The Michigan Daily - michigandaily.com
Wednesday, November 26, 2008 - 3A
NEWS BRIEFS
NEW YORK
FDIC adds 54 more
banks to its
'problem list'
The Federal Deposit Insurance
Corp. said yesterday the list of
banks it considers to be in trouble
shotupnearlySopercentto 171dur-
ing the third quarter - yet another
sign of escalating problems among
the institutions controlling Ameri-
cans' deposits.
The 171 banks on the FDIC's
"problem list" encompass only
about 2 percent of the nearly 8,500
FDIC-insured institutions. Still,
the increase from 117 in the second
quarter is sharp, and the current
tally is the highest since late 1995.
"We've had profound problems in
our financial markets that are tak-
ing a rising toll on the real economy,"
said FDIC Chairman Sheila Bair in
a statement, adding that Tuesday's
report "reflects these challenges."
Banks across the country have
been hurt - and in some cases,
devastated - by the collapse of the
subprime mortgage market and
subsequent problems across the
lending spectrum.
BANGKOK, Thailand
Protesters swarm
Thai airport,
takeoffs suspended
Protesters swarmed Thailand's
main international airport Tues-
day, forcing the cancellation of
departing flights just hours after
their comrades opened fire on gov-
ernment supporters in a clash on
the streets of the capital.
It was the boldest move yet by
the People's Alliance for Democ-
racy in a monthslong campaign to
topple Prime Minister Somchai
Wongsawat, whom it accuses of
being the puppet of a disgraced
fugitive predecessor, billionaire
Thaksin Shinawatra.
Tuesday's events saw for the first
time the open use of guns by the
alliance's so-called guards and the
entanglement of foreigners - the
thousands of tourists trapped at the
international airport.
The protesters appeared intent
on forcing the military to intervene
and bring down the elected regime.
CHICAGO
Obama names
budget director,
promotes restraint
S President-elect Barack Obama
pledged to make deficit reduction a
goal of his administration yesterday
- but only after recovery from the
financial crisis is well under way.
"We are going to have to jump start
the economy," he said.
At his second news conference
in as many days, Obama claimed
a "mandate to move the country
in a new direction," and promised
to consult with Republicans as he
goes about it.
"I think what the American
people want more than anything is
just commonsense, smart govern-
ment. They don't want ideology,
they don't want bickering, sniping,
they want action and effective-
ness. When it comes to the bud-
get, people don't want to continue
Sargument about big government
Wor small government, they want
smart government and effective
government."
The president-elect announced
Peter Orszag would be his budget
director, charged with scrutinizing
spending with a goal of "eliminat-
ing those programs we don't need
and insisting that those we do need
operate in a cost-effective way."
ALLEN PARK, Mich.
Lions sell out
Thanksgiving game;
blackout averted
The Detroit Lions have sold
out their Thanksgiving Day game
against the Tennessee Titans,
making the TV broadcast available
in the area.
The winless Lions found takers
for the fewer than 1,000 remaining
. tickets by yesterday's deadline.
Detroitfailedtoselloutits previous
three home games - after a streak of
SO straight sellouts at Ford Field -
and that blacked out the game for the
Detroit, Lansing, Saginaw/Flint and
" Toledo, Ohio, markets.
The Lions have had sellouts on
Thanksgiving every year since 1992.
One-loss Tennessee is a double-
digit favorite to beat Detroit, which
could become the NFL's first team
to finish 0-16.
- Compiled from
Daily wire reports
Obama, Dems
plan $500B
for rescue plan
GOING HOME FOR THE HOLIDAY
Economists say
$300B needed to
make real impact
WASHINGTON (AP) - Con-
gressional Democrats and Pres-
ident-elect Barack Obama are
laying the groundwork for quick
enactment in January of a giant,
two-year economic rescue pack-
age that will total about a half-
trillion dollars.
