Ohio election officials brace for early voting

Singer John Legend greets fans after a rally Monday, Sept. 29, 2008, on the campus of Ohio State University, in Columbus, Ohio. Legend, a Springfield, Ohio native, encouraged Barack Obama supporters to cast their ballots early and take advantage of the month-long early voting window leading up to Election Day. (AP Photo/Terry Gilliam)

CLEVELAND—Voters in this crucial swing state began casting absentee ballots Tuesday, a day after state and federal courts upheld a disputed early voting law.

Five people were waiting at the Cuyahoga County Board of Elections when doors opened at 8:30 a.m. Two in line said they were voting for Democratic presidential candidate Barack Obama, including John Fuller, 73, a retired hospital orderly from Cleveland.

Fuller said voting early would allow him to work on Election Day helping others get out and vote.

Election officials around Ohio were preparing for a rush of early voting Tuesday, the first day absentee ballots are accepted in advance of the Nov. 4 presidential election.

Secretary of State Jennifer Brunner, a Democrat, is also allowing new voters to register and cast an absentee ballot on the same day during a weeklong period that ends Oct. 6.

For weeks, the Ohio Republican Party accused Brunner of interpreting the early voting law to benefit her own party by allowing same-day registering and voting. Republicans argued that Ohio law requires voters to have been registered for 30 days before they cast an absentee ballot.

But the Republican-dominated Ohio Supreme Court decided Monday that Brunner was following the law. The decision was backed by a federal judge in Cleveland. Another federal judge in Columbus declined to rule, deferring to the state Supreme Court's decision.

In Cuyahoga County, the state's most populous county, election workers underwent two days of training last week to properly process voters who are registering and voting on the same day.

Fuller and others in line Tuesday morning were previously registered.

Julia Kramer, 19, a Case Western Reserve University freshman from New York City and an Obama volunteer, was second in line. She said she's been working on campus to register out-of-state students to change their registrations to Ohio because of its critical role in the election.

Nevertheless, "A lot of people are really attached to their hometowns," Kramer said. "It's hard to explain to people that your vote (in New York) won't count as much."

In Columbus, voters wanting to cast ballots as soon as possible on Tuesday morning had set up tents Monday night to wait in line outside the Franklin County Board of Elections.

The outcome of the court battles is likely to benefit Democrats in a state that narrowly awarded President Bush re-election in 2004.

Obama's campaign has organized car pools beginning Tuesday from college campuses to early voting sites. The Northeast Ohio Coalition for the Homeless is ferrying voters from homeless shelters to polling sites in the Cleveland area. Other organizations that seek to increase poor and minority participation in elections are transporting voters from low-income neighborhoods.

The targeted voters have all traditionally had a harder time getting registered, and then getting to polling places on Election Day. Thanks to Monday's court decisions, these Democratic-leaning voters can do it all at once.

It's a reality that inspired the Ohio GOP to lash out at Brunner once again. "This is a win for Jennifer Brunner's partisan efforts to aide the Democrat turnout strategy," said Ohio GOP Chairman Bob Bennett in a statement.

Still, Republicans weren't ceding the early voting crowd just because they were engaged in a court challenge.

"You have a special opportunity to help elect John McCain, Sarah Palin and Republicans across the ballot," a page on the Republican National Committee's Web site said.

McCain's presidential campaign has not provided as many details as the Obama campaign on how it intends to take advantage of the window, but still plans to push it.

The window occurs because state law requires absentee voting to begin 35 days before Election Day, on Sept. 30, while the end of registration for this election is Oct. 6. The window was used by voters sparingly in previous elections, but never got any attention until the Republican-controlled Legislature passed a law in 2005 that enabled all Ohio voters to vote absentee.

Cadbury recalls Chinese-made products

British chocolate maker Cadbury said Monday tests have „cast doubt" on the safety of its Chinese-made products and ordered a recall, the latest foreign company affected by China's tainted milk scandal.

Foto: AP

British chocolate Cadbury said in a statement issued Monday by its Singapore office that tests had "cast doubt on the integrity of a range of our products manufactured in China." Hong Kong's government said Cadbury is recalling 11 types of Chinese-made chocolates as a precaution.

China stops tainted sweet sales

The sweets were found to contain a chemical used to make plastic

A Chinese sweet maker has stopped domestic sales of one of its best-known brands after it was found to contain the industrial chemical melamine.

The company, Guanshengyuan, has already halted exports of the popular White Rabbit candy, made from milk.

It is the latest development in a spreading food safety scandal involving milk contaminated with melamine.

Traces of the chemical have also been found in Hong Kong and Japan in products containing Chinese milk.

They are among a growing number of countries which have already banned or restricted imports of Chinese products containing milk.

Four babies have died and more than 53,000 children have so far been made ill by drinking contaminated powder milk in China.

The World Health Organisation (WHO) has meanwhile urged five countries to immediately recall all milk powder imported from China.

Car Bomb Attack on Lebanese Army Bus Kills 5

Forensic experts search for evidence in the bus wreckage at the site of explosion in the northern...

Forensic experts search for evidence in the bus wreckage at the site of explosion in the northern city of Tripoli, Lebanon, Monday, Sept. 29, 2008. A car bomb exploded Monday near a military bus carrying troops on their way to work in northern Lebanon, killing five people and injuring 26, Lebanese security officials said.

(Ahmad Omar/AP Photo)

TRIPOLI, Lebanon (Reuters) - A car bomb tore through an army bus in northern Lebanon on Monday, killing four soldiers and a civilian passerby in the second attack on the army in less than two months, security sources said.

Thirty-five people were also wounded in the blast in the city of Tripoli, scene of an August 13 bombing that killed 10 soldiers and five civilians at a bus stop.

The car bomb exploded during the morning rush hour in the Buhsas area at the southern entrance to Lebanon's second largest city, hurling mangled metal through the bus, damaging other vehicles and shattering windows of nearby buildings.

"Once again the hand of treachery has reached the military institution in a clear targeting of security and stability," the army said in a statement, describing the bombing as a terrorist act. There were no immediate claims of responsibility.

Somali pirates remain at large on Ukrainian cargo ship

Somali pirates in small boats are seen alongside the hijacked cargo ship Faina in this picture released by U.S. Navy on Sunday. (U.S. Navy/Associated Press)Somali pirates who seized a Ukrainian ship laden with military hardware last week remained at large on Tuesday, even as they denied reports that three of their own were killed in a shootout aboard the ship.

Andrew Mwangura of the East African Seafarers' Assistance Program said there was an unconfirmed report that three Somali pirates were killed Monday night in a dispute over whether to surrender to U.S. warships that have surrounded the ship.

Pentagon officials later verified the report.

But a spokesman for the pirates insisted there was no truth to the account.

"We didn't dispute over a single thing, let alone have a shootout," pirate spokesman Sugule Ali told the Associated Press by satellite phone.

The 21-person crew aboard the ship includes 17 Ukrainians, three Russians and a Latvian. One of the crewmembers died on Sunday of an apparent heart attack, reported the Associated Press.

