POLITICAL HOT TOPICS: Wednesday, May 25, 2011

The CNN Washington Bureau’s morning speed read of the top stories making news from around the country and the world. Click on the headlines for more.

WASHINGTON/POLITICAL
For the latest political news: http://www.CNNPolitics.com

CNN: Democrat Kathy Hochul wins House seat in New York special election
Democrat Kathy Hochul swept to victory Tuesday night in a closely watched Congressional election in New York state, which turned into a proxy battle on a House Republican proposal on Medicare. …The seat had been considered safe for Republicans, who had held the district for more than four decades.

Washington Post: Democrats join Republicans in questioning Obama’s policy on Israel
Top Democrats have joined a number of Republicans in challenging President Obama’s policy toward Israel, further exposing rifts that the White House and its allies will seek to mend before next year’s election. …Senate Majority Leader Harry M. Reid (Nev.), House Minority Whip Steny H. Hoyer (Md.) and other Democrats appeared to reject the president’s reference to the 1967 lines in his latest attempt to nudge along peace talks, thinking that he was giving away too much, too soon.

BBC: President Obama in UK: Visit's focus shifts to politics
The Nato operation in Libya and ongoing tensions in the Middle East and north Africa are expected to be high on the agenda when Mr Cameron and Mr Obama meet in the morning in Downing Street. …Later in the day, Mr Obama will give a speech on US foreign policy at Westminster Hall, an honour usually reserved for British monarchs. The hall has seen speeches from a number of heads of state – most recently Pope Benedict XVI in 2010 – but Mr Obama will be the first US president to give an address there to both Houses of Parliament.

ABC News: John Edwards: US Green-Lights Prosecution for Alleged Campaign Law Violations Tied to Affair Cover-Up
The United States Department of Justice has green-lighted the prosecution of former presidential candidate John Edwards for alleged violations of campaign laws while he tried to cover up an extra-marital affair, ABC News has learned. A source close to the case said Edwards is aware that the government intends to seek an indictment and that the former senator from North Carolina is now considering his limited options. He could accept a plea bargain with prosecutors or face a potentially costly trial.

CNN: Biden says increased revenue must be part of deficit reduction plan
Vice President Joe Biden told bipartisan congressional negotiators Tuesday that additional tax revenues must be part of any deal to raise the nation's debt ceiling. …Biden didn't say if he was talking about tax increases or reforms to the tax code that would lower rates while increasing revenue to the government. Most Republicans oppose either approach as part of a deal to increase the debt limit before the August deadline when the government would default on its loans.

NATIONAL
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CNN: Deadly tornadoes churn across Oklahoma, Kansas, Arkansas
Severe weather rampaged across the U.S. heartland, claiming at least eight lives across Arkansas, Kansas and Oklahoma, in what has already become a historic spring storm season. Early Wednesday, the storm system was contributing to sleepless nights from southwestern Iowa to central Texas, pelting many areas with golf ball-size hail.

Chicago Tribune: Blagojevich plans to take witness stand at his corruption retrial, sources say
Rod Blagojevich's retrial on corruption charges has been mostly a scaled-back repeat of last summer's first installment, but that could soon change dramatically if the former governor testifies in his own defense and calls Chicago Mayor Rahm Emanuel among his first witnesses. With the defense set to begin presenting evidence Wednesday, a source with knowledge of the situation said Emanuel was told to prepare to testify at the retrial.

CNN: Loughner competency hearing set for Wednesday
[Jared Lee] Loughner was indicted in March on 49 counts, including murder and attempted murder. He has been ordered to undergo a mental evaluation to help a judge determine if he is competent to stand trial in the case. That competency hearing is scheduled for Wednesday in a federal court in Tucson.

CNN: New Jersey governor's school budget ruled unconstitutional
The New Jersey Supreme Court ruled Tuesday that $500 million must be restored to the state's poorest school districts after it found part of Gov. Chris Christie's controversial 2011 budget to be unconstitutional. …According to court documents, Christie's budget fails to meet the funding requirements set forth by the School Funding Reform Act of 2008, a spending formula that guarantees financial support for all New Jersey public school districts.

Wall Street Journal: Public Schools Charge Kids for Basics, Frills
Though public schools have long charged for extras such as driver's education and field trips, many are now asking parents to pay for supplies needed to take core classes—from biology-lab safety goggles to algebra workbooks to the printer ink used to run off grammar exercises in language arts. …Public-school administrators say the fees—some of which are waived for low-income families—allow them to continue to offer specialty classes and activities that would otherwise fall to the budget ax.

