Words from Obama - Daily Updates

[sajiv]

Obama: Signs of economic progress, strains remain

President Barack Obama said on Friday that he was seeing "glimmers of hope" across the recession-hit U.S. economy but that it still remained under severe strain.

"We've still got a lot of work to do," Obama told reporters after meeting top economic policymakers and financial regulators at the White House. "We're starting to see progress."

Obama spoke a day after encouraging data on U.S. trade and jobless claims helped Wall Street stocks end higher, while White House economic adviser Lawrence Summers predicted the economy would emerge from a sense of "freefall" in months as stimulus and rescue efforts took effect.

Obama stopped short of declaring that the recession was bottoming out, saying instead that his administration was remaining cautious in its forecasts.

But he offered a somewhat more upbeat tone than he has recently on the the state of the economy, which is locked in its worst crisis in decades. "What we're starting to see is glimmers of hope across the economy," he said.

"Over the next several weeks, you'll be seeing additional actions by the administration," he added but gave no details.

Obama made no mention of "stress tests" being conducted at 19 major U.S. banks.

The White House had said he would receive a status report on those appraisals at Friday's meeting. Attempting to assess banks' capital needs, the government is testing how they would fare under more adverse economic conditions than are expected.

Obama did, however, voice confidence that his administration was dealing with problems in both the banking system as well as non-bank financial institutions widely seen as a sector that escaped adequate regulatory scrutiny before the latest crisis.

His comments followed a briefing by Treasury Secretary Timothy Geithner, Federal Reserve Board Chairman Ben Bernanke, Federal Deposit Insurance Corp Chairman Sheila Bair, top White House economic adviser Larry Summers, Securities and Exchange Commission chair Mary Shapiro and U.S. Comptroller of the Currency John Dugan.

Obama cited improvement in small business financing and what he called a "very significant" pickup in mortgage refinancing needed to stabilize the troubled housing market.

But he added, "The economy is still under severe stress."

[sajiv]

Obama sees "glimmers of hope" in economy

President Barack Obama said on Friday the recession-hit U.S. economy was showing "glimmers of hope" despite remaining under strain and promised further steps in coming weeks to tackle the financial crisis.

"We've still got a lot of work to do," Obama told reporters after a meeting with economic and regulatory teams plus Federal Reserve Board Chairman Ben Bernanke. But he added, "We're starting to see progress."

Obama spoke a day after encouraging trade and jobless figures pushed stocks higher, and White House economic adviser Lawrence Summers predicted the economy would emerge from a sense of "freefall" by the middle of the year.

Less than three months into his presidency, Obama stopped short of declaring that the recession he inherited from predecessor George W. Bush was bottoming out.

But he offered a somewhat more upbeat tone than he has recently on the state of the economy, which is locked in its worst crisis in decades. "What we're starting to see is glimmers of hope across the economy," he said.

"Over the next several weeks, you'll be seeing additional actions by the administration," he added but gave no details.

Obama made no mention of "stress tests" being conducted at 19 major U.S. banks. The results, due at the end of April, are anxiously awaited by the financial markets.

The White House had said Obama was to receive a status report on those appraisals on Friday. Attempting to assess banks' capital needs, the government is testing how they would fare under more adverse economic conditions than are expected.

[Kalyan]

Obama wants to visit India early with wife, daughters

Prime Minister Manmohan Singh said Friday US President Barack Obama had told him that he was keen to visit India early with his entire family and build on the improving relationship with this country.

In his interaction with women journalists Friday, Manmohan Singh spoke about his meeting with the US president on the sidelines of the G-20 summit in London last week.

'From my 45 minutes with Obama, my impression was that he was very clearly interested in India. He wants to improve relations with India and build on the strong ties between the two countries for the last several years,' he said.

The prime minister said that Obama wished to come to India 'very early' with his wife, Michelle Obama. 'In fact, he said that he wants wants to bring his two daughters with him,' he said.

'Judging by my conversation I look look forward to a very fruitful relation with him,' Manmohan Singh said.

source : yahoo

[sajiv]

Obama war plan not enough: Pakistani, Afghan envoys

President Barack Obama's anti-terror escalation may not prove enough to break the back of Al-Qaeda and the Taliban, the Pakistani and Afghan envoys in Washington warned on Thursday.

Both ambassadors called on the United States and its allies to provide more cash and military tools to defeat terrorism on the battlefield and alleviate the poverty and ignorance that sustains extremist ideology.

Pakistan's Husain Haqqani welcomed the new Obama strategy, but contrasted the aid given to nations in the extremist epicenter with the multi-billion-dollar bailouts extended to US companies in distress.

"The resources that are being committed may look big to some but very frankly, I think that a company on the verge of failure is quite clearly able to get a bigger bailout than a nation that is accused of failure," he said.

"Why does Afghanistan or Pakistan get less resources allocated to solving a bigger problem (extremism) ... than say for example some failed insurance company or some car company whose real achievement is that they couldn't make cars that they could sell?"

Obama last month put Pakistan at the center of the fight against Al-Qaeda as part of a new strategy dispatching 4,000 more troops, in addition to an extra 17,000 already committed, and billions of dollars to the Afghan war.

The plan includes a focus on Al-Qaeda sanctuaries in Pakistan and boosting civilian efforts to build up both Afghanistan and Pakistan, notably in agriculture and education.

Afghan ambassador Said Jawad, speaking alongside Haqqani at a forum organised by Washington's Atlantic Council think-tank, also said Obama's new strategy marked a welcome reorganization of US goals.

But he stressed that Afghanistan needed more help for a major expansion of its security forces, from the 134,000 army troops and 82,000 police personnel foreseen in the Obama plan.

To counter the resurgent Taliban, he said, the Afghan army should number at least 250,000 and the police 150,000.

"Right now you are paying with your blood and treasure in Afghanistan by sending your sons to fight for us," Jawad said.

"The most sustainable way is to create this capacity in us," he said, insisting Afghan President Hamid Karzai's government was already tackling the endemic police corruption identified by foreign donors.
"The police force, the judicial system, was neglected for a very long time," Jawad said. "We are paying a price for that right now."

Obama on Thursday wrote to US lawmakers asking for an extra 83.4 billion dollars this year to pay for military efforts in Iraq, Afghanistan and Pakistan.

"This funding request will ensure that the full force of the United States -- our military, intelligence, diplomatic, and economic power -- are engaged in an overall effort to defeat Al-Qaeda and uproot the safe haven from which it plans and trains for attacks on the homeland and on our allies," he wrote.

Haqqani welcomed a bill introduced in the US House of Representatives that would triple economic assistance for Pakistan to $1.5 billion a year and shore up democratic rule by attacking hotbeds of extremist schooling.

The Pakistani ambassador said his government welcomed US demands for accountability for how aid money is spent, but rejected 'intrusion' by Congress through onerous conditions.

While complaining about US missile attacks on suspected militants, Haqqani acknowledged US suspicions that Pakistan's powerful Inter-Services Intelligence foments extremist groups as a counter to India's regional influence.

But he said that Pakistan, under civilian leadership, now stood united in viewing the fight against militancy as a struggle "to save the soul of our nation."

[sajiv]

Obama lets off CIA officers on torture

WASHINGTON: In 2001, in the aftermath of the September 11 attacks, CIA operatives were allowed to shackle, strip and waterboard terror suspects. Now, U.S. President Barack Obama has assured these operatives that they will not be prosecuted for their rough interrogation tactics.

At the same time, Mr. Obama's Attorney-General offered the operatives legal help if anyone else takes them to court over the harsh interrogation methods that were approved by the Bush administration.

The offer of presidential support did not extend to those outside the CIA who approved the so-called enhanced interrogation methods or any CIA officers who may have gone beyond what was allowed in four legal memos written in 2002 and 2005 that the Obama administration released Thursday.

The Bush administration memos authorised keeping detainees naked, in painful standing positions and in cold cells for long periods of time. Other techniques included depriving them of solid food and slapping them. Sleep deprivation, prolonged shackling and threats to a detainee's family also were used.

In releasing the most comprehensive accounting yet of interrogation methods that were among the Bush administration's most closely guarded secrets, Mr. Obama said he wanted to move beyond "a dark and painful chapter in our history."

Parts of the four memos were blacked out, and past and present CIA officials had pressed for larger portions of the documents to be kept secret. Some critics argued that the release of the memos would make the United States less safe.

Michael Hayden, who led the CIA under President George W. Bush, said CIA officers now would be more timid and allies would be more reluctant to share sensitive intelligence.

"If you want an intelligence service to work for you, they always work on the edge. That's just where they work," said Mr. Hayden. Now, he argued, foreign partners would be less likely to cooperate with the CIA because the release showed they "can't keep anything secret."

