The Michigan Daily - michiganclaily.com
Wednesday, January 28, 2009 - 3A
The Michigan Daily - michigandailycom Wednesday, January 28, 2009 - 3A
NEWS BRIEFS
ATLANTA
Food inspectors
didn't consider
salmonella a threat
Food regulators didn't consider
salmonella a threat to most pea-
nut products before they traced an
outbreak to a peanut butter plant in
Georgia two years ago. Officials in
the nation's top peanut-producing
state promptly began checking for
the bacteria during routine inspec-
tions, and everything went fine for
about a year.
+ Then this month, investigators
zeroed in on another Georgia plant
while probing a second bout of sal-
monella that began in the fall and
has sickened some 500 people in 43
states, and may have contributed to
at least eight deaths.
As health officials scramble to
limit the effects of the latest out-
break, food safety advocates have
renewed calls for increased test-
ing at peanut processing plants.
It's a costly and time-consuming
proposition for an inspection pro-
cess that, as an Associated Press
review of state and federal proce-
dures shows, already suffers from
a lack of manpower and transpar-
ency, and from uncertainty over
how much testing is enough.
LANSING
State senate panel
votes to lower
business tax
Michigan Republicans are again
trying to repeal a 22 percent sur-
charge added to the state's main
business tax to help resolve a bud-
get crisis 14 months ago.
The Senate Finance Committee
voted along party lines Tuesday to
send a business tax cut to the full
Senate. The GOP-led chamber may
vote as early as Wednesday.
Similar legislation approved last
year died in the Democratic-con-
trolled House. The new measure
again faces tough odds because the
state is confronting a big deficit in
the next budget.
Gov. Jennifer Granholm has
been open to reducing the Michi-
gan Business Tax in exchange for
cuts in prison spending.
WASHINGTON
Bill Clinton made
millions from
foreign sources
Former President Bill Clinton
earned nearly $6 million in speak-
ing fees last year, almost all of it
from foreign companies, accord-
ing to financial documents filed by
his wife, Secretary of State Hillary
Rodham Clinton.
The documents obtained yester-
day by The Associated Press show
that $4.6 million of the former presi-
dent's reported $5.7 million in 2008
honoraria came from foreign sourc-
es, including Kuwait's national bank,
other firms and groups in Canada,
Germany, India, Malaysia, Mexico
andPortugalandaHongKong-based
company that spent $100,000 on fed-
eral lobbyinglastyear.
Executives at many of the firms
that paid honoraria to Bill Clinton
have also donated large amounts of
money to the Clinton Foundation,
according to documents it released
last year as part of an agreement
A with Congress on Hillary Clinton's
nomination as secretary of state.
NEW YORK
John Updike, prize-
winning writer
dead at age 76
John Updike, the Pulitzer
Prize-winning novelist, prolific
man of letters and erudite chroni-
cler of sex, divorce and other
adventures in the postwar prime
of the American empire, died yes-
terday at age 76.
Updike, best known for his four
"Rabbit" novels, died of lung can-
cer at a hospice near his home in
Beverly Farms, Mass., according to
his longtime publisher, Alfred A.
Knopf.
A literary writer who frequently
appeared on best-seller lists, the
tall, hawk-nosed Updike wrote nov-
els, short stories, poems, criticism,
the memoir "Self-Consciousness"
and even a famous essay about
baseball great Ted Williams.
He released more than 50 books
in a career that started in the
1950s, winning virtually every lit-
erary prize, including two Pulit-
zers, for "Rabbit Is Rich" and
"Rabbit at Rest," and two National
Book Awards.
Compiled from
Gaily wire reports
Obama looks to GOP for compromise
President asks
Republicans to work
together for job
creation, stimulus
WASHINGTON (AP) - On
the eve of a key vote, President
Barack Obama privately promised
Republican critics he stands ready
to accept changes in $825 billion
economic stimulus legislation, and
urged lawmakers to "put politics
aside" in the interest of creating
badly needed jobs.
"The American people expect
action," Obama said Tuesday as
he shuttled between closed-door
meetings with House and Senate
Republicans on atrip to the Capitol
that blended substance with politi-
cal symbolism.
Republicans who attended the
sessions said the president did not
agree to any specific changes but
did pledge to have his aides consid-
er some that GOP lawmakers raised
dealing with additional tax relief
for businesses.
