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Nearly 300 killed in Honduras prison fire

The fate of some 105 inmates remained unknown Wednesday as families clamored to learn whether their loved ones perished in a prison fire in central Honduras. At least 272 prisoners were confirmed dead by fire officials in Comayagua, Honduras. "Everyone ran for their lives," said one survivor who spoke briefly to local television cameras. The young man, who only gave his name as Alex, said he did not know how the fire started but that he and the other prisoners were asleep when they awoke to the screams of fellow inmates. The prisoners forced themselves out of the prison any way they could, he said. The blaze was controlled, but the exact number of fatalities remained unknown, said Jose Turcios, spokesman for the Comayagua fire department. Some 35 prisoners were transported to a local hospital, he said, and some were then taken to a hospital in the capital. Before dawn Wednesday, families of the prisoners were already gathering in front of the prison gates and authorities' offices, demanding to know if their loved ones were among the survivors. Hundreds of family members pressed against the prison's gates as an official began to read aloud the names of the survivors. When they were done reading the names, some 105 inmates remained unaccounted for. It was possible that they had also been killed or that they had survived but escaped from the prison. Five of the prison's units -- more than half of the prison -- were affected by the fire, Turcios said. The prison holds 851 prisoners. The cause of the blaze is under investigation, he said. The country's prison commissioner said authorities are looking into whether a short circuit sparked the fire or if possibly a prisoner set a mattress on fire. The blaze broke out at 11 p.m. Tuesday (12 a.m. Wednesday ET). The fire was the third fatal prison fire in recent years. In 2003, 61 prisoners were killed in a fire at a prison in La Ceiba. In 2004, the death toll was 107 from a fire in a San Pedro Sula prison. The U.S. State Department published a report last April which painted a damning portrait of conditions in Honduras' 24 prisons. Prisoners "suffered from severe overcrowding, malnutrition, and lack of adequate sanitation," it cited human rights groups as saying. "Authorities did not provide adequate food or other basic necessities. The ready access of prisoners to weapons and other contraband, impunity for inmate attacks against nonviolent prisoners, inmate escapes, and threats by inmates and their associates outside prisons against prison officials and their families contributed to an unstable and dangerous penitentiary system environment," the department said in its 2010 Country Reports on Human Rights Practices. Human rights groups also alleged that prison officials used excessive force against prisoners, the State Department said. As of December 2010, the total prison population in the country was just under 12,000, about 400 of whom were women, the report said.

Published: Wed, 15 Feb 2012 14:14:08 GMT

Eurozone optimism to boost stocks

U.S. stocks were poised for a higher open Wednesday, thanks to better-than-expected European economic data and fresh promises from China to keep buying debt issued by eurozone governments. The Dow Jones industrial average, S&P 500 and Nasdaq futures were up between 0.3% and 0.5% higher ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET. The overall eurozone economy shrank for the first time in more than two years during the final three months of 2011, but the 0.3% quarterly drop was not as bad as economists expected. The performance was driven by a smaller-than-expected drop in German GDP and surprise growth in France -- the eurozone's two largest economies. Meanwhile, a China-European Union summit ended Tuesday with promises for more support from Beijing for debt-straddled Europe. "China is firm in supporting the EU side in dealing with the debt problems. We match our words with actions," Chinese Premier Wen Jiabao said. Despite the encouraging data from the eurozone as a whole, Greece still remains on the brink of disaster. A much anticipated meeting of eurozone finance ministers scheduled for Wednesday was canceled a day earlier. Jean-Claude Juncker, who heads the Eurogroup of 17 eurozone finance ministers, said more work needed to be done between Greece and its bailout partners, and that he would hold a conference call in place of Wednesday's meeting. Greece needs the group of finance ministers to approve its latest economic reform proposal, in order to secure bailout funds to avoid defaulting on a €14.5 billion bond redemption in March. U.S. stocks recovered from earlier losses late Tuesday to closed mixed. World markets: European stocks rose in afternoon trading. Britain's FTSE 100 edged up 0.1%, the DAX in Germany gained 0.9%and France's CAC 40 added 0.7%. Asian markets ended with solid gains. The Shanghai Composite rose 0.9%, the Hang Seng in Hong Kong spiked 2.1% and Japan's Nikkei rallied 2.3%. Economy: The Empire Manufacturing survey rose to 19.5 in February, from 13.5 the previous month. Analysts were expecting the survey to come in at 14.0. Analysts expect January industrial production to have increased by 0.6%. The February installment of the National Association of Home Builders is expected to stand at 26, up from 25 in January. The Federal Reserve will release the minutes from its monetary policy meeting in late January. Companies: Comcast shares popped after the cable provider beat estimates for its fourth-quarter profit and revenue, and announced a 44% increase to its dividend -- as well as a $6.5 billion stock buyback program. Shares of Abercrombie & Fitch slid after the retailer's fourth-quarter profit fell from a year ago. Shares of Dean Foods jumped after the the company's fourth-quarter loss narrowed compared to a year ago. Devon Energy's stock rose on the company's higher-than-expected fourth-quarter profit, as production of oil and gas rose. Shares of Hartford Financial spiked after hedge fund manager John Paulsom ramped up pressure on the company, calling for it to spin-off the property-and-casualty business from the life insurance business. Paulson trimmed his stake in the company during the fourth quarter, but remains Hartford's largest shareholder. Shares of Zynga were down sharply after the social gaming giant posted a net loss of $404 million for the full 2011 fiscal year, due to large stock-based compensation expenses. Procter & Gamble has found a new buyer for its Pringles unit. Cereal maker Kellogg Co. will pay $2.7 billion for the distinctively shaped potato chip product. P&G was looking for a buyer for Pringles after a previous deal fell through last week, in the wake of a scandal at would-be buyer Diamond Foods. Currencies and commodities: The dollar fell against the euro and the British pound, but rose versus the Japanese yen. Oil for March delivery rose 75 cents to $101.49 a barrel. Gold futures for April delivery gained $10.30 to $1,728 an ounce. Bonds: The price on the benchmark 10-year U.S. Treasury was lower, pushing the yield down to 1.95% from 1.92% late Tuesday.

