Friday, February 27, 2009

ANSWER Coalition Responds to President Obama's Iraq Speech

ANSWER Coalition Responds to President Obama's Iraq Speech of Friday, February 27

All Out for the Mass March on the Pentagonon Saturday March 21, 2009!

With his speech today, President Obama has essentially agreed to continue the criminal occupation of Iraq indefinitely. He announced that there will be an occupation force of 50,000 U.S. troops in Iraq for at least three more years. President Obama used carefully chosen words to avoid a firm commitment to remove the 50,000 occupation troops, even after 2011.

The war in Iraq was illegal. It was aggression. It was based on lies and false rationales. President Obama's speech today made Bush’s invasion sound like a liberating act and congratulated the troops for "getting the job done." More than a million Iraqis died and a cruel civil war was set into motion because of the foreign invasion. President Obama did not once criticize the invasion itself.

He has also requested an increase in war spending for Iraq and Afghanistan, and plans to double the number of U.S. troops sent to fight in Afghanistan.

President Obama has asked Congress to provide more than $200 billion for the Iraq and Afghanistan wars over the next two years, in addition to increasing the Pentagon budget by four percent.

Based on President Obama's new budget, the Pentagon would rank as the world's 17th largest economy—if it were a country. This new budget increases war spending. Total spending in 2010 would roughly equate to an average of $21,000 a second.

This is not the end of the occupation of Iraq, but rather the continuation of the occupation.

There is only one reason that tens of thousands of troops will remain in Iraq: It is because this is a colonial-type occupation of a strategically important and oil-rich country located in the Middle East where two-thirds of the world's oil reserve can be found.

Obama's speech was a major disappointment for anyone who was hoping that Obama would renounce the illegal occupation of Iraq. Today, the U.S. government spends $480 million per day to fund the occupation of Iraq. Even if 100,000 troops are drawn out by August 2010, that means the indefinite occupation of Iraq will cost more than $100 million each day. The continued occupation of Iraq for two years or three years or more makes a complete mockery out of the idea that the Iraqi people control their own destiny. It is a violation of Iraq's sovereignty and independence.

It is no wonder that John McCain came out to support President Obama's announced plan on Iraq. McCain was an supporter of former President Bush's and Vice President Cheney's war and occupation in Iraq.

Bush, Cheney and Rumsfeld—the architects of regime change in Iraq—never had the goal of indefinitely keeping 150,000 U.S. troops in Iraq. They wanted to subdue the Iraqi people and exercise control with a smaller force. The Iraqi armed resistance prolonged the stationing of 150,000 U.S. troops.

Bush's goal was domination over Iraq and its oil supplies, and domination over the region. This continues to be the goal of the U.S. political and economic establishment, including that of the new administration.

President Obama decided not to challenge the fundamental strategic orientation. That explains why he kept the Bush team—Secretary of Defense Robert Gates, and Generals Petraeus and Odierno—on the job to oversee and manage the Iraq occupation. They will also manage the widening U.S. war in Afghanistan and the aerial assaults on Pakistan. There have been over 30 U.S. bombing attacks in Pakistan in the last two months.

We are marching on Saturday, March 21 because the people of this country are fed up with the status quo. They want decent-paying jobs, and affordable health care and housing for all. Students want to study rather than be driven out by soaring tuition rates. The majority of people want a complete—not partial—withdrawal of ALL troops from Iraq. They want the war in Afghanistan to end rather than escalate. They are increasingly opposed to sending $2.6 billion each year to Israel and want an end to the colonial occupation of Palestine.

Don't miss the important announcement about the
Dramatic Action Planned for the March 21st Pentagon March:

On March 21, 2009, March on the Pentagon
and the Corporate War Profiteers


Get Involved

Go to http://www.pentagonmarch.org for more information.

Stats Reaffirm Autism-Vaccine Link

Stats Reaffirm Autism-Vaccine Link

By Jack Phillips

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Which of these is more important to American politicians—drug company profits or kids? Judging from the recent action of the government of the state of New Jersey, drug company profits win hands down. Late last year New Jersey parents were ordered to have their children get flu shots before Dec. 31, 2008, if they wanted them to attend school or day care establishments.

These flu shots contain 25 micrograms of mercury in the form of thimerosol. This contains 50% mercury and breaks down in the body to form ethyl mercury, a very toxic compound. According to a recent article in the Journal of the American Association of Physicians and Surgeons, children who receive three flu shots are 27 times more likely to develop autism than those who do not.

Years ago the same thimerosol used in vaccines was tested as a topical ointment for cure of umbilical cord infection. Children whose bodies couldn’t excrete mercury fast enough died. Physicians involved in the test recommended that thimerosol be banished from hospitals.

Dr. Boyd Haley, chairman of the Department of Chemistry at the University of Kentucky, after disclosing these facts at a meeting, asked: “Knowing this who, in his right mind, would inject this substance into the bodies of young children?”

Unfortunately, the Center for Disease Control would. They promoted multiple vaccinations of young children, with vaccines containing 12.5 micrograms of mercury per shot, even before their blood brain barriers and digestive systems were fully operational. Moreover they persisted for more than 15 years after Haley first brought it to their attention.

As a result of about 20 years of multiple vaccinations of our children, we have experienced an epidemic of autism, a new American disease first reported as just four cases by a physician at Johns Hopkins University. Devastated families, overloaded schools and billions of dollars of medical expense have resulted from this ill-conceived program. Autism and autism spectrum disease preferentially affect males. The female hormones are protective against these diseases.

The ratio of males to females with autism is about 4:1. A whole generation of our young men has suffered brain damage which is showing up in our universities. At Harvard some classes, which used to contain mostly young men, now have a majority of young women. At the University of Kentucky, points have to be added to test scores of young men to get them into law and medical schools.

Courtesy of our federal government, taxpayers, not drug companies or other members of the medical monopoly, are responsible for the damages caused by these vaccines. Only a few claims of injured children have been adjudicated. Meanwhile the drug medical monopoly is hard at work trying to obscure the facts about mercury and the American Dental Association is continuing to claim that its “silver” fillings, which also contain mercury, do no harm.

New York Times Falsifies History of Federal Reserve

New York Times Falsifies History of Federal Reserve

By Michael Collins Piper

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The New York Times published a flat-out untruth on Feb. 7 about the Federal Reserve Act of 1913. And the untruth came from the pen of a distinguished American academic who is author of many much-touted works of history.

In a commentary in the Times, entitled “The Value of Other People’s Money,” Dr. Melvin I. Urofsky, a professor at Virginia Commonwealth University, reflected on the origins of the congressional measure that created the Federal Reserve System. He said that the measure “allowed Congress to take away banks’ control over currency.” In fact, nothing could be further from the truth.

Dr. Urofsky was dead wrong. The New York Times was guilty of perpetrating a falsehood, something which should come as no surprise, considering the fact that The New York Times—which fancies itself America’s newspaper of record—has long been the daily media voice in the United States of the international banking dynasties that control the American money system through their domination of the Fed.

The truth about the nature of the Fed is no secret to Americans who have access to independent newspapers such as AMERICAN FREE PRESS, historical journals such as THE BARNES REVIEW and radio outlets such as Republic Broadcasting (which can be found on the Internet at republicbroadcasting.org).

In fact, as far back as the 1920s, the great American industrialist Henry Ford was warning Americans of the venal nature of the Fed and the plutocratic money masters who created the Fed and who controlled it then as they do today. Ford wrote:

What the people of the United States do not understand and never have understood is that while the Federal Reserve Act was governmental, the whole Federal Reserve System is private. It is an officially created private banking system.

Examine the first 1,000 people you meet on the street, and 999 of them will tell you that the Federal Reserve System is a device whereby the United States government went into the banking business for the benefit of the people. They have an idea that like the Post Office and the Custom House the Federal Reserve is part of the government’s official machinery. . . .

Take up the standard encyclopedias and while you will find no misstatements of fact in them, you will find no statement that the Federal Reserve System is a private banking system; the impression carried away by the lay reader is that it is a part of the government.

