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January 14, 2009 - Image 3

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The Michigan Daily, 2009-01-14

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The Michigan Daily - michigandaily.com

Wednesday, January 14, 2009 - 3A

U.S. deficit hits
record level; could
top $1 trillion
The federal government already
has run up a record deficit of $485.2
billion in just the first three months
of the current budget year. And
economists say the imbalance for the
full year could easily top $1 trillion,
pushed to that eye-popping level
by the spending the government is
likely to do to combat the recession
and the most severe financial crisis
in generations.
The Treasury Department
reported Tuesday that the deficit
for December totaled $83.6 billion, a
sharp deterioration from a year ago
when the government managed a
surplus of $48.3 billion.
All the red ink comes from the
massive spending out of the finan-
cial rescue program - $247 billion
out of $700 billion spent so far -
and a prolonged recession that has
depressed tax revenues.
The overall deficit from October
through December is the highest
on record for a first quarter and
surpasses the mark for a full budget
year of $454.8 billion set last year.
Biden: U.S.troops
not expected to
pull out of Iraq
Vice President-elect Joe Biden
assured Iraq's prime minister yester-
day that the incoming administra-
tion won't withdraw U.S. troops in a
way that threatens stability, an Iraqi
spokesman said.
Biden later traveled to one of the
major threats to that stability - the
northern city of Kirkuk. He urged
rival Arabs, Kurds and Turkomen to
make concessions to resolve peace-
fully their competing claims to the
oil-rich city.
U.S. officials issued no state-
ment about Biden's meeting with
Prime Minister Nouri al-Maliki,
which happened on the second
and final day of his visit to Iraq.
However, Iraqi government
spokesman Ali al-Dabbagh quoted
Biden as saying that President-
elect Barack Obama is commit-
ted to withdrawing from Iraq in a
manner than does not endanger the
security gains of last year.
"He said that Obama is com-
mitted to withdraw but he wants
the withdrawal to be a responsible
one. Obama does not want to waste
the security gains that have been
achieved," al-Dabbagh said.
Clinton declines
to give details on
foundation doorOs
Hillary Rodham Clinton, Presi-
dent-elect Barack Obama's choice
for secretary of state, rejected calls
yesterday for more details about
donors to her husband's founda-
tion, saying she has revealed enough
to avoid even the hint of conflicts.

An Associated Press review found
that Clinton stepped in at least a
half-dozen times on issues involv-
ing businesses and others who later
gave to the charity.
Clinton said as secretary of state
she willnot be influenced by her hus-
band's contributors, which include
foreign governments.
Richard Lugar of Indiana was
among GOP senators on the Foreign
Relations Committee pressing for
full transparency about contribu-
tors to the William J. Clinton Foun-
dation and one of its main projects,
the Clinton Global Initiative.
Blagojevich swears
in III. Senators
The state Senate that will decide
whether to throw impeached Gov.
Rod Blagojevich out of office will be
sworn in Wednesday by - who else?
- impeached Gov. Rod Blagojevich.
In an ironic, surreal scene, the
governor will preside briefly over
the chamber that will hold his polit-
ical life in its hands in less than two
weeks. The opening of a new legis-
lative session is normally an upbeat
occasion, but how the senators and
the governor will respond this time
is anyone's guess.
"On one hand, it's a time of great
celebration here in the Senate of a
new beginning and new leadership,"
said Sen. Jeffrey Schoenberg, an
Evanston Democrat. "On the other
hand, there will be no denying the
fact that the governor's participation
in the proceedings will give it a char-
acter and flavor that many members
would just as soon not experience."
- Compiled from
Daily wire reports