The pirates have demanded a $20-million US ransom for the cargo ship Faina and its cargo of 33 Soviet-designed tanks and weapons, which they hijacked on Sept. 25 as it was passing the Gulf of Aden off the Indian Ocean en route to the Kenyan port of Mombasa. The gulf is one of the world's busiest shipping lanes.

The San Diego-based USS guided missile destroyer Howard has been watching the pirate ship for several days and has spoken to the pirates and crew by radio.

On Monday, U.S. naval officials said several other U.S. ships and helicopters had joined the watch, but declined to give details. Russia has also dispatched a warship to the area, but it will take about a week to get there.

SpaceX Launches 1st Commercial Rocket Into Orbait

Brain Behind PayPal Sends Commercial Rocket Into Orbit in Effort to Make Space Launch Cheaper

Launch of the SpaceX Falcon 1 Flight 4 vehicle from Omelek Island, in the Kwajalein Atoll, 2,500 miles southwest of Hawaii. Liftoff occurred on Sunday 28 September 2008, at 4:15 PM

(Business Wire/AP Photo)

An Internet entrepreneur's latest effort to make space launch more affordable paid off Sunday when his commercial rocket, carrying a dummy payload, was lofted into orbit from the South Pacific.

It was the fourth attempt by Space Exploration Technologies, or SpaceX, to launch its two-stage Falcon 1 rocket into orbit.

"Fourth time's a charm," said Elon Musk, the multimillionaire who started up SpaceX after making his fortune as the co-founder of PayPal Inc., the electronic payment system.

The rocket carried a 364-pound dummy payload designed and built by SpaceX for the launch.

"This really means a lot," Musk told a crowd of whooping employees. "There's only a handful of countries on Earth that have done this. It's usually a country thing, not a company thing. We did it."

U.S. Navy Surrounds Hijacked Ship

MOGADISHU, Somalia -- U.S. warships and helicopters on Monday surrounded a hijacked cargo ship loaded with Sudan-bound tanks and other arms to keep the weapons from falling "into the wrong hands," an American Navy spokesman said.

Lt. Nathan Christensen, a deputy spokesman for the U.S. Navy's Bahrain-based 5th Fleet, said the shipment of 33 Russian-designed tanks, rifles and ammunition on the Ukrainian-operated Faina was headed for Sudan -- not Kenya as previously claimed by Kenyan officials.

U.S. Navy

Pirates holding the Ukrainian-operated Faina resupply the ship while under observation by the U.S. Navy.

The U.S. fears the armaments onboard the Ukrainian vessel may end up with al Qaeda-linked Islamic insurgents who have been fighting the shaky U.N.-backed Somali transitional government since late 2006.

"We maintain a vigilant watch over the ship and we will remain on station while negotiations between the pirates and the shipping company are going on," Lt. Christensen said.

Pirates seized the Faina's Ukrainian, Russian and Latvian crew off Somalia's lawless coast on Thursday as it headed to Kenya and anchored the vessel off Somalia's coast near the central town of Hobyo. One crew member has died.

Lt. Christensen did not specify whether the arms were intended for the Khartoum-based Sudanese government, or southern Sudan, which was granted a degree of autonomy under a 2005 peace deal that also guaranteed the oil-rich region a referendum on full independence in 2011.

The U.N. has imposed an arms embargo on weapons headed to Sudan's Darfur conflict zone, but the ban does not cover other weapons sales to the Khartoum government or the southern Sudan's autonomous government.

Kenyan officials on Monday declined to discuss the destination of the weapons. Ukrainian Defense Ministry spokesman Valentyn Mandriyevsky said the ministry was not dealing in weapons trade and didn't know where the cargo was bound.

A spokesman for Ukraine's arms trader, Ukrspetexport, had no immediate comment.

Western intelligence reports a few days ago said the ultimate destination was Sudan and that Kenya was only the transshipment point, said one Western official, who spoke on condition of anonymity because he was discussing classified material. He said the issue became confused after Kenyan leaders had publicly referred to the tanks as their own.

Christensen said an unspecified number of destroyers and cruisers have joined the San Diego-based USS destroyer Howard within a 10-mile radius of the Faina.

"The safety of the ship's crew and cargo is a paramount concern to us," Christensen said, adding additional warships and helicopters were deployed to prevent the weapons from falling "into the wrong hands."

There have been 24 reported attacks in Somalia this year, according to the International Maritime Bureau's piracy reporting center. Last year, U.S. naval helicopters fired on pirate skiffs tied to a hijacked Japanese tanker carrying 30,000 tons of benzene after they feared that pirates might try to use it as a floating bomb in a middle eastern oil port.

Seizing ships has become an important source of income for pirates in Somalia, which is riven between rival clan-based warlords since they overthrew a socialist dictator in 1991.

Financial Crisis Hits More US, European Banks

The United States and several European countries are trying to prevent fallout from the global financial crisis from toppling more high-profile banks.

U.S. officials Monday helped arrange the takeover of one of the country's largest banks, saying its failure would have "serious, adverse effects" on the economy.

The Federal Deposit Insurance Corporation says Wachovia Corporation has taken substantial losses on $312 billion in loans. Under the FDIC-brokered deal, U.S.-based Citigroup will take over Wachovia's accounts and absorb billions of dollars in debt.

" alt="People walk by a branch of Bradford & Bingley bank in Croydon, South London, 28 Sep 2008 " src="http://www.voanews.com/english/images/AP-Britain-Bradford-and-Bingley-bank-in-Croydon-eng-190-28sep08.jpg" border="0" vspace="2" width="190" height="190" hspace="2">

People walk by a branch of Bradford & Bingley bank in Croydon, South London, 28 Sep 2008

The British government says it will nationalize troubled British mortgage lender Bradford and Bingley, and assume $75 billion in home loans. The bank's savings division, which has $40 billion in customer accounts, will be sold to Spanish banking giant Santander.

On Sunday, Belgium, Luxembourg, and the Netherlands injected more than $16 billion into banking and insurance giant Fortis, whose profits have tumbled in the past year.

Iceland's government says it is buying a 75 percent stake in the country's third-largest bank, Glitnir.

Authorities in Reykjavik say the move is aimed at ensuring market stability by easing the bank's liquidity problems.

The global banking crisis has largely been linked to lenders making bad home loans and then getting stuck with bad mortgages, shrinking available credit for customers and businesses.

House Rejects Bailout Package, 228-205; Stocks Plunge

WASHINGTON — In a moment of historic drama in the Capitol and on Wall Street, the House of Representatives voted on Monday to reject a $700 billion rescue of the financial industry. The vote came in stunning defiance of President Bush and Congressional leaders of both parties, who said the bailout was needed to prevent a widespread financial collapse.
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House Speaker Nancy Pelosi walked through the Capitol building on Monday.
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Conservatives Viewed Bailout Plan as Last Straw (September 27, 2008)
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Senator Judd Gregg, Republican of New Hampshire, said of the new plan, “If we don’t pass it, we shouldn’t be a Congress.”
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The vote against the measure was 228 to 205, with 133 Republicans joining 95 Democrats in opposition. The bill was backed by 140 Democrats and 65 Republicans.