Prodded to budge on another
point, Obama said that despite
Republican opposition, he will
insist on giving relief to wage-
earners who pay Social Security
taxes but do not earn enough to owe
income tax.
In a measure of the complicated
political dynamic in Congress, one
Republican quoted the president as
saying any changes would have to
come after the House gives what
is expected to be largely party-
line approval Wednesday to the
Democratic-backed bill. The mea-
sure includes about $550 billion in
spending and roughly $275 billion
in tax cuts.
The Senate shows signs of greater
bipartisanship, including a deci-
sion in the Finance Committee on
Tuesday to add a new tax break for
upper middle-income taxpayers, at
a two-year cost of $70 billion. It was
advanced by Sen. Chuck Grassley of
Iowa, the panel's senior Republican.
Democratic leaders in both
houses have promised to have
legislation ready for Obama's sig-
nature by mid-February, and Tues-
day's developments coincided with
fresh evidence of deterioration in a
national economy seemingly grow-
ing weaker bythe day.
Housing prices tumbled by the
sharpest annual rate on record in
November, according to a closely
watched private report released
during the day, and a measure of
consumer confidence dropped to a
historic low.
Separately, the Treasury Depart-
ment announced distribution of
$386 million to 23 troubled banks,
the first awards from the federal
bailout fund since Obama took
office a week ago.
Obama traveled to and from
the Capitol in a snowy motorcade
on Tuesday, far different from the
inaugural parade seven days earlier.
This was a business trip, marking
his second reach across party lines
in as many days in keeping with a
pledge to seek bipartisan solutions
to major problems.
On Monday, he leaned on House
Democrats to jettison an item that
would make it easier for states to
provide family planning funds for
the poor under Medicaid, a pro-
vision in the legislation that had
become a target of ridicule for
Republicans. Press Secretary Rob-
ert Gibbs said Obama supports the
concept but wants it included in a
different bill.
Ironically; Democrats said delet-
ing the provision would wind up
increasing federalspending, since it
probably would mean more money
spent on higher pregnancy and
post-natal care. -
House Republican leaders wel-
comed the president a few hours
after urging their rank-and-file to
oppose the stimulus bill, and it was
far from clearthat Obama had man-
aged to pick up any GOP support
during the day.
Gibbs said the White House
expects some GOP lawmakers will
vote for the measure on Wednes-
day in the House, and indicated he
hopes there willbe more in the Sen-
ate and even more later when a final
compromise is reached.
One Republican senator, speak-
ing on condition of anonymity,
said the president pledged to Sen.
John Ensign, R-Nev., to have aides
reviev two specific proposals. One
would affect businesses that pay
down their debt. The other would
provide a temporary tax holiday for
companies that have money over-
seas and bring it back to the United
States to invest.
Obama ventured into an uncer-
tain political environment when he
stepped intothe Capitol, apresident
with high approval ratings pitching
a plan that also has been favorably
received in the polls.
I
U.S. economic
mood darkens
One of Gov. Rod Blagojevich's quotes is displayed as evidence during the second day of his impeachment trial in the Illinois
senate in Springfield, Ill. on Tuesday, Jan. 27, 2009.
FBI tapes played for jurors.
during Blagoj evich trial
Tapes document Ill.
Gov. demands for
money in exchange
for signing bills
SPRINGFIELD, Ill. (AP) -
Gov. Rod Blagojevich was hun-
dreds of miles away but his voice
boomed through the Illinois Sen-
ate's chambers yesterday as his
impeachment jurors listened to
FBI wiretaps of conversations in
which he seems to demand cam-
paign contributions in exchange
for signing legislation.
One person on the recordings
assures Blagojevich that a horse-
racing track owner "is good for
it" and just has to decide "what
accounts to get it out of." Anoth-
er assures him the track owner
knows he must keep his "com-
mitment" soon.
Blagojevich replies with com-
ments like "good" and "good
job." Legislation sought by the
racing industry had been sent to
the governor's desk, and on the
tapes, he says to reassure a rac-
ing lobbyist he hopes "to do this
so we can get together and start
picking some dates to do a bill-
signing."
Senators conducting the trial,
which Blagojevich is boycot-
ting though it could remove him
from office within days, listened
intently as the fuzzy, indistinct
conversations echoed through
the room - the heating system,
reporters typing on laptops and
the occasional cough accounting
for the only other noise.
