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Congress reaches final payroll tax deal

Congressional negotiators resolved all differences on an agreement to extend the payroll tax cut and unemployment benefits while avoiding a fee cut for Medicare doctors for the rest of the year, leaving only technical issues to sort out. "It's good for the country. It's very good for the country," Montana's Max Baucus, the Democratic chairman of the Senate Finance Committee, said early Thursday in announcing the deal. But resolving those technical issues and getting the necessary signatures required to finalize the conference report was expected to take through at least Thursday. "We're confident that this can be concluded ... and we're moving forward," Republican Rep. Dave Camp of Michigan, the other committee chariman, said. Senate Majority Leader Harry Reid of Nevada hailed the deal. "This bipartisan agreement ensures that middle class families in Nevada and across our nation will not see their taxes go up this year," he said in a statement. "It also guarantees that hard-working Americans looking for a job in this tough economy will not have their safety net ripped out from under them, and ensures that seniors who rely Medicare will continue to be able to see their doctors." The roughly $100 billion payroll tax cut, a key part of President Barack Obama's economic recovery plan, has reduced how much 160 million American workers pay into Social Security on their first $110,100 in wages. Instead of paying in 6.2%, they've been paying 4.2% for the past year and two months. The break is worth about $83 a month for someone making $50,000. The president said earlier Wednesday he will sign the agreement as soon as Congress sends it to him. The agreement came together after House Republicans dropped a key demand Monday, saying they would accept the extended payroll tax cut without including spending cuts elsewhere to pay the $100 billion cost. House Speaker John Boehner, R-Ohio, defended the decision to move forward with a payroll tax cut extension that is not paid for, arguing that it was the only way to prevent a tax hike. "We were not going to allow Democrats to continue to play games and cause a tax increase for hardworking Americans," Boehner told reporters on Capitol Hill. "We made a decision to bring them to the table so that the games would stop and we would get this worked out." Boehner said he expects a vote on the measure this week. For their part, senior Democrats on Capitol Hill expressed confidence that the deal would pass. And some GOP House members have said they expect the package to ultimately pass with support from a majority of Republicans as well as Democrats. "It's the art of a deal. I mean, it's a compromise," said Rep. Steve Latourette, R-Ohio. "You have people that didn't get ... 100% of what they wanted." The agreement covers all three measures -- the payroll tax cut, the unemployment benefits extension, and the so-called "doc fix" -- for the rest of 2012. The latter two measures -- costing a combined $50 billion -- will be paid for, aides said. Possible funding sources to pay for the latter two measures include savings from broadband spectrum sales of about $13 billion, increased pension contributions by federal employees of about $16 billion, and cuts to Medicare hospital and specialist fees that would not affect patients, according to the congressional aides. Under the terms of the deal, the maximum time an unemployed person can receive benefits will drop from 99 to 73 weeks, according to a GOP aide and a Democratic aide close to the discussions. The maximum length of time for people in states with an average unemployment rate will drop to 63 weeks. In addition, states will be allowed to perform drug tests on individuals applying for unemployment benefits if those people lost their previous job because they either failed or refused an employer's drug test, according to sources. Individuals receiving unemployment assistance could also be tested if they are seeking a job that generally requires a drug test. Also, welfare beneficiaries will be banned from accessing public assistance funds at ATMs in strip clubs, liquor stores, and casinos. The payroll tax cut, unemployment benefits and enhanced doc fix payments are currently set to expire at the end of February -- a timeline put in place through a short-term agreement reached by Congress in December. That agreement also set up the conference committee that resumed negotiations last month on a longer-term deal. Monday's decision by House GOP leaders to drop their insistence that the tax cut extension be paid for by offsetting spending cuts was a sharp turnaround for House Republicans. Top party members had previously insisted that a failure to fully pay for the tax break would be financially reckless. But the debate over whether and how to extend the tax cut has been a political loser so far for the Republicans, who publicly questioned its value last year. Democrats have gleefully highlighted the GOP's reluctance, using the issue to portray Republicans as defenders of the rich who are indifferent to the plight of the middle class. Political analysts believe the showdown over the payroll holiday has eroded GOP strength on the party's core issue of lower taxes. Fearing negative repercussions, Republican leaders have now backtracked on the issue twice: dropping their opposition to the two-month extension last December and dropping their insistence on paying for a longer extension on Monday. "December was a debacle," Sen. John McCain, R-Arizona, said Wednesday. "We don't want to repeat that." "I think the GOP has read the writing on the wall when it comes to the payroll tax cut," said Brown University political scientist Wendy Schiller. "Americans are benefiting from it, and to take it away at this juncture leaves them open to charges of raising taxes. ... It would severely hamper the GOP presidential nominee's effort to defeat Obama." Boehner and other top House GOP leaders tried Monday to separate the payroll tax extension from provisions dealing with unemployment benefits and the doc fix, but quickly backed away from the proposal. Democrats objected loudly to the idea.

