Obama slams intelligence failings in US plane plot

WASHINGTON: US President Barack Obama Tuesday lashed US intelligence Tuesday for missing “red flags” in the Arabian peninsula that could have disrupted a plot to blow up a US-bound plane and vowed to stop future lapses.

“It is increasingly clear that intelligence was not fully analyzed or fully leveraged,” Obama said in a terse televised statement. “That’s not acceptable, and I will not tolerate it.” He was speaking after meeting US spy chiefs and top national security aides at the White House to discuss two probes into the attempt to blow up a Northwest airliner as it approached Detroit on December 25.

“The bottom line is this — the US government had sufficient information to have uncovered this plot and potentially disrupt the Christmas Day attack, but our intelligence community failed to connect those dots,” Obama said.

“When a suspected terrorist is able to board a plane with explosives on Christmas Day, the system has failed in a potentially disastrous way,” he said.

“It’s my responsibility to find out why, and to correct that failure so that we can prevent such attacks in the future.” The findings showed US intelligence missed other “red flags” in the Arabian peninsula as well as the already revealed fact that the top suspect, 23-year-old Nigerian Umar Farouk Abdulmutallab, was an extremist who had traveled to Yemen, Obama said.

Sanaa has been under increasing pressure in recent days to deal with an Al-Qaeda cell in the country which has claimed to be behind the plot to blow up the plane mid-air. Al-Qaeda in the Arabian Peninsula (AQAP) has also urged attacks on Western interests in Yemen.

The US embassy in Yemen reopened Tuesday after a two-day closure prompted by fears of an attack as US Secretary of State Hillary Clinton warned unrest in the Arab country was a threat to global stability.

The US embassy said on its website that Yemeni security forces had addressed a “specific area of concern” in the north of the capital Sanaa on Monday, paving the way for the reopening.But full services at the British, French and Japanese embassies have yet to resume.

Investigations spanning from west Africa to Europe to the Middle East have been trying to piece together the would-be bomber’s whereabouts and actions leading up to the Christmas Day attack, foiled when the explosives failed to detonate properly.

Dutch prosecutors said Tuesday Abdulmutallab had probably obtained the explosives, which were stitched into his underwear, before he arrived at Amsterdam’s Schiphol airport where he boarded the US-bound flight.

White House said earlier he had been providing useful leads during his interrogations by the FBI as he awaits his arraignment on Friday in Detroit.

“Abdulmutallab spent a number of hours with FBI investigators in which we gleaned usable, actionable intelligence,” White House spokesman Robert Gibbs said.

The United States has unleashed a barrage of measures to stop would-be attackers riding planes into the country, overhauling its terror watchlists and adding dozens more suspects to “no-fly” lists.

Further boosting security measures, all travelers coming from or via 14 “terror linked” countries will have to undergo compulsory enhanced screening.
US officials also revealed that “additional visas” had been revoked since the Christmas Day, but gave no details of how many or which countries the applicants were from.

“Additional visas have been revoked for people that we believe have suspected ties to terrorism,” US State Department spokesman PJ Crowley told reporters.

Nigeria, one of the 14 countries on the security list, on Tuesday protested the new rules. “I made it clear, through the US ambassador, to the US government that this is unacceptable to Nigeria,” Foreign Minister Ojo Maduekwe told journalists.

EU security experts will meet in Brussels on Thursday to discuss the US emergency travel measures, amid privacy and health concerns over broader use of full body scanners.

Obama said, meanwhile, it had been decided not to transfer any more Guantanamo Bay prisoners to Yemen for now due to the “unsettled situation”there.

“But make no mistake. We will close Guantanamo prison, which has damaged our national security interests and become a tremendous recruiting tool for Al-Qaeda,” Obama said.

The Obama administration has been under intense pressure from domestic critics and some friendly lawmakers not to send any more inmates back to Yemen, because of fears they will slip into extremism. — AFP


Around 30,000 more troops being considered

WASHINGTON: US President Barack Obama is wrapping up deliberations on war strategy in Afghanistan and is considering final Pentagon options that include sending about 30,000 more troops, officials said on Saturday.

A deployment of that size would be less than the 40,000-troop increase recommended by Gen Stanley McChrystal, the commander of US and Nato forces in Afghanistan, but more than many of Obama’s Democratic allies may support.

