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March 18, 2009 - Image 3

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The Michigan Daily - michigandaily.com

Wednesday, March 18, 2009 - 3A

The Michigan Daily - michigandailycom Wednesday, March 18, 2009 - 3A

NEWS BRIEFS
WASHINGTON
Experts: universal
health care will
cost $1.5 trillion
Guaranteeing health insur-
ance for all Americans may cost
about $1.5 trillion over the next
decade, health experts say. That's
more than double the $634 billion
'down payment' President Barack
Obama set aside for health reform
in his budget, raising the prospect
of sticker shock at a time of record
federal spending.
Administration officials have
pointedly avoided providing a ball-
park estimate, saying it depends on
details to be worked out with Con-
gress.
"It's impossible to put a price tag
on the plan before even the basics
have been finalized," said White
House spokesman Reid Cherlin.
"Here's what we do know: The
reserve fund in the president's bud-
get is fully paid for and provides a
substantial down payment on the
cost of reforming our health care
system."
ANTANANARIVO, MADAGASCAR
Army gives control
to opposition leader
In one tumultuous day, Mada-
gascar's top generals handed over
control of this Indian Ocean island
nation to the opposition leader yes-
terday, hours after the president
himself stepped down and tried to
put the military in charge.
In a ceremony broadcast from
a military camp in the capital,
Vice-Admiral Hyppolite Rarison
Ramaroson said he and two other
generals rejected President Marc
Ravalomanana's attempt to trans-
fer power to a military directorate.
Instead, Ramaroson said the mil-
itary was installing the president's
bitter rival, opposition leader Andry
Rajoelina, as the country's leader.
For months, Rajoelina - a disc
jockey turned broadcasting mag-
nate who had been mayor of Anta-
nanarivo, the capital - has been
leading anti-government rallies
and pressing Ravalomanana to step
down. Some of the protests have
led to deadly clashes.
CALGARY, Canada
Bush: Obama
"deserves my
silence"
Former President George W.
Bush said he won't criticize Presi-
dent Barack Obama because Obama
"deserves my silence," and said
he plans to write a book about the
12 toughest decisions he made in
office.
Bush declined to critique the
Obama administration yesterday in
his first speech since leaving office.
FormerVice President Dick Cheney
has said that Obama's decisions are
threatening America's safety.
"I'm not going to spend my time
criticizing him. There are plenty of
critics in the arena," Bush said. "He
deserves my silence."
Bush said he wants Obama to

succeed and said it's important that
he has that support. Talk-showhost
Rush Limbaugh has said he hoped
Obama would fail.
"I love my country a lot more
than I love politics," Bush said.
"I think it is essential that he be
helped in office."
ATLANTA, Ga.
Assisted suicide
networkleader
defends practice
A former assisted suicide net-
work leader being prosecuted in
a Georgia man's death is defend-
ing his group's practice of guiding
people who want to kill themselves
because they're suffering but not
necessarily dying.
Atleastthreeofthepeopleknown
to have committed suicide through
the Final Exit Network were not
terminally ill. In his most extensive
remarks since his arrest last month,
Ted Goodwin told The Associated
Press yesterday that people with
just months to live aren't the only
ones who should be able to seek help
committing suicide.
"These people who are termi-
nally ill are blessed in a small way
- there's a finite time for their
suffering," said Goodwin, who
stepped down as president of the
network after his arrest. "But there
are many, many people who are
doomed to suffer interminably for
years. And why should they not
receive our support as well?"
- Compiled from
Daily wire reports

Dems in Senate:
AIG bonuses
won't stand

The storefront of Ties Mexican Cafe will soon be replaced by parking space after the city purchased the building in July.

TIOS
From Page 1A
an uphill struggle financially.
"I'm sorry, I think it's just fair
and ethical and intelligent to help
us find another spot," he said. "As
far as (the city is) concerned, if
you can't open somewhere else:
tough."
AnnArbor City Councilmember
Sabra Briere (D-Ward 1), said that
there was no discussion among
council members about help-
ing Tios financially. She said the
property was offered to the city,
which purchased it for $605,000.

