Senate leader: Significant progress on bailout

Senate leader: Significant progress on bailout

Senate Banking, Housing and Urban Affairs Chairman Sen. Christopher Dodd, D-Conn., speaks to a reporter on the financial crisis Saturday, Sept. 27, 2008, on Capitol Hill in Washington.

WASHINGTON (AP) -- Congressional leaders said Saturday they hoped to reach an agreement on a multibillion-dollar bailout plan for the financial sector before the markets open Monday, even if House and Senate votes would come later.

"The goal is to come up with a final agreement by tomorrow," Senate Majority Leader Harry Reid, D-Nev., said during an unusual weekend session of Congress. "We may not be able to do that, but we're trying very hard."

He said he hoped for an announcement by 6 p.m. EDT Sunday, just hours before the Asian markets open again. "Everybody is waiting for this thing to tip a little bit too far," he said, so "we may not have another day."

President Bush expressed confidence that lawmakers soon would approve a rescue plan. He acknowledged that many Americans are frustrated and angry that up to $700 billion in tax dollars may be needed to cover Wall Street firms' mistakes.

The bailout is intended to rescue bankers from bad loans that threaten to derail the economy and plunge the country into a long depression. Lawmakers likened the situation to a major car wreck that has backed up traffic - credit, in this case - for miles. The rescue is meant to remove the wreckage so credit can start moving to borrowers again.

The main sticking point is with House Republicans. They object to several parts of the Bush administration's approach, developed largely by Treasury Secretary Henry Paulson.

Negotiators on Saturday sought to accommodate enough of their demands to entice a reasonable number of House Republicans to back the eventual plan, which is nearly certain to be unpopular with many voters.

Democrats and administration officials said they were willing to include House Republicans' idea of having the government insure distressed mortgage-backed securities - but only as an option, not a replacement for the broader idea of buying outright those toxic securities.

"There may be a way in which that could be accommodated as part of the toolbox" available to the Treasury Department, said Sen. John Thune said after Republican senators were briefed on the negotiations. "As a practical matter, that can't be the engine that drives this bill," said Thune, R-S.D.

Negotiators also discussed phasing in the program's costs. For example, after the first $350 billion is made available, Congress could try to block later amounts, which could total an additional $350 billion, if it believed the program was not working. The president presumably could veto such a move, however, requiring extra large margins in the House and Senate to override.

Some Democrats still want a provision allowing bankruptcy judges to rewrite mortgages to help homeowners avoid foreclosure. Thune said that would be "a deal-breaker" for Republicans.

The compromise legislation that seemed to be emerging Saturday "is not the proposal that we got from Secretary Paulson," Reid said. But lawmakers said it would be much closer to Paulson's original plan than to the alternative offered by House Republicans several days ago.

Some House Republicans continued to resist a plan that might move quickly once drafted and might include only modest portions of their alternative.

"There must be no rush to misjudgment regarding this critical threat to America's economic future for generations to come," said Rep. Thaddeus McCotter, R-Mich. "All Americans want responsible progress toward a positive, pro-taxpayer solution."

The debate has divided Republicans more so than Democrats, with Bush struggling to salvage the main elements of his plan from attacks by members of his own party.

Some Republicans have taunted Democrats, saying Democrats could pass the bill without GOP help because they control both the House and Senate. With the Nov. 4 election only weeks away, Democrats have refused to push anything that appears to be a sharply partisan plan, which Republicans could then use against them. Even some Republicans have defended them.

"You can't have a deal" on an issue this large when "a large part of the body" refuses to go along, Sen. Lindsey Graham. R-S.C., said in an interview.

New details emerged over the weekend of a remarkably tumultuous White House meeting on the bailout Thursday. With the session breaking up in disarray, according to two participants, Bush issued an appeal, saying, "Can't we just all go out and say things are OK?"

The group around the table, which included congressional leaders and the presidential nominees-Republican John McCain and Democrat Barack Obama -spurned the request. The participants spoke on condition of anonymity because the meeting was private.

In an Associated Press-Knowledge Networks poll, only 30 percent of those surveyed expressed support for Bush's package. Forty-five percent were opposed, with 25 percent undecided. The survey was conducted Thursday and had a margin of error or plus or minus 3.8 percentage points.

Wrong Myers shows up as Phillies fall

Wrong Myers shows up as Phillies fall

PHILADELPHIA -- The Brett Myers of July and August was the one the Phillies needed on the mound Wednesday night.

That was the pitcher who seemed unhittable at times and was almost always determined to pitch a complete game.

However, the Myers on the mound for the Phillies' 10-4 loss to the Braves at Citizens Bank Park looked more like the pitcher who struggled through the season's early months and wound up in the Minor Leagues.

And this is not a time that the Phillies can afford to see anyone struggle. Their grasp on the National League East has looked increasingly tenuous in recent days.

The Phillies began this week with a 1 1/2-game lead over the Mets. With six games to go, it looked to be Philadelphia's perfect opportunity to deal a knockout punch to any hope New York had of winning the division. Philly was playing in front of a frenzied, towel-waving home crowd against the Braves, a team it had dominated in 2008, winning 13 of their first 15 contests.

But things haven't worked out quite as easily as they might have.

"It wouldn't be the Philly way," shortstop Jimmy Rollins said. "It doesn't matter what sport -- we don't make things easy."

Three days later, the Phillies are still pushing the gas pedal to the floor with the car in neutral. They dropped two of three to the Braves, but were fortunate enough to preserve their 1 1/2-game lead over New York when the Mets fell to the Cubs on Wednesday night.

Still, manager Charlie Manuel knows a missed opportunity when he sees one.

"This time of year, with the position we're in, you can't afford to lose two or three games in a row," Manuel said.

There's plenty of scoreboard watching to do at Citizens Bank Park these days. In addition to the Mets, the Phils also will be keeping an eye on the Brewers, who are in the hunt for the NL Wild Card. Milwaukee won Wednesday to pull even with New York.

Publicly, the Phillies are professing the no-panic, one-game-at-a-time philosophy. If they are worried about the Mets, they aren't showing it to the outside world. Philadelphia's game Wednesday ended about 40 minutes before New York's, but the four big plasma TVs mounted to the ceiling of the Phillies' clubhouse remained blank and quiet in the aftermath of the loss.

"We just have to win," Myers said. "We said that from the beginning. I was a huge part of why we lost and I take full responsibility."

To be fair, though, maybe all the responsibility for Wednesday's loss shouldn't fall on Myers' shoulders.

True, he fell into his old early-season ways of allowing early runs. A leadoff single in the first inning by Josh Anderson, followed by a single by Kelly Johnson, turned into a 2-0 Braves lead. After the Phillies tied it up at 3 on home runs by Chase Utley and Ryan Howard, Myers walked Martin Prado in the fifth and allowed him to score on a Brian McCann double.

After Myers was relieved, a close game turned into a rout when Chipper Jones blasted a three-run homer off Scott Eyre later in the inning.

"It seemed like we couldn't get out of the fifth," Manuel said. "That pretty much put the game out of reach."

But the Phillies' bats, which looked so full of life when they won 10 of 11 earlier in the month, were mostly held silent for the second night in a row. After Utley's and Howard's home runs, the Phillies added only one more run when Pat Burrell scored on a passed ball in the eighth.

