Thursday, January 8, 2009

Why Do They Hate The West So Much, We Will Ask

Why Do They Hate The West So Much, We Will Ask

By Robert Fisk

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So once again, Israel has opened the gates of hell to the Palestinians. Forty civilian refugees dead in a United Nations school, three more in another. Not bad for a night's work in Gaza by the army that believes in "purity of arms". But why should we be surprised?

Have we forgotten the 17,500 dead – almost all civilians, most of them children and women – in Israel's 1982 invasion of Lebanon; the 1,700 Palestinian civilian dead in the Sabra-Chatila massacre; the 1996 Qana massacre of 106 Lebanese civilian refugees, more than half of them children, at a UN base; the massacre of the Marwahin refugees who were ordered from their homes by the Israelis in 2006 then slaughtered by an Israeli helicopter crew; the 1,000 dead of that same 2006 bombardment and Lebanese invasion, almost all of them civilians?

What is amazing is that so many Western leaders, so many presidents and prime ministers and, I fear, so many editors and journalists, bought the old lie; that Israelis take such great care to avoid civilian casualties. "Israel makes every possible effort to avoid civilian casualties," yet another Israeli ambassador said only hours before the Gaza massacre. And every president and prime minister who repeated this mendacity as an excuse to avoid a ceasefire has the blood of last night's butchery on their hands. Had George Bush had the courage to demand an immediate ceasefire 48 hours earlier, those 40 civilians, the old and the women and children, would be alive.

What happened was not just shameful. It was a disgrace. Would war crime be too strong a description? For that is what we would call this atrocity if it had been committed by Hamas. So a war crime, I'm afraid, it was. After covering so many mass murders by the armies of the Middle East – by Syrian troops, by Iraqi troops, by Iranian troops, by Israeli troops – I suppose cynicism should be my reaction. But Israel claims it is fighting our war against "international terror". The Israelis claim they are fighting in Gaza for us, for our Western ideals, for our security, for our safety, by our standards. And so we are also complicit in the savagery now being visited upon Gaza.

I've reported the excuses the Israeli army has served up in the past for these outrages. Since they may well be reheated in the coming hours, here are some of them: that the Palestinians killed their own refugees, that the Palestinians dug up bodies from cemeteries and planted them in the ruins, that ultimately the Palestinians are to blame because they supported an armed faction, or because armed Palestinians deliberately used the innocent refugees as cover.

The Sabra and Chatila massacre was committed by Israel's right-wing Lebanese Phalangist allies while Israeli troops, as Israel's own commission of inquiry revealed, watched for 48 hours and did nothing. When Israel was blamed, Menachem Begin's government accused the world of a blood libel. After Israeli artillery had fired shells into the UN base at Qana in 1996, the Israelis claimed that Hizbollah gunmen were also sheltering in the base. It was a lie. The more than 1,000 dead of 2006 – a war started when Hizbollah captured two Israeli soldiers on the border – were simply dismissed as the responsibility of the Hizbollah. Israel claimed the bodies of children killed in a second Qana massacre may have been taken from a graveyard. It was another lie. The Marwahin massacre was never excused. The people of the village were ordered to flee, obeyed Israeli orders and were then attacked by an Israeli gunship. The refugees took their children and stood them around the truck in which they were travelling so that Israeli pilots would see they were innocents. Then the Israeli helicopter mowed them down at close range. Only two survived, by playing dead. Israel didn't even apologise.

Twelve years earlier, another Israeli helicopter attacked an ambulance carrying civilians from a neighbouring village – again after they were ordered to leave by Israel – and killed three children and two women. The Israelis claimed that a Hizbollah fighter was in the ambulance. It was untrue. I covered all these atrocities, I investigated them all, talked to the survivors. So did a number of my colleagues. Our fate, of course, was that most slanderous of libels: we were accused of being anti-Semitic.

And I write the following without the slightest doubt: we'll hear all these scandalous fabrications again. We'll have the Hamas-to-blame lie – heaven knows, there is enough to blame them for without adding this crime – and we may well have the bodies-from-the-cemetery lie and we'll almost certainly have the Hamas-was-in-the-UN-school lie and we will very definitely have the anti-Semitism lie. And our leaders will huff and puff and remind the world that Hamas originally broke the ceasefire. It didn't. Israel broke it, first on 4 November when its bombardment killed six Palestinians in Gaza and again on 17 November when another bombardment killed four more Palestinians.

Yes, Israelis deserve security. Twenty Israelis dead in 10 years around Gaza is a grim figure indeed. But 600 Palestinians dead in just over a week, thousands over the years since 1948 – when the Israeli massacre at Deir Yassin helped to kick-start the flight of Palestinians from that part of Palestine that was to become Israel – is on a quite different scale. This recalls not a normal Middle East bloodletting but an atrocity on the level of the Balkan wars of the 1990s. And of course, when an Arab bestirs himself with unrestrained fury and takes out his incendiary, blind anger on the West, we will say it has nothing to do with us. Why do they hate us, we will ask? But let us not say we do not know the answer.

Holocaust Denied The lying silence of those who know

Holocaust Denied, The lying silence of those who know

By John Pilger

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When the truth is replaced by silence," the Soviet dissident Yevgeny Yevtushenko said, "the silence is a lie." It may appear the silence is broken on Gaza. The cocoons of murdered children, wrapped in green, together with boxes containing their dismembered parents and the cries of grief and rage of everyone in that death camp by the sea, can be viewed on al-Jazeera and YouTube, even glimpsed on the BBC. But Russia's incorrigible poet was not referring to the ephemeral we call news; he was asking why those who knew the why never spoke it and so denied it. Among the Anglo-American intelligentsia, this is especially striking. It is they who hold the keys to the great storehouses of knowledge: the historiographies and archives that lead us to the why.

They know that the horror now raining on Gaza has little to do with Hamas or, absurdly, "Israel's right to exist." They know the opposite to be true: that Palestine's right to exist was canceled 61 years ago and the expulsion and, if necessary, extinction of the indigenous people was planned and executed by the founders of Israel. They know, for example, that the infamous "Plan D" resulted in the murderous depopulation of 369 Palestinian towns and villages by the Haganah (Jewish army) and that massacre upon massacre of Palestinian civilians in such places as Deir Yassin, al-Dawayima, Eilaboun, Jish, Ramle and Lydda are referred to in official records as "ethnic cleansing." Arriving at a scene of this carnage, David Ben-Gurion, Israel's first prime minister, was asked by a general, Yigal Allon, "What shall we do with the Arabs?" Ben-Gurion, reported the Israeli historian Benny Morris, "made a dismissive, energetic gesture with his hand and said, ‘Expel them'. The order to expel an entire population "without attention to age" was signed by Yitzhak Rabin, a future prime minister promoted by the world's most efficient propaganda as a peacemaker. The terrible irony of this was addressed only in passing, such as when the Mapan Party co-leader Meir Ya'ari noted "how easily" Israel's leaders spoke of how it was "possible and permissible to take women, children and old men and to fill the roads with them because such is the imperative of strategy … who remembers who used this means against our people during the [Second World] war … we are appalled."

Every subsequent "war" Israel has waged has had the same objective: the expulsion of the native people and the theft of more and more land. The lie of David and Goliath, of perennial victim, reached its apogee in 1967 when the propaganda became a righteous fury that claimed the Arab states had struck first. Since then, mostly Jewish truth-tellers such as Avi Schlaim, Noam Chomsky, the late Tanya Reinhart, Neve Gordon, Tom Segev, Yuri Avnery, Ilan Pappe and Norman Finklestein have dispatched this and other myths and revealed a state shorn of the humane traditions of Judaism, whose unrelenting militarism is the sum of an expansionist, lawless and racist ideology called zionism. "It seems," wrote the Israeli historian Ilan Pappe on 2 January, "that even the most horrendous crimes, such as the genocide in Gaza, are treated as desperate events, unconnected to anything that happened in the past and not associated with any ideology or system … Very much as the apartheid ideology explained the oppressive policies of the South African government, this ideology – in its most consensual and simplistic variety – has allowed all the Israeli governments in the past and the present to dehumanize the Palestinians wherever they are and strive to destroy them. The means altered from period to period, from location to location, as did the narrative covering up these atrocities. But there is a clear pattern [of genocide]."

