Record numbers of people have taken to the streets of France, in the biggest demonstrations since Nicolas Sarkozy’s election to the presidency, to protest about his handling of the economic crisis.

Unions estimated that more than 3 million people took part in demonstrations across the country on Thursday, in the second general strike over the economic crisis in two months. Police put the figure at 1.2 million.

One in three people supporting the protest – the highest public backing for a strike in a decade.

Mr Sarkozy maintains he is the only person who can face down street protests and pursue his reform plans.

But he faces growing anger and an array of demands. Protesting teachers and doctors claimed the cuts to public sector jobs resulting from his reforms would kill schools and hospitals.

Private-sector employees, including cashiers, bank clerks and car workers, protested over poor pay, factory closures and rising unemployment.

On the march in Paris, Roland Bonnot, a primary teacher from Dijon, said that in the suburb where he taught parents were in constant fear of unemployment after the announcement that a mustard factory was closing.

“Children are now picking up on the anxiety and not performing well at school,”

The strike disrupted transport, schools, airports, government offices and even theatres. Unions demanded job protection, an increase in the minimum wage and a U-turn on Mr Sarkozy’s move to cut taxes for the very rich. But the Government insists there will be no concessions.

The Government is concerned about the increasingly radical nature of protesters. Sony factory workers held a chief executive hostage over redundancies last week.

Mr Sarkozy has focused on a €27 billion stimulus plan through public and private investment instead of boosting consumers’ pockets with tax cuts or higher welfare spending.

He argues that without investment leading to job creation, France will not be able to recover as fast other countries.

Technorati Tags: Nicolas Sarkozy, Paris, reforms

Stephen Colbert, a comedian who plays a slightly goofy conservative Republican, began his Comedy Central TV show The Colbert Report this week brandishing a pitchfork.

“Nation! I am enraged!” he yelled to his audience.

“AIG announced this week that they are giving executives $US165 million in bonuses. Excuse me? That bail-out money is supposed to be used responsibly – in ways we never see, to prop up businesses we don’t understand,”

“Well, the Government says they can’t stop it, but we can, folks! Our founding fathers knew that when the rights of the people get trampled we must become a torch-and-pitchfork-wielding mob, empty of all thought.”

“Let’s go get AIG!” he said, brandishing his pitchfork as his audience cheered wildly.

Colbert’s skit came uncomfortably close to the mark.

Americans – who have spent a year watching jobs disappear by the hundreds of thousands, unemployment rise to a 25-year high of 8.1 per cent, their neighbourhoods decimated by foreclosures and their pension plans slashed by a stockmarket they barely understand – are viscerally angry.

But it is not just outrage at the sheer chutzpah of those at AIG who took bonuses after the company was given $US170 billion of taxpayer funds just to survive.

The AIG bonuses have laid bare the unbridled greed that has driven US-style capitalism in the past decade, confronting even the most staunch defenders of deregulated markets. It has exposed a lack of moral compass in the system and it has rattled Americans’ faith that the best and brightest will rise to the top and be justly rewarded.

Just as disturbing for some Americans, though, are the solutions that President Barack Obama proposes:

- that Government should intervene more strongly, that it should spend billions of taxpayers’ dollars and their children’s tax dollars to rescue companies and banks,

- that it should spend up big on government projects to save the economy.

This isn’t how American capitalism works, either.

It all boiled over this week. Ordinary Americans jammed phone switches at talkback radio stations, flooded blogs and TV stations with emails and deluged their Congressional representatives as the news about AIG and bonuses to executives kept coming.

The company has been forced to enhance security at the Connecticut and London offices of its financial products division, the part of the company at the eye of the storm over bonuses. It was this group of just 350 people whose trade in risky credit default swaps – essentially insurance on the value of mortgage-backed securities – brought the venerable insurance giant undone.

The lawmakers have responded quickly and with a vehemence that is almost as unseemly as Colbert’s mock call to arms. An Iowa Republican senator, Chuck Grassley, went on radio to suggest that the bonus recipients should “follow the Japanese example” and either resign or commit suicide.