Neither the governor nor the
others on the call - the gover-
nor's brother and chief fund-
raiser Robert Blagojevich and
former chief of staff Lon Monk,
officials say - specifically men-
tions money or any amounts.
Thegovernor was arrested last
month on a variety of corruption
charges, including scheming to
benefit from appointing Presi-
dent Barack Obama's U.S. Sen-
ate replacement and demanding
campaign contributions in
exchange for state services. He
denies any wrongdoing and nei-
ther his brother nor Monk has
been c rged.
Before the tapes were played
Tuesday, an FBI agent vouched
for the accuracy of those and
other Blagojevich quotes that
were included the federal crimi-
nal complaint against him.
Again and again, agent Daniel
Cain told state senators he had
accurately quoted Blagojevich in
a sworn affidavit filed when the
governor was arrested. At each
stage, House prosecutor David
Ellis displayed the most damn-
ing quote on a poster board.
' The affidavit quoted
Blagojevich saying his power to-
name a replacement to Obama's
vacant Senate seat was a "valu-
able thing, you just don't give it
away for nothing." Ellis asked
if that was accurate. Yes, Cain
replied.
As Blagojevich's private words
took center stage in Springfield,
the governor remained in New
York for the second day of a
media tour focused on portray-
ing the impeachment as unfair
and politically motivated.
Consumer The gloomy news initially sent
the Dow Jones industrial average
confidence down 50 lower, but by mid-afternoon it took
heart from some positive earn-
points, hits record low ings reports, finishing up about 58
points at 8,174.
NEW YORK (AP) - This is one President Barack Obama and
recession Americans aren't going to Congress are scrambling to enact
spend their way out of. a $825 billion package of increased
The Conference Board said yes- federal spending, including money
terday its Consumer Confidence for big public works projects and for
Index edged down to 37.7 this states, as well as tax cuts to revive
month, a record low, from a revised the economy.
38.6 in December. It stood at about That could encourage Ameri-
87 just a year ago. cans to spend more, but Baumohl
Americans are battered by head- believes the relief would be only
lines about massive job cuts, includ- temporary unless financial insti-
ing thousands at Home Depot, tutions become healthy enough to
Corning, General Motors and Cat- revive lending. Tighter credit has
erpillar in just the past two days,. been a challenge for shoppers and
and are still watching the values of businesses alike.
their homes and retirement funds Feder-al Reserve p6licrnakers
'dwindle. are gathering this week to exam-
"Virtually, there is no confi- ine what other tools they-can use
dence out there," said Bernard to help ease a recession that start-
7iauiiiT,-chief g o al eonsrmist ed in December 2007. They are all
at The Economic Outlook Group but certain to leave the benchmark
LLC. "Household anxiety has interest rate at its current record
reached a point that we can count low.
them out to get us out of the reces- But without the help of consumer
sion." spending, which accounts for more
Economists believe Americans than two-thirds of economic activ-
will remain in a financial funk ity, the economy faces a slow recov-
until they start seeing fundamen- ery. In past recessions, consumers
tal improvements in the economy, had helped the economy dig itself
includingaturnaround inthe hous- out of its funk.
ing and job markets. And two other Americans"arefeelingextreme-
reports Tuesday suggested that's ly bad about jobs - both current
unlikely to come soon. and expected," said Lynn Franco,
The Labor Department director of The Conference Board
announced that state unemploy- Consumer Research Center.
ment rates shot up nationwide The Conference Board survey
in December, with Indiana and showed fewer people expect to get
South Carolina racking up the raises over the next few months, or
largest monthly increases. South for jobs to be plentiful.
Carolina's jobless rate bolted to 9.5 Nationally, the unemployment
percent, more than 2 percentage rate, which stands at a 16-year
points above the national rate. high of 7.2 percent, could hit 10
And the Standard & Poor's/ percent or more later this year or
Case-Shiller 20-city housing early next year, according to some
index dropped by a record 18.2 analysts' estimates. Michigan and
percent in November from the Rhode island already had unem-
same month a year earlier - the ployment rates in double digits
sharpest annual rate since the last month. And the pink' slips
index's inception in 2000. keep coming.
Gates: U.S. missile
strikes to continue
in1 Pakistan
Citigroup won't buy new
jet after $45B gov't bailout
Pressure from
politicians leads
bank to reject plane
NEW YORK (AP) - Citigroup
won't be getting a new corporate
jet after all.