His economic team in place,
Obama has tasked his aides with
assemblinganambitious measure
to not only swiftly pump money
into the battered economy, but
also create 2.5 million new jobs,
send a tax cut to the poor and
middle class, and make massive
government investments in ener-
gy-saving and other technologies
designed to pay for themselves in
the long run.
Some senior Democratic law-
makers put the cost of the pack-
age as high as $700 billion, a
figure Obama's team calls pre-
mature and several Democratic
aides said was unlikely. One top
Democratic congressional offi-
cial, speaking on condition of
anonymity because talks on the
economic rescue measure are
ongoing, said itwill probably cost
between $400 billion and $500
billion over two years.
Senate Majority Leader Harry
Reid told reporters in his home-
state of Nevada on Monday that
the plan, which is still taking
shape, "will be about $500 bil-
lion," and said he would move it
through Congress "fairly quick-
ly," in January, according to the
Las Vegas Review-Journal.
The president-elect has
already acknowledged that its
price tag will be far higher than
the $175billion economic aid plan
he advocated while he was cam-
paigning for the White House.
"We have to make sure that
the stimulus is significant
enough that it really gives a jolt
to the economy, that it is put-
ting people back to work, that it
is making investments, that it is
restoring some confidence in the
business community that, in fact,
their products and services are
goingto have customers," Obam
said Monday as he announced his
economic team.
Declining repeatedly to esti-
mate the cost of the plan, Obama
said, "It's goingto be costly."
Indeed, many economists now
agree that in order to jump-start
the anemic economy, Obama
needs to put in place a rescue
costing at least $300 billion to
$400 billion, or 2 percent of the
size of the economy, as measured
by the gross domestic product.
Itneedstobe"verybig,because
it's a very serious situation," said
Alice M. Rivlin, a Brookings
Institution economistand former
top budget official who has been
advising Democratic leaders on
the size and scope of the forth-
coming package. "We do need
to stimulate the economy and to
keep this snowballing recession
from getting worse."
Democratic congressional
leaders have been pressing for
months for another "stimulus"
plan to follow the $168 billion
package of tax rebates enacted
in February. Ina statement Mon-
day praising Obama's economic
team, House Speaker Nancy
Pelosi, D-Calif., said President
George W. Bush and congressio-
nal Republicans should agree to a
second economic aid plan before
year's end, to "provide a down
payment on new job-creating
infrastructure investments, help
states avoid deep cuts to health
care and other essential services,
and provide nutrition assistance
to struggling families."
But there's little chance that
Bush and the Democratic Con-
gress will reach a breakthrough
on such a measure. Instead,
Obama's team and Democratic
leaders are hard at work on Plan
B: The new Congress that con-
venes in early January will move
swiftly on an aid package, ready-
ing it for Obama's signature as
one of his first acts after being
inaugurated.
Themeasureislikelytoinclude
a beefed-up version of a $61 bil-
lion stimulus plan the House
passed in September, which
included $37 billion in spending
on public works projects such
as road-building and water and
sewage projects; about $15billion
in aid to cash-strapped states to
guard against cuts to health care
for the poor; a $3 billion boost
in food stamp aid; and a $7 bil-
lion jobless benefits extension for
unemployed workers whose pay-
ments would otherwise run out.
Those elements are likely to
grow, given that economic con-
ditions have worsened since
that legislation was drafted, said
people familiar with the emerg-
ing plan.
Obama has also embraced
calls for a "green jobs" program
that invests as much as $100 bil-
lion in projects to slash harmful
emissions. This could include
projects such as retrofitting
buildings to make them more
energy-efficient, upgrading the
electrical grid and improving
mass transit.
"It turns out that putting
money into green technologies...
has a very large positive employ-
ment effect relative to tax cuts,"
said Robert Pollin, a University
of Massachusetts-Amherst econ-
omist who has written exten-
sively on what he calls the "green
recovery."
"It's very efficient in terms of
creating jobs for a given amount
of spending, and it has the added
benefit that the short-term
effects are compatible with long-
term needs in the economy," Pol-
lin said.