Washington has staged its own version of a pillorying. The chief executive of AIG, Edward Liddy, was called before a House of Representatives committee on Wednesday, where he was lectured and harangued about the bonus payments, even though he took over in October at the request of the Government – for a $1 salary – and played no part in writing the bonus schemes. He’d looked into stopping the payments but decided he had no legal avenues.

“Malfeasance” and “a complete violation of trust in the people who invested in your company,” said Representative Stephen Lynch, a Democrat from Massachusetts.

“We have teachers right now across the nation that are receiving pink slips, especially in the state of California. I mean, they’re doing an excellent job, and yet they’re not getting bonuses.”

Liddy was repeatedly asked to name names, which he refused to do, saying he feared for the safety of his staff. Some, he said, had already handed back the bonuses – ostensibly part of a scheme to retain key staff – which range from $US6 million to about US$100,000. Angered at his refusal, Representative Barney Frank said he would subpoena them.

Next week it will be the turn of the Treasury Secretary, Tim Geithner, and Chairman of the Federal Reserve, Ben Bernanke, for a public flogging as congressmen seek to find someone – anyone – to blame for what the White House called “outrageous” payments.

Meanwhile, President Obama was trying to harness the public anger to drive his push for more regulation and more intervention to stabilise the financial market.

“I don’t want to quell anger. I think people are right to be angry. I’m angry. What I want us to do, though, is channel our anger in a constructive way,”

Polls show he still has a big stock of political goodwill. Some 59 per cent of people approve of the way he is handling the economy, while 40 per cent disapprove, according to a CNN poll taken last weekend, before the AIG crisis erupted.

The same poll showed that 86 per cent of people want his policies to work, although a smaller number – 64 per cent – think they are more likely to work than fail.

But President Obama is walking a fine political tightrope.

In this volatile environment, that political capital could quickly evaporate, putting at risk not just his future ability to convince Congress to support further measures to save American banks, but also his own chances of being more than a one-term president.

In the short term, keeping the American public’s trust in his ability to handle the economy is paramount.

During the election campaign he faced Republican attacks that he was a socialist or, worse, a communist. The tom-toms have begun to beat again about Obama’s liberal agenda.

Last week Obama hit back, telling a small business round table he was a “strong believer in the free market“.

“I believe that our role as lawmakers is not to disparage wealth but to expand its reach, not to stifle the market but to strengthen its ability to unleash the creativity and innovation that still makes this nation the envy of the world,”

But in trying to impose remuneration caps, he risks giving the Republicans more ammunition to attack, while at the same time raising expectations too high on Main Street that he can curb the excesses of Wall Street.

Just as outrageous as the bonuses was the culture of Wall Street, based on greed, excess risk-taking and a bubble-and-bust mentality, he said on Wednesday.

“The financial regulatory package that we’re designing, as well as the economic policies that we want to put in place, are going to put an end to that culture,”

Obama is also grappling with another serious problem. His Treasury Secretary, Tim Geithner, who was confirmed despite overlooking $US43,000 in tax, is now a target, thanks in part to his poor performance in selling the Government’s plan for dealing with toxic assets.

Geithner insists he did not know about the AIG bonuses until last Tuesday – just days before the bonuses were paid – but Liddy insists he told the Federal Reserve staff months ago and he assumed they were keeping Treasury and the White House informed.

The who-knew-what-when drama is now consuming the Washington media, even though Geithner was clearly not responsible for the bonuses and commonsense says that he might have had a few more pressing issues on his desk than $US165 million in bonus payments.

Whether it’s fair or not, the newly-minted President has a serious political problem on his hands.

On Intrade, a futures contract is being offered that Geithner will not survive beyond June. On Wednesday, Connie Mack, a junior Republican in Congress, and some traders on Wall Street went so far as to call for Geithner to quit. The Republican leader of the House, Representative John Boehner, said the Treasury Secretary was “on thin ice”.

President Obama, however, expressed “complete confidence” in Geithner and his economic team.

Mr Obama told reporters as he left for California on Wednesday:

“Tim Geithner didn’t draft these contracts with AIG,”

“There has never been a secretary of the Treasury, except maybe Alexander Hamilton during the Revolutionary War, who’s had to deal with the multiplicity of issues that Secretary Geithner is having to deal with – all at the same time.”