Still, Myers' struggles on the hill came into especially sharp focus because, after such a strong second-half resurgence, he has now been hit hard in his past two starts, posting a 15.12 ERA (14 earned runs allowed in 8 1/3 innings of work).

"I feel fine," Myers said. "Before I went down to the Minors, I had no idea what I was doing wrong. This start, I didn't have my fastball downhill. If I can't pitch with my fastball, it's tough to stay out there for a while.

"We're fine. It's going to come down to the last games like it did last year. We're enjoying every bit of it. We'll keep pounding and going out there and winning ballgames."

Milton Street Goes Directly to Jail

Milton Street Goes Directly to Jail

Milton Street, the older brother of former Philadelphia mayor John Street, has been sentenced for tax evasion.
Street was sentenced Friday afternoon to 2½ years in prison for failing to file income taxes and cheating the government out of more than $400,000 in taxes owed.

Prosecutor Jennifer Williams argued that Street ignored the law and flaunted it, living an expensive and flamboyant lifestyle. And she argued the tax cheat should get the maximum sentence, which was three years in prison.

For full story go to: http://www.kyw1060.com/

Subpoenaed Palin aides don't appear at abuse probe

Subpoenaed Palin aides don't appear at abuse probe

Alaska Senate Judiciary Committee chairman, State Sen. Hollis French, D-Anchorage, right, reads a statement on the refusal of subpoenaed witnesses for the Troopergate investigation to appear before the committee in Anchorage, Alaska Friday, Sept. 19, 2008 as Alaska State Rep. Jay Ramras, R-Fairbanks, left, and Alaska Senate Judiciary members, state Sen. Gene Therriault, R-North Pole, and Sen. Bill Bill Wielechowski, D-Anchorage, second right, listen.

ANCHORAGE, Alaska (AP) -- Seven of Alaska Gov. Sarah Palin's top aides defied subpoenas for their testimony Friday into possible abuse of power by the governor. Palin's Chief of Staff Mike Nizich and six other aides failed to appear at a legislative hearing into whether Palin abused her power when she fired her public safety commissioner this summer.

Alaska Senate Judiciary Chairman Hollis French, D-Anchorage, waited 30 minutes Friday before reading a statement that the witnesses could be found in contempt when the full Legislature convenes in January.

Alaska Attorney General Talis Colberg filed a lawsuit on behalf of the seven state workers Thursday challenging the subpoenas. He claims the committee has no jurisdiction to issue subpoenas in the investigation.

Colberg planned a news conference later Friday.

Palin fired Walt Monegan, the public safety commissioner, in July. He claims he was fired for refusing to fire a state trooper who had gone through a nasty divorce with Palin's sister.

He claims he was pressured by Palin, her husband and members of her staff to fire the trooper.

Palin denies the charge, and says he was dismissed over budget disagreements.

The Legislative Council, in a unanimous bipartisan vote, ordered an investigation into Monegan's firing, and Palin agreed to cooperate - until she was named John McCain's running mate.

Since then, Palin - through the McCain campaign - has accused lawmakers of manipulating the probe to be potentially damaging ahead of the November election.

Most witnesses under subpoena have refused to testify before the special investigator or the legislative body.

Five Republican state legislators have filed a lawsuit seeking to halt the Legislative Council's investigation.

McCain to attend debate even without bailout deal

McCain to attend debate even without bailout deal

Republican presidential candidate Sen. John McCain, R-Ariz. leaves after touring the presidential debate sites at the University of Mississippi in Oxford, Miss., Friday Sept. 26, 2008.

WASHINGTON (AP) -- Republican John McCain agreed to attend the first presidential debate Friday night even though Congress doesn't have a bailout deal, reversing an earlier decision to delay the event until Washington had taken action to address the crisis.

With less than 10 hours until the debate was scheduled to start, the McCain campaign announced that the Arizona senator would travel to the University of Mississippi. The campaign said that afterward McCain would return to Washington to continue working on the financial crisis.

Obama had always planned to attend the debate and was aboard his plane preparing to take off when McCain's announcement was made. McCain quickly moved to his own private aircraft and headed South with his wife and former New York Mayor Rudy Giuliani and his wife, Judith, on board.

The action contradicted the position McCain had taken Wednesday, when he announced, "I'm directing my campaign to work with the Obama campaign and the Commission on Presidential Debates to delay Friday night's debate until we have taken action to address this crisis."

McCain had also said he would suspend all campaign activities, but in reality the campaign just shifted to Washington while the work of trying to win the election went on.

McCain had taken a gamble with the move, trying to appear above politics and as a leader on an issue that had overshadowed the presidential campaign and given him trouble. But Democratic rival Barack Obama had not bowed to McCain's challenge, and instead questioned why the Republican nominee couldn't handle two things at once - the debate and involvement in the bailout negotiations.

An Associated Press-Knowledge Networks poll out Friday just before McCain's announcement showed the public overwhelmingly wanted the candidates to debate, 60 percent to 22 percent, with the rest undecided.

By Friday morning, it appeared McCain was looking for a face-saving way to get to the debate even though a deal had not been reached. He met with Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader John Boehner, R-Ohio, before heading to his campaign headquarters and issuing a statement that blamed others in Washington for the failure to reach an agreement.

"John McCain's decision to suspend his campaign was made in the hopes that politics could be set aside to address our economic crisis," the statement said. "In response, Americans saw a familiar spectacle in Washington. At a moment of crisis that threatened the economic security of American families, Washington played the blame game rather than work together to find a solution that would avert a collapse of financial markets without squandering hundreds of billions of taxpayers' money to bail out bankers and brokers who bet their fortunes on unsafe lending practices."

Just before McCain's announcement, Obama told reporters that he had spent Friday morning on the phone with Treasury Secretary Henry Paulson and congressional leaders and he was optimistic that progress was being made toward a bailout deal.

"At this point, my strong sense is that the best thing that I can do, rather than to inject presidential politics into these delicate negotiations, is to go down to Mississippi and explain to the American people what is going on and my vision for leading the country over the next four years," Obama told reporters aboard his campaign plane as they prepared to travel to Mississippi.

Former Arkansas Gov. Mike Huckabee, a McCain supporter, said the Republican made a "huge mistake" by even discussing canceling the debate.

"You can't just say, 'World, stop for a moment. I'm going to cancel everything,'" Huckabee told reporters Thursday night in Alabama before attending a benefit for the University of Mobile. He said it's more important for voters to hear from the presidential candidates than for them to huddle with fellow senators in Washington.

Both McCain and Obama had returned to Washington on Thursday at the urging of President Bush, who invited them to a meeting with congressional leaders at the White House. But a session aimed at showing unity in resolving the financial crisis broke up with conflicts in plain view.

McCain's campaign said the meeting "devolved into a contentious shouting match" and implied Obama was at fault - on a day when McCain said he was putting politics aside to focus on the nation's financial problems.

Democrats differed, saying the refusal of McCain and other Republicans to support the plan worked out by congressional negotiators was creating a road block.

"The insertion of presidential politics has not been helpful," Senate Majority Leader Harry Reid, D-Nev., said Friday.