Published: Wed, 15 Feb 2012 14:08:37 GMT

First Iranian-made fuel rods loaded in Tehran reactor

Iran vaunted mastery of the nuclear fuel cycle Wednesday as President Mahmoud Ahmadinejad, clad in a white lab coat, was on hand to load domestically made fuel rods into the core of a Tehran reactor. Also announced were a new generation of advanced centrifuges and an intent to start production of yellowcake, a material used in enriching uranium. United Nations sanctions ban Iran from importing yellowcake. Domestic production would further Iranian nuclear self-sufficiency. State-run Press TV broadcast live images of the Tehran event, hailed by the Iranians as a major scientific advancement for the Islamic republic. The first Iranian made nuclear fuel rods, produced by Iranian scientists at the Natanz facility in central Iran, are to be used at the Tehran Nuclear Research Center, which Iran says is used primarily for medical purposes. The Tehran facility creates radio isotopes used for cancer treatment, Press TV reported, adding that 850,000 cancer patients were in dire need. Ahmadinejad had announced in a speech marking the anniversary last week of the 1979 Iranian revolution that Iran would be unveiling something big. Photos of assassinated nuclear scientists adorned the hall at Wednesday's unveiling ceremony. Iran's latest activities have spiked tensions with Western powers, which believe Iran's atomic ambitions are focused on building a bomb. But despite Iran's drift from the international community and punishing sanctions that have disrupted Iran's economy, Tehran's clerical leaders have refused to bow down on its nuclear program that it insists is intended for civilian energy purposes. Recent Iranian announcements appear aimed at demonstrating to its foes the sophistication it has attained in its home-grown nuclear program. In January 2008, the semi-official Fars news agency had reported that Iran was able to produce everything it needs for the nuclear fuel cycle, making its nuclear program self-sufficient. But it was not clear that Tehran actually had the technology to turn enriched uranium into fuel rods. Then, last month, Iran said it had succeeded in building and testing a nuclear fuel rod, or a stack of low-enriched uranium pellets bundled together at the core of a nuclear reactor. "Because Western countries were unwilling to help us, we began enriching uranium to 20% to make nuclear fuel rods," Ali Bagheri, deputy chief of Iran's national security council, told the Russian news agency, RIA Novosti on Tuesday. Iranian news agencies quoted the Russian news agency report. A November report by the United Nations nuclear watchdog found "credible" information that Tehran has carried out work toward nuclear weapons -- including tests of possible bomb components. After the January report, the governing council of the International Atomic Energy Agency adopted a resolution expressing "deep and increasing concern about the unresolved issues regarding the Iranian nuclear program." Iran responded to the IAEA report by calling it a fabrication aimed at bolstering U.S. accusations that Iran is working toward a bomb. "We will never ever suspend our enrichment," Ali Asghar Soltanieh, Iran's permanent envoy to the IAEA, said in November. In December, the United States as well as several other nations announced increased sanctions against Iran in an international effort to tighten the screws around the suspected nuclear weapons program.

Published: Wed, 15 Feb 2012 14:04:29 GMT

Opposition: Syrian war planes blow up oil pipeline in Homs

A massive plume of thick, black smoke billowed from the Syrian city of Homs Wednesday, punctuating the chaos that has plagued the opposition stronghold for months. According to the Local Coordination Committees of Syria, an opposition activist group, government war planes flew over Homs and blew up an oil pipeline. But Syrian state-run TV blamed a "terrorist group" for the assault. Under the opaque cloud of smoke, sounds of sustained attacks -- including artillery fire and automatic machine gunfire -- echoed through the city of 1 million people, CNN's Arwa Damon reported from inside Homs Wednesday. Opposition activists say government forces are set on flattening every neighborhood that might hold dissidents calling for the ouster of Syrian President Bashar al-Assad. But reports of fresh violence Wednesday weren't limited to Homs. Three bodies were recovered from Idlib province; a 16-year-old student was killed by gunfire in Daraa province; and another person was killed in Aleppo, the opposition Syrian Observatory for Human Rights said. And military forces stormed the city of Hama, where explosions rattled two neighborhoods, the group said. The Observatory said landlines, cell phone communication and Internet access in Hama were cut off. While residents across Syria grappled with the turmoil, the state-run Syrian Arab News Agency said al-Assad has set a date of February 26 for a referendum on a draft constitution. Members of a committee tasked with drafting the document "reiterated their keenness on a constitution that allows ... public freedoms and political plurality in a way to lay the foundation for a new stage that will enrich Syria's cultural history," SANA reported. Al-Assad has previously said Syria planned to hold a constitutional referendum, but reports of bloodshed at the hands of his regime have only intensified since his statement. Meanwhile, after repeated U.N. failures to formally denounce the Syrian government, the latest U.N. draft resolution condemning Syria could go for a vote in the General Assembly as early as Wednesday. Though a General Assembly vote would not be binding, it would mark the strongest U.N. statement yet on the violence. Russia and China have vetoed attempts to condemn Syria for the crackdown by the U.N. Security Council, whose resolutions are binding. The draft resolution calls on Syria to end human-rights violations and attacks against civilians immediately, and condemns "all violence, irrespective of where it comes from." But any U.N. action is long overdue, say opposition activists, who reported 49 deaths across Syria on Tuesday. The dead included three Syrian soldiers who defected, the LCC said. Deaths took place in Idlib, Homs, Daraa, Aleppo, Deir Ezzor, Hama, Damascus, the Damascus suburbs and Latakia, the group said. Navi Pillay, the U.N. high commissioner for human rights, said Monday most of the wounded avoid going to public hospitals for fear of being arrested or tortured. Instead, they are being treated in underground hospitals where hygiene and sterilization conditions are rudimentary and medical supplies are scarce, she said. Pillay denounced the Syrian government's "ongoing onslaught" against its citizens. "The nature and scale of abuses committed by Syrian forces indicates that crimes against humanity are likely to have been committed since March 2011," Pillay said. Syria posted a banner on state TV Tuesday saying its Foreign Affairs Ministry "absolutely rejects all the new allegations in the new report by the human rights high commissioner." The Syrian regime has consistently blamed "armed terrorist groups" for the violence in Syria. "What is happening has nothing to do with reforms, with the spread of democracy. This is the work of armed terrorist groups that are being funded from outside," said Syria's ambassador to Russia, Riad Haddad, according to Russia's RIA Novosti state news agency. He added: "Damascus will not let international peacekeepers into the country. Syria does not need peacekeepers. Syria has categorically dismissed that option." CNN cannot independently confirm details of events across Syria because the government has severely limited the access of international journalists. But the vast majority of accounts from within the country indicate al-Assad's forces are slaughtering civilians en masse, part of a brutal crackdown on protesters calling for democratic reforms. Pillay has said at least 5,400 people have been killed in the Syrian conflict, but she said it is difficult to update that number due to the turmoil on the ground. The LCC has said well over 7,000 people have been killed. European Union diplomats said they expect new EU sanctions on Syria by February 27, targeting the Syrian Central Bank and imposing a ban on exports of precious metals and phosphates. Victoria Nuland, a U.S. State Department spokeswoman, said Tuesday that increasing pressure and sanctions on al-Assad's government was crucial. French Foreign Minister Alain Juppe announced a national decision to establish an emergency relief fund for Syria, according to the website of the permanent mission of France to the United Nations. The fund, with an initial sum of €1 million ($1.3 million), will "fund the actions of all organizations and associations wishing to help the Syrian people." France will propose the creation of a similar fund at the international level at the first "Friends of Syria" meeting in Tunis, Tunisia, on February 24, the statement said. Juppe said on French radio Wednesday morning that diplomats have not given up on Russia in the Syria talks. "We are currently renegotiating a resolution at the U.N Security Council to see if we can persuade the Russians," Juppe told France Info.