Record combat deaths have eroded US public support for the war, and a decision to expand troop levels could become a political liability for the president ahead of congressional elections next year.

Currently, there are about 67,000 US troops and 40,000 allied forces in Afghanistan.

Under one of the final Pentagon options presented to the White House, three additional combat brigades would be deployed and a division headquarters set up near Kandahar in southern Afghanistan, as part of a 30,000-troop increase.

US officials, speaking on condition of anonymity, said Mr Obama had settled on a troop increase but has yet to make up his mind about its size.

Brigades generally include 3,500 to 4,000 troops, though they can swell to over 5,000 troops if other units are attached. Marine brigades can be larger.

Mr Obama, who will visit Asia from Nov 12-19, is expected to announce his decision within a few weeks, possibly after Afghan President Hamid Karzai’s inauguration. Mr Karzai was re-elected in a controversial poll tainted by fraud.

The timing may hinge on the extent to which Mr Karzai embraces US and European calls for a pact under which his government would commit to taking concrete steps to fight corruption and improve governance, including the delivery of public services.

Washington believes a successful counter-insurgency strategy against the Taliban hinges in large part on winning Afghan public support for the government in Kabul.

But Admiral Mike Mullen, chairman of the US military’s Joint Chiefs of Staff, said earlier this week that the re-elected president’s legitimacy among the Afghan people was ‘at best, in question right now and, at worst, doesn’t exist.’

Options on table

Senior Obama administration officials have stepped up consultations with key allies, laying the ground for an announcement on strategy and troop levels.

In his confidential troop request, Gen McChrystal said 40,000 additional troops were needed to help secure Afghan population centres and to give Nato some additional resources to take on Taliban and Al Qaeda fighters in outlying areas.

Another option, deemed more risky by Gen McChrystal, calls for between 10,000 and 15,000 more troops, which would enable the commander to focus on securing population centres but provide few additional resources to broaden the anti-Taliban campaign.

A third option – to send an additional 80,000 troops to mount a more robust counter-insurgency campaign against the Taliban across the country – was widely seen as a non-starter from the onset of the White House review.

Support for continuing a counter-insurgency strategy with a greater focus on protecting major Afghan population centres has been growing within the Obama administration.

Counter-insurgency advocates include Defence Secretary Robert Gates and military leaders, including Gen McChrystal. Officials said this strategy could be combined with a stepped up counter-terrorism campaign, advocated by Vice President Joe Biden, using unmanned aerial drones and special operations forces to combat Taliban and Al Qaeda fighters in the Afghan countryside and near the border with Pakistan. — Reuters.

US House passes sweeping health care overhaul

WASHINGTON: The US House of Representatives late Saturday approved the broadest US health care overhaul in a half-century, handing President Barack Obama a major victory on his top domestic priority.

After hours of bitter debate and an appeal from Obama to ‘answer the call of history,’ lawmakers voted 220-215 for a 10-year, trillion-dollar plan to extend health coverage to some 36 million Americans who lack it now.

The chamber’s Democrats erupted in loud cheers and triumphant applause the moment the bill had the 218 votes needed for passage, about 11:07 pm (0407 GMT), a happy din that grew deafening when a gavel made it official.

The president had paid a rare visit to Congress to lobby for unity among his Democratic allies and reinforced it with a public speech, but 39 still joined 176 of the chamber’s Republicans in opposition to the proposal.

One Republican broke ranks, nominally fulfilling, in the barest terms, Obama’s vow to secure bipartisan support.

‘This is our moment to deliver. I urge members of congress to rise to this moment, answer the call of history and vote yes for health insurance reform for America,’ Obama said in the White House’s Rose Garden hours before the vote.

The fight to remake health care in the world’s richest country shifted to the US Senate, where its fate remained unclear amid a intra-party dispute among Democrats anchored on what role the US government should play.

Democratic Senate Majority Leader Harry Reid, struggling to pull together the 60 votes needed to ensure passage, has hinted that the chamber may not act until next year.

That would put the issue front-and-center in the 2010 mid-term elections, when one third of the Senate, the entire House of Representatives, and many US governorships are up for grabs.

If, as expected, the two chambers pass rival versions of health care legislation, they will need to thrash out a compromise version and approve it in order to send it to Obama to sign into law.