INTERNATIONAL
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CNN: Mubarak to be charged for corruption, protester deaths
Mubarak, who was forced from office in February, is being charged with consenting to a plan to kill protesters in Cairo's Tahrir Square on January 25, according to Adel Saeed, a spokesman for the prosecutor's office. Mubarak ordered police officers to use live ammunition while they fired into the crowd of protesters, Saeed said. The former president could be executed if he is convicted of ordering the killing of protesters, Egyptian Justice Minister Mohamed Abdelaziz al-Juindy said earlier this month.

CNN: U.S. slaps sanctions on companies working with Iran
The United States is imposing sanctions against seven companies for working with Iran in the energy sector, part of an effort to suppress Tehran's nuclear program, the State Department said Tuesday. The companies in Iran, the United Arab Emirates, Israel, Monaco and Venezuela's state oil company "engaged in activities related to the supply of refined petroleum products in Iran," Deputy Secretary of State James Steinberg announced.

CNN: Spokesman: Israel will not commit to settlement freeze before talks
In his speech to the joint meeting of Congress on Tuesday, Israeli Prime Minister Benjamin Netanyahu said his country is willing to make "painful compromises," including ceding some Israeli settlements in order to achieve a peace deal with a future Palestinian state. But Mark Regev, a spokesman for the Israeli prime minister, said his government is not ready to declare the size of such concessions.

CNN: Suicide bomber rams police station, kills 7 in Pakistan
A suicide bomber in an explosive-laden car rammed into a police station in Peshawar, Pakistan, on Wednesday, in a Taliban attack that killed seven police officers and injured several others, a senior police official said. The Pakistani Taliban said the attack was to avenge the killing of innocent civilians.

Financial Times: Bric nations say European IMF claim ‘obsolete’
The IMF executive directors for Brazil, Russia, India, China and South Africa attacked the “obsolete unwritten convention” that the head of the fund is always a European and calling for a “truly transparent, merit-based and competitive process”. The statement is a rare example of co-ordination by the Brics countries and marks a challenge to Europe, which is uniting behind Christine Lagarde, the French finance minister, as its candidate in an effort to keep control of the IMF job.

BUSINESS
For the latest business news: http://www.CNNMoney.com

CNNMoney: AIG stock sale raises $8.7 billion
Shares of American International Group's long-awaited stock sale priced at $29 apiece late Tuesday to raise $8.7 billion, leaving the U.S. government with a tiny profit on the offering, the company and Treasury Department announced. AIG will sell 100 million shares, while Treasury, the bailed-out insurer's biggest shareholder, will offer 200 million.

CNNMoney: Chrysler's $7.6 billion I.O.U. paid off
Chrysler has paid back $7.6 billion worth of high-interest bailout loans to the U.S. and Canadian governments, the automaker said Tuesday. The payback included the $5.9 billion the carmaker owed in loans to U.S. taxpayers and the $1.7 billion owed to the Canadians, Chrysler said. …This doesn't mean that Chrysler is debt free. In fact, the automaker took out additional loans last week to help pay off older debt. But the company said it could save $300 million in annual interest payments through refinancing.

National Journal: Microsoft Backing Merger Between AT&T and T-Mobile
One of the newest players in the mobile phone space—Microsoft—is backing AT&T’s proposed merger with T-Mobile, saying the combined firm will help expand the nationwide rollout of new broadband services. “We see it as a step toward building out broadband capability and capacity,” Microsoft General Counsel Brad Smith said Tuesday during a briefing with reporters at the company’s new Washington, D.C., Innovation and Policy Center.

Time: Can Hollywood Afford to Make Films China Doesn't Like?
China currently only allows 20 foreign titles to be screened domestically each year. While studios can lobby for their films to be included in that quota, there is no magic formula that guarantees distribution. China does not have a film-rating system, and all movies must secure government approval from government censors before being shown commercially. …A movie that doesn't make the cut automatically loses out on the billions of renminbi China's audiences have to offer.

In Case You Missed It…
Ben Wedeman reports on the families of Misrata's missing, whose number now surpasses 1,000.
http://www.cnn.com/video/#/video/world/2011/05/24/wedeman.libya.misrata.taken.cnn