On the other side, human rights advocates argued that Mr. Obama should not have assured the CIA that officers who conducted interrogations would not be prosecuted if they used methods authorised by Bush lawyers in the memos. Mr. Obama disagreed, saying in a statement: "Nothing will be gained by spending our time and energy laying blame for the past."

The Bush administration memos describe the tough interrogation methods used against 28 terror suspects, the fullest government accounting of the techniques to date. They range from waterboarding — or simulated drowning — to using a plastic neck collar to slam detainees into walls.

Other methods were more psychological than violent. One technique approved, but never used, involved putting a detainee who had shown a fear of insects into a box filled with caterpillars.

The documents also offer justification for using the tough tactics.

A memo dated May 30, 2005, says that before the harsher methods were used on top Al-Qaeda detenu Khalid Sheikh Mohammed, he refused to answer questions about pending plots against the United States.

"Soon, you will know," he told them, according to the memo.

It says the interrogations later extracted details of a plot called the "second wave" to use east-Asian operatives to crash a hijacked airliner into a building in Los Angeles.

Terror plots that were disrupted, the memos say, include the alleged effort by Jose Padilla to detonate a "dirty bomb" spreading radioactive materials by means of conventional explosives.

[sajiv]

Obama drives Chavez out of limelight

Port-Of-Spain (Trinidad): Venezuela's Hugo Chavez was greeted like a rock star with onlookers biggest cheers when he arrived at a 34-nation summit but only because Barack Obama slipped through a back door.

A short while later, a roomful of dignitaries from every nation in the Americas except Cuba met the US president with thundering applause and a few whoops. Some stood up to clap.

No one else got as warm a reception, and Obama was repeatedly interrupted by applause as he promised an "equal partnership" with the region, including a bid to mend relations with Cuba.

Chavez didn't speak at the opening ceremony, and had to be content sitting quietly with the other leaders.

It was a big change from the last Summit of the Americas in 2004, when Chavez led the pack in defeating a hemispheric trade accord spearheaded by his nemesis, former US President George W Bush.

Though Chavez remains hugely popular among Latin American leftists, he has been considerably weakened by Bush's departure and Obama's arrival. He's also less powerful because his oil-rich nation can't simply buy as much goodwill now that oil prices have plunged.

Chavez's rise on the world stage in the last decade as an outspoken critic of Washington was largely due to having the perfect foil in the White House, said Marta Lagos, director of the Chile-based Latinobarometro polling firm.

[sajiv]

Obama picks Virginia technology leader for CTO post

President Barack Obama, in his weekly address Saturday, announced the appointment of Aneesh Chopra to serve as the nation's first chief technology officer.

Chopra, who is currently Virginia's secretary of technology, "will promote technological innovation to help achieve our most urgent priorities--from creating jobs and reducing health care costs to keeping our nation secure," Obama said.

At the same time, Obama also announced the appointment of executive andmanagement consultant Jeffery Zients to be the administration's chief performance officer. Zients, along with Chopra "will work closely with our chief information officer, Vivek Kundra, who is responsible for setting technology policy across the government, and using technology to improve security, ensure transparency, and lower costs," the president said.

Chopra has led his commonwealth's "strategy to effectively leverage technology in government reform, to promote Virginia's innovation agenda, and to foster technology-related economic development," according to a White House press release.

Prior to his Virginia post, Chopra was managing director for the Advisory Board Company, where he advised executives on health care operations. That likely prepared him for Obama's proposed health care reforms, which focus heavily on information technology.

At the Congressional Internet Caucus Advisory Committee's State of the Net Conference in Washington earlier this year, Chopra talked of Virginia's initiatives to improve aspects of governance in areas like health care and education.

For example, Virginia was set to debut its physics "flexbook," comprised of Web-based instructional materials that cover areas of physics in which Virginia's traditional curriculum is lacking.

"You can make information more accessible, collaborate more, and people can do more to hold their elected officials more accountable," said Chopra, who was one of a team of volunteers serving on the Obama transition's technology, innovation and government reform police working group.

Although Chopra had reportedly been under consideration for months for a job in the administration and had put in long hours helping Obama's transition team, much of the speculation around the post surrounded candidates with Silicon Valley roots, as TechCrunch points out in a post with the headline, "Obama Spurns Silicon Valley Vets."

Others, like Tim O'Reilly, are praising Chopra as the perfect candidate due to his understanding of how to build a better government with the help of technology.

Mark Rutledge, director at McAfee's public sector business and former CIO for the state of Kentucky, also had strong praise. "Aneesh Chopra is a fantastic pick, he is a visionary and a great communicator. If I was looking for one person to bring change, and create energy he's the pick," he said in a statement

Gary Shapiro, president and CEO of the Consumer Electronics Association, also commended Obama for his choice. "Chopra is an excellent selection as he served proficiently in Virginia as Secretary of Technology and also has a strong background in the private sector advising the health care industry on technology management issues," he said in a statement. "He will bring to the position real world technology and public policy experience."

[sajiv]

Obama to challenge credit card industry chiefs

WASHINGTON: US President Barack Obama will on Thursday tell US credit card industry chiefs he will push for more regulation to shield consumers
from unfair fees, punitive interest rates and predatory lending.

Obama was expected to meet heads of firms including American Express, Visa and MasterCard at the White House as he and Democrats in Congress craft new guidelines which are causing concern in the under-fire sector.

"The president believes new rules of the road for the credit card industry are needed," said Obama's special advisor Valerie Jarrett on Wednesday.

"He looks forward to having an open and productive conversation tomorrow with the representatives of the credit card industry about the impact of the current crisis on consumers."

Obama's meeting follows a previous encounter with titans of the US banking industry, which reportedly included sharp discussion on the causes of the crisis, its impact on ordinary Americans and the best way to promote recovery.

The president's spokesman Robert Gibbs said Obama wanted to ensure if "somebody gets a credit card, they don't find that their rates go up exponentially on a certain day based on fine print in a contract that no one is ever going to read.

"Or that we find out... an interest rate is charged on certain fees involved in a credit card," Gibbs said on Air Force One as Obama returned from a visit to Iowa.

Earlier Wednesday, Democrats in Congress widened their crackdown on the industry, which stands accused of tempting borrowers with easy credit in good times and clamping down hard with high rates and reduced credit lines when the economy went sour.

Members of the House of Representatives Financial Services committee voted to send a bill tightening rules on the industry to the full chamber.

New York Democratic Congresswoman Carolyn Maloney, who wrote the Credit Cardholders' Bill of Rights, said the legislation would level the playing field between cardholders and card companies.

"For too long the relationship has been one-sided; but markets function best when all sides know what they're getting into -- and these deceptive practices need to be stopped," she said.

"The Credit Cardholders' Bill of Rights brings more transparency to the contractual relationship and give consumers the tools they need to responsibly manage their own credit," Maloney said.

The legislation protects cardholders against arbitrary rate increases, ensures those who pay bills on time are not unfairly penalized and shields them from misleading terms and conditions in the small print of card contracts. It also empowers cardholders to set their own credit limits and forces card companies to fairly allocate payments.

The White House has signaled that it plans to propose some changes to the legislation before it goes before the full House for a vote where it is expected to win significant support.

Prospects of credit card reform passing the Senate are more uncertain however, with opposition to such a move significant in the 100-seat chamber where 60 votes are required to pass major legislation. A previous version of the bill, which barred such practices as retroactive rate hikes, passed overwhelmingly in the House last September but was killed off in the Senate.

Credit card firms have warned that proposed reforms could tighten an already frozen credit market which is already seen as a drag on recovery.

An administration official noted that Obama, who called for reform of the industry during his 2008 presidential campaign and while still a senator, did not want to punish the industry, merely to rein in unfair practices.

"The president recognizes that credit cards are a critical source of liquidity and can be a last line of credit during hard economic times," the official said, noting that the industry provided four trillion dollars in available credit to US consumers.

[nithyasubramanian]

Obama vows end to abusive credit card practices

Washington, April 24: President Barack Obama met top credit card executives and vowed reforms to purge their industry of abusive rate hikes and fees and to restore "strong" protections for consumers.

As millions of card holders struggle with high balances amid a deep recession, Obama said the under-fire sector played a crucial role but warned its relationship with customers was "out of balance."

"We want to preserve the credit card market, but we also want to do so in a way that eliminates some of the abuses and some of the problems that a lot of people are familiar with," Obama said.

"I think that there has to be strong and reliable protections for consumers, protections that ban unfair rate increases and forbid abusive fees and penalties," Obama said after meeting 14 executives from companies including American Express, Visa and MasterCard and a representative of the American Bankers Association (ABA).