When asked whether the meeting was a mistake, Obama replied, "I'm not sure it was as productive as it could have been. I think at this point it's important to just move forward."

ACORN Demands Moratorium on Forclosures in Harrisburg

Michelle Obama, Jill Biden to Campaign in the Phila. Area

Michelle Obama, Jill Biden to Campaign in the Phila. Area

Michelle Obama and Dr. Jill Biden were coming to the Philadelphia area on Wednesday.

Both were headed to Allentown, Pa. before traveling to a recreation center in the city's Kingsessing section.

Obama Spokesperson Zach Friend explains what those attending were to expect:

For the full story go to: http://www.kyw1060.com/

Dems seek to slash bailout; Bush on TV tonight

Dems seek to slash bailout; Bush on TV tonight

WASHINGTON (AP) -- Democrats won a key concession from the White House on legislation to bail out the financial industry on Wednesday, then sought to scale back the $700 billion price tag. President Bush readied a prime-time speech to rally public support for his plan to stave off a deepening economic crisis.

With the administration's original proposal deeply unpopular in Congress, top House leaders issued an upbeat statement at day's end saying that they had made progress toward revised legislation. "We are committed to continuing to work cooperatively and on a bipartisan basis to safeguard the interests of the American taxpayers," said Speaker Nancy Pelosi, D-Calif., and House Republican leader John Boehner of Ohio.

But they offered no timetable on a bailout that the administration said was needed more with each passing day.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke spent most of the day in the Capitol, shuttling between public hearings on the proposal and private meetings with lawmakers.

Presidential politics intruded, as well, when Republican John McCain said he intended to return to Washington and called on Bush to convene crisis meetings until an agreement was reached on legislation.

In their statement, Pelosi and Boehner said, "We agree that key changes should be made to the administration's initial proposal. It must include basic good-government principles, including rigorous and independent oversight, strong executive compensation standards and protections for taxpayers."

Earlier, Paulson agreed to demands from critics in both parties to limit the pay packages of Wall Street executives whose companies would benefit from the proposed bailout.

"The American people are angry about executive compensation and rightfully so," Paulson told the House Financial Services Committee. "We must find a way to address this in the legislation without undermining the effectiveness of the program."

The issue has been a much-debated point in the struggle to win congressional approval of the historic rescue of the financial industry, though the "golden parachute" money involved would be relatively insignificant compared with the huge sums being talked about.

At the same time, Democrats were asking the Bush administration to dramatically cut the size of the rescue and then come back to Congress later if they need more.

Under that plan, which was still emerging, Congress would approve a fraction of what Bush is asking for - perhaps $150 billion or $200 billion - to allow the government to begin rescuing tottering financial companies.

Pelosi has privately suggested the idea to Paulson, according to officials who spoke on condition of anonymity because the negotiations are private.

Sen. Chuck Schumer, D-N.Y., pressed Paulson on the idea Tuesday and was told it would be a "grave mistake."

Rep. Barney Frank, D-Mass., said Wednesday, "Ultimately $700 billion has to be available but ... they are making progress about how to give people some assurance that it is not going to go to $700 billion in one fell swoop."

Frank, who as chairman of the Financial Services Committee has taken a lead in the negotiations, said Paulson also "accepts the fact" that the bill will give the government an ownership stake in the companies whose bad debts are taken over, a Democratic goal.

The heart of the unprecedented plan, dramatically unveiled less than a week ago, involves the government buying up sour assets of tottering financial firms to keep them from going under and to stave off a potentially severe recession and the accompanying lost jobs and further home foreclosures.

Away from Washington, debate over the bailout became embroiled in presidential politics as Republican presidential nominee John McCain said he was returning to the capital and was asking Democratic rival Barack Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown.

Obama said the debate should go ahead.

McCain said the Bush administration's plan seemed headed for defeat and a bipartisan solution was urgently needed.

"I do not believe that the plan on the table will pass as it currently stands, and we are running out of time," he said.

Obama said the two campaigns' staffs were working on a statement the candidates might make, spelling out major points they believe the rescue legislation must include.

Bush, who says the massive government intervention is needed to stave off economic catastrophe, planned to talk to the American people Wednesday night about how the crisis affects them, said White House press secretary Dana Perino.

Wall Street, down sharply the previous two days, basically marked time, waiting for the next shoe to drop. The Dow Jones industrials declined 29 points.

The crisis is hardly limited to the United States. Bernanke, who warned senators on Tuesday that they must act or face recession, was back on Capitol Hill Wednesday saying that global financial markets are under "extraordinary stress."

Lawmakers in both parties have strenuously objected to the plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on help for beleaguered homeowners.

Paulson, who with Bernanke heard hours of withering criticism at a hearing on Tuesday, met for the second day with House Republicans, some of whom have announced their opposition to any federal bailout of the private financial markets that form the backbone of American capitalism.

Other Republicans appear to be more open to legislation, according to congressional and administration officials, although on different terms than the White House has proposed.

Still, most majority Democrats and minority Republicans say something must be done - and will be soon.

Pelosi met with administration officials and then told reporters, "We're moving in a productive direction." She declined to discuss specifics.

She has insisted Republican lawmakers must stand up for their own president's proposal, but they appear anything but eager to do so.

"It's a tough sell to most of our members," said Rep. Tom Davis, R-Va., after a closed-door meeting with Paulson and Bernanke. "It's a terrible plan, but I haven't heard anything better."

Compounding the administration's challenge, Republicans and Democrats both say Bush has lost credibility, particularly in cases where he argues there will be dire consequences if Congress doesn't act.

"They sold the war, they sold the stimulus package and some other things. It's the 'wolf at the door'" argument, Davis said.

Additionally, they want to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure.

Speaking to reporters Wednesday, Obama said the provision was a priority, but one that he'd be willing to sacrifice in the interest of a bipartisan deal.

He said he told Pelosi and Sen. Harry Reid, D-Nev., the majority leader, that the measure "is probably something that we shouldn't try to do in this piece of legislation."

Another demand, for provisions that give Congress greater authority over the bailout, have already been accepted in principle.

For their part, some Republicans have called for a suspension of the capital gains tax to free money for investment.

Conn. Democrats to debate censuring Lieberman

Conn. Democrats to debate censuring Lieberman

In this April 8, 2008 file photo Sen. Joseph Lieberman, I-Conn., addresses the Vets For Freedom on Capitol Hill in Washington. Connecticut Democrats are considering whether to ask Sen. Joe Lieberman to leave the party for speaking at the Republicans' convention and backing GOP presidential nominee John McCain.

HARTFORD, Conn. (AP) -- Connecticut Democrats are considering whether to ask Sen. Joe Lieberman to leave the party for speaking at the Republicans' convention and backing GOP presidential nominee John McCain.

The party scheduled a debate Wednesday night on a resolution that would censure Lieberman and ask the veteran politician to resign from the Democratic Party.

Lieberman was re-elected to the Senate as an independent after losing the Democratic primary in 2006 to businessman Ned Lamont, but while he calls himself an "independent Democrat" in the Senate he remains a registered Democrat and has said he has no plans to change his affiliation. The four-term senator nearly became vice president in 2000 as Al Gore's running mate.

