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(03/15/09 2:13am)
____simple_html_dom__voku__html_wrapper____>WASHINGTON — Insurance giant American International Group has agreed to Obama administration demands to restructure some of its corporate bonuses.However, the troubled company will still pay about $100 million in bonuses, The New York Times reported Saturday. This comes after the Treasury Department determined that the government did not have the legal authority to block those payments.AIG has received more than $170 billion in bailout funds from the government.Treasury Secretary Timothy Geithner has demanded that the company scale back future bonus payments where legally possible, an administration official said Saturday.This official, who spoke on condition of anonymity because of the sensitivity of the issue, said that Geithner had called AIG Chairman Edward Liddy on Wednesday to demand that Liddy renegotiate AIG's current bonus structure.Geithner termed the current bonus structure unacceptable in view of the billions of dollars of taxpayer support the company is receiving, this official said.In a letter to Geithner dated Saturday, Liddy informed Treasury that it would restructure $9.6 million in bonuses scheduled to go a group that covers the top 50 executives. Liddy and six other executives have agreed to forgo bonuses.The group of top executives getting bonuses will receive a total of $9.6 million now, with the average payment around $112,000.This group will get another 25 percent on July 14 and the final 25 percent on September 15. But these payments will be contingent on the AIG board determining that the company is meeting the goals the government has set for dealing with the company's financial troubles.
(03/03/09 1:53am)
____simple_html_dom__voku__html_wrapper____>WASHINGTON – Consumer spending rose in January after falling for a record six straight months, pushed higher by purchases of food and other nondurable items. But the increase is expected to be fleeting given all the problems facing the economy.A batch of fresh reports Monday showed little signs of an economic rebound, with the nonresidential construction spending falling to its lowest level in more than a decade and manufacturing activity contracting tumbling for a 13th straight month.On Wall Street, the Dow Jones industrial average plunged below 7,000 for the first time since Oct. 28, 1997, as investors grew pessimistic about the health of banks and the economy. The Dow – which lost about 230 points in afternoon trading and was heading toward 6,800 – last closed below 7,000 on May 1, 1997.The Commerce Department report on consumers showed spending rose 0.6 percent in January, even better than the 0.4 percent gain that economists expected.Personal incomes rose 0.4 percent in January, partly reflecting the cost-of-living adjustments provided to millions of Social Security recipients. Still, that was better than the 0.2 percent decline economists expected.The personal savings rate surged to 5 percent, the highest level since 1995, as consumers continued to sock away more of their incomes amid the deepening recession.The government calculates the savings rate as a percentage of after-tax incomes. The growth from from 3.9 percent in December partly reflected that while overall incomes rose 0.4 percent, after-tax incomes shot up 1.7 percent, providing potentially more money for savings.The 0.6 percent rise in spending followed a record six straight declines, including a 1 percent drop in December when retailers endured their worst holiday shopping season in at least four decades.The January increase was driven by a sharp 1.3 percent rise in purchases of nondurable goods led by much higher spending on food. Durable goods posted a tiny 0.1 percent increase, as Americans again avoided spending on cars and other large items.While the 0.6 percent increase in consumer spending was the largest since May, analysts do not expect the strength to continue amid a recession that’s already the longest in a quarter-century.The cutback in consumer spending has been a key factor making this recession so severe. The government reported last week that the overall economy, as measured by the gross domestic product, shrank at an annual rate of 6.2 percent in the final three months of 2008. That was the sharpest fall in about 26 years.The slump in consumer spending in recent months has been tough on many of the nation’s retailers. Macy’s, Inc. last month said its fourth-quarter earnings fell almost 59 percent, while J.C. Penney Co. recorded a 51 percent drop in earnings and projected a wider first-quarter loss than analysts had expected.Wal-Mart Stores Inc., the world’s largest retailer, managed to buck the trend. The company reported better-than-expected earnings for the fourth quarter as it appeared to benefit from a wave of store liquidations at former competitors such as Circuit City Stores Inc.
(02/26/09 9:18pm)
____simple_html_dom__voku__html_wrapper____>WASHINGTON – Pledging "a new era of responsibility," President Barack Obama unveiled a multi-trillion-dollar spending plan Thursday that would boost taxes on the wealthy, curtail Medicare, lay the groundwork for universal health care and leave a string of deficits dwarfing any in the nation's history.In addition to sending Congress his $3.55 trillion budget plan for 2010, Obama proposed more immediate changes that would push spending to $3.94 trillion in the current year. That would result in a record deficit Obama projects will hit $1.75 trillion, reflecting the massive spending being undertaken to battle a severe recession and the worst financial crisis in seven decades.As part of the effort to end the crisis, the administration proposes boosting the deficit by an additional $250 billion this year, enough to support as much as $750 billion in increased spending under the government's rescue program for banks and other financial institutions. That would more than double the $700 billion bank bailout passed by Congress last October.In his budget message, Obama sought to draw a clear distinction with the Bush administration, saying "the time has come to usher in a new era ‚Äî a new era of responsibility" both in government and the private sector.But Republicans contended Obama was avoiding hard choices in favor of exploding the deficit and raising taxes."This budget plan is once again a missed opportunity for American taxpayers ‚Äî it raises taxes on all Americans, implements massive new spending and fails to make any tough choices to control the deficit," said Sen. Judd Gregg, R-N.H., the top Budget Committee Republican who was nominated by Obama to join his Cabinet as commerce secretary but then withdrew.The administration called the request for additional bailout resources a "placeholder" in advance of a determination by the Treasury Department of what will actually be needed.The spending blueprint Obama sent Congress was a 134-page outline with further details to come in mid to late April, when the new administration sends up the massive budget books that will flesh out the plan.The plan balances efforts to fulfill Obama's campaign pledges to deliver tax cuts to the middle class, expand health care coverage and combat the economic crisis with an effort to keep a soaring deficit from becoming a permanent drag on the economy. However, Republicans assailed the budget for the tax increases, and some Democrats worried that Obama was not doing enough to get the deficit under control."I would give him good marks as a beginning, but we have to do a lot more to take on this long-term debt buildup," said Senate Budget Committee Chairman Kent Conrad, D-N.D."Everyone agrees that all Americans deserve access to affordable health care, but is increasing taxes during an economic recession, especially on small businesses, the right way to accomplish that goal?" asked House Minority Leader John Boehner, R-Ohio.The $634 billion down payment on expanding health care coverage would come from a $318 billion increase over 10 years in taxes on the wealthy, defined as couples making more than $250,000 per year and individuals making more than $200,000. The tax increase would occur by reducing the benefit the wealthy get on tax deductions. As one example, taxpayers in the current top tax bracket of 35 percent would see their tax deduction for every $1 given to charity drop from 35 cents to 28 cents.The other half of the money for expanding health care ‚Äî $316 billion ‚Äî would come from curtailing payments to hospitals and insurance companies under Medicare and drug payments under Medicaid.To meet his pledge of tax cuts for the middle class, the president wants to make permanent the $400 annual tax cut due to start showing up in workers' paychecks in April as part of the $787 billion stimulus package just passed by Congress. Obama's budget also extends the middle class tax cuts passed by the Bush administration in 2001 and 2003. Those cuts were due to expire at the end of 2010. If Congress approves Obama's recommendations, the Bush tax cuts would expire only for couples making more than $250,000 per year.The cost of the stimulus bill and the increased bailout support would push the deficit for this year to $1.75 trillion, nearly four times last year's record $455 billion and a percentage of the economy ‚Äî just over 12 percent ‚Äî not seen since World War II. The deficit would remain near $1 trillion over the next two years before dropping to $581 billion in 2012 and $533 billion in 2013, the year that Obama has pledged to cut the deficit he inherited in half.However, to meet that goal, the administration's budget depends on optimistic projections that the economy, currently in the longest recession in a quarter-century, will come roaring back with economic growth of 3.2 percent next year and 4 percent-plus rates