Supporters vowed to try to bring the rescue package up for consideration again as soon as possible, perhaps late Wednesday or Thursday, but there were no definite plans to do so.

Stock markets plunged sharply as it appeared that the measure would go down to defeat, and kept slumping into the afternoon when that appearance became a reality. Worldwide financial markets had slumped even before the House vote; shares in Hong Kong closed down 4 percent and in Paris and London they were down 3 percent. By 3:15 p.m. Eastern time the Dow Jones Industrial Average had fallen more than 5 percent.House leaders pushing for the package kept the voting period open for some 40 minutes past the allotted time, trying to convert “no” votes by pointing to damage being done to the markets, but to no avail.

The bill amounted to a catastrophic political defeat for President Bush, who had put the full weight of the White House behind the measure and had lobbied wavering Republicans in intensely personal telephone calls on Monday morning before the vote. Both presidential candidates also supported the plan.

Supporters of the bill had argued that it was necessary to avoid a collapse of the economic system, a calamity that would drag down not just Wall Street investment houses but possibly the savings and portfolios of millions of Americans. Moreover, supporters argued, a lingering crisis in America could choke off business and consumer loans to a degree that could trigger bank failures in Europe and slow down the global economy.

Opponents said the bill was cobbled together in too much haste and might amount to throwing good money from taxpayers after bad investments from Wall Street gamblers.

Immediately after the vote, many House members appeared stunned. Some Republicans blamed Speaker Nancy Pelosi, Democrat of California, for a pre-vote speech that disdained President Bush’s economic policies, and did so in too partisan a way in the opinion of the Speaker’s critics.

“Clearly, there was something lacking in the leadership here,” said Representative Eric Cantor, Republican of Virginia.

Democrats, meanwhile, blamed the Republicans for not coming up with enough support for the measure on their side of the aisle.

Members of both parties, doing a quick political post-mortem, said those who voted “no” had encountered too much hostility for the bill among their constituents, and were worried that a vote in favor would be political suicide.

The Senate had been expected to vote later in the week if the bill had cleared the House on Monday. Senate vote-counters had predicted that there was enough support in the chamber for the measure to pass. But the stunning vote in the House, coupled with the Jewish holidays, made it difficult to predict when other votes might be held. Many House members who voted for the bill held their noses, figuratively speaking, as they did so. Representative John A. Boehner of Ohio, the Republican minority leader, called the measure “a mud sandwich” at one point, but he said that there was too much at stake not to support it. He urged members to reflect on the damage that a defeat of the measure could mean “to your friends, your neighbors, your constituents” as they might watch their retirement savings “shrivel up to zero.”

And Representative Steny Hoyer of Maryland, who as Democratic majority leader often clashes with Mr. Boehner, said that on this “day of consequence for America” he and Mr. Boehner “speak with one voice” in pleading for passage.

When it comes to America’s economy, Mr. Hoyer said, “none of us is an island.”

The House debate was heated and, occasionally, emotional up to the last minute, as illustrated by the remarks of two California lawmakers.

Representative Darrell Issa, a Republican, said he was “resolute” in his opposition to the measure because it would betray party principles and amount to “a coffin on top of Ronald Reagan’s coffin.”

But Representative Maxine Waters, a Democrat, said the measure was vital to help financial institutions survive and keep people in their homes. “There’s plenty of blame to go around,” she said, and attaching blame should come later.

The House vote came after a weekend of tense negotiations produced a rescue plan that Congressional leaders said was greatly strengthened by new taxpayer safeguards. “If we defeat this bill today, it will be a very bad day for the financial sector of the economy,” said Representative Barney Frank, Democrat of Massachusetts and the chairman of the Financial Services Committee. The Standard & Poor’s 500 index was down almost 3.4 percent at midmorning, even before the midday plunge; by 3:15 p.m. it had fallen more than 8 percent.

Earlier Monday, President Bush urged Congress to act quickly. Calling the rescue bill “bold,” Mr. Bush praised lawmakers “from both sides of the aisle” for reaching agreement, and said it would “help keep the crisis in our financial system from spreading throughout our economy.”

Crew member says pirates want ransom

By STEVE GUTTERMAN

The Associated Press
Saturday, September 27, 2008; 7:25 AM

MOSCOW -- Pirates who seized a ship laden with tanks off the Horn of Africa were seeking ransom and keeping most of the 35 people aboard in a single stuffy room, a man identified as the captain's aide said in a report on a Russian news Web site Saturday.

In a telephone conversation posted on the site Life.ru, the purported crew member said the ship, the Faina, had anchored close to shore near the Somalian town of Hobyo and that there were two other apparently hijacked ships nearby.

An international anti-piracy watchdog group said Saturday that armed pirates on Friday seized a Greek chemical tanker with 19 crew members in the Gulf of Aden off Somalia.

The tanker, carrying a cargo of refined petroleum from Europe to the Middle East, was ambushed, chased and fired upon, said Noel Choong, who heads the International Maritime Bureau's piracy reporting center in Malaysia.

In the telephone conversation on Life.ru, the man issued what sounded like a coded call for help, repeating part of the Russian word for 'seals' twice.

The 530-foot cargo ship Faina was seized Thursday. Ukraine's defense chief said Friday that it was carrying 33 Russian-built T-72 tanks and a substantial quantity of ammunition and spare parts. Russia's navy said it dispatched a warship to the area, and U.S naval ships were monitoring the situation.

Nobody aboard the Faina was injured, but the captain, Vladimir Kolobkov, was suffering from heatstroke and his condition was "not so good," the man in the report said. He identified himself as Vladimir Nikolsky, the captain's senior assistant, and said the hijackers demanded that he speak only in English.

"They asking that we make contact with the owners about his money," Nikolsky said. Asked how much they were demanding, he said: "I'm not sure, approximately _ I cannot say he exact price." He suggested the hijackers indicated that would be matter for negotiations.

"They would like to speak directly to our owner," he said later.

Ukrainian news agencies have identified the ship's operator as Tomex Team, a company based in the Black Sea port of Odessa. A person who answered the phone at the company's office on Saturday declined to comment and refused to give his name.

Kenyan Defense Department spokesman Bogita Ongeri said on Saturday that Kenyan authorities have had no contact with the pirates or received any demands for ransom.

Ongeri said that the Ukrainian vessel was seized in international waters in the Gulf of Aden, one of the world's busiest shipping lanes. He said that the pirates hijacked the ship beyond 200 nautical miles away from the coast of the northeastern Somali region of Puntland. Two hundred nautical miles in maritime law mark the end of a country's territorial waters.

Hurricane Kyle Races Toward Coast

MACHIAS, Maine -- Fishermen moved boats to shelter from a rare burst of tropical weather along Maine's rugged Down East coast Sunday as Hurricane Kyle plowed past on its way to Canada, threatening a glancing blow equivalent to a classic nor'easter storm without the snow.