One of several Democrats pushing for the resolution, 30-year party veteran Audrey Blondin, said Lieberman's very public support of McCain over Democratic nominee Barack Obama is hurting the state party.

"If you have someone who says they're a Democrat, who is registered as a Democrat and is a national figure supporting a candidate who is opposed to all the ideals and beliefs and positions that we hold as Democrats, he's diluting - in my opinion - the meaning of our party," she said.

Lieberman's staff did not respond to a call from The Associated Press seeking comment Wednesday, but he said on a radio show that the move toward censure surprised him.

"Honestly, I thought that was the kind of thing that happened only in the former Soviet Union," Lieberman told WICH-AM.

"I understand that people are unhappy, but, you know, I'm doing something that I really believe," he said. "I thought in this country you don't get punished for that. So, I hope that in the end, my colleagues will understand and life will go on either way."

Blondin said Lieberman's speech at the Republican National Convention, in which he praised McCain and criticized Obama, convinced her that the state's Democrats need to take a stand.

"Our point is not that Joe should in some way be prohibited from supporting McCain or speaking at the National Republican Convention. That's not the issue," Blondin said. "The issue is, he's a Democrat. And Joe, in our opinion, needs to reconsider membership in our party."

The resolution says Lieberman's actions exhibited "extraordinary disloyalty to countless Connecticut Democrats without whom his career as an elected official would never have been possible."

It calls on the party to "publicly censure and repudiate" Lieberman's words and actions and ask him to resign.

Lieberman and Sen. Bernie Sanders, a Vermont independent, have been caucusing with Democrats in Washington, giving them control of the Senate with a 51-49 majority, even though each party has 49 members. Democrats, in turn, have made Lieberman chairman of the Homeland Security and Governmental Affairs Committee.

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Palin: US could face another Great Depression

Palin: US could face another Great Depression

Republican vice presidential candidate Sarah Palin, center, talks to an unidentified man on the sidewalk near the United Nations while aides huddle nearby, Wednesday, Sept. 24, 2008 in New York.

NEW YORK (AP) -- Republican vice presidential candidate Sarah Palin said Wednesday that the United States could be headed for another Great Depression if Congress doesn't act on the financial crisis.

Palin made the comment in an interview with CBS evening news anchor Katie Couric while visiting New York to meet foreign leaders for the first time in her political career. As Palin sought to establish her credentials in world affairs, first lady Laura Bush said that Palin lacked sufficient foreign policy experience but was "a quick study."

Recent surveys have shown that Palin's popularity, while still strong, has begun to fade.

Earlier this month, an Associated Press-Yahoo News poll showed more people viewing Palin favorably than unfavorably, 47 percent to 28 percent. But an ABC News-Washington Post poll released Wednesday showed that in a two-week period, the number seeing Palin positively dropped 6 percentage points while 10 points more see her unfavorably. On Monday, a CNN-Opinion Research Corp. poll said her favorable rating dropped 4 points and her unfavorable rating rose 8 points over two weeks.

Palin has been in New York this week for a series of meetings with foreign leaders, part of an effort by Republican John McCain's presidential campaign to counter criticism that the former small-town mayor lacks the experience to be vice president, let alone president in an emergency.

The CBS interview was just her third major interview in nearly four weeks on the GOP presidential ticket. Asked whether there's a risk of another Great Depression if Congress doesn't approve a $700 billion bailout package, Palin said, "Unfortunately, that is the road that America may find itself on."

Palin said the answer to the financial crisis doesn't necessarily have to be the bailout plan that the Bush administration has proposed, but that it should be some form of bipartisan action to reform Wall Street.

"I'm ill about the position that America is in and that we have to look at a $700 billion bailout. At the same time we know that inaction is not an option and as Senator McCain has said unless this nearly trillion-dollar bailout is what it may end up to be, unless there are amendments in Paulson's proposal, really I don't believe that Americans are going to support this and we will not support this," Palin said in the interview.

Couric pressed Palin on examples of how McCain, a 26-year congressional veteran, had led the charge for more oversight.

The Alaska governor cited McCain's warnings about Fannie Mae and Freddie Mac two years ago as well as image as a maverick. Questioned again for examples, and reminded that McCain had been chairman of the Commerce Committee, Palin said, "I'll try to find you some and I'll bring them to you."

McCain has insisted Palin is ready to take over as president, but he made no mention of including her in the meetings he wants in Washington to deal with the financial crisis.

Laura Bush told CNN that she thought Palin had "a lot of really good common sense" and commended her executive experience. Asked if she thought Palin had sufficient foreign policy experience, the first lady said: "Of course she doesn't have that. You know, that's not been her role, but I think she is a very quick study, and fortunately John McCain does have that sort of experience."

Palin got a glimpse of ground zero for the Sept. 11 terror attacks in New York as her motorcade made its way downtown to a private meeting with Iraqi President Jalal Talabani. She did not respond to a reporter's question about what she thought when she passed by the 16-acre site.

Her motorcade was stuck in traffic for a few minutes along its western border, where passers-by can see cranes jutting into the sky from the base of the deep pit that once was the World Trade Center basement. Crews are building a memorial to the attacks and a 1,776-foot-tall building to replace the destroyed twin towers.

Palin met with Talabani and then with Pakistani President Asif Ali Zardari before preparing to join McCain for an evening session with Indian Prime Minister Manmohan Singh. Earlier Wednesday, Palin and McCain met jointly with Georgian President Mikhail Saakashvili and Ukrainian President Viktor Yuschenko.

The McCain campaign set up the sessions with the leaders, who were among those in town for the United Nations General Assembly.

Meanwhile, Palin's infant son and two youngest daughters headed home to Alaska after a day of quintessential New York sightseeing with their father, Todd Palin. He took the children to the tip of Manhattan to see the Statue of Liberty. The family also visited ground zero, and then ate hot dogs and soft pretzels in Central Park.

They stopped at the toy store FAO Schwarz, where daughter Piper tried on princess dresses, the campaign said.

At the start of her meeting with Talabani at a downtown hotel, the governor was overheard saying: "There's plenty to do here, isn't there? Plenty to

Dems seek to slash bailout; Bush on TV tonight

Dems seek to slash bailout; Bush on TV tonight

President Bush is silhouetted as he walks up to Air Force One for his departure from JFK International airport in New York to Washington, Wednesday, Sept. 24, 2008. The president canceled his scheduled trip to Florida for a Republican fundraiser to monitor the economy crisis.

WASHINGTON (AP) -- Democrats won a key concession from the White House on legislation to bail out the financial industry on Wednesday, then sought to scale back the $700 billion price tag. President Bush readied a prime-time speech to rally public support for his plan to stave off a deepening economic crisis.

With the administration's original proposal deeply unpopular in Congress, top House leaders issued an upbeat statement at day's end saying that they had made progress toward revised legislation. "We are committed to continuing to work cooperatively and on a bipartisan basis to safeguard the interests of the American taxpayers," said Speaker Nancy Pelosi, D-Calif., and House Republican leader John Boehner of Ohio.

But they offered no timetable on a bailout that the administration said was needed more with each passing day.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke spent most of the day in the Capitol, shuttling between public hearings on the proposal and private meetings with lawmakers.