Published: Thu, 16 Feb 2012 13:19:45 GMT

Much of northern Syria in 'open revolt'

Syrian security forces resumed their fierce shelling of opposition targets in Homs Thursday but appeared to be losing their tight grip in the northern region, CNN journalists said. Government troops were stretched thin in their effort to control all fronts in the volatile country, while violence raged in the grass-roots anti-government uprising. The revolt has now entered its 12th month and the U.N. General Assembly prepared to take up a symbolic resolution condemning President Bashar al-Assad's brutal crackdown. Syrian forces shelled the flashpoint city of Homs for a 13th straight day, targeting the opposition stronghold neighborhoods of Baba Amr, Inshaat and Khalidiya, according to the London-based Syrian Observatory for Human Rights, an opposition activist group. About 50 people were injured Thursday in the heavy sustained bombardment that commenced around 5 a.m., CNN correspondent Arwa Damon reported from Homs. In Idlib province in the northwest, people appear to be preparing for the possibility of a military offensive. "What is astounding here is that the countryside in northern Syria, much of it is in open revolt. This is a rebellion of farmers, of carpenters and of high school teachers," said CNN correspondent Ivan Watson, reporting from the region. "It does appear that villages and towns in northern Syria have been, basically, out of government control for several months now -- except when government forces have tried to conduct deadly incursions into these towns that are temporary at best." In southwestern Syria, al-Assad's forces reportedly stormed the village of Sahm al-Golan searching for military defectors who have joined the rebel army or local militias, according to a member of the opposition in the town who asked to be identified only as Abu Issam out of fear of government reprisal. Syrian forces shelled the town and used tanks when it began its assault Wednesday, forcing many residents to flee toward the Jordanian border, Abu Issam said early Thursday. The Syrian army reportedly took control of Zabadani, in the Damascus countryside, where soldiers and tanks made a show of force along the streets, according to Mohamed Ali, a member of the opposition Syrian Revolution Coordination Committee. Security forces in Hama province killed at least 10 army defectors and least four civilians died from shelling there, the opposition Syrian Observatory for Human Rights The uprising in Syria -- influenced by the Arab Spring movement that forced regime change in Egypt and Tunisia -- was sparked about a year ago in the southern city of Daraa with demonstrators angered by the arrests of young people who scrawled anti-government graffiti. Their grievances and calls for reforms were met with a violent security crackdown, and the unrest there served to catalyze anti-government ferment across the nation. Thousands have died in the crackdown -- well over 5,000, according to the United Nations, but the Local Coordination Committees of Syria, an opposition activist network, puts the toll at well over 7,000. Syria's actions have been strongly denounced around the world. But international powers have backed the Arab League's efforts to deal with the uprising and some countries and groups, such as the Arab League, Turkey, the United States and the European Union, have initiated sanctions against al-Assad's government. But they have not been able to agree on strong action at the United Nations to rein in the government's onslaught. The U.N. General Assembly is scheduled to consider a resolution after China and Russia blocked the Security Council from approving enforceable measures aimed at curbing the violence. The anticipated vote follows news that al-Assad has moved up a vote on a constitutional referendum touted by his government as an important reform initiative, a move critics say is nothing more than window dressing. That vote is set for February 26. While a resolution adopted by the 193-member nation General Assembly would not be binding, it would mark the strongest U.N. statement to date condemning al-Assad's regime. The draft resolution calls on Syria to end human rights violations and attacks against civilians immediately, and condemns violence by al-Assad's forces and the opposition. For nearly a year, al-Assad has denied reports that his forces are indiscriminately targeting civilians, saying they were fighting armed gangs and foreign fighters bent on destabilizing the government. But the vast majority of accounts from within the country say that Syrian forces are slaughtering civilians as part of a crackdown on anti-government opposition calling for al-Assad's ouster. It is unclear what, if any, effect a resolution would have on what many world leaders see as a relentless campaign by al-Assad's forces to stamp out opposition. The General Assembly's anticipated vote follows news that France is bringing another resolution before the U.N. Security Council. "We are currently renegotiating a resolution at the U.N Security Council to see if we can persuade the Russians," French Foreign Minister Alain Juppe told radio station France Info Wednesday. Russia is seen as the linchpin in winning passage of a resolution that could force change in Syria because it could open al-Assad's regime