3/04/2009

Clinton meets Palestinian leaders in West Bank

Play Video Video:Clinton to send US envoys to Syria BBC Play Video Barack Obama Video:President Obama Promoting Long Term Recovery CBS 2 New York Play Video Barack Obama Video:Obama's agenda comes with risks, rewards AP AFP/Pool – US Secretary of State Hillary Clinton is to meet with Palestinian leaders as she pushes on with "aggressive" … RAMALLAH, West Bank (Reuters) – Secretary of State Hillary Clinton held talks on Wednesday with Palestinian leaders concerned over whether Israel's next government will commit to a U.S.-backed peace process leading to a Palestinian state.

A day after pledging the new Obama administration would always protect Israel's security, Clinton visited the Israeli-occupied West Bank to deliver a message of support for President Mahmoud Abbas's Palestinian Authority.

"We are very committed to your efforts in this leadership of President Abbas," Clinton told Prime Minister Salam Fayyad, pointman in Western-backed reconstruction plans for the Gaza Strip that freeze out the territory's Hamas Islamist rulers.

Hamas, which won a parliamentary election in 2006, violently wrested control of the Gaza Strip from Abbas's Fatah faction in 2007. The West shuns Hamas over its refusal to recognize Israel, renounce violence and accept existing interim peace deals.

Clinton is on her first visit to the region as secretary of state during a time of political transition in Israel, which held an election on February 10 that led to right-winger Benjamin Netanyahu being invited to form a government by April 3.

The Likud party leader's reluctance to commit to the creation of a Palestinian state alongside Israel, a "two-state solution" to the Middle East conflict, could put him on a collision course with the Obama White House.

Clinton met Netanyahu and other political leaders in Jerusalem on Tuesday and pledged that Washington would be "vigorously engaged" in the pursuit of a Palestinian state, an outcome she said would be in Israel's best interests.

Saleh Rafat, a member of the Palestine Liberation Organisation's Executive Committee, said Abbas would tell Clinton later in the day there would be no peace negotiations unless Israel agreed unequivocally to a two-state solution.

SETTLEMENTS

Rafat said Abbas also would urge Clinton to press Israel to halt settlement expansion in the West Bank and East Jerusalem. Palestinians fear Israeli settlements on occupied land, deemed illegal by the World Court, could deny them a viable state.

Netanyahu, mirroring the policy of the outgoing government of Prime Minister Ehud Olmert, has said he would not build new settlements but expand existing ones to accommodate the "natural growth" of their populations.

A U.S.-backed peace "road map" that has served as the foundation of Israeli-Palestinian talks that were restarted under the Bush administration in 2007 calls for a halt to all Israeli settlement activity, including "natural growth."

Bush, who was regarded by Israel as one of its best allies, brought little pressure to bear on Israeli leaders over the issue. Israel has said it intends to keep major West Bank settlement blocs in any future peace deal.

Netanyahu said on Tuesday he and Clinton found "common ground" and would cooperate.

He has enough votes in parliament to form a right-wing government but has been trying to enlist centrist partners in an apparent bid to avoid friction with Washington.

A former prime minister, Netanyahu has proposed shifting the focus of currently stalled peace negotiations from territorial issues to shoring up the Palestinian economy, a concept Palestinian leaders have rejected. He is not against setting up a Palestinian state, but says that should not be the guaranteed outcome of negotiations yet to be held with Israel.

In her talks in Jerusalem on Tuesday, Clinton also called for the consolidation of a ceasefire in the Gaza Strip, where Israel in December launched a devastating 22-day offensive in a declared bid to halt cross-border rocket attacks.

(Writing by Jeffrey Heller, Editing by Alastair Macdonald and Richard Balmforth)

Source: Obama to order gov't contracting overhaul

WASHINGTON – President Barack Obama plans to change how government contracts are awarded and who can earn them, a move his aides say would save taxpayers about $40 billion a year by making the process more competitive.

Obama is to sign a presidential memo Wednesday that changes government contracting procedures, an administration official said on the condition of anonymity in order to discuss the decision before it was announced.

Obama's directive would order Peter Orszag, director of the White House Office of Management and Budget, to work with Cabinet and agency officials to draft new contracting rules by the end of September. Those new rules, officials said, would make it more difficult for contractors to bilk taxpayers and make some half-trillion dollars in federal contracts each year more accessible to independent contractors.