The city plans to use the property
for parking.
To improve business once the
move is made, Seaver said he has
plans to apply for a liquor license.
Seaver said the landlord of the
property on East Liberty would be
willing to help obtain a license.
In light of the economy, Tios'
day business has fallen to a frac-
tion of what it once was and
having a bar would hopefully
improve profits, Seaver said.
Compounding the problem are
recent layoffs at Guy C. Larcom
City Hall and The Ann Arbor
News building - both of which
are located in close proximity to

the restaurant. These changes
have taken massive bites out of
Tios' revenue, he said.
Slate, a Tios employee for seven
and a half years, said that the city
will be losing a source of revenue
if Tios can't relocate. She said
that people come from areas sur-
rounding Ann Arbor to eat at Tios
and they spend money in the city
while they are here.
"It's unbelievable at a time like
this when so many people are
becoming unemployed and your
spending dollar is shrinking that
the city would take away a source
of revenue," she said. "It makes no
sense to me at all."

Bill approved shortly
after $1.8 trillion
deficit announced
WASHINGTON (AP) - Talking
tougher by the hour, livid Demo-
crats confronted beleaguered
insurance giant AIG with an ulti-
matum Tuesday: Give back $165
million in post-bailout bonuses or
watch Congress tax it away with
emergency legislation.
Fresh details, meanwhile,
pushed AIG outrage ever high-
er: New York Attorney General
Andrew Cuomo reported that
73 separate company employees
received bonus checks of $1 mil-
lion or more last Friday. This at a
company that was failing so spec-
tacularly the government felt the
need to prop it up with a $170 bil-
lion bailout.
And while Democratic lawmak-
ers talked tax penalties, Republi-
cans declared the Democrats were
hardly blameless, accusing them
of standing by while the bonus
deal was cemented and suggesting
that Treasury Secretary Timothy
Geithner could and should have
done more.While the White House
expressed confidence in Geithner,
it was clearly placing the responsi-
bility for how the matter was han-
dled on his shoulders.
The financial bailout program
remains politically unpopular and
has been a drag on Barack Obama's
new presidency, even though the
plan began under his predecessor,
George W. Bush. The White House
is well aware of the nation's bailout
fatigue - anger that hundreds of
billions of taxpayer dollars have
gone to prop up financial institu-
tions that made poor decisions,
while many others who have done
no wrong have paid the price.
AIG chief executive Edward
Liddy can expect a verbal pummel-
ing Wednesday when he testifies
before a House subcommittee.
On Capitol Hill late Tuesday,
House Democrats directed three
powerful committees to come
up with legislation this week to
authorize Attorney General Eric
Holder to recover massive bonus
payments made by companies like
the ones paid last week by Ameri-
can International Group Inc.
Senate Democrats, meanwhile,
suggested that if the AIG execu-
tives had any integrity, they would
return the $165 million in bonus
money. One leading Democrat
even suggested they might honor-
ably kill themselves, then said he
didn't really mean it.'
Whatever the process, lawmak-
ers of all stripes said, the bonus
money belongs back in the govern-