Presidential politics intruded, as well, when Republican John McCain said he intended to return to Washington and called on Bush to convene crisis meetings until an agreement was reached on legislation.

In their statement, Pelosi and Boehner said, "We agree that key changes should be made to the administration's initial proposal. It must include basic good-government principles, including rigorous and independent oversight, strong executive compensation standards and protections for taxpayers."

Earlier, Paulson agreed to demands from critics in both parties to limit the pay packages of Wall Street executives whose companies would benefit from the proposed bailout.

"The American people are angry about executive compensation and rightfully so," Paulson told the House Financial Services Committee. "We must find a way to address this in the legislation without undermining the effectiveness of the program."

The issue has been a much-debated point in the struggle to win congressional approval of the historic rescue of the financial industry, though the "golden parachute" money involved would be relatively insignificant compared with the huge sums being talked about.

At the same time, Democrats were asking the Bush administration to dramatically cut the size of the rescue and then come back to Congress later if they need more.

Under that plan, which was still emerging, Congress would approve a fraction of what Bush is asking for - perhaps $150 billion or $200 billion - to allow the government to begin rescuing tottering financial companies.

Pelosi has privately suggested the idea to Paulson, according to officials who spoke on condition of anonymity because the negotiations are private.

Sen. Chuck Schumer, D-N.Y., pressed Paulson on the idea Tuesday and was told it would be a "grave mistake."

Rep. Barney Frank, D-Mass., said Wednesday, "Ultimately $700 billion has to be available but ... they are making progress about how to give people some assurance that it is not going to go to $700 billion in one fell swoop."

Frank, who as chairman of the Financial Services Committee has taken a lead in the negotiations, said Paulson also "accepts the fact" that the bill will give the government an ownership stake in the companies whose bad debts are taken over, a Democratic goal.

The heart of the unprecedented plan, dramatically unveiled less than a week ago, involves the government buying up sour assets of tottering financial firms to keep them from going under and to stave off a potentially severe recession and the accompanying lost jobs and further home foreclosures.

Away from Washington, debate over the bailout became embroiled in presidential politics as Republican presidential nominee John McCain said he was returning to the capital and was asking Democratic rival Barack Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown.

Obama said the debate should go ahead.

McCain said the Bush administration's plan seemed headed for defeat and a bipartisan solution was urgently needed.

"I do not believe that the plan on the table will pass as it currently stands, and we are running out of time," he said.

Obama said the two campaigns' staffs were working on a statement the candidates might make, spelling out major points they believe the rescue legislation must include.

Bush, who says the massive government intervention is needed to stave off economic catastrophe, planned to talk to the American people Wednesday night about how the crisis affects them, said White House press secretary Dana Perino.

Wall Street, down sharply the previous two days, basically marked time, waiting for the next shoe to drop. The Dow Jones industrials declined 29 points.

The crisis is hardly limited to the United States. Bernanke, who warned senators on Tuesday that they must act or face recession, was back on Capitol Hill Wednesday saying that global financial markets are under "extraordinary stress."

Lawmakers in both parties have strenuously objected to the plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on help for beleaguered homeowners.

Paulson, who with Bernanke heard hours of withering criticism at a hearing on Tuesday, met for the second day with House Republicans, some of whom have announced their opposition to any federal bailout of the private financial markets that form the backbone of American capitalism.

Other Republicans appear to be more open to legislation, according to congressional and administration officials, although on different terms than the White House has proposed.

Still, most majority Democrats and minority Republicans say something must be done - and will be soon.

Pelosi met with administration officials and then told reporters, "We're moving in a productive direction." She declined to discuss specifics.

She has insisted Republican lawmakers must stand up for their own president's proposal, but they appear anything but eager to do so.

"It's a tough sell to most of our members," said Rep. Tom Davis, R-Va., after a closed-door meeting with Paulson and Bernanke. "It's a terrible plan, but I haven't heard anything better."

Compounding the administration's challenge, Republicans and Democrats both say Bush has lost credibility, particularly in cases where he argues there will be dire consequences if Congress doesn't act.

"They sold the war, they sold the stimulus package and some other things. It's the 'wolf at the door'" argument, Davis said.

Additionally, they want to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure.

Speaking to reporters Wednesday, Obama said the provision was a priority, but one that he'd be willing to sacrifice in the interest of a bipartisan deal.

He said he told Pelosi and Sen. Harry Reid, D-Nev., the majority leader, that the measure "is probably something that we shouldn't try to do in this piece of legislation."

Another demand, for provisions that give Congress greater authority over the bailout, have already been accepted in principle.

For their part, some Republicans have called for a suspension of the capital gains tax to free money for investment.

Obama rejects McCain's call to delay debate

Obama rejects McCain's call to delay debate

Democratic presidential candidate Sen. Barack Obama, D-Ill. speaks during news conference in Clearwater, Fla., Wednesday, Sept. 24, 2008. In response to Republican John McCain's statement Wednesday that he wants to postpone Friday's debate to deal with the nation's financial problems, Obama said "it's more important than ever" that the country hear from its next president.

NEW YORK (AP) -- The economic crisis and raw politics threatened to derail the first presidential debate as John McCain challenged Barack Obama to delay the Friday forum and join forces to help Washington fix the financial mess. Obama rebuffed his GOP rival, saying the next president needs to "deal with more than one thing at once."

The White House rivals maneuvered to claim the leadership role in resolving the economic turmoil that has overshadowed their campaign six weeks before Election Day. Obama said he would proceed with his debate preparations while consulting with bailout negotiators and Treasury Secretary Henry Paulson. McCain said he would stop all advertising, fundraising and other campaign events to return to Washington and work for a bipartisan solution.

"It's my belief that this is exactly the time when the American people need to hear from the person who, in approximately 40 days, will be responsible for dealing with this mess," Obama said at a news conference in Clearwater, Fla. "It's going to be part of the president's job to deal with more than one thing at once."

But McCain said they must focus on a bipartisan solution to the nation's financial woes as the Bush administration's $700 billion bailout proposal seemed headed for defeat. If not, McCain said ominously, credit will dry up, people will no longer be able to buy homes, life savings will be at stake and businesses will not have enough money to pay workers.

"It has become clear that no consensus has developed to support the administration's proposal," McCain said. "I do not believe that the plan on the table will pass as it currently stands, and we are running out of time."

Sen. Lindsey Graham, McCain's representative in debate negotiations, said McCain will not attend the debate "unless there is an agreement that would provide a solution" to the financial crisis. Graham, R-S.C., told The Associated Press that the agreement would have to be publicly endorsed by Obama, McCain, the White House and congressional leaders, but not necessarily given final passage by the House and Senate.

Asked whether the debate could go forward if McCain doesn't show, Obama spokesman Robert Gibbs replied, "My sense is there's going to be a stage, a moderator, an audience and at least one presidential candidate."

Their competing positions came after the two senators spoke privately, each trying to portray himself as the bipartisan leader in a time of crisis.

McCain beat Obama to the punch with the first public statement. He said he had spoken to President Bush and asked him to convene a leadership meeting in Washington that would include him and Obama.