In Gaza, the enforced starvation and denial of humanitarian aid, the piracy of life-giving resources such as fuel and water, the denial of medicines and treatment, the systematic destruction of infrastructure and the killing and maiming of the civilian population, 50 per cent of whom are children, meet the international standard of the Genocide Convention. "Is it an irresponsible overstatement," asked Richard Falk, the United Nations Special Rapporteur for Human Rights in the Occupied Palestinian Territory and international law authority at Princeton University, "to associate the treatment of Palestinians with this criminalized Nazi record of collective atrocity? I think not."

In describing a "holocaust-in-the making," Falk was alluding to the Nazis' establishment of Jewish ghettos in Poland. For one month in 1943, the captive Polish Jews led by Mordechaj Anielewiz fought off the German army and the SS, but their resistance was finally crushed and the Nazis exacted their final revenge. Falk is also a Jew. Today's holocaust-in-the-making, which began with Ben-Gurion's Plan D, is in its final stages. The difference today is that it is a joint US-Israeli project. The F-16 jet fighters, the 250-pound "smart" GBU-39 bombs supplied on the eve of the attack on Gaza, having been approved by a Congress dominated by the Democratic Party, plus the annual $2.4 billion in war-making "aid," give Washington de facto control. It beggars belief that President-elect Obama was not informed. Outspoken on Russia's war in Georgia and the terrorism in Mumbai, Obama's silence on Palestine marks his approval, which is to be expected, given his obsequiousness to the Tel Aviv regime and its lobbyists during the presidential campaign and his appointment of Zionists as his secretary of state, chief of staff and principal Middle East advisers. When Aretha Franklin sings "Think," her wonderful 1960s anthem to freedom, at Obama's inauguration on 21 January, I trust someone with the brave heart of Muntadar al-Zaidi, the shoe-thrower, will shout: "Gaza!"

The asymmetry of conquest and terror is clear. Plan D is now "Operation Cast Lead," which is the unfinished "Operation Justified Vengeance." The latter was launched by Prime Minister Ariel Sharon in 2001 when, with Bush's approval, he used F-16s against Palestinian towns and villages for the first time. In the same year, the authoritative Jane's Foreign Report disclosed that the Blair government had given Israel the "green light" to attack the West Bank after it was shown Israel's secret designs for a bloodbath. It was typical of New Labor Party's enduring, cringing complicity in Palestine's agony. However, the 2001 Israeli plan, reported Jane's, needed the "trigger" of a suicide bombing which would cause "numerous deaths and injuries [because] the 'revenge' factor is crucial." This would "motivate Israeli soldiers to demolish the Palestinians." What alarmed Sharon and the author of the plan, General Shaul Mofaz, the Israeli Chief of Staff, was a secret agreement between Yasser Arafat and Hamas to ban suicide attacks. On 23 November, 2001, Israeli agents assassinated the Hamas leader, Mahmud Abu Hunud, and got their "trigger"; the suicide attacks resumed in response to his killing.

Something uncannily similar happened on 5 November last, when Israeli special forces attacked Gaza, killing six people. Once again, they got their propaganda "trigger." A ceasefire initiated and sustained by the Hamas government – which had imprisoned its violators – was shattered by the Israeli attack and homemade rockets were fired into what used to be Palestine before its Arab occupants were "cleansed." The On 23 December, Hamas offered to renew the ceasefire, but Israel's charade was such that its all-out assault on Gaza had been planned six months earlier, according to the Israeli daily Ha'aretz.

Behind this sordid game is the "Dagan Plan," named after General Meir Dagan, who served with Sharon in his bloody invasion of Lebanon in 1982. Now head of Mossad, the Israeli intelligence organization, Dagan is the author of a "solution" that has seen the imprisonment of Palestinians behind a ghetto wall snaking across the West Bank and in Gaza, effectively a concentration camp. The establishment of a quisling government in Ramallah under Mohammed Abbas is Dagan's achievement, together with a hasbara (propaganda) campaign relayed through a mostly supine, if intimidated western media, notably in America, that says Hamas is a terrorist organization devoted to Israel's destruction and to "blame" for the massacres and siege of its own people over two generations, long before its creation. "We have never had it so good," said the Israeli Foreign Ministry spokesman Gideon Meir in 2006. "The hasbara effort is a well-oiled machine." In fact, Hamas's real threat is its example as the Arab world's only democratically elected government, drawing its popularity from its resistance to the Palestinians' oppressor and tormentor. This was demonstrated when Hamas foiled a CIA coup in 2007, an event ordained in the western media as "Hamas's seizure of power." Likewise, Hamas is never described as a government, let alone democratic. Neither is its proposal of a ten-year truce as a historic recognition of the "reality" of Israel and support for a two-state solution with just one condition: that the Israelis obey international law and end their illegal occupation beyond the 1967 borders. As every annual vote in the UN General Assembly demonstrates, 99 per cent of humanity concurs. On 4 January, the president of the General Assembly, Miguel d'Escoto, described the Israeli attack on Gaza as a "monstrosity."

When the monstrosity is done and the people of Gaza are even more stricken, the Dagan Plan foresees what Sharon called a "1948-style solution" – the destruction of all Palestinian leadership and authority followed by mass expulsions into smaller and smaller "cantonments" and perhaps finally into Jordan. This demolition of institutional and educational life in Gaza is designed to produce, wrote Karma Nabulsi, a Palestinian exile in Britain, "a Hobbesian vision of an anarchic society: truncated, violent, powerless, destroyed, cowed … Look to the Iraq of today: that is what [Sharon] had in store for us, and he has nearly achieved it."

Dr. Dahlia Wasfi is an American writer on Palestine. She has a Jewish mother and an Iraqi Muslim father. "Holocaust denial is anti-Semitic," she wrote on 31 December. "But I'm not talking about World War Two, Mahmoud Ahmedinijad (the president of Iran) or Ashkenazi Jews. What I'm referring to is the holocaust we are all witnessing and responsible for in Gaza today and in Palestine over the past 60 years … Since Arabs are Semites, US-Israeli policy doesn't get more anti-Semitic than this." She quoted Rachel Corrie, the young American who went to Palestine to defend Palestinians and was crushed by an Israeli bulldozer. "I am in the midst of a genocide," wrote Corrie, "which I am also indirectly supporting and for which my government is largely responsible."

Reading the words of both, I am struck by the use of "responsibility." Breaking the lie of silence is not an esoteric abstraction but an urgent responsibility that falls to those with the privilege of a platform. With the BBC cowed, so too is much of journalism, merely allowing vigorous debate within unmovable invisible boundaries, ever fearful of the smear of anti-Semitism. The unreported news, meanwhile, is that the death toll in Gaza is the equivalent of 18,000 dead in Britain. Imagine, if you can.

Then there are the academics, the deans and teachers and researchers. Why are they silent as they watch a university bombed and hear the Association of University Teachers in Gaza plea for help? Are British universities now, as Terry Eagleton believes, no more than "intellectual Tescos, churning out a commodity known as graduates rather than greengroceries"?

Then there are the writers. In the dark year of 1939, the Third Writers' Congress was held at Carnegie Hall in New York and the likes of Thomas Mann and Albert Einstein sent messages and spoke up to ensure the lie of silence was broken. By one account, 3,500 jammed the auditorium and a thousand were turned away. Today, this mighty voice of realism and morality is said to be obsolete; the literary review pages affect an ironic hauteur of irrelevance; false symbolism is all. As for the readers, their moral and political imagination is to be pacified, not primed. The anti-Muslim Martin Amis expressed this well in Visiting Mrs. Nabokov: "The dominance of the self is not a flaw, it is an evolutionary characteristic; it is just how things are."