A hurricane watch for Maine was discontinued Sunday but a tropical storm warning remained in effect from Stonington, at the mouth of Penobscot Bay, to Eastport on the Canadian border, the National Hurricane Center said. The Canadian Hurricane Centre issued a hurricane warning for parts of southwestern Nova Scotia, with tropical storm warnings for parts of New Brunswick and Nova Scotia.
[Hurricane Kyle] NOAA

Hurricane Kyle is heading toward Nova Scotia and the Gulf of Maine.

The Category 1 storm's track was expected to bring its center ashore in New Brunswick just west of Saint John late Sunday or early Monday, but by then it is expected to have less than hurricane strength, said Peter Bowyer of the Canadian center in Dartmouth, Nova Scotia.

There were no immediate plans for evacuations in Maine, although residents were warned of potential power outages and interruptions in ferry services to islands.

Heavy rain lashed the state Sunday for a third straight day. As much as 5.5 inches had already fallen along coastal areas. Flood watches were in effect for the southern two-thirds of New Hampshire and southern Maine through Sunday evening.

Authorities expected wind gusts in Maine to reach up to 60 mph and waves up to 20 feet, said Robert McAleer, Maine Emergency Management Agency director.

Down East residents are accustomed to rough weather, but it most often comes in the winter when nor'easters howl along the East Coast. Maine hasn't had anything like a hurricane since Bob was downgraded as it moved into the state in 1991 after causing problems in southern New England.

While residents took precautions, many weren't impressed by Kyle.

"It probably won't be much different than a Nor'easter except we don't have to deal with the snow," said Jesse Davis of Marshfield, who planned to ride out the wind and rain at home with his wife and 2-month-old daughter. He gassed up his vehicles and generator, took in his deck furniture and filled up water jugs, but said that's what he does for any big storm.

"Down East we get storms with 50 to 60 mph winds every winter. Those storms can become ferocious," said Washington County Emergency Management Agency Director Michael Hineman. Down East is the rugged, sparsely populated area from about Bar Harbor to the Canadian border.

Many lobstermen moved their boats to sheltered coves, said Dwight Carver, a lobsterman on Beals Island. Some also moved lobster traps from shallow water.

"I'm sure we'll have a lot of snarls, a lot of mess, to take care of when it's done," Carver said. "It'll take us a few days to straighten things out."

In Lubec, the easternmost town in the U.S., town workers pulled up docks and fishermen moved boats across the harbor into Campobello Island, New Brunswick, which has coves and wharves that offer shelter.

At 2 p.m. EDT Sunday, Kyle was centered about 225 miles southeast of Portland, Maine, and about 230 miles southwest of Halifax, Nova Scotia, the National Hurricane Center said. It was moving toward the north-northeast at roughly 24 mph and was expected to continue that track for the next day or so.

Kyle's maximum sustained wind was blowing at nearly 80 mph, with hurricane-force wind of at least 74 mph extending up to 70 miles out from the center.

Emergency Measures officials in New Brunswick were concerned that people living inland were not taking the storm warnings seriously enough.

"We're talking to people on the street and they're shrugging this off," said spokesman Ernie MacGillvray.

He noted that the storm system was hundreds of miles wide. "They need to understand there's going to be a whole bunch of impact and it could be a few days before phones and power is restored," Mr. MacGillvray said.

The deadliest storm to hit the Northeast was in 1938 when a hurricane killed 700 people and destroyed 63,000 homes on New York's Long Island and throughout New England. Other hurricanes that have hit Maine were Carol and Edna in 1954, Donna in 1960 and Gloria in 1985.

A hurricane watch means hurricane conditions, with wind of at least 74 mph, are possible within 36 hours. A tropical storm warning means conditions for that type of storm, with wind of 39 to 73 mph, are expected within the next 24 hours.

Bank-Rescue Compromise Plan Is Under Review by U.S. Lawmakers

By Alison Vekshin and Laura Litvan

Sept. 28 (Bloomberg) -- U.S. lawmakers are reviewing a tentative agreement to revive credit markets by authorizing a $700 billion plan to buy troubled assets from financial institutions.

``The deal is done,'' Senator Judd Gregg, a New Hampshire Republican, a ranking member of the Budget Committee, said this morning. The House and Senate may vote tomorrow, Gregg said.

Still, Republican House members are waiting to see the compromise proposal written into legislation before making a final decision to support it, said Representative Eric Cantor of Virginia.

``We're waiting to see what this looks like on paper to see if we have an agreement,'' Cantor said.

The negotiations were completed about midnight when lawmakers agreed to require the president to offer a plan to recoup any loss to the taxpayers after five years, said a Democratic congressional aide. That clause was intended to address concerns about the cost of the program.

The agreement alters the Bush administration's original request for unchecked authority to purchase distressed debt securities from financial companies reeling from the record number of home foreclosures. That plan evoked a blizzard of emails and phone calls from voters outraged at being asked to foot the bill for the mistakes of Wall Street investors.

Initial Cost

During weeklong negotiations, lawmakers reduced the initial cost by half to $350 billion, with the remainder to be authorized later, and they added provisions creating an oversight structure and help to homeowners facing foreclosure.

The compromise also includes a proposal by House Republicans, whose objections scuttled an earlier agreement in principle, that provides for government insurance for mortgage- backed securities. The plan also imposes limits on the compensation of executives at participating companies.

``It will be the first time in American history that there will be legislative restrictions on CEO compensation,'' said House Financial Services Chairman Barney Frank, Democrat of Massachusetts.

Lawmakers want to announce a firm agreement before Asian financial markets open late today, Senate Majority Leader Harry Reid said. The deadline reflects concern that markets will be further rocked by lack of an agreement after the Standard & Poor's 500 index recorded its largest weekly drop since May.

Treasury Secretary Paulson last night said the proposed deal ``will work and be effective.'' More work needs to be done, ``but I think we're there,'' he said.

Government Bailouts

Paulson and Federal Reserve Chairman Ben S. Bernanke proposed the plan after the collapse and bankruptcy of Lehman Brothers Holding Inc. and the Federal Reserve's takeover of American International Group Inc. earlier this month. They said it was needed to revive lending and restore the flow of credit to the U.S. economy.

President George W. Bush warned yesterday that legislative action was needed to avoid a ``deep and painful recession.''

Bush spokesman Tony Fratto said early this morning that administration officials are ``pleased with the progress tonight and appreciate the bipartisan effort to stabilize our financial markets and protect our economy.'' He said Bush had spoken last night with House Speaker Nancy Pelosi on the negotiations.

The proposal immediately provides $250 billion, and another $100 billion could be used at the request of the president. Congress would have to review the expenditure of the remaining $350 billion, according to an outline distributed to reporters.

The package includes a provision aimed at ``preventing golden parachutes'' for executives of companies who leave firms that have sold troubled assets to the government, said Senator Kent Conrad, a North Dakota Democrat.