“He is making all the right moves in terms of playing a bad hand,”

But Obama knows that the handling of the economy is the yardstick against which he will be measured by the American people in four years, and selling that message of competence is crucial to his survival.

For the Republicans, too, the AIG bonus affair has thrown into sharp focus the party’s internal conflicts.

Several Republicans gleefully reminded their Democratic colleagues this week that they did not support government bail-outs in the first place. The decision to bail out AIG was the policy misstep, not the bonuses themselves.

Others, heeding the public outrage, were more focused on how to prevent such payments in the future.

By Thursday, when a bill to tax the AIG payments at 90 per cent went to a vote, it seems that outrage and free-market capitalism had claimed roughly even numbers.

Eighty-seven Republicans, joined by six Democrats, voted against the bill. Boehner described the bill as a “sham” which would not work.

But 85 Republicans voted alongside 243 Democrats for the measure, which needed a two-thirds majority. The Senate is due to vote on a similar bill next week.

Obama’s success in crafting a new, more morally-centred form of US capitalism will need the support of some of those Republicans down the track.

His huge agenda of regulating the markets more effectively will be just one plank in an agenda that is, perhaps, more weighty than any other in history.

Technorati Tags: AIG, barack obama, Stephen Colbert, Tim Geitnet

While Bernard Madoff sits in his New York cell facing a life behind bars today, the search for any accomplices continues.

By choosing to plead guilty in court, Madoff has robbed the prosecution and victims of the chance to hear details of how he perpetrated the world’s biggest fraud to date. Questions about whether Madoff acted alone or in concert remain unanswered but the victims of Madoff’s fraud will hope that remains a temporary state of affairs.

Speaking in court yesterday, the assistant US attorney, Marc Litt, said:

“The Government’s investigation continues. Both in terms of finding assets and anyone else who may be responsible for this fraud.”

The biggest question marks hang over whether family members including Madoff’s wife Ruth, brother Peter, sons Mark and Andrew and niece and legal adviser Shana played any role in the fraud.

Ruth Madoff owns $US70 million of property, including a $US7 million Manhattan penthouse, and has caught the attention of investigators who want to seize assets in the wake of the scandal. Her lawyers claim her assets are unrelated to the fraud.

Lawyers to sons Mark and Andrew, who held trading positions at Bernard Madoff Investment Securities, insist they

“had no knowledge whatsoever of the fraud”.

The two were responsible for blowing the whistle on their father after he told them:

“It’s all just one big lie.”

The role of brother Peter, chief compliance officer at the company, has also been called into question by lawyers who point out he would have been responsible for checking whether trades had taken place and the veracity of claims over the fund’s returns. The whole family will be under scrutiny.

“To see him for the first time, I’m just very emotional and close to falling apart,”

Sharon Lissauer said, biting back tears.

“I lost all my savings. I don’t have anything else. If only he could reveal where [the assets] are and help make the investors whole.”

As television helicopters circled overhead and hundreds of cameramen and photographers crowded around, Madoff walked briskly into the courthouse. He would not re-emerge. He pleaded guilty to 11 felony charges, including securities fraud, mail fraud and money laundering. At 11.13am, a little more than an hour after the proceedings began, an expressionless Madoff was led away to jail. Sentencing is set for June 16.

If the nation’s economic crisis needed a face, Madoff supplied it. And if average citizens watching their retirement savings sink needed to see a Wall Street villain hauled off in handcuffs, Madoff on Thursday supplied that, too.

Zsa Zsa Gabor might look back on her film roles with a wry smile today. The Hungarian-born actress once acted in a little-known film entitled The Man Who Wouldn’t Talk.

As one of the victims of Madoff’s $65 billion fraud, the irony of the title is unlikely to be lost on the nonagenarian film star.

Technorati Tags: Bernard Madoff, fraud, Zsa Zsa Gabor

THE radio talkback host Rush Limbaugh has said he wants to see President Barack Obama fail, warning that the core free enterprise values of the nation are “under assault” and its very survival is at stake.