The Federal Reserve System is a system of private banks, the creation of a banking aristocracy within an already existing system of aristocracy, whereby a great proportion of banking independence was lost, and whereby it was made possible for speculative financiers to centralize great sums of money for their own purposes, beneficial [to the people of the United States] or not.

In addition, while there has been much written on the Federal Reserve and the reality of what it constitutes— a privately owned and privately controlled money monopoly in the hands of banking institutions—the fact that the Rothschild family of Europe was, ultimately, the primary force behind the establishment of the system on American soil, is not something that is fully understood.

For example, because there were no people named “Rothschild” at the famous meeting off the coast of Georgia at Jekyll Island where the framework for the Federal Reserve was put forth and where the planning for the Federal Reserve Act of 1913 established the Fed, there are those who would divorce the Rothschild family altogether from the circumstances. However, the fine hand of Rothschild was indeed on the scene, represented by Paul Warburg of the New York-based Kuhn, Loeb Company, which was under the control of longtime Rothschild associate Jacob Schiff.

Despite all of this very clear history—which has been outlined by numerous authors such as Wyckliffe Vennard, Eustace Mullins, and Dr. Martin Larson, the preeminent among them—modern-day media propagandists (and we must include the aforementioned Dr. Melvin I. Urofsky among them)—continue to present the Fed as precisely the opposite of what it really is. That Urofsky is assisting in the perpetration of the fraud is particularly egregious in light of the fact that he is a much-published author of such volumes as:

� American Zionism from Herzl to the Holocaust;

�We are One!: American Jewry and Israel;

� Commonwealth and Community: The Jewish Experience in Virginia;

� Documents of American Constitutional and Legal History; and

� A March of Liberty: A Constitutional History of the United States.

And these are just a few of the works to which Urofsky has added his name.

Those who wish to contact Urofsky and provide him factual information about the Federal Reserve System (of which he is apparently unaware) may contact him by email at murofsky@vcu.edu or write: Dr. Melvin Urof sky, 919 W. Franklin Street, Richmond, Va. 23220.

Senate to Investigate CIA's Actions Under Bush

Senate to investigate CIA's actions under Bush

The 'fact-finding' effort will seek details on secret prisons and interrogation methods -- but will not aim to determine if CIA officials broke laws, legislative sources say.

By Greg Miller

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The Senate Intelligence Committee is preparing to launch an investigation of the CIA's detention and interrogation programs under President George W. Bush, setting the stage for a sweeping examination of some of most secretive and controversial operations in recent agency history.

The inquiry is aimed at uncovering new information on the origins of the programs as well as scrutinizing how they were executed -- including the conditions at clandestine CIA prison sites and the interrogation regimens used to break Al Qaeda suspects, according to Senate aides familiar with the investigation plans.

Officials said the inquiry was not designed to determine whether CIA officials broke laws. "The purpose here is to do fact-finding in order to learn lessons from the programs and see if there are recommendations to be made for detention and interrogations in the future," said a senior Senate aide, who like others described the plan on condition of anonymity because it had not been made public.

Still, the investigation is likely to call new attention to the agency's conduct in operations that drew condemnation around the world. It is also bound to renew friction between Democrats and Republicans who have spent much of the last five years fighting over the Bush administration's prosecution of the war on terrorism.

The investigation also could draw comparisons to the special Senate committee formed to investigate the CIA in 1975 and headed by Sen. Frank Church, an Idaho Democrat. Revelations by the Church Committee led to greater congressional oversight and legislation restricting intelligence activities.

The terms and scope of the new inquiry still were being negotiated by members of the committee and senior staffers Thursday. The senior aide said that the committee had no short-term plans to hold public hearings, and that it was not clear whether the panel would release its final report to the public.

The inquiry, which could take a year or more to complete, means the CIA will once again be the target of intense congressional scrutiny at a time when it is engaged in two wars and its ongoing pursuit of Al Qaeda.

The agency was stripped of some of its power and prestige after coming under severe criticism in previous investigations of its failures leading up to the Sept. 11 attacks and the war in Iraq.

But whereas those investigations focused largely on errors in the CIA's analytic efforts, the new inquiry will dive directly into its most sensitive operations, seeking to unearth details that previous generations of agency officials referred to as the "crown jewels."

During the Bush administration, the agency was often able to safeguard many of those secrets. Lawmakers have never been told the locations of the CIA's secret prisons overseas, for example.

But the Obama administration is expected to give congressional investigators new access to classified records as well as individuals who took part in operating the secret prisons and interrogating detainees.

CIA Director Leon E. Panetta pledged this week that he would cooperate with any congressional investigation.

"If those committees are seeking information in these areas, we'll cooperate with them," Panetta said in a meeting with reporters Wednesday. "I think that we have a responsibility to be transparent on these issues and to provide them that information."

Panetta argued that CIA officers should not face prosecution if they were acting on orders in accordance with Bush administration legal opinions.

"I would not support, obviously, an investigation or a prosecution of those individuals," Panetta said. "I think they did their job, they did it pursuant to the guidance that was provided them, whether you agreed or disagreed with it."

News of the inquiry was greeted with concern among agency veterans.

"There is a good deal of investigation fatigue, and a feeling that the agency has become even more than before a piñata," said a former high-ranking CIA official, who spoke on condition of anonymity.

The new investigation is likely to "stimulate more risk aversion," the former official said. "There's a potential cost to other operations down the road when the current administration says, 'We would like you to take this operation, it's been blessed by lawyers and briefed by Congress.' Why should we do anything anywhere near cutting-edge if down the road the next administration can decide to get back at their political opponents?"

Senate aides declined to say whether the committee would seek new testimony from former CIA Director George J. Tenet or other former top officials who were involved in the creation and management of the programs.

The Senate investigation will examine whether the detention and interrogation operations were carried out in ways that were consistent with the authorities and instructions issued in the aftermath of the Sept. 11 attacks, officials said.

The panel will also look at whether lawmakers were kept fully informed. Sen. Dianne Feinstein (D-Calif.), the chairwoman of the committee, and others have said that the Bush administration improperly withheld information from Congress on the CIA's operations.

The investigation comes at a time when the Obama administration is in the midst of making dramatic changes in the CIA's counter-terrorism programs.

Last month, President Obama ordered the CIA to close its secret prison facilities and to abandon "enhanced" interrogation measures, including waterboarding, a method that simulates drowning. Instead, Obama ordered the agency to abide by the Army Field Manual on interrogation.

The administration has also established a task force to look at the interrogation programs, although that effort is mainly designed to examine their effectiveness and determine whether the CIA should again be granted authority beyond the Army Field Manual.

Senate investigators plan a similar line of inquiry, with a goal of assessing the effectiveness of enhanced interrogation techniques employed by the CIA, including sleep deprivation and subjecting prisoners to cold temperatures.

Panetta's immediate predecessor as CIA chief, Michael V. Hayden, has defended the agency's use of such methods and argued that the agency should not be bound by Army Field Manual constraints.

Hayden has said the agency has held fewer than 100 prisoners in custody since the Sept. 11 attacks, and less than one-third of those were ever subjected to enhanced interrogation measures. Three prisoners, including self-proclaimed Sept. 11 mastermind Khalid Shaikh Mohammed, were subjected to waterboarding.

There has also been a push from other lawmakers to launch an independent investigation of the CIA's operations. The Senate Judiciary Committee has scheduled a hearing next week on a proposal to create a commission like the one that investigated the Sept. 11 attacks to examine CIA counter-terrorism operations under Bush.

"The last administration justified torture, presided over the abuses at Abu Ghraib, destroyed tapes of harsh interrogations," said Sen. Patrick J. Leahy (D-Vt.), the chairman of that committee. "How can we restore our moral leadership and ensure transparent government if we ignore what has happened?"

But the Senate Intelligence Committee has direct jurisdiction over U.S. spy agencies, and is launching its inquiry in part to make sure its members have independent data and are in position to influence future interrogation and detention policies, officials said.

