

The committee, which sets the IMF's agenda, said it was also committed to protecting the voting share of its poorest members. Panel members include IMF Managing Director Dominique Strauss-Kahn and U.S. Treasury Secretary Timothy Geithner, and other finance chiefs.

The announcement came at the IMF's annual meeting, held this year in Istanbul. It followed a decision at a Pittsburgh forum that the G-20 nations would become the world's main economic decision-making forum, effectively taking over the role of the G-7 group of rich countries.

Earlier Sunday, Geithner said "a more representative, responsive and accountable governance structure is essential to strengthening the IMF's legitimacy."

He noted that G-20 countries had committed to shift some control in the IMF to countries with relatively little input. The Group of 20 includes developing economic powerhouses such as China, India and Brazil.

Geithner said the IMF should outline soon how the proposed transfer of voting power can occur. He said reform of the IMF's executive board was vital to modernizing the Washington-based institution, which represents 186 countries. The U.S. recommends reducing the board size while preserving the current number of emerging market and developing country chairs.

The IMF is usually headed by a European and the World Bank by an American. It has received pledges of more money to help poor countries struggling to emerge from the global economic crisis, and a broader range of nations wants to have more say in how the funds are handled.

Aid agency OXFAM says current voting formulas at the IMF give Luxembourg more weight than the Philippines, which has almost 200 times the population. It said the 5 percent shift in voting power was insufficient.

"They need to give more voice to the poorest countries, have fewer European seats on the Board, and get rid of the U.S. veto," said Caroline Pearce, OXFAM policy adviser. She said the IMF can only be relevant if it gives "countries hardest hit by the financial crisis a say in their own destiny."

The U.S. has a 17 percent voting stake in the IMF, effectively giving it veto power because major decisions require an 85-percent majority to pass.

SOLIDAR, a European network of non-governmental organizations, said the calls for a 5 percent shift amounted to "grandstanding" that distracted attention from the harsh impact of IMF austerity policies in nations including Ethiopia and Latvia.

"Governments are still being forced to cut pensions, jobs in the public sector, unemployment benefits, teacher's salaries, and the list goes on," Andrea Maksimovic of SOLIDAR said in a statement.

The IMF has often been criticized for allegedly imposing tough measures on countries in exchange for loans and without sufficient regard for the impact on the poor.

IMF officials say they have shown more flexibility in recent years. John Lipsky, the IMF's No 2. official, has said the IMF is undertaking "substantial efforts" toward internal reform that will provide "a fair shake for all our members."

At the Istanbul conference, a group of 35 heavily indebted countries welcomed the G-20's new role as a leader in global economic decisions, but said poor nations also needed representation to express their financing needs.

"We need at least one seat so that almost 1 billion Africans can express their views," said Lazare Essimi Menye, Cameroon's finance minister.

Associated Press Writer Suzan Fraser contributed to this report.

Electric carmaker Tesla Motors to begin offering house calls for service and repairs

NEW YORK (AP) -- Electric carmaker Tesla Motors is launching a maintenance plan where mechanics travel to owners' homes or offices to perform repairs and tuneups.

Tesla, which makes the $109,000 Roadster electric car, said the plan is convenient for customers who won't have to bring their vehicle to a showroom, while cutting costs by making a large network of Tesla service locations unnecessary.

"You know how there's a Chevy dealer on every block or strip mall? We don't intend to have a footprint like this," spokeswoman Rachel Konrad said.

But the service won't be cheap. The carmaker will charge vehicle owners $1 for every roundtrip mile its technicians travel, from showroom to garage, with a minimum charge of $100 per trip.

For the Tesla driver in Manhattan, where the company opened a store over the summer, the cost won't be much. But for Roadster devotees in Honolulu, that's a charge of about $4,800 per trip -- not including the cost of repair.

Still, Konrad said the maintenance cost will still be low because electric cars have fewer moving parts and require less "care and feeding" than vehicles powered by internal combustion.

The company said a recall of hundreds of Roadsters in May to address a steering problem was in part the inspiration for the plan. Rather than ask owners to bring the vehicle to a showroom -- there are only four currently in the U.S. -- it sent technicians to repair the cars at their homes and offices. The response was overwhelmingly positive, Konrad said.