Taking the side of consumers against unpopular banks, the president said credit card agreements should be "written in plain language" and warned against hidden conditions which trap customers with sudden rate increases or costs.

White House plans would force firms to ensure contract terms were easily accessible and provide consumers with information they need to go online to compare various services.

Officials said the industry will faced increased penalties for deceptive practices and called for greater punishments for those who break the law.

ABA president and chief executive Edward Yingling issued a statement after the meeting arguing that new rules for the industry already established by US regulators would address many issues raised by US officials and Congress.

"The card issuers are currently hard at work implementing these new rules, although the Federal Reserve itself has indicated these rules are likely to shrink credit availability and result in increased rates for some consumers.

"The goal of any additional efforts should be to achieve the right balance between enhancing consumer protections and ensuring that credit remains available to consumers and small businesses at a reasonable cost," he said.

Republicans used the meeting to slap Obama anew over his ambitious political program, which they maintain will bankrupt future generations of Americans.

"It is the height of hypocrisy for President Obama to summon credit card company CEOs to the White House woodshed when his own reckless spending and borrowing is piling debt onto the federal government?s credit card at an astronomical rate," said Republican National Committee chairman Michael Steele.

On Wednesday, Democrats in Congress widened their crackdown on the industry, which is accused of offering easy credit in good times and clamping down hard with high rates and reduced credit lines when the economy went sour.

The House of Representatives Financial Services committee voted to send a bill tightening rules on the industry to the full chamber.

courtesy : Zeenews.com

[sajiv]

Sonal Shah joins Obama administration

Houston: Indian-American Sonal Shah, who formerly led the philanthropic arm of Google, has been appointed head of the new Office of Social Innovation and Civic Participation in the Obama administration.

Members of President Obama's transition team had proposed creating an Office of Social Innovation to promote government efforts to help innovative non-profit groups and social entrepreneurs expand successful approaches to tackle pressing social problems. Widely recognised as a leading voice on global development, Ms. Shah was a member of the Obama transition project's advisory board and co-chair of a transition group that made recommendations about technology and innovation, including innovation in civil society.

Ms. Shah's appointment to the transition team was challenged by two Indo-American groups who alleged that she had ties with the VHP and Gujarat government in India.

[sajiv]

Obama wants renewable energy partnership with India

With his administration focusing on alternative sources of energy so as to reduce dependence on fossil fuel, US President Barack Obama wants to build Indo-US renewable energy partnership which would end up in benefiting not only the two countries, but also the entire world.

When Prime Minister's Special Envoy on Climate Change
Shyam Saran met the US President at the White House Tuesday evening at an official reception, Obama was quick to remind him the conversation he had in this regard with Manmohan Singh in London early this month.

India and the US should seek to build renewable energy partnership, Obama told Saran during the brief exchange they had at the reception hosted by the President at White House for the participants of the 17-nation Major Economies Forum on Energy and Climate.

"In the very brief exchange that I had with him, he (Obama) referred to his meeting with the Prime Minister Manmohan Singh in London at the time of the G-20 Summit and said how encouraged and pleased he was with the exchange of views he had with the Prime Minister on that occasion, which included an exchange of views on issue of climate change and energy security," Saran told a group of Indian journalists.

[sajiv]

Obama to prod credit card firms on fee practices

Washington: The President, Barack Obama, will weigh in on Thursday on the lending practices of US credit card companies, an issue that has triggered an outcry from consumers hit with high fees and interest rates.

Obama has joined a push by lawmakers to rein in credit card practices that his aides have labeled as "abusive" and plans to air some of his concerns at a White House meeting with 13 executives from top banks and companies that issue the cards.

Senior White House aide Valerie Jarrett said Obama, who is trying to rescue the US economy from recession and fight the financial crisis on a variety of fronts, hopes to see "new rules of the road" for the credit card industry.

[sajiv]

Obama not to attend new South African president's inauguration

Pretoria (South Africa): US President Barack Obama will not be among the heads of state attending ANC leader Jacob Zuma's inauguration as the country's fourth democratically-elected president, the foreign affairs department said on Wednesday.

Director general Ayanda Ntsaluba told the media in Pretoria that confirmations were continuing to flow in for the May 9 festivities, and so far, 21 heads of state have confirmed that they will be attending.

The foreign delegate's list would become clearer around Monday or Tuesday.

Ntsaluba said mostly their foreign ministers and special envoys would represent the 20 other countries.

According to News 24 and SACA, he would not elaborate on which heads of state would come, as it was a "sensitive matter" and there were security concerns. He did however confirm that US President Barack Obama would not be present.

Meanwhile, preparations for the approximately R 75 million inauguration at the Union Buildings were well under way with workmen busy and scaffolding scattered across the grounds.

[sajiv]

Obama says financial sector to shrink in U.S. economy

The financial sector will make up a smaller part of the U.S. economy in the future as new regulations clamp down on "massive risk-taking," President Barack Obama said in an interview published on Saturday.

Obama, whose young administration has spearheaded a raft of reforms in the banking sector as part of efforts to tackle the financial crisis, said the industry's role in the United States would look different at the end of the current recession.

"What I think will change, what I think was an aberration, was a situation where corporate profits in the financial sector were such a heavy part of our overall profitability over the last decade," he said told the New York Times Magazine.

"Part of that has to do with the effects of regulation that will inhibit some of the massive leveraging and the massive risk-taking that had become so common."

Obama said some of the job-seekers who may normally have gone to the financial sector would shift to other areas of the economy, such as engineering.

"Wall Street will remain a big, important part of our economy, just as it was in the '70s and the '80s. It just won't be half of our economy," he said.

"We don't want every single college grad with mathematical aptitude to become a derivatives trader."

The Obama administration in March proposed sweeping reforms to curb risk-taking on Wall Street and close regulatory gaps to prevent the kind of excesses that led to the worst financial crisis since the 1930s Great Depression.

The president said in the interview that better regulation would help restore confidence in the U.S. financial system.

"A more vigorous regulatory regime, I think, will help restore confidence, and you're still going to see a lot of global capital wanting to park itself in the United States," he said.

REGAINING TRUST AND CONFIDENCE

Obama expressed optimism that the market for securitized products would pick up, though he said that could take time.

The Federal Reserve, with taxpayer capital from the U.S. Treasury, is supporting consumer and real estate lending markets through a loan facility that could reach $1 trillion.

Holders of existing asset-backed and commercial mortgage-backed securities can get loans from the Fed by putting up their securities as collateral.

The facility aims to unclog frozen credit markets and jumpstart securitization.

"We're going to have to determine whether or not as a consequence of some of the steps that the Fed has been taking, the Treasury has been taking, that we see the market for securitized products restored," Obama said.

"I'm optimistic that ultimately we're going to be able to get that part of the financial sector going again, but it could take some time to regain confidence and trust."

Part of Obama's regulatory reforms include the creation of a new "systemic risk regulator" with broad powers to seize large non-bank financial firms, such as insurers, hedge funds or private equity companies, if they are deemed to threaten the stability of the financial system.

Large, "systemically important" firms would be required to hold bigger capital cushions.

Obama also said financial rules should be crafted according to what an institution actually does to avoid a regulatory gap in areas such as commercial and investment banking.

"Other countries that have not seen some of the problems in their financial markets that we have nevertheless don't separate between investment banks and commercial banks," he said, citing Canada as one example in that area.

"The experience in a country like Canada would indicate that good, strong regulation that focuses less on the legal form of the institution and more on the functions that they're carrying out is probably the right approach to take."

[sajiv]

Obama to outline international tax proposals

President Barack Obama on Monday will propose raising billions in new tax revenue by changing tax policies for U.S. firms with overseas operations, according to administration officials familiar with his plan.

In an announcement at the White House at 11:05 EDT (1505 GMT), Obama will announce a series of international tax policy and enforcement proposals that together would raise $210 billion over the next decade.

U.S. officials, who spoke on condition of anonymity, said that as part of that package Obama would propose altering provisions that allow companies to defer paying taxes on profits earned overseas. Companies would still be allowed to defer paying taxes but they would not be allowed to take deductions on expenses for overseas operations right away, as current law allows.

The administration contends the changes would encourage companies to keep jobs at home but U.S. businesses oppose such ideas, saying they would make them less competitive internationally.

[Kalyan]

Obama to crack down on business taxes

President Barack Obama plans to propose changes to tax policy certain to be unpopular with corporations with international divisions and individuals who use tax havens. Obama also plans to ask Congress for 800 new federal tax agents to enforce his broad requests.

Obama's two-piece plan, to be announced at the White House on Monday, would eliminate some tax deductions for companies that earn profits in countries with low tax rates, as well as consider US citizens who use tax havens such as the Bahamas or Cayman Islands guilty of violating US tax laws.