If that is how things are, we are diminished as a civilized society. For what happens in Gaza is the defining moment of our time, which either grants the impunity of war criminals the immunity of our silence, while we contort our own intellect and morality, or gives us the power to speak out. For the moment I prefer my own memory of Gaza: of the people's courage and resistance and their "luminous humanity," as Karma Nabulsi put it. On my last trip there, I was rewarded with a spectacle of Palestinian flags fluttering in unlikely places. It was dusk and children had done this. No one told them to do it. They made flagpoles out of sticks tied together, and a few of them climbed on to a wall and held the flag between them, some silently, others crying out. They do this every day when they know foreigners are leaving, believing the world will not forget them.

The Israeli Invasion and Gaza's Offshore Gas Fields

The Israeli Invasion and Gaza's Offshore Gas Fields

by Michel Chossudovsky

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The military invasion of the Gaza Strip by Israeli Forces bears a direct relation to the control and ownership of strategic offshore gas reserves.

This is a war of conquest. Discovered in 2000, there are extensive gas reserves off the Gaza coastline.

British Gas (BG Group) and its partner, the Athens based Consolidated Contractors International Company (CCC) owned by Lebanon's Sabbagh and Koury families, were granted oil and gas exploration rights in a 25 year agreement signed in November 1999 with the Palestinian Authority.

The rights to the offshore gas field are respectively British Gas (60 percent); Consolidated Contractors (CCC) (30 percent); and the Investment Fund of the Palestinian Authority (10 percent). (Haaretz, October 21, 2007).

The PA-BG-CCC agreement includes field development and the construction of a gas pipeline.(Middle East Economic Digest, Jan 5, 2001).

The BG licence covers the entire Gazan offshore marine area, which is contiguous to several Israeli offshore gas facilities. (See Map below). It should be noted that 60 percent of the gas reserves along the Gaza-Israel coastline belong to Palestine.

The BG Group drilled two wells in 2000: Gaza Marine-1 and Gaza Marine-2. Reserves are estimated by British Gas to be of the order of 1.4 trillion cubic feet, valued at approximately 4 billion dollars. These are the figures made public by British Gas. The size of Palestine's gas reserves could be much larger.

Map 1

Map 2

Who Owns the Gas Fields

The issue of sovereignty over Gaza's gas fields is crucial. From a legal standpoint, the gas reserves belong to Palestine.

The death of Yasser Arafat, the election of the Hamas government and the ruin of the Palestinian Authority have enabled Israel to establish de facto control over Gaza's offshore gas reserves.

British Gas (BG Group) has been dealing with the Tel Aviv government. In turn, the Hamas government has been bypassed in regards to exploration and development rights over the gas fields.

The election of Prime Minister Ariel Sharon in 2001 was a major turning point. Palestine's sovereignty over the offshore gas fields was challenged in the Israeli Supreme Court. Sharon stated unequivocally that "Israel would never buy gas from Palestine" intimating that Gaza's offshore gas reserves belong to Israel.

In 2003, Ariel Sharon, vetoed an initial deal, which would allow British Gas to supply Israel with natural gas from Gaza's offshore wells. (The Independent, August 19, 2003)

The election victory of Hamas in 2006 was conducive to the demise of the Palestinian Authority, which became confined to the West Bank, under the proxy regime of Mahmoud Abbas.

In 2006, British Gas "was close to signing a deal to pump the gas to Egypt." (Times, May, 23, 2007). According to reports, British Prime Minister Tony Blair intervened on behalf of Israel with a view to shunting the agreement with Egypt.

The following year, in May 2007, the Israeli Cabinet approved a proposal by Prime Minister Ehud Olmert "to buy gas from the Palestinian Authority." The proposed contract was for $4 billion, with profits of the order of $2 billion of which one billion was to go the Palestinians.

Tel Aviv, however, had no intention on sharing the revenues with Palestine. An Israeli team of negotiators was set up by the Israeli Cabinet to thrash out a deal with the BG Group, bypassing both the Hamas government and the Palestinian Authority:

"Israeli defence authorities want the Palestinians to be paid in goods and services and insist that no money go to the Hamas-controlled Government." (Ibid, emphasis added)

The objective was essentially to nullify the contract signed in 1999 between the BG Group and the Palestinian Authority under Yasser Arafat.

Under the proposed 2007 agreement with BG, Palestinian gas from Gaza's offshore wells was to be channeled by an undersea pipeline to the Israeli seaport of Ashkelon, thereby transferring control over the sale of the natural gas to Israel.

The deal fell through. The negotiations were suspended:

"Mossad Chief Meir Dagan opposed the transaction on security grounds, that the proceeds would fund terror". (Member of Knesset Gilad Erdan, Address to the Knesset on "The Intention of Deputy Prime Minister Ehud Olmert to Purchase Gas from the Palestinians When Payment Will Serve Hamas," March 1, 2006, quoted in Lt. Gen. (ret.) Moshe Yaalon, Does the Prospective Purchase of British Gas from Gaza's Coastal Waters Threaten Israel's National Security? Jerusalem Center for Public Affairs, October 2007)

Israel's intent was to foreclose the possibility that royalties be paid to the Palestinians. In December 2007, The BG Group withdrew from the negotiations with Israel and in January 2008 they closed their office in Israel.(BG website).

Invasion Plan on The Drawing Board

The invasion plan of the Gaza Strip under "Operation Cast Lead" was set in motion in June 2008, according to Israeli military sources:

"Sources in the defense establishment said Defense Minister Ehud Barak instructed the Israel Defense Forces to prepare for the operation over six months ago [June or before June] , even as Israel was beginning to negotiate a ceasefire agreement with Hamas."(Barak Ravid, Operation "Cast Lead": Israeli Air Force strike followed months of planning, Haaretz, December 27, 2008)

That very same month, the Israeli authorities contacted British Gas, with a view to resuming crucial negotiations pertaining to the purchase of Gaza's natural gas:

"Both Ministry of Finance director general Yarom Ariav and Ministry of National Infrastructures director general Hezi Kugler agreed to inform BG of Israel's wish to renew the talks.

The sources added that BG has not yet officially responded to Israel's request, but that company executives would probably come to Israel in a few weeks to hold talks with government officials." (Globes online- Israel's Business Arena, June 23, 2008)

The decision to speed up negotiations with British Gas (BG Group) coincided, chronologically, with the planning of the invasion of Gaza initiated in June. It would appear that Israel was anxious to reach an agreement with the BG Group prior to the invasion, which was already in an advanced planning stage.

Moreover, these negotiations with British Gas were conducted by the Ehud Olmert government with the knowledge that a military invasion was on the drawing board. In all likelihood, a new "post war" political-territorial arrangement for the Gaza strip was also being contemplated by the Israeli government.

In fact, negotiations between British Gas and Israeli officials were ongoing in October 2008, 2-3 months prior to the commencement of the bombings on December 27th.

In November 2008, the Israeli Ministry of Finance and the Ministry of National Infrastructures instructed Israel Electric Corporation (IEC) to enter into negotiations with British Gas, on the purchase of natural gas from the BG's offshore concession in Gaza. (Globes, November 13, 2008)

"Ministry of Finance director general Yarom Ariav and Ministry of National Infrastructures director general Hezi Kugler wrote to IEC CEO Amos Lasker recently, informing him of the government's decision to allow negotiations to go forward, in line with the framework proposal it approved earlier this year.

The IEC board, headed by chairman Moti Friedman, approved the principles of the framework proposal a few weeks ago. The talks with BG Group will begin once the board approves the exemption from a tender." (Globes Nov. 13, 2008)

Gaza and Energy Geopolitics

The military occupation of Gaza is intent upon transferring the sovereignty of the gas fields to Israel in violation of international law.

What can we expect in the wake of the invasion?

What is the intent of Israel with regard to Palestine's Natural Gas reserves?

A new territorial arrangement, with the stationing of Israeli and/or "peacekeeping" troops?

The militarization of the entire Gaza coastline, which is strategic for Israel?

The outright confiscation of Palestinian gas fields and the unilateral declaration of Israeli sovereignty over Gaza's maritime areas?

If this were to occur, the Gaza gas fields would be integrated into Israel's offshore installations, which are contiguous to those of the Gaza Strip. (See Map 1 above).