Stock Warrants

Companies that sell debt to the government will issue stock warrants to the government so that taxpayers ``can gain as companies recover'' from economic difficulties, Conrad said.

House Republicans initially balked at the cost of Paulson's plan. Missouri Representative Roy Blunt, the lead negotiator for House Republicans, said his colleagues wanted to ``bring both free-market principles and taxpayer protections to the table.''

``I think we will be able to have an announcement'' later today, Blunt said.

Republican leadership aides said that provisions favored by unions that own significant stakes in companies through pension plans were dropped. That includes a requirement for shareholder votes on executive-compensation issues.

At one point during the negotiations, billionaire Warren Buffett spoke by telephone to a lawmaker involved in the talks to offer ``his best thinking about market reaction to various things,'' said Conrad. ``People are trying to reach out to the best minds that they know.''

Obama, McCain Support

Presidential candidates Barack Obama and John McCain backed the compromise.

``My inclination is to support it,'' Obama, a Democrat, said on CBS' ``Face the Nation.''

Obama said the agreement reflects his core concerns by putting limits on executive compensation, providing congressional oversight and protecting taxpayers.

McCain urged lawmakers to ``swallow hard'' and support the proposal in an interview today on ABC's ``This Week'' program.

``Let's get this deal done, signed by the president, get moving,'' McCain, a Republican, said. ``It's going to restore confidence and get some credit out there, get this economic system moving again, which is basically in gridlock today.''

To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.netAlison Vekshin in Washington at

Obama, McCain head to D.C. for rescue talks

President Bush summoned Barack Obama, John McCain and legislative leaders to an extraordinary White House summit, warning Americans and Congress on Wednesday that failing to act on a $700 billion financial industry bailout could lead to "a long and painful recession."

Foto: AP

In this video image from APTN, President Bush speaks in a prime-time address from the Cross Hall of the White House in Washington, Wednesday, Sept. 24, 2008. Bush is set to meet with the presidential candidates and lawmakers to discuss the $700 billion bailout.

Bush had bowed to Democratic demands to limit the pay of executives whose tottering companies would be rescued, and appeared to be softening his resistance to Democrats’ demand that the eye-popping cost be phased in rather than approved all at once.

Democrats and Republicans were nearing agreement on the rescue legislation, the most sweeping government intervention in the market since the Great Depression, and set a meeting early Thursday to begin drafting a bipartisan bill.

Bush acknowledged in a prime time television address Wednesday night that the bailout would be a "tough vote“ for lawmakers.

"Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold,“ Bush said as he worked to resurrect the unpopular bailout package.

Weiterführende Links

• Angst returns, stocks dive, oil soars
• Bush administration wants $700 billion bailout
• President Bush: 'our entire economy is in danger'
• Possible U.S. lifeline sees global markets soar
• Markets mixed after Buffett backs Goldman Sachs
• Obama gains slight lead over McCain
• Asian stocks soar over potential U.S. gov't fix
• Asian markets deeply in the red

The president’s dire warning came not long after he invited Obama and McCain, one of whom will inherit the economic mess in four months, as well as key congressional leaders to a White House meeting on Thursday to work on a compromise.

Bush strongly urged Congress to act quickly to pass the plan, warning Americans in his 12-minute speech that failing to act fast risked dire economic consequences such as disappearing retirement savings, rising foreclosures, lost jobs and closed businesses.

With the administration’s original proposal considered dead in Congress – even McCain called it flawed – top House leaders issued an upbeat statement late Wednesday saying there was progress toward revised legislation that could pass.

"We are committed to continuing to work cooperatively and on a bipartisan basis to safeguard the interests of the American taxpayers,“ said Speaker Nancy Pelosi, a Democrat from California, and House Republican leader John Boehner of Ohio.

Sen. Dick Durbin of Illinois, the Senate’s No. 2 Democrat, expressed optimism that Congress could work through the weekend and pass the measure, possibly by the time markets open on Monday.

Rep. Barney Frank, a Democrat from Massachusetts and a lead negotiator on the package, said given the progress of the talks, the White House meeting scheduled for Thursday afternoon was a distraction.

"We’re going to have to interrupt a negotiating session tomorrow between the Democrats and Republicans on a bill where I think we are getting pretty close, and troop down to the White House for their photo op,“ said Frank, the House Financial Services Committee chairman. "I wish they’d checked with us.“The heart of the unprecedented plan, unveiled less than a week ago, involves the government buying up sour assets of shaky financial firms in a bid to keep them from going under and to stave off a potentially severe recession. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke spent most of the day at the Capitol, shuttling between public hearings on the proposal and private meetings with lawmakers.

Presidential politics intruded, as well, when McCain said he intended to return to Washington and was asking Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown.

Obama said the debate should go ahead.

The rivals issued a joint statement calling for a bipartisan effort to deal with the crisis.

"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail,“ the two candidates said. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe.“ Pelosi and Boehner said they, too, agreed that "key changes“ were needed in Bush’s plan. "It must include basic good-government principles, including rigorous and independent oversight, strong executive compensation standards, and protections for taxpayers.“

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

Acknowledging the concession in his speech, Bush said the rescue "should make certain that failed executives do not receive a windfall from your tax dollars.“

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Lehman Bros

Bankruptcy continues U.S. banking crisis

The administration and congressional negotiators also were nearing accord on parceling out the $700 billion so it would not be available all at once, although key details remained to be worked out. "People understand it’s not going to be a straight $700 billion,“ Frank said. Paulson also was said to have accepted the idea of allowing the government to take an equity stake in some of the companies aided – rather than just purchasing their bad assets, as Bush originally proposed – but there was no agreement yet on how the plan would work.

Lawmakers in both parties have strenuously objected to the plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on help for beleaguered homeowners. But many appear to be open to legislation, although on different terms than the White House has proposed.

"There’s politically a lot of pessimism because the American people are pushing back,“ said Rep. Spencer Bachus of Alabama, the senior Financial Services Committee Republican. But, he added, "There’s a realization that we have to do something, and that we can’t leave town until we do.“

Polls in the past several days have provided mixed messages about the public’s view.

An ABC News-Washington Post poll said Wednesday the public is split about evenly over whether it supports federal "steps“ to handle the financial crisis. In a survey released Tuesday by the nonpartisan Pew Research Center, there was nearly 2-1 support for the government "potentially investing“ billions to try securing the markets.

Democrats insist Republican lawmakers must stand up for their own president’s proposal, but they appear anything but eager to do so.

Schlagworte

• George W. Bush
• Barack Obama
• John McCain
• financial crisis
• Democrats
• Republicans
• US Elections

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

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

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

Democrats are pushing to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure as part of the plan. But Obama told reporters the provision "is probably something that we shouldn’t try to do in this piece of legislation.“

Other Democratic demands, to give Congress greater authority over the bailout and require that the government help homeowners avoid foreclosures, already have been accepted in principle.