Final House passage came after a flurry of votes, including a 240-194 vote to sharply tighten restrictions on government monies paying for abortions, seen as critical to cementing support from a group of anti-abortion Democrats.

The House then voted 176-258 to defeat the Republican alternative to the overall plan — with one lone Republican, Representative Timothy Johnson of Illinois, joining the Democrats in opposition.

The United States is the only industrialized democracy that does not ensure that all of its citizens have health care coverage, with an estimated 36 million Americans uninsured.

And Washington spends vastly more on health care — both per person and as a share of national income as measured by Gross Domestic Product — than other industrialized democracies, but with no meaningful edge in quality of care, according to the Organization for Economic Cooperation and Development.

The bill would create a government-backed insurance plan, popularly known as a ‘public option,’ to compete with private firms and would end denial of coverage based on preexisting medical problems.

Under the White House-backed bill, Americans would have to buy insurance and most employers would have to offer coverage to their workers — though some small businesses would be exempt and the government would offer subsidies. —AFP

Lawmakers split on timing of Afghan decision

WASHINGTON – Top lawmakers sparred Sunday over the timing of President Barack Obama’s decision on how to move ahead in Afghanistan, with Republicans urging a quick move to boost troop levels and Democrats counseling patience.

In partisan displays, senators generally agreed on the need to support whatever Afghan government emerges from a Nov. 7 run-off election between President Hamid Karzai and challenger Abdullah Abdullah. But they differed on exactly how to do that and when.

Republicans said Obama must sign off soon on a recommendation from the top commander in Afghanistan, Gen. Stanley McChrystal, to substantially increase the number of American troops there by as many as 40,000 or more. Democrats warned against a hasty decision on any increase.

“Clearly, time is of the essence here,” said Sen. Jon Kyl of Arizona, the second-ranking Republican. “I’m afraid that with every passing day we risk the future success of the mission.”

“I think it’s taken too long,” added Sen. Orrin Hatch, R-Utah. “Why not follow the advice of his hand-picked general?”

Arizona Sen. John McCain, the GOP nominee for president last year, said that “every day we delay will be a delay in this strategy succeeding.” The deteriorating situation “argues for a rapid decision,” he said.

Obama has had McChrystal’s recommendation for weeks but has yet to decide on putting it in place even after numerous strategy sessions with senior aides. The White House has said the president will not be rushed, but suggested a decision will be made soon.

None of the Republicans would second a claim made last week by former Vice President Dick Cheney that Obama is “dithering” in making a decision, but they agreed that continued delay would endanger the 68,000 U.S. soldiers now on the ground in Afghanistan.

“I would never want to call my president dithering,” Hatch said. He stressed, though, that “they need these troops, there is no question about it. We’re exposing them without the proper help that they have just got to have. … I think it’s a mistake.”

Distancing himself from Cheney, McCain also said he “wouldn’t use that language.” But, he added, “The sooner we implement the strategy the more we will able to ensure their (troops’) safety.”

Sen. Carl Levin, chairman of the Senate Armed Services Committee, lashed out at Cheney’s criticism, which came in a speech on Wednesday while accepting an award from a conservative national security group.

“I thought that comments of the former vice president were totally out of bounds,” said Levin, D-Mich. “I don’t think he has any credibility left with the American people in any event. But I think it is really wrong. … The president needs to make the right decision.”

Sen. Jim Webb, D-Va., another member of the Armed Services Committee, also disagreed.

“The process that this administration is using is, I think, is a very proper and smart process,” he said. “This deliberative process is what we need because we’re going to end up living with the results for some time.”

In addition to differing on the timing of the decision, lawmakers were divided by party over on what it should be. Republicans wholeheartedly endorsed McChrystal’s appeal while Democrats were more skeptical.

Levin, who has urged that the Afghan security forces be built up before any increase in U.S. combat troops, said “it would be a mistake to have any significant number of additional combat forces because I would like to see a large increase in the Afghan army be the major way in which this is successful.”

Sen. Russ Feingold, D-Wis., was more strident, saying he is against a build up of American forces.

“It is time to start thinking about bringing troops out of Afghanistan and reducing our commitment there,” he said. He pledged to oppose a decision to send more.

“There will be resistance to this if necessary,” Feingold said. “If necessary, we will act to prevent this mistake.”