These various offshore installations are also linked up to Israel's energy transport corridor, extending from the port of Eilat, which is an oil pipeline terminal, on the Red Sea to the seaport - pipeline terminal at Ashkelon, and northwards to Haifa, and eventually linking up through a proposed Israeli-Turkish pipeline with the Turkish port of Ceyhan.

Ceyhan is the terminal of the Baku, Tblisi Ceyhan Trans Caspian pipeline. "What is envisaged is to link the BTC pipeline to the Trans-Israel Eilat-Ashkelon pipeline, also known as Israel's Tipline." (See Michel Chossudovsky, The War on Lebanon and the Battle for Oil, Global Research, July 23, 2006)

Map 3

Gaza death toll tops 700 as Israel prepares new escalation

Gaza death toll tops 700 as Israel prepares new escalation

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Israeli military forces resumed their assault on Gaza Wednesday following a three-hour truce, which itself was marked by sporadic attacks. According to reports in the Israeli press, the government is discussing a major escalation of the assault on Gaza, even as it claims to welcome efforts by France, Egypt and other countries to broker a ceasefire.

Medical authorities in Gaza Wednesday put the death toll in the 12-day Israeli military siege at over 700, including 219 children and 89 women. The number of wounded, meanwhile, has risen to over 3,100—46 percent of them women and children.

The stated aim of Wednesday's brief suspension of hostilities was to allow Gaza's 1.5 million people to venture out in search of food and other supplies and to allow aid convoys into the territory. Aid officials made clear, however, that the respite was entirely inadequate to distribute food, fuel and other necessities of life to a population that is on the brink of starvation following not only the last 12 days of bombardment, but also the 18 months of Israeli economic blockade that preceded it.

Gazans did use the brief cease-fire, however, to bury their dead and dig out more bodies from the rubble.

Tens of thousands attended a mass funeral in the Jabalya refugee camp in northern Gaza for the civilians massacred there Tuesday, when Israeli forces deliberately shelled the UN-run al-Fakhora school, where they had sought refuge.

The death toll in the attack, the single bloodiest action since the Israeli onslaught began on December 27, rose to 46 Wednesday as four more gravely wounded victims died in Gaza hospitals.

Standing before the bodies of men women, children and elderly people wrapped in white shrouds and the green and yellow flags of Hamas and Fatah, the massive crowd at Wednesday's funeral shouted slogans demanding that Israeli officials be tried as war criminals and calling for revenge.

John Ging, the head of the United Nations Relief and Works Agency (UNRWA) in the Gaza Strip, dismissed Israeli claims that its forces had shelled the school after coming under mortar fire from the facility. "I can tell you categorically that there was no militant activity in that school at the time of that tragedy," he told the Al Jazeera news agency. "They were innocent people," Ging said of 350 Palestinians who sought safety in the school after fleeing the Israeli invaders.

"We are completely devastated. There is nowhere safe in Gaza," Ging added. Approximately 15,000 Palestinians have fled to the 23 UN-run schools in the territory in hopes of finding security. Another school was also bombed Tuesday, killing another three Palestinians.

UN Secretary General Ban Ki-moon condemned these attacks, calling them "totally unacceptable." He said in a statement, "After earlier strikes, the Israeli government was warned that its operations were endangering UN compounds. I am deeply dismayed that despite these repeated efforts, today's tragedies have ensued." The UN called for a formal investigation into the Jabalya massacre.

The Israeli decision to suspend its military operations for three hours and open up what it touted as a "humanitarian corridor" was widely seen as a public relations gesture aimed at diverting public attention from the atrocity carried out the day before. The maneuver proved largely successful in terms of media coverage in the West, where no government appears inclined to hold the Israeli regime responsible for its crimes.

As for the UN, it held a session on Gaza Wednesday in which various foreign ministers spoke out against the Israeli operation, but no action was taken. The US has systematically blocked any resolution demanding an end to the assault on Gaza.

The attack on the Jabalya school recalls a similar atrocity carried out by the Israeli military in its "Operation Grapes of Wrath" attack on southern Lebanon in 1996, when it rained artillery fire on a UN compound in the village of Qana, where some 800 civilians had taken refuge from the fighting. That attack killed 106 people.

The differences, however, are striking. In the wake of the1996 attack the Israeli government claimed, falsely, that it was an accident and brought its military operations to an end. This time, it has steadfastly defended its criminal action and made it clear that the killing will go on.

And so it did in earnest once the 180-minute truce expired at 4 pm Gaza time. Israeli warplanes and tanks resumed pounding Gaza's densely populated neighborhoods.

Hundreds of families were forced to flee from the Rafah area near Gaza's southern border with Egypt after Israeli planes dropped leaflets announcing that the area would be subjected to intense bombardment.

The stated aim of this attack is to destroy the tunnels that have been dug under the border and which have served as a narrow lifeline for Gaza, bringing in food and fuel supplies that are blocked by Israel's economic blockade. Israel charges that they have also been used to supply Hamas fighters with weapons, including the rockets that have been fired into Israel. In practice, the bombardment is destroying scores of homes, creating a wider no-man's-land on the border.

Among those killed Wednesday was a father and three of his children, who died in an air strike on their car.

Medical workers at the Kamal Udwan Hospital reported that three sisters were killed in an Israeli bombardment on the eastern edge of the sprawling Jabalya refugee camp carried out during the supposed three-hour suspension of attacks.

Four other people were killed and seven wounded in an attack on a Mosque in the Sheik Radwan neighborhood of Gaza City, and two died in an aerial bombardment of the Zeitoun district.

The Palestine Red Crescent reported Wednesday that Israeli forces had shelled five of its ambulances, killing six people.

The Israeli Army released footage Wednesday showing its troops rounding up Gazan men in civilian clothes, taking them away in handcuffs and blindfolds.

Meanwhile, Gaza's humanitarian crisis is becoming ever more catastrophic. Aid workers said that instead of a three-hour ceasefire, they would need an end to bombardments lasting a month to be able to adequately resume food distributions to the 750,000 Gazans who are totally dependent upon UN aid for survival.

Three quarters of the territory's population remain without electricity or water, and fuel for heating homes has run out in what is Gaza's coldest month. Families are forced to keep their windows open to prevent them from being shattered by explosions.

The World Bank issued a report Wednesday warning that Gaza confronts a severe public health crisis as a result of the lack of drinking water and the escalating degradation of its sewage system.

The director of Ash-Shifa Hospital, Gaza's largest medical facility, warned Wednesday that it would cease functioning if it failed to receive fuel to power its emergency generators. Deprived of electric power, a failure of the generators, he said, could lead to the deaths of hundreds of patients on kidney dialysis and in intensive care, as well as 25 premature babies. The hospital has already been overwhelmed by the flood of wounded, lacking adequate medicines, anesthetics and other basic necessities.

As with Wednesday's "humanitarian" gesture, the flurry of positive remarks about ongoing diplomatic efforts led by French President Nicolas Sarkozy and Egyptian President Hosni Mubarak to bring about a ceasefire seems aimed at obscuring the fact that the massacre of Gaza's people is continuing.

Sarkozy's office initially reported that Israel and the West Bank-based Palestinian Authority had accepted the Franco-Egyptian peace proposal. It was forced to retract this assertion, however, acknowledging that Israel had merely reacted "positively" to the plan.

A senior Israeli official told the Reuters news agency, "There is agreement on the principles but translating those principles into practical action is a challenge that is still ahead of us."

Specifically rejected was Egypt's call for a 48-hour ceasefire to facilitate the negotiation of an end to the fighting. Israel intends to use the talks on a ceasefire agreement as a cover for continuing and even intensifying its military operations.

The Egyptian and French proposal, which is apparently being negotiated over the head of Hamas, essentially calls for a tightening of the noose that Israel has placed around Gaza by more effectively sealing off the Egypt-Gaza border, potentially through the deployment of an international force there.

Palestinian legislator and former negotiator Hanan Ashrawi in an interview with the BBC on the discussions surrounding the proposal said, "Israel is still buying time to create facts on the ground."