Limbaugh, who in the absence of a clear leader of the Republican Party is being championed by some as its intellectual voice, delivered an hour-long diatribe against the President and his policies at the Conservative Political Action committee forum in Washington.

“There are going to be more controls over what you can and can’t do, how you can and can’t do it, what you can and can’t drive, what you can and can’t say, where you can and can’t say it,”

Limbaugh’s take on the Obama budget, which includes tax rises for the wealthiest 5 per cent of Americans and an emissions trading scheme which will raise the cost of electricity to pay for health-care reforms and green energy projects, is helping to galvanise the Republicans into opposing key elements of it.

Eric Cantor, a leading congressional Republican, said the budget “obviously has raised a lot of concerns”.

He foreshadowed opposition to a second top-up $US410 billion spending bill now working its way through Congress.

“What we see in this budget, frankly, is an attempt, again, to try and stimulate the economy through government expenditure. And, you know, at best what that can do is redistribute wealth. It can’t create jobs; it can’t create wealth,”

The head of the White House Budget Office, Peter Orzag, hinted that the Administration might be prepared to use procedural tactics to ram through its health and energy proposals, by treating them as budget bills which require only a 50 per cent vote to pass instead of a 60 per cent vote to end a filibuster in the Senate.

Meanwhile the Obama Administration is gearing up for another week of difficult financial news, beginning with the likelihood that American International Group, the world’s biggest insurer, will seek a further $US30 billion in government capital when it reports a record quarterly loss of $US60 billion later this week. The company has already received $US150 billion in taxpayer funds, but is deemed too big to fail.

The chairman of the Federal Reserve, Ben Bernanke, is due to give evidence on the budget outlook. There will also be a raft of figures released on unemployment statistics, consumer credit and spending.

Technorati Tags: barack obama, Ben Bernanke, Economy, eric cantor, Rush Limbaugh

With his first month as President in the bag, Barack Obama is receiving an unparalleled level of support from the American public in regards to his ability to handle, and in this case fix, the shattered economy. In fact President Obama has the largest lead over opposition party in overall trust to handle the economy as any U.S. President has had in over 20 years.

Even sky high approval ratings, President Barack Obama still has some undeniable challenges in front of him in regards to the post-partisanship government he spoke of so often throughout his long and hard fought presidential campaign. Nonetheless Obama clearly holds the upper hand, both in overall approval and on the dominant issue of the day. He leads the Republicans in Congress by 61-26 percent in trust to handle the economy, the biggest such lead for a president in ABC News/Washington Post polls since 1991.

Obama’s overall approval ratings are definitely strong, in both the literal and historical sense, currently hovering at 68 percent of Americans approving of the job he has done so far. However when you look closely at the polls internal findings you will find that the partisanship is as glaring as ever with 90 percent of Democrats approving of Obama’s performance thus far, and only 37 percent of Republicans happy with the newly elected President. This sharp party line divide among American’s is nearly identical to the numbers that accompanied George W. Bush in his first term which was hot off the heels of the controversial 2000 election and its subsequent outcome.

As mentioned above, the partisanship divide is as clear cut as ever before, but with that said it also becomes important to point out that many American’s are giving the President credit for his attempts at bringing the two sides together. More or less, a healthy majority of American’s recognize that while it may not be working yet, Barack Obama is undoubtedly attempting to forge a healthy middle ground between the Democrats and Republicans:

While President Barack Obama cannot be happy with the ultra-partisanship we are currently seeing, regardless if he is being recognized for trying to bring the two political factions together, it begs the question; how bad is this split for Republicans? According to the same ABC News/Washington Post poll — the hyper partisanship appears to be a bigger downfall for the Republicans, whose party remains on life support after what the majority of Americans fee was a disastrous Bush presidency. Below are the numbers – and it won’t take long until you see that if anyone is hurting from the inability to work together, it is the elected officials of the right:

• The Democratic Party leads the Republicans by 56-30 percent in trust to handle the country’s main problems. That has slightly improved from 56-23 percent in December, as congressional Republicans found a unified voice in opposition to the stimulus. But the December number was the Republicans’ worst in ABC/Post polls since 1982; they still have far to climb.
• Fifty percent of Americans approve of the way the Democrats in Congress are doing their jobs, while 44 percent disapprove – if hardly a barn-burner, still the Democrats’ best in two years, since April 2007, just after they regained control of Congress. And their Republican counterparts are a good deal weaker: 38 percent approve, 56 percent disapprove. (Democratic gains have come mainly in two groups: among Democrats themselves, and among liberals. Seventy-seven percent of Democrats now approve of their own party; just 55 percent of Republicans feel the same about theirs.)
• The Democrats are holding the edge in partisan affiliation they’ve built since 2004, when the public soured on the Iraq war and the Bush presidency in turn. Thirty-six percent in this poll identify themselves as Democrats, just 24 percent as Republicans. On average in 2003, by contrast, the parties were at parity, 31 percent apiece.

I have also attached a graph that pretty much reinforces the bumbers cited above — You will see just how much the public’s trust level in terms of the economy has dropped off for Republicans starting back in 2005 and plummeting at a fairly steady rate ever since:

Some constants have remained throughout this first month. For instance,young people still support Barack Obama at an unprecedented rate. Among young adults, or as they are being referred to nowadays, “Millennials” (those between the age of 18 and 30) his overall approval rating peaks at a startling 84 percent, compared with 59 percent in his weakest age group, seniors (this was a trend we saw throughout the primaries and general election as well.) There are income gaps here as well; among people with incomes less than $50,000, 66 percent approve of Obama’s handling of the economy; among those in $100,000+ households, this drops to half. Two possible reasons: Better-off Americans are more apt to be Republicans. And they’re in Obama’s cross hairs on taxes — and their awareness of it.

If you are interested in seeing the entire ABC/Washington Post poll regarding Obama’s first month in office you can do so by clicking here. It is really quite interesting and unfortunately, familiar to what we have seen throughout the past couple of years. The main difference  is that now it’s Republican’s who are in the doghouse, and many would say it’s rightfully so.

Technorati Tags: barack obama, Breaking news, Breaking political news, Breaking Politics News, Democrats, george w. bush, GOP, latest Polls, Latest Presidential Polls, Obama

US President Barack Obama is vowing to tackle trillion-dollar budget deficits facing the nation after he launched an unprecedented spending program aimed at helping the troubled US economy get back on its feet.

In his weekly radio address on Saturday, Obama said that he and his administration were determined to do

“all we can to get exploding deficits under control as our economy begins to recover.”

According to the Congressional Budget Office, the provisional US budget deficit in fiscal 2009 will balloon to a record $US1.2 trillion.

The deficit for fiscal 2008 which ended in September reached $US438 billion, or 3.1 per cent of the nation’s gross domestic product, the office said in a report last month.

However, the figures do not include the cost of a huge $US787 billion economic stimulus plan signed by Obama into law last Tuesday.

Roughly one-third of the stimulus funds will be spent on tax cuts, totaling $US286 billion, in an effort to boost consumer spending, a key engine of the world’s largest economy.

Leading Republicans and other critics said the mammoth spending plan was mortgaging the nation’s future, for which America’s “children and grandchildren will pay a hefty price.”

But Obama said he was now determined to put spending under control, saying that work on the deficit will begin on Monday, when he will convene a fiscal summit of independent experts, unions, advocacy groups and members of Congress to discuss how the trillion-dollar deficit could be cut.

He promised to further tackle the issue in Tuesday’s address to the nation, in which he planned to outline urgent national priorities

On Thursday, the White House releases a budget blueprint, which Obama said is “sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don’t, and restoring fiscal discipline.”

A senior administration official told AFP that Obama planned to cut the federal budget deficit by half by end of his first term.

Savings will be made by cutting spending on the war in Iraq and by eventually raising taxes for the “wealthiest Americans,” the official said.

The official did not specify how much money a person must make to be categorised as the “wealthiest.” But during the election campaign, Obama included into this group people making more than $US250,000 a year.

Obama used his radio address to again showcase his recovery plan, saying that because of it, “three and a half million Americans will now go to work doing the work that America needs done.”