Kyl and Levin spoke on “Fox News Sunday,” Hatch and Webb were on CNN’s “State of the Union,” and Feingold and McCain appeared on CBS’s “Face the Nation.”

US note dilutes some conditions in Kerry-Lugar bill

WASHINGTON: The requirement for an effective civilian control over promotions and strategic planning in the Pakistani military is not mentioned in a new joint explanatory statement of the US Congress issued on Wednesday.

‘There is no intent to, and nothing in this act in any way suggests that there should be, any US role in micromanaging internal Pakistani affairs, including the promotion of Pakistani military officers or the internal operations of the Pakistani military,’ said an explanatory note attached to the Enhanced Partnership with Pakistan Act of 2009.

The explanatory note also dilutes the requirement that needed Pakistan to interrogate any Pakistani national involved in nuclear proliferation and to allow US officials access to such a person.

A new clause included in the explanatory note now ‘reflects our understanding that cooperative effort currently being undertaken by the governments of Pakistan and the United States to combat proliferation will continue.’

Section 302 of the act Congress passed late last month required the Secretary of State to submit annual reports to appropriate congressional committees to justify the continuation of security and military assistance to Pakistan. A failure to issue such a report could cause the aid to be discontinued.

There’s no such requirement for economic assistance. The secretary’s report shall include an assessment of the extent to which the Pakistan government exercises effective civilian control of the military.

This report should also include ‘a description of the extent to which civilian executive leaders and parliament exercise oversight and approval of military budgets, the chain of command, the process of promotion for senior military leaders, civilian involvement in strategic guidance and planning, and military involvement in civil administration,’ said the original document.

Pakistani diplomats, however, explained to the media on Wednesday that while the above clause could not be deleted from the bill, the explanatory statement would make it ineffective. The administration will no longer be asked to issue such a report.

Missing from the explanatory note are words like ‘civilian executive leaders and parliament’ exercising the power of ‘oversight and approval’ and the requirement that the military will not get involved in civil administration.

The explanatory note also states that even the remaining requirement can be ‘waived if the determination is made by the Secretary of State in the interest of (US) national security that this was necessary to continue’ military assistance to Pakistan.

Interestingly, the requirement for ‘effective civilian control’ over the military was also absent from the original Senate version of the Kerry-Lugar bill.

The earlier bill said that the US intended to work with the government of Pakistan to ensure that Pakistan had strong and effective law-enforcement and national defence forces, under civilian leadership, with sufficient and appropriate security equipment and training to effectively defend Pakistan against internal and external threats.

In this clause, there was no mention of civilian control over chain of command or the process of promotion in the Pakistan army or any thing else hair-raising about the armed forces.

The explanatory note was issued jointly by the US House of Representatives and the Senate, clarifying their intent behind the aid to Pakistan bill.

The statement stresses that the US neither seeks to micromanage Pakistani affairs nor impinge on its sovereignty.

Senator John Kerry, chairman of the Senate Foreign Relations Committee, and Congressman Howard Berman, chairman of the House Foreign Affairs Committee, read out part of the statement inside Capitol Hill, standing beside Foreign Minister Shah Mahmood Qureshi.

‘This document today is I think a historic document, a step forward in our relationship,’ Qureshi told a joint news conference with Senator Kerry and Congressman Berman.

‘I am going back to Pakistan to tell my parliament and conclude the debate on the note that our relationship can move forward , we will deepen it and we will strengthen it,’ he said.

Senator Kerry and Congressman Berman reaffirmed their resolve to forge a long-term relationship with Pakistan, adding that the legislation, now being called as Kerry-Lugar-Berman Act, manifests the American commitment to economic uplift of the Pakistani people.

‘There is nothing in this bill that impinges on Pakistani sovereignty, period,’ said Senator Kerry.

The joint statement says that the reports envisioned in Section 302 are not binding on Pakistan, and require only the provision of information by the executive branch to the US Congress, in furtherance of the proposed legislation’s stated purpose of strengthening civilian institutions and the democratically-elected government of Pakistan.

The final text of the legislation reflects an agreement reached by the Senate Committee on Foreign Relations and the House Committee on Foreign Affairs.

‘The purpose of this explanatory statement is to facilitate accurate interpretation of the text and to ensure faithful implementation of its provisions in accordance with the intentions of the legislation,’ said Senator Kerry.

