The Michigan Daily - michigandailycom Wednesday, November 21, 2007 - 3A The Michigan Daily - michigandailycom Wednesday, November 21, 2007 - 3A NEWS BRIEFS * WASHINGTON Former press sec.: Bush, Cheney misled public 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. WASHINGTON Court to examine whether 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 years. The justices' decision to hear the case could make the divisive debate over guns an issue in the 2008 presidential and congressio- nal elections. 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 homes. WASHINGTON U.S. to host Middle East conference 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 years. 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 Polygamist leader 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 bars. 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 3,873 Number of American service mem- bers who have died in the war in Iraq, according to The Associated Press. No new deaths were identi- fied yesterday. Fed predicts slowdown in'08 'TIS THE SEASON, ALREADY Unemployment expected to rise; inflation to drop slightly 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- tained." 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- tion. 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 "close call." 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 assumes. "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. PETER SCHOTTENFELS/Daily 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." Sarkozy stands firm against strikes Says he won't back off on reform plans as country grinds to halt 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 not retreat." 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- distance trains. 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 E~Ann Arbors ONLs bnt Brsat 9 PM MCm516E.Lberty Street 7 34a945431 THURSDAYS DJ Hardy spins Top 40. $2 Vodka Drinks and $2 Miller Lite until 11;30 PM. $5 Cover. "'0FRIDAYS DJ Jace wi high energy dance. DJ Mark & DJ John G keep 4 hotwith pop & dance in the Red Room, $2 Long Islands until 11 PM,$10 Fishbowls all night tong NO toner before 101 PM. Guys with college ID FREE until 11 PM. 21+ $5 cover. 18-20 $8 cover. F881SATURDAYS DJ Hardy holdsdown Top40 and Dance. $2 Miller Lite pints, $2 Rum and Coke, $2 Cranberry and Vodka all night long. 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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- tors. "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.