in the following three years, significantly higher than private economists are forecasting.Christina Romer, head of the president's Council of Economic Advisers, defended the administration forecast, telling reporters at a briefing that the private forecasters may not be taking into account all of the efforts the government is employing to jump-start the economy.She said in past downturns, the more severe the recession, the stronger the recovery from the slump.Obama's budget projects $2 trillion in deficit reduction over a decade ‚Äî split between tax hikes on wealthier Americans and trimming a variety of government programs ranging from subsidies paid to wealthy farmers to eliminating ineffective government programs. However, previous presidents have also sought to target wasteful government spending only to find the programs targeted had powerful supporters in Congress.Obama's blueprint awards domestic agencies budget increases, on average, of 7 percent in 2010 over 2009 levels. The Pentagon would get a 4 percent boost, to $534 billion next year, but would then get increases of 2 percent or less over the next several years.Obama's plan proposes to build up a $634 billion reserve fund he would use to expand health care coverage to some of the 48 million currently uninsured Americans currently. The fund would represent a little more than half the money projected to be needed to extend health insurance to all Americans.Obama also asked for an additional $75 billion to cover the costs of wars in Iraq and Afghanistan through September, the end of the current budget year. The administration will also ask for $130 billion for Iraq and Afghanistan in 2010 and will budget the costs of operations in Iraq and Afghanistan at $50 billion annually over the next several years.Obama's budget proposal would effectively raise income taxes and curb tax deductions on couples making more than $250,000 a year, beginning in 2011. By not extending former President George W. Bush's tax cuts for such wealthier filers, Obama would allow the marginal rate on household incomes above $250,000 to rise from 35 percent to 39.6 percent.The plan also contains a contentious proposal to raise hundreds of billions of dollars by auctioning off permits to exceed carbon emissions caps, which Obama wants to impose on users of fossil fuels to address global warming.The Medicare plan is sure to incite battles with hospitals, health insurance companies and drug manufacturers.Some of the Medicare savings would come from scaling back payments to private insurance plans that serve older Americans, which many analysts believe to be inflated. Other proposals include charging upper-income beneficiaries a higher premium for Medicare's prescription drug coverage.To raise the other half of the money for expanding health coverage, Obama wants to reduce the rate by which wealthier people can cut their taxes through deductions for mortgage interest, charitable contributions, local taxes and other expenses to 28 cents on the dollar, rather than the 35 cents they can claim now. Even more money would be raised if the top rate reverts to 39.6 percent, as Obama wants.The $1.75 trillion deficit projected for this year would represent 12.3 percent of the gross domestic product, double the previous post-war record of 6 percent in 1983, when Ronald Reagan was president, and the highest level since the deficit totaled 21.5 percent of GDP in 1945, at the end of World War II.
(04/08/08 3:53am)
WASHINGTON – Hospitals, schools and the assembly line at an airplane factory look like pretty good places to be with a recession looming and unemployment rising. Construction workers, real estate agents and auto workers aren’t expected to fare as well.\nThe startling news that the economy lost 80,000 jobs last month and nearly a quarter-million over the last three months is the starkest signal yet that the country has probably fallen into a recession, with things on the job front expected to get worse.\n“All the indicators suggest that we will see even larger job declines in coming months. Businesses are getting nervous and pulling back,” said Mark Zandi, chief economist at Moody’s Economy.com.\nWhile the downturn is expected to be short and mild, economists are still forecasting the unemployment rate, which jumped to 5.1 percent in March, will climb much higher before the nation’s job engine sputters back to life.\nEconomists are forecasting a jobless rate that will peak at around 6 percent, but probably not until early next year, several months after the recession is expected to end. Analysts said as many as 2 million people could lose their jobs in the current downturn.\nIn an environment of a sluggish economy and rising unemployment, analysts said there will be some safe harbors where job demand will keep growing. First and foremost in this group will be health care, where the demographics of an aging population mean the demands for medical care will keep rising.\nAlso a bright spot in a generally bleak jobs picture will be education, again driven by the demographics of a rising population of school-age children and students attending colleges, community colleges and trade schools.\nOutside of those areas, the falling value of the dollar against many foreign currencies is helping to power an export boom, which is benefiting farmers and some segments of manufacturing, particularly airplane makers and factories producing various types of heavy machinery where the United States enjoys a competitive edge.\nBut other segments of manufacturing are not faring nearly as well. Domestic automakers have been laying off workers in the face of slumping sales as the weak economy and soaring gasoline prices cut into demand. General Motors and Chrysler reported U.S. sales were down 19 percent in March compared with a year ago, while sales at Ford fell by 14 percent.\nOther manufacturers, such as appliance and furniture makers, have been hurt by the deep downturn in housing. In all, manufacturing lost 48,000 jobs in March, with half of those cuts coming in autos and auto parts.
(04/01/08 2:23am)
WASHINGTON – The Bush administration Monday proposed the most far-ranging overhaul of the financial regulatory system since the stock market crash of 1929 and the ensuing Great Depression.\nThe plan would change how the government regulates thousands of businesses from the nation’s biggest banks and investment houses down to the local insurance agent and mortgage broker.\nTreasury Secretary Henry Paulson unveiled the 218-page plan in a speech in the Department of Treasury’s ornate Cash Room, declaring, “A strong financial system is vitally important – not for Wall Street, not for bankers, but for working Americans.”\nThe administration’s plan drew criticism, however, from Democrats who said it did not go far enough to deal with abuses in mortgage lending and securities trading that were exposed by the current credit crisis. Some state officials criticized what they saw as unwanted federal intrusion on their turf.\nMassachusetts Secretary of the Commonwealth William F. Galvin blasted Paulson’s approach as “a disastrous backward step that would put the investor in jeopardy” because it would pre-empt state regulation of securities and insurance.\nThe administration said it planned to work with Congress to have constructive conversations, but officials would not predict when any aspects of the proposal could be enacted into law.\nAsked if Bush’s goal was to get the overhaul approved before he leaves office, presidential press secretary Dana Perino told reporters aboard Air Force One, “We’ll have to see. It is a big attempt.”\nThe plan, which would require congressional approval for its biggest changes, seeks to trim a hodge-podge collection of overlapping jurisdictions that date back to the Civil War.\nIt would give the Federal Reserve more power to protect the stability of the entire financial system while merging day-to-day bank supervision into one agency, down from five at present.\nIt also would create one super agency in charge of business conduct and consumer protection, performing many of the functions of the current Securities and Exchange Commission.\nIt would propose eliminating the Office of Thrift Supervision and the Commodity Futures Trading Commission, merging their functions into other agencies.\nIt would ask Congress to establish a federal Mortgage Origination Commission to set recommended minimum licensing standards for mortgage brokers, many of whom now operate outside of federal regulation, and it would also take a first step toward federal regulation of the insurance industry by asking Congress to establish an Office of Insurance Oversight inside the Treasury Department.\nPaulson acknowledged in his remarks that most of the changes will not occur until after a lengthy debate in Congress, leaving it to the next administration to deal with the biggest changes proposed by the report. He also said the Bush administration’s focus would remain on getting through the current severe credit crisis, which has roiled financial markets since last August.\nPaulson rejected Democratic charges that it was lax regulation of mortgage brokers and the financial industry that had led to the current problems.\n“I do not believe it is fair or accurate to blame our regulatory structure for the current market turmoil,” he said. “I am not suggesting that more regulation is the answer or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to 10 years.”\nSen. Charles Schumer, D-N.Y., said he strongly disagreed with Paulson. \n“The unregulated corners of our economy did much to contribute to the meltdown in our housing market and the accompanying spillover to our financial markets,” Schumer said in a statement. “The administration’s ‘deregulation-above-all-else’ attitude helped cause the problems we now face.”