The San Carlos, California-based startup has so far sold about 700 Roadsters, its only vehicle on the market now. The company in June was approved for $465 million in loans from the U.S. Department of Energy to help it build next-generation electric cars.

It has plans to introduce an electric sedan, the Model S, which it hopes to price under $50,000 after government rebates when it goes on sale in 2011.

The new service plan will be standard for all new Tesla vehicles and current owners will have their warranties updated so they are covered by the new plan, Konrad said.

As US faces growing cyberthreats, everyday users must learn to block the digital doorways

WASHINGTON (AP) -- When swine flu broke out, the government revved up a massive information campaign centered on three words: Wash your hands. The Obama administration now wants to convey similarly clear and concise guidance about one of the biggest national security threats in your home and office -- the computer.

AP - In this Sept. 18, 2007 file photo, National Intelligence Director Mike McConnell testifies on Capitol Hill in Washington. ...

Think before you click. Know who's on the other side of that instant message. What you say or do in cyberspace stays in cyberspace -- for many to see, steal and use against you or your government.

The Internet, said former national intelligence director Michael McConnell, "is the soft underbelly" of the U.S. today. Speaking at a new cybersecurity exhibit at the International Spy Museum in Washington, McConnell said the Internet has "introduced a level of vulnerability that is unprecedented."

The Pentagon's computer systems are probed 360 million times a day, and one prominent power company has acknowledged that its networks see up to 70,000 scans a day, according to cybersecurity expert James Lewis.

For the most part, those probes of government and critical infrastructure networks are benign. Many, said McConnell, are a nuisance and some are crimes. But the most dangerous are probes aimed at espionage or tampering with or destroying data.

The attackers could be terrorists aiming at the U.S. culture and economy, or nation-states looking to insert malicious computer code into the electrical grid that could be activated weeks or years from now.

"We are the fat kid in the race," said Lewis. "We are the biggest target, we have the most to steal, and everybody wants to get us."

And if, for example, the U.S. gets into a conflict with China over Taiwan, "expect the lights to go out," he said.

The exhibit at the Spy Museum -- "Weapons of Mass Disruption" -- tries to bring that threat to life.

A network of neon lights zigzags across the ceiling. Along the walls computer screens light up with harrowing headlines outlining the country's digital dependence. Drinking water, sewer systems, phone lines, banks, air traffic, government systems, all depend on the electric grid, and losing them for weeks would plunge the country into the 1800s.

Suddenly, the lights go out and the room is plunged into silent darkness.

Seconds later as the sound system crackles, a video ticks off a pretend crisis: no food, no water, system shutdown.

That faux threat has become a prime concern for the government, but fully protecting the grid and other critical computer systems are problems still waiting a solution.

Federal agencies, including the Pentagon and the Department of Homeland Security, are pouring more money into hiring computer experts and protecting their networks.

But there are persistent questions about how to ensure that Internet traffic is safe without violating personal privacy.

One answer, experts said last week, is to begin a broader public dialogue about cybersecurity, making people more aware of the risks and how individuals can do their part at home and at work.

Some will find it easier than others.

Much of the younger generation has grown up online and are more likely to know about secure passwords, antivirus software and dangerous spam e-mails that look to steal identities, bank accounts and government secrets.

Older people moved into the digital universe as it began to evolve and most have not grown up thinking about how to protect themselves online.

"Detection and prevention are fast, but crime is still faster," said Phil Reitinger, director of the National Cybersecurity Center. The key, he said, "is to make sure that we're all getting the word out about not only the seriousness of the threat, but the fairly simple steps that people can take to help secure their systems and their lives and families from the threats that are out there."

In the computer world, "wash your hands" is less about tossing your keyboard into the dishwasher -- although some have tried -- and more about exercising caution.

Those steps include:

--using antivirus software, spam filters, parental controls and firewalls.

--regularly backing up important files to external computer drives.

--thinking twice before sending information over the Internet, particularly when using wireless or unsecured public networks.