"U.S. tax dollars should not be used to buy Chinese-made products," said bill co-sponsor Sen. Sherrod Brown (D-Ohio).

Congress should make a revamp of Fannie Mae and Freddie Mac its next financial priority after finishing the Wall Street overhaul bill, a top government regulator said Friday.

Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation (FDIC), said in speech that the two firms should not remain as quasi-governmental entities. The two government-sponsored enterprises (GSEs) were bailed out by taxpayers in 2008 and continue to rely on billions of dollars in aid.

"After the financial reform package becomes law, GSE reform should rise to the top of the agenda," Bair said.

Republicans have criticized the Democratic financial bill for leaving out the question of how to remake Fannie and Freddie. Democrats have pledged to take up the issue in separate legislation.

The Obama administration has yet to lay out its views on the two firms' futures.

Senate Finance Chairman Max Baucus (D-Mont.) and Republican Chuck Grassley (Iowa) forged the deal late Thursday.

The Republican Policy Committee just sent members' staffs an update on Thursday night's agreement between Sens. Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa) for a fully offset Medicare "doc fix." The update provides new details as to how the six-month, $6.5 billion provision would be paid for.

The text of the update is below:

You may have seen various press reports indicating that Senators Baucus and Grassley have reached agreement on a doc fix extension.  When Leader Reid offered unanimous consent to pass this SGR proposal after cloture on the entire extenders package failed last night, Sen. McConnell objected temporarily, so that all offices would have an opportunity to review the agreement.  The proposal is being hotlined this morning; however, the House is not in session today, so a UC agreement would set up consideration of the bill in that body next week.

Unemployment rates dropped in 37 states in May but improvements still aren't considered a signal that job creation is rooting nationwide. 

Six states saw an increase in the jobless rate and seven saw no change, according to a report from the Labor Department on Friday. 

Nonfarm payrolls rose in 41 states and in Washington, D.C., while only five states showed drops. The nation's most populated states — California, Texas and New York — added the largest number of jobs, but Delaware, Maine and Rhode Island added the most jobs in percentage terms.

President Barack Obama said "more needs to be done" to bring jobs and economic growth to those fams and communities not yet seeing it, during a speech Friday in Columbus, Ohio.

The Investment Company Institute is urging Congress to not include in the tax extender bill 401(k) disclosure fee rules championed by House Education and Labor Committee Chairman George Miller (D-Calif.) because the Department of Labor (DOL) will soon issue disclosure rules on retirement plans. 

"These regulations are the result of literally years of work within the Department, with input from all sectors of the regulated community," states an ICI letter to Senate leaders. "While the Institute expects the DOL rules to entail significant compliance costs for our industry, we support them." 

BP's credit rating was cut three notches Friday morning as the oil giant faces billions in costs from the oil spill in the Gulf of Mexico. 

Moody's Investors Services said today that the oil spill will have "a sustained negative impact on the group’s free cash flow generation and overall financial profile for a number of years. This assessment reflects a substantial upward revision of the estimated size of the leak, the continued failure to bring the leaking Macondo well under control, and the mounting costs and claims for damages. Moody’s believes that costs for containment, clean-up, litigation and fines are likely to be higher than the rating agency had previously expected in view of the widespread and continuing physical and economic damage."

Moody's called the creation of a $20 billion escrow fund a "mildly positive development," and characterized the staggered schedule of contributions over the next three and a half years as "manageable from a liquidity perspective, considering the strong cash flow generated from its global operations and the various measures BP has announced to conserve cash."

"Establishing a clear funding mechanism to make payments to injured parties may moderate pressure for the government to pursue more punitive actions," Moody's said in a release. 

The White House on Friday released a letter from President Barack Obama to G-20 leaders that urges them to continue efforts to shore up the global economy as they head to the summit in Toronto.

"Our highest priority in Toronto must be to safeguard and strengthen the recovery," the June 16 letter states. "We worked exceptionally hard to restore growth; we cannot let it falter or lose strength now."

Senate Democratic leaders will meet Friday to determine a way forward on tax extenders package after an attempt failed Thursday night to end debate and advance the legislation.

Senate Finance Committee Chairman Max Baucus (D-Mont.) said he wasn't sure at this point what changes or cuts would attract the one or two Republicans needed for passage, speculating that it's possible nothing can be done.

Nearly all Democrats are now aligned — 12 Democrats opposed ending debate Wednesday — with their party in support of the bill, except for Sen. Ben Nelson (D-Neb.), who has said repeatedly that he won't back a bill that's not completely offset.

The second version of the measure unveiled Wednesday night — designed to attract opponents — cut deficit spending from $80 billion to $55 billion.

But that wasn't enough for Nelson.

Baucus said he has been fighting "mightily" to get enough support to pass the bill, and he vowed Thursday night to "keep trying, because that's what the American people want us to do."

Senate Majority Leader Harry Reid (D-Nev.) wouldn't say whether the bill would be ready for floor action next week, but there's a growing sense of urgency to fix Medicare payments to doctors, extend unemployment benefits for the long-term jobless and renew expired tax breaks for small businesses.