Published: Wed, 15 Feb 2012 13:00:31 GMT

Obama wants cheaper pennies and nickels

The U.S. Mint is facing a problem -- especially during these penny-pinching times. It turns out it costs more to make pennies and nickels than the coins are worth. And because of that, the Obama administration this week asked Congress for permission to change the mix of metal that goes to make pennies and nickels, an expensive recipe that has remained unchanged for more than 30 years. To be precise, it cost 2.4 cents to make one penny in 2011 and about 11.2 cents for each nickel. Given the number of coins that the mint produces -- 4.3 billion pennies and 914 million nickels last year alone, those costs add up pretty quickly: a little more than $100 million for each coin. But even though Treasury has been studying new metals since 2010, it has yet to come up with a workable mix that would definitely be cheaper, and it has no details yet as to what metals should be used or how much it would save to do so. Even if a cheaper metal can be used, it might not take the cost of a penny down to less than a penny. Just the administrative cost of minting 4.3 billion pennies costs almost a half-cent per coin by itself, leaving precious little room to make a penny for less than a cent, no matter the raw material used. The raw material cost of the metals used in a current penny is only about 0.6 cents per coin, according to prices quoted on the London Metal Exchange, and a breakdown of a penny's composition from the mint. The mint paid 1.1 cents on average for the metal used in a penny in 2011, but that is the cost of ready-to-stamp blanks from the supplier, not raw material traded on commodity markets. There have been times in recent years when a run-up in zinc and copper prices has taken the raw material value of a penny above one cent. That's the case for a nickel today. Its more expensive metal mix means the raw materials in each are worth almost 6 cents per coin, based on current market prices. Despite popular belief, since 1982 pennies have only been copper plated, not copper through and through. Much less expensive zinc makes up 97.5% of the mass of a penny, the rest is a copper coating. Nickels actually have much more copper in them -- 75% copper and 25% nickel, the same mix it has always had. The mint did make steel pennies for one year -- in 1943 -- when copper was needed for the war effort. And steel might be a cheaper alternative this time. Steel is roughly one-quarter the price of zinc on the London Metal Exchange. Treasury had already made a cost-saving move in December when it stopped making dollar coins. With 1.4 billion surplus presidential dollar coins sitting in bank vaults waiting to be circulated, and American consumers showing little appetite to start using the coins, Treasury estimates the halt in production of the coins will save about $50 million a year. Treasury spokesman Matt Anderson said Treasury has the authority to stop making the dollar coins on its own, but it can't change the mix of metals in pennies without permission. As for the suggestion of some that the penny be abandoned altogether, Anderson said only "that is not a proposal we have put forward."

Published: Wed, 15 Feb 2012 12:15:58 GMT

Winans to deliver eulogy at Houston's funeral

Close friends and family will mourn Whitney Houston at a private funeral, led by a pastor who has known her for decades, at a church where she honed her vocal skills as a child. Gospel singer Marvin Winans will give the eulogy at the funeral Saturday at the request of Houston's mother, according to Pastor Joe Carter of New Hope Baptist Church in Newark, New Jersey. Winans officiated Houston's 1992 marriage to R&B singer Bobby Brown, said Carter. The two divorced in 2007. Winans is also the brother of noted gospel singer CeCe Winans. Houston, 48, died Saturday after a member of her staff found her unconscious in the bathtub of her Beverly Hilton hotel suite, hours before she was to attend a pre-Grammy Awards bash at the hotel. Emergency crews were unable to revive her. A cause of death has not yet been determined pending toxicology results that could take weeks. "When I've seen her, she's ... so full of life. That's why this is so weird. You can't imagine her not being alive," award-winning songwriter Diane Warren told CNN's Piers Morgan on Tuesday night. "She was able to leave us with so many wonderful memories of that God-given gift," Carter said. "That's what we are celebrating on Saturday." Carter said he'll officiate the invitation-only service that starts at noon at his church. The church seats a maximum of 1,500 people, and the pastor said he expects "all these empty pews to be filled with people whose hearts are broken." In honor of the family's wishes, there will be no public memorial in Newark, city spokeswoman Anne Torres said. The church hopes to set up a large screen outside so residents and fans can watch the service. New Jersey Gov. Chris Christie said he plans to issue an order for flags to fly at half-staff at government buildings on the day of the funeral. Speculation has grown over the cause of Houston's death, but a Los Angeles County coroner official has downplayed suspicions that drugs played a major role. Medication recovered by investigators in her room was less than what is usually present in deaths attributed to overdoses, said Ed Winter, an assistant chief coroner. "I know there are reports that she maybe was drowned or did she overdose, but we won't make a final determination until all the tests are in," he said. Winter ruled out foul play and said there were no injuries to Houston's body. The pop superstar's body arrived at the Whigham Funeral Home in New Jersey on Monday from California on a private plane. Cissy Houston, the late singer's mother, was waiting at the funeral home, police said. "Her heart is broken: Nobody expects to bury her child," Carter said. "But she is managing it with miraculous strength. She is so grateful for prayers and thoughts, and that's holding her together." The coroner's office said toxicology tests could take six to eight weeks, though Beverly Hills police Lt. Mark Rosen said that the coroner's report is expected to be finished sooner -- in two to three weeks.

Published: Wed, 15 Feb 2012 12:04:23 GMT

Pastor, wife accused of killing 'possessed' kids

A pastor and his wife are in custody accused of killing three of their children by starving them to ward off evil spirits, police in South Korea said Wednesday. The couple told police the children -- aged 9, 7 and 3 -- had been ill, which they believed was a sign they were invaded by evil spirits after eating too much on Lunar New Year. They then cut the children's hair to chase the spirits out and starved them from Jan. 24 until Feb. 2, only allowing them to drink water. Local media reports said the parents had beaten the children with a belt and a fly swatter numerous times. The pastor, named only by his surname Park, and his wife, Cho, told police they tied the children's arms and legs with stockings. All three died on Feb. 2, the first around 2 a.m., the second at 5am and the third at 7 a.m., according to police in the town of Boseong, more than 186 miles (300 kilometers) south of Seoul. The bodies were found nine days later by Park's brother-in-law. Police said the couple was praying in the hope of resurrecting the children. Their 8-month-old daughter who survived has been taken into care, police said. Park, 43, and Cho, 34, told police they opened a church in Boseong in March 2009 with a congregation of 10, but were accused of being a cult. The police plan to forward the case to the prosecutor's office on Feb. 17.