(02/06/08 5:04am)
WASHINGTON – The Treasury Department on Tuesday announced it was imposing financial sanctions against family members of the military-run government of Myanmar and individuals it identified as key members of the financial empire of Tay Za, an influential businessman in the country.\n“The president has made clear that we will continue to take action against the military junta and those who prop it up so long as human rights violations continue and democracy is suppressed,” said Adam Szubin, the director of Treasury’s Office of Foreign Assets Control.\nHe said the new order will tighten financial sanctions against associates of Tay Za, described by Szubin as “an arms dealer and financial henchmen of Burma’s repressive regime.”\nThe new order was also aimed at family members of regime leaders and key individuals and businesses that are part of Tay Za’s financial network.\nIt follows previous actions by the Bush administration to impose economic sanctions to express condemnation of the Myanmar government’s crackdown on protestors. Before the new sanctions announced Tuesday, the administration had imposed sanctions on 30 individuals and seven entities connected with the ruling regime headed up by junta leader Senior Gen. Than Shwe.\n“The actions of Than Shwe and his associates remain unacceptable to all those who value freedom,” White House press secretary Dana Perino said in a statement Tuesday.\n“In defiance of the unanimous call of the U.N. Security Council, the regime continues to keep (pro-democracy leader) Aung San Suu Kyi isolated and under house arrest, refuses to allow United Nations Special Advisor Ibrahim Gambari’s return to Burma and continues to hunt down peaceful activists,” Perino said.\nMyanmar’s crisis attracted world attention when Buddhist monks last September began leading the biggest anti-government protests in two decades. At least 30 people are believed to have been killed when the government suppressed the demonstrations and thousands were detained, although most have since been released.\nThe new order targets the Htoo Group of Companies, which carries out key projects on behalf of the military regime, including the purchase of military equipment and aircraft for the military of Myanmar, also known as Burma.\nThe designation on Tuesday will freeze any assets that the named individuals and companies have in U.S. financial institutions and it also prohibits any financial or commercial transactions between U.S. individuals and American firms with those named in the sanctions order.\nAmong the individuals named are Aung Thet Mann, a director of Tay Za’s Htoo Group of Companies and the son of Gen. Thura Shwe Mann, a senior official in the Myanmar government.\nThe Treasury Department said in its announcement that Tay Za has used his business relationship with Aung Thet Mann to win favorable business contracts from the military-run government.\nTreasury also designated Thiha, Tay Za’s brother and business partner, and U Kyaw Thein, a director of Tay Za’s business ventures in Singapore.\nThe companies designated were Myanmar Avia Export Co. Limited, a company Treasury said that Tay Za has used to purchase helicopters and aircraft By Martin Crutsinger\nThe Associated Press\nWASHINGTON – The Treasury Department on Tuesday announced it was imposing financial sanctions against family members of the military-run government of Myanmar and individuals it identified as key members of the financial empire of Tay Za, an influential businessman in the country.\n“The president has made clear that we will continue to take action against the military junta and those who prop it up so long as human rights violations continue and democracy is suppressed,” said Adam Szubin, the director of Treasury’s Office of Foreign Assets Control.\nHe said the new order will tighten financial sanctions against associates of Tay Za, described by Szubin as “an arms dealer and financial henchmen of Burma’s repressive regime.”\nThe new order was also aimed at family members of regime leaders and key individuals and businesses that are part of Tay Za’s financial network.\nIt follows previous actions by the Bush administration to impose economic sanctions to express condemnation of the Myanmar government’s crackdown on protestors. Before the new sanctions announced Tuesday, the administration had imposed sanctions on 30 individuals and seven entities connected with the ruling regime headed up by junta leader Senior Gen. Than Shwe.\n“The actions of Than Shwe and his associates remain unacceptable to all those who value freedom,” White House press secretary Dana Perino said in a statement Tuesday.\n“In defiance of the unanimous call of the U.N. Security Council, the regime continues to keep (pro-democracy leader) Aung San Suu Kyi isolated and under house arrest, refuses to allow United Nations Special Advisor Ibrahim Gambari’s return to Burma and continues to hunt down peaceful activists,” Perino said.\nMyanmar’s crisis attracted world attention when Buddhist monks last September began leading the biggest anti-government protests in two decades. At least 30 people are believed to have been killed when the government suppressed the demonstrations and thousands were detained, although most have since been released.\nThe new order targets the Htoo Group of Companies, which carries out key projects on behalf of the military regime, including the purchase of military equipment and aircraft for the military of Myanmar, also known as Burma.\nThe designation on Tuesday will freeze any assets that the named individuals and companies have in U.S. financial institutions and it also prohibits any financial or commercial transactions between U.S. individuals and American firms with those named in the sanctions order.\nAmong the individuals named are Aung Thet Mann, a director of Tay Za’s Htoo Group of Companies and the son of Gen. Thura Shwe Mann, a senior official in the Myanmar government.\nThe Treasury Department said in its announcement that Tay Za has used his business relationship with Aung Thet Mann to win favorable business contracts from the military-run government.\nTreasury also designated Thiha, Tay Za’s brother and business partner, and U Kyaw Thein, a director of Tay Za’s business ventures in Singapore.\nThe companies designated were Myanmar Avia Export Co. Limited, a company Treasury said that Tay Za has used to purchase helicopters and aircraft for the military regime, and Ayer Shwe Wah Co. Limited and Pavo Aircraft Leasing in Singapore.\nThe four spouses of senior Myanmar government officials who were named were Khin Lay Thet, the wife of General Thura Shwe Mann; Myint Myint Ko, the wife of Construction Minister Saw Tun; Tin Lin Myint, the wife of Lt. General Ye Myint, and Myint Myint Soe, the wife of Foreign Affairs Minister Nyan Win.
(02/05/08 4:38am)
By Martin Crutsinger\nThe Associated Press\nWASHINGTON – President Bush sent the nation’s first-ever $3 trillion budget proposal to Congress on Monday, contending that the spending blueprint will fulfill his chief responsibility to keep America safe.\nThe $3.1 trillion proposed budget projects sizable increases in national security but forces the rest of government to pinch pennies. It seeks $196 billion in savings over five years in the government’s giant health care programs –Medicare and Medicaid.\nBut even with those restraints, the budget projects the deficits will soar to near-record levels of $410 billion this year and $407 billion in 2009, driven higher in part by efforts to revive the sagging economy with a $145 billion stimulus package.\nBush called the document, which protects his signature tax cuts, “a good, solid budget.” But Democrats, and even a top Republican, attacked the plan for using budgetary gimmicks to claim the budget can return to balance in 2012, three years after Bush leaves office.\n“They’ve obviously played an inordinate number of games to try to make it look better,” Sen. Judd Gregg, the top Republican on the Budget Committee, said in an interview with The Associated Press.\n“Let’s face it. This budget is done with the understanding that nobody’s going to be taking a long, hard look at it,” said Gregg, R-N.H.\nDemocrats called Bush’s final spending plan a continuation of this administration’s failed policies which wiped out a projected 10-year surplus of $5.6 trillion and replaced it with a record buildup in debt.\n“Today’s budget bears all the hallmarks of the Bush legacy – it leads to more deficits, more debt, more tax cuts, more cutbacks in critical services,” said House Budget Committee Chairman John Spratt, D-S.C.\nFor his last budget, Bush, as a money-saving measure, stopped the practice of providing 3,000 paper copies of the budget to members of Congress and the media, instead posting the entire document online at www.budget.gov. Democrats joked that Bush cut back on the printed copies because he ran out of red ink.\n“This budget is fiscally irresponsible and highly deceptive, hiding the costs of the war in Iraq while increasing the skyrocketing debt,’ said Senate Majority Leader Harry Reid, D-Nev.\n“The president proposes more of the same failed policies he has embraced throughout his time in office – more deficit-financed war spending, more deficit-financed tax cuts tilted to benefit the wealthiest and more borrowing from foreign nations like China and Japan,” said Senate Budget Committee Chairman Kent Conrad, D-N.D.\nBush defended his record, saying it supported a strong defense and, if his policies are followed, will produce a budget surplus of $48 billion in 2012.\n“Two key principles guided the development of my budget – keeping America safe and ensuring our continued prosperity,” Bush said in his budget message to Congress.\nReviewing the budget with his Cabinet, Bush said it would keep the economy growing and protect the U.S. militarily. He called it “innovative” because it was dispatched to Congress electronically.\nBush’s final full budget is for the 2009 fiscal year, which begins on Oct. 1. It proposes spending $3.1 trillion, up 6 percent from projected spending of $2.9 trillion in the current budget year.