Aides said the negotiations were aimed at producing an investigation with broad support from both parties. Republicans have argued that the inquiry should focus on CIA programs and not become a referendum on Bush administration policies, such as the Justice Department legal memos that underpinned the program.

Sen. Christopher S. Bond (R-Mo.), the panel's ranking Republican, "does not think that witch hunts and discussions of the legality of [Justice Department] memos are in any way helpful at this point," another Senate aide said.

Obama defends his “Guantanamo” in Afghanistan

Obama defends his “Guantánamo” in Afghanistan

By James Cogan

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The Obama administration has insisted that prisoners being detained indefinitely without trial at a US prison at Bagram air base in Afghanistan have no right to challenge their detention or treatment through American courts.

Last Friday, in a case in the federal district court involving four detainees at Bagram, Obama's Justice Department stood by the Bush administration's claim that the men were "enemy combatants" and that US courts had no jurisdiction. "Having considered the matter," Acting Assistant Attorney General Michael Hertz wrote in a submission, "the government adheres to its previously articulated position".

Upon taking office, Obama has attempted to repair the damage done to the image of US imperialism by the Guantánamo Bay detention centre. He announced its closure and publicly declared that "we don't torture". Now, the real stance of his administration is clear. While alleged "terrorist suspects" will no longer be abused at Guantánamo—which American courts ultimately ruled was US territory and subject to legal oversight—similar outrages will continue unchecked in Afghanistan and elsewhere.

Jonathan Hafetz, of the American Civil Liberties Union, commented to the Associated Press: "They've [the Obama White House] now embraced the Bush policy that you can create prisons outside the law."

The Bagram detention centre reportedly holds at least 600 prisoners. Other US prisons are known to be operating in Afghan cities such as Kandahar, Jalalabad and Khost. The detainees are not brought before a court; do not see or hear the alleged evidence against them; and cannot consult lawyers. They are held at the whim of the US military. They are only visited by Red Cross representatives, who are not permitted to report on the conditions inside.

In some cases, including the men involved in the federal court action, the detainees were seized in other countries as "terrorist suspects" and then "rendered" to Afghanistan. The four plaintiffs had been rendered from Yemen, Tunisia, Thailand and Pakistan. One of them has been held without charges for six years. The British government admitted last week that it had sent two Pakistani nationals detained in Iraq to Afghanistan on "suspicion" of belonging to an Islamist organisation.

The bulk of the detainees at Bagram are Afghans who have been seized by the US military on the suspicion of involvement in the armed, anti-occupation resistance being waged by the Taliban and other groups.

These "enemy combatants" are not covered by the Geneva Convention for prisoners of war, which states: "No physical or mental torture, nor any other form of coercion, may be inflicted on prisoners of war to secure from them information of any kind whatever. Prisoners of war who refuse to answer may not be threatened, insulted, or exposed to unpleasant or disadvantageous treatment of any kind."

According to this month's UN report on Afghanistan, ex-Bagram detainees reported being subjected to repeated interrogation involving torture or abuse for not answering questions or signing confessions. They were kept in overcrowded cells with as many as 15 to 20 other men. All the methods made infamous at Abu Ghraib in Iraq and Guantánamo were reportedly used at the camp. In late 2002, two detainees at Bagram died after being physically abused by US military personnel.

After American military and intelligence agencies have finished with them, dozens of detainees have been handed over to be tried in the courts established by the US-backed Afghan government. A 2008 report by Human Rights First described these trials:

"The detainees are being charged under Afghan law for crimes ranging from treason and destruction of government property to threatening the security of Afghanistan. Trials last between 30 minutes to an hour and defendants have been sentenced to terms of imprisonment ranging from 3 to 20 years.... there are no prosecution witnesses presented, no out-of-court sworn prosecution witness statements to support the charges, and little or no physical evidence is presented.... Such trials violate both Afghan criminal procedure law and international fair trial standards."

When the lack of evidence has been challenged by defence lawyers, prosecutors have allegedly replied that the US military would not have detained the person unless they were guilty. The relatives of detainees last month told the British-based Telegraph that many of the prisoners had been seized on the basis of false information provided by tribal rivals or family enemies.

As the Obama administration deploys additional troops to Afghanistan to secure US interests in Central Asia, it is preparing to expand the capacity of the Bagram detention centre. The camp is undergoing a $60 million revamp so it can hold over 1,100 prisoners. Hundreds more people, from inside and outside Afghanistan, will vanish into the legal black-hole created by Bush, and now continued by Obama, in the name of a fraudulent "war on terror".

Obama budget projects record deficits and borrowing

Obama budget projects record deficits and borrowing

By Patrick Martin

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Under the budget outline issued by the Obama administration Thursday, the US government will run a $1.75 trillion deficit during the current fiscal year, which ends September 30, nearly four times the largest previous federal deficit. This gargantuan sum includes the $700 billion allocated for the Wall Street bailout, more than half of it already spent, as well as part of the $787 billion in spending authorized by the economic stimulus bill passed by Congress and signed into law by Obama last week.

For fiscal year 2009, nearly half over, the federal government will borrow almost half of all the dollars it spends: $1.75 trillion out of a record expenditure of $3.94 trillion. The White House projects that spending in fiscal year 2010 will be only slightly lower, $3.55 trillion, with the deficit falling to a still staggering $1.17 trillion.

According to the White House estimates, the combined deficit for the four years 2009-2012 comes to $4.42 trillion. The net debt of the federal government, what it owes to individuals, businesses and foreign countries, will double, rising from $5.3 trillion to $11 trillion over the same period.

There is no discussion in the budget outline of where these vast sums will come from. Given the worldwide financial crisis, US borrowing on such a scale means that the American government will be competing with—and effectively denying funds for—the governments of other, weaker capitalist powers, many of which have already had to resort to borrowing from the International Monetary Fund to avoid financial collapse.

The ten-year budget projection, covering the years 2010 to 2019, shows the annual deficit declining to $533 billion in fiscal 2013—still larger than any previous year before the crash of 2008—and then beginning to rise again. By 2019, the US national debt is estimated at $13.8 trillion, a sum equivalent to the entire US Gross Domestic Product last year.

The actual trajectory of the federal budget is even more ominous than these figures suggest, since the White House estimates assume that the US economy will essentially stand still in 2009 and 2010, rather than declining even further, and that economic growth will resume in 2011 and accelerate rapidly. That is a highly optimistic and unlikely projection.

The budget sets aside as much as $250 billion to cover the cost of further bailouts of US financial institutions, although the White House readily admitted that this was only a "placeholder" and there was no way of predicting today how much more will be expended in the effort to rescue the banks.

The White House has ended the Bush administration practice of excluding the cost of the wars in Iraq and Afghanistan from the regular budget, and financing the wars through so-called emergency spending bills passed separately. Obama hailed this action as truth in budgeting, although he will nonetheless request a supplemental appropriation for the two wars, supposedly the last such effort, totaling $75 billion for the current year.

The ten-year projection nonetheless shows total Pentagon spending rising steadily, despite the assumed end to combat operations in Iraq, reaching the staggering total of $872 billion by 2019. Over the entire ten-year period, total US military spending is projected at nearly $8 trillion, a sum greater than the entire GDP of any other country on the planet.

Much publicity has been given to claims that the Obama budget allows Pentagon spending to rise by only 4 percent in 2010, and thereafter 2 percent annually, compared to a 7 percent rate of increase for domestic spending. This is largely a statistical fiction, caused by the assumed decline in spending in Iraq. The baseline Pentagon budget, excluding Iraq and Afghanistan, will rise from $557 billion this year to $689 billion in 2012, a 24 percent increase during Obama's first term in office.

The bloated military budget is likely to swell to even greater proportions. The budget document explicitly declares that the reduction in spending on Iraq and Afghanistan is merely an assumption for the purpose of making estimates, and does not reflect any actual policy decisions to withdraw or redeploy US troops.