–––

Associated Press writers Jennifer Loven, Martin Crutsinger, Jeannine Aversa and Alan Fram contributed to this report.

Economy takes back seat in first US presidential debate

Tom Baldwin in Washington

Barack Obama and John McCain will face each other for the first time in a presidential debate this week even as the financial upheaval from Wall Street to Washington turns once-solid policy positions into treacherously shifting ground.

Both candidates, seeking a route to the White House through the worst economic crisis since the Great Depression, are continuing to tiptoe around saying whether they support the US Treasury’s trillion-dollar bailouts.

Mr Obama yesterday insisted “there can be no blank cheque”, saying that a proposal he described as “a concept with a staggering price tag — not a plan” required independent oversight. He also demanded measures to address “the crisis on Main Street”, as well as the one on Wall Street, by helping mortgage-payers to stay in their homes.

Mr McCain, aware that the bailout is being criticised by free-market conservatives, has promised merely that he will review the scheme, “as well as any modifications that might emerge in congressional negotiations”.

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At the request of Mr Obama, Friday’s debate will focus on foreign affairs with a full discussion on economic issues delayed until the third — and final — forum on October 15. After acknowledging yesterday that “this is a global financial crisis and it requires a global solution”, neither the Democratic nominee nor his Republican rival expect to avoid difficult questions on the economy when they meet in Oxford, Mississippi, this week.

Tomorrow Mr Obama will go to Tampa Bay, Florida, to begin three days of intense preparation for the clash. In a weekend radio address, he pledged to press on with ambitious plans to cut taxes for 95 per cent of families, introduce affordable healthcare for all Americans and invest $150 billion (£80 billion) in a new energy initiative.

He made only passing reference to how he might pay for all these measures. “I won’t pretend that the changes we need will come without a cost,” he said, adding that he hoped to make them “in a fiscally responsible way”.

Analysts say that the next president will have little room for manoeuvre. Some are suggesting that Democratic plans for universal healthcare may have to be put on hold, while a longstanding Republican agenda for privatising social security pensions is unlikely to gain the support of voters who have more reason than ever to distrust Wall Street.

The existing $10 trillion-worth of publicly held debt is expected to soar when the cost of borrowing to shore up financial institutions is taken into account, although Henry Paulson, the Treasury Secretary, emphasised yesterday that the final price may well turn out to be lower than had been feared.

Mr Obama’s proposals for limited tax increases on capital gains may become more problematic when markets are still absorbing recent shocks. So, too, may be tax cuts of the sort proposed by both candidates for the American middle class.

The non-partisan Tax Policy Centre has estimated that the ten-year deficit incurred by Mr Obama’s tax plans would be $5.4 trillion. The various tax-cutting measures promised by Mr McCain would cost even more — $7.4 trillion.

Mr Obama has surrounded himself with a blue-chip team of economic advisers including the billionaire investor Warren Buffett, the former Federal Reserve chairman Paul Volcker, and the ex-Treasury secretaries Robert Rubin, Lawrence Summers and Paul O’Neill. At a rally yesterday in Charlotte, North Carolina, he again sought to blame the crisis on Republican policies over the past eight years.

“Senator McCain, who candidly admitted not long ago that he doesn’t know as much about economics as he should, wants to keep going down the same disastrous path,” he declared.

Mr McCain has reacted with some sharply populist rhetoric and a degree of inconsistency, abruptly changing his position on regulating financial institutions and the need for bailouts, as well as demanding that Chris Cox, the chairman of the Securities and Exchange Commission, be sacked for “betraying the public’s trust”.

Yesterday, speaking to the National Guard Association in Baltimore, the Republican nominee contrasted his plan “to keep people in their homes and safeguard the life savings of all Americans” with Mr Obama’s lack of a detailed plan of his own. “At a time of crisis, when leadership is needed, Senator Obama has not provided it,” he said.

Crash class for Palin with world leaders

Republican vice presidential candidate Sarah Palin met yesterday with the Afghan president, Hamid Karzai, in New York. (Henny Ray Abrams/associated press)

By Farah Stockman Globe Staff / September 24, 2008

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NEW YORK - Republican vice presidential nominee Sarah Palin threw herself into a crash course in diplomacy at the United Nations yesterday, beginning her first of two days of meetings with foreign leaders, including Afghan president Hamid Karzai, Colombian president Álvaro Uribe, Pakistani president Ali Asif Zardari, and Iraqi president Jalal Talabani.

The meetings with Palin, who had never met a foreign head of state before and who traveled outside North America for the first time last year, were designed to bolster her foreign policy credentials and introduce her to close US allies with whom she would work if she became vice president.

But the carefully orchestrated visits also highlighted the degree to which John McCain's presidential campaign will go to shield the first-term Alaska governor from the press. Until CNN threatened to withdraw its pool camera crew, Palin's aides initially banned reporters, who are traditionally allowed to briefly view private diplomatic meetings that are being photographed, and are sometimes allowed to ask questions.

Palin - who was escorted by Randy Scheunemann, John McCain's top foreign policy adviser, and Steve Biegun, a former National Security Council member - met with Karzai yesterday for about a half hour. He said later at the Asia Society: "I found her quite a capable woman. She asked the right questions on Afghanistan. She was concerned and she said how can she help, so I'm very pleased with that meeting."

Reporters were allowed in for less than a minute, and heard the self-proclaimed "hockey mom" of five discussing Karzai's only child, who was born in January 2007.

"What is his name?" Palin asked, according to a pool report.

Karzai replied that the boy's name is Mirwais, which means "The Light of the House."

"Oh, nice," Palin responded.

Walter Russell Mead, a historian with the Council on Foreign Relations, said the meetings were likely to be more like courtesy calls than serious talks, given the uncertainty about whether McCain will win the presidency, and how much influence Palin would have over foreign policy in his administration. "We're not going to be talking about deep negotiations here," he said.

Biegun told reporters that Palin realizes that she is not yet in the White House: "Rather than make specific policy prescriptions, she was largely listening, having an exchange of views and also very interested in forming a relationship with people she met with today."

After meeting with Karzai, during which aides said she discussed the need for more troops in Afghanistan, Palin traveled by motorcade to the Colombian mission to the UN, where she met with Uribe and talked about a proposed US-Colombian Free Trade Agreement, which McCain and Palin support but Obama opposes, according to Biegun.

Then Palin met with former secretary of state Henry Kissinger at his consulting firm's offices for what was perhaps her most substantive meeting of the day. Palin talked for more than an hour with Kissinger, who tutored President Bush during his first White House campaign and has kept in close contact with him through his presidency.

Kissinger and Palin spoke about Russia, Iran, and China, Biegun said. In recent weeks, Kissinger has stated that he believes the United States should meet with Iranian leaders without preconditions - the position that has been taken by Democratic nominee Barack Obama and that McCain has repeatedly ridiculed.

Kissinger walked Palin to the doorway of his building and watched her motorcade drive away, but declined to answer reporters' questions about what advice he had given.