(10/18/07 2:37am)
Come January, Social Security benefits for nearly 50 million Americans are going up 2.3 percent, the smallest increase in four years. It will mean an extra $24 per month in the average check, the government announced Wednesday.\nThe cost of living adjustment means that the monthly benefit for the typical retired worker in 2008 will go from $1,055 currently to $1,079 next year.\nThe adjustment, announced by the Social Security Administration, will go to more than 54 million Americans. Nearly 50 million receive Social Security benefits and the rest get Supplemental Security Income payments aimed at helping \nthe poor.\nThe 2.3 percent increase is the smallest since a 2.1 percent rise in 2004. It compares to an increase of 3.3 percent last year and a jump of 4.1 percent in 2006, which had been the biggest advance in 15 years.\nThe cost of living increase is based on the change in consumer prices from the July-September quarter of this year compared to the same period last year. Benefit payments have been tied to inflation \nsince 1975.\nAdvocacy groups for the elderly said that the small increase announced Wednesday underscored the need to revamp the cost-of-living adjustment to better reflect prices paid by retired people, including the money they spend on \nhealth care.\nThe Senior Citizens League said a study it has done showed that in eight key spending areas, people over the age of 65 have lost 40 percent of their purchasing power since 2000, reflecting such factors as a doubling in the price of gasoline and home heating oil over that period.\n“Social Security is supposed to protect seniors in need – but with 5 million seniors below the poverty line, it’s clear the system is failing them,” said Shannon Benton, executive director for the league.\nPart of the Social Security increase will be eaten up by a rise in the cost of Medicare, the giant health care program that covers the elderly and disabled. The government announced earlier this month that Medicare premiums will rise 3.1 percent next year or $2.50 to $96.40 per month. That is the lowest Medicare premium increase in six years.\nThe average retired couple, both receiving Social Security benefits, will see their monthly check go from $1,722 to $1,761, an increase of $39.\nThe standard SSI payment for an individual will go from $623 per month to $637.\nThe average monthly check for a disabled worker will go from $981 to $1,004.\nThe government also announced Wednesday that nearly 12 million wage earners will pay higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $97,500 currently to $102,000. In all, an estimated 164 million workers will pay Social Security taxes in 2008.\nAn estimated 10,000 people a day will become eligible for Social Security benefits during the next two decades, putting a severe strain on the \npension program.
(10/17/07 2:47am)
Treasury Secretary Henry Paulson called Tuesday for an aggressive response to deal with an unfolding housing crisis that he said presents a significant risk to \nthe economy.\nIn the administration’s most detailed reaction to the steepest housing slump in 16 years, Paulson said that government and the financial industry should provide immediate help for homeowners trying to refinance current mortgages before they reset at much higher rates.\nHe also called for an overhaul of laws and regulations governing mortgage lending to halt abusive practices that contributed to the current crisis.\n“Let me be clear, despite strong economic fundamentals, the housing decline is still unfolding and I view it as the most significant current risk to our economy,” Paulson said in a speech delivered at Georgetown University’s law school. \n“The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth.”\nIn his most somber assessment of the crisis to date, Paulson said that the housing correction is “not ending as quickly” as it had appeared it would and that “it now looks like it will continue to adversely impact our economy, our capital markets and many homeowners for some time yet.”\nPaulson spoke a day after officials from the nation’s three biggest banks announced the creation of a fund with up to $100 billion in resources to buy troubled assets such as mortgage-backed securities.\nTreasury Department officials participated in the behind-the-scenes discussions that led to creation of the fund, but no government resources have been pledged to the effort.\nPaulson said that the government must balance the need to help homeowners stay in their homes against the threat that government action can encourage investors to make risky decisions in the future.\n“We must help as many able homeowners as possible stay in their homes,” Paulson said. “Foreclosures are costly and painful for homeowners.”\nBut Paulson also stated, “When investors are relieved of the cost of bad decisions, they are more likely to repeat their mistakes. I have no interest in bailing out lenders or property speculators.”\nFederal Reserve Chairman Ben Bernanke said Monday that the housing problem would be a “significant drag” on economic growth into next year and that it would take time for Wall Street to fully recover from a significant \ncredit crunch.\nIn August, financial markets around the world were roiled by the worst credit crisis in nearly a decade as investors became worried about rising defaults in the mortgage market, causing credit to dry up in a number of markets including the market for commercial paper, short-term loans used extensively \nby businesses.\nAt the time, Paulson insisted that the country would be able to work through the problems without any lingering \nadverse effects. \nHowever, as the extent of the troubles in subprime mortgages has grown and the housing slump has deepened, the administration has worked to increase its efforts.\nDemocrats have also been critical of many of the administration’s proposals so far, saying they will offer too little help in the face of the prospect that 2 million mortgages homeowners obtained with low introductory “teaser” rates will reset at much higher rates in the coming 18 months.
(02/06/07 2:44am)
WASHINGTON -- President Bush on Monday unveiled a $2.9 trillion spending plan that devotes billions more to fighting the war in Iraq but pinches pennies on programs promised to voters by Democrats now running Congress. Democrats widely attacked the plan, and even a prominent Republican conceded it faced bleak prospects.\nBush's spending plan would make his first-term tax cuts permanent, at a cost of $1.6 trillion over 10 years. He is seeking $78 billion in savings in the government's big health-care programs -- Medicare and Medicaid -- over the next five years, in part by increasing premiums for higher-income Medicare recipients.\nRelease of the budget in four massive volumes kicks off months of debate in which Democrats, now in control of both the House and Senate for the first time in Bush's presidency, made clear that they have significantly different views on spending and taxes.\n"The president's budget is filled with debt and deception, disconnected from reality and continues to move America in the wrong direction," said Senate Budget Committee Chairman Kent Conrad, D-N.D.\nHouse Budget Committee Chairman John Spratt, D-S.C., said, "I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it either."\nSen. Judd Gregg of New Hampshire, the top Republican on the Senate Budget Committee, agreed with the bleak assessment of Bush's prospects of getting Congress to approve his budget as proposed.\n"Unfortunately, I don't think it has got a whole lot of legs," said Gregg, who contended there is a wide gulf between the two parties. "The White House is afraid of taxes and the Democrats are afraid of controlling spending."\nThe president insisted he had made the right choices to keep the nation secure from terrorist threats and the economy growing.\n"I strongly believe Congress needs to listen to a budget which says no tax increase and a budget, because of fiscal discipline, that can be balanced in five years," Bush told reporters after meeting with his Cabinet.\nJust as Iraq has come to dominate Bush's presidency, military spending was a major element in the president's new spending request. Bush was seeking a Pentagon budget of $624.6 billion for 2008, more than one-fifth of the total budget, up from $600.3 billion in 2007.\nFor the first time, the Pentagon included details for the upcoming budget year on how much the Iraq war would cost -- an estimated $141.7 billion for fighting in Iraq and Afghanistan, as well as the cost of repairing and replacing equipment lost in combat.\nBut White House spokesman Tony Fratto cautioned that the 2008 projection was likely to change. "We're not saying the number for '08 is the final number."\nThe Bush budget includes just $50 billion for the Iraq and Afghanistan wars in 2009 and no money after that year. But the president rejected the suggestion that the administration was setting a timetable for troop withdrawal.\n"There will be no timetable set," Bush told reporters. He said a timetable would send the wrong signal to the enemy, the struggling Iraq democracy and the troops.\nBush projected a deficit in the current year of $244 billion, just slightly lower than last year's $248 billion imbalance. For 2008, the budget year that begins next Oct. 1, Bush sees another slight decline in the deficit to $239 billion. He sees that decline continuing over the next three years until the budget records a surplus of $61 billion in 2012, three years after Bush has left office.\nDemocrats, however, challenged those projections, contending that Bush only achieves a surplus by leaving out the billions of dollars Congress is expected to spend to keep the alternative minimum tax from ensnaring millions of middle-class taxpayers. His budget includes an AMT fix for just one year.