Obama calls on Congress for funds
President-elect asks closure. Several Democrats said his tion will blend federal spending times, despite the magnitude of the day from Federal Reserve Chair
commitments, to be made in writ- with tax cuts, and could reach $1 nation's economic woes and the man Ben Bernanke, who said in.
Congress for $350B ing, would be enough to prevent trillion in size, a measure of the challenge Obama and fellow Dem- speech in London that the emer
an embarrassing pre-inauguration nation's economic woes. ocrats confront. ing legislation could provide
bailout money drubbing for the president-elect Democratic leaders in the "It's kind of hard not to call him, "significant boost" to the sinkin


before taking power, President-
elect Barack Obama appealed to
Democratsin Congress Tuesday to
allow the use of an additional $350
billion in federal bailout funds and
vowed to veto any move to block
the money.
Obama backed up his plea with
a promise to revise elements of the
original bailout program that have
drawn widespread criticism, pledg-
ing that billions will go toward
helping homeowners facing fore-

when the Senate votes this week.
"This will be the first vote that
President-elect Obama is asking
us for. I'll be shocked and I'll be
really disappointed if he doesn't
get it," said Sen. Joseph Lieber-
man, an independent Democrat
from Connecticut.
"This is a new beginning."
Behind closed doors, Obama
also urged lawmakers to act
quickly on the massive economic
stimulus measure that his aides
have been negotiating with con-
gressional officials. The legisla-

House and Senate hope to have
the legislation ready for his signa-
ture by mid-February, and House
Speaker Nancy Pelosi and Sen-
ate Majority Leader Harry Reid
arranged a late-afternoon meet-
ing to review progress.
For Obama, attendance at the
Democrats' weekly closed-door
lunch was a homecoming of sorts,
a return to the Capitol where he
arrived as a newly elected senator
only four years ago.
Sen. Carl Levin said the ses-
sion had a sentimental tone at

'Barack.'Sohe said, 'Call me Barack
for the next couple of days,"' Levin
said with a smile
Despite its size, the economic
stimulus bill is not expected to face
heavy opposition among Demo-
crats, and Obama has won praise
from Republicans for showing a
willingness to show deference to
their concerns. Senate Republican
leader Mitch McConnell, R-Ky.,
floated a new proposal, raising the
possibility ofatwo-year elimination
of Social Security payroll taxes.
Obama got a boost during the

Bernanke also warned in
remarks prepared for the London
School of Economics that a recov-
ery wouldn't last unless other steps
were taken to stabilize the shaky
financial system.
There was plenty of controversy
surrounding Obama's decision to
tap the $350billion remainingfrom
the financial bailout program that.
Congress created last fall, when
the nation's credit markets ceased
working and plunged an already
weak economy into a tailspin.

Israel continues
offensive in Gaza

Israeli troops in
Gaza City, cease-fire
talks in Cairo
GAZA CITY, Gaza Strip (AP) -
Terrified residents ran for cover
yesterday in a densely populated
neighborhood of Gaza City as
Israeli troops backed by tanks
thrust deeper into the city and
sought Hamas fighters in alley-
ways and cellars.
On the diplomatic front, Egyp-
tian mediators pushed Hamas to
accept a truce proposal and, in a
hopeful sign, Israel sent its lead
negotiator to Cairo for "decisive"
talks on a cease-fire. U.N. Secre-
tary-General Ban Ki-moon also
headed for the region to join diplo-
matic efforts.
Israeli military officials say that
depending on what happens with
what they described as "decisive"
talks in Cairo, Israel will move
closer to a cease-fire or widen its
offensive. They spoke on condi-
tion of anonymity because they
were discussing sensitive policy
Asked if Israel's war aims had
been achieved, Israeli Defense
Minister Ehud Barak said: "Most
of them, probably not all of them."
Israeli troops now have the
coastal city of 400,000 virtually
surrounded as part of an offensive

