The Michigan Daily - michigandailycom
Wednesday, November 21, 2007 - 3A
The Michigan Daily - michigandailycom Wednesday, November 21, 2007 - 3A
Former press sec.:
Former White House press sec-
retary Scott McClellan blames
President Bush and Vice President
Dick Cheney for efforts to mislead
the public about the role of White
House aides in leaking the identity
of a CIA operative.
In an excerpt from his forthcom-
ing book, McClellan recounts the
2003 news conference in which he
told reporters that aides Karl Rove
and I. Lewis "Scooter" Libby were
"not involved" in the leak involving
operative Valerie Plame.
"There was one problem. It was
nottrue," McClellanwrites, accord-
ing to a brief excerpt released Tues-
day. "I had unknowingly passed
along false information. And five of
the highest-ranking officials in the
administration were involved in
my doing so: Rove, Libby, the vice
president, the president's chief of
staff and the president himself."
Bush's chief of staff at the time
was Andrew Card.
D.C. can ban guns
The Supreme Court said yes-
terday it will decide whether
the District of Columbia can ban
handguns, a case that could pro-
duce the most in-depth examina-
tion of the constitutional right to
"keep and bear arms" in nearly 70
The justices' decision to hear
the case could make the divisive
debate over guns an issue in the
2008 presidential and congressio-
City officials said the law is de-
signed to reduce gun violence, not-
ing that four out of every five ho-
micides this year was committed
with a gun. Opponents of the ban
pointed to the level of violence to
make their case that Washington
residents should be allowed to have
guns to protect themselves in their
U.S. to host
The State Department
announced yesterday that the U.S.
will host a Middle East conference
next week as a prelude to talks that
President Bush hopes will put the
Israeli-Palestinian peace process
back on track.
The announcement by spokes-
man Sean McCormack came after
Israel and the Palestinians con-
firmed having received invitations
to the meeting, which is intended
to launch their first serious peace
negotiations in more than seven
McCormack told reporters that
49 countries, institutions and
individuals, including select Arab
states and other key nations with a
stake in the Mideast peace process
were invited to the meeting begin-
ning Nov. 27.
. ST.GEORGE, Utah
sentenced to jail
A judge sentenced a polygamous-
sect leader yesterday to two consecu-
tive terms of five years to life in prison
for his role in the arranged marriage
of teenage cousins.
Warren Jeffs, 51, was convicted
of two counts of rape as an accom-
plice for his role in the marriage of
a 14-year-old follower and her 19-
year-old cousin in 2001. It will be up
to the Utah parole board to decide
how long he actually stays behind
As the verdict was read, Jeffs was
stoic, as he was throughout the trial.
His attorney, Wally Bugden, asked
the judge for concurrent sentences
but lost the argument.
- Compiled from
Daily wire reports
Number of American service mem-
bers who have died in the war in
Iraq, according to The Associated
Press. No new deaths were identi-
'TIS THE SEASON, ALREADY
expected to rise;
inflation to drop
By EDMUND L. ANDREWS
The New York Times
WASHINGTON - The Fed-
eral Reserve expects economic
growth to slow sharply next year,
and policymakers there are wor-
ried that even this forecast may
prove too optimistic, according
to an assessment that the central
bank released yesterday.
In a new effort to be more open,
the Fed released a detailed fore-
cast that summarized the predic-
tions of the Fed governors and
regional bank presidents.
It also reported their disagree-
ments, which almost all centered
on how much the broad economy
is likely to be damaged by the
surge in oil prices and the tight
credit markets brought on by the
recent severe problems in housing
and mortgage lending.
At the same time, Fed officials
expect unemployment to rise
only slightly and inflation to edge
down. Ina shift from three weeks
ago, the officials said they agreed
that recent evidence of slowing
inflation was more than a tempo-
rary blip and would "likely besus-
Neither the forecast nor newly
released minutes from the Fed's
last meeting on Oct. 31 mentioned
the chances of a recession, but the
new predictions are low enough
that, if borne out, the economic
situation might feel like a reces-
sion to many people.
The forecast, which was much
anticipated, did nothing to end the
battle of wills between Fed offi-
cials and Wall Streetoverthe need
to reduce interest rates for a third
time this year when the rate-set-
ting Federal Open Market Com-
mittee meets next, on Dec. 11.
Investors did not seem to know
how to react to the information.
Share prices initially dropped
after the report was released,
possibly in reaction to the reluc-
tance that the policymakers had
expressed toward cutting rates
last month. But prices bounced
back and ended the day modestly
higher, possibly in response to the
Fed's reduced alarms about infla-
The Dow Jones industrial aver-
age rose 51.70 points, or 0.40 per-
cent, to 13,010.14, after making
100-point swings in both direc-
tions. That followed Monday's
drop of more than 200 points.
Many Nasdaqorsmall stocks were
flat or lower.
Fed officials have signaled in
recent speeches that they do not
want to cut rates anytime soon,
saying their cuts in September and
October would be enough to keep
the economy out of recession.
Indeed, many of them were
already uneasy about their last cut
in the benchmark federal funds
rate on Oct. 31, to 4.5 percent
from 4.75 percent. According to
the minutes of that meeting, Fed
bankers saw that decision as a
But many investors continue
to bet heavily on a rate cut in
December, and some economists
and Wall Street analysts argue
that the economy will come much
closer to stallingthan the Fed now
"I think what we're really
debating here is the timing," said
Stuart Hoffman, an economist
at PNC Financial in Pittsburgh.