During last week's White House meetings on the nation's financial future, lawmakers and officials bluntly told top Obama aides that government contracts needed to be handled in a better way. The president's own fleet of Marine One helicopters became an illustration of out-of-control spending.

Arizona Sen. John McCain, Obama's Republican rival during last year's presidential election, dryly told Obama, "Your helicopter is now going to cost as much as Air Force One."

Obama said he already had spoken with Defense Secretary Robert Gates about the fleet of 28 Marine One helicopters that is now over budget at $11.2 billion, a price that has almost doubled since the Navy started the project.

"It is an example of the procurement process gone amok, and we're going to have to fix it," Obama said last week.

Obama will say that his administration will stop outsourcing to private contractors many services that should be performed by government employees. He also pledged to open contracts to small businesses and eliminate "unnecessary" no-bid contracts that allow preferred contractors to take assignments even though they might not be the least expensive option.

In his remarks Wednesday, Obama also planned to praise McCain and Democratic Sen. Carl Levin of Michigan for their work to curb cost overruns in defense contracts. He also will acknowledge Gates' attention to the procurement process.

The administration official said Obama would not, however, sacrifice national security to save pennies. The official also said the administration plans to increase transparency and accountability provisions in contracts — a major theme of Obama's young administration.

A review of 95 defense projects by the Government Accountability Office, the auditing arm of Congress, found that the projects went over budget by $295 billion over the course of several years.

USA

Play Video Barack Obama Video:Obama's agenda comes with risks, rewards AP Play Video Barack Obama Video:Obama: Wall St. Numbers Not Reflective Of Future CBS 2 New York British Prime Minister Gordon Brown, the first European leader to visit President Obama, met with the president Tuesday ahead of an address to a joint session of Congress Wednesday. Brown's visit is meant to strengthen ties with the US in anticipation of a "global new deal" strategy Brown will present at a G-20 economic summit in London next month.

Bernard Madoff's lawyer filed court papers Monday seeking to let Madoff's wife, Ruth, keep a $7 million Manhattan penthouse and $62 million in assets that he and his client claim are "unrelated" to the securities fraud charges against the accused Wall Street broker. While awaiting trial in an alleged $50 billion Ponzi operation, Madoff is confined to the apartment.

Former Dallas Mayor Ron Kirk, President Obama's choice to be US Trade Representative, has agreed to pay an estimated $10,000 in unpaid income taxes related to speaking fees and sports tickets, the Senate Finance Committee reviewing his nomination said Monday.

Dartmouth College named Jim Yong Kim the Ivy League's first Asian-American president Monday. Born in South Korea but raised in Iowa, Dr. Kim is known as a leader in the global fight against HIV/AIDS and for his work supporting healthcare for the poor.

The number of people on probation or parole more than tripled to 5.1 million between 1982 and 2007, according to a new report by the Pew Center on the States. The study recommends gearing up community-supervision strategies to reduce recidivism.

Japanese Emperor Akihito may become the first Japanese emperor or prime minister to visit Pearl Harbor, according to the Kyodo News. A tour of the site of Japan's surprise World War II attack on the US Navy base could occur during an unofficial July stopover in Hawaii while en route to Canada.

Democrats have opened up their widest lead since 1984 in the race for voters' party identification, a Harris Poll indicates. They enjoy a 10 percentage-point lead over the GOP, a seven-point jump since 2002.

The US Tennis Association saluted Billie Jean King at an exhibition event – the Billie Jean King Cup – played Monday in New York's Madison Square Garden. The Williams sisters joined King after Serena defeated Venus 6-4, 6-3 in the final. King founded the Women's Tennis Association in 1973.

Obama tries to pump up confidence in the economy

WASHINGTON – Trying to pump up the nation's confidence, President Barack Obama said that Wall Street has been hammered so hard that "buying stocks is a potentially good deal," and he dispatched top aides to Capitol Hill to defend his plans for pulling the economy out of its deep recession. The stock market slipped ever lower, and Republicans suggested Obama was "cooking the books" in rosy recovery predictions.

After being accused for weeks of being too negative about the economy, Obama recently has shifted to a more positive tone. He and his aides still say recovery won't come quickly, but they are becoming more aggressive in declaring that the government's efforts will work.

They better work, Federal Reserve Chairman Ben Bernanke said. The country faces "a prolonged episode of economic stagnation" without bold policy moves, he told the Senate Banking Committee.