Indeed, as the Jerusalem Post noted, "Just hours after Jerusalem signaled it might give Franco-Egyptian diplomacy a chance on Wednesday, the Security Cabinet gave the IDF (Israeli Defense Forces) the green light to continue Operation Cast Lead in Gaza." Plans for the third and bloodiest phase of the operation, which would send Israeli troops into the south of the Gaza Strip as well as into the heart of Gaza City's crowded neighborhoods may well be implemented under the cover of this supposed renewal of diplomacy.

According to a report on Wednesday's cabinet meeting by DEBKAfile, an Internet site with close connections to Israeli military-intelligence sources, "A growing number of cabinet ministers advocated expanding the military operation against Hamas and bringing it to the point of resolution, supporting the view held by Prime Minister Ehud Olmert and the military high command."

In Washington, Secretary of State Condoleezza Rice responded to the French-Egyptian initiative by repeating what has been the administration's mantra since the outset of the Israeli blitz against Gaza: "It has to be a ceasefire that will not allow a return to the status quo," she said. This position translates into US support for Israel continuing its drive to change facts on the ground through the slaughter of innocent civilians.

President-elect Barack Obama found himself compelled to break his 11-day-old silence on the killing spree in Gaza. Apparently reacting to the wave of international revulsion over the massacre at the UN school in Jabalya, Obama made a brief statement declaring that "the loss of civilian life in Gaza and in Israel is a source of deep concern to me, and after January 20th I'll have plenty to say about the issue."

Obama again voiced no disagreement with the Bush administration's policy and certainly no condemnation of Israel's actions.

Leading Democrats in both houses in Congress, having officially begun their new session on Tuesday, are working furiously to prepare a non-binding resolution supporting Israel's action and essentially backing the position of the Bush administration.

House Majority Leader Steny Hoyer (Democrat from Maryland) told the Jewish Telegraphic Agency that such a resolution is "in the works."

"Certainly it would not demand a ceasefire," Hoyer said. "It would speak to the conditions that would justify a cease-fire. A cease-fire is not a just cease-fire when it's just Israel," he added.

Obama prepares sweeping cuts in social programs

Obama prepares sweeping cuts in social programs

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Barack Obama took the occasion of his first press appearance in Washington as president-elect to declare his determination to impose policies of budgetary austerity, including the elimination of entire federal programs and cost-cutting in the entitlement programs such as Social Security, Medicare and Medicaid that are of vital importance to tens of millions of elderly and poor people.

Obama announced his appointment of Nancy Killefer, a director at the management consulting firm McKinsey & Co., to a new White House post of chief performance officer. Killefer, a Treasury official in the Clinton administration, will be in charge of setting performance standards for federal agencies and enforcing them on agency officials. Those programs that fail to meet these standards will be targeted for reorganization or elimination.

The president-elect made the statement on the eve of a speech Thursday in which he will make the case for a proposed stimulus package. It was a clear effort to appease both congressional Republicans and the sizeable faction of fiscal conservatives among the congressional Democrats, reassuring them that while unlimited funds are to be provided to bail out big business, there will be a tight rein on spending for programs that support the needs of working people.

Obama's remarks on Wednesday shed light on the basic character of his stimulus plan, which is tailored to the demands of the financial and corporate elite and will provide hundreds of billions in additional public funds to prop up corporate profits, while doing little to provide relief for tens of millions of working people facing the deepest slump since the Great Depression.

Obama noted the Congressional Budget Office (CBO) estimate released Wednesday that the federal deficit for the current fiscal year will top $1.2 trillion, without counting any additional spending for the economic stimulus plan that the Obama administration and Congress will enact after his inauguration. "Trillion dollar deficits will be a reality for years to come," he warned, declaring that containing the deficit and putting the lid on federal spending must become "fundamental principles of government."

When a reporter from the Wall Street Journal asked about Medicare and Social Security, noting that these were among the largest federal expenditures, Obama replied, "We are beginning consultations with members of Congress around how we expect to approach the deficit. We expect that discussion around entitlements will be a part, a central part, of those plans." He added that once the stimulus package was adopted, by mid-February, "we will have more to say about how we're going to approach entitlement spending."

These remarks and comments by Democratic congressional leaders are a warning of what is to come: a frontal assault on the most important components of what remains of a social safety net in the United States—the programs that provide at least minimal retirement benefits and medical coverage for tens of millions of elderly people, as well as medical coverage for millions of low-income families.

While both Social Security and Medicare are solvent, currently taking in more tax revenues than they pay out, the Social Security Trust Fund, which represents the accumulated contributions of three generations of working people, has been effectively plundered to pay for the Bush administration's tax cuts for the wealthy, two wars and the immense US military establishment.

Out of $10.7 trillion in total federal debt, about 40 percent, or $4.3 trillion, is borrowed from Social Security. The Trust Fund is the largest holder of federal debt, followed by US private investors, who hold $3.4 trillion, and foreign investors, many of them governments, who hold $3 trillion.

The CBO figure of $1.2 trillion likely underestimates the current year's deficit by a significant amount. It includes nothing for the stimulus package which has yet to be spelled out in detail by the incoming administration, and assumes no emergency spending to finance Obama's promised buildup of US military forces in Afghanistan. Reuters reported Wednesday that Obama's secretary of defense, Robert Gates, a holdover from the Bush administration, is requesting an additional $70 billion for the ongoing wars in Iraq and Afghanistan, not counting the additional cost of a doubling of US forces to some 60,000 in Afghanistan.

The CBO estimates that the US unemployment rate, at 6.7 percent in November, will rise to 9 percent by the end of this year, although many economists project a rate of 10 percent or more. Double-digit unemployment would drive up spending on jobless benefits, food stamps and Medicaid, among other programs, swelling the deficit even further.

The CBO also placed the cost of the Treasury bailout of Wall Street at $180 billion in 2009, although Congress is expected to authorize an additional $350 billion on top of the $350 billion already expended since October. The bailout of Fannie Mae and Freddie Mac, the two government-sponsored mortgage finance companies brought down by the subprime mortgage crisis, will add another $240 billion to the deficit.

Senate Budget Committee Chairman Kent Conrad, Democrat from North Dakota, echoed Obama's warning of trillion-dollar deficits for several years, as well as his pledge to tackle long-term problems in the financing of Social Security and Medicare. He told the press, "It would send a very healthy message to the markets and the American people if President-elect Obama were to simultaneously announce an economic recovery package and the beginning of a bipartisan process to deal with our long-term imbalances."

House Majority Leader Steny Hoyer, who has close ties to the right-wing faction of House Democrats, the so-called Blue Dogs, added his voice to the chorus calling for long-term deficit-reduction measures, going so far as to suggest that the Obama administration might have to follow the example of the Republican administrations of the 1980s, when White House budget officials engaged in across-the-board budget cuts by executive order, a process called "sequestering."

Congressional Democrats opposed sequestering 20 years ago, pointing out that there was no constitutional authority for such executive action without congressional authorization. It is a measure of how far to the right the Democratic Party has moved that one of its top leaders now embraces such a policy.

Robert Bixby, director of the Concord Coalition, a bipartisan group that advocates fiscal austerity, provided an indication of what is being contemplated, saying, "I would analogize it to what the government is doing with the auto companies. Congress said, we'll give you the money but you have to show us a plan for sustainability." In return for emergency loans to the US auto companies, Congress demanded tens of thousands of layoffs, the closure of dozens of plants and draconian cuts in auto workers' wages and benefits.

Four years ago, George W. Bush began his second term as president by proposing a sweeping privatization of Social Security, a measure which was never formally introduced in Congress due to overwhelming popular opposition. The plan was quietly shelved after the debacle of Hurricane Katrina demonstrated the Bush administration's gross incompetence and utter indifference to the plight of poor and working class Americans. It has thus been left to Obama, who occasionally postures as the heir of Franklin Roosevelt, to take responsibility for dismantling the last legacy of the New Deal.

Weak economic reports suggest employers will shed many more jobs

Economy in grip of recession, reports show

Weak economic reports suggest employers will shed many more jobs, analysts say

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Anyone looking for a bright spot in the recession might have pointed to a reading Tuesday of the nation's office workers, retailers and other service industries, which contracted at a slower-than-expected pace in December.