(05/11/06 12:03am)
WASHINGTON -- The Federal Reserve on Wednesday raised a key interest rate to the highest level in more than five years but signaled that it may pause to assess the impact of its string of rate hikes.\nThe Fed boosted its target for the federal funds rate to 5 percent. The funds rate, the interest that banks charge each other, stood at a 46-year low of 1 percent when the central bank began raising rates in June 2004 to keep inflation under control.\nIn its statement announcing the decision, Fed policy-makers indicated they might take at least a brief pause in pushing rates up further. It said the "extent and timing" of further rate increases would depend on future economic data.\nThe Fed's rate hikes have raised the borrowing costs for millions of Americans on everything from adjustable rate home mortgages to auto loans. Commercial banks were expected to quickly match the Fed action by boosting the prime lending rate to a five-year high of 8 percent.\nFed Chairman Ben Bernanke had raised expectations that the central bank was getting ready to pause when he said in congressional testimony on April 27 that the central bank might take a break for "one or more meetings."\nBernanke, who succeeded Alan Greenspan as Fed chairman Feb. 1, said a pause would give the central bank time to assess the impact that its long string of rate increases was having on the economy.\nIn the statement announcing Wednesday's rate increase, the Fed said that some further rate hikes "may yet be needed." That marked a modification from the March statement which stated further rate increases "may be needed."\nIt added another phrase in the latest statement saying that "the extent and timing of any such firming will depend importantly on the evolution of the economic outlook as implied by incoming information."\nBernanke had created confusion about the exact meaning of his congressional remarks when he was quoted by CNBC as saying that financial markets had misread his congressional testimony.\nThat comment came after bond prices, always sensitive to inflation worries, had fallen on fears that Bernanke would not be as tough as Greenspan had been in fighting inflation.\nPrivate economists are split over whether Wednesday's rate hike will be the last for awhile or whether the Fed may pause for one or two meetings and then raise rates another one or two times to make sure that a recent jump in energy prices does not spill over into more widespread inflation problems.\nIn assessing the current state of the economy, the Fed's brief statement tracked the comments Bernanke had made to the Joint Economic Committee.\nThe statement said that while economic growth had been "quite strong so far this year," the central bank still expected growth would moderate to a more sustainable pace, "partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices."\nThe overall economy grew at a sizzling pace of 4.8 percent in the first three months of this year, the fastest spurt for the gross domestic product in 2 1/2 years. But private forecasters believe growth has slowed in the current quarter, reflecting in part rising mortgage rates, which have dampened home sales.\nOn inflation, the Fed said that the surge in energy prices so far had had "only a modest effect on core inflation" with inflation expectations remaining contained.\nThe statement noted a unanimous vote for the quarter-point increase in the funds rate.
(04/21/06 4:01am)
WASHINGTON -- President Bush and Chinese President Hu Jintao agreed to cooperate more closely on trade and nuclear tensions over Iran and North Korea but failed to break new ground Thursday toward resolving a host of differences. Their meeting was marred by a protest.\nNo breakthroughs had been expected during Hu's first visit to the White House as the president of China. Both he and Bush acknowledged at a picture-taking session that much work remained to be done and that the two sides would strive for progress in these areas.\nA welcoming ceremony on the South Lawn for Hu's first visit as Chinese leader was briefly marred by the screams of a woman critical of the Chinese president, and by hundreds of demonstrators that massed outside to protest Beijing's human-rights policies.\nBush, sitting in the Oval Office with Hu before a formal luncheon, praised China for previous progress in what is perhaps the major irritant in the relationship -- Beijing's tightly controlled currency.\nThe United States views the Chinese yuan as undervalued, and Bush said, "We would hope there would be more appreciation" in allowing the currency to rise with market forces.\nOn Iran, China has resisted the approach favored by the United States and Europe -- pursuing sanctions if Tehran does not comply with demands that it halt uranium enrichment. There appeared to be no movement on that issue.\nBush said only that the two sides agreed on the goal of preventing Iran from developing nuclear weapons or having the capability to produce them. The United States and China are in a position to "work on tactics" to achieve that goal, Bush said.\n"We don't agree on everything but we are able to discuss our disagreements in friendship and cooperation," Bush told reporters.\nHu, aware of the growing U.S. impatience with America's record $202 billion trade deficit with China, offered general promises to address the yawning gap. But his comments were likely to do little to cool calls in Congress for punitive tariffs on Chinese products.\n"We have taken measures and will continue to take steps to resolve the issue," he said.\nBush put a good face on the meeting.\n"He recognizes that a trade deficit with the United States is substantial and it is unsustainable," the president said of Hu. "Obviously the Chinese government takes the currency issue seriously, and so do I."\nBush also had been hoping to get Beijing to take on more than a mediator's role in efforts to bring North Korea back to six-nation talks aimed at halting its nuclear weapons program. Asked what more his country could do to resolve the dispute, Hu said that China "has always been making constructive efforts to de-nuclearize the Korean peninsula."\nThe two presidents had not been expected to take questions. But an agreement to take questions from two reporters from each country came at the last minute and produced more than a half-hour of back-and-forth as the leaders sat in front of a fireplace.