launched Dec. 27 to end years of
Palestinian rocket attacks on its
southern towns.
Palestinian medical officials
reported at least 42 deaths from
the conflict on Tuesday through-
out Gaza.
The army said three soldiers
were wounded, including an officer
who was searching a northern Gaza
house when a bomb exploded.
Palestinian hospital officials say
more than 940 Palestinians, half of
them civilians, have been killed in
the fighting. A total of 13 Israelis,
10 of them soldiers, have died.
Palestinian rocket fire has
dropped significantly since the
offensive was launched. Some 15
rockets and mortar shells were
fired toward Israel Tuesday, caus-
ing no injuries, the army said.
Fireballs and smoke plumes
from Israelibombinghave become
a common sight in the territory of
1.4 million people, who are effec-
tively trapped because of block-
aded border crossings. Recent
fighting has focused on Gaza
City, where Israeli soldiers could
be increasingly exposed to the
treacherous conditions of urban
The operation in Tel Hawwa
neighborhood, one mile (1.5 kilo-
meters) southeast of downtown,
matched fast-paced forays into
other areas designed to avoid
Israeli casualties.

Secretary of State-designate Sen. Hillary Rodham Clinton (-N.Y.) listens toa question as she testifies on Capitol Hill is
Washington, Tuesday, Jan.13, 2009, during her confirmation hearing before the Senate Foreign Relations Committee.
revitalize foreign policy

Future diplomat to
change strategy
for Middle East
Rodham Clinton , said yesterday
that she intends to revitalize the
mission of diplomacy in American
foreign policy, calling for a "smart
power" strategy in the MiddleEast
and implicitly criticizing the Bush
administration for having down-
graded the role of arms control.
At a daylong confirmation
hearing before the Senate Foreign
Relations Committee, President-
elect Barack Obama's choice for
secretary of state sailed smoothly
through an array of non-conten-
tious questions until two Repub-
lican committee members pressed
her to take additional steps to
ensure that former President Bill
Clinton's global fundraising work
does not pose even an appearance
of conflict with her role as the
chief U.S. diplomat. She balked,
saying disclosure rules already in
place were carefully crafted and
adequate to avoid any conflict.
Clinton appeared headed for
easy confirmation. She encoun-

tered no challenges to her basic
vision for foreign policy.
Clinton, who will relinquish
her seat in the Senate when con-
firmed, spoke confidently of
Obama's intentions to renew
American leadership in the world
and to strengthen U.S. diplomacy.
"America cannot solve the most
pressing problems on our own,
and the world cannot solve them
without America," she said, her
daughter Chelsea seated behind
her in the audience. "The best
way to advance America's inter-
est in reducing global threats and
seizing global opportunities is to
design and implement global solu-
tions. This isn't a philosophical
point. This is our reality."
In laying out a general outlook
for American foreign policy under
Obama, Clinton spoke in a clear,
unhurried voice and looked at
ease. She made it plain, citing poli-
cy themes that were familiar from
Obama's presidential campaign -
and in many cases her own - that
the incoming Democratic admin-
istration wants to elevate the role
of diplomacy. She and Obama con-
tend that the Bush administration
relied too heavily on the military
to carry out foreign policy and that

it leaned too much on ideology and
too little on pragmatism.
The Foreign Relations Com-
mittee planned to vote on Clin-
ton's nomination on Thursday. If
it approves her, she could gain full
Senate confirmation as early as
Inauguration Day.
The Senate also held confirma-
tion hearings for other Obama
choices for Cabinet and top
White House positions. Appear-
ing were Peter Orszag, to head
the Office of Management and
Budget, and Robert Nabors II,
for deputy director of OMB; New
York housing official Shaun Don-
ovan, to be secretary of housing
and urban development; Steven
Chu, to head the Energy Depart-
ment; and Arne Duncan, as edu-
cation secretary.
Chu promised that if. con-
firmed as energy secretary he
will aggressively pursue poli-
cies aimed at addressing climate
change and achieving greater
energy independence by develop-
ing clean energy sources.
At his hearing, Duncan said
that the No Child Left Behind
law should stop punishing
schools where only a handful of
kids are struggling.