Even as McCain said he was putting the good of the country ahead of politics, his surprise announcement was clearly political. It was an attempt to try to outmaneuver Obama on an issue in which he's trailing, the economy, as the Democrat gains in polls. He quickly went before TV cameras minutes after speaking with Obama and before the two campaigns had hammered out a joint statement expressing that Congress should act urgently on the bailout.

And while McCain's campaign said he would "suspend" his campaign, it simply will move to Washington knowing the spotlight will remain on him no matter where he is.

Obama, too, made a political calculation by rejecting McCain's challenge while trying to still appear on top of the problem. Obama repeatedly stressed at his news conference that he called McCain first to propose that they issue a joint statement in support of a package to help fix the economy as soon as possible. He said McCain called back several hours later, as Obama was leaving a rally in Florida, and agreed to the idea of a statement but also said he wanted to postpone the debate and hold joint meetings in Washington.

Obama said he suggested they first issue a joint statement showing bipartisanship.

"When I got back to the hotel, he had gone on television to announce what he was going to do," Obama said.

McCain said he would return to Washington after addressing former President Clinton's Global Initiative session in New York Thursday. He canceled his planned appearance Wednesday on CBS' "Late Show With David Letterman" program and a meeting with the prime minister of India.

McCain called Senate Democratic Leader Harry Reid and House Speaker Nancy Pelosi to propose that joint meetings with Obama and congressional leadership be held quickly, according to leadership aides. Reid spokesman Jim Manley said Reid responded by reading McCain his public statement, in which he said it would not be helpful to have the candidates come back during negotiations and inject presidential politics.

The Commission on Presidential Debates and the University of Mississippi, the site of the forum, said they were moving forward with plans for the debate.

McCain's running mate, Sarah Palin, was canceling her limited campaign events. Palin said in an interview with CBS Evening News Wednesday that the country could be headed for another Great Depression if Congress doesn't reach a solution.

McCain adviser Steve Schmidt would not say how long the suspension would last but indicated it would go through the weekend, in order to reach agreement on a deal before the markets open on Monday.

McCain has struggled with how to handle the financial situation, which he might escape with modest political damage if he and Obama could reach some type of accord on the matter.

Scores of congressional Republicans have hinted this week they may oppose the proposed $700 billion bailout even though it is Bush's priority. Senate Majority Leader Harry Reid, D-Nev., pointedly suggested that Democratic lawmakers could not be expected to back it if McCain did not publicly do so.

That leaves McCain with two unpalatable choices. He can oppose a major Republican initiative that the administration says is essential to preventing a full-blown recession, and risk heavy blame if the prediction comes true. Or he can vote for an extraordinarily costly bailout, which many Americans seem to resent, just when polls show him falling farther behind Obama.

Several GOP lawmakers and strategists said they see no way that McCain can oppose the main elements of the bailout plan and present himself as a bold leader. He must say, "we need to get this done for the future of our country," said John Feehery, a former aide to top Republican lawmakers. "Country first," Feehery said, noting McCain's campaign slogan.

But McCain might reap few political rewards for such a move.

Rep. Tom Cole, R-Okla., said he has not found any Republican colleagues who say the proposed bailout "is popular in their district."

Of course, Obama also risks angry voter reactions if he supports the bailout plan. But he could frame his stand as bipartisan statesmanship, whereas McCain's vote could be spun as another example of his siding with Bush, a major impediment to his campaign.

2 Police Officers Shot in North Philadelphia, 1 Fatally; Suspect Killed at Scene

2 Police Officers Shot in North Philadelphia, 1 Fatally; Suspect Killed at Scene

Two Philadelphia police officers were shot early Tuesday afternoon in North Philadelphia during a shootout with a suspect. One of them died a short time later at Temple Hospital. A suspect was killed at the scene.

According to investigators, shots were fired about 1:45pm in the 2200 block of North Colorado Street, near 17th and Susquehanna, during a foot pursuit.

Officials say a suspect was killed at the scene (right) and the two officers -- both highway patrolmen -- were transported to Temple University Hospital.

One officer was listed in extremely critical condition with a gunshot wound of the chest; he died about 2:10pm. The other officer was shot in the hip; his condition was listed as stable and his wounds were not believed to be life-threatening.



An angry Mayor Nutter (right) made a short statement at the hospital after Officer McDonald's death was announced:

"We are deeply saddened, we are hurt, we are in pain, and we are very angry about what's going on in our city. We will not stand for it, and we will protect our officers every step along the way."

He said that he and the police department will aggressively pursue those who think that engaging in a shootout with police is a viable option.

For full story go to: http://www.kyw1060.com/

Philly's magic number to clinch playoff spot down to four

Philly's magic number to clinch playoff spot down to four

MIAMI -- Pedro Feliz, or "Pete Happy" as he's known around the Phillies' clubhouse, spread joy on Sunday.

Despite not starting, Feliz delivered with his bat and glove in a 5-2 win at Dolphin Stadium, giving the Phillies their first series victory over the Marlins this season and a 1 1/2-game cushion on the Mets in the National League East. Philadelphia also lowered its magic number to clinch a playoff spot to four.

In a season of extremes, the Phillies are peaking at the right time, while their playoff contenders have stepped aside. On Sunday, an injury to Greg Dobbs proved fortunate for the Phils.

"Happy" replaced Dobbs with the bases loaded and two outs in the seventh, after Dobbs felt a cramp in his right calf while snaring Josh Willingham's scorcher down the line. Unable to make a throw, Dobbs held the ball.

Willingham reached first and a run scored, vaulting Florida within a run. Dobbs couldn't continue.

"It grabbed on me pretty good," Dobbs said. "I couldn't push off on my right leg to get something on the throw. I didn't want to risk sailing the throw or doing something silly. I just ate it. Petey came in and closed the door for us, all is well."

Clay Condrey, one of the unheralded members of an efficient bullpen, fell behind, 2-0, on Cody Ross, but got him to ground to Feliz, who went to second for the inning-ending force play.

When manager Charlie Manuel brought both players in, he pondered inserting Condrey in the seventh spot of the order, which would've had the pitcher hitting second in the top of the eighth. With Shane Victorino scheduled to lead off, that could've meant a sacrifice situation.

Instead, he left Feliz in the seventh spot. Victorino singled. Manuel put on the sacrifice, but took it off after reliever Joe Nelson threw a ball.

Genius. Feliz homered.

"Lucky swing," Feliz said. "I try to do my best every time I go in there, but especially in those moments, that's when you want to do it. That's the time when you need it. I hope I can keep doing it."

"Feliz's home run definitely turned the momentum in the game," Manuel said. "They were right there at us, threatening, and a two-run homer became a huge hit."

Manuel and the Phillies can't do anything wrong this month. Chase Utley joined the party with a third-inning homer, his first since Aug. 22, a span of 125 plate appearances. During that span, he had recorded just five extra-base hits.

With the game tight, Feliz came through. Condrey recorded what closer Brad Lidge called "the biggest out of the game." Ryan Madson worked a spotless eighth inning a day after working out of a jam.

Then Lidge, Mr. Automatic, secured the ninth, nailing down his 40th save in as many chances and 43rd straight dating to last season. The right-hander is the only perfect closer this year and is a big reason the Phillies are 75-0 in '08 when leading after eight innings.