(02/07/06 6:01am)
WASHINGTON -- President Bush sent Congress a $2.77 trillion budget plan Monday that would boost spending in the War on Terror but squeeze a wide swath of other government programs to deal with exploding budget deficits.\nBush, hoping to get his domestic agenda back on track after a year of political setbacks, unveiled a budget blueprint with a heavy emphasis on keeping the country strong militarily. It would also make his first-term tax cuts permanent, at a cost of $1.4 trillion over 10 years, and still achieve his goal of cutting the deficit in half by 2009.\nAchieving these two goals constrained Bush's efforts to offer new initiatives, although he did put forward a few mostly modest programs to deal with American anxieties about global competition, soaring energy costs and skyrocketing medical bills.\nBut among the losers were 141 government programs Bush sought to sharply reduce or eliminate entirely. Almost one-third of the targeted programs are in education, including ones that provide money to support the arts, vocational education, parent resource centers and drug-free schools.\n"My administration has focused the nation's resources on our highest priority -- protecting our citizens and our homeland," Bush said in his budget message.\nBush's spending proposals, contained in four massive volumes featuring green and beige covers, are for the 2007 budget year that begins next Oct. 1. The $2.77 trillion in spending would be up by 2.3 percent from projected spending of $2.71 trillion this year.\nThe administration, in its budget documents, said the deficit for this year will soar to an all-time high of $423 billion, reflecting increased outlays for the Iraq war and hurricane relief.\nBut the administration says the deficits will be on a declining path over the next five years, which would allow the president to achieve his goal of cutting the deficit in half by 2009, the year he leaves office. \nHowever, the deficit of $354 billion that the administration is projecting for 2007 probably will be higher because the budget at present only contains $50 billion in spending for Iraq, White House Budget Director Joshua Bolten told reporters.\nBush is also seeking savings by trimming the growth of spending in Medicare, the government's giant health care program for the elderly and disabled, by $35.9 billion over five years. The reductions, which are certain to face stiff opposition in Congress, would, among other things, reduce inflation adjustments for hospitals, nursing homes, home health care providers and hospices.\n"These are not cuts," Bolten said of Bush's Medicare plans. "These are modest reductions in the rate of growth."\nDemocrats attacked what they said were Bush's skewed priorities. They said he was trying to impose austere budgets that will harm programs for the poor while protecting tax cuts Democrats said were going primarily to the wealthy.\nThey also charged that Bush was understating future budget deficits by leaving out major items such as the true costs of the Iraq war and a long-term fix to keep the alternative minimum tax from hitting more middle class taxpayers.\n"It explodes deficits, but then conceals them by providing only five years of numbers and leaving out large costs," said Sen. Kent Conrad of North Dakota, the top Democrat on the Senate Budget Committee. "The result will be more debt passed on to our children."\nSenate Minority Leader Harry Reid, D-Nev., said that the budget was "filled with pages of giveaways to special interests and cuts to those who can least afford it."\nResponding, presidential spokesman Scott McClellan said, "The president is focused on making sure that we keep our economy growing, and that means keeping taxes low."\nRepublicans in Congress expressed support for the spending document, which will kick off months of debate likely to last until the next budget year begins in October and perhaps beyond.\n"We have to face up to this fiscal reality that this baby boom generation is going to retire soon and we need to do something about it," said Senate Budget Committee Chairman Judd Gregg, R-N.H.\nIn addition to trimming Medicare, other proposed Bush savings in so-called mandatory spending, because the payments are set in law for all who are eligible, include $4.99 billion in changes in farm commodity programs, and $16.7 billion in reforms of the Pension Benefit Guaranty Corp., the government program that backs private pensions.\nBush's budget also projects receiving $4 billion over the next five years for drilling in the Arctic National Wildlife Refuge, something Congress has repeatedly refused to allow.
(10/06/05 5:03am)
WASHINGTON -- After nearly 100 years of depicting presidents in somber profiles on the nation's coins, the U.S. Mint is trying something different: The new nickel features Thomas Jefferson, facing forward, with the hint of a smile.\n"It isn't a silly smile or a smirk, but a sense of optimism that I was trying to convey with the expression," said Jamie Franki, an associate professor of art at the University of North Carolina-Charlotte. His drawing was chosen out of 147 entries.\nIn unveiling the design Tuesday, Mint officials said they believed the new image of Jefferson was an appropriate way to commemorate his support for expanding the country through the Louisiana Purchase and sending Meriwether Lewis and William Clark to explore the territory in 1804-05.\n"The image of a forward-looking Jefferson is a fitting tribute to that vision," said David Lebryk, the acting director of the Mint.\nFor the past two years, the Mint has changed the design of the nickel every six months to commemorate the 200th anniversary of the Louisiana Purchase and the Lewis and Clark expedition, both of which occurred during Jefferson's administration.\nThe new five-cent coin, which will go into circulation early next year, is the last scheduled change in the nickel's appearance. It will feature Jefferson's Monticello home on the reverse side of the coin, but it will be an updated image that first began appearing on the nickel in 1938.\nThe image of Jefferson will be accompanied by the word "Liberty" in Jefferson's own handwriting, a detail that was introduced last year in the Westward Journey series of nickels.\nSince Abraham Lincoln became the first president to be depicted on a circulating coin in 1909, presidents have always been shown in profile, in part because profile designs remain recognizable even after extensive wear on the coin. The Mint, however, believes it has produced an image of Jefferson for the new nickel that can stand up to heavy use.\nNext year, between 1.4 billion and 1.8 billion of the new nickels are expected to go into circulation. The coins will be called the Jefferson 1800 because Franki's image of Jefferson is based on a Rembrandt Peale portrait of Jefferson done in 1800, the year Jefferson was first elected president.\nJefferson will be the first, but perhaps not the last, president to go from profile to frontal view on U.S. coins. Congress is considering whether to direct the Mint to redesign the penny for 2009, the 200th anniversary of Lincoln's birth.
(03/24/05 4:06am)
WASHINGTON -- The trust fund for Social Security will go broke in 2041 -- a year earlier than previously estimated -- the trustees reported Wednesday. Trustees also said that Medicare, the giant health care program for the elderly and disabled, faces insolvency in 2020.\nThe new projections made in the trustees' annual report were certain to be cited by both sides in the massive battle to overhaul Social Security, which President Bush has made the top domestic priority of his second term.\nThe go-broke date for Medicare was delayed by one year, compared with the estimate trustees gave a year ago.\nThe insolvency dates represent when both trust funds will have exhausted the government bonds that have been building up to take care of the pending retirement of 78 million baby boomers.\nHowever, the more important dates are when Social Security and Medicare begin paying out more in benefits than they are receiving in taxes because that represents the time the government must start redeeming the bonds in the trust fund. To do that, the government will have to increase its borrowing on financial markets, raise taxes or divert money from other government programs.\nFor Medicare, the threshold when benefits exceed program income occurred last year.\nFor Social Security, that threshold will be crossed in 2017, one year earlier than the 2018 date projected in last year's report.\nThat change is certain to be cited by the administration as a sign of the urgency to act to deal with Social Security's funding woes. Democrats argue that the immediate funding crisis is in Medicare, a problem they charge Bush is ignoring.\nTreasury Secretary John Snow, chairman of the six-member board of trustees for both programs, said the estimates "leave no question that Social Security reform is needed and it is needed soon. Reform of this system, for the sake of our children, grandchildren and the financial future of our country, is a very real and pressing matter."\nThe trustees said Social Security's unfunded obligations total $4 trillion over the next 75 years, an increase from last year's projection of $3.7 trillion in unfunded liabilities.\nSnow said to meet that shortfall, Social Security payroll taxes would have to be raised by 3.5 percentage points or benefits would have to be cut by 22 percent.\nBush has said he will not raise payroll taxes to deal with the funding problem, although he has left the door open to raising the $90,000 cap on incomes subject to the payroll tax.\nIn the report, the trustees said "the projected trust fund deficits should be addressed in timely way to allow for a gradual phasing of the necessary changes and to provide advanced notices to workers. The sooner adjustments are made, the smaller and less abrupt they will have to be."\nThe report said in 2017, the new date for Social Security's insolvency, payroll taxes will be generating enough income to cover 74 percent of benefit payments. That represented an increase from last year's projection that only 73 percent of benefits would be covered in the year that the trust fund went broke.\nFor Medicare, the trustees estimated that taxes will be sufficient to cover 79 percent of the program's cost in 2020, when the Medicare trust fund is exhausted. Last year, when the insolvency date was projected to be 2019, tax income was estimated to be sufficient to pay 81 percent of the program's costs.\nSocial Security provides retirement, survivors and disability income for 47.6 million Americans and Medicare provides health care for 41.7 million seniors and disabled people.