In the course of the Bush administration's "war on terror," total Pentagon outlays rose so sharply that they came to exceed the combined total of all other discretionary government spending (i.e., spending that is not already required by law, such as payments under Social Security, Medicare, Medicaid and other "entitlement" programs.) The Obama administration budget confirms and extends this supremacy of guns over butter: Pentagon spending will exceed all other discretionary spending in each of the next ten years, and the discrepancy will grow wider year by year.

One feature of the new budget outline much celebrated in the media is the set-aside of $634 billion over ten years to cover the cost of an as-yet-undetermined health care reform program. While the number might appear substantial, it is a small compared to a health care system that now costs the American people $2.3 trillion a year—generating huge profits for drug, insurance and medical equipment companies, but producing worse health outcomes than in any other advanced industrial country.

The annual average cost of Obama's health care initiative, about $60 billion a year, is less than 3 percent of annual US spending on medical care. In other words, Obama's policy is a change at the margins, not a significant reform. Put another way, Obama's health care "reform" provides just over $1,000 a year for each uninsured American—a sum grossly inadequate to pay for healthcare coverage.

The $634 billion allocated to the administration's most important social policy proposal also compares unfavorably to the amount projected for payment of interest on the federal debt, a colossal $4.9 trillion over the next ten years. In other words, Obama's budget openly states that interest payments, which go largely to the wealthy, will cost eight times more than his proposed health care reform.

On taxes, the Obama budget makes a significant concession to the Republican Party and the super-rich by allowing the Bush tax cuts for the wealthy to expire as scheduled at the end of 2010, rather than canceling them immediately, as the Democratic candidate had suggested he would do in the course of the presidential election campaign. This delay is worth hundreds of billions of dollars to the wealthiest one or two percent of Americans.

This concession is offset in part by tax increases on the wealthy to finance the health care program. The Obama budget outline suggests that $318 billion, about half the cost of the initiative, will be raised by reducing the amount of tax write-offs for wealthy families and individuals who itemize their deductions. One other new tax will be imposed on the wealthy: elimination of the "carried interest" tax loophole that allows hedge fund managers to pay a lower tax rate than their janitors and secretaries.

The White House budget outline assumes that Congress will make permanent both the Bush tax cuts for families making less than $250,000 a year and the temporary tax cut for working class families enacted as part of the stimulus plan. These modest reductions will be paid for from the estimated $637 billion in additional revenue when the Bush tax cuts for high-income households expire in 2011.

The total tax increases on the wealthy, however, are less than one quarter of the new spending for interest payments, which go overwhelmingly to these same high-income households who own the vast bulk of Treasury bills and other US government bonds.

Obama’s open-ended bailout of the banks

Obama’s open-ended bailout of the banks

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It is increasingly clear that the policy of the Obama administration is to pump as much taxpayer money as possible into the banks to avert a new wave of failures, in the hope that the economy will somehow begin to recover in 2010. Then Wall Street will be free to resume the speculative practices that enriched the financial aristocracy while precipitating the greatest global economic crisis since the 1930s.

Federal Reserve Board Chairman Ben Bernanke said as much in testimony before the US Congress earlier this week. In his prepared statement to the Senate Banking Committee and the House Financial Services Committee he said, "If actions taken by the administration, the Congress and the Federal Reserve are successful in restoring some measure of financial stability—and only if that is the case, in my view—there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery."

With banking giants such as Citigroup and Bank of America teetering on the brink of bankruptcy, and a new surge of bank losses in consumer and commercial loans as well as home mortgages in the offing as the impact of the recession deepens, the government has been obliged, with great reluctance, to increase its equity stake in the banks in return for the next round of cash infusions, in order to shore up the banks' balance sheets.

To allay fears on Wall Street of government "nationalization," which would wipe out bank shareholders and result in large losses for bondholders, Bernanke and Obama administration officials have spent much of this week reiterating the government's support for private ownership and control of the banks.

Bernanke told Congress that while the government might be forced to acquire a substantial minority stake in some banks, it had no intention of gaining majority control. Treasury Secretary Timothy Geithner, announcing details of bank "stress tests" that are to pave the way for hundreds of billions of dollars in new bailout money, said Wednesday, "US government ownership is not an objective" of the administration's bank rescue program.

In his address to Congress Tuesday night, President Barack Obama made clear that the commitment of public funds to bail out the banks is open-ended. "We will act with the full force of the federal government," he said, "to ensure that the major banks that Americans depend on have enough confidence and enough money to lend even in more difficult times." He reinforced this carte blanche for Wall Street by declaring he would do "whatever it takes" and calling on Congress to "join me in doing whatever proves necessary."

The media, which is doing its best to promote popular illusions in Obama, made no mention of the glaring double standard in the president's speech between his policy toward the banks and his plans for the American people. The people, Obama said, have to accept their supposed "responsibility" for the crisis and resign themselves in the near future to sharply reduced spending for social programs and, he suggested, a more or less permanent reduction in living standards. And while the public treasury is to be put at the disposal of Wall Street, the auto industry must be "re-tooled and re-imagined" so that it can "compete and win"—euphemisms for massive downsizing, the destruction of tens of thousands of jobs and permanent cuts in wages and benefits for auto workers.

The social implications of these policies were indicated by the budget outline released by the administration on Thursday, which proposes to reduce the budget deficit from $1.75 trillion this year to $533 billion by 2013—a proposal that can be realized only through massive attacks on the working class. The budget plan includes $250 billion in additional money for the banks—a sum described by administration officials as merely a "placeholder."

The class bias of these policies, despite occasional bursts of populist demagogy, could not be clearer. The controlling principle is to do the least possible harm to the interests of the richest segment of society, a miniscule minority, and do nothing that seriously impinges on the wealth and prerogatives of the most powerful sections of the ruling class—whatever the cost to the broad masses of people.

It is extraordinary that in the midst of the greatest economic collapse since the Great Depression there is no serious examination of its causes, no attempt to expose the social interests responsible or hold any bankers or speculators accountable, and no suggestion that a significant restructuring of the financial system and the economy as a whole is required. For all the attempts of various liberal commentators to portray Obama as the spearhead of a new "New Deal," there is nothing comparable to the reforms carried out by Roosevelt.

Roosevelt was no socialist. He was an astute defender of American capitalism, who recognized that the survival of the system, thoroughly discredited in the eyes of the people and facing that threat of social revolution, required the imposition of significant restraints on the operations of the banks and large-scale intervention by the government into what had been the exclusive preserves of private capital.

Shortly after his inauguration he passed the Glass-Steagall Act barring commercial depository banks from engaging in stock-trading and other forms of speculation. He launched government public works projects that directly employed large numbers of workers, including the massive Tennessee Valley Authority, which brought electrification to millions of rural Americans.

That, however, was during the rise of American capitalism to the status of the world's preeminent industrial power. Obama presides over a crisis that is the outcome of decades of decay and decline, which has transformed American capitalism into the debt-ridden global center of financial parasitism. The American ruling class has spent the last three decades diverting social resources from manufacturing, with devastating consequences for the working class, into various forms of financial manipulation, from which it derived huge profits and staggering levels of personal wealth.

A significant milestone in this process was the repeal of Glass-Steagall in 1999, under a Democratic president—Bill Clinton—and with broad bipartisan support. This freed the hands of the financial elite to mortgage the country's future by engaging in an unprecedented orgy of speculation, creating a mountain of paper values that has now come crashing down.

There is nothing resembling the public works programs of the New Deal and no talk of structural reform today in large part because the entire economic system has become wedded to the most parasitic forms of financial activity, and the most powerful sections of the ruling class are precisely those which have benefited the most from the separation of wealth creation from the process of production.

The industrial base of America has been decimated, to the point where, as pointed out recently by New York Times economic commentator Louis Uchitelle, the "Buy American" clause in the $787 billion stimulus package "has a certain quaintness to it." He notes that many of the manufactured goods required for the infrastructure projects proposed in the package are not produced in the US and have to be imported from abroad. He points out that by last year, 37 percent of all manufactured goods sold in America were imported, more than double the percentage in 1991 and nearly four times the level in 1978.