If Obama wins congressional approval for the changes-and he faces a challenge on Capitol Hill-it could deliver $210 billion in tax revenue over the next decade.

Treasury Secretary Timothy Geithner was to join Obama for the 11 a.m. (1500 GMT) comments.

Officials described the administration's plan ahead of the announcement on the condition of anonymity so they wouldn't upstage the president's remarks. However, they acknowledged the political challenges facing the plan. The administration won't seek a complete repeal of overseas tax benefits and, although the rule changes are narrower than some anticipated, business leaders still oppose them as a tax hike.


Obama aides countered that the plan is a step toward a massive overhaul of international financial regulations the president has promised.

In exchange, Obama said he was willing to make permanent a research tax credit that was to expire at the end of the year and is popular with businesses. Officials estimate that making the tax credits permanent would cost taxpayers $74.5 billion over the next decade.

But administration aides said 75 percent of those tax credits paid workers' wages; given the struggling economy, aides were reluctant to do anything that could add more Americans to the unemployment rolls.

It was small comfort. Companies who shelter profits in international accounts stand to lose billions if Obama's plan becomes law. Under the existing regulation, those companies pay taxes only if they bring the profits back to the US If they keep the profits offshore, they can defer paying taxes indefinitely-and many do.

Obama's plan wouldn't go into effect until 2011; Obama has said he does not want to tinker with tax revenues until his $787 billion stimulus plan has run its course. The proposals, however, were far from complete, and aides said this was just one piece of the administration's plan for sweeping overhaul.





source : economic times

[Kalyan]

First up: Companies won't be able to write-off domestic expenses for generating profits abroad. For instance, administrative tasks performed in New York for a London office would not be tax deductible in the United States.

Administration officials depicted the move as a way to close unfair tax loopholes that encouraged companies to send jobs overseas. They argued that if it costs the same amount to do business in, say, Ireland as in Iowa, why not do it entirely in Des Moines? Officials said Obama would characterize the move as a way to keep jobs in the United States and fight a system that is rigged against US companies who keep their entire business operation domestic.

Obama also planned to ask Congress to crack down on tax havens and implement a major shift in the way courts view guilt. Under Obama's proposal, Americans would have to prove they were not breaking US tax laws by sending money to banks that don't cooperate with tax officials. It essentially would reverse the long-held assumption of innocence in US courts.

If financial institutions cooperate with Washington and disclose details when asked, Americans could invest anywhere they like.

Obama officials also said they would close a Clinton-era provision that would cost $87 billion over the next decade by letting US companies ``check the box'' and treat international subsidiaries as mere branch offices. Officials said it was meant as a paperwork shortcut that is now a widely used and perfectly legal way to avoid paying billions in taxes on international operations.

The White House said that in 2004, multinational corporations enjoyed an effective tax rate of 2.3 percent in the United States because of such allowances. Aides said that was the most recent year available for analysis.

Officials said the situation was indefensible.


source : economic times

[Kalyan]

Say no to Bangalore, yes to Buffalo: Obama


'Say no to Bangalore and yes to Buffalo,' seems to be the latest mantra of US President Barack Obama as he struggles to bring the
ailing American economy back on track.

Meeting one of his major election promises, Obama yesterday announced end to years of tax incentives to those US companies which create jobs overseas in places like Bangalore. Instead, the incentives would now go to those creating jobs inside the US, in places like the Buffalo city -- bordering Canada in upstate New York.

"We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits," Obama said at White House announcing the international tax policy reform.

"We will use the savings to give tax cuts to companies that are investing in research and development here at home so that we can jump start job creation, foster innovation, and enhance America's competitiveness," Obama said.


The new tax laws are expected to majorly hit countries like India, China and Philippines, where US companies have been outsourcing their work.

Hitting hard at the current taxation system, to which he had been very critical since his election days and as a Senator, Obama said: "It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York."

Reiterating his campaign rhetoric, the US President said: "The way we make our businesses competitive is not to reward American companies operating overseas with a roughly two per cent tax rate on foreign profits; a rate that costs taxpayers tens of billions of dollars a year."

Obama said he wants US companies to remain most competitive in the world. "But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," he argued.

Announcing a set of proposals to crack down on illegal overseas tax evasion, close loopholes, and make it more profitable for companies to create jobs here in the US, Obama said his series of tax reforms would save $210 billion in the next 10 years.

Under new measures, American companies would also have to disclose before the IRS details of the income American citizens are generating in overseas accounts. "For years, we've talked about stopping Americans from illegally hiding their money overseas, and getting tough with the financial institutions that let them get away with it," he said.






source : economic times

[dwarakesh]

Obama reforms tax policy, may hit outsourcing

Keeping on of the biggest election promises he made, Barack Obama has declared to end the tax incentive to those US companies which create jobs overseas and instead provide these incentives to those creating jobs inside the country.

Announcing the tax policy reforms, he added that US will use the savings to give tax cuts to companies that are investing in research and development at home in order to create jobs along with promoting innovation and competitiveness of America.

These new tax laws will hit country like India and China as the outsourcing revenues which form a significant part of the economy are bound to be adversely hit.

Source: oneindia

[sajiv]

Obama's tax measure: 'a retrograde step'

It would harm the interest of U.S. corporations, says FICCI

NEW DELHI: India Inc on Tuesday described as a retrograde measure the action of U.S. President Barack Obama to end tax breaks to companies that invest and create jobs abroad.

Federation of Indian Chambers of Commerce and Industry (FICCI) President Harsh Pati Singhania cautioned that such a move would only constrain U.S. companies as they would not be able to reap the benefits and advantages that different parts of the world offer in matters of production, distribution and marketing. He felt that when the world was opening up through communications and transportation restricting economic activities of companies was a retrograde measure.

He feared that it would impact U.S. investments abroad and in India but in the long run it would harm the interest of the U.S. corporations desirous of cost efficient operations across the globe.
Biggest beneficiary

Associated Chambers of Commerce and Industry of India (Assocham) President Sajjan Jindal hoped that the U.S. President would reconsider his decision pointing to the past experience that the outsourcing country had been the biggest beneficiary while outsourcing jobs in other countries.

Mr. Jindal said that a U.S. survey had itself established that their companies had benefited at least 10 times more by outsourcing assignments to other countries including India than what these countries had benefited from receiving job contracts.

Hoping that the U.S. administration would reconsider its decision, Mr. Jindal feared that it would otherwise send a harsh signal to other countries to adopt protectionist tendencies.

PTI reports from New Delhi
The PHD Chamber of Commerce and Industry (PHDCCI) said the move was an arm-twisting measure.

"The U.S. government should not interfere in the affairs of private companies. It is up to the companies whether they want to outsource their business or not," the PHD chamber said in a statement.

[sajiv]

Obama's tax proposal to hit US firms more than India

Indian IT services providers do not appear perturbed over the proposal of US President Obama to eliminate a loophole that allows US firms to avoid paying tax on profits earned overseas.

They say that the proposal will primarily impact US-headquartered companies like IBM, Hewlett Packard, Microsoft and Oracle that have overseas operations in countries like India.

Most large American companies earn more than 50 per cent of their revenues from markets outside the US and will be affected by the proposed tax reforms.

[dhilipkumar]

Obama's Bangalore remarks anti-growth, job-destroying:

President Barack Obama's proposal to make tax changes to deter outsourcing jobs to, say, Bangalore is "antigrowth, job-destroying, protectionist and unlikely to raise the tax revenue", the Wall Street Journal argued Tuesday, while the Los Angeles Times termed it populist. The president Monday said the US tax system is such "that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York." That looks like a great argument for lowering taxes on the firms creating jobs in Buffalo, but that is not what Obama has in mind, the Journal noted in an editorial "Obama's Global Tax Raid".

"Set aside that India is a poor example to make Mr. Obama's point, since its corporate tax rate on foreign-owned companies can be as high as 55 percent. The president's argument is that US tax-deferral rules make it more expensive for American companies to reinvest overseas profits at home than abroad. This, he claims, creates a perverse incentive for companies to "ship jobs overseas" and reduces investment and job creation in the US." Obama's right, except that his proposals would only compound the problem, the Journal said.

"His plan would limit the tax deferral on income earned abroad by tightening the rules, limiting allowable deductions and restricting eligibility for foreign-tax credits. This 'solution' is antigrowth, job-destroying, protectionist and unlikely to raise the tax revenue Mr. Obama predicts."



The explicit goal of Obama's tax reform plan is to reduce the incentive for American companies to invest abroad, which he derisively calls "shipping jobs overseas".

