Morning Splash: Bernanke Warns of Calamity; Grand Jury Slams Oakland Bldg Services; Backlash Against Netflix

The Federal Reserve chairman, Ben S. Bernanke, warned on Wednesday of a “huge financial calamity” if President Obama and the Republicans cannot agree on a budget deal that allows the federal debt ceiling to be increased. Moody’s, the ratings agency, threatened a credit downgrade, citing a “rising possibility” that no deal would be reached before the government’s borrowing authority hits its limit on Aug. 2. And the latest bipartisan negotiating session on Wednesday evening ended in heightened tension. Republicans said Mr. Obama had abruptly walked out in an agitated state; Democrats described the president as having summed up with an impassioned case for action before bringing the meeting to a close and leaving.

A college football player from San Francisco who was thrown off an airplane in a dispute over his sagging pants will not face criminal charges. Deshon Marman, 20, was arrested by San Francisco police on suspicion of trespassing, battery and resisting arrest in connection with the June 15 incident on US Airways Flight 488 at San Francisco International Airport.

The Alameda County grand jury has published a scathing review of Oakland's Building Services division, and its conclusions likely will spark a thorough overhaul of the department responsible for handling inspections and code violations for blight and illegal construction. Oakland Mayor Jean Quan said the grand jury's findings are a top priority and one of the first things that incoming City Administrator Deanna Santana will take up.

The State Board of Education tentatively approved rules Wednesday to help parents of students at low-performing schools to fire principals and teachers or transform the schools into charters. The regulations would fill in the gaps of the controversial "parent trigger" law signed last year by then-Gov. Arnold Schwarzenegger after barely passing the Legislature. The law allows parents to demand one of four school overhaul options if a majority of parents at the school or from feeder schools petition for the change.

In the space of a day, Netflix seems to have transformed itself from one of the best-loved companies to one of the most hated -- at least among thousands of its customers. After the Los Gatos-based DVD and streaming video company announced Tuesday that it was raising rates as much as 60 percent, tens of thousands of disgruntled subscribers flooded social networking sites with complaints and threats. "Sorry Netflix, but you're losing another customer of many years," read one of the more civil posts.

After California suffered its most serious whooping cough epidemic in six decades last year, a new state law requires all students entering seventh grade or above to be immunized with a booster shot to help prevent the spread of the disease. Without proof of having received the Tdap — tetanus, diphtheria and pertussis — vaccine, students will not be allowed to attend school, unless their parents sign a "personal belief exemption" waiver.

...Reacting to a flood of protests, California's Citizens Redistricting Commission has abandoned plans to pair Davis with much of Sacramento city in state Assembly and Senate districts.

Parents of children with autism are hopeful they have scored a victory this week after Blue Shield of California has agreed to pay for a form of therapy for the developmental disorder that it previously refused to cover. The announcement that Blue Shield will pay for behavioral therapies for autism treatment - a step that other providers may soon follow - was made Wednesday during a hearing at the Capitol.

More Marin municipalities are hoping local sales tax measures will help them deal with looming budget shortfalls. The San Anselmo Town Council decided Tuesday to put a sales tax initiative on the Nov. 8 ballot. The council hasn't decided how large a tax to propose, but it will range from a quarter cent to a full cent. And on Wednesday night, the Fairfax Town Council appeared poised to vote on a proposal for a local sales tax measure of either half a cent or three-quarters of a cent.

The Sonoma-Marin Area Rail Transit agency won a key approval Wednesday when a committee agreed to shift almost $33 million to the San Rafael-to-Santa Rosa commuter rail plan to help the project get rolling. In 2004, Bay Area voters approved a bridge toll increase via Regional Measure 2, including $35 million for the SMART project — about $13 million of which was spent on the completed Cal Park Hill Tunnel project. The balance of the money was to extend rail to Larkspur. But as the sales tax-driven project faltered along with the economy, it was shortened to exclude Larkspur for the time being. Now the Metropolitan Transportation Commission is looking to shift the Larkspur dollars to the revamped San Rafael-to-Santa Rosa project.

California's numbers are down, but this time it's a good thing. The state's adult smoking rate is at a record low, with just 11.9 percent of adults lighting up. Smoking rates are down across gender, ethnic and age groups in California -- although men, African-Americans and people age 25 to 44 still have the highest rates in their respective categories. But the lower adult smoking rate is a milestone for the Golden State.

The planned Irvington district BART station suffered yet another setback this week even as the City Council unanimously voted to continue funding the station and other redevelopment projects. Fremont on Tuesday became one of the first cities in the state to retain its redevelopment agency, by agreeing to return millions in agency funds to the state. City leaders originally thought that would set the stage for its redevelopment agency to issue $140 million in bonds in September to build the BART station by 2015. However, leading law firms that represent bond underwriters warned Tuesday that the legal uncertainty hanging over state redevelopment made the bonds risky investments...

Opponents of Public Defender Jeff Adachi's pension reform ballot measure are threatening legal action after releasing an undercover video that they say shows voters were tricked into signing the petition. Among the misstatements: One signature gatherer says the measure would prevent the city from continuing to install nighttime parking meters; another wrongly says it would improve city workers' benefits.

The 26-year-old girlfriend of Giovanni Ramirez, the prime suspect in the beating of Giants fan Bryan Stow, was arrested in Las Vegas on methamphetamine and weapon charges, according to CBS2 in Los Angeles. Los Angeles police have been hunting Denise Piccione since Stow’s attack, saying she is a person of interest in the vicious beating. Ramirez remains the prime suspect, according to the Los Angeles Police Department