Published: Wed, 15 Feb 2012 12:02:37 GMT

China's VP to meet congressional leaders

China's presumptive leader, Xi Jinping, is expected to meet with U.S. congressional leaders Wednesday on the third day of a visit that could influence relations between the two world powers for years to come. Xi, who currently holds the position of Chinese vice president, is also due to deliver a major policy address to public and private sector leaders at a hotel in Washington before he travels on to Iowa, a state he first visited as an agricultural official in 1985. President Barack Obama welcomed Xi at the White House on Tuesday but also set a firm tone for future ties between the countries. The meeting with Obama came amid a day of top-level Washington diplomacy for Xi, who also met with Vice President Joe Biden and spoke at the State Department. On Wednesday, Xi will spend time with both Senate and House leaders on Capitol Hill as he continues his five-day visit. At the Oval Office meeting Tuesday, Obama said that with China's meteoric rise as an economic powerhouse came a responsibility to ensure balanced trade flows, referring to China's trade surpluses. The president also raised the delicate issue of human rights as a critical area of concern for the United States. "We've tried to emphasize that because of China's extraordinary development over the last two decades, that with expanding power and prosperity also comes increased responsibilities," Obama said while sitting next to Xi in the Oval Office. "We want to work with China to make sure everyone is working by the same rules of the road when it comes to the world economic system," he added. For his part, Xi said the main purpose of his visit was to work to strengthen U.S.-Chinese relations and build a "cooperative partnership based on mutual respect and mutual interests." The trip is an opportunity for Xi, who is expected to be the Asian giant's next Communist Party leader and president, to burnish his credentials. President Hu Jintao undertook a similar visit 10 years ago as he was being groomed for the top job. As well as looking to the future, Xi's itinerary gives a nod to his past. In Iowa on Wednesday, he'll revisit Muscatine, the town in which he stayed in April 1985 as part of a Chinese delegation looking into farming technology. Xi will also attend a dinner with Gov. Terry Branstad of Iowa, who he originally met during his 1985 trip. The visit by Xi is giving U.S. officials chance to size him up. His meeting with Obama lasted almost 90 minutes, which was longer than planned, White House Press Secretary Jay Carney told reporters. According to Carney, Obama said the meeting ran long "because of the importance of the relationship and cooperation in dealing with the range of challenges that" the two countries face. In welcoming Xi earlier, Vice President Joe Biden said the United States and China had one of the most important bilateral relationships in the world. But the two countries, he said, were not always going to see eye to eye. "We saw this in the recent U.N Security Council debate about Syria where we strongly disagreed with China and Russia's veto of a resolution against the unconscionable violence being perpetrated by the Assad regime," Biden said. Xi, who is expected to become the leader of China's ruling Communist Party later this year, said he looked forward to in-depth and candid talks. He also said he hoped to engage with a broad section of the American people. But beneath the carefully choreographed presentation of the high-profile meetings lies a range of contentious issues on which Xi has little incentive to give ground, including trade, human rights and China's growing military presence. The subject of Xi's trip and what it portends for U.S.-Chinese relations in the coming years has received heavy coverage in state-run media in China. "The U.S. has never met a competitor like China before," the Global Times, an English-language newspaper run by the Communist Party, said in an editorial published Monday that noted China's global clout in manufacturing and exports. The Obama administration, under pressure from stubbornly high unemployment figures in an election year, has already taken steps concerning China's role in global trade. Obama mentioned China by name when he announced in his State of the Union address last month that he was creating a trade enforcement unit to bring cases against other countries. There is also persistent tension over China's efforts to control the level of its currency, the renminbi, which U.S. officials say makes it undervalued. Carney told reporters Tuesday that the currency issue is routinely raised in any meeting with Chinese leaders. Xi, 58, is very well versed in these issues, according to Jon Huntsman, the former Republican presidential hopeful who was U.S. ambassador to China between 2009 and 2011. "He's gone out of his way in recent years to bone up economics and trade, knowing full well that these are the issues that are going to determine whether or not the United States and China are able to get through the years to come," Huntsman said. Chinese officials are aware of U.S. concerns, but Xi and other leaders face the challenge of keeping China's hundreds of millions of workers content as economic growth starts to ease from the torrid levels of recent years. Policy makers in Beijing are grappling with how to tackle rapidly rising prices and the widening gap between rich and poor. Xi's engagements in the United States began Monday with a dinner in Washington attended by former U.S. secretaries of state Henry Kissinger and Madeleine Albright. He was given a less cordial welcome by activists advocating Tibetan independence, who started unfurling a banner on Arlington Memorial Bridge in Washington Monday afternoon. The activists were detained by the police before being released. On Tuesday, several hundred protesters chanting for a free Tibet gathered at the U.S. Chamber of Commerce as Xi and Biden met with business leaders. Calling for Tibetan freedom, the protesters waved flags, carried signs and voiced their message through a bull horn. Beijing has been struggling in recent weeks to contain unrest among ethnic Tibetans in the southwestern province of Sichuan. It has sent additional security forces to the region after Tibetan protesters set themselves on fire and clashed with police to express frustration with Chinese rule. After Iowa, Xi will fly Thursday to Los Angeles where he is scheduled to attend an economic forum and meet with local leaders and students.

Published: Wed, 15 Feb 2012 11:21:34 GMT

Egypt releases American accused in protest

Egyptian authorities have freed an American student and an Australian freelance journalist arrested Saturday along with their Egyptian translator but charges are still pending against them, an official said. "The three of them are not allowed to travel, and they are charged with inciting people to destabilize the security of the country. We are waiting for the final report from the investigators," said Adel Saeed, spokesman for Egypt's general prosecutor. American student Derek Ludovici, Australian Austin Mackell and their Egyptian translator, Aliya Alwi, were arrested Saturday on accusations that they were trying to bribe people to join a general strike in Mahalla, an industrial city about 70 miles (108 kilometers) north of Cairo. The official Middle East News Agency said the three were accused of "inciting protest and vandalism" via Facebook and that Ludovici also was illegally working as a journalist even though he had entered the country using a tourist visa. Mackell and Alwi had traveled to Mahalla to interview a labor rights activist and to cover a general strike scheduled for February 11, according to Mackell and Egyptian activist Shahira Abu el Leil, a founding member of the No To Military Tribunals of Civilians group. Ludovici, Mackell's friend and a student at American University in Cairo, joined them on the trip because it related to the thesis he is preparing as part of his studies, she said. Witnesses who accused the trio of bribing people to join the strike were themselves bribed, she alleged. "The witnesses who testified against them were paid, and I got a confirmation from a young boy who was paid 200 pounds to confirm they were inciting and bribing people," she said. It was unclear Tuesday when the investigation against the three would be completed.