"Foreign companies may relish the loss of US corporate competitiveness that his proposal will bring in the short term. But in the long term, reducing US investment globally will hurt everyone. And that investment is a two-way street...," the editorial said. The Los Angeles Times too criticised Obama's remarks. "We're all for closing loopholes and ending tax shelters that enable the wealthy to hide income. But we're not convinced that changing tax law can stop corporations from steering jobs and capital to countries with the lowest costs," the Times said in an editorial comment.

"Obama's proposal, however, is more about populism than effective tax reform," was its conclusion.

indiatimes

[sajiv]

Is Obama right about Bangalore?

Before anyone in India gets hot under the collar about US President Barack Obama's tax proposals, because they might seem targeted at job creation in 'Bangalore,' it is important to understand what he is trying to do. For, on any rational basis, it is hard to be critical.

American companies that invest abroad have been tax-exempt on the profits from such businesses until they bring the profits back into the US; however, they have been allowed to claim a set-off on the expenses related to such investment.

This has been an open invitation to invest overseas and not in the home market, especially if the money is routed through tax havens so that the firms pay no tax on their profits anywhere. Mr Obama has called this a 'scam,' a term to which American businessmen have taken umbrage, but it is hard to think of it in any other terms.

The figures trotted out, showing that effective tax rates on such investments have been in the 2-3 percentage points range, support the president's drive to raise the effective level of tax on such corporate activity, at a time when he is running a gigantic deficit and needs money for other programmes.

Indeed, India should do likewise (companies that borrow money to invest overseas, and claim a tax set-off on the interest cost of the loan, should not get a set-off unless they remit the profits home and pay tax on it).

In other words, this is not about jobs in Bangalore or Buffalo, though that is how Mr Obama put it somewhat dramatically. The truth is that no Indian tech or BPO companies are going to be affected by this; nor will any of their clients in the US now find that it pays to cancel their contracts with Infosys [Get Quote] and TCS [Get Quote].

The situation is different for American companies like IBM and Accenture, which have large back-office operations in India and which may well find that their tax burden goes up in the US as a result of Mr Obama's proposal.

However, one should not conclude from this that they will pull up their stakes and go hotfooting it back to the US to set up tent there. It is more than likely that it makes economic and business sense for these companies to locate their operations in India, even without the tax breaks.

It is possible that some marginal operations are affected, but that should not blur the larger picture.

The Obama initiative should be seen in a larger context.

International capital has become so mobile, and has access to so many tax havens through which to route money, that the owners of this capital have a global tax holiday. It is to strike at this that the Organisation for Economic Cooperation and Development has started moving against the tax havens, which in turn has resulted in the debate in India about how much Indian money is hiding in such places as Leichtenstein.

And so, far from criticising the US president, India should welcome the initiative that Mr Obama has taken to attack the tax havens (for they are his real target, not Bangalore), and see what New Delhi can do -- about Mauritius and others.

Doing this will not be easy.

The giant US corporations will line up their lobbying firepower to try and defeat or water down the new tax proposals. Similarly, any such move in India will draw howls of protest from the business lobby groups.

At the end of the day, however, the issue is quite simple: you should not be claiming tax set-offs on expenditure that is used to earn profits on which you do not pay tax under the same tax regime.

[sajiv]

Obama remark on Bangalore worrying, admits Azim Premji

Bangalore: Terming the US President Barack Obama's tax reform proposal as a 'worrying' development, Wipro chairman Azim Premji Thursday said it was against what Obama said at the recent G-20 summit.

'It's worrying! This is against what Obama said at G-20 summit in London recently,' Premji told reporters here on the sidelines of the launch of Wipro's product qualification and compliance certificate facility 'Tarang'.

While speaking at the Group-20 summit April 2, Obama had said that the leading economies in the world had 'rejected protectionism that could deepen the crisis'.

He, however, Monday announced end of tax incentives to those US corporations that outsource jobs to other countries, including India.

'It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York,' Obama said at White House.

Premji, however, expressed hope that Obama 'will exercise a lot of judgment. I hope he will do it.'

After unveiling the Tarang facility, Wipro joint chief executive Girish Paranjpe said: 'Wipro's agenda to make innovation purposeful and customer centric got stronger with the launch of Tarang.'

As the first-of-its-kind facility in the country, the $8.5-million Tarang has been developed by the research and development (R&D) division of Wipro Technologies.

'We are confident this world class facility will enhance our ability to provide fully integrated product development solutions for our customers,' Paranjpe added.

[dwarakesh]

Obama: new tax plans are bad news for offshoring

US President Barack Obama's recently announced intention to close tax loopholes that he feels permit US firms to send jobs overseas more easily should be taken as disturbing news for contact center outsourcers that have delivery centers in offshore locations. While few observers of this industry should be surprised at the president's move, which many considered inevitable following the 2008 election campaign, how these tax laws could impact vendors' ability to do business in a cost-effective manner is of significant concern.

Should Obama's new tax plans become law in 2011 as planned, the initial impact for contact center outsourcers selling offshore delivery will be increased price points. In an era of ever-tightening margins, not only will this option be unpalatable for many prospects looking to work with an outsourcer, it could also force existing clients to examine other business models for customer-facing work.

Another possible impact of these changes is a reduction in operational flexibility. For many contact center outsourcers, offshoring some degree of agent positions has been crucial in ensuring seamless service delivery. This has been very important in terms of both labor supply, as well as finding agents with suitable language skills (especially important due to the growth of the Hispanic community in the US). Therefore, should vendors find themselves financially pressured into moving more operations back onshore in the US, it could easily have a negative impact on daily operations, given the traditionally high attrition rates associated with domestic contact center work.

A final source of concern relates to tax laws in other locations. Many observers have identified that unless other western countries follow suit, US firms will be placed at a serious disadvantage relative to competitors based in nations in which such tax provisions have not been implemented, thereby ensuring more price flexibility. This will leave US outsourcers with few options other than to find ways of offsetting their own higher taxes through internal cost-cutting or possibly relocating to more tax friendly jurisdictions.

There can be little doubt that the Obama administration is doing its best to make good on campaign promises to encourage US firms to limit offshoring as much as possible. In the case of the recent changes to the tax code, outsourcers should examine the implications for their operations prior to the 2011 implementation point, so as to determine what impact it will have on their ability to deliver high-end and cost-effective contact center services.

[nithyasubramanian]

'Obama wants Fed to be finance supercop'   

Washington, May 09: The Federal Reserve could become the supercop for "too big to fail" companies capable of causing another financial meltdown under a proposal being seriously considered by the White House.

The Obama administration told industry officials on Friday that it was leaning toward making such a recommendation, according to officials who attended a private one-hour meeting between President Barack Obama's economic advisers and representatives from about a dozen banks, hedge funds and other financial groups.

Treasury Secretary Timothy Geithner and other officials made it clear they were not inclined to divide the job among various regulators as has been suggested by industry and some federal regulators. Geithner told the group that one organization needs to be held responsible for monitoring systemwide risk.

"Committees don't make decisions," said Geithner, according to one participant.

Officials from the Treasury Department and National Economic Council, which hosted the meeting, told participants that the Fed was considered the most likely candidate for the job, according to several officials who attended or were briefed on the discussions.

The administration officials said a legislative proposal would likely be sent to Capitol Hill in June with the expectation the House Financial Services Committee, led by Rep. Barney Frank, D-Mass., would consider the measure before the Independence Day recess.

The officials requested anonymity because the meeting had not been publicly announced and they were not authorized to discuss it.

A Treasury Department statement provided to The Associated Press on Friday confirmed Geithner's position that he wants a "single independent regulator with responsibility for systemically important firms and critical payment and settlement systems."

A spokesman said Geithner also is open to creating a council to "coordinate among the various regulators, including the systemic risk regulator."

The Fed itself hasn't taken a position on whether it should have the job, although Chairman Ben Bernanke has said the Fed would have to be involved in any effort to identify and resolve systemwide risk.

courtesy : Zeenews.com

[sajiv]

Obama's tax proposals won't affect Indian firms: HCL chief

New Delhi: US President Barack Obama's recent announcement on tax crackdown on companies outsourcing to overseas firms will not affect the Indian IT sector, an industry official said here Monday.

'It will impact only American companies. It is being misunderstood largely. However, we still need to study its impact in the future,' HCL chairman and chief executive Ajai Chowdhry told reporters on the sidelines of a business conference.

Regarding the slowdown in India, he said: 'The first signs of recovery are already being seen. Though it is still a tough period, we need to maintain a positive outlook.'

Elaborating, Chowdhry said: 'The two market indicators - Sensex and manufacturing - are showing positive signs, which indicates that we are in a good position.'

He, however, admitted consumption was still subdued, and attributed it to the lack of credit available in the market, which drives growth.

'Government buying is still low and needs to pick up so that the market stabilises a bit,' the HCL chief executive said.