But even the closely watched gauge of activity in the service sector, where most Americans work, showed it was still shrinking. And coupled with two bleaker economic reports, it suggested to analysts that the struggling economy is likely to shed many more jobs in the months ahead.

The Institute for Supply Management, a trade group of purchasing executives, said its service sectors index posted a small increase to 40.6 in December from 37.3 in November. Economists had been looking for the index to slip further in December. Any reading below 50 signals economic contraction.

Despite the better-than-expected reading, analysts said the overall index -- and its major components, such as employment prospects -- remained at recessionary levels.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, a private research firm in Valhalla, N.Y., said the reading on the employment component of the index was consistent with "massive job losses" of around 350,000 per month.

"This is not an indicator of recovery," Shepherdson said.

Other reports Tuesday on factory orders and pending home sales showed the economy's troubles have intensified since the worst financial crisis in seven decades erupted with fury in the fall.

Wall Street advanced moderately Tuesday, paring some earlier gains following the mixed economic readings but stocks still finished at their highest levels in two months. The Dow Jones industrial average gained more than 62 points to 9,015.10, and broader indexes also rose.

Still, economists are predicting that December's unemployment report, which will be released Friday, will show the total economy lost a half-million jobs last month after a loss of 533,000 in November.

On Tuesday, Pittsburgh-based aluminum maker Alcoa Inc. said it will cut 13,500 employees, or 13 percent of its global work force. A day earlier, Philadelphia-based managed care provider Cigna Corp. said the slumping economy was forcing it to cut roughly 1,100 jobs, about 4 percent of its work force.

The labor market is being slammed by a recession that already has lasted for a year, the longest stretch in a quarter-century. The jobless rate, which jumped to a 15-year high of 6.7 percent in November, is expected to hit 7 percent in December. Many analysts are worried that the jobless rate could top 8 percent later this year before the economy recovers enough to start generating better hiring prospects.

Federal Reserve Chairman Ben Bernanke and his colleagues also are concerned about the length and severity of the downturn, according to minutes of their closed-door deliberations released Tuesday.

The minutes of the Dec. 15-16 meeting showed that Fed officials feared that the economy could "remain weak for some time and that the downside risks to economic growth would be substantial" despite the central bank's aggressive actions to fight the downturn. The Fed in December slashed a key lending rate to nearly zero and pledged to use other unconventional methods to fight the slump.

The Commerce Department reported Tuesday that orders to factories fell for a record fourth straight month in November, dropping by a bigger-than-expected 4.6 percent following a 6 percent plunge in October that was the biggest drop in more than eight years.

Meanwhile, pending home sales fell to their lowest level on record in November, according to a report from the National Association of Realtors.

The Realtors' 8-year-old index of pending sales dropped to 82.3, down from an October reading of 85.7. Since there is typically a one- to two-month lag between when a contract and a completed sale, the bigger-than-expected fall in the pending sales index signaled anemic sales in coming months.

"Plain and simple, the economy is in the dumps," said Joel Naroff, chief economist at Naroff Economic Advisors.

But investors and businesses are hopeful that the new Congress that was installed Tuesday and President-elect Barack Obama will reach agreement in the next few weeks on a massive economic stimulus program. Lawmakers in both houses pledged to move quickly on the stimulus program, which is expected to include $300 billion in tax cuts.

Various industries are hoping to be included in the new round of government stimulus, including the beleaguered housing sector, where the economy's troubles began more than two years ago.

Lawrence Yun, chief economist for the Realtors group, said the slump in pending home sales underscored that a "real estate-focused plan is urgently needed."

Despite the dismal news Tuesday, there were some glimmers that better days could be ahead, said Brian Bethune, chief U.S. financial economist at IHS Global Insight in Lexington, Mass. Recent substantial reductions in auto loan rates and some easing in credit standards may be pointing to stabilized consumer spending, which accounts for two-thirds of economic activity, and has been plunging in recent months.

But Bethune said Congress must come through quickly with another economic stimulus program to make the hopes of recovery a reality.

"A large dose of targeted tax relief, executed early in 2009, would be the most effective mechanism for jolting the economy out of the recessionary cycle quickly," Bethune said.

California may delay tax refunds amid budget impasse

California may delay tax refunds amid budget impasse

With Gov. Arnold Schwarzenegger's veto of Democrats' $18-billion package of tax hikes and cuts, the state could begin issuing IOUs as soon as Feb. 1. GOP legislators join a suit against the package.

By Jordan Rau and Evan Halper

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State officials on Tuesday braced for the possibility of delaying tax refunds to millions of Californians, along with student grants and payments to vendors, as the latest round of budget negotiations between Gov. Arnold Schwarzenegger and Democratic legislators collapsed.

With little more than a month's worth of cash left in the state treasury, the governor and lawmakers have been unable to agree on how to erase a budget gap projected to reach $41.6 billion by the middle of next year. Democrats announced Tuesday that two weeks of discussions had ended in an impasse and sent Schwarzenegger the $18-billion fiscal package they passed last month. The governor vetoed it, as he had promised to do.

State Controller John Chiang has said that as early as Feb. 1, his office may begin issuing promissory notes if lawmakers have not resolved the budget crisis. The state has done this only once before since the Great Depression -- in 1992.

"We have not made any decision about deferring payments or using IOUs, but they are possibilities if the governor and Legislature don't come to some agreement soon," Chiang spokeswoman Hallye Jordan said Tuesday.

Under the state Constitution, schools and bondholders get first rights to any cash in the state's coffers.

Among the first to get IOUs instead of payments would be business and individual taxpayers who are expecting refunds, local governments and recipients of grants from the California Student Aid Commission. Last year, more than 10 million taxpayers received state refunds totaling $8 billion.

Court-appointed lawyers, 1,700 judges, legislators and their staffs would also go unpaid. And officials are preparing to delay a popular program that helps elderly and disabled Californians by paying their property taxes.

Last year, nearly 5,500 homeowners benefited from the 32-year-old Property Tax Postponement Program, which was created to help keep low-income elderly people from being forced to sell their homes or lose them to foreclosure.

California has already suspended financing for public works projects because its dismal financial situation has made investors balk at lending the state money.

In 1992, amid a budget crisis triggered by a deep recession, natural disasters and the Los Angeles riots, California ran short of cash and was forced to send out thousands of IOUs. They resembled checks but included a notice that they could not be paid by California "for want of funds."

Schwarzenegger and Democratic lawmakers' inability to break the most recent fiscal impasse was striking, because the two sides had already agreed on the basic outlines of the plan that the governor vetoed. It would have raised $9.3 billion in new and increased taxes on gasoline, sales and personal income and cut schools, health and other state programs.

But Democrats had refused to accede to all of the spending cuts Schwarzenegger demanded, or to his requests that some environmental laws be relaxed and government construction projects be opened to private contractors.

Assembly Speaker Karen Bass (D-Los Angeles) and Senate President Pro Tem Darrell Steinberg (D-Sacramento) told reporters at a news conference that they offered major concessions in all these areas but that Schwarzenegger kept raising new objections.

"These measures would prevent what the governor has called 'fiscal Armageddon,' " Bass said. "However, the governor cannot ward off Armageddon if he keeps moving the goal posts."

In a letter sent to the Democrats on Tuesday night explaining his veto, Schwarzenegger wrote: "The measures you sent me punish people with increased taxes, but do not make the serious cuts in spending necessary to balance our budget; do nothing to help keep California families working during this recession; and do nothing to help Californians facing foreclosure in this mortgage crisis."

In the letter, the governor insisted he had never "minced words" about his views of the Democratic plan. But he announced for the first time that he did not support the Democratic proposal to raise the gas tax by 13 cents a gallon.

The Democrats said they were willing to continue negotiations. But even if the governor signed a revised version of the plan into law, it could still unravel in court because of the untested legislative maneuvers Democrats employed to pass the tax increases without a two-thirds vote of lawmakers.

They used a complex strategy that hinges on the legal difference between taxes and fees, and passed the package on a simple majority, without any of the Republican votes they typically would have needed.