Published: Wed, 15 Feb 2012 10:33:06 GMT

Taliban won't talk peace with Karzai gov't

The Taliban have met with U.S. officials to discuss possible peace talks, but do not want to negotiate with Afghan President Hamid Karzai's government, a Taliban spokesman said Tuesday. The spokesman's comments, rejecting a key American condition, could potentially derail American efforts for Afghans to reach a negotiated end to the decade-long war. In an e-mail response to questions from CNN, Taliban spokesman Zabiullah Mujahid denied previous reports that the Taliban had been invited to meet with the Karzai government in Saudi Arabia, saying that talks with what he called a "puppet" government would be pointless. "We have never been asked to attend talks with Karzai administration officials in Saudi Arabia, but even if we are asked to attend, we won't because (the) Karzai government is a puppet and unauthorized, and meeting with them will not be beneficial in solving the issue," Mujahid wrote in a message from an e-mail account regularly used by the Taliban to issue statements. The spokesman, in answers that he said had taken some time to consider, said the Taliban wants direct discussions with the Americans. "The issue is ... who is powerful and has got the power to make a decision, and who hasn't, and everyone around the world knows that the one who has got the authority in opposition to the Mujahideen (the Taliban) is America," he wrote. The e-mail also contained the Taliban's first open recognition that they have met with U.S. officials in Qatar -- talks that senior American officials also confirmed. The talks with the Taliban are aimed at establishing what the senior U.S. officials called "confidence-building measures" to lay the groundwork for negotiations between the Afghan government and the Taliban, with the United States possibly serving in a mediation role. U.S. officials have been trying to jump-start peace talks between the Taliban and Afghan officials through discussions over the past year. The nascent process has been marred by dissatisfaction from Afghan government officials that they were not included at the start. Karzai's advisers have complained that U.S. officials were going behind Kabul's back in talking to the Taliban. After initially opposing U.S.-Taliban talks, Karzai has since given his blessing, paving the way for a meeting last month between U.S. envoy Marc Grossman and Taliban representatives in Doha, Qatar, senior U.S. officials said. The Taliban's demand to talk with U.S. officials and not the Karzai administration could throw a wrench in the U.S. State Department's demand that all talks be Afghan-led and Afghan-owned. Another meeting between U.S. officials and Taliban representatives could happen this month, the senior U.S. officials said. The officials said the likelihood of reaching a deal between the Afghan government and the Taliban is slim. The talks could sow discord in the Taliban ranks, between those who want to negotiate and those who don't, the senior U.S. officials said. On Tuesday, Mujahid said that the Taliban sought confidence-building measures from the Americans for talks to proceed. "The trust-building phase is totally up to Americans," the spokesman wrote, "and they have to take measures and our conditions are as follows: Exchange of Guantanamo prisoners, the establishment of political office (in Qatar), removing the sanction lists of the UN (against Taliban figures)." American demands for the Taliban include requiring them to renounce terrorism and to distance themselves from al Qaeda, senior U.S. officials said. Taliban representatives seemed organized, professional and willing to meet those demands during the Qatar talks, according to the senior U.S. officials.

Published: Wed, 15 Feb 2012 10:24:43 GMT

Al-Qaida suspect charged by military

Military commission charges have been sworn against Majid Shoukat Khan, a Pakistani national who lived in the United States from 1996 to early 2002 who is suspected of helping al-Qaida plan attacks in the United States and elsewhere, the Defense Department said Tuesday. He is charged with conspiracy, murder and attempted murder in violation of the law of war, providing material support for terrorism, and spying. If convicted, he faces a maximum penalty of life in prison. The charges allege that Khan, who is being held at Guantanamo Bay, Cuba, joined with members of the terrorist group in Pakistan after the September 11, 2001, attacks in New York, Washington and Pennsylvania. Khan is accused of having: --used a fraudulently obtained travel document to travel from Baltimore, to Karachi, Pakistan, in January 2002; --conspired with Khalid Sheikh Mohammed to blow up underground storage tanks at U.S. gas stations; --recorded a "martyr video," then donned an explosive vest and waited in a mosque where Pervez Musharraf was expected, but the plan failed when the Pakistani president did not show up; --traveled in March 2002 from Karachi to Baltimore, where he performed tasks for al-Qaida and Khalid Sheikh Mohammed, including buying a laptop computer for al-Qaida and contacting a military recruiter to obtain materials regarding the United States military, which he intended to give to Khalid Sheikh Mohammed; --worked for Khalid Sheikh Mohammed and other al-Qaida members once he returned to Pakistan in August 2002; --traveled with his wife in December 2002 to Bangkok, Thailand, where he gave $50,000 in al-Qaida funds to a Southeast Asia-based al-Qaida affiliate, which gave the money to Jemaah Islamiyah to fund the August 2003 bombing of the J.W. Marriott Hotel in Jakarta, Indonesia. That incident killed 11 people and wounded at least 181 others. Chief Prosecutor Mark Martins forwarded the charges to Convening Authority Bruce MacDonald with a recommendation that the charges be referred to military commission for trial, according to the Defense Department. Martins on Tuesday assigned Courtney Sullivan of the Justice Department as trial counsel and Army Lt. Col. Michael Hosang and Navy Lt. Nathaniel Gross as assistant trial counsel. MacDonald will determine whether to refer some, all, or none of the charges to trial by military commission. If the case is referred to trial, MacDonald will designate the commission panel members who would function as jurors. The chief trial judge of the Military Commissions Trial Judiciary would also detail a military judge to the case. The alleged gas-station plot was revealed in 2003 to news media by sources familiar with the questioning of Khalid Sheikh Mohammed. In a statement, the Center for Constitutional Rights said Khan was with two of his civilian lawyers, Wells Dixon of the New York-based Center for Constitutional Rights and Katya Jestin of the Chicago-based law firm of Jenner & Block, when he was served Monday with the military commission charges. "We are reviewing the charges, and will represent Majid throughout this process," the statement said. "Majid is doing well considering these challenging circumstances." Khan, who attended high school in Baltimore, was held for more than three years at the secret CIA prisons and "subjected to an aggressive CIA detention and interrogation program notable for its elaborate planning and ruthless application of torture," his lawyers have said, according to court documents. Details of Khan's torture claims were redacted in the filing but Khan's attorneys have said he suffers "severe physical and psychological trauma from which he is unlikely ever to recover fully" as a result of his ordeal. Asked about Khan's claims, CIA spokesman Paul Gimigliano has told CNN, "CIA's terrorist interrogation effort has always been small, carefully run, lawful and highly productive. Fewer than 100 hardened terrorists have gone through the program since it began in 2002, and of those, less than a third required any special methods of questioning. The United States does not conduct or condone torture." Khan's attorneys claim he was taken into custody in 2003 and "forcibly disappeared" before his transfer to Guantanamo. He filed a legal challenge to his detention in September 2006, the court documents said, and appeared before a Combatant Status Review Tribunal in April 2007. He was found to have been properly detained as an enemy combatant, but filed a challenge to that August 14, 2007. He was not allowed to meet with an attorney, however, until October, the documents said. The Bush administration contended that, in addition to researching how to blow up gas stations, Khan researched how to poison reservoirs in the United States.