'However, if we look at the GDP of Singapore which is minus 6 percent and that of India which is at 6 percent, we are still in a very good position,' Chowdhry added.

[sajiv]

Obama admin to strengthen antitrust rules

Washington:

US President Barack Obama's top antitrust official this week plans to restore an aggressive enforcement policy against corporations that use their market dominance to elbow out competitors or to keep them from gaining market share.

The new enforcement policy would reverse the Bush administration's approach, which strongly favored defendants against antitrust claims. It would restore a policy that led to the landmark antitrust lawsuits against Microsoft and Intel in the 1990s.

The head of the Justice Department's antitrust division, Christine Varney, is to announce the policy reversal in a speech she will give on Monday before the Center for American Progress, a liberal policy research organization. She will deliver the same speech on Tuesday to the United States Chamber of Commerce.

The speeches were described by people who have consulted with her about the policy shift. The administration is hoping to encourage smaller companies in an array of industries to bring their complaints to the Justice Department about potentially improper business practices by their larger rivals. Some of the biggest antitrust cases were initiated by complaints taken to the Justice Department.

She will assert instead that severe recessions can provide dangerous incentives for large and dominating companies to engage in predatory behavior that harms consumers and weakens competition.

The announcement is aimed at making sure that no court or party to a lawsuit can cite the Bush administration policy as the government's official view in any pending cases.

[sajiv]

Obama names Preet Bharara as U.S. Attorney

Washington: President Barack Obama has nominated Preet Bharara, an Indian-American lawyer, to become the U.S. Attorney for Southern District of New York.

Mr. Bharara (40), was counsel to New York Democrat Senator Charles Schumer and played a key role in the congressional investigation of the Bush administration's firing of eight U.S. Attorneys, according to a White House announcement on Friday. "This group of men and women have distinguished themselves as fair, tenacious and respected attorneys throughout their careers," Mr. Obama said of Mr. Bharara and five others named on Friday.

Born in Punjab, India, Mr. Bharara emmigrated to the U.S. with his parents in 1970 and became a U.S. citizen 10 years later.

Raised in Monmouth County, New Jersey, he graduated from Harvard University in 1990 and from Columbia Law School in 1993.

Mr. Bharara was named 2007 South Asian Lawyer of the Year by the North American South Asian Bar Association.

The Southern District, which traces its roots to 1789, prosecutes federal crimes in Manhattan and the Bronx as well as Westchester, Rockland and four other counties north of New York City. — IANS

[sajiv]

Automakers, Obama announce mileage, pollution plan

President Barack Obama wants drivers to go farther on a gallon of gas and cause less damage to the environment — and be willing to pick up the tab.

Obama on Tuesday planned to announce the first-ever national emissions limits for cars and trucks, as well as require a 35.5 miles per gallon standard. Consumers should expect to pay an extra $1,300 per vehicle by the time the plan is complete in 2016, officials said.

The administration officials spoke on the condition of anonymity ahead of the formal announcement by Obama.

The plan also would effectively end a feud between automakers and statehouses over emission standards — with the states coming out on top but the automakers getting the single national standard they've been seeking and more time to make the changes.

Obama's plan couples for the first time pollution reduction from vehicle tailpipes with increased efficiency on the road. It would save 1.8 billion barrels of oil through 2016 and would be the environmental equivalent to taking 177 million cars off the road, senior administration officials said Monday night.

New vehicles would be 30 percent cleaner and more fuel-efficient by the end of the program, according to officials familiar with the administration's discussions. The officials also spoke on condition of anonymity because the formal announcement had not been made.

The plan still must clear regulatory hurdles at the Environmental Protection Agency and the Transportation Department. Automakers appear to be in support.

Administration officials said consumers were going to pay an extra $700 for mileage standards that had already been approved. The comprehensive Obama plan would add another $600 to the price of a vehicle, a senior administration official said.

The extra miles would come at roughly a 5 percent increase each year. By the time the plan takes full effect, at the end of 2016, new vehicles would cost an extra $1,300.

That official said the cost would be recovered through savings at the pump for consumers who choose a standard 60-month car loan and if gas prices follow government projections.

In a battle over emission standards, California, 13 other states and the District of Columbia have urged the federal government to let them enact more stringent standards than the federal government's requirements. The states' regulations would cut greenhouse gas emissions by 30 percent in new cars and trucks by 2016 — the benchmark Obama planned to unveil for vehicles built in model years 2012 and beyond.

The Obama plan gives the states essentially what they sought and more, although the buildup is slower than the states sought. In exchange, though, cash-strapped states such as California would not have to develop their own standards and enforcement plan. Instead, they can rely on federal tax dollars to monitor the environment.

The auto industry will be required to ramp up production of more fuel-efficient vehicles on a much tighter timeline than originally envisioned. It will be costly; the Transportation Department last year estimated that requiring the industry to meet 31.6 mpg by 2015 would cost nearly $47 billion.

[sajiv]

Obama to toughen rules on emissions, mileage

President Obama will announce tough new nationwide rules for automobile emissions and mileage standards on Tuesday, embracing standards that California has sought to enact for years over the objections of the auto industry and the Bush administration.

The rules, which will begin to take effect in 2012, will put in place a federal standard for fuel efficiency that is as tough as the California program, while imposing the first-ever limits on climate-altering gases from cars and trucks.

The effect will be a single new national standard that will create a car and light truck fleet in the United States that is almost 40 percent cleaner and more fuel-efficient by 2016 than it is today, with an average of 35.5 miles per gallon.

Environmental advocates and industry officials welcomed the new program, but for different reasons. Environmentalists called it a long-overdue tightening of emissions and fuel economy standards after decades of government delay and industry opposition. Auto industry officials said it would provide the single national efficiency standard they have long desired, a reasonable timetable to meet it and the certainty they need to proceed with product development plans.

Yet the industry position represents an abrupt about-face after years of battling tougher mileage standards in the courts and in Congress, reflecting the change in the political climate and the automakers' shaky financial condition. The decision comes as General Motors and Chrysler are receiving billions of dollars in federal help, closing hundreds of dealerships and trying to design the products and business strategy they will need to survive.

"For seven long years, there has been a debate over whether states or the federal government should regulate autos," said Dave McCurdy, president of the Alliance of Auto Manufacturers, the industry's largest trade association. "President Obama's announcement ends that old debate by starting a federal rulemaking to set a national program."

McCurdy, a former Democratic congressman from Oklahoma, has been working with Obama and his advisers on the issue since early this year.

In announcing the new program at the White House, Obama will be accompanied by Gov. Jennifer Granholm of Michigan and Gov. Arnold Schwarzenegger of California, along with auto industry executives and environmental leaders.

The administration's decision resolves a question over California's application for a waiver from federal clean air laws to impose its own, tougher vehicle emissions standards. Thirteen states and the District of Columbia have said they plan to adopt the California program.

The new national fleet mileage rule for cars and light trucks of 35.5 miles per gallon by 2016 roughly corresponds to the California requirement, which will be shelved as a result. The current national standard is slightly more than 25 miles per gallon.

The California plan, first proposed in 2002, had been stalled by industry lawsuits and the Bush administration's refusal to grant a waiver from less stringent federal rules, although California has been given dozens of such exemptions over the last 40 years.

[sajiv]

Obama praises shuttle crew for Hubble success

President Barack Obama praised the crew of the shuttle Atlantis for their perseverance in a difficult mission to extend the life of the 19-year-old Hubble Space Telescope.

The astronauts themselves rejoiced at what they characterized as the unexpected full success of their soon to end mission to equip the telescope for at least another five years of observations.

"Like a lot of Americans I have been watching with amazement the gorgeous images you have been sending back and the incredible repair mission you have been making in space," said Obama in a call from the White House.

"I think you are providing a wonderful example of the kind of dedication and commitment to exploration that represents America and the space program in general. These are traits that have always made this country strong," he said.

The president spoke with the astronauts for six minutes. Though the conversation was private, the White House provided an audio recording of the exchange.

"Watching you guys out in space on some of these spacewalks is amazing," Obama told John Grunsfeld, an astronomer turned astronaut who led three of the mission's five spacewalks.

"What you guys represent is an example of what vision means in the space program, always describing our willingness to stretch beyond currrent boundaries and to look at things in new ways," said Obama.

"I'm hoping you guys recognize how important your mission is to the world as well as to this country, the president said."

"I can assure you it's a high priority of mine to restore that sense of wonder that space can provide and to make sure we have a strong sense of misison, not just within NASA but for the country as a whole."

The flight's four spacewalkers faced multiple obstacles as they overhauled the telescope, with most of the outings running into overtime.

They overcame stuck bolts, a power tool that lost battery power at a crucial point in the repair of the telescope's black hole hunter.