Today, Palin is set to meet with Talabani, Zardari, Indian prime minister Manmohan Singh, and Bono, the rock star who has been an activist on Africa issues. With McCain, she is also slated to meet the leaders of Georgia and Ukraine. Asked what Zardari knew about Palin, an aide to Zardari said: "Everybody knows about her. . . . She is a much-talked-about woman these days."

The aide said the Pakistani leader was also expecting to meet Democratic vice presidential nominee Joe Biden in New York. But Biden, who has been on the Senate foreign relations committee since 1973, did not travel to the UN yesterday. Biden has already spoken with or met all the foreign leaders on Palin's schedule, including Zardari in a meeting in February in Islamabad.

Palin's visit caused a stir in New York. Passersby trying to catch a glimpse formed small crowds outside the offices where she held her meetings. Outside Kissinger's building on Park Avenue, Jackie Taliaferro, a 34-year-old executive head-hunter who wore an "Obama Rocks" button, said she did not believe Palin's whirlwind meetings would give her enough foreign policy experience to qualify her to be next in line for the presidency.

"She's going to talk to Dr. Kissinger to pick his brain on foreign policy," Taliaferro said. "Good luck."

But Lynne Timmes, a 26-year-old songwriter in an "I love you Sarah" T-shirt, said Palin just needed a little "brushup" on foreign policy.

When Palin finally emerged from the meeting, Timmes yelled, "I love you, Sarah." But her compliment was drowned out by another woman protesting Palin, who shouted: "Women's rights will stand."

Schwarzenegger Says He Will Veto Calif. Budget

California Governor Sets up Historic Showdown with Lawmakers

By JUDY LIN Associated Press Writer
SACRAMENTO, Calif. September 16, 2008 (AP)

The Associated Press
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Gov. Arnold Schwarzenegger made an extraordinary pledge Tuesday to veto the state budget because he said the long-overdue spending plan lawmakers approved hours earlier lacked long-term fiscal reforms and would burden taxpayers.

If Schwarzenegger follows through on his threat, it would mark the first time in modern history that a California governor would veto a state spending plan.

"I think nothing is more important than getting our fiscal house in order, and I promise the people of California that I will not stop until the job is done," Schwarzenegger said during a Capitol news conference.

State lawmakers refused to back down, saying they were prepared to override Schwarzenegger's pending veto. The bill was expected to be delivered to the governor's desk Wednesday morning and vetoed as soon as that day. The Assembly and Senate are likely to convene Thursday.

Schwarzenegger Signs Calif. Budget 85 Days Late

By JUDY LIN Associated Press Writer
SACRAMENTO, Calif. September 23, 2008 (AP)

The Associated Press
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Gov. Arnold Schwarzenegger announced that he would veto a state budget plan approved by the Legislature, but after a compromise, agreed to sign.

(Rich Pedroncelli/AP Photo)

Gov. Arnold Schwarzenegger signed the most overdue state budget in California history Tuesday, skipping the usual fanfare because he said the Legislature's efforts on the $144.5 billion spending plan were nothing to celebrate.

Nearly a quarter of the way through its fiscal year, the state finally has freed up billions of dollars to pay medical clinics, nursing homes, daycare centers and contract vendors. The 85-day impasse stemmed from a partisan legislative standoff over how to close California's $15.2 billion deficit.

The governor signed the budget bills in his office, rather than the Capitol rotunda where budgets are usually signed.

"Why I didn't feel like celebrating in the rotunda is that it is inexcusable to have a budget that's three months late," Schwarzenegger said after signing the budget before a small gathering of local officials. "It's three months late because both of the parties stayed in their ideological corners and refused to come out."

Gunman kills 10 at school in Finland, then self

KAUHAJOKI, Finland (AP) — A masked gunman whose violent YouTube postings prompted police to question him just a day earlier opened fire Tuesday at his trade school in western Finland, killing 10 people and burning some of their bodies before shooting himself in the head.

Witnesses said panic broke out as the gunman, dressed in black and carrying a large bag, entered the school in Kauhajoki and started firing in a classroom where students were taking an exam. The shootings began just before 11 a.m. local time (0800GMT), as about 150 students were at the Kauhajoki School of Hospitality, 180 miles (300 kilometers) northwest of Helsinki.

"I heard several dozen rounds of shots, in other words it was an automatic pistol," school janitor Jukka Forsberg told Finnish broadcaster YLE. "I saw some female students who were wailing and moaning and one managed to escape out the back door."

On Monday, police questioned the gunman about YouTube postings in which he is seen firing a handgun, but he was released because there was no legal reason to hold him, Interior Minister Anne Holmlund said.

"The detective who handled the case did not think that the circumstances were such that they required a confiscation of the weapon or a withdrawal of the license," Holmlund told reporters.

Police spokesman Jari Neulaniemi said the attacker walked into the school armed with a .22-caliber pistol and explosive devices that were used to start a fire. He killed 10 people, burning some of them beyond recognition, Neulaniemi said. The big bag apparently contained the explosives.

It was Finland's second school massacre in less than a year and the two attacks had eerie similarities. Both gunmen posted violent clips on YouTube prior to the massacres, both were fascinated by the 1999 Columbine school shootings in Colorado, both attacked their own schools and both died after shooting themselves in the head.

The gunman was taken to a hospital in Tampere, about two hours away, along with a female victim he had shot in the head. The gunman later died, according to hospital's medical director.

The female victim's condition was not immediately clear. Police said two people were wounded, in addition to the 10 victims and dead shooter.

Finnish media identified the gunman as Matti Juhani Saari, a 22-year-old student at the school, which offers courses in catering, tourism, nursing and home economics.

"He was just a regular and calm guy. Nothing outstanding. He had lots of friends. Nothing that would have given an idea that something like this would happen," student Susanna Keranen told an AP television crew outside the school.

The ruling center-right government held an emergency meeting Tuesday, and some ministers planned to go to Kauhajoki (pronounced COW-ha-yer-key) — a town of 14,000 — on Wednesday.

"We have experienced a tragic day," Prime Minister Matti Vanhanen said as he expressed condolences to the families of the victims and declared Wednesday a day of mourning.

Police have not released the names or ages of the victims. The school says most of its students are between 18 to 25 years old, with some older.

Finnish authorities did not confirm exactly what YouTube clips were linked to the shooter.

But in one YouTube clip posted by a 22-year-old "Mr. Saari," a young man wearing a leather jacket fires several shots in rapid succession with a handgun at what appears to be a shooting range.

The posting was made five days before the shooting and the location was given as Kauhajoki — the same town as Tuesday's shooting. The posting included a message saying: "Whole life is war and whole life is pain. And you will fight alone in your personal war."

"Mr. Saari" also posted three other clips of himself firing a handgun in the past three weeks.

Clips from the 1999 Columbine school shootings in Colorado were listed among his favorite videos.

Another clip shown by Scandinavian media showed the alleged gunman pointing his gun to the camera and saying "You will die next" before firing four rounds.