Published: Wed, 15 Feb 2012 09:11:05 GMT

Most Americans see no obligation in Syria

Nearly three-quarters of Americans believe the United States does not have a responsibility to do something about the fighting in Syria between government forces and anti-government groups, according to a new national survey. In a CNN/ORC/International poll released Tuesday, 73% of Americans said the U.S. has no obligation to respond to the ongoing unrest, while 25% agreed with the notion. Two percent had no opinion. Those numbers reflect similar poll results last year regarding Libya shortly before the U.S. and allies established a no-fly zone over the country. According to a Pew Research Center survey last March, 63% said the U.S. has no obligation while 27% of American said the U.S. has a responsibility to do something about the fighting in Libya. Ten percent had no opinion. U.N. officials estimate 6,000 people have died in Syria since protests seeking political reforms and the ouster of President Bashar al-Assad began nearly a year ago. On Monday, the U.N. high commissioner for human rights denounced the Syrian government's "ongoing onslaught" against its citizens, and multiple Syrians told CNN they believe the country is bracing for a full blown war. So far, the Obama administration has recalled the U.S. ambassador to Syria and imposed sanctions, while pushing unsuccessfully for a U.N. Security Council resolution against the Assad regime. However, it has resisted calls by veteran Republican Sen. John McCain of Arizona and some Republican presidential candidates to take a larger role in backing the Syrian opposition movement. Independent Sen. Joe Lieberman of Connecticut, who caucuses with Democrats, also called on the U.S. to take action Sunday. The CNN poll was conducted by ORC International from February 10-13, with 1,026 adult Americans questioned by telephone. The survey's overall sampling error is plus or minus three percentage points.

Published: Wed, 15 Feb 2012 09:05:43 GMT

Israel blames Iran for Thai bombings

Israel's defense minister blamed Iran for a series of bombings in the Thai capital of Bangkok Tuesday, a day after attacks against the country's diplomats in India and Georgia. "The attempted terror attack in Thailand proves once again that Iran and its proxies continue to operate in the ways of terror and the latest attacks are an example of that," said Defense Minister Ehud Barak, who issued the statement from Singapore, where he is currently traveling. "Iran and Hezbollah are unrelenting terror elements endangering the stability of the region, and endangering the stability of the world," Barak added. Two Iranians are now in custody in Thailand and another person is at large, the government said. Five people were injured, authorities said. The first bomb went off in a rental house, believed to be leased by three foreigners, according to Thai Police Maj. Gen. Pisit Pisutthisak. The three fled after the blast. Two of the men left the scene, he said. The third man detonated two more bombs -- one when a taxi driver refused to give him a ride, and another when he tried to throw a bomb at police as they closed on him. The last bomb exploded near the man, blowing off one of his legs, Pisit said. He was taken to Chulalongkorn General Hospital for treatment. Thai government spokeswoman Thitima Chaisaeng said the man in the hospital is Iranian, and that Iranian documents were found on him. Another man arrested at the airport is holding an Iranian passport and is one of the three, Thitima said. He was identified as Mohammad Hasai, 42, and was about to leave for Malaysia, she added. Thitima told CNN that Thai intelligence agencies don't think the incident was an act of terror because it was carried out in a sporadic way. But, she said, police think that the men may have been selling weapons and drugs. Israeli Foreign Ministry personnel based overseas have been on alert in recent weeks to the heightened possibility of attacks at Israeli facilities by Hezbollah, the Lebanese Muslim militant group and political party backed by Iran. Sunday marked the fourth anniversary of the death of Hezbollah leader Imad Mugniyah in a car bombing in Damascus, Syria. Hezbollah holds Israel responsible for his death and has vowed revenge. Israeli police spokesman Micky Rosenfeld told CNN that the level of alert in the country had been raised following a security assessment after the overseas incidents in New Delhi and Tbilisi, the capitals of India and Georgia. The alert means patrols will be heightened in and around various public areas inside Israel, and around Israeli embassies and offices worldwide. In the Monday incidents, a device attached to an Israeli Embassy van in New Delhi exploded and injured four people. Another device was found on an embassy car in Tbilisi, Georgia, but it was safety detonated. The Israeli government issued a travel advisory this year for citizens traveling to Thailand after Thai security officials arrested a man in January connected with a planned attack in the country. The police charged the man, Atris Hussein, after finding "initial chemical materials that could produce bombs" in an area just outside Bangkok. Police said Hussein, who also holds a Swedish passport, led them to the location. The authorities are accusing Hussein of trying to attack spots in Bangkok that are popular with Western tourists and say he is believed to belong to Hezbollah, the Shiite Muslim group active in Lebanon that the United States views as a terrorist organization. Police could not confirm whether the Tuesday incident in Bangkok has any link with the Hezbollah suspect, who is still in Thai police custody. Officers found the explosive C-4 during the search of the rented house. U.S. State Department spokeswoman Victoria Nuland said the United States condemns the incident and offered its condolences to the victims. Even as she noted that Thai authorities were investigating the incidents, she went on to draw a parallel between Tuesday's attacks in Bangkok and Monday's attacks against Israeli diplomats in India and Georgia, both of which are also under investigation. "What I would say is that, with regard to this bombing, the incidents in Delhi, incidents in Georgia, while we will await the results of the investigations, these events do come on the heels of other disrupted attacks targeted at Israel and Western interests, including an Iranian-sponsored attack in Baku, Azerbaijan, and a Hezbollah-linked attack in Bangkok, Thailand, before this. "So they serve as a reminder that a variety of states and nonstate actors continue to view international terrorism as a legitimate foreign policy tool, which we consider reprehensible." While Nuland said the United States is "not going to prejudge this," she added, "We're just concerned that these come on the heels of other incidences that clearly had links back to Iran." Israeli Prime Minister Benjamin Netanyahu on Monday blamed the Georgia and India incidents on Iran, calling it "the biggest exporter of terror in the world." "The Israeli government and her security organizations are continuing to operate together with local security services against these acts of terror," Netanyahu said. "We will continue to act in a strong way, systematically and steadfastly." In an interview Tuesday with CNN's Piers Morgan, Israeli Vice Prime Minister Silvan Shalom said Iran has been trying to target Israeli and Jewish sites for "a few decades now." "We knew that they are planning it, preparing it. We're in touch with local governments with a few countries in Asia and in other places and together we -- we're trying to prevent those attacks for a very long time," Shalom said. "Unfortunately, they succeeded to do it in India and tried to do it in Georgia and Azerbaijan a few weeks ago. That's something Iran is responsible for." Iranian Foreign Ministry spokesman Ramin Mehmanparast blamed Israel, accusing it of having bombed its own embassies in New Delhi and Tbilisi "to tarnish Iran's friendly ties with the host countries," Iran's state-run Islamic Republic News Agency said. "He brushed aside Israeli accusation on Iranian involvement in the bombing and said that Israel perpetrated the terrorist actions to launch psychological warfare against Iran," IRNA reported. "Iran condemns terrorism in strongest term and Iran has been the victim of terrorism," Mehmanparast said. Iran's supreme leader, Ayatollah Ali Khamenei, said this month that Iran would support any nation or group that stands up against Israel. He said Iran doesn't interfere in other nations but has aided such militant groups as Hamas and Hezbollah in conflicts with Israel in Gaza and Lebanon. The modus operandi is not new. Last month, a mysterious explosion in Iran killed a man identified as a nuclear scientist -- the third such killing in the past two years in which someone placed a bomb on or under a scientist's car. A fourth survived an assassination attempt. The United States and Israel oppose Iran's nuclear program, although numerous countries have expressed concern as well. Iran insists its nuclear program is for peaceful, civilian energy purposes. Iranian officials, on state-run media, blame Israel and the United States for the killings of the scientists. U.S. Secretary of State Hillary Clinton has denied "any United States involvement in any kind of act of violence inside Iran." While Israel generally refuses to comment on accusations and speculation, Brig. Gen. Yoav Mordechai, a spokesman for the Israel Defense Forces, said on his Facebook page, "I have no idea who targeted the Iranian scientist but I certainly don't shed a tear."