Under pressure from President
Barack Obama, one of the nation's
largest banks reversed course,
announcing that it will not take
delivery of the jet it had planned
to purchase before the credit cri-
sis unfolded.
The canceled deal came as
many politicians voiced concern
about how banks are spending
government bailout money.
The White House reached
out to Citigroup on Monday to
reiterate Obama's position that
such jets are not "the best use of
money at this point," calling them
"outrageous" spending for a com-
pany getting taxpayer dollars,
said a White House official who
spoke on condition of anonymity
because the official was describ-
ing private conversations.
In a statement late Mon-
day, Citigroup Inc. said it paid a
deposit in 2005 to acquire the jet.
The New York-based bank said jt
did not plan to use government
money for the purchase, and it
noted that any cancellation of the
deal would probably lead to mul-
timillion-dollar penalties.
On Monday, the New York Post
reported that Citi was set to take
possession of the jet even after
receiving $45 billion from the
government.
The government is also provid-
ing guarantees on hundreds of
billions of dollars of Citi invest-
ments in mortgages and other
troubled investments.
With the cancellation of the jet
deal, a deposit on the plane will
be lost, but is recoverable once the
jet is sold, according to a person
familiar with the situation. Citi
was in the process of purchasing
a Dassault Falcon 7X for $50 mil-
lion, the person said.
Citi is also planning to cut
the number of corporate jets
in its existing fleet from five to
two, said the person, who also
spoke on condition of anonymity
because the details have not been
made public.
Corporate jets have become
controversial during the credit
crisis as critics of large companies
question the cost of owning and
operating the aircraft especially
for businesses receiving govern-
ment help.
In November, executives of
automakers Ford Motor Co., Gen-
eral Motors Corp. and Chrysler
LLC were sharply criticized for
flying on corporate jets to Wash-
ington to ask Congress for federal
bailout money.
Amid the credit woes, Citi
has been working to streamline
its operations and shed assets to
regain profitability. The bank has
posted five consecutive quarterly
losses, including a fourth-quarter
loss of $8.29 billion.
Earlier thismonth,Citireached
a deal to sell a majority stake in
its Smith Barney brokerage unit
to Morgan Stanley. xCiti has also
announced plans to split its oper-
ations into two units, separating
its traditional banking businesses
from its riskier operations.
Citi may have to wait a while
to recover its deposit on the can-
celed jet deal, as the market for
corporate aircraft has softened
with the economy.
Before the jet market cooled
last year, speculators sometimes
placed orders with no intention
of taking delivery of the plane.
They would sell their position
in line. ;
22 people killed
in attacks last week
WASHINGTON (AP) - Presi-
dent Barack Obama is retaining a
powerful but controversial weapon
left over from the Bush administra-
tion's war on terror: Predator mis-
sile strikes on Pakistan.
Defense Secretary Robert Gates
signaled to senators yesterday that
missile strikes will continue. He
did not directly refer to the Preda-
tor hunt-and-kill dronwe program
but said the U.S. would continue to
strike at al-Qaida inside Pakistan
along its border with Afghanistan.
But senior Obama administra-
tion and Capitol Hill officials say
the Predator strikes are effective,
and there is no plan to discontinue
the program.
The Predator attacks have
strained U.S. relations with Paki-
stan, which has urged Obama to
halt them.
Pakistan was struck last week
by missiles that killed at least 22
people. The strike was part of a
continuing wav of more than 30
missile attacks since August.
In testimony Tuesday to the
Senate Armed Services Commit-
tee, Gates said Obama and former
President George W. Bush were
twinned in their efforts to pursue
al-Qaida.
"Both President Bush and Presi-
dent Obama have made clear that
we will go after al-Qaida wherever
al-Qaida is, and we will continue to
pursue them," Gates said.
"Has that decision been trans-
mitted to the 'Pakistan govern-
ment?" the panel's chairman, Sen.
Carl Levin, D-Mich., ssked.
"Yes, sir," Gates responded.
The U.S. rarely acknowledges
such missile strikes, at least some
of which are carried out with
unmanned Predator drones, used
by the Pentagon and CIA to hunt
down and kill terrorists.
A senior Obama administration
official told The Associated Press
that the Predator program would
remain, saying simply: "It works."
The comments were made on con-
dition of anonymity because the
official was not authorized to dis-
cussihe program publicly.