Iraqi officials raise
concerns over voting
Problems result implementa legally required quota
system setting aside seats for them
from Jan. 31 on the councils.
The confusion stems from the
election outcomes election law that sets guidelines
for the vote. The measure was
BAGHDAD (AP) - Iraqi offi- enacted in November after months
cials acknowledged problems of bitter debate among rival ethnic
yesterday in determining how and religious factions.
winners will be chosen in regional Members of the Independent
elections, raising concerns that High Electoral Commission,
electoral challenges could tarnish which oversees balloting, said the
the key Jan. 31 vote. law was unclear on certain points,
U.S. and Iraqi officials have including how to allocate seats
pinned their hopes on the ballot- based on the number of votes
ing to unify the country's fractious received.
ethnic and sectarian groups. But Lack of clarity has forced the
confusion about the results could commission make its own inter-
undermine that goal and provide a pretations in establishing the spe-
new source of tension. cific guidelines for the vote.
Voters in 14 of the country's 18 Commission chief Faraj al-Hai-
provinces will choose members of dari singled out the women's quota
ruling councils, which wield con- system, saying the committee had
siderable powers at the regional decided to mandate one female
level. The vote is widely seen as a winner for every two men because
dress rehearsal for national parlia- the law did not take into account
mentary elections expected by the smaller parties without female
end of the year. candidates.
One of the most contentious "The elections law says that
issues is how to ensure the fair for every four winners there is a
representation of women - with woman, but the commission had
questions arising over how to another interpretation," he said.

Obama's pick to head Treasury
Dept. failed to pay $34K in taxes

Geithner's tax bill
found by Obama
transition team
dent-elect Barack Obama's choice
to run the Treasury Department
and lead the nation's economic
rescue disclosed publicly yester-
day that he failed to pay $34,000
in taxes from 2001 to 2004, a last-
minute complication that Senate
Democrats tried to brush aside
as a minor bump on an otherwise
smooth path to confirmation.
Timothy Geithner paid most
of the past-due taxes days before
Obama announced his choice in
November, according to materi-
als released by the Senate Finance
Committee. He had paid the
remainder of the taxes in 2006,
after the IRS sent him a bill.
The still-unpaid taxes were dis-
covered by Obama's transition team
while investigatingGeithner'sback-
ground. Obama's staff told senators
about the tax issues Dec. 5.
Finance Committee Chairman
Max Baucus said he still hoped
Geithner could be confirmed on

Inauguration Day.
"These errors were not inten-
tional; they were honest mis-
takes," Baucus said after he and
other committee members met
with Geithner behind closed doors
on yesterday.
Republicansenators, whomight
be expected to raise the most sig-
nificant objections, did not imme-
diately comment.
After senators met with Geith-
ner, the panel released 30 pages
of documents detailing his tax
errors - and also how he came to
employ a housekeeper whose legal
immigrant work status had briefly
lapsed in 2005.
Senate Majority Leader Harry
Reid dismissed the events as "a
few little hiccups," and said he
was "not concerned at all" about
the impact.
Obama reiterated his support.
"He's dedicated his career to our
country and served with honor,
intelligence and distinction,"
incoming White House spokesman
Robert Gibbs said. "That service
should not be tarnished by honest
mistakes, which, upon learning of
them, he quickly addressed."
Geithner, plucked from his

job as president of the Federal
Reserve Bank of New York to
serve as Obama's treasury sec-
retary, told transition officials
and senators that he didn't know
he owed self-employment taxes
when he worked for the Interna-
tional Monetary Fund.
He failed to pay self-employ-
ment taxes for money he earned
while working for IMF from 2001
to 2003, according to materials
released by the Senate committee.
In 2006, the IRS notified him that
he owed $14,847 in self-employ-
ment taxes and $2,383 in interest
from 2003 and 2004, which he
paid after an audit. The IRS waived
penalties for those tax years.
Transition officials discovered
last fall that Geithner also had not
paid the taxes in 2001 or 2002. He
paid $25,970 in back taxes and
interest for those years several
days before Obama announced his
choice, the committee documents
Geithner and his supporters
have said his mistake was a com-
mon one for people hired by inter-
national organizations that don't
pay the employer share of Social
Security taxes.



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