Even as he announced plans to revamp government regulation of the banks on Wednesday, Obama signaled that there would be no return to the restrictions of previous decades and that the banks would essentially be left to resume their speculative ways. "Free markets are the key to our progress," he declared, adding that nothing would be done to "hinder financial institutions."

In his Tuesday night speech, Obama engaged in a form of political extortion of the American people—asserting that the only alternative to the looting of the public treasury to rescue the private banking system is an economic catastrophe. "While the cost of action will be great," he said, "I can assure you that the cost of inaction will be far greater, for it could result in an economy that sputters along for not months or years, but perhaps a decade."

This political blackmail is based on a lie. There is an alternative to the impoverishment of the people to bail out the banks. It is a socialist and revolutionary policy directed against the so-called "free enterprise system" and the economic stranglehold of the financial aristocracy.

Witness against Chuck Turner turns on FBI

Witness against Chuck Turner turns on FBI

By Frank Neisser

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Ron Wilburn, the FBI’s “cooperating witness” in their case against Boston City Councilor Chuck Turner and former Massachusetts state Sen. Dianne Wilkerson, told the Boston Globe he was used and duped by the FBI—not to expose corruption in the Massachusetts political establishment, but to bring down two prominent progressive Black elected officials. No white officials have been charged in the case, which involves alleged corruption around liquor licensing.

In remarks from an interview published by the Globe on Feb. 20, Wilburn announced that he is no longer cooperating in the government’s case. He stated that the $1,000 he is alleged to have given Chuck Turner “could have been a gift or a campaign contribution. ... Chuck is a victim of circumstance.”

He cited the pressure of being known in the community as the FBI’s star witness in its attack on the two Black officials—pressure that is clearly a reflection of the political campaign and offensive by Turner and his supporters. Many assert that the case is a fraudulent attempt by the FBI and U.S. Attorney’s office to strip the African-American community of greater Roxbury of their right to the political representation and leadership of their own choosing, and further designed to undercut the most prominent defender of the community’s right to equal quality education, which is under attack by Boston’s mayor, political establishment and business community.

A rally in support of Turner will be held Feb. 24, on the day of his next court appearance. Supporters are urged to sign on to the campaign’s online petition at www.iacboston.org. The petition demands charges against Turner be dropped and that all politically and racially motivated prosecutions of progressive elected officials during the Bush administration be reversed and investigated.

Boston elite launches attack to resegregate schools

Boston elite launches attack to resegregate schools

By Frank Neisser

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In 1974, Boston became synonymous with racism, as images of white gangs throwing stones at school buses carrying African-American schoolchildren flashed round the world. It took a national civil rights march of 25,000 people with buses from all over, including the Deep South, to turn the tide of racism and defend the right of the African-American community to equal education access by whatever means the community chose.

With schools completely segregated and unequal, Boston’s African-American community chose desegregation. And since 1974, United Steelworkers (USW) Local 8751, the Boston School Bus Drivers Union, has been providing safe, reliable transportation to support that choice.

But the racist forces and the business establishment of Boston have never given up the goal of returning to racist, resegregated “neighborhood” schools where all the resources are reserved for the white neighborhoods.

They tried it in 2004, proposing to replace the existing three-zone system, which allows parents access to a wide range of schools, with plans for much smaller zones limiting access to quality schools. The community organized, fought back and stopped the plan, with leadership from the Black Educators’ Alliance of Massachusetts, Work for Quality, City Councilor Chuck Turner, USW Local 8751, the International Action Center and others.

The School Bus Drivers Union gave thousands of leaflets to the children to take home, mobilizing at the 12th Baptist Church in Roxbury a mass outpouring of parents who vented their anger in rejecting the plan. The parents showed that since 1974, multiple schools in communities of color have been shut down, torn down or converted into condos or private businesses. Consequently there are not adequate seats in the community schools, nor is there adequate access to advanced classes and quality educational programs.

Last year when the mayor declared war on the African-American community by demanding an end to school transportation, the community was again able to beat back the attack.

This time the full weight of the business and political establishment has joined in, using racism to attempt to force the weight of the economic crisis onto the backs of communities of color. The school department is packaging the attack on school transportation as part of a series of budget cuts, including school closings and teacher and other education worker layoffs.

The Boston Globe, the Herald and the Boston Phoenix all released editorials demanding an end to school transportation. They led off with an op-ed by Theodore Landsmark, who was made famous in a 1974 picture depicting an attack on him by an anti-busing racist with an American flag. The Globe reran the picture alongside his article saying it was “time to end” school transportation in support of parent choice. (Jan. 31)

The community is calling for parents to come out to the department’s budget hearing on March 10 at English High School, 144 McBride St. in Jamaica Plain to make clear that denying access to equal quality education is not an option.

The issue will also be taken up at the New England Fightback Conference, being held by the Bail Out the People Movement on Feb. 28 at the School Bus Union Hall, 25 Colgate Rd. in Roslindale.

Freeing Up Resources... for More War

Freeing Up Resources... for More War

by Norman Solomon

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Hours after President Obama’s speech to a joint session of Congress, the New York Times printed the news that he plans to gradually withdraw “American combat forces” from Iraq during the next 18 months. The newspaper reported that the advantages of the pullout will include “relieving the strain on the armed forces and freeing up resources for Afghanistan.”

The president’s speech had little to say about the plans for escalation, but the few words will come back to haunt: “With our friends and allies, we will forge a new and comprehensive strategy for Afghanistan and Pakistan to defeat Al Qaida and combat extremism, because I will not allow terrorists to plot against the American people from safe havens halfway around the world. We will not allow it.”

Obama didn’t mention the additional number of U.S. troops — 17,000 — that he has just ordered to Afghanistan. But his pledge that he “will not allow terrorists to plot against the American people” and his ringing declaration, “We will not allow it,” came just before this statement: “As we meet here tonight, our men and women in uniform stand watch abroad and more are readying to deploy.”

Get the message? In his first speech to Congress, the new president threw down a 90-month-old gauntlet, reaffirming the notion that committing to war halfway around the world — in Afghanistan and now in Pakistan too — will make Americans safer. With drumrolls like that, the mission could outlive all of us.

And so, a colossal and fateful blunder, made by a very smart leader, arguably our best and brightest, is careening forward with the help of silence that defers all too readily to power. This is how the war in Vietnam escalated, while individuals and groups muted their voices. Many people will pay with their lives.

The reasons why the war in Afghanistan cannot be won are directly connected to why the war is wrong. In essence, people do not like their country occupied for years on end, especially when the occupiers are routinely killing civilians (whatever the rationale). Monochrome words like Taliban and “terrorists” might seem tidy and clear enough as they appear in media coverage, or as they roll off a president’s tongue, but in the real Afghan world the opponents of the U.S. war are diverse and wide-ranging. With every missile strike that incinerates a household or terrorizes a village, the truly implacable “extremists” can rejoice at Uncle Sam’s assistance to their recruiting efforts.


Those who are fond of talking and writing about President Obama’s admirable progressive values will, sooner or later, need to come to terms with the particulars of his actual policies. In foreign affairs, the realities now include the ominous pairing of his anti-terrorism rhetoric and his avowed commitment to ratchet up the U.S. war effort in Afghanistan.

I don’t often make predictions, but I’m confident about this one: Within a few years, some members of Congress, and leaders of some progressive groups with huge email lists, will look back with regret as they recall their failure to clearly and openly oppose the pivotal escalation of the Afghan war.

They could save themselves a lot of shame, and save others their lives, by speaking out sooner rather than later. In the process, they might help save the Obama presidency from running aground in Afghanistan.

Retirement Wealth of Millions of Baby Boomers Threatened

http://www.cepr.net/documents/publications/baby-boomer-wealth-2009-02.pdf

Obama Unveils $3.55 Trillion Budget Proposal

In $3.6 Trillion Budget, Obama Signals Broad Shift in Priorities

Bold Agenda for Social Spending, Energy and Taxes Faces Fierce Fight

By Lori Montgomery

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President Obama delivered to Congress yesterday a $3.6 trillion spending plan that would finance vast new investments in health care, energy independence and education by raising taxes on the oil and gas industry, hedge fund managers, multinational corporations and nearly 3 million of the nation's top earners.