Published: Wed, 15 Feb 2012 09:03:09 GMT

Obama stresses economy with China's Xi

President Barack Obama welcomed China's presumptive next leader at the White House Tuesday but also set a firm tone for future relations between the two world powers. The meeting with Obama highlighted a day of top-level Washington diplomacy for Chinese Vice President Xi Jinping, who also met with Vice President Joe Biden and spoke at the State Department. On Wednesday, Xi will meet with congressional leaders on Capitol Hill and deliver a major policy address at the U.S. Chamber of Commerce as he continues his five-day visit. At the Oval Office meeting Tuesday, Obama said that with China's meteoric rise as an economic powerhouse came a responsibility to ensure balanced trade flows, referring to China's trade surpluses. The president also raised the delicate issue of human rights as a critical area of concern for the United States. "We've tried to emphasize that because of China's extraordinary development over the last two decades, that with expanding power and prosperity also comes increased responsibilities," Obama said while sitting next to Chinese Vice President Xi Jinping in the Oval Office. "We want to work with China to make sure everyone is working by the same rules of the road when it comes to the world economic system," he added. For his part, Xi said the main purpose of his visit was to work to strengthen U.S.-Chinese relations and build a "cooperative partnership based on mutual respect and mutual interests." The trip is an opportunity for Xi, who is expected to be the Asian giant's next Communist Party leader and president, to burnish his credentials. President Hu Jintao undertook a similar visit 10 years ago as he was being groomed for the top job. It also gave U.S. officials chance to size up Xi. His meeting with Obama lasted almost 90 minutes, which was longer than planned, White House Press Secretary Jay Carney told reporters. According to Carney, Obama said the meeting ran long "because of the importance of the relationship and cooperation in dealing with the range of challenges that" the two countries face. In welcoming Xi earlier, Vice President Joe Biden said the United States and China had one of the most important bilateral relationships in the world. But the two countries, he said, were not always going to see eye to eye. "We saw this in the recent U.N Security Council debate about Syria where we strongly disagreed with China and Russia's veto of a resolution against the unconscionable violence being perpetrated by the Assad regime," Biden said. Xi, who is expected to become the leader of China's ruling Communist Party later this year, said he looked forward to in-depth and candid talks. He also said he hoped to engage with a broad section of the American people. But beneath the carefully choreographed presentation of the high-profile meetings lies a range of contentious issues on which Xi has little incentive to give ground, including trade and China's growing military presence. "I think he's going to be tough with a smile on his face," said James McGregor, senior counselor for the communications firm APCO Worldwide in China. "He's gonna appear to be a very friendly man. But he has to be tough because he's still talking to an audience back here." The subject of Xi's trip and what it portends for U.S.-Chinese relations in the coming years has received heavy coverage in state-run media in China. "The U.S. has never met a competitor like China before," the Global Times, an English-language newspaper run by the Communist Party, said in an editorial published Monday that noted China's global clout in manufacturing and exports. The Obama administration, under pressure from stubbornly high unemployment figures in an election year, has already taken steps concerning China's role in global trade. Obama mentioned China by name when he announced in his State of the Union address last month that he was creating a trade enforcement unit to bring cases against other countries. There is also persistent tension over China's efforts to control the level of its currency, the renminbi, which U.S. officials say makes it undervalued. Carney told reporters Tuesday that the currency issue is routinely raised in any meeting with Chinese leaders. Xi, 58, is very well versed in these issues, according to Jon Huntsman, the former Republican presidential hopeful who was U.S. ambassador to China between 2009 and 2011. "He's gone out of his way in recent years to bone up economics and trade, knowing full well that these are the issues that are going to determine whether or not the United States and China are able to get through the years to come," Huntsman said. Chinese officials are aware of U.S. concerns, but Xi and other leaders face the challenge of keeping China's hundreds of millions of workers content as economic growth starts to ease from the torrid levels of recent years. Policy makers in Beijing are grappling with how to tackle rapidly rising prices and the widening gap between rich and poor. "I want a job," said Xie Yingling, an unemployed welder in the coastal province of Fujian, where Xi used to be governor. "Our local economy is just bad. I find even a bowl of noodles too expensive here." Xi's engagements in the United States began Monday with a dinner in Washington attended by former U.S. secretaries of state Henry Kissinger and Madeleine Albright. He was given a less cordial welcome by activists advocating Tibetan independence, who started unfurling a banner on Arlington Memorial Bridge in Washington Monday afternoon. The activists were detained by the police before being released. On Tuesday, several hundred protesters chanting for a free Tibet gathered the U.S. Chamber of Commerce Xi and Biden met with business leaders. Calling for Tibetan freedom, the protesters waved flags, carried signs and voiced their message through a bull horn. Beijing has been struggling in recent weeks to contain unrest among ethnic Tibetans in the southwestern province of Sichuan. It has sent additional security forces to the region after Tibetan protesters set themselves on fire and clashed with police to express frustration with Chinese rule. After Washington, Xi will travel Wednesday to Iowa, a state he first visited as a local official in the 1980s. He is visiting the United States amid the rhetoric and political uncertainty of presidential election campaigning. But upheaval is also under way in China through the leadership transition that is set to result in Xi's taking charge later this year. With about 70% of the country's top 200 officials expected to be swapped out during the process, Huntsman said Xi is "stepping into the forefront of China's political leadership structure at a time of enormous change."