He announced that, starting this Saturday, employers had begun reducing taxes for 95 per cent of working American families as mandated by the stimulus package.

By April, the average American family will begin to keep an additional $US65  each month.

But the president acknowledged that signing the stimulus plan into law was only a first step on the road to economic recovery.

He said a complete recovery will require stemming the spread of real estate foreclosures and falling home values, stabilising and repairing the banking system in order to restore the flow of credit to families and businesses and reforming the broken regulatory system that made the crisis possible.

“None of this will be easy,” he cautioned.

“The road ahead will be long and full of hazards. But I’m confident that we, as a people, have the strength and wisdom to carry out this strategy and overcome this crisis.”

Technorati Tags: barack obama, Economy, federal deficit

President Barack Obama has taken aim at the housing crisis which helped tip the US economy into meltdown, with a program which could cost $US275 billion and reach nine million homeowners.

- Housing plan
- Six million foreclosures expected
- Arizona among worst-hit states

Obama opened the new front in the broad battle against the economic crisis, a day after signing a huge $US787 billion stimulus plan into law and as he simultaneously attempts to restructure the debilitated US auto industry.

“All of us are paying a price for this home mortgage crisis and all of us will pay an even steeper price if we allow this crisis to continue to deepen,” Obama said as he unveiled the plan in Arizona, one of the states worst hit by the crisis.

“When the housing market collapsed, so did the availability of credit on which our economy depends.”

“We will help between seven and nine million families restructure or refinance their mortgages so they can avoid foreclosure,”

Treasury officials said the plan could reach or make affordable $US1.5 trillion in mortgage debt and deal with a large proportion of the six million foreclosures expected over the next four years.

The plan includes incentives for lenders to help debtors who cannot make monthly payments but also cannot sell their homes due to negative equity, to lower mortgage payments to no more than 31 per cent of their income.

The plan will see the Treasury Department double its financial support to troubled mortgage finance giants Fannie Mae and Freddie Mac, to $US200 billion each, in an effort to stabilise the real estate sector.

A $US75 billion initiative will target those who cannot afford to pay their mortgages and have seen the price of their properties plunge so cannot sell them and move into cheaper accommodation.

The initiative also aims to help families who put money down on homes and met their regular payments, yet cannot take advantage of refinancing made attractive by low mortgage rates because the value of their homes have sharply dropped.

US stock markets shrugged off the new housing plan, a day after the Dow Jones Industrial Average fell 3.79 per cent on pessimism that the stimulus plan and new housing strategy would lead the economy out of recession.

Today, the Dow was down 12.18 points (0.16 per cent) to 7,540.42 after posting marginal gains at the opening hour and the tech-heavy Nasdaq was up 2.45 points (0.17 per cent) to 1,473.11.

Treasury Secretary Timothy Geithner told reporters here that the plan would not only awake the slumbering housing market, but would also help reignite the broader economy.

“This is necessary policy, it is smart economics and it is just and fair,” he said.

“By helping keep mortgage rates down, and helping reduce monthly payments, you are putting money in the hands of Americans, in that case it acts like stimulus.”

Officials said the plan would not benefit irresponsible homeowners who took out bigger loans than they can afford, or banks that took dangerous risks or speculators who helped build the housing bubble.

“Let us be clear, housing has been a significant part of initiating the economic slide we are in and will be a key part of getting us out,” said Housing and Urban Development Secretary Shaun Donovan.

“It is of a scale that can have a real impact.”

The program, like other aspects of Obama’s attempts to clean up the debt-laden finance industry, relies heavily on lenders to thaw out credit which has been frozen during the deepest economic crisis since the 1930s.

“This program creates pretty powerful incentives for initiatives by the servicers to move,” said Geithner.

“We think it will change behaviour on a significant scale.”

The far western state of Arizona was an appropriate spot for Obama to roll out his program, as cities here expanded quickly during the housing boom, but have now fallen deep into trouble as the mortgage crisis expands.

In 2008, there were 117,000 foreclosure notices received in Arizona, making it the third worst-hit state in America, according to the online realty market firm RealtyTrac Inc.