The blueprint, meanwhile, would overhaul programs across the federal bureaucracy to strengthen assistance for millions of people who have borne the consequences of what Obama called "an era of profound irresponsibility," helping them pay for college, train for better jobs and save for retirement while taking less of their earnings in taxes.

The ambitious agenda for the fiscal year that begins in October would not come cheap. This year's budget deficit, swollen by spending to combat a severe recession, would hit a record $1.75 trillion, or 12.3 percent of the overall economy, under the president's plan, the highest since 1945. While Obama inherited the bulk of that gap, his budget would make room for a fresh round of spending that could hit $750 billion to prop up troubled financial institutions.

Next year's deficit would approach $1.2 trillion. But Obama proposes to cut that figure roughly in half by the end of his first term, in large part by levying nearly $1 trillion in new taxes over the next decade on the nation's highest earners, defined as families with gross income of more than $250,000 a year.

In unveiling the 134-page volume that outlines his spending priorities, Obama acknowledged that his proposal would "add to our deficits in the short term to provide immediate relief to families and get our economy moving." But he argued that the economic crisis should not be used as an excuse to delay costly investments intended to modernize the nation's economy, enhance its workforce and, ultimately, reduce government spending.

"What I won't do is sacrifice investments that will make America stronger, more competitive and more prosperous in the 21st century -- investments that have been neglected for too long," Obama said. Citing the need to "break free" from foreign oil, reduce "crushing health-care costs," and improve public education, Obama said: "These investments must be America's priorities, and that's what they will be when I sign this budget into law."

With its immense scope and bold prescriptions, Obama's agenda seeks to foster a redistribution of wealth, with the government working to narrow the growing gap between rich and poor. It is likely to spark fierce political battles on an array of fronts, from social spending to energy policy to taxes.

Alice M. Rivlin, a Brookings Institution economist who served as former president Bill Clinton's budget director, called the plan "gutsy and quite good."

"It has a strong flavor of the Obama philosophy, which is tilting the playing field away from upper income and toward the rest of America," she said.

Republicans quickly attacked the document as a recipe for economic disaster, saying it would raise taxes on businesses and consumers in the middle of a recession in order to bankroll a massive government expansion.

"The era of big government is back, and Democrats are asking you to pay for it," said House Minority Leader John A. Boehner (R-Ohio). "The administration's plan, I think, is a job killer, plain and simple."

White House budget director Peter Orszag rejected that analysis, saying none of the tax increases would take effect until 2011. But some economists worry that even in 2011 the economy may be too fragile to absorb a tax increase. Meanwhile, some Democrats joined Republicans in complaining that the budget plan does not go far enough to narrow the yawning budget gap. While Obama predicts the deficit would fall to $533 billion by the end of his first term, it would quickly begin to rise again and the national debt would remain elevated throughout the next decade.

Obama is expected to send Congress a complete plan in April, and Democratic leaders said they hope to approve it later this spring. But House Majority Leader Steny H. Hoyer (D-Md.) predicted that finding the votes will be "tough." With Democrats in control of both the White House and Congress, their budget will have real meaning for the first time in 15 years, he said, and lawmakers will fight hard to advance favored causes.

"These are real votes, real consequences," Hoyer said. "You're playing with real money."

Obama's spending proposal contains plenty to fight over.

It calls on lawmakers to enact major new programs across the government, including one that would establish a national infrastructure bank to prioritize federal investments and another that would set new mandates on employers to enroll millions of workers for the first time in voluntary retirement savings accounts.

The budget seeks approval of a cap-and-trade program to curb U.S. greenhouse gas emissions by 14 percent by 2020. The program, similar to one used to slash emissions that cause acid rain, would auction permits to companies that emit greenhouse gases and allow them to trade those allowances.

The administration is counting on the program to produce a big new stream of revenue, amounting to $646 billion over the next decade. About $15 billion a year would be set aside to pay for "clean energy technologies" while the rest would go toward making Obama's signature "Making Work Pay" tax credit permanent. The tax credit, worth as much as $800 a year to low- and middle-income workers, was enacted in the stimulus package.

In what the president called an "historic commitment to comprehensive health care reform," the budget proposes to create a $634 billion reserve fund that lawmakers could use to finance a major expansion of health coverage for the uninsured.

The fund would include savings from proposed efficiencies in Medicare and Medicaid, the federal health programs for the elderly and the poor, as well as $318 billion in new taxes on families in the highest income brackets, who would see new limits on the value of the tax breaks from itemized deductions.

That proposal is a fraction of the new taxes Obama proposes to heap on the nation's highest earners. Individuals who earn more than $200,000 a year and families who make more than $250,000 would also lose the tax cuts enacted during the Bush administration, meaning their top income tax rate would rise to 39.6 percent from 35 percent, their investment income would be taxed at 20 percent rather than 15 percent and their deductions for mortgage interest, state and local taxes and charitable contributions would be reduced.

If Obama's tax plan is approved, a family making $500,000 a year would see its annual tax bill rise to nearly $132,000 from about $120,000, a 10 percent increase, said Clint Stretch, managing principal of tax policy at Deloitte Tax.

Hedge fund managers would take an even bigger hit. Much of their multimillion-dollar earnings would be taxed as regular income rather than capital gains, causing their tax rate to rise from 15 percent to as much as 39.6 percent. Oil and gas companies would be asked to pay an extra $31 billion over the next 10 years through an excise tax on offshore production in the Gulf of Mexico as well as new fees for drilling on federal land. Corporations that operate overseas could expect to pay $210 billion more over the next 10 years as a result of new limits on their ability to defer taxation on foreign earnings.

John Castellani, president of the Business Roundtable, an association of executives, praised Obama's commitment to health care and deficit reduction, but said his tax plans could hinder American competitiveness. Calling the president's proposals "aspirational," Castellani said he would "work with Congress" to produce a balanced tax plan that would "help the economy grow and create jobs."

CIA Adds Economy to Threat Updates

CIA Adds Economy To Threat Updates

White House Given First Daily Briefing

By Joby Warrick

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The daily White House intelligence report that catalogs the top security threats to the nation has a grim new addition, reflecting the realities of the age: a daily update on the global financial crisis and its cascading effects on the stability of countries through the world.

The first Economic Intelligence Briefing report was presented to the White House yesterday by the CIA, the agency's new director, Leon Panetta, revealed at a news conference. The addition of economic news to the daily roundup of terrorist attacks and surveillance reports appears to reflect a growing belief among intelligence officials that the economic meltdown is now preeminent among security threats facing the United States.

"We've seen the impact of a worldwide recession occur throughout the world," said Panetta, who described the agency's newest product at his first news briefing since his confirmation. Instigated at the request of the White House, the daily report will ensure that U.S. policymakers are "not surprised" by the aftershocks from bank failures and rising unemployment, he said.

The spy agency is following worrisome trends in many corners of the globe, from East Asia to Latin America. In private meetings yesterday, Latin American intelligence officials warned their U.S. counterparts of a crisis spreading throughout the hemisphere, particularly in Argentina, Ecuador and Venezuela, Panetta said.

"Clearly, it's related: What happens in the economy, and what's happening as a result of that, is affecting the stability of the world," he said.

Other key intelligence officials have raised similar alarms in other settings. The new director of national intelligence, Dennis C. Blair, told a Senate panel this month that economic woes have largely replaced terrorism as the country's No. 1 security challenge.

Blair repeated the theme yesterday in testimony before the House intelligence committee, noting that three European governments have fallen because of economic issues. Central and Eastern Europe "are under tremendous strain," and much of Eurasia, Latin American and sub-Saharan Africa lack sufficient cash reserves and access to international aid, he said.

"Our analysis indicates that economic crisis increases the risk of regime-threatening instability if it continues for a one- or two-year period," Blair said. "Instability can loosen the fragile hold that many developing countries have on law and order."