Separately, the Fed announced a long-awaited program to spur lending for autos, education, credit cards and other consumer loans by providing up to $200 billion in financing to investors to buy up the debt. If the program succeeds, it should help break economy-crippling credit clogs and make it easier for Americans to finance purchases large and small at lower rates, Bernanke said.

"What the economy requires, what the American people demand is that we move as aggressively as we can to get growth back on track," Treasury Secretary Timothy Geithner told the tax-writing House Ways and Means Committee. "I'm confident this is the right path for the country."

Republicans were not so sure, accusing the new administration of raising taxes during a recession — on many ordinary Americans as well as on the wealthy.

Underscoring the economy's weakness, Detroit's Big Three automakers reported huge U.S. sales declines for February from a year earlier — 53 percent for General Motors Corp., 48 percent for Ford Motor Co. and 44 percent for Chrysler LLC.

On Wall Street, the Dow Jones industrials lost 37 points, but stocks have been falling so fast — 300 points on Monday alone — that the new decline seemed quite modest.

Obama's plan envisions a deficit of $1.7 trillion this year followed by several more years of trillion-dollar shortfalls.

"The new administration has inherited an economic crisis unlike any we have seen in our lifetimes," White House Budget Director Peter Orszag told the House Budget Committee.

The administration acknowledges that its energy proposal would increase costs for consumers but argues that the vast majority of people will get tax breaks elsewhere in Obama's budget package.

"Now, if people don't change how they use energy, then they will face higher costs for energy," Geithner acknowledged.

Obama, meanwhile, was asked about the stock market's swoon in recent days to levels not seen since 1997.

"What I'm looking for is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing," Obama said after meeting in the Oval Office with British Prime Minister Gordon Brown.

"You know, it bobs up and down," he said, comparing stock market movements to daily tracking polls during political campaigns. "The banking system has been dealt a heavy blow," he added. "There are a lot of losses that are working their way through the system. And it's not surprising that the market is hurting as a consequence."

Sounding ever more like an analyst, he said that "profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it."

The president predicted a recovery "but it's not going to happen overnight."

He got a boost from Bernanke, who was appointed to the top Fed job in 2006 by President George W. Bush. Bernanke said Obama's recently enacted $787 billion stimulus package of increased federal spending and tax cuts should help revive consumer spending, boost factory production and "mitigate the overall loss of employment and income that would otherwise occur."

Bernanke testified that an economic recovery depends on the government's ability to stabilize weak financial markets.

Geithner and Orszag were grilled by Republicans on the tax portion of the budget.

In particular, GOP lawmakers complained about a section that would require polluters to purchase permits from the government for their greenhouse gas emissions, suggesting it would essentially impose huge new energy costs on all consumers and businesses. They also criticized a section limiting the charitable deductions that households earning over $250,000 a year can claim, saying it would burden charities.

"The president's budget increases taxes on every American, and does so during a recession," Rep. Dave Camp, R-Mich., told Geithner.

Geithner said the budget reflects what Obama views as "a deep moral imperative to make our society more just. But it's very good economic policy, too. It will mean there is again a fairer, more equitably shared tax burden on the vast majority of Americans."

Higher taxes for affluent Americans would not come until 2011 once "we are safely into recovery," Geithner said.

But some lawmakers challenged the administration's predictions for such a speedy recovery.

The budget forecasts that the economy, as measured by the gross domestic product, would shrink by just 1.2 percent this year and then snap back and grow by a solid 3.2 percent in 2010, followed by several years over 4 percent.

That's more optimistic than most private forecasts, and comes despite a new government report showing the economy contracted by 6.2 percent in late 2008, far more than the 3.2 percent drop first reported.

"It looks like somebody's cooking the books," Rep. Kevin Brady, R-Texas, told Geithner.

The Obama plan "does predict a somewhat more rapid recovery" than other forecasts, Geithner acknowledged. But, he added, "I believe this is a realistic forecast."

Questioning was pretty much along party lines. Democrats for the most part praised Obama's proposal.

"It is making the tax code more fair," Rep. John Lewis, D-Ga., told Geithner.

Obama's budget faces a difficult path through Congress because of its many controversial proposals on health care, taxes and global warming.

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Associated Press Writers Stephen Ohlemacher, Andrew Taylor, Jeannine Aversa and Jennifer Loven contributed to this report from Washington, Tom Krisher and Bree Fowler from Detroit.