Good timing?

"Our timing is tremendous right now, whether it's a guy getting a cramp in his calf or what," Lidge said. "We still realize that if we start looking ahead to the postseason, we're going to be trouble. We have to keep doing what we're doing, which is to keep putting urgency on every game."

With six games to go and a magic number of four to guarantee a ticket to the playoffs, the players know they're aren't in yet.

Just close.

"We still have to play," said Jamie Moyer, who worked the first six innings and improved to 11-1 against Florida in 12 career starts. "With six games to go, we still have to play good baseball, pitch well, swing the bats and play good defense.

"We'll see where that leads us. It's nice to go into the last week of the season ahead. Hopefully we can build off that."

McCain again opposes big payouts for executives

McCain again opposes big payouts for executives

Republican presidential candidate Sen. John McCain, R-Ariz., gestures while speaking at a campaign rally, Monday Sept. 22, 2008, in Media Pa

MIDDLEBURG HEIGHTS, Ohio (AP) -- Republican presidential nominee John McCain on Tuesday renewed his insistence that the Bush administration's $700 billion bailout plan for U.S. financial markets ensure that "taxpayers' dollars don't line the pockets of executives."

The Arizona senator made his comments as Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and Securities and Exchange Chairman Chris Cox testified before the Senate Banking Committee on the need to pass quickly the massive plan to buy up bad mortgage loans from financial firms around the country. Bernanke warned skeptical senators that the economy would plunge into recession without quick action.

While members of Congress have agreed in principle on aspects of the administration's proposal, many Democrats and some Republicans, like McCain, have insisted the plan deny "golden parachutes" to executives at failing financial firms.

Neither McCain nor his Democratic rival, Illinois Sen. Barack Obama, have left the campaign trail to return to Washington to address the crisis.

"In any solution, we must see accountability, we must see transparency, and we must make sure taxpayers' dollars don't line the pockets of executives," he said.

McCain spoke briefly after touring Nova Machine Products, which supplies parts to nuclear power plants around the country. He called again for the construction of 45 new nuclear power plants by 2030, both to ease U.S. dependence on foreign oil and to create jobs in the energy sector.

He also visited campaign volunteers at Baldwin-Wallace College where he lowered expectations for his own performance in his first campaign debate with Obama in Mississippi on Friday.

"Have no doubt about the capabilities of Sen. Obama to a debate. He's very, very good," McCain said. "He was able to defeat Sen. Hillary Clinton, who, as we all know, is very accomplished. He was able to, with his eloquence, inspire a great number of Americans. These will be tough debates."

Earlier, McCain accepted the endorsement of a local chapter of the International Union of Operating Engineers, where he ignored shouted questions from reporters about the bailout proposal. McCain has not held a formal press conference since Aug. 13, but aides said he planned to take some questions from reporters before a campaign stop in Michigan later Tuesday.

Palin meets her first world leaders in New York

Palin meets her first world leaders in New York

Republican vice presidential candidate Sarah Palin, right, meets former U.S. Secretary of State Henry Kissinger at his Park Avenue offices, Tuesday, Sept. 23, 2008 in New York.

NEW YORK (AP) -- Sarah Palin met her first world leaders Tuesday. It was a tightly controlled crash course on foreign policy for the Republican vice presidential candidate, the mayor-turned-governor who has been outside North America just once.

Palin sat down with Afghan President Hamid Karzai and Colombian President Alvaro Uribe. The conversation was private, the pictures public, meant to pad her resume for voters concerned about her lack of experience in world affairs.

The self-described "hockey mom" also asked former Secretary of State Henry Kissinger for insights on Georgia, Russia, China and Iran, and she'll see more leaders Wednesday on the sidelines of the United Nations General Assembly meetings.

It was shuttle diplomacy, New York-style. At several points, Palin's motorcade got stuck in traffic and New Yorkers, unimpressed with the flashing lights, sirens and police officers in her group, simply walked between the vehicles to get across the street. Secretary of State Condoleezza Rice, three hours behind Palin in seeing Karzai, found herself overshadowed for a day as she made her own rounds.

John McCain's presidential campaign has shielded the first-term Alaska governor for weeks from spontaneous questions from voters and reporters, and went to striking lengths Tuesday to maintain that distance as Palin made her diplomatic debut.

The GOP campaign, applying more restrictive rules on access than even President Bush uses in the White House, banned reporters from the start of the meetings, so as not to risk a question being asked of Palin.

McCain aides relented after news organizations objected and CNN, which was supplying TV footage to a variety of networks, decided to pull its TV crew from Palin's meeting with Karzai.

Overheard: small talk.

Palin is studying foreign policy ahead of her one debate with Democratic vice presidential candidate Joe Biden, a senator with deep credentials on that front. More broadly, the Republican ticket is trying to counter questions exploited by Democrats about her qualifications to serve as vice president and step into the presidency at a moment's notice if necessary.

There was no chance of putting such questions to rest with photo opportunities Tuesday.

But Palin, who got a passport only last year, no longer has to own up to a blank slate when asked about heads of state she has met.

She also got her first intelligence briefing Tuesday, over two hours.

Randy Scheunemann, a longtime McCain aide on foreign policy, was close at hand during the sessions. Another adviser, Stephen Biegun, also accompanied her at each meeting and briefed reporters later in the day.

Karzai and Palin discussed some of the security challenges that still remain in Afghanistan, including cross-border insurgencies. They also talked about the need for more U.S. troops there, which both McCain and Democrat Barack Obama say is necessary, Biegun said.

With both Karzai and Uribe, Palin discussed the importance of energy security. With Uribe, the conversation also touched on the proposed U.S.-Colombian Free Trade Agreement that McCain and Palin support but Obama opposes.

Her meeting with Kissinger, which lasted more than an hour, covered a range of national security and foreign policy issues, specifically Russia, Iran and China, Biegun said.

"Gov. Palin, in these meetings, is cognizant that she is a candidate for office, that she's not, that there is a president of the United States and she is in the middle of a campaign for president of the United States," Biegun said. "So rather than make specific policy prescriptions, she was largely listening, having an exchange of views and also very interested in forming a relationship with people she met with today."

Before Palin's first meeting of the day, with Karzai, campaign aides had told reporters in the press pool that followed her they could not go into meetings where photographers and a video camera crew would be let in for pictures.

Bush and members of Congress routinely allow reporters to attend photo opportunities along with photographers, and the reporters sometimes are able to ask questions at the beginning of private meetings before they are ushered out.

At least two news organizations, including AP, objected to the exclusion of reporters and were told that the decision to have a "photo spray" only was not subject to discussion. After aides backed away from that, campaign spokeswoman Tracey Schmitt said the reporter ban was a "miscommunication."

On Wednesday, McCain and Palin are expected to meet jointly with Georgian President Mikhail Saakashvili and Ukrainian President Viktor Yuschenko. Palin is then to meet separately with Iraqi President Jalal Talabani, Pakistani President Asif Ali Zardari and Indian Prime Minister Manmohan Singh.

Palin, 44, has been to neighboring Canada and to Mexico, and made a brief trip to Kuwait and Germany to see Alaska National Guard troops.