The economic crunch adds to a formidable list of global concerns facing the new administration's security team. Panetta said the CIA continues to regard al-Qaeda as a serious threat, as the terrorist movement retains its stronghold along the Pakistan-Afghanistan border and gains momentum in Somalia and Yemen.

U.S. Ready to Respond to N.Korea Missile

U.S. Ready to Respond to N.Korea Missile

Admiral Keating Tells ABC News U.S. Prepared to Shoot Down Missile If Obama Gives OK

By MARTHA RADDATZ and LAUREN SHER

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In an exclusive interview with ABC News' Martha Raddatz, Adm. Timothy Keating, head of the U.S. Pacific Commands, said that the military is prepared to shoot down any North Korean ballistic missile -- if President Obama should give the order.

"If a missile leaves the launch pad we'll be prepared to respond upon direction of the president," Keating told ABC News. "I'm not a betting man but I'd go like 60/40, 70/30 that it will, they will attempt to launch a satellite. There's equipment moving up there that would indicate the preliminary stages of preparation for a launch. So I'd say it's more than less likely."

"Should it look like it's not a satellite launch -- that it's something other than a satellite launch -- we'll be ready to respond."

Intelligence reports suggest that North Korea is preparing a long-range missile test. Earlier this week, North Korea announced its plans to send a satellite into orbit as part of its space program.

However, many in the international community assert that North Korea's satellite test is simply a means of concealing a long-range missile test -- a move that would flare existing tension in the region.

Keating said that the military is ready to respond with at least five different systems: destroyer, Aegis cruiser, radar, space-based system and ground-based interceptor. All of these work in conjunction with one another to protect against any missile threat.

Destroyers are fast, multi-purpose warships that can be used in almost any type of naval operation. They would likely play a defensive role, helping to repel an air attack and offering a platform for gunfire and missiles to hit airborne objects.

The Aegis cruiser is part of the Navy's computer-based command and control system that integrates radar and missiles to fight against land, air and sea attacks. For Keating, the Aegis combat system can tracks threats and counter any short- or medium-range missiles.

Radars vary in type and design, but the military would likely employ a range of sea-based and early warning radars to detect the presence of a North Korean missile, track warheads' movement and more easily home in on the position of a missile to knock it down.

Space-based infrared system is a defense system that provides warning of any missile launches, detecting the threat and employing other tools to obliterate it.

Ground-based interceptor is a weapon that seeks and destroys incoming ballistic missiles outside of the earth's atmosphere. Its sensors give the military the ability to locate and obliterate a North Korean missile.

"We will be fully prepared to respond as the president directs," Keating said. "Everything that we need to be ready is ready. So that's ready twice in one sentence, but we're not kidding, it doesn't take much for us to be fully postured to respond."

Missile Launch a 'Stern Test' of Obama

In the U.S. arsenal is a "very sophisticated and complex, but effective ballistic missile-defense system," Keating says, which would provide a line of attack against any kind of ballistic missile or warhead that springs from a North Korean launch pad.

Ground-based interceptors, he says, will be able to take down an object other than a satellite. And while they have not moved ships into place yet, Keating says he is prepared to do so at a moment's notice.

Experts say that North Korea's announcement of its satellite launch is an attempt to put Pyongyang on President Obama's radar.

"It's a fairly stern test early of President Obama and his administration," Keating said.

Members of the Committee for the Peaceful Reunification of [North] Korea, a state body, chastised critics Thursday, saying it would retaliate against those who attempt to disrupt its satellite plan. Keating says the U.S. military is keeping a close eye on the launch pad, but does not want to jump the gun.

"We're intentionally being a little more cautious and a little more reserved as to not stimulate unnecessary activity in North Korea," he said. "We want to do no harm, if you will."

Nevertheless, Keating says that his priority first and foremost is defending the United States.

"If that means we detect a missile that is a threat to U.S. territory, then we are going to defend U.S. territory. And [if] we hit what we're aiming at that should be a source of great confidence and reassurance to our allies and partners."

Economy likely suffered deeper contraction

Economy likely suffered deeper contraction

By JEANNINE AVERSA

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The economy's downhill slide at the end of last year was likely much steeper than the government initially thought and it is probably doing just as poorly now — if not worse — as a relentless slew of negative forces feed on each other, pushing the country deeper into recession.

American consumers — spooked by vanishing jobs, sinking home values and shrinking investment portfolios have cut back. In turn, companies are slashing production and payrolls. Rising foreclosures are aggravating the already stricken housing market, hard-to-get credit has stymied business investment and is crimping the ability of some consumers to make big-ticket purchases.

It's creating a self-perpetuating vicious cycle that is causing the economy to deteriorate at a rapid pace. The country is suffering through the worst housing, credit and financial crises since the 1930s.

The Commerce Department is set to release a report Friday expected to show the economy contracted at a pace of 5.4 percent in the October-to-December quarter. If economists are correct, the updated reading on gross domestic product, or GDP, would show the economy sinking faster than the 3.8 percent annualized decline the government first estimated a month ago. GDP measures the value of all goods and services produced within the United States and is best barometer of the country's economic health.

"The economy kind of fell off a cliff and unleashed all of these negative downward spirals that are feeding on each other and still are," said Bill Cheney, chief economist at John Hancock Financial Services.

The new projected GDP figure — like the old one — would mark the weakest quarterly showing since an annualized drop of 6.4 percent in the first quarter of 1982, when the country was suffering through an intense recession.

Looking ahead to the current January-to-March quarter, economists believe it is also shaping up to be quite weak, with many projecting an annualized drop of 5 percent. Given the dismal state of the jobs market, some economists believe an even sharper decline in first-quarter GDP is possible.

"It doesn't appear as if the free-fall in the economy has slowed down at all," said Stuart Hoffman, chief economist at PNC Financial Services Group. "So far, there is no net."

Many predict the economy will continue to shrink in the April-to-June quarter — though not as deeply — by around a 1.7 percent pace.

To jolt life back into the economy, President Barack Obama recently signed a $787 billion recovery package of increased government spending and tax cuts. The president also unveiled a $75 billion plan to stem home foreclosures and Treasury Secretary Timothy Geithner said as much as $2 trillion could be plowed into the financial system to jump-start lending.

A massive pullback by consumers is playing a prominent role in the economy's worsening backslide. Businesses are retrenching, too.

That's left companies with bloated inventories of unsold goods, which actually adds to GDP. Some economists think those backlogs weren't as big as the government initially thought in the fourth quarter, which factors into economists' forecasts for a lower GDP reading. Even deeper cutbacks in construction and by businesses in other areas also are expected to play a role weaker forecast.

Federal Reserve Chairman Ben Bernanke told Congress earlier this week that the economy is suffering a "severe contraction" and is likely to keep shrinking in the fix six months of this year. But he planted a seed of hope that the recession might end his year if the government managed to prop up the shaky banking system.

Even in the best-case scenario that the recession ends this year and an economic recovery happens next year, unemployment is likely to keep rising.

In part, that's because many analysts think don't think the early stages of any recovery will be vigorous and also because companies won't be inclined to ramp up hiring until they feel confident that any economic rebound will have staying power.

The nation's unemployment rate is now at 7.6 percent, the highest in more than 16 years. The Fed expects the jobless rate to rise to close to 9 percent this year, and probably remain above normal levels of around 5 percent into 2011.

Senator Gregg had stake in, won aid for base

Gregg had stake in, won aid for base

By SHARON THEIMER

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Republican Sen. Judd Gregg, steered taxpayer money to his home state's redevelopment of a former Air Force base even as he and his brother engaged in real estate deals there, an Associated Press investigation found.

Gregg, R-N.H., has personally invested hundreds of thousands of dollars in Cyrus Gregg's office projects at the Pease International Tradeport, a Portsmouth business park built at the defunct Pease Air Force Base, once home to nuclear bombers. Judd Gregg has collected at least $240,017 to $651,801 from his investments there, Senate records show, while helping to arrange at least $66 million in federal aid for the former base.

Gregg said he violated no laws or Senate rules. In a statement Friday, he said that all the federal money he steered to Pease had been requested by the National Guard, the city of Portsmouth or its mayor or other public officials "and did not involve my initiative but only my support of the requests."