One spacewalker contended with a painful, ill-fitting boot, another damaged an airtight glove. At one point, the shuttle astronauts almost had to dodge a fragment unleashed by a Chinese anti-satellite weapons test.

"It's amazing looking back at how hard things looked a couple of times, more difficult than I ever expected," Altman told a news briefing prior to the White House exchange.

"But then to overcome and wind up with everything done in the way it was -- we were very successful."

The successful outcome was a testament to the value of humans rather than robots in space, the astronauts said.

"Many of the things we did were not possible robotically," Grunsfeld told reporters. "That is the real utility of humans. We are able to deal with situations that are unexpected, and we do that all day long."

The shuttle astronauts will attempt to land Friday, touching down at NASA's Kennedy Space Center in Florida at 10:01 a.m. EST.

[sajiv]

Indian stitch on Obama suit

The bankrupt US suit maker Hartmarx Corporation, whose clientele include US President Barack Obama, is likely to be revived under a new Indian owner — S. Kumars Nationwide Limited (SKNL).

Textile firm S. Kumars is close to acquiring Hartmarx Corporation jointly with London-based private equity firm Emerisque Brands for $119 million.

Hartmarx Corporation said in a statement on May 22 that it had entered into a "stalking horse" asset purchase agreement with Emerisque Brands UK Limited and SKNL North America, an arm of S. Kumars Nationwide for all the assets of Hartmarx.

A stalking horse bid is an attempt by a debtor to maximise the value of its assets as part of or before a bankruptcy court-approved auction process.

The American clothing company said it had filed motions last Thursday with the Bankruptcy Court for the Northern District of Illinois with the aim of preserving the maximum value for all stakeholders.

Under the terms of the agreement, subject to court approval, the buyer will acquire substantially all of the assets for $70.5 million in cash and a junior secured note with a face value of $15 million. Also, it has agreed to assume certain liabilities of Hartmarx estimated to be about $33.5 million.

"We are very pleased to have taken this first yet very important step in resolving the future of Hartmarx as a continuing enterprise. In this challenging economic environment, the Emerisque offer is the best we have received," Hartmarx chairman and chief executive officer Homi B. Patel said.

On January 23, Hartmarx and 50 of its wholly owned US subsidiaries filed voluntary petitions for protection under chapter 11 of the United States Bankruptcy Code.

Meanwhile, according to a report by Chicago Tribune, "The purchase agreement sets the bid floor for a potential auction of Chicago-based Hartmarx that could come as soon as June 30 and be wrapped up in mid-July."

Hartmarx is the largest maker of men's tailored clothing in the US and made the tuxedo, topcoat and suit that the 47-year-old Obama wore on his inauguration on January 20.

[sajiv]

Obama's secret itinerary being speculated in Cairo

Speculations are on the ripe in Cairo to figure out what the US President Barack Obama's itinerary would be during his visit to the capital city of Egypt on Thursday.

Apparently, the presidential visit is to address the Muslim world. But nothing has been officially announced of yet, which is leading to all the speculations.

"The White House did not put out a schedule yet. It is not finalised, and we are still working on it. As far as the White House is concerned, there is no schedule yet," said a spokeswoman from the US embassy in Cairo, news.scotsman.com reported.

However, Al Masry Al Youm, a local newspaper, had the presidential itinerary on its front page, which said that the speech would be given at Cairo University.

"He is speaking in Cairo University, I read it in the paper " said Ramadan Abdel Al, a local resident.

The newspaper has reported that the university that has about 200,000 students will be closed when the president is in town and the faculty will be given the day off. Only 15 students from each of 18 colleges will be invited to attend.

According to news.scotsman.com, Obama's itinerary is being kept under wraps for the reason that, security is a big concern when it comes to US president's visit to such crowded and chaotic city, where only a few people hold a good deal of animosity for the US. (ANI)

[sajiv]

Obama against US dictating 'values' to other nations

On the eve of his high-profile visit to the Middle East, President Barack Obama has said the US should act as a role model rather than impose its "values" on other nations, even as he contented that "principles" like democracy, rule of law and human rights were "universal." Obama, who is due to arrive in Saudi Arabia tomorrow, said there were "obviously" human rights issues to address in some Middle Eastern countries.

However, he said the job of the US was not to lecture but to encourage what he said were "universal principles" that those countries could "embrace and affirm as part of their national identity". "The danger, I think, is when the United States, or any country, thinks that we can simply impose these values on another country with a different history and a different culture," Obama said in an interview to BBC. "Democracy, rule of law, freedom of speech, freedom of religion -- those are not simply principles of the West to be hoisted on these countries, but rather what I believe to be universal principles that they can embrace and affirm as part of their national identity," he said.

Obama, whose father was a Muslim but he himself is a practising Christian, is scheduled on Thursday to make a high-profile speech on US ties with the region at a university in the Egyptian capital Cairo. PTI.

[sajiv]

Obama rules out mediation on Kashmir

Washington: President Barack Obama has firmly ruled out any U.S. mediation on the Kashmir issue.

Describing both India and Pakistan as "great friends" of the U.S., he said Washington hoped the two would resolve their differences through dialogue. It wanted to be "helpful" in that process but could not dictate to them how they should go about it.

"I believe that there are opportunities, maybe not starting with Kashmir but starting with other issues, that Pakistan and India can be in a dialogue together and over time to try to reduce tensions and find areas of common interest," Mr. Obama said in an interview to Pakistan's Dawn TV. The answer came in response to a question why his administration was silent on Kashmir, after he had initially mentioned it.

"Well, I don't think that we have been silent on the fact that India is a great friend of the United States and Pakistan is a great friend of the United States, and it always grieves us to see friends fighting. And we can't dictate to Pakistan or India how they should resolve their differences, but we know that both countries would prosper if those differences are resolved," he said.

"We want to be helpful in that process, but I don't think it's appropriate for us to be the mediators in that process. I think that this is something that the Pakistanis and Indians can take leadership on." — PTI

[sajiv]

Obama on relation-mending visit to Russia

US President Barack Obama arrived here on Monday on a maiden visit to Russia to 'reset' the damaged bilateral ties and sign new accords, including a landmark arms reduction treaty to replace a Cold War era nuclear pact. He is accompanied by First Lady Michelle Obama and daughters Sasha and Malia.

Several documents including framework accord on arms reduction and transit of US troops to Afghanistan via Russian territory are expected to be signed later on Monday.

Moscow welcomed the First Family with an unusual mid-summer chill with temperature dropping to 12 degrees. Later on Monday Obama is scheduled to hold five hours of formal and informal talks with President Dmitry Medvedev and address a joint press conference in the Kremlin after 19.30 hrs IST.

The first day will conclude with a private dinner hosted by Medvedev family at their country retreat near Moscow. During his three-day stay in Moscow, Obama would hold a US-Russia summit meeting with his Russian counterpart Dmitry Medvedev, besides meeting Prime Minister Vladimir Putin and former President Mikhail Gorbachev.

Earlier in an interview to a Russian media outlet, Obama said he was looking forward to explore with Moscow the possibilities of cooperation on economic and defence issues besides on dealing with terrorism and issues like Iran. "What I said coming in is that I wanted to press the reset button on relations between the US and Russia," he said in Washington. Obama said his first step would be to provide a framework for replacing the Cold War-era missile treaty START. "My goal is that both countries reduce their nuclear stockpiles in a way that doesn't leave either country with an advantage, but reduces tensions and the expense of maintaining such high nuclear stockpiles," he had said.

[sajiv]

Obama sees G8 expanding, wants 'fewer summits'

US President Barack Obama signalled support Friday for the expansion of the G8 to include major emerging economies, streamlining the international system and reducing the number of summits.

The US leader was speaking after a summit of the G8 rich countries at which leaders from developing countries represented in the larger G14 lobbied to be included in future in the core group's economic policy decision making.

"I think we're in a transition period. We're trying to find the right shape that combines the efficiency and capacity for action with inclusiveness," Obama told a news conference on the final day of the summit in Italy.

"And my expectation is that over the next several years you'll see an evolution and we'll be able to find the right combination. The one thing I will be looking forward to is fewer summit meetings," he said.

Prior to this week's G8 event, US officials had described the meeting as marking the half-way point between two summits of the larger G20 grouping, which has taken the lead in fighting the global financial crisis.

Some leaders, including Brazil's President Luis Ignacio Lula da Silva and his French counterpart Nicolas Sarkozy, have expressed support for simplifying and expanding the international system by folding the G8 into the G14 or G20.

But others, including Japan's Prime Minister Taro Aso, feel the G8 still plays an important role as decisions are easier to take in a smaller group of industrialised democracies that can give the rest of the world a lead.

"It's true that the G8 alone will not be able to resolve all the problems in the world that need resolution," Aso told reporters at the summit.

