In his Economic Track Opening Session Statement in Beijing, Treasury Secretary Timothy Geithner on Monday assured the Chinese that the escalating deficit confronting the U.S. would lessen as the economic recovery takes hold.

"We will bring down our fiscal deficits to sustainable levels," he said. "The president has laid out a detailed, comprehensive plan to cut our budget deficit as a share of GDP by more than half over the next five years."

Rising deficits and increases in the debt have concerned many on Capitol Hill about Chinese investors becoming squeamish on U.S. investments. Geithner's assurance that the U.S. can handle its deficit comes as European leaders wrestle for control of their debt crisis, which is not expected to affect the global economy.

The National Center for Policy Analysis study says that tax credits in the new healthcare law could negatively impact hiring.

Republicans were forced to "back down" from blocking Wall Street reform, according to a fundraising letter sent by the president.

In the e-mail to his supporters, President Barack Obama wrote that pressure on lawmakers forced Republicans to "back down" from blocking the legislation, which the Senate passed Thursday.

"This movement proved again that the strongest special interests, who for so long have called the shots in Washington, can be beat," he wrote. "When opponents in Congress tried to block the legislation altogether, you stood up -- and they backed down. When the lobbyists pushed for loopholes and exemptions just before a final vote, you did not relent -- and we fought them off."

Heading into the midterm elections, Democrats are looking to capitalize on momentum following the passage of the bill imposing new regulations on the financial services industry. 

Several Republicans helped Democrats pass the bill.

Three Republicans -- Sens. Olympia Snowe (Maine), Susan Collins (Maine) and Scott Brown (Mass.) crossed the aisle to vote to break a filibuster of the bill. Brown cited assurances he received from Democratic leaders, and phone calls to his senatorial office, in his decision to vote for the bill.

Sen. Chuck Grassley (R-Iowa) joined them in voting for final passage. No House Republicans voted for the lower chamber's bill last year. 

Cross-posted from the Briefing Room

Federal prosecutors have decided not to bring charges against an AIG executive at the center of the financial storm.

Democratic efforts to hike taxes on hedge funds and other investment managers will raise $19 billion during the next decade, according to a nonpartisan estimate late Friday.

House and Senate Democrats are looking to increase taxes on "carried interest" at hedge funds, real estate partnerships, private equity firms, venture capital companies and other funds. Democrats intend to use the increased tax revenue to pay for a package of spending provisions, including an extension of unemployment benefits.

The carried interest tax is an offset for $174 billion in new spending under the package, according to the Congressional Budget Office (CBO). The measures are part of legislation up for consideration in the House as early as next week.

The carried interest tax would raise $19 billion between 2010 and 2020, according to estimates prepared by CBO and the Joint Committee on Taxation. The estimates were sent to House Ways & Means Committee Chairman Sandy Levin (D-Mich.) on Friday evening.

Lawmakers are looking to change the tax structure so that fund managers pay more of their taxes at higher income tax rates rather than lower capital gains rates. Starting in 2013, 75 percent of carried interest would be taxed at higher income rates and the remaining 25 percent would be treated as capital gains, according to a summary of the legislation.

Kenneth Johnson will permanently take over as chief financial officer of the Securities and Exchange Commission. 

The 37-year-old Johnson will lead the SEC's Office of Financial Management, which handles the budget, finance and accounting operations for the federal regulator, Chairman Mary Schapiro announced Friday.  

"His deep experience in the financial arena will be incredibly valuable as we grow as an agency," Schapiro said in a release. 

Johnson said he is "deeply committed to strong financial management, and I'm proud to lead the agency's initiatives in this area." 

He joined the SEC in 2003 as a management analyst in the Office of the Executive Director, advising on the budget process and responded to inquiries from the Office of Management and Budget and Congress in regards to the agency's budget. In 2006, he became chief management analyst. 

Previously he worked as a commerce analyst at the Congressional Budget Office. 

Stocks made a late rebound Friday as the Dow Jones industrials closed up 125 points, a day after recording its worst finish in more than a year. 

After a day of yo-yoing, volatile trading, the market rebounded slightly despite intensifying fears that Europe's debt problems will negate improvements in the recovering global economy. 

The markets again fell sharply again today from the morning's opening and went on a roller coaster ride until the closing bell. 

Overall, the Dow was up 125.38 points or 1.2 percent to finish at 10,193.39 while the S&P 500 index was up 1.5 percent and Nasdaq composite increased 1.1 percent. 

The American Institute of Architects (AIA) on Friday criticized lawmakers for slapping a withholding tax on S corporations in legislation extending several tax and spending measures. 

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Despite presidential courting, a group representing the nation's top executives expressed disappointment in the version of financial regulatory reform legislation passed in the Senate on Thursday night. 

Business Roundtable members, who represent $6 trillion in annual revenues and 12 million employees, have advocated for an overhaul of financial regulations but said Friday they "are extremely disappointed" about the bill that "raises more questions and uncertainty than workable solutions."

"It has no cost-benefit analysis and no examination of its impact on the more than 12,000 non-financial publicly traded companies," said John Castellani, president and CEO of the Business Roundtable in a release. "The potential negative impact to Main Street is alarming."

President Barack Obama met with members of the group in March about his economic policies and his push for financial reform.