Friday, 27 February 2009

Six years after Iraq invasion, Obama sets out his exit plan

From The Guardian, UK

Ewen MacAskill in Washington

Almost six years after the invasion of Iraq, the end is finally in sight for America's involvement in its longest and bloodiest conflict since Vietnam. Barack Obama yesterday set out a timetable that will see all US combat units out by summer next year and the remainder by the end of 2011.

Obama said yesterday that "by any measure, this has already been a long war". It had cost the US 4,425 dead, divided the country and cost it friends abroad. For Iraq, the death toll is unknown, in the tens of thousands, victims of the war, a nationalist uprising, sectarian in-fighting and jihadists attracted by the US presence.

Obama flew from Washington yesterday morning to Fort Lejeune, North Carolina, to deliver his speech in front of 8,000 marines. He told them it was going to be a speech with far-reaching consequences: "Today, I have come to speak to you about how the war in Iraq will end."
Of the 142,000 US troops in Iraq, between 92,000 and 107,000 are to leave by August next year. The mission at that point will change, from combat to one that deals primarily with training Iraqi forces, supporting the Iraqi government and engaging in counter-terrorism.

His delivery contrasted with the premature celebrations of President George Bush (right) almost six years ago when, shortly after the invasion, he spoke on an aircraft carrier beneath the now infamous banner reading 'mission accomplished'.
He had gone to North Carolina to bury the biggest and most divisive issue of the Bush era, the failed neo-conservative experiment to create a model Arab country that would be a beacon for the rest. He did that with the words: "Let me say this as plainly as I can - by August 31 2010, our combat mission in Iraq will end."

In doing so, Obama fulfilled one of the central pledges of his election campaign.

He aimed his words at those at home who long ago lost faith in the war and at those Iraqis who do not believe the US will really ever leave. He hoped the US departure from Iraq would herald "a new era of American leadership and engagement in the Middle East", changing the way the world sees the US,

Most of Obama's speech was aimed at an American audience, in particular the armed services. He said they had completed their tasks with honour. And he spoke with sadness of an America that will take a long time to come to terms with the legacy of Iraq, of the names of the dead commemorated in town squares and highways and etched on the white stones at Arlington cemetery.

(Click here to read the article in full)

"Obama's budget sweeps away Reagan's ideas"

from the International Herald Tribune.

by David Leonhardt

"The budget that President Barack Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.

The Obama budget — a bold, even radical departure from recent history, wrapped in bureaucratic formality and statistical tables — would sharply raise taxes on the rich, beyond where Bill Clinton had raised them. It would reduce taxes for everyone else, to a lower point than they were under either Clinton or George W. Bush. And it would lay the groundwork for sweeping changes in health care and education, among other areas.

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class income slowdown, like high medical costs and slowing educational gains.

After Obama spent much of his first five weeks in office responding to the financial crisis, his budget effectively tried to reclaim momentum for the priorities on which he campaigned.
His efforts would add to a budget deficit already swollen by Bush's policies and the recession, creating the largest deficit, relative to the size of the economy, since World War II. Erasing that deficit will require some tough choices — about further spending cuts and tax increases — that Obama avoided this week."

But he nonetheless made choices.
He sought to eliminate some corporate subsidies, for health insurers, banks and agricultural companies, that economists have long criticized. He proposed putting a price on carbon, to slow global warming, and then refunding most of the revenue from that program through broad-based tax cuts. He called for roughly $100 billion a year in tax increases on the wealthy — mostly delayed until 2011, when the recession will presumably have ended — and $50 billion a year in net tax cuts for the nonwealthy.

(Click here to read the article in full)

"Green budget"

From la Repubblica, Italy

WASHINGTON - "Higher tax for the well-off, a medium term fund for healthcare reforms, 'green' revenues from the trade-off of C02 emissions to fund tax relief for the low and middle classes. These are some of the core points of the budget as unveiled today by President Barack Obama. Along with the pledge to halve the deficit, which is expected to reach $1,750 bn in 2009, 12,3% of the entire US economy: the highest level since WWII. Obama hasn't denied the severity of the ongoing recession and stated that he intends "to offer transparency on the way each single dollar from the taxpayer is being spent".
(More here)

Saturday, 21 February 2009

Obama hails 'fastest' US tax cut

from BBC News Online, 21 February 2009
President Barack Obama has said US tax bills will begin to fall from April, hailing a tax cut he called the fastest ever to take effect.
In his weekly radio and internet address, President Obama said the typical American family would gain by at least $65 (£46) a month.
He also pledged to cut America's trillion-dollar deficit.

The tax cuts announced on Saturday are part of a $787bn stimulus plan approved by Congress earlier this week.
The stimulus plan, aimed at reviving the US economy amid a global economic crisis, is split into 36% for tax cuts and 64% percent allocated for spending on social programmes.
Mr Obama said the US treasury had already begun directing employers to reduce the amount of taxes claimed from pay cheques.

The savings will reach 95% of American families, he said.
"Never before in our history has a tax cut taken effect faster or gone to so many hardworking Americans," the president said.
(Click here to read the article in full)

Wednesday, 18 February 2009

Obama's housing plan to help 9m

From BBC News Online, 18 February 2009

President Barack Obama has revealed a long-awaited plan to tackle the US housing crisis, aiming to help up to nine million families.

The plan will provide refinancing to four to five million "responsible homeowners" on the verge of defaulting. A $75bn (£53bn) fund will also aim to help reduce monthly payments for a further three to four million people, to no more than 31% of their income.