Shocked residents gathered for a special service late Tuesday at the local church, where Vicar Jouko Ala-Prinkkila and Bishop Simo Peura preached with trembling voices. The church bells tolled solemnly at the end of the service, as about 600 grieving congregants walked out in silence.

"Everybody is still in shock. It's hard to understand this," Ala-Prinkkila told AP.

Last November, another gunman killed eight people and himself at a school in southern Finland, an attack that triggered a fierce debate about gun laws in this Nordic nation with deep-rooted hunting traditions in the sub-Arctic wilderness.

Pekka-Eric Auvinen, described by police as a bullied 18-year-old outcast, opened fire at his high school in southern Finland on Nov. 7, killing six students, a school nurse and the principal before ending his own life.

Finnish investigators have said Auvinen left a suicide note for his family and foreshadowed his attack in YouTube postings.

With 1.65 million firearms in private hands, Finland is an anomaly in Europe, lagging behind only the United States, Yemen and Switzerland in civilian gun ownership, according to the 2007 Small Arms Survey, a Geneva-based watchdog organization.

After Auvinen's rampage, the government promised to raise the minimum age for buying guns from 15 to 18, but insisted there was no need for sweeping changes to Finland's gun laws. The age limit was never raised.

Associated Press writers Matti Huuhtanen and Jari Tanner in Helsinki and Karl Ritter in Stockhom, Sweden, contributed to this report.

Bernanke: Recession certain in absence of bailout

By JULIE HIRSCHFELD DAVIS AND JEANNINE AVERSA
ASSOCIATED PRESS WRITERS

	From left, Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, Security and Exchange Commission (SEC) Chairman Christopher Cox, and Federal Housing Finance Agency Director James Lockhart testify on Capitol Hill in Washington, Tuesday, Sept. 23, 2008, before the Senate Banking Committee. (AP Photo/Charles Dharapak)

WASHINGTON -- Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday it risks a recession, with higher unemployment and increased home foreclosures, if lawmakers fail to pass the Bush administration's $700 billion plan to bail out the financial industry.

Bernanke told the Senate Banking Committee that inaction could leave ordinary businesses unable to borrow the money they need to expand and hire additional employees, while consumers could find themselves unable to finance big-ticket purchases such as cars and homes.

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

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

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

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

Bernanke outlined his grim scenario as committee members sat in silence, and as the Bush administration pressed lawmakers publicly and privately to act speedily.

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

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

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

Dodd and other key Democrats have been in private negotiations with the administration since the weekend on legislation designed to allow the government to buy bad debts held by banks and other financial institutions.

Despite expressions of unhappiness in both parties, the prospects for legislation seemed strong, with lawmakers eager to adjourn this week or next for the elections.

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

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

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

Stocks held steady in pre-noon trading on Wall Street as Treasury Secretary Henry Paulson told the Senate Banking Committee that quick passage of the administration's plan is "the single most effective thing we can do to help homeowners, the American people and stimulate our economy."

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

"I understand speed is important, but I'm far more interested in whether or not we get this right," said Dodd, who spoke first. "There is no second act to this. There is no alternative idea out there with resources available if this does not work," he added.

Sen. Richard C. Shelby of Alabama, the panel's senior Republican, was even more blunt. "I have long opposed government bailouts for individuals and corporate America alike," he said. Seated a few feet away from Paulson and Ben Bernanke, the chairman of the Federal reserve, he added, "We have been given no credible assurances that this plan will work. We could very well send $700 billion, or a trillion, and not resolve the crisis."

The legislation that the administration is promoting would allow the government to buy bad mortgages and other troubled assets held by endangered banks and financial institutions. Getting those debts off their books should bolster their balance sheets, making them more inclined to lend and easing one of the biggest choke points in the credit crisis. If the plan works, it should help lift a major weight off the sputtering economy.

Buttressing Paulson's comments, Bernanke said action by lawmakers "is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy."

A third witness, Securities and Exchange Commission Chairman Christopher Cox, urged Congress to regulate a type of corporate debt insurance that figured prominently in the country's financial crisis.

"I urge you to provide in statute the authority to regulate these products to enhance investor protection and ensure the operation of fair and orderly markets," he said. The debt insurance is known as credit default swaps.

Over 12,000 Chinese children sick from tainted milk

China's Health Ministry says the number of children sickened by tainted milk products has doubled, with nearly 12,900 in hospital and 104 of them seriously ill.

In a statement posted on its website late Sunday, the ministry said the sick children consumed milk made from milk powder, most of it produced by the Shijiazhuang Sanlu Group. It said 12,892 children have been hospitalized.

Chinese Premier Wen Jiabao visits an infant who suffered from kidney stones after drinking tainted formula milk at Beijing Children's Hospital, Sunday, September 21, 2008. [Xinhua]

Authorities continued over the weekend to contain public dismay over widespread milk contamination, punishing local officials for negligence while strengthening inspections of dairy products across the nation.

Officials promised to keep stores supplied with clean milk and set up medical hot lines nationwide to handle one of the worst food safety scandals in years.

Investigations found 22 manufacturers were involved in a melamine-tainted formula milk scandal, including leading companies, such as the Bright Dairy & Food, Yili Industrial Group, and Mengniu Group.

The Ministry of Health said on Sunday that as of 8 am, 39,965 children had visited hospitals for checks or consultation and 12,892 had undergone treatment.

A total of 104 infants were seriously ill and 1,579 were discharged from hospitals after treatment.

Most of the children under treatment had drunk Sanlu formula milk. Among the children under treatment, 99.2 percent were under age 3.

The ministry said no case related to liquid milk had been reported in the mainland.

On Saturday, Premier Wen Jiabao told senior officials that official misconduct contributed to the milk contamination and earlier product scandals.

"In some places, incidents of food and production safety have continuously arisen and seriously harmed people's lives and health," Wen was quoted as saying by Xinhua News Agency. "The social impact is vile and the lesson profound."

Yesterday, Wen visited Beijing Children's Hospital, a local community and a supermarket in Beijing.

"For such a big food safety incident, parents are concerned about their children; so are we," Xinhua quoted him as saying, when he was visiting a neighborhood near Fuxingmen Avenue.

"Although people have shown a great understanding to the government, as government officials, we are deeply sorry."

Vice-premier Li Keqiang made a trip to a dairy region south of Beijing at the center of the scandal, visiting farms, shops and a hospital, where he urged "all-out efforts on medical treatment" for the sick.

In Dingxing County Hospital of Hebei province, he went to the infant ward where he talked to parents, asking about their infants' symptoms and progress.

Governments and hospitals should provide support when equipment was needed for treating the babies, he said.

Recalls of Chinese-made dairy products were extended on Saturday to Japan, which followed Singapore's lead, while more products were recalled in Hong Kong and Macao.

The State Administration for Industry and Commerce initiated a nationwide monitoring of dairy producers and sellers on Saturday.

By 9 am on Saturday, the administration had received 106,143 complaints and had refunded 304.38 tons of dairy products.