But the senator's mixture of personal and professional business would have been difficult to square with President Barack Obama's campaign promise to impose greater transparency and integrity over federal budget earmarks — funding for lawmakers' pet projects. Gregg said that during his consideration for the Cabinet job, the White House did not know about his Pease earmarks, although the administration knew about his investments at Pease.

Under new Senate ethics rules, Gregg had to certify that federal aid he directed to specific projects was not intended solely to enrich him or his immediate family, including siblings. Senators are also supposed to avoid even the appearance of a conflict of interest, though the Senate Ethics Committee seldom investigates or disciplines senators when questions are raised about their activities.

"I am absolutely sure that in every way I've complied with the ethics rules of the Senate both literally and in their spirit relative to any investment that I've made anywhere," Gregg told the AP. "These earmarks do not benefit me in any way, shape, manner financially, personally or in any other manner other than the fact that I'm a citizen of New Hampshire."

Gregg abruptly announced earlier this month that he was stepping aside from consideration for the Cabinet post, citing philosophical differences with Obama.

The senator has said his withdrawal had nothing to do with anything the White House uncovered in his background. A White House spokesman, Ben LaBolt, declined to discuss the matter with the AP. AP began looking into the Greggs' activities at Pease before then but had not yet contacted them or the White House before Judd Gregg withdrew.

"My decision to withdraw my nomination to be secretary of commerce was made solely due to differences in political ideology with the administration and the concern that I could not properly serve the president in his Cabinet with full support for his initiatives at all times due to these differences," Gregg said in his statement Friday. "To somehow imply anything else is totally false."

Obama's administration has wrestled in recent weeks with embarrassing revelations about his choices for the Cabinet and other high-profile jobs, including the treasury secretary's failure to pay $34,000 in income taxes on time. Obama's first choice for commerce secretary, New Mexico Gov. Bill Richardson, withdrew due to the disclosure that a grand jury was investigating the awarding of a state contract to one of his major political donors.

Gregg told the AP the White House expressed no concerns about his involvement at Pease. He said he does not believe his investments there or his role in obtaining federal aid would have affected his consideration for the job.

The Greggs have long been a wealthy and powerful New Hampshire family. Judd Gregg's selection by Obama gave him national prominence, and he was among GOP lawmakers the president invited to a meeting earlier this week on the nation's financial health.

Gregg was governor in the early 1990s when Pease became the first base shut down in closings under then-President George H.W. Bush. Gregg created a state development authority to approve development projects at the former base, and he supported millions of dollars in state-backed bonds and at least $10 million in state roadwork to help transform Pease from a military installation to a business center.

Such efforts to convert defunct bases were encouraged by the federal government. But the personal financial involvement of Gregg and his brother, Cyrus, at Pease sets it apart from other bases' redevelopment.

Cyrus Gregg is a partner in Two International Group, a developer that quickly established itself as a major player at Pease. It has built roughly a dozen office buildings there since the base closed.

Judd Gregg has invested in several of Cyrus Gregg's projects through limited partnerships and limited liability companies: 222 International LP, Say Pease LLC and other LLCs using variations on the "Say Pease" name, according to New Hampshire corporate records and the senator's financial disclosure reports.

The senator said 222 International's and the limited liability companies' only real estate holdings were at Pease. An office building at 222 International Drive developed by Cyrus Gregg and his associates was valued at just under $11 million last year, according to local assessment records. Judd Gregg said he put money into his brother's Pease developments as a passive investor and had no role beyond that.

"I've throughout my entire lifetime been involved in my family's businesses and that's just the way our family works," he said. "We support each other and our activities."

By putting government money into the former base, Gregg helped it become a desirable place for employers to locate, making developments there more valuable.

Gregg took in at least $240,017 and possibly as much as $651,801 from the investments between 1999 and 2007 in rent and capital gains, according to his Senate filings. He said it was too soon to say if the real estate deals will be profitable: "That's obviously why you invest your money. You do hope to make money."

Gregg said he was proud to bring development and jobs to the former base.

"When it closed as an air base it was a devastating event," Gregg said. "It's been the most successful redevelopment of a closed military base in the country."

In the Senate, Gregg has repeatedly won federal money for Pease's redevelopment:

_At least $24.8 million for a new federal building. The senator said the city of Portsmouth wanted to move an unattractive federal building out of its picturesque downtown. The new building hasn't been built yet, he said.

_At least $24.5 million for other New Hampshire National Guard projects at the base, including a new fire and crash rescue station, a new medical training facility, repair to an aircraft parking ramp and the upgrade of an aircraft parking apron.

_$8.9 million for a new wing headquarters operations and training facility at Pease for the Air National Guard.

_At least $8 million to help Pease's airport transition from military to civilian use, including improving terminal security, buying snow removal equipment, building an aircraft deicing area and adding a parking lot.

_$475,000 to shield office buildings at Pease from noise from the former Air Force runway, which is now used by private planes and the New Hampshire Air National Guard. Earlier, Gregg lined up $25,000 in federal money for noise monitoring equipment at Pease.

_$400,000 for development of a photonics and laser technology program at the New Hampshire Community Technical College campusthen-Sen. John Sununu, R-N.H., won federal money to develop the college's biotechnology lab, and education and training center at Pease. at Pease. Earlier, Gregg and

Gregg leases a former guard post at the Pease entrance and uses it as one of his Senate offices.

Gregg listed the real estate investments in his Senate financial reports, identifying the dollar values in broad ranges as ethics rules allow rather than giving specific totals. He declined to tell AP exactly how much he has invested there. Gregg's Senate reports do not include the addresses of all the Portsmouth properties where he invested; AP pored through local real estate records to identify the Pease developments.

Gregg's investments in the partnerships date back at least to 1999, when he had $15,001 to $50,000 invested in 222 International Drive LP, according to his Senate reports.

By 2007, Gregg had a total of $465,000 to $1.05 million invested in four businesses: 222 International Drive LP, Say Pease LLC, Say Pease II/IV LLC and Say Pease VII LRC, according to his most recent Senate report.

Gregg has sometimes officially sought his brother's expertise on development.

As governor in 1989, he appointed Cyrus Gregg to a panel considering the future of state land in Laconia, N.H., that had been the site of a home for the developmentally disabled. The lakeside parcel eventually was used for a prison.

State records that might show what, if any, other interactions Cyrus Gregg had with his brother's administration no longer exist. New Hampshire does not require governors to give their records to the state archives when they leave office and Judd Gregg didn't, State Archivist Frank Mevers said. Gregg's Senate office told AP that Gregg hasn't kept papers or other materials from his previous elected positions.

In all, Gregg had $5.6 million to $12.8 million in assets in 2007, including those cited in his Senate reports and the $2.5 million home in Rye, N.H., that he owns with his wife. Judd and Cyrus Gregg have been involved in various businesses in New Hampshire and elsewhere, as was their father, Hugh, before his death.

Cyrus Gregg is less known than his father and brother, though he has been active in Republican Party politics and seems to have made no secret of his involvement at Pease. His name appears in numerous corporate filings and local real estate records.

Besides its activities at Pease, Two International also develops properties elsewhere in Portsmouth, recently selling a $1 million-plus condominium at its One Harbor Place development to J. Bonnie Newman, Judd Gregg's former chief of staff. Gregg agreed to become commerce secretary if the Democratic New Hampshire governor named her to succeed him.

The senator said he had no involvement with the sale or the Harbor Place development. Newman said she has known Cyrus Gregg for years and approached him about the condo.

"We see one another on a pretty regular basis socially, so I think I may have said, `Let me know what you're doing with the apartments. I could be interested,'" Newman said. She used to have an office in the building, and it was well-known around Portsmouth that one floor was being converted to condos, she said. Newman negotiated the purchase through the fall and said she signed the purchase agreement in November, long before there was any indication Judd Gregg might be a Cabinet pick.

"It's a wonderful old building in a very special waterfront area," Newman said.

The condominium hasn't been built yet.