President Obama unveiled the details in a speech at an Arizona high school.
He stressed that the plan focused on helping families who had "played by the rules" and would not help lenders or borrowers who had acted irresponsibly.
The announcement came one day after President Obama signed into law a $787bn (£548bn) economic stimulus package.

Help for homeowners

Falling house prices have been at the heart of the problems in the financial sector.
More than one million people in the US have lost their homes in the housing crisis, and President Obama said a further six million homes were at risk of foreclosure.
"All of us are paying a price for this home mortgage crisis," he said.

The plan is designed to assist "underwater" homeowners - those who owe more on their mortgages than their homes are now worth, as well as those on the verge of foreclosure.
President Obama said it could provide a buffer of up to $6,000 against declining values on the average home.

He also revealed a further $200bn in Treasury funding to mortgage giants Fannie Mae and Freddie Mac, which underwrite more than half of all US mortgages.
Fannie and Freddie would also have to change their policy on refinancing, he said.
Currently they will only refinance borrowers with mortgages up to 80% of the value of their home.

This plan abolishes that rule though, so that "underwater" homeowners could now refinance.

Mixed reaction

"By addressing the foreclosure crisis directly, the administration's housing plan finally begins to plug the holes that cause the problem," the Center for Responsible Lending said in a statement.

However, others were less optimistic.

"[The plan] seems to offer little help to borrowers whose loan exceeds their property value by more than 5%," said John Courson, chief executive of the Mortgage Bankers Association.
US markets closed flat as investors greeted the plan with caution.
Earlier, official data showed the rate of construction of new homes in the US fell to a 50-year low".

Monday, 16 February 2009

Obama tears down wall with Cuba

The Bill that will end travel restrictions to the island is already in the Congress. The President's advisors are confident of its speedy approval.

Lissette Bustamante, Miami

(from Publico, Spain, 15 February 2009)

Obama isn't wasting time. This is perhaps why Cuba is no longer a taboo for Uncle Sam. And what has now descended upon the White House "is a doses of realism on the subject of Cuba", said to Público Frank Sánchez, Obama's advisor on global affairs.

The proposal from nine congressmen from the Foreign Office Committee in the Congress to wholly liberalise US tourist access to the Pearl of the Caribbean is the perfect epitome of the new atmosphere as brought by Obama's administration. In The Freedom to Travel to Cuba Act, as previewed by Público, submitted to the Congress on Feb 4, it is explained that "not only will those Cubans domiciled in the US be allowed to travel for family reasons, but also every American tourist". The President, according to the Act, "may not regulate or prohibit travel to or from Cuba, except in the event the two countries are at war with each other". As such, the Americans will be free to visit the island for the first time since 1963.

The democrat William Delahunt, promoter of the initiative and historic opponent of the embargo worked on all details. The Bill will first reach the Senate and in March it will be voted by the Congress.

The situation has never been as promising. The Democrats control both chambers and President Obama has expressed his intention to revise the travel policy to the island. Obama's advisors consulted by Público seem certain that the Bill will be approved.

Unlocking travel from the US is effectively a time bomb for the Castro brothers' apparatus. A study by the International Monetary Fund (IMF) suggests that between 3 and 3.5 million Americans a year will visit Cuba. The huge access of dollars, in the view of many analysts, may signify the beginning of the end for the communist regime.

The democrat Joe García admits that "it will all depend on how freedom of travel and consignment will be taken". "Within three months - he says- academic exchange programmes will begin". Allowing tourism may only be the tip of the iceberg. For instance, sociologist Ted D. Henken, author of Cuba: a Global Studies Handbook, expects Obama to lift 2004's restrictions in his first 100 days in office.

What is undisputed is that Washington under the new administration is bustling. And the Cuban affairs are no exception: work is underway to cross Cuba off the lists of country accused by the US of supporting terrorism (a political hot potato in the hands of Hillary Clinton). Despite the fact that Obama's government has no plans to repeal the embargo, it "it will trigger a debate amongst its supporters in the Congress on the start of a reversing process", says journalist Louise Bardach, writer of Cuba Confidential.

[Read the full article and more here]

Wednesday, 4 February 2009

Obama caps executive pay

Fat cats pay on bailout businesses to be limited.

It's what millions of people would want to hear from the British government. It's the natural course of action for those banks who were bailed out from the taxpayer to the tune of hundreds of billions. But whereas in Britain they're still tiptoeing about, in the US Barack Obama is going straight to the point.

After dubbing the Wall Street culture of bonuses in times of crisis "shameful", the new President revealed "details of new rules limiting executive pay to $500,000 [still a level that you or me will never understand through our entire lifetime -ed] a year for firms getting a US taxpayer bail-out".

The BBC reports that "here was public outcry over $18.4bn in bonuses paid out in 2008 at a time when taxpayer money was propping up the financial system"."If the taxpayers are helping you, then you've got certain responsibilities to not be living high on the hog," Obama said. As the Reuters agency notes, "the White House aims to hold banking executives accountable for the money they receive from government coffers with the new rules, which were presented as being in the interest of shareholders and taxpayers alike".

Interestingly, while this is front page news in the US, you'll struggle to find any mention in the UK press. Instead, all the headlines are for Obama "screwing up" the nomination process. The question is: why? Could it be that our lovely bankers may want to shield people from overexcitement with ideas of fairness and accountability?