"At the time of the economic and financial crisis that started last year we need the contribution of India, China and Brazil."

But he insisted that the G8, with its tight decision making process, still had a leadership role to play amid international groupings.

"It's precisely because we need today in the world to address probably a greater number of countries that I think that the importance of the G8 is increasing," he argued.

The next summit of the G20 will be held at the end of September in the US city of Pittsburgh.

[sajiv]

Obama rejects 2nd stimulus: Give recovery time

WASHINGTON – President Barack Obama said Saturday the $787 billion stimulus program must be given a chance to work before consideration is given to a second such jolt for the still-ailing economy.

Obama acknowledged in his weekly radio and Internet address that people are getting nervous about continuing high joblessness — the unemployment rate hit 9.5 percent in June — but said reversing payroll losses takes time. He asked Americans to be as patient as possible.

Republicans have labeled the $787 billion stimulus a failure. Both Obama and Vice President Joe Biden have argued that the bulk of the money from the stimulus program is still being disbursed and that it already has saved many jobs.

Obama criticized Republicans for opposing the stimulus but offering few alternatives to the worst recession since the Great Depression. And he rejected talk of a second stimulus, an idea that has been discussed by Democrats and even famed investor Warren Buffett.

"We must let it work the way it's supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity," Obama, who is visiting Ghana on Saturday, said in his recorded message.

The stimulus included $288 billion in tax cuts, dramatic increases in Medicaid spending, about $48 billion in highway and bridge construction and billions more to boost energy efficiency, shore up state budgets and improve schools.

The plan "was not designed to work in four months," Obama said. "It was designed to work over two years."

Since Obama signed the stimulus into law, the economy has lost more than 2 million jobs and the unemployment rate has climbed higher than the White House predicted it would have ever reached without the stimulus.

Some companies say stimulus money helped avoid layoffs. Independent government auditors found that stimulus aid to states helped keep teachers off unemployment lines. But overall job numbers continue to suffer.

Republicans have seized on this opportunity to criticize the president, but they have struggled to find their collective voice. At a news conference Friday, Republican lawmakers criticized the White House for spending so much, while simultaneously saying the administration wasn't spending it fast enough.

With the Obama administration now pushing for a costly overhaul of the nation's health care system, Republicans are casting Democrats as liberals on a shopping spree. In the GOP's weekly address Saturday, Virginia Rep. Eric Cantor, the House Republican whip, accused the Democratic-controlled Congress of reckless spending and careless borrowing.

Though the Republican stimulus proposal this January had its own deficit-pushing price tag of $478 billion, Cantor and Republicans are trying to make their case against Obama as one of fiscal restraint.

"For the stimulus alone, Washington borrowed nearly $10,000 from every American household," Cantor said. "Let me ask you: Do you feel $10,000 richer today?"

In his speech, Obama twice referred to "cleaning up the wreckage" of a recession that began on President George W. Bush's watch. But with Obama's poll numbers slipping on economic issues, Republicans want to lay the economy at the president's feet.

"This is now President Obama's economy," Cantor said.

[jayanthi mandhalapu]

US President Barack Obama's will celebrate his 48th birthday in White House as he will be having lunch with Senate Democrats at the White House.

"Chuck E. Cheese was booked," White House press secretary Robert Gibbs joked during his daily White House press briefing on Monday.

"They are likely to discuss health care, the economy, energy legislation and the so-called "Cash for Clunkers" programme that would provide federal vouchers of up to $4,500 for people to trade in their vehicles for new ones that get better mileage."

[sajiv]

Obama Signs $2 Billion Measure to Keep 'Clunkers' Deals Going

President Barack Obama signed into law an emergency measure giving $2 billion to the "cash for clunkers" discount program today after lawmakers said it was helping ailing automakers and the U.S. economy.

The Senate voted 60-37 to extend the program last night, six days after the House took the same action.

Obama, who lobbied for the measure, issued a statement after the vote calling the government initiative “a proven success.â€

The program has boosted sales for the ailing auto industry while removing pollution-belching cars from U.S. roads, said Senator Debbie Stabenow, a Michigan Democrat.

This is the "single most effective stimulus plan to date," Stabenow told reporters after the vote.

Some economists, such as Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York, have boosted forecasts for growth in the second half of the year due in part to the influence of the cash for clunkers program on manufacturing and consumer spending.

Sales for Ford Motor Co. rose for the first time since 2007 after the program began in July. Vehicle sales for General Motors Co. and Chrysler Group LLC fell during the month, compared with a year earlier.

Some Republicans tried to halt the program, saying it was expensive and so poorly administered that it was unclear whether the initial funding was exhausted or how many cars had been sold.

'Cash for Golf Clubs'

Senator John McCain, an Arizona Republican, described the program as arbitrary and expensive, saying Congress should next embark on a "cash for golf clubs" offer.

Seven amendments, including one that would have imposed an income limit for participants and another to temporarily halt the program to clear a backlog of discount applications, were rejected before the final vote.

Any alterations to the program would have forced a suspension in the auto discounts until September, when the House returns from a monthlong recess.

The Car Allowance Rebate System provides credits of as much as $4,500 for the purchase of a new car when turning in an older vehicle to be scrapped. Lawmakers had expected the first $1 billion to generate about 250,000 vehicle sales and last until about Nov. 1.

The infusion of funds is intended to extend the program through August. Stabenow said it wouldn’t need a third allocation.

GM, the largest U.S. automaker, has the most sales under the program, according to Transportation Department data released this week.

Toyota, Ford

The Detroit-based company sold 18.7 percent of the cars purchased under the plan. Toyota Motor Corp. based in Toyota City, Japan, had the second-most sales with 17.9 percent. Dearborn, Michigan-based Ford, was third with 16 percent. The agency released data on each automaker's overall share a day after providing a list showing that four of the top five models sold were made by foreign automakers.

Toyota's Corolla was the top model purchased by clunkers buyers through Aug. 5, surpassing Ford's Focus, which had been No. 1, according to the data.

The Transportation Department had received 184,304 dealer applications for funds totaling $775 million through Aug. 5, as the agency works through a backlog that reached hundreds of thousands of online submissions.

Three Largest

Vehicles made by the three largest U.S. automakers -- GM, Ford and Chrysler -- comprised fewer than half of sales under the program through Aug. 5, according to the Transportation Department data. The companies accounted for 45 percent of the clunkers transactions. Some vehicles sold by foreign companies are manufactured in the U.S.

Ford's Explorer was the most popular trade-in vehicle, followed by Ford's F150 pickup and Chrysler's Jeep Grand Cherokee. All of the top 10 trade-in models are made by the three U.S. automakers.

The average fuel economy of the vehicles purchased is 25.3 miles-per-gallon, a 60 percent improvement over the 15.8 miles- per-gallon average of the trade-ins.

[sajiv]

'Obama administration has big plans for India'

MYSORE: Describing the Indo-U.S. relationship as having undergone a seismic change in recent years, David Holmes, Second Secretary, Political-Military and Nuclear Affairs, U.S. Embassy, New Delhi, said that the Obama administration had big plans for India.

He was speaking on "Indo-U.S. relations: a new perspective", at a programme organised by the Mysore Chamber of Commerce and Industry (MCCI) and the U.S. Consulate-General here on Monday.

Mr. Holmes recalled the "shared values" between the two countries and said the visit by Secretary of State Hillary Clinton within six months of being in office, was a testimony to this.

The Indo-U.S. relationship was characterised in recent times by dialogue and partnership on five crucial issues: strategic cooperation on nuclear issues, science and technology, energy and climate change, education, and economics and development, said Mr. Holmes, who pointed out that there was potential for cooperation in space science and military sales. Reiterating U.S. President Barack Obama's eagerness to do business with India, he narrated an incident in which Mr. Obama was asked by schoolchildren to name a person, dead or alive, with whom he wished to dine, and he named Mahatma Gandhi. This was another indication that Mr. Obama has India high on the agenda, said Mr. Holmes.

He said the fact that Prime Minister Manmohan Singh had been given the honour of being the first State guest of the U.S. on November 24 underlined the significance attached to India.

Participating in an interaction with members of the MCCI, Mr. Holmes said that both countries were victims of terrorism and there had been unprecedented levels of cooperation between the two in information and intelligence sharing. Responding to queries on arms supplied by the U.S. to Pakistan to fight terror but used against India, he said the U.S. shared India's concern and hence there were more stringent norms and audit.

The programme was part of "Experience America" organised by the U.S. Consulate-General in which U.S. Embassy officials will tour 23 cities across the country and interact with a cross-section of people.

MCCI chairman Krishna, historian Sheik Ali, faculty members of the University of Mysore and industrialists were present.