Every GOP legislator joined a lawsuit Tuesday intended to nullify the package, which they said violated the provision in Proposition 13 that prohibits a simple majority of the Legislature from passing broad-based tax increases.

"This dishonest effort to raise taxes without a two-thirds vote is a dagger at the heart of Proposition 13 and every California taxpayer," said Jon Coupal, president of the Howard Jarvis Taxpayers Assn., which filed the lawsuit in a state appeals court in Sacramento.

State unemployment claim systems overwhelmed

State unemployment claim systems overwhelmed

Electronic unemployment filing systems have crashed in at least three states in recent days amid an unprecedented crush of thousands of newly jobless Americans seeking benefits, and other states were adjusting their systems to avoid being next.

About 4.5 million Americans are collecting jobless benefits, a 26-year high, so the Web sites and phone systems now commonly used to file for benefits are being tested like never before.

Even those that are holding up under the strain are in many cases leaving filers on the line for hours, or kissing them off with an "all circuits are busy" message. Agencies have been scrambling to hire hundreds more workers to handle the calls.

Systems in New York, North Carolina and Ohio were shut down completely by technical glitches and heavy volume, and labor officials in several other states are reporting higher-than-normal use.

"Regardless of when you call, be prepared to wait and just hang on. Try not to get frustrated," said Howard Cosgrove, a spokesman for the Wisconsin Department of Workforce Development, which boosted its staff of telephone operators by 25 percent last month to cope with a phone system that has been overloaded for weeks. "We sympathize, we're on their side, we're doing our best to help them out."

The nation's unemployment rate in November zoomed to 6.7 percent, a 15-year high. Economists predict it will rise to 7 percent in December, with another 500,000 jobs probably cut last month. The government releases its monthly employment report on Friday.

Some states attribute the increase in call volume in part to an extension of federal emergency unemployment compensation from 13 weeks to 20 weeks in late November. More than 54,000 Pennsylvanians had exhausted their federal benefits after 13 weeks by the time that occurred, said David Smith, a spokesman for the Pennsylvania Department of Labor and Industry.

"It really was a perfect storm," he said.

New York's phone and Internet claims system started to buckle on Monday afternoon and was out of service completely for the first half of Tuesday while as many as 10,000 people per hour tried to get in, said Leo Rosales, a state Labor Department spokesman.

Although that was an unusually high number of calls, Rosales said it was a software glitch in an authentication system used to verify filers' identities that caused the system to crash.

"It's designed to handle this volume of calls, but the authentication process didn't work as it should have," he said. Rosales said the glitch that caused the shutdown has been fixed, and the agency doesn't expect any more problems.

About 256,000 people are collecting unemployment in New York, up from about 184,000 at this time last year.

North Carolina's Web site crashed twice this week under a rush of claims as that state set one-day records for both the amount of benefits paid and the number of transactions.

On Sunday and Monday, the number of North Carolinians trying to sign up online for new or continuing benefits was about triple what it was before the economic slowdown started, according to the state Employment Security Commission. That volume, together with a phone line problem, overwhelmed the agency's computers and prevented some people from filing claims.

The system was working again by Monday afternoon after the agency added another server and demand decreased, officials said.

"Right now, everything is back to normal," agency spokesman Larry Parker said.

Mark Turner, 39, of Raleigh said Tuesday that North Carolina's site had an easy setup when he started using the site after he was laid off in November.

But on Sunday, he couldn't logon to the site. "I basically gave up for the night at 10:30 after trying and not getting through," he said Tuesday. "Once you get on the site, you can be done in half a minute. Apparently that was too much."

Turner, who's since landed a temporary job, suggested the site separate people trying to get recertified and people signing up for the first time. "I think it's going to get worse before it gets better," he said.

Thousands were unable to get through to Ohio's unemployment hot line beginning Monday because of a crush of callers and technical problems, said Dennis Evans, spokesman for the state Department of Job and Family Services. He said the phone system was running normally again Tuesday afternoon, but the section of the state's Web site that enables people to make claims online remained down.

California has seen a record number of calls to an 800 number over the last few weeks.

"During this holiday period we've been averaging a record of more than 2 million call attempts a day, and it took more than 20 times before people could get through to our UI call centers," said Employment Development Department spokeswoman Patti Roberts.

That's about twice the one-day record of call attempts set in 2004 during an earlier recession, she said.

Callers to Michigan's main phone line handling applications for jobless benefits got an "all circuits are busy now" message Tuesday afternoon. Officials in Michigan, which had the nation's highest jobless rate at 9.6 percent in November, recently began urging applicants to seek benefits through a state Internet site instead. Michigan counted about 473,000 people as unemployed in November, up from about 370,000 a year ago.

Unemployment agencies from Kentucky to Alaska also are reporting long hold times for callers and slowdowns for those filing online because of higher volume.

Several states have added staff to their call centers to handle the surge, including Ohio, Oklahoma and Washington.

Pennsylvania has hired temporary workers and expanded the hours of its unemployment benefits hot line to accommodate a surge in the number of calls, going from 600 employees to more than 800. Officials hope to eventually have 1,100 workers answering calls.

New Mexico has extended call-center hours, upgraded the phone system and added 15 workers. Even so, "We still are receiving reports of people's inability to get through," said Carrie Moritomo, a spokeswoman for the state Department of Workforce Solutions.

In Kentucky, where claims rose to 40,400 in November from 23,400 a year earlier, a flood of new filers overwhelmed the state's unemployment Web site and phone lines on Monday, when more than 8,000 people filed initial claims, said Kim Brannock, a spokeswoman for the Kentucky Education Cabinet, which oversees the state unemployment office.

"People seem to feel like they have to file first thing Monday morning," she said. "They don't have to, but they feel that way. It's just overwhelming to the system."

State unemployment claim systems overwhelmed By RICHARD RICHTMYER, Associated Press Writer Richard Richtmyer, Associated Press Writer Tue Jan 6, 10:0

Venezuela reinstates free home heating oil for poor in U.S.

Venezuela reinstates free home heating oil for poor in U.S.

Tyler Bridges

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The Venezuelan government reversed course Wednesday, announcing that its U.S. oil subsidiary would continue to provide free home heating oil to poor Americans two days after the government announced that the program had been suspended.

Critics of President Hugo Chavez had pummeled him since Monday for suspending a program that he had milked for its maximum publicity as a champion of the poor, even in the U.S.

In the wake of Monday's announced halt, analysts had predicted this was only the first of Chavez's ambitious foreign assistance programs that would disappear, given the sharp drop in oil prices and the Venezuelan government’s dependence on oil export income.

Venezuelan government officials wasted no time in reinstating the program, which saved about 180,000 U.S. households around $260 apiece in 2008. That covered about one month's heating bill.

Among the beneficiaries of the 100 gallons of heating oil were 65 Indian tribes, including those in Alaska, Montana and South Dakota.

Alejandro Granado, the chairman, president and chief executive officer of Citgo Petroleum, the Venezuelan government's Houston-based oil subsidiary, said he discussed the plan to renew the program with Chavez on Wednesday morning.

The decision "is the result of a strong commitment and a big effort on the part of Citgo and our shareholders in light of the current global financial crisis and its impact on the oil industry in general," Granado said in a press statement.

Venezuelan oil, which is a lower grade than conventional crude and trades at a lower price, peaked at $126 a barrel in July and now sells for about $40 a barrel. About 93 percent of Venezuela's export revenue comes from oil sales, mostly to the U.S.

Granado made his statement in Boston alongside Joseph P. Kennedy II, who's the chairman of Citizens Energy Corp., the Massachusetts-based nonprofit that manages the program.

"Chavez is trying to save face," said Dennis Jett, a former American ambassador who's now a professor of International Affairs at Penn State University. "He decided he needs to hide the fact that he's having a cash crisis."

Monday's announcement also had prompted critics to have a field day with Kennedy, the son of Robert F. Kennedy and a former Democratic congressman. Kennedy had announced that 20 staffers would be laid off.

"For Joe, all that remains was sullied family honor and no fuel," Investor's Business Daily wrote Tuesday. "He'd been used by Chavez during the boom, thrown overboard as excess baggage during the bust, and finally realized it Monday."