Obama will unveil his initiative after two US banks – JPMorgan Chase and Citigroup – and mortgage finance giants Fannie Mae and Freddie Mac agreed last week to suspend home foreclosures.

Technorati Tags: barack obama, Economy, Housing Crisis

President Barack Obama on Saturday savoured his first major victory in Congress with the newly passed $US787-billion economic stimulus package aimed at combating the worst economic crisis since the Great Depression of the 1930s.

The president could sign the bill as early as next week, less than a month after taking office. He described the bill’s passage as a “major milestone on our road to recovery”.

Speaking in his weekly radio and internet address, Obama said:

“I will sign this legislation into law shortly, and we’ll begin making the immediate investments necessary to put people back to work doing the work America needs done.”

At the same time, he said:

“The problems that led us into this crisis are deep and widespread, and our response must be equal to the task.”

The bill was passed on Friday with politicians largely voting along party lines, allowing Democratic leaders to deliver on their promise of clearing the legislation by mid-February.

The Senate approved the measure 60-38 with three Republican moderates providing crucial support. Hours earlier, the House vote was 246-183, with all Republicans opposed to the package of tax cuts and federal spending that Obama has made the centrepiece of his plan for economic recovery.

Obama “now has a bill to sign that will create millions of good-paying jobs and help families and businesses stay afloat financially”, said Senator Max Baucus, a Montana Democrat who was a leading architect of the measure.

“A stimulus bill that was supposed to be timely, targeted and temporary is none of the above,” Senate Republican Leader Mitch McConnell said in remarks on Friday on the Senate floor.

Told that no House Republican backed the measure on Friday, White House press secretary Robert Gibbs reacted by citing another number: “Three-and-a-half million jobs that we look forward to saving or creating.”

Obama gave a thumbs-up sign upon hearing of the package’s passage in the House. He hailed the massive bill and the “spirited debate” that accompanied it, but said:

“It’s only the beginning of what we must do to turn our economy around.”

He said those things include implementing the separate, newly reconfigured $US700 billion financial industry bailout program, stemming home foreclosures, reforming financial sector regulations and crafting what he called a “responsible” federal budget.

The Senate vote was held up to allow time for Democratic senator Sherrod Brown to fly back from Ohio, where his mother died earlier in the week. His was the decisive 60th vote for the bill in the 100-seat Senate.

The legislation, among the costliest ever considered in Congress, provides billions of dollars to aid victims of the recession through expanded unemployment benefits, food stamps, medical care, job retraining and more. Tens of billions are ticketed for financially strapped states to offset cuts they might otherwise have to make in aid to schools and local governments, and there is more than $US48 billion for transportation projects such as road and bridge construction, mass transit and high-speed rail.

Obama’s much touted tax break for middle- and working-class Americans survived but was scaled back. To tamp down costs, several tax provisions were dropped or sharply cut back.

After the Senate passed the stimulus package, Obama took his first significant break since taking office on January 20.

Obama and his family are spending the Presidents’ Day holiday weekend at their Chicago home. Aides say they have no public events, and the first couple plans to go out for a Valentine’s Day dinner on Saturday night.

AP

Technorati Tags: barack obama, congress, President, stimulus

BARACK OBAMA’S bold experiment in bipartisanship has taken another hit with his second nominee for commerce secretary, the Republican senator Judd Gregg, abruptly withdrawing his nomination citing “irresolvable differences”.

Senator Gregg pointed to the stimulus package and changes to the Census Bureau as the two areas where he could not support Administration policy.

The bones of the stimulus package have been public for weeks. But the Census Bureau issue has been festering behind the scenes after the White House indicated it wanted to move it from the Commerce Department to an independent agency reporting to the White House.

The bureau is crucial; it is not only used for determining funding to programs but also to redistribute congressional districts.

Mr Gregg was the second nominee for the important post of commerce secretary. Bill Richardson, the Democratic Governor of New Mexico, withdrew because of a federal inquiry into donations.

When Senator Gregg came to his decision is unclear and two separate statements were issued – one from the senator and another from the White House spokesman, Robert Gibbs – suggesting tensions.