(02/08/05 4:39am)
WASHINGTON -- President Bush sent Congress a $2.57 trillion budget plan Monday that would boost spending on the military and homeland security but seeks spending cuts across a wide swath of other government programs. Bush's budget would reduce subsidies paid to farmers, cut health programs for poor people and veterans and trim spending on the environment and education.\n"It is a budget that sets priorities," Bush said after a meeting with his Cabinet. "It's a budget that reduces and eliminates redundancy. It's a budget that's a lean budget."\nBush acknowledged that it would be difficult to eliminate popular programs but said programs must prove their worth. "I look forward to explaining to the American people why we made some of the requests that we made in our budget," the president told reporters.\nJoshua Bolten, Bush's budget director, said, "Are we going to get everything we asked for? No." But he predicted Congress likely would accept the administration's broad priorities. He said he entered the upcoming congressional budget battle with a "happy spirit."\nDemocrats immediately branded the budget a "hoax" because it left out the huge future costs for the war in Iraq and Afghanistan and did not include the billions of dollars that will be needed for Bush's No. 1 domestic priority, overhauling Social Security.\nBolten said the administration would soon be coming forward with a supplemental request for an additional $81 billion for operations in Iraq and Afghanistan. He said that request was reflected in the overall spending projections in Bush's budget for the current year and into 2006.\nHe said including further additional spending for Iraq and Afghanistan "wouldn't be responsible" because it would represent guesses on what will be needed. Bolten also said that even if transition costs for Social Security had been included, the president still would be able to meet his goal of cutting the deficit in half by 2009 as a percentage of the total economy.\nThe budget would eliminate or vastly scale back 150 government programs. It will spark months of contentious debate in Congress, where lawmakers will fight to protect their favored programs.\nHouse Democratic Leader Rep. Nancy Pelosi of California called Bush's budget "a hoax on the American people. The two issues that dominated the president's State of the Union address -- Iraq and Social Security -- are nowhere to be found in this budget."\nThe spending document projects the deficit will hit a record $427 billion this year, the third straight year that the red ink in dollar terms has set a record. Bush projects that the deficit will fall to $390 billion in 2006 and gradually decline to $233 billion in 2009 and $207 billion in 2010.\nBush's 2006 spending plan, for the budget year that begins next Oct. 1, counts on a healthy economy to boost revenues by 6.1 percent to $2.18 trillion. Spending, meanwhile, would grow by 3.5 percent to $2.57 trillion.\nOutside defense, homeland security and the government's huge mandatory programs such as Social Security, Bush proposes cutting spending by 0.5 percent, the first such proposed cut since the Reagan administration battled with its own soaring deficits.\nOf 23 major government agencies, 12 would see their budget authority reduced next year, including cuts of 9.6 percent at Agriculture, 5.6 percent at the Environmental Protection Agency, 6.7 percent at Transportation and 11.5 percent at Housing and Urban Development.
(02/07/05 4:04am)
WASHINGTON -- President Bush's $2.5 trillion budget is shaping up as his most austere, trying to restrain spending across a wide swath of government from popular farm subsidies to poor people's health programs.\nVice President Dick Cheney on Sunday defended the plan against Democratic criticism that Bush had to seek steep cuts in scores of federal programs because he is unwilling to roll back first-term tax cuts that opponents contend primarily benefited the wealthy.\nThe budget's submission to Congress on Monday will set off months of intense debate. Lawmakers from both parties can be expected to vigorously fight to protect their favorite programs.\n"This is the tightest budget that has been submitted since we got here," Cheney told "Fox News Sunday."\n"It is a fair, reasonable, responsible, serious piece of effort. It's not something we have done with a meat ax, nor are we suddenly turning our backs on the most needy people in our society."\nThe president, who campaigned for re-election on a pledge to cut the deficit in half by 2009, is targeting 150 government programs for either outright elimination or sharp cutbacks.\nThe five-year projections in the budget will show the deficit declining to about $230 billion in 2009, when a new president takes office.\nThose projections do not take into account some big-ticket items: the military costs incurred in Iraq and Afghanistan, the price of making Bush's first term tax cuts permanent, or the transition costs for his No. 1 domestic priority, overhauling Social Security.\nSen. Kent Conrad, the top Democrat on the Senate Budget Committee, said Bush's budget "talks about the next five years of reducing deficits, but what that hides is what happens after that five-year window. The cost of everything he advocates explodes."\nSen. John McCain, R-Ariz., praised the administration's willingness to tackle the deficit. "I'm glad the president is coming over with a very austere budget. I hope we in Congress will have the courage to support it," he told ABC's "This Week."\nJoshua Bolten, Bush's budget director, told The Associated Press that when the budget is released, the administration will provide some estimates of the cost in increased government borrowing for the president's proposal to allow younger workers to set up private savings accounts.\nBut he said the administration cannot provide total cost figures for the Social Security overhaul because all the elements of the plan have yet to be decided upon.\nCheney would not confirm estimates the overhaul could cost $4.5 billion in additional government borrowing over 20 years.\nBush's budget will restrain the growth in discretionary programs to less than 2.3 percent. But because defense and homeland security are set for increases above that amount, the rest of government programs will see outright cuts or tiny gains far below the rate of inflation.\nOne of the biggest battles is certain to occur in the area of payments and other assistance to farmers, which the administration wants to trim by $587 million in 2006 and by $5.7 billion over the next decade.\nThose payments go to farmers growing a wide range of crops from cotton, rice and corn to soybeans and wheat.\nThe United States and other rich countries have come under criticism for these agriculture subsidies from poor countries. In the current round of global trade talks, these nations are pressing for the subsidies' elimination.
(01/10/05 4:42am)
WASHINGTON -- The Bush administration wants China to crack down on the rampant piracy of U.S. movies, music and computer programs and will not be satisfied until copyright violators get stiff prison sentences, Commerce Secretary Donald Evans said.\nEvans, who on Monday was leaving on his fourth and final trip to China as a member of President Bush's Cabinet, said in an Associated Press interview that he wanted to learn firsthand what China was doing to fulfill promises to better enforce its intellectual property laws.\nChinese Vice Premier Wu Yi led a 70-person delegation to Washington last April for economic talks that resulted in a number of pledges by the Chinese on trade, including protections for U.S. copyrights.\nThe Motion Picture Association estimates that its members lost up to $3.5 billion last year from movie pirates. China is considered the second worst offender behind Russia.\nEvans said even though the Chinese government had committed to specific steps to combat piracy, the United States was concerned about the lack of significant criminal prosecutions.\nHe said the administration wants to see "jail time and tough criminal actions against those responsible for the thefts. We haven't seen enough evidence that this is happening yet."\nEvans said he would emphasize this point during meetings with Chinese leaders and in a speech Thursday at an intellectual property conference in Beijing.\nDuring Bush's second term, the United States will keep the pressure on China to abide by the market-opening commitments it made upon joining the World Trade Organization, Evans said.\nThat effort, he said, will continue under Carlos Gutierrez, the president's nominee for commerce secretary. The head of cereal giant Kellogg is awaiting Senate approval to take over for Evans.\nEvans, a close friend of Bush, said in November he was leaving the Cabinet to return to Texas.\nGutierrez told lawmakers last week that the administration intended to press China to narrow the trade gap with the United States. That imbalance hit $124 billion in 2003, a record for any U.S. trading partner, and widened in 2004.\nCritics of the administration's trade policies contend that Bush has not done enough to protect American workers from unfair trade practices in other nations. Those practices have contributed greatly to the loss of 2.7 million U.S. manufacturing jobs over the past four years, these critics say.\nIn the interview, Evans said he was not disappointed by the growth in the overall trade deficit and the deficit with China. He said he saw it as "an ongoing challenge to make sure that we do all we can to eliminate not only tariff barriers but nontariff barriers with China."\nU.S. manufacturers say the best thing the administration could do for the industry would be to persuade China to stop linking its currency directly to the U.S. dollar. American companies say that as a result of that system, the Chinese yuan is undervalued by as much as 40 percent, giving Beijing a huge competitive advantage.\nEvans said currency issues would not come up directly in his conversations with Chinese leaders because Treasury Secretary John Snow is handling that policy matter for the administration.\nBut Evans said he would raise with the Chinese the additional steps needed, such as selling off state-owned enterprises, so China can be classified by the United States as a market economy.\nThe Chinese want this designation because it will make it harder for American companies to win claims that Chinese competitors are setting unfairly low prices on goods sold in the U.S. market.\n"It is very important to them to be classified as a market economy under our trade laws and they are not there yet," Evans said.