Published: Wed, 15 Feb 2012 09:01:20 GMT

Tentative payroll tax cut deal reached

Congressional negotiators reached a tentative deal Tuesday to extend the payroll tax cut and unemployment benefits while avoiding a fee cut for Medicare doctors, according to Republican legislators and aides. The framework deal followed a key Republican concession Monday and could receive the endorsement of a House-Senate conference committee on Wednesday. Reps. Renee Elmers of North Carolina and Fred Upton of Michigan, both Republicans, called it a tentative agreement, while a top House Democratic aide said Democratic leaders would discuss the proposal with their members on Wednesday morning. Elmers and Upton were part of the conference committee negotiations, and they said they expected the special panel to sign off on the measure Wednesday if no objections arise. In that case, the House would vote on the agreement, in the form of the conference committee report, as soon as Friday. Under the agreement that would cover the rest of 2012, the nearly $100 billion payroll tax cut would not be paid for -- a consequence of the parties' inability to compromise on either new taxes or offsetting spending cuts, said top congressional aides from both parties. It would be coupled, however, with measures extending unemployment benefits and preventing a fee cut to Medicare doctors -- known in Washington as the "doc fix." The latter two measures -- costing a combined $50 billion -- would be paid for, the aides said. Possible funding sources to pay for the measure include saving from broadband spectrum sales of about $13 billion, increased pension contributions by federal employees of about $16 billion and cuts to Medicare hospital and specialist fees that would not impact patients, according to the congressional aides. "I think they have to work out all the details, but I think the big scope has been agreed to," House Speaker John Boehner, R-Ohio, told reporters. However, House Majority Leader Eric Cantor, R-Virginia, was less enthusiastic, saying "this is not our preferred way" to deal with the issues and adding that details were still being studied. Congressional aides differed by party on details of extending the unemployment benefits, particularly the maximum number of weeks that will be funded. While a Democratic aide said the maximum for states with high unemployment would continue at the current 99 weeks, a Republican aide said the maximum would be 89 weeks and most states would have a maximum of 63 weeks of benefits by the end of the year. Some Republicans wanted unemployed individuals to pass drug tests and meet certain education standards before getting benefits -- an idea generally opposed by Democrats. A top Republican aide said the tentative agreement would allow for states to conduct drug testing when the unemployment benefits applicant was seeking a job that required drug testing or lost a job due to a failed drugg test. News of the tentative deal came hours after President Barack Obama publicly urged Congress to extend the payroll tax cut, which is currently set to expire at the end of February. Failure to do so, Obama warned, could derail the economic recovery. "This is a make-or-break moment for the middle class," the president said. "The last thing we need is for Washington to stand in the way of America's comeback." White House Press Secretary Jay Carney later told reporters that the payroll tax cut, extension of unemployment benefits and "doc fix" provision all were "important to the economy in different ways." "It is of vital importance that Congress not muck up the recovery that we're seeing under way," Carney said of the need for a broad agreement. The payroll tax cut, unemployment benefits and enhanced "doc fix" payments are set to expire at the end of February under a short-term agreement reached by Congress in December. That agreement also set up the conference committee that resumed negotiations last month on a longer-term deal. Final negotiations have been hammered out by the two committee chairman, Democratic Sen. Max Baucus of Montana and Republican Rep. Dave Camp of Michigan, in conjunction with Senate Majority Leader Harry Reid, D-Nevada, and Boehner. The payroll tax cut, a key part of Obama's economic recovery plan, has reduced how much 160 million American workers pay into Social Security on their first $110,100 in wages. Instead of paying in 6.2%, they've been paying 4.2% for the past year and two months. The break is worth about $83 a month for someone making $50,000. On Monday, House GOP leaders dropped their demand that any extension of the tax cut be offset by spending cuts elsewhere in the budget. The decision was a sharp turnaround for House Republicans, who previously argued that a failure to fully pay for the tax break would be financially reckless. The debate over whether and how to extend the tax cut has been a political loser so far for the Republicans, who had publicly questioned its value last year. Democrats have gleefully highlighted the GOP's reluctance, using the issue to portray Republicans as defenders of the rich who are indifferent to the plight of the middle class. Political analysts believe the showdown over the payroll holiday has eroded GOP strength on the party's core issue of lower taxes. Fearing negative repercussions, Republican leaders have now backtracked on the issue twice: dropping their opposition to the two-month extension last December and dropping their insistence on paying for a longer extension on Monday. "I think the GOP has read the writing on the wall when it comes to the payroll tax cut," said Brown University political scientist Wendy Schiller. "Americans are benefiting from it, and to take it away at this juncture leaves them open to charges of raising taxes. ... It would severely hamper the GOP presidential nominee's effort to defeat Obama." Johns Hopkins University political scientist Adam Sheingate called the GOP's latest move "a subtle shift in strategy precipitated by the improving economic outlook of the past few weeks." "By agreeing to a deal, the GOP can claim some credit for extending the holiday," Sheingate said. "Failing to extend the payroll tax would not only be unpopular, it would shift some of the responsibility for the economy back on the Republicans. This is to be avoided at all costs since the GOP (election) strategy rests almost entirely on Obama's handling of the economy." In announcing their shift on the payroll tax issue Monday, Boehner and two other top House GOP leaders said they wanted separate the matter from legislation dealing with unemployment benefits and the doc fix. Doing so would "protect small businesses and our economy from the consequences of Washington Democrats' political games," said Boehner, Cantor and House Majority Whip Kevin McCarthy, R-California. Schiller told CNN the idea of divorcing the payroll tax cut from an unemployment benefits extension and the doc fix was a "clever" idea on the part of the House GOP leadership. Doing so would have removed the Democrats' "leverage on the other issues of unemployment and Medicare payments," she said. "Also, as the unemployment numbers get better, the rationale for a lengthy extension of benefits diminishes. The longer the GOP can stall on the unemployment extension, the more likely it is they win in terms of authorizing a much shorter extension than the Democrats would like." Democrats, however, quickly pushed back hard against the idea. Senate Majority Leader Harry Reid, D-Nevada, and House Minority Leader Nancy Pelosi, D-California, on Tuesday urged Republicans to allow Congress to quickly complete its work on all three issues -- the payroll tax cut, unemployment insurance, and the doc fix. Pelosi said Congress should cancel a recess currently scheduled for next week if it fails to complete work on all of them by Friday. "These crucial policies affect millions of middle class families and seniors and must not expire at the end of this month," Pelosi said. Instead of a separate measure involving only the payroll tax cut extension, the tentative agreement Tuesday was a more comprehensive package worked out by the conference committee negotiators It remains unclear if the increasingly conservative House GOP caucus will be willing to go along with the tentative deal. House Republican freshmen, elected on a tidal wave of tea party support in 2010, have made deficit reduction their top priority and repeatedly insisted that any new initiatives be fully paid for. Veteran political analyst Norm Ornstein warned that the GOP leadership's repeated maneuvering on the issue could end up backfiring. House Republican leaders have been "trying to make the best of crummy situation," Ornstein told CNN. But tea party Republicans "don't care" if fighting the tax cut extension is "a political loser. They don't like the payroll tax cut and now the (leadership's) sin is being compounded by saying they won't pay for it." This "could play out in ways that make the life of Boehner (and other Republican leaders) a little less comfortable," he predicted. One key conservative, Rep. Jim Jordan of Ohio, indicated Tuesday he's prepared to back Boehner and the other House GOP leaders. Jordan's "view is anytime we're letting people keep more of their money, that's a good thing," said Brian Straessle, a spokesman for the Republican congressman. CNNMoney's Jeanne Sahadi and CNN's Tom Cohen contributed to this report

Published: Wed, 15 Feb 2012 03:40:18 GMT

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