Kennedy appeared to have had the last laugh, at least on Wednesday.

Kennedy said he's "personally aware of President Chavez's genuine concern for the most vulnerable, regardless of where they may live.

Kennedy added, "This decision is a clear, direct message from President Chavez of his desire to strengthen relations between his country and the United States, particularly at this time, when a new U.S. administration is scheduled to be sworn-in within the next few weeks."

Brian O'Connor, Citizen Energy's spokesman, said Citgo will serve as many customers in 2009 as the year before but will spend less than last year since oil prices have declined. The program cost Citgo $100 million in 2008.

People unable to pay their heating bills can call a toll-free hotline number, 1-877-JOE-4-OIL, as of Jan. 19.

Budget deficit to hit $1.2 trillion in fiscal 2009

Budget deficit to hit $1.2 trillion in fiscal 2009

By Richard Cowan and Jeremy Pelofsky

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The U.S. budget deficit will swell to a record $1.186 trillion in fiscal 2009, congressional forecasters said on Wednesday, the result of an economic recession that has cut tax receipts and caused massive government bailouts of banks and automakers.

The out-of-control deficit picture by the Congressional Budget Office illustrates the daunting economic challenges President-elect Barack Obama faces when he takes office on January 20.

But on Thursday, Obama will deliver a speech on the economy in which he will lay out his case for even more short-term deficit spending, possibly $775 billion or more over two years, to help heal the sick economy.

CBO also said the budget deficit could fall to $703 billion in the 2010 fiscal year which begins October 1, 2009, as the U.S. recession begins easing.

The actual budget gaps for both years may be significantly greater as Washington prepares to pass the gigantic economic stimulus bill by mid-February.

The CBO report shattered President George W. Bush's pledge that the government would balance its budget by 2012. Instead, CBO sees significant deficits at least through 2019.

The recession, which began in December 2007, has brought major job losses and slashed consumer spending and tax revenues. Unhappy and anxious voters elected Obama to the White House and gave Democrats larger majorities in Congress.

"This isn't your run-of-the-mill recession," CBO Acting Director Robert Sunshine told reporters. He said it might be the longest downturn since World War II.

CBO projected the U.S. economy will shrink 2.2 percent in 2009, the deepest for any calendar year since an 11 percent decline in 1946, before growing a modest 1.5 percent in 2010.

Unemployment was forecast to rise to an average of 8.3 percent this year and 9 percent in 2010. But Sunshine said there was unusual uncertainty with the forecasts.

Obama has said he expects deficits around $1 trillion for years, forcing tough budget choices. But on Wednesday he said his stimulus plan would not be as big as some have projected.


While trying to revive the economy, Obama also faces a longer-term problem of trying to control the rapid growth in the cost of federal retiree and health benefits for an aging population. Politicians have been putting off these tough decisions for years.

Obama said he was mindful that the stimulus package would add to the near-term deficits but said it was needed because of the "dire" condition of the economy.

Signaling that he intends to stress fiscal responsibility, Obama on Wednesday named former Treasury official Nancy Killefer to scour the budget for wasteful spending items.

Rep. Paul Ryan of Wisconsin, the senior Republican on the House Budget Committee, warned that if the stimulus measure establishes permanent new spending programs, trillion dollar deficits would never go away.

The projected deficits dwarf last year's $455 billion -- the current record.

House Budget Committee Chairman John Spratt, a South Carolina Democrat, said the new CBO deficit forecast represented "a grim epitaph for the Bush administration," which inherited a surplus in 2001.

In coming months, Congress will be asked to approve tens of billions of dollars for the wars in Iraq and Afghanistan which have so far cost $857 billion, further adding to the deficit.

This year's deficit also swelled in part because of a $240 billion rescue of mortgaging financing companies Fannie Mae and Freddie Mac and a tax rebate, part of a 2008 stimulus package which will cost $168 billion over two years.

The Bush administration has loaned hundreds of billions of dollars to rescue financial institutions from risky real estate investments that went sour. Domestic automakers also are getting assistance from Washington.

The bailouts could cost the government $184 billion this year and $5 billion next year, the CBO projected. So far, the Treasury Department has spent about half of the $700 billion authorized by Congress.

CBO also estimated deficits over the next five years will total $1.972 trillion.

When Bush took office, total U.S. debt was $5.7 trillion. It now stands at more than $10.6 trillion because of increased government spending, tax cuts and the recession.

Labor Calls for Unity After Years of Division

Labor Calls for Unity After Years of Division

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The presidents of 12 of the nation’s largest labor unions called Wednesday for reuniting the American labor movement, which split apart three and a half years ago when seven unions left the A.F.L.-C.I.O. and formed a rival federation.

The union presidents issued their joint call after the transition team for President-elect Barack Obama signaled that it would prefer dealing with a united movement, rather than a fractured one that often had two competing voices.

David E. Bonior, a member of Mr. Obama’s economic transition team who withdrew from consideration as labor secretary, helped arrange and oversee a meeting of the union presidents on Wednesday in Washington.

The leaders are hoping, by April 15, to approve a plan to reunify, one union official said. But some officials said they might fail to reach agreement.

Mr. Bonior, a former House majority whip, said he would organize meetings with labor leaders over the next few weeks in the hope of hammering out details about what form a reunified labor federation would take.

The 12 union presidents issued a statement, saying: “The goal of the meeting is to create a unified labor movement that can speak and act nationally on the critical issues facing working Americans. While we represent the largest labor unions, we recognize that unity requires broad participation.”

The call for reunification was something of an about-face for the presidents of the Service Employees International Union, the Teamsters and several other unions that quit the A.F.L.-C.I.O., asserting that the federation was stodgy and had not done enough to reverse organized labor’s long decline. The breakaway unions formed a federation called Change to Win.

“There was a real sense of commitment to unifying our movement again,” Randi Weingarten, president of the American Federation of Teachers, said Wednesday. “It was clear that many of us felt that the whole is greater than the sum of its parts, and we really want to do things to help American workers get their rightful place in society.”

To bring about reunification, several labor leaders have called for revamping and modernizing the A.F.L.-C.I.O., traditionally the nation’s main federation, currently with 56 member unions. But several labor leaders have called for replacing the A.F.L.-C.I.O. with a new, more dynamic group.

There was general agreement that any future federation should focus on political and legislative matters, while also serving to encourage individual unions to do more to organize workers.

The leaders of several breakaway unions have called for changing the name of the A.F.L.-C.I.O. because they had vowed never to return to the same federation.

But many A.F.L.-C.I.O. officials argue that it would be silly to alter the name of such a well-known organization and replace it with a name that few Americans are familiar with.

Labor officials said they did not discuss on Wednesday who would succeed John J. Sweeney, 74, who is scheduled to step down this year after heading the A.F.L.-C.I.O. for 13 years.

Richard Trumka, the federation’s secretary-treasurer and former president of the United Mine Workers, has been lobbying among union presidents to succeed Mr. Sweeney. But some union leaders, especially those in the rival labor federation, say they want a fresh voice leading organized labor.

The reorganizing proposals that unions president have floated in recent days include a rotating presidency for the A.F.L.-C.I.O. or its successor federation, with the presidents of individual unions serving two-year terms as head of the parent federation.

One A.F.L.-C.I.O. official described that plan this way: “The dukes want to replace the king.”

But many officials oppose a rotating presidency, saying the parent federation needs a strong, visible president who, by dint of serving for several years, is recognized by Congress and the news media as the undisputed voice for labor.

Several presidents have also called for creating a strong executive director’s position, partly in the hope that the parent federation would have two strong voices rather than one.

Those at Wednesday’s meeting included Andy Stern, president of the Service Employees union, who led the walkout in 2005; as well as the presidents of the Teamsters, the United Steelworkers, United Auto Workers, and the American Federation of State, County and Municipal Employees.

One somewhat surprising attendee was Dennis Van Roekel, president of the National Education Association, which, with 3.2 million members, is the nation’s largest labor union, but has traditionally remained outside any larger labor federations.

Officials from several Change to Win unions have said in recent months that they were seeing little advantage in maintaining a separate labor federation.