The core intent of the Enhanced Partnership with Pakistan Act is to demonstrate the American people’s long-term commitment to the people of Pakistan, he added.

Senator Kerry and Congressman Berman said that the United States valued its friendship with the Pakistani people and honoured the great sacrifices made by Pakistani security forces in the fight against extremism, and the legislation reflected the goals shared by the two governments.

The joint statement emphasised that the legislation ‘does not seek in any way to compromise Pakistan’s sovereignty, impinge on Pakistan’s national security interests, or micromanage any aspect of Pakistani military or civilian operations’.

There are no conditions on Pakistan attached to the authorisation of $7.5 billion in non-military aid.
The only requirements on this funding are financial accountability measures that Congress is imposing on the US executive branch, to ensure that this assistance supports programmes that most benefit the Pakistani people.

President Barack Obama has till midnight Friday to sign the Kerry-Lugar bill and he will sign it before that, according to White House spokesman Robert Gibbs.

Obama hosts Passover meal

WASHINGTON, April 10: Barack Obama hosted family, friends and staff on Thursday night for a Passover seder, thought to be a first for a sitting US president.

A photograph released by the White House showed Mr Obama at the head of a cheerful table of 18, including First Lady Michelle Obama and daughters Malia, 10, and Sasha, seven.

An aide said the meal stuck to traditional fare like matzo, bitter herbs, roasted egg and greens in the White House’s family dining room, and that the event included reading of the Haggadah, the religious text of the holiday.

Passover, which celebrates the Jewish exodus from Egypt after 400 years of slavery, began at sundown on Wednesday. White House aides said they believed it was a first for a US president to host it.

About two per cent of the US population of more than 300 million is Jewish. White House spokesman Robert Gibbs said the event grew out of a seder dinner during the 2008 campaign, held in the basement of a hotel in Harrisburg, Pennsylvania.

“I did not go, but somebody told me that at the event they said, ‘Next year let’s do this at the White House,’ and here we are,” Gibbs said on Thursday.—AFP

2 months into 2009, US deaths spike in Afghanistan

KABUL – U.S. deaths in Afghanistan increased threefold during the first two months of 2009 compared with the same period last year, after thousands more troops deployed and commanders ramped up winter operations against an increasingly violent insurgency.

As troops pour into the country and violence rises, another sobering measure has also increased: More Afghan civilians are dying in U.S. and allied operations than at the hands of the Taliban, according to a count by The Associated Press. In the first two months of the year, U.S., NATO or Afghan forces have killed 100 civilians, while militants have killed 60.

President Barack Obama recently announced the deployment of 17,000 additional troops to bolster 38,000 already in the country, increasing the U.S. focus on Afghanistan while a drawdown begins in Iraq. The latest casualty toll among U.S. forces could portend a deadlier year in Afghanistan than the U.S. military has experienced since the Taliban’s ouster in 2001.

“I think that because you are going to see that additional engagement, there is a risk of greater additional casualties in the short term, just as there was in Iraq,” Obama told the Pentagon Channel on Friday from Camp Lejeune, N.C. “That is something we will have to monitor very carefully.”

Twenty-nine U.S. troops died in Afghanistan the first two months of 2009 — compared with eight Americans in the first two months of 2008.

Part of the increase is due to the influx of troops. In early 2008 there were about 27,000 forces in the country, some 10,000 fewer than today.

But U.S. troops are also operating in new, dangerous areas. A brigade of 10th Mountain Division soldiers deployed to two insurgent-heavy provinces outside Kabul in January — Wardak and Logar. And American forces are increasingly operating in Taliban heartland in the south.

“It has a lot to do with the fact that we have a presence in places and going into places and disrupting insurgents in area where they haven’t been bothered much,” Col. Greg Julian, the top U.S. spokesman in Afghanistan, said Saturday. That, he said, means more battles and more attacks.

American troop deaths occurred at a much higher rate in Afghanistan than in Iraq in January and February. Thirty-one U.S. forces have died in Iraq so far this year, but there are roughly 140,000 American troops in Iraq, more than three times the number in Afghanistan.

The decreasing U.S. death toll in Iraq coincides with an overall decline in violence largely attributed to a cease-fire by anti-U.S. cleric Muqtada al-Sadr and a Sunni decision to join forces with the Americans against al-Qaida in Iraq.