"Whether or not it happens on
Dec. 11, my guess is that by the
March meeting, the Fed funds
rate will be 4 percent."
The new forecasts for growth
next year in the gross domestic
product range from 1.6 percent
to 2.6 percent. That is both lower
and more uncertain than in June,
when the forecasts ranged from
2.5 percent to 3 percent.
Bill McGill of Tecumseh, Mich. window shopping in Nickel's Arcade in Ann Arbor yesterday. Many stores in the arcade have
already put up their holiday decorations. "It's like it goes from Christmas to Christmas," McGill said. "They never take this stuff
down, I guess its good for sales, though."
firm against strikes
Says he won't back
off on reform plans
as country grinds
PARIS (AP) - President Nicolas
Sarkozy stood firm againstspread-
ing strikes yesterday, insisting he
will not water down plans for a
thorough overhaul of France, even
as civil servants joined the walk-
outs and thousands of protesters
took to the streets.
Sarkozy was characteristically
defiant as he broke what had been
an unusual silence during a week
of transit strikes that have dis-
rupted travel across the nation.
He accused the strikers of holding
commuters "hostage" and called
for them to return to work.
Turning to critics who hope he
can be forced to back away from
deep economic, social and politi-
cal changes for a country that has
proved difficult to reform, Sarkozy
had a simple message: Forget it.
"France needs reforms to meet
the challenges imposed on it by the
world," he said in a spirited speech
to mayors. "These reforms have
been too long in coming.... After so
much hesitation, so much procras-
tination, so many backward steps,
we will not surrender and we will
Sarkozy appears to have the
upper hand in his test of strength
with powerful transport unions
fighting tougher pension rules
- opinion polls say the public
strongly supports the president
and strikers have been trickling
back to work on subway and long-
If he wins the faceoff, Sarkozy
will improve his chances for pushing
throughevenbigger and more ambi-
tious reforms. One involves slim-
ming down and reforming the civil
service, whose 5 million workers
make it France's largest employer.
Sarkozy insisted in his speech
that he didn't deliberately pick the
fight with the train unions.
But he certainly chose the field
of combat well: Pension rights that
train drivers and other specially
classed workers are fighting to
protect are cushier than those
enjoyed by most in France. Sar-
kozy says pension rights should be
equal for all - and he has public
opinion on his side.
Sarkozy "hasn't won the gamble
yet, because the trains still aren't
running. But it seems he will
win," said Etienne Schweisguth,
a researcher at the respected Sci-
ences Po school of political sci-
ences in Paris.
Service tax repeal
slowed in legislature
Ter orar Many in the business commu-
nity support a measure passed by
surcharge would the Democrat-controlled House
that would generate the same
take effect Dec. 1 amount of money as the sales tax
on services, which businesses
oppose because they say it would
LANSING (AP) - The state cost too much, whether they were
Legislature has a lot of work left paying it or collecting it.
but little time remaining to repeal A House-Senate conference
an unpopular tax on services committee most likely will try
before it takes effect Dec. 1. to craft a compromise proposal
The Republican-controlled next week when House members
Senate voted along party lines return Monday from a two-week
yesterday to replace the service break.
tax by adding a temporary sur- The biggest fight may be over
charge to Michigan's main busi- how long the surcharge should
ness tax. last. Republican lawmakers want
But Democratic Gov. Jennifer it to end three years from now,
Granholm doesn't like the bill when the next governor takes
because she said it fails to bring office. That official can then
in the same amount of revenue as decide if the surcharge should
the service tax, leading to what continue, said Senate Majority
she called unacceptable budget Leader Mike Bishop (R-Roches-
cuts to education, health care and ter).
public safety. But Democrats accused Repub-
Granholm also doesn't like a licans of reneging on a promise to
part of the bill that eliminates raise tax revenues. They note that
the surcharge in 2011, leaving a the service tax, which passed Oct.
potential annual budget short- 1, didn't include any date for being
fall of $750 million. She wants phased out or eliminated.
any solution to have bipartisan Senate Republicans don't like
support, but Senate Democrats the plan passed two weeks ago
refused to support the GOP bill by the Democratic-led House
partly because they said it taps because it contains an initial sur-
money that should go into the charge on businesses of 33 per-
state rainy day fund. cent, which they say is too high.
Man charged with
scamming $250 ml
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WASHINGTON (AP) - A
Detroit-area man bilked senior
citizens and others out of as much
as $250 million in a long-running
scam that promised profits on
lucrative telecommunication con-
tracts with Las Vegas resorts and
casinos, U.S. authorities said in
court documents filed yesterday.
Edward May, 71, and E-M Man-
agement Co. guaranteed returns
on companies that purportedly
had contracts with Hilton Hotels
Corp., MGM Grand Hotel, Tropi-
cana Resort Casino and others,
according to documents filed in
U.S. District Court for the East-
ern District of Michigan. Author-
ities said that the contracts didn't
exist and that the scheme, dating
back to at least 1998, victimized
between 500 and 1,200 inves-
"Many of these investors were
seniors," said Peter Chan, assis-
tant regional director in the
Securities and Exchange Com-
mission's Chicago office, which
filed a civil lawsuit Tuesday
against May and his company.
The SEC said that investors were
drawn from Michigan, Illinois,
Ohio, New York, New Jersey, Cal-
ifornia and Florida and that the
alleged scam pulled in between
$74 million and $250 million.