Man Health Magazine

U.S. Congress approves compromise budget blueprint

By Jeremy Pelofsky

WASHINGTON (Reuters) - The Democratic-controlled U.S. Congress Wednesday approved a $3.4 trillion compromise budget plan for the 2010 fiscal year, clinching a big victory for President Barack Obama on his 100th day in office but with no Republican support.

The nonbinding plan sets parameters for spending and tax legislation for the upcoming fiscal year that begins on October 1 and mirrors most of what Obama had sought, but Republicans blasted it for exploding the debt and undermining the ailing economy.

Obama has argued that the budget and the $787 billion economic stimulus package were necessary to heal the economy and reverse what he says has been neglect of programs like education and healthcare.

"We have to lay a new foundation for growth, a foundation that will strengthen our economy and help us compete in the 21st century and that's exactly what this budget begins to do," he told an evening news conference.

Democratic Senator Kent Conrad, chairman of the Senate Budget Committee, told reporters, "For every one of his (Obama's) key priorities, reducing dependence on foreign energy, making possible healthcare reform, a focus on excellence in education, none of those things could have been pursued effectively without this budget."

The House approved the Democratic-written budget resolution without any Republican support on a vote of 233-193, while the Senate voted 53-43, also without any Republican support. Seventeen House Democrats and four Senate Democrats also voted against the budget plan.

"We have spent in the first 100 days $12 billion a day, we are running up the deficit and the debt at an alarming rate and we're growing the size of the government in a way that future generations are going to have to pay for it," said Republican Senator Lindsey Graham.

The resolution includes language that would enable the Democrats to expedite under special rules the consideration of healthcare reform legislation despite fierce Republican opposition to such a route.

Democratic leaders have said they will try the normal legislative route first.

The budget forecasts $1.2 trillion in red ink for fiscal 2010 before falling to $523 billion by 2014. House Democratic leaders had to make some promises to assuage fiscally conservative members of their party who were worried about rising deficits amid a deep recession.

In one bit of intrigue, Senator Arlen Specter, who switched parties to become a Democrat Tuesday in a move aimed at winning re-election next year, voted against the budget plan. He voted against the original version earlier this month too.

"SO MUCH UNCERTAINTY"

Republicans seized on new data that showed the U.S. economy shrank at a 6.1 percent annual rate during the first quarter of 2009, steeper than expected. They argued that the data, coupled with some tax hikes and aggressive spending in the budget, would make the situation worse.

"This budget creates so much uncertainty on the part of investors, on the part of families, I don't see how we're going to work our way out of this economic doldrums," said Representative Eric Cantor, a member of the House Republican leadership.

While the five-year budget outline is largely in line with Obama's own proposed budget, it drops some provisions he sought and leaves out many of the details for overhauling healthcare and energy policies that are expected this year.

Facing huge annual budget deficits, lawmakers cast aside Obama's requests for Congress to extend his signature tax cut for low- and middle-income workers beyond 2010 and left out additional money for the $700 billion financial bailout fund.

The budget does include provisions for $764 billion in tax cuts and calls for making permanent the current 45 percent rate for the estate tax, with the first $3.5 million tax-free for individuals and $7 million for couples.

It would also let some Bush-era tax cuts for the wealthy expire at the end of next year, a move Republicans have criticized. The Democrats' budget also sets some $130 billion for the U.S. wars in Iraq and Afghanistan in fiscal 2010.

To temper growing concerns among some Democratic fiscal hawks in the House, leaders there made it clear they would let certain tax law changes advance -- like middle-class tax cuts and the estate tax -- only if they were paid for with spending cuts or other tax increases.

(Editing by Peter Cooney)

Obama says clearing away “wreckage” of recession

By Matt Spetalnick

WASHINGTON (Reuters) - President Barack Obama told Americans on Wednesday his administration was working to "clear away the wreckage" of recession as he assessed his first 100 days in office and promised to keep up the whirlwind pace.

"We are off to a good start. But it is just a start ... I am pleased with our progress, but I am not satisfied," Obama said in an opening statement to be delivered at a televised White House news conference starting at 8 p.m. EDT.(Midnight GMT)

Buoyed by high public approval ratings, Obama was set to focus on the jam-packed policy agenda he has pursued since his January 20 inauguration, topped by efforts to rescue the crippled economy and repair the United States' image in the world.

In just a few short months, Obama -- a Democrat elected on a promise of sweeping change in government -- has made a sharp break with his Republican predecessor George W. Bush on issues ranging from war and recession to healthcare and climate change.

Supporters and critics alike filled the airwaves with conflicting assessments of Obama's record so far, but most analysts said it was too early to judge whether his long list of new initiatives would yield success.