(06/10/04 1:37am)
SEA ISLAND, Ga. -- President Bush, hoping to build on momentum from a U.N. victory on Iraq, said Wednesday he hopes for a wider role for NATO in post-occupation Iraq. But the French immediately voiced reservations.\nStanding alongside British Prime Minister Tony Blair, his top ally in the war in Iraq, Bush said he and Blair discussed NATO's possible role at a breakfast meeting.\n"We believe NATO ought to be involved," Bush said about the 15 NATO nations that already have forces in Iraq. "We will work with our NATO friends to at least continue the role that now exists, and hopefully expand it somewhat."\nFrench President Jacques Chirac, also attending this year's Group of Eight summit of powerful nations, expressed skepticism about an expanded NATO role. "I do not believe it is NATO's purpose to intervene in Iraq," he told reporters. "I have reservations vis-a-vis this initiative."\nAt the same time, trying to convey a new G-8 atmosphere of compromise, Chirac said, "I'm very much open to debate and discussion" about security for post-occupation Iraq. Chirac said any NATO role could only be justified "if the sovereign Iraqi government were to ask for it."\nThe United States is hoping that the U.N. resolution vote Tuesday giving Iraq's new leaders some clout over a U.S.-led military force could help heal bitter divisions over the war.\nBlair said the next step is to make sure Iraqis can take care of their own security.\n"This is a process of change and we have to help people manage it," Blair said. He added, "It's not just about security measures. It's not just about force."\nAsked if he wanted to see a larger role for NATO, Bush said, "I think NATO ought to stay involved and I think we have a good chance of getting it done."\nBush did not elaborate, but administration officials said the United States would like to see NATO get involved in training the new Iraqi army, in addition to having NATO members currently in Iraq remain there.\nFour of the eight industrialized nations at the economic summit here -- Russia, France, Germany and Canada -- have refused to send troops to Iraq and said the U.N. vote had not changed their mind.\nAnd an administration official, speaking on condition of anonymity after Bush's meeting with Blair, said the United States understands there are constraints on NATO's possible role given France and Germany's continued hesitation to put troops in Iraq.\nA possible future role for NATO in Iraq would depend on requests from the Iraqi government and decisions made by all the allied countries, NATO spokesman James Appathurai told Associated Press Television News on Wednesday.\n"It could range from a geographic role -- taking over a zone -- to a functional role, such as training," he said. "It is just too early to prejudge and we don't want to rush to judgment."\nBush was touting the U.N. vote on Iraq in a one-on-one meeting with the nation's new interim president, Ghazi al-Yawer.\n"I'm going to tell him we're pulling for him," Bush told reporters.\nBefore that session, Bush greeted Al-Yawer and the leaders from five other Arab countries before an ornate fountain and then posed with them for a group photo with the Atlantic Ocean and swaying palm trees as a backdrop.\nBush drove Blair to their one-on-one meeting at an exclusive resort on this barrier island in a futuristic, electric, golf-cart sized car emblazoned with the red, white and blue colors of the American flag.\nThe G-8 leaders were talking about topics including a Bush plan to expand the push for democracy throughout the Arab world -- an initiative that will test the newfound unity.\nEager to get the talks started at the opening session, Bush draped his jacket over the back of his chair and greeted the other leaders with a shouted "welcome."\nBush set a casual tone for the meetings, dressed in a knit shirt. Others wore dress shirts without ties, but Chirac shunned the resort-casual approach altogether, and wore a dark business suit and tie.\nThe opening session was devoted to economic issues with Bush leading off with a review of the good performance of the U.S. economy.\nThe threat to economic growth from rising oil prices was expected to come up as well.\nThe world leaders were meeting over lunch with the leaders of six Middle Eastern nations in a discussion aimed at boosting Bush's initiative to promote freedom, democracy and economic growth throughout the Middle East. Bush hopes the plan will emerge as the central achievement of the summit.\nThe plan has stirred deep suspicion in the region, home to some of the world's most authoritarian regimes. Many Arab and European countries view the proposal as unwanted meddling. And three Arab countries -- Egypt, Saudi Arabia and Morocco -- turned down Bush's invitation to participate.\nThe U.S. cause in the Arab world has not been helped by Bush's support for Israeli Prime Minister Ariel Sharon's handling of the Israeli-Palestinian conflict, nor by the worldwide uproar over the Iraqi prisoner abuse scandal.\nThe G-8 was expected to endorse a scaled-down version of the U.S. plan. One European official stressed it left room for countries to choose their own preferred methods to promote reforms. The declaration also does not require specific financial contributions.
(02/10/04 4:50am)
WASHINGTON -- Declaring that "America's economy is strong and getting stronger," President Bush told Congress Monday in his annual economic report that last year's tax cut was doing the job in reviving business growth.\nThis year's 412-page "Economic Report of the President," is considerably more upbeat than Bush's report a year ago, issued at a time when the country was still mired in a lackluster recovery and rising unemployment rate.\nIn the new report, the president says the country has been able to overcome a series of shocks starting with the bursting of the stock market bubble in early 2000 and followed by the first recession in a decade, the terrorist attacks, two wars and corporate accounting scandals.\nThe report, prepared by the president's Council of Economic Advisers, contained the administration's economic forecast for 2004. It predicted the economy will grow by 4 percent and create 2.6 million new jobs this year.\nIf the jobs forecast comes true, it will represent the first year of the Bush presidency in which there will be a net increase in payroll jobs. Since he took office, the country has lost 2.2 million payroll jobs.\nOn the campaign stump, Democratic presidential candidate Sen. John Kerry said Bush had the worst jobs record of the last 11 presidents and the rosy view of the economy presented in the new report was probably "prepared by the same people who brought us the intelligence on Iraq."\n"I don't think we need a new report about jobs in America. I think we need a new president who is going to create jobs in America and put America back to work," Kerry told a campaign rally in Roanoke, Va.\nSocial Security is one of the issues examined in the administration's report -- with a CEA analysis speaking favorably of one of the options put forward by a commission Bush appointed to examine the looming funding crisis in Social Security.\nUnder this proposal a portion of American workers' Social Security payroll taxes would be diverted to private investment accounts. While this proposal would increase the national debt over the next 30 years because the money would not be available to pay for current retirees' benefits, it would save the government from facing far larger deficits later on, the CEA analysis said.\nBush has said he favors using private accounts to fix the serious funding shortfall facing Social Security, but he hasn't endorsed a specific proposal.\nThe release of Bush's economic report came on a day when the president traveled to Missouri to tout the country's economic rebound, one of three such trips he has scheduled this week.\nBush took note of a number of encouraging developments in recent months, including strong economic growth beginning last summer which has finally begun to encourage the nation's businesses to start rehiring laid off workers.\nAcknowledging his jobs' deficit, Bush said, "We are moving in the right direction but have more to do. I will not be satisfied until every American who wants a job can find one."\nThe president credited last year's tax cut for making a sizable contribution to boosting economic growth.\nDemocrats and Bush's first Treasury secretary, Paul O'Neill, have attacked that tax cut as being unnecessary and have charged that it made the deficit problem worse. Bush fired O'Neill in December 2002 after he raised objections to going forward with further tax cuts.\nThe economic report came a week after Bush sent his new budget to Congress, a document that projects that this year's deficit will hit a record $521 billion.