Julian said that troops in Afghanistan have “maintained the pressure throughout the winter months” this season, though in previous years there had been a lull.

About a third of the 29 deaths this year were caused by roadside bombs, including an attack in Kandahar province on Tuesday that killed four U.S. troops. Julian said insurgents are using more IEDs and fewer direct attacks because militants die in large numbers when they fight the U.S. head on.

The number of other NATO soldiers killed so far this year has risen as well, but not at the same rate. Last year 13 soldiers from other NATO countries died in January and February, compared with 18 in the first two months of 2009. Of those 18 deaths, 12 were British.

Gen. David McKiernan, the top U.S. and NATO commander in the country, said he thinks that Taliban militants are “resilient” but not necessarily stronger.

“I’m not with the group that says everything is in a downward spiral, that the Taliban are resurgent and stronger than they were. I think they’re very resilient, but I don’t necessarily think they’re stronger,” McKiernan told the Chicago Tribune in an interview published Friday.

“And I do see some measures of progress in this country. Now I’m not going to say everything is going to improve dramatically in 2009, but I think as a military commander, I am not going to be pessimistic about this. I’m going to be glass-is-half-full.”

Violence in all categories is up in general so far this year. Militant deaths rose from 129 in early 2008 to 308 in early 2009, according to numbers compiled by The Associated Press based on figures from U.S., NATO and Afghan officials.

Civilian deaths from U.S. and NATO operations have also spiked, despite increasingly emotional pleas from Afghan President Hamid Karzai to address the problem.

Last year the Taliban set off several large suicide bombs in crowded areas, killing around 180 Afghan civilians the first two months of the year, while U.S., NATO or Afghan forces killed fewer than 10.

But the numbers have reversed this year. In the first two months of 2009 some 100 Afghan civilians have been killed by U.S., NATO or Afghan forces, according to the AP count, many during overnight missions by Special Operations Forces. Militants have killed around 60.

source : news.yahoo.com

Obama challenges lobbyists to legislative duel

WASHINGTON – President Barack Obama challenged the nation’s vested interests to a legislative duel Saturday, saying he will fight to change health care, energy and education in dramatic ways that will upset the status quo.

“The system we have now might work for the powerful and well-connected interests that have run Washington for far too long,” Obama said in his weekly radio and video address. “But I don’t. I work for the American people.”

He said the ambitious budget plan he presented Thursday will help millions of people, but only if Congress overcomes resistance from deep-pocket lobbies.

“I know these steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they’re gearing up for a fight,” Obama said, using tough-guy language reminiscent of his predecessor, George W. Bush. “My message to them is this: So am I.”

The bring-it-on tone underscored Obama’s combative side as he prepares for a drawn-out battle over his tax and spending proposals. Sometimes he uses more conciliatory language and stresses the need for bipartisanship. Often he favors lofty, inspirational phrases.

On Saturday, he was a full-throated populist, casting himself as the people’s champion confronting special interest groups that care more about themselves and the wealthy than about the average American.

Some analysts say Obama’s proposals are almost radical. But he said all of them were included in his campaign promises. “It is the change the American people voted for in November,” he said.

Nonetheless, he said, well-financed interest groups will fight back furiously.

Insurance companies will dislike having “to bid competitively to continue offering Medicare coverage, but that’s how we’ll help preserve and protect Medicare and lower health care costs,” the president said. “I know that banks and big student lenders won’t like the idea that we’re ending their huge taxpayer subsidies, but that’s how we’ll save taxpayers nearly $50 billion and make college more affordable. I know that oil and gas companies won’t like us ending nearly $30 billion in tax breaks, but that’s how we’ll help fund a renewable energy economy.”

Passing the budget, even with a Democratic-controlled Congress, “won’t be easy,” Obama said. “Because it represents real and dramatic change, it also represents a threat to the status quo in Washington.”

Obama also promoted his economic proposals in a video message to a group meeting in Los Angeles on “the state of the black union.”

“We have done more in these past 30 days to bring about progressive change than we have in the past many years,” the president in remarks the White House released in advance. “We are closing the gap between the nation we are and the nation we can be by implementing policies that will speed our recovery and build a foundation for lasting prosperity and opportunity.”

Congressional Republicans continued to bash Obama’s spending proposals and his projection of a $1.75 trillion deficit this year.