Even though the White House had dismissed the 100-day marker as a symbolic point largely of interest to the media, it staged two events -- a townhall meeting in Missouri and later a prime-time news conference -- for Obama to rally continued public support for the challenges ahead.

Underscoring the difficulties Obama faces, new government data on Wednesday showed the economy contracted at a 6.1 percent annual rate in the first quarter, a steeper-than-expected decline.[nN2987998]

"PLENTY OF WORK LEFT TO DO"

Citing approval by the Democratic-controlled Congress of his $3.4 trillion fiscal 2010 budget shortly before his news conference, Obama insisted that his policies had put the country on the right track.

"But even as we clear away the wreckage of this recession, I have also said that we cannot go back to an economy that is built on a pile of sand," he said, according to advance excerpts from his opening statement.

"We have plenty of work left to do. It is work that will take time. It will take effort. But the United States of America will see a better day. We will rebuild a stronger nation," said Obama, who became the country's first black president when he took office in January.

Obama, who has job approval ratings of more than 60 percent according to opinion polls, also kept up efforts to reassure Americans about his administration's response to a growing swine flu outbreak that has presented him with his first public health emergency.

His aides are mindful of the political damage to Bush over the government's inept handling of the devastating Hurricane Katrina in 2005, and want to be sure the new president is not seen as out of touch if the flu threat continues to build.

Obama was also expected to face questions from reporters about his foreign policy agenda, including overtures to Iran, efforts to stabilize Pakistan and Afghanistan in the face of growing insurgencies and his administration's deepening engagement in Israeli-Palestinian peace diplomacy.

100-DAY TRADITION

Countering critics who say he is taking on too much, Obama was to say in his opening remarks that "We still confront threats ranging from terrorism to nuclear proliferation to pandemic flu."

"And all of this means you can expect an unrelenting, unyielding effort from this administration to strengthen our prosperity and our security -- in the second hundred days, and the third hundred days, and all the days after," he said.

The tradition of marking the first 100 days of U.S. presidencies dates back to Franklin Delano Roosevelt, who set the standard by putting in place the building blocks of his New Deal programs to pull the United States out of the Great Depression.

With his deliberative "no-drama Obama" style, the president has sought a balanced tone between harsh economic reality and a more hopeful future, which pollsters say has helped ease Americans' anxieties in the midst of the worst economic crisis in decades.

(Additional reporting by Caren Bohan, Jeff Mason, David Alexander and Ross Colvin; Editing by Frances Kerry)

WHO warns flu pandemic imminent

By Laura MacInnis and Stephanie Nebehay

GENEVA (Reuters) - The World Health Organization said on Wednesday the world is at the brink of a pandemic, raising its threat level as the swine flu virus spread and killed the first person outside of Mexico, a toddler in Texas.

"Influenza pandemics must be taken seriously precisely because of their capacity to spread rapidly to every country in the world," WHO Director General Margaret Chan told a news conference in Geneva as she raised the official alert level to phase 5, the last step before a pandemic.

"The biggest question is this: how severe will the pandemic be, especially now at the start," Chan said. But she added that the world "is better prepared for an influenza pandemic than at any time in history."

Nearly a week after the H1N1 swine flu virus first emerged in California and Texas and was found to have caused dozens of deaths in Mexico, Spain reported the first case in Europe of swine flu in a person who had not been to Mexico, illustrating the danger of person-to-person transmission.

Both U.S. and European officials have said they expect to see swine flu deaths.

Despite worries that a major flu outbreak could hit the struggling global economy, world stocks rallied on Wednesday after the Federal Reserve said the U.S. recession appeared to be easing.

Almost all cases outside Mexico have had mild symptoms, and only a handful have required hospitalization.

"We doubt that the markets will react with the same worry as found during avian flu scares in the past," said Citigroup analyst Tobias Levkovich in New York.

DRUG STOCKPILES

Chan also urged companies who make the drugs to ramp up production. Two antiviral drugs -- Relenza, made by GlaxoSmithKlin and Tamiflu, made by Roche AG and Gilead Sciences Inc. -- have been shown to work against the H1N1 swine flu strain.

Drugmakers have donated millions of doses of their drugs to the WHO. She also alerted governments to be ready to distribute stockpiles of their drugs.

Vaccine makers were on standby to begin making a new vaccine if needed.

In Mexico, where up to 159 people have died from the virus and around 1,300 more are being tested for infection, people struggled with an emergency that has brought normal life virtually to a standstill over the past week.

"I'm depressed. I don't understand where this came from, how it spreads, how long it will last or what it will to the economy," said an elderly woman named Licha, sitting on a Mexico City park bench and wearing a surgical mask.