Students board the Michigan Student Assembly-sponsored Airbus on State Street for a ride to the airport yesterday. The service
bus picks up students on North Campus, the Hill, and State Street approximately every 30 minutes. Tickets cost $7 to $10.
Sunni ler m.g. withhold
support for .S. withdawal act
Agreement would
allow American
troop presence
through 2011
BAGHDAD (AP) - A leader of
the largest Sunni Arab bloc in par-
liament hinted he might withhold
support for a proposed pact that
would allow American troops to
stay in Iraq through 2011, making
it difficult for the Shiite-led gov-
ernment to win the big victory it
needs in Wednesday's vote.
A comfortable parliamentary
majority would ensure the legiti-
macy of an agreement that sets a
clear timetable for U.S. withdraw-
al after years of war and could lead
to full sovereignty for Iraq.
But intense debate and back-
room dealing continued over the
pact, which has supporters and
detractors from both Sunni and
Shiite communities jockeying for
political gain ahead of provincial
and general elections next year.
"The national division over the
agreement is very clear," said Vice
President Tariq al-Hashemi, who
leads one of three parties in a Sunni
bloc called the Iraqi Accordance
Front. "Consensus appears to be
very difficult, if not impossible," he
said Tuesday.
Al-Hashemi is a member of a
Sunni bloc that seeks a national
referendum on the U.S.-Iraqi secu-
rity pact and other concessions in
exchange for its support for the
agreement, a position that Prime
Minister Nouri al-Maliki has
described as political blackmail.
Even if parliament passes the
deal - only the barest of majori-
ties would do the trick - it faces
an additional hurdle because the
three-man Presidential Council,
which includes al-Hashemi, must
then ratify it. Each of the three has
veto power.
Another obstacle is that if the
agreement passes with a nar-
row majority, it could prompt the
country's most influential Shiite
cleric, Grand Ayatollah Ali al-Sis-
tani, to express his dissatisfaction
publicly. That would likely sink
the deal.
Al-Sistani is revered by Iraq's
majority Shiites. He has indicated
that the agreement was less than
ideal but would not object if it pass-
es by a comfortable majority.
If the deal is finally approved, it
would set in motion an American
withdrawal that could be accelerat-
ed if President-elect Barack Obama
makes good on a plan to pull out all
combat troops within 16 months of
moving into the White House in
January.
But the Iraqi government has
struggled to win over skeptical
lawmakers, who see an easy politi-
cal target in an agreement negoti-
ated with a foreign government
that has forces on Iraqi soil. Debate
in parliament degenerated into
scuffles last week, and Iraqi lead-
ers have delivered increasingly dire
warnings about the security and
economic threats to Iraq if the deal
does not pass.
U.S. forces are currently oper-
ating under a U.N. mandate that
expires Dec. 31. If the security
pact is rejected and the U.N. man-
date is not renewed, American
forces would be confined to their
bases, leaving Iraqi troops to fend
for themselves in a country where
security concerns have hampered
development.
"The alternatives are danger-
ous," Deputy Prime Minister Bar-
ham Saleh said. "They will push
Iraq and its young political experi-
ment into the unknown. ... Let us
not play with the future of this
country."
A senior Sunni lawmaker, Omar
Abdul-Sattar, said the Presidential
Council was working on a package
of political reforms demanded by
several blocs in exchange for their
support of the agreement.
The package would be put to a
vote in parliament Wednesday, al-
Sattarsaid. If approved, it would go
to the Presidential Council for rati-
fication, he said.
The White House expressed
hope that parliament would
approve the pact, and referred to
bombings in Baghdad a day earlier
that killed at least 22 people, by an
Iraqi count.
"If you look at the violence that
took place there yesterday - that
was indiscriminate and killed
many people - it reminds us that
the Iraqis have come a long way,"
White House press secretary Dana
Perino told reporters. "But they're
not quite there yet to be able to take
care of all their security needs on
their own, and they continue to
need our support."