ment's hands.
"Recipients of these bonuses
will not be able to keep all of their
money," declared Senate Majority
Leader Harry Reid in an unusually
strong threat delivered on the Sen-
ate floor.
"If you don't return it on your
own, we will do it for you," echoed
Chuck Schumer of New York.
Not all Democratic leaders were
racing in that direction. Penalizing
people with the tax code is inap-
propriate, declared Rep. Charlie
Rangel, D-N.Y., chairman of the
taxwriting Ways and Means Com-
mittee. He said, "It's difficult for
me to think of the code as a politi-
cal weapon."
Others saw the connection as
reasonable and relevant. House
Financial Services Committee
Chairman Barney Frank, D-Mass.,
noted that the government,
through the bailout, is now an 80
percent owner of the company and
suggested that was grounds to sue
to recover the bonuses.
Republicans said President
Obama and his administration
should have leaned harder on AIG
executives to reject the extra pay,
raising some speculation over Gei-
thner's future.
"I don't know if he should resign
over this," said Sen. Richard Shelby,
R-Ala. "He works for the president
of the United States. But I can tell
you, this is just another example
of where he seems to be out of the
loop. Treasury should have let the
American people know about this."
The administrationquicklymoved
to quash talk of Geithner's ouster.
White House spokesman Robert
Gibbs said Obama retains full confi-
dence in his treasury secretary.
There was a daylong rush to the
microphones on Capitol Hill - a
bipartisan campaign to out-out-
rage each other.
Sen. Chuck Grassley, R-Iowa,
led the stampede with a statement
Monday night on a radio show that
AIG executives should either return
the money or commit suicide in
what he described as the Japanese
style of taking responsibility. He
spent much of Tuesday backtrack-
ing but still calling for corporate
titans to take responsibility for
grievous errors in judgment.
Other Republicans said Demo-
cratic leaders last month killed a
plan that would have forced finan-
cial institutions to compensate
taxpayers if they paid their execu-
tives large bonuses after receiving
federal bailout money.
Sen. Olympia Snowe, R-Maine,
a co-sponsor of the amendment to
Obama's stimulus bill, said strik-
ing it "left open an escape hatch of
golden parachutes for top execu-
tives on Wall Street."

IRS Commissioner Douglas Shulman arrives on Capitol Hill in Washington, yesterday, to testify before the Senate Finance
Committee hearing on tax issues related to Ponzi schemes.
Ma dof victims won't pay taxes
on lost investment earnings

IRS Commissioner
sets new guidelines
for Ponzi Scheme
victims

Determining the amount
and timing of losses from Ponzi
schemes is "factually difficult"
and it can take years to determine
the prospects for recovering the
lost money, he noted. -
Sen. Charles Schumer, D-N.Y.,
a member of the Finance Com-

have sided with the victims,"
Schumer said. "These victims
were not only sophisticated finan-
cial professionals, but also ordi-
nary people who believed they
were making safe, responsible
investments for their future. The
steps announced today mean vic-
tims won't owe taxes on income
they never received."
If deductions claimed this year
result in a "net operating loss" for
taxpayers, meaning they would
owe no taxes, they can apply
excess deductions to prior years.

WASHINGTON (AP) - The mittee who has been pushint
Internal Revenue Service issued for tax relief for victims of Ponz
guidelines yesterdaythatwillallow schemes, said that with the ne
tax relief and refunds for some guidelines the IRS "has done th
Bernard Madoff victims who were right thing here."
levied for investment earnings that "In most every area where
turned out to be nonexistent. there was a major dispute, the)
IRS Commissioner Douglas
Shulman told Congress the new
guidelines are for taxpayers who A i AT Ai
have suffered losses from Ponzi GMAT GR i LSAT
investment schemes such as the.
massive Madoff swindle. 1
He said the guidelines will
apply to victims of all Ponzi
schemes - financial scams in
which early investors are paid
returns from money put in by
later investors. But given the
scope of the Madoff scandal, the
IRS wanted to establish an easy
system for investors to recover
taxes they paid on "fictitious
income," Shulman said.
Madoff investors should have
reported earnings from their
investments with him through
the years - the scheme stretched
from the early 1990s to Madoff's
arrest on Dec. 11 - and thus paid 8 6
taxes on those earnings. Given
that some of those were "phan-
tom" profits, investors have said
they shouldbe entitled to refunds
of the taxes they paid. 6
Investors in some of these cases
areentitledto a"theft-loss"deduc-
tion, not subject to the limits on
normal capital losses from invest- 4
ments, accordingto the IRS guide-
lines, Shulmantestified at aSenate
Finance Committee hearing.2 1 3
The theft-loss deduction can be
taken in the year a fraud is discov- 7 9
ered, except to the extent an inves-
tor has a "reasonable prospect" of
recovering the lost money, Shul-
man said. Investors will be able to
deduct 95 percent of their losses
immediately. If they are unable to
recover the remaining 5 percent,
they can claimthose deductions in
subsequent years.

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