Germany and Austria reported cases of the illness, bringing the number of affected countries to 9.

Texas officials said a 22-month-old boy had died -- the first confirmed U.S. swine flu death -- while on a family visit from Mexico.

In the Texas border city of Brownsville, where the young Mexican was first diagnosed and many residents have families on both sides of the Rio Grande river border, some residents said they were now reluctant to venture south to Mexico.

"I am extremely concerned because you could die," said Santiago Perez, 18, a student at Pace High School.

About 30 U.S. Marines in southern California on the biggest military base in the United States were quarantined after one was confirmed to have contracted the illness.

President Barack Obama, facing the sudden flu emergency along with his broader drive to pull the United States out of its deep recession, said the Texas death showed it was time to take "utmost precautions."

Kathleen Sebelius, Obama's newly confirmed health secretary, spent her first day in office on a rapid-fire media tour as the administration sought to calm public fears while urging public health vigilance.

"We know that the cases will continue to rise," Sebelius said.

Homeland Security Secretary Janet Napolitano said the Customs and Border Patrol was keeping an eye out for sick travelers, as usual, and had checked 49 people with flu-like symptoms. She said 41 had been cleared of H1N1 infection and eight were still being studied.

"We are preparing for the worst; hoping for the best," Napolitano said. "All of us should be dusting off our business contingency plans, looking at things like telecommuting and the like so that things keep operating."

Many Americans were heeding the warnings, snapping up hand sanitizers, wipes and soap. "I figure it's going to get worse before it gets better, right?" said Kathy Ivcich, 53, a real estate agent in Chicago.

WORRIES FOR MEXICO

Mexico's central bank warned the outbreak could deepen the nation's recession, hurting an economy that already shrank by as much as 8 percent from the previous year in the first quarter.

France said it would seek a European Union ban on flights to Mexico.

The EU, the United States and Canada have advised against non-essential travel to Mexico, a popular tourist destination, with many of the cases linked to travel there.

Many tourists already in Mexico were hurrying to leave, crowding airports and trying to change their tickets.

"We didn't want to get stuck here," said Australian Alex Grinter, who left her beach vacation in the southern state of Oaxaca to get an early flight to Vancouver.

In Mexico City, a metropolis of 20 million, all schools, restaurants, nightclubs and public events have been shut down to try to stop the sickness from spreading.

H1N1 swine flu is seen as the biggest risk since H5N1 avian flu re-emerged in 2003, killing 257 people of 421 infected in 15 countries. In 1968 a "Hong Kong" flu pandemic killed about 1 million people globally, and a 1957 pandemic killed 2 million.

Seasonal flu kills 250,000 to 500,000 people in a normal year, including healthy children in rich countries.

(Reporting by Maggie Fox and Tabassum Zakaria in Washington, Jason Lange, Catherine Bremer Alistair Bell and Helen Popper in Mexico City; Matt Bigg in Atlanta; Writing by Andrew Quinn, editing by Frances Kerry and Todd Eastham)

Fed says U.S. recession appears to be easing

By Mark Felsenthal and Alister Bull

WASHINGTON (Reuters) - The Federal Reserve said on Wednesday the outlook for the U.S. economy had improved a bit in recent weeks but that low interest rates would be needed for some time to ensure it recovers from its deep recession.

Wrapping up a two-day policy meeting, the U.S. central bank said it had decided to hold benchmark overnight interest rates in the range of zero to 0.25 percent reached in December even as officials took stock of some recent hopeful economic signs.

"Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time," the Fed said in a statement.

"The economy has continued to contract, though the pace of contraction appears to be somewhat slower," it said.

Stocks shot higher and government bond prices sank as the Fed's announcement added to a sense of light at the end of the tunnel. The dollar rose against the yen but lost ground to the euro as investors' appetite for risk increased, easing demand for both the dollar and the yen as a safe haven.

"The economy has gone from being in a freefall and is now on the road to recovery," said Mark Vitner, an economist for Wachovia Securities in Charlotte, North Carolina.

After their last meeting on March 17-18, Fed officials had offered no hint the recession was abating and they announced plans to pump an additional $1.15 trillion into the economy.

On Wednesday, no new actions were announced, although the central bank repeated its pledge to use all available tools to promote recovery and reiterated a vow to keep rates low for an extended period.

A leading bond fund executive cautioned that the Fed runs the risk of a Japanese-style scenario of prolonged weak growth and deflation if policy-makers pull back from efforts to support the struggling economy prematurely.

"Today's statement suggests that policy-makers are now comfortable with partially taking their foot off the accelerator," Mohamed El-Erian, chief executive of Pacific Investment Management Co, told Reuters.

The United States appears to be moving through its economic crisis ahead of other major economies.