Almost every day brings another “multibillion-dollar government spending plan being proposed or even worse, passed,” said Sen. Richard Burr, R-N.C., who gave the GOP‘s weekly address.

He said Obama is pushing “the single largest increase in federal spending in the history of the United States, while driving the deficit to levels that were once thought impossible.”

source : news.yahoo.com

Official: Budget projects $1.75 trillion deficit

WASHINGTON – President Barack Obama is sending Congress a budget Thursday that projects the government’s deficit for this year will soar to $1.75 trillion, reflecting efforts to pull the nation out of a deep recession and a severe financial crisis.

A senior administration official told The Associated Press that Obama’s $3 trillion-plus spending blueprint also asks Congress to raise taxes on the wealthy in 2011 and cut Medicare costs to provide health care for the uninsured.

The president’s first budget also holds out the possibility of spending $250 billion more for additional financial industry rescue efforts on top of the $700 billion that Congress has already authorized, according to this official, who spoke on condition of anonymity before the formal release of the budget.

The official said the administration felt it would be prudent to ask for additional resources to deal with the financial crisis, the most severe to hit the country in seven decades. He called the request a “placeholder” in advance of a determination by the Treasury Department of what extra resources will actually be needed.

The spending blueprint Obama is sending Congress is a 140-page outline, with the complete details scheduled to come in mid- to late April, when the new administration sends up the massive budget books that will flesh out the plan.

However, the submission of the bare budget outline was certain to set off fierce debate in Congress over Obama’s spending and tax priorities. The budget document includes additional requests for the current year and Obama’s proposals the 2010 budget year, which begins Oct. 1.

The president wants Congress to extend the $400 annual tax cut due to start showing up in workers’ paychecks in April, and it extends the tax cuts passed in 2001 and 2003 for couples earning less than $250,000 per year. Those tax cuts were due to expire at the end of 2010.

To pay for the middle-class tax relief and the effort to increase health coverage, Obama’s budget makes significant cuts on the rate of growth in other areas of health care and seeks to trim a variety of other government programs, including subsidies earned by farmers with revenue of more than $500,000 a year.

The budget would also seek savings in military weapons purchases. It would raise taxes on wealthy hedge fund managers and corporations, eliminating tax incentives U.S. companies now have to move jobs overseas, something Obama repeatedly mentioned during the presidential campaign.

Even with all the savings, the cost of the $787 billion economic stimulus bill will push the deficit for this year to $1.75 trillion, a level — as a percentage of the economy — not seen since World War II. The deficit is expected to remain around $1 trillion for the next two years before starting to decline to $533 billion in 2013, according to budget projections.

Obama’s plan proposes achieving $634 billion in savings on projected health care spending and diverting those resources to expanding coverage for uninsured Americans. The $634 billion represents a little more than half the money that would be needed to extend health insurance to all of the 48 million Americans now uninsured.

Americans now spend a total of $2.4 trillion a year on health care.

Obama also will ask for an additional $75 billion to cover the costs of wars in Iraq and Afghanistan through September, the end of the current budget year. That would be on top of the $40 billion already appropriated by Congress, the administration official said.

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.

Some of the revenues from the pollution permits would be used to extend the “Making Work Pay” tax credit of $400 for individuals and $800 for couples beyond 2010, as provided in the just-passed economic stimulus bill.

About half of what officials characterized as a $634 billion “down payment” toward health care coverage for every American would come from cuts in Medicare. That is sure to incite battles with doctors, 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, 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.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, called Obama’s proposal to tax the wealthy to finance health care reform a starting point. But he wants to also examine taxing some of health insurance benefits provided by employers — an idea rejected by Obama in last year’s presidential campaign.

Budget documents provided to The Associated Press show that Obama will not lay out a detailed blueprint for a health care overhaul, but a set of broad policy principles and some specific ideas for how to raise a big chunk of the money.

Obama’s promise to phase out direct payments to farming operations with revenues above $500,000 a year is sure to cause concerns among rural Democrats.

Even after all those difficult choices, cutting about $2 trillion from the budget over 10 years, Obama’s budget still would feature huge deficits.

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.

At $533 billion, the deficit in 2013 will be about 3 percent of the size of the economy, a level that administration officials said would be manageable.