Al-Maliki's Cabinet has
approved the agreement. But the
ruling coalition's main Shiite and
Kurdish partners would mus-
ter only a slight majority in the
275-seat legislature if the 44-seat
Accordance Front, also repre-
sented in the coalition, remains
opposed to the agreement.
Thirty lawmakers loyal to anti-
American Shiite cleric Muqtada al-
Sadr have rejected the deal.
The deal requires U.S. forces to
withdraw from the cities by June
30 and from the entire country by
Jan. 1, 2012, and places them under
strict Iraqi oversight. It gives. Iraq
limited judicial rights over U.S.
soldiers and civilian Pentagon
employees in the case of serious
crimes off-duty and off-base, and
bars U.S. forces from using Iraqi
territory from attacking neighbor-
ing nations.
Bush, Olmert likely to leave office
without reaching peace agreement
Time running out
in tenures of U.S.,
Israeli leaders
WASHINGTON (AP) - Israeli
Prime Minister Ehud Olmert said
Tuesday that Israel and the Pales-
tinians could reach an agreement
onthe"coreissues"oftheir century-
old conflict very soon, despite time
running out on both his and Presi-
dent George W. Bush's tenures.
Speaking to reporters a day
after his final meeting with Bush,
Olmert said the sides were very
close on the central issues and that
it was time to make decisions.
"I think we are in a situation
where we can reach that point, and
I want to reach that point," he said.
"I am ready and I hope the other
side is ready too."
Regardless, Bush and Olmert's
lofty Mideast peace goals are end-
ing with a whimper. A year ago,
almost exactly to the day, the lead-
ers announced the resumption of
peace talks to great fanfare, after
a seven-year hiatus, at a Mideast
summit hosted in Annapolis, Md.
Summit participants set an ambi-
tious target of concluding a final
peace deal by the end of 2008.
Despite frequent negotiating
sessions, Olmert and the Palestin-
ian president, Mahmoud Abbas,
have little to show for their efforts
and seem no closer to a peace icy scholar at the Woodrow Wilson
agreement than they were before Center, said "The Bush administra-
the summit. tion leaves its Arab-Israeli diplo-
Olmert said it could be done rel- macy certainly in better shape
atively soon. "To make decisions, than they got it," when President
you don't need months," he said. Bill Clinton departed and a violent
But time seems to have run out Palestinian uprising raged.
on the leaders. Bush leaves office President-elect Barack Obama
on Jan. 20 and Olmert's successor now inherits the reins, but with
will be selected three weeks later. hardline opposition leader Benja-
The prime minister announced min Netanyahu seemingly poised
plans to resign in September amid towin Israelielections in February,
corruption charges. and the Hamas militant group's
In brief comments to reporters continued control of the Gaza Strip,
before their hourlong talk in the the future of peace talks appears
oval Office, both gave off an air murky.
of nostalgia, thanking each other Besides the peace process,
profusely for their friendship and Olmert said the ongoing threat
dedication to peace, and pledging from Iran's nuclear program was
to leave behind a productive peace a central topic of his discussions
process for their successors when with Bush.
they leave office. Israel sees Iran as its biggest
"We've been through a lot national security threat, because
together during our time in office," of its development of long-range
Bush said. "We strongly believe weapons and Iranian President
that Israel will benefit by having a Mahmoud Ahmadinejad's repeat-
Palestinian state, a democracy on ed calls for the destruction of the
her border that works for peace." Jewish state. It believes Iran will
Turning to Olmert, he said: "I be capable of building a bomb by
want to thank you for the friend- 2010.
ship, and thank you for your vision. The U.N. Security Council has
And I just want you to know that I imposed three rounds of economic
believe thatvision is alive." penalties on Iran, which insists its
Speaking Tuesday, Olmert reit- nuclear program is peaceful and
erated his commitment to the two- designed to produce energy. Both
state solution and said he expected the U.S. and Israel say they hope
progress to continue after both he diplomatic pressure resolves the
and Bush leave office. standoff, but they have not ruled
Aaron David Miller, a public pol- out military action.
* E 4elevenofts.com