The European Central Bank looks set to cut rates to an historic low of 1 percent on May 7 and is considering other steps it can take to prop up a weak euro-zone economy.

In Japan, the central bank is expected to cut its forecast for the Japanese economy at a meeting on Thursday.

"GREEN SHOOTS" APPEAR

Fed officials are trying to pull the economy out of a deep recession that next month will become the longest since the Great Depression. They warned on Wednesday that with job losses mounting, households pinched by diminished wealth and credit still hard to get, consumers were still under pressure.

Underscoring the economy's perilous state, a Commerce Department report showed on Wednesday that U.S. gross domestic product shrank by a larger-than-expected 6.1 percent annual rate in the first quarter, following a 6.3 percent decline in the fourth quarter of 2008.

The recession has already cost the economy 5.1 million jobs, driving the unemployment rate to a 25-year high of 8.5 percent in March. Economists expect the jobless rate to rise further.

Still, some data have supported Fed Chairman Ben Bernanke's mid-March suggestion that that some "green shoots" could be seen emerging from the economic wreckage -- even if only showing that the pace of contraction is slowing.

For example, first-time claims for unemployment aid have been running below the 26-1/2 year high touched in late March.

Similarly, while sales of previously owned homes fell in March, inventories of homes available for sale also fell, and some analysts saw the decimated housing sector, which is at the heart of the U.S. economic breakdown, as stabilizing.

The Fed's Beige Book of anecdotal reports from across the nation issued on April 15 said five of the U.S. central bank's 12 districts saw the pace of decline in the economy slowing.

Even the report on first-quarter GDP offered some hopeful signs. Consumer spending turned up and business inventories fell sharply, which could pave the way for future production.

At their last meeting, policy-makers reacted to a sense that the economy was deteriorating quickly with a massive expansion of their credit-easing efforts.

The Fed announced it would buy $300 billion in long-term U.S. government debt and increase purchases of debt and securities issued by government-supported mortgage agencies by $850 billion in a bid to lower mortgage and other interest rates.

Policy-makers said on Wednesday they would adjust purchases in response to the changing economic outlook and developments in financial markets.

(Editing by Tim Ahmann, Dan Grebler and Jan Paschal)

U.S. House passes “hate crime” bill that Bush opposed

By Thomas Ferraro

WASHINGTON (Reuters) - The Democratic-led U.S. House of Representatives Wednesday approved an expansion of federal "hate crime" laws -- an effort that former Republican President George W. Bush had opposed.

On a vote of 249-175, the House passed and sent to the Senate a bill backed by the new Democratic White House to broaden such laws by classifying as "hate crimes" those attacks based on a victim's sexual orientation, gender identity or mental or physical disability.

The current law, enacted four decades ago, limits federal jurisdiction over hate crimes to assaults based on race, color, religion or national origin.

The bill would lift a requirement that a victim had to be attacked while engaged in a federally protected activity, like attending school, for it to be a federal hate crime.

House Democratic Leader Steny Hoyer urged passage of the Federal Local Law Enforcement Hate Crimes Prevention Act of 2009.

"Hate crimes motivated by race, religion, national origin, gender, sexual orientation, and identity or disability not only injure individual victims, but also terrorize entire segments of our population and tear at our nation's social fabric," Hoyer said.

Bush had helped stop such a bill in the last Congress, arguing existing state and federal laws were adequate. But President Barack Obama asked Congress to send it to him to sign into law.

"I urge members on both sides of the aisle to act on this important civil rights issue by passing this legislation to protect all of our citizens from violent acts of intolerance," Obama said in a statement before the vote.

Conviction of a hate crime carries stepped up punishment, above and beyond that meted out for the attack. The bill would allow the federal government to help state and local authorities investigate hate crimes.

Representative Lamar Smith, ranking Republican on the House Judiciary Committee, helped lead the charge against the bill, arguing it was misdirected and discriminatory.

"All violent crimes must be vigorously prosecuted," Smith said. "Unfortunately, this bill undermines one of the most basic principles of our criminal justice system -- 'equal justice for all.'"

"Justice will now depend on the race, gender, sexual orientation, disability or other protected status of the victim," Smith said. "It will allow different penalties to be imposed for the same crime."

Earlier this year, Congress passed two other major bills derailed during the Bush administration.

One, vetoed by Bush, would have expanded a federal health insurance program for children. The other, blocked by Bush's fellow Republicans in the Senate, would have reversed a U.S. Supreme Court ruling to make it easier to sue for discrimination in the workplace.

With Democrats having won the White House and expanded their control of Congress in the 2008 election, both measures were among the party's top 2009 legislative priorities. And they became among the first bills Obama signed into law.

(Editing by Eric Beech)