Associated Press writers Andrew Taylor, Ricardo Alonso-Zaldivar and Anne Gearan contributed to this report.

source : news.yahoo.com

Obama to address Congress, nation on economy

WASHINGTON – Barreling ahead on a mammoth agenda, Barack Obama is ready to offer a detailed sketch of the first year of his presidency, casting the nation’s bleeding economy as a tangle of tough, neglected problems.

In a prime-time speech to Congress and millions watching at home, Obama will make his case Tuesday that much more has to be done to turn around the economy — a message he knows he must explain.

White House spokesman Robert Gibbs said Tuesday that Obama will provide more details about his financial stability plan and measures to help the economy while delivering “a sober assessment about where we are and the challenges we face.”

“He’ll say we’re on the right path to meeting these challenges, and there are better days ahead,” Gibbs said.

Obama approaches this moment riding a strong, upbeat sentiment among the public. Overall, 68 percent of people approve of his job performance, a new Washington Post-ABC News poll finds. A New York Times/CBS News polls finds that more than three-quarters of those surveyed were optimistic about the next four years with Obama in charge, and similar majorities said they were confident in his ability to make the right decisions about the economy.

Still, the president faces steep challenges. The nation is nearly dizzy keeping up with what’s emerged from Washington during Obama’s first weeks as president, from a staggering $787 billion stimulus plan to a revamped bailout for the financial sector to a rescue plan for struggling homeowners.

And investors are dour. Wall Street took another pounding Monday, with the Dow Jones industrial average tumbling to its lowest close since 1997.

Although Obama is too new in office to be delivering a State of the Union address, his speech will have all the same trappings. It comes two days before he delivers a budget blueprint to Congress. Unlike that detail-driven document, his address will be broad, spelling out what he wants and how he will do it.

The economy, in its worst tailspin in decades, will dominate. Obama will touch on foreign policy, but that will largely be left for other upcoming speeches. This will not be a rollout of one policy initiative after another.

Obama will make clear that the trillion-dollar-plus deficit is one he “inherited.” In other words, he wants to remind people that President George W. Bush and the previous Congress left him a big hole, forcing him to pursue the costly stimulus package.

The president will push for movement on ensuring health coverage for all Americans. He will seek to expand educational opportunities, and diversify the country’s energy sources, and contain sacred entitlements like Social Security, and halve the soaring budget deficit in four years.

His rhetorical mission is to show not only how all those pieces connect to the health of the economy, but why they must be pursued simultaneously.

Gunning for so much at once is complicated, both in terms of the issues themselves and the politics. Senior presidential adviser David Axelrod acknowledged Monday there is a risk in taking on too much.

“I think the bigger concern,” he said, “is to not be aggressive at a time when a tepid approach could really consign us to a long-term economic catastrophe. We believe the times demand vigor and aggressive action, and so we’re having to do a lot of things at once.”

Rep. Darrell Issa of California, the top Republican on the House Committee on Oversight and Government Reform, said Obama’s speech amounts to a coming-out party.

“You never know what a salesman’s going to sell you until he shows up at your door,” Issa said of his expectations. “If he gives us a narrow set of priorities that can be executed, and they don’t just involve more spending, then I think it will be refreshing. If he gives us a long laundry list, which most presidents do, then although it will set the agenda … it won’t be as meaningful.”

In many ways, though, Obama will be speaking directly to the American people. Daily followers of Obama’s rhetoric are not likely to be surprised by Obama’s words, some of which will be repeats. He is trying to reach millions of people who don’t get to hear him every day.

So Obama will say that the crises facing the nation are so large they can only be solved in bipartisan ways. He will be blunt about the country’s woes but try to balance that talk with optimism. He will talk about his travels as president so he can focus on the stories of communities outside Washington.

Asked in an MSNBC interview how the president plans to make good on his pledge to cut the deficit in half by the end of his first term, Gibbs said, “The biggest thing we’re going to do is cut the amount of money we spend each year in Iraq.”

He said Obama also planned to talk about necessary investments and about taxes.

“I think the president believes very clearly that we have to be honest about where we are,” Gibbs said. “Tonight, he will tell the country that we’ve faced greater challenges than we face now and we’ve always met those challenges.”

There is sure to be ceremony as Obama arrives in the well of the House. His speech is tentatively at 45 minutes, accounting for applause time.

source : news.yahoo.com