Bernanke: Approve bailout or risk recession

Bernanke: Approve bailout or risk recession

Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington,Tuesday, Sept. 23, 2008, before the Senate Banking Committee. Ben Bernanke bluntly warned reluctant lawmakers Tuesday they risk a recession with higher unemployment and increased home foreclosures unless they act on the Bush administration's $700 billion plan to bail out the financial industry.

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke bluntly warned reluctant lawmakers Tuesday they risk a recession with higher unemployment and increased home foreclosures unless they act on the Bush administration's $700 billion plan to bail out the financial industry.

Despite the warning, influential lawmakers in both parties demanded changes in the White House-backed proposal, and conservative Republicans recoiled at the prospect of federal intervention into private capital markets.

Six weeks before the elections, both major party presidential contenders also insisted on alterations in the administration's prescription for the worst financial crisis in decades.

Bernanke's remarks about the risk of recession came in response to a question from Sen. Chris Dodd, D-Conn., who seemed eager to hear a strong rationale for lawmakers to act swiftly on the administration's unprecedented request.

"The financial markets are in quite fragile condition and I think absent a plan they will get worse," Bernanke said.

Ominously, he added, "I believe if the credit markets are not functioning, that jobs will be lost, that our credit rate will rise, more houses will be foreclosed upon, GDP will contract, that the economy will just not be able to recover in a normal, healthy way."

GDP is a measure of growth, and a decline correlates with a recession.

Dodd later spoke disparagingly of the administration's proposal. "What they have sent us is not acceptable," he told reporters after presiding over a lengthy Senate Banking Committee hearing at which Bernanke and Treasury Secretary Henry Paulson urged swift action by Congress.

Sen. Richard Shelby of Alabama, the panel's senior Republican, added, "We have got to look at some alternatives" to the administration's plan.

The legislation that the administration is seeking would allow the government to buy bad mortgages and other troubled assets held by endangered banks and financial institutions.

Getting those debts off their books should bolster the institutions' balance sheets, making them more inclined to lend and easing one of the biggest choke points in the credit crisis. If the plan works, it could help lift a major weight off the sputtering national economy.

The White House and key lawmakers have been in negotiations since the weekend on terms of the legislation. It was not clear what impact the new congressional complaints would have on the discussions.

"Nobody is happy" about the bailout request, said House Majority Leader Steny Hoyer, D-Md., although he spoke of possible passage of legislation by the weekend.

"Nobody wants to have to do this," agreed Rep. John Boehner of Ohio, the Republican leader. He said he was hopeful of a quick agreement.

Presidential politics have become part of the debate.

Sen. Barack Obama, the Democratic presidential candidate, called a news conference to urge changes in what he called the administration's "stubborn inflexibility."

He said Wall Street executives must not be allowed to walk away from the mess with multimillion-dollar severance packages, taxpayers who are bearing the risk of the bailout must benefit if it succeeds and homeowners should be able to get relief from unaffordable mortgages.

Obama's Republican opponent, Sen. John McCain, has also said he wants steps to limit the compensation of CEOs who leave financially wrecked firms.

The stakes were unmistakable.

"I understand speed is important, but I'm far more interested in whether or not we get this right," Dodd said at the hearing.

Later, he told reporters he hopes for legislation soon.

"But it is not going to be a blank check or a simple signing on to a bill that sends a blank check to this secretary or any other secretary." He noted that either Obama or McCain would probably be appointing a new treasury secretary after he takes over in the White House.

Across the Capitol complex, Vice President Dick Cheney and Jim Nussle, the administration's budget director, met privately with restive House Republicans, some of whom emerged from the session unpersuaded.

"Just because God created the world in seven days doesn't mean we have to pass this bill in seven days," said Rep. Joe Barton, R-Texas.

Added Rep. Darrell Issa, R-Calif., "I am emphatically against it."

Still, prospects for legislation seemed strong, with lawmakers eager to adjourn this week or next for the elections.

Differences include a demand from many Democrats and some Republicans to strip executives at failing financial firms of lucrative "golden parachutes" on their way out the door.

The administration balked at another key Democratic demand: allowing judges to rewrite bankrupt homeowners' mortgages so they could avoid foreclosure.

Paulson, seated next to Bernanke at the committee hearing, objected strongly when Sen. Chuck Schumer, D-N.Y., asked if $150 billion might be enough to get the program started, with a promise of more to come.

Paulson said that would be a "grave mistake," and would fail to give the markets the confidence they need to rebound.

Paulson repeatedly fielded questions from committee members asking why taxpayers should accept the burdens of a bailout.

"You worry about taxpayers being on the hook?" he replied at one point. "Guess what - they're already on the hook." Paulson suggested that the fallout from the credit crisis would hit everyone's pocketbook unless forceful action was taken. Moreover, a flawed and outdated regulatory system, which didn't catch abuses, needed to be overhauled, he said.

Despite the unresolved issues, President Bush predicted the Democratic-controlled Congress would soon pass a "a robust plan to deal with serious problems." He spoke before the United Nations General Assembly.

In his testimony before the Banking Committee, Paulson told senators that quick passage of the administration's plan is "the single most effective thing we can do to help homeowners, the American people and stimulate our economy."

But even before Paulson could speak, lawmakers expressed unhappiness, criticism of the plan and - in the case of some conservative Republicans - outright opposition.

"This massive bailout is not a solution. It is financial socialism and it's un-American," said Sen. Jim Bunning, R-Ky.

So far this year, a dozen federally insured banks and thrifts have failed, compared with three last year. The country's largest thrift, Washington Mutual Inc., is faltering.

The U.S. has taken extraordinary measures in recent weeks to prevent a financial calamity, which would have devastating implications for the broader economy. It has, among other things, taken control of mortgage giants Fannie Mae and Freddie Mac, provided an $85 billion emergency loan to insurance colossus American International Group Inc. and temporarily banned short selling of hundreds of financial stocks.

Just Because He's BLack

A white man asked his black friend, 'Are you voting for Barack Obama
just because he's black?'

The black man responded by saying, 'Why not?

Hell, in this country men are pulled over everyday just cause they're black; passed over for promotions just cause they're black; considered to be criminals just cause they're black; and there are going to be thousands of you who won't be voting for him just because he's black! However, you do not seem to have a problem with that!

This country was built with the sweat and whip off the black slaves' back, and now a descendent of those same slaves has a chance to lead the same country, where we weren't even considered to be people, where we weren't allowed to be educated, drink from the same water fountains, eat in the same restaurants, or even vote.

So yes! I'm going to vote for him! But it's not just because he's black, but because he is hope, he is change, and he now allows me to understand when my grandson says that he wants to be president when he grows up, it is not a fairy tale but a short term goal. He now sees, understands and knows that he can achieve, withstand and do ANYTHING just because he's black!'

___________

Ed Kimmel Wrote:

"Before I started taking my pictures, I NEVER would have said that "just because he's black" is a good enough reason, but I may be softening on that.

Oh, not 'just because' . . .But you really have to see the hope, the enthusiasm, the pure joy of a group of people who haven't had just a heck of a lot of hope before. "Here are a few samples."

About 1,000 more are at my Flickr.com page: www.Flickr.com/photos/MdFriendofHillary