Mr Gibbs said it was Senator Gregg who had “reached out to the President and offered his name for secretary of commerce”.

Senator Gregg said that he had thought he could bring some ideas and views that would assist the President at this difficult time.

“I especially admire his willingness to reach across the aisle,” he said.

“However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the census there are irresolvable conflicts for me.”

This latest setback in Mr Obama’s bipartisanship experiment is likely to further polarise the vote on the stimulus package.

There have been rumours that up to 20 Republicans, other than the three renegades who have been involved with negotiations, would support the bill in its final form.

Speaking in Peoria, Illinois, where he paid a visit to the Caterpillar factory, the President highlighted the fact that his Transport Secretary, Ray LaHood, who is from Peoria, was a Republican. Mr Obama said he would keep working on a bipartisan approach; Americans were “desperate” for Republicans and Democrats to co-operate.

The fact that Mr Obama was in the Caterpillar factory campaigning in the same way as he did during the election shows that the experiment in bipartisanship is not going smoothly.

Mr Obama has let Republicans paint his stimulus package as irresponsible spending – and their message has started getting traction.

Polls show that while Mr Obama enjoys enormous personal approval, there are serious reservations about his stimulus package.

As a result Mr Obama has reverted to his old campaign strategies, taking his message on the road and directly to the public.

But in some good news for the President, his pick for director of the CIA, the veteran Democratic politician Leon Panetta was confirmed by the Senate late on Thursday.

Technorati Tags: barack obama, Bill Richardson, bipartisanship, Census Bureau, Judd Gregg, Ray LaHood, White House

The wife of disgraced US money manager Bernard Madoff withdrew more than $US15 million from a firm co-owned by her husband just before his alleged $US50 billion fraud scheme collapsed, authorities say.

Massachusetts secretary of state William Galvin has filed a complaint in which Madoff’s wife Ruth is said to have withdrawn $US15.5 million from a Madoff-linked brokerage ahead of his arrest and alleged confession.

Galvin said Ruth Madoff, 67, withdrew $US5.5 million on November 25 and $US10 million on December 10 – the day before Bernard Madoff was arrested – from Cohmad Securities Corp, a New York firm co-owned by her husband.

Galvin is seeking to have the brokerage banned from operating in Massachusetts over what he says is the failure to co-operate with investigators probing its dealings with Madoff.

Ira Sorkin, a lawyer for Bernard Madoff, said he had no comment on the withdrawals, and a Cohmad spokeswoman in New York said the company also had no comment.

Galvin’s complaint appeared to follow what authorities consider a disturbing trend on the part of the Madoffs to hide money that could be used to reimburse burned investors.

Prosecutors have already said investigators found 100 signed cheques worth $US173 million that Madoff was ready to send out to his closest family and friends at the time of his arrest in December.

Two weeks later, during the Christmas holidays, Madoff sent more than $US1 million in jewellery and heirlooms to family and friends.

The next deadline for indicting Madoff and bringing him to trial is March 13. A similar delay was made in January.

The latest delay by prosecutors in indicting Madoff stoked speculation that the former Nasdaq stock exchange chairman is attempting to negotiate a guilty plea over charges that he ran a $US50 billion pyramid fraud.

Defence lawyers and prosecutors often agree on such delays to give both sides time to work out a guilty plea and move straight to sentencing without trial, legal experts say.

Madoff was arrested on December 11 after allegedly confessing to his two sons and to the FBI that he had run a giant scam known as a pyramid scheme, where new investors’ money is stolen to pay profits to existing clients.

Madoff is free on $US10 million bail but confined to his New York apartment under round-the-clock surveillance.

So far, Madoff is the only person charged in what could be the biggest such fraud in Wall Street history.

However, family members are among those who have come under the spotlight as investigators probe whether one man could have managed the alleged scheme by himself.

Since Madoff’s arrest, investigators have been assessing the financial damage inflicted on thousands of people who lost money investing with him.

The victims identified so far have included ordinary people and Hollywood celebrities, along with large hedge funds, international banks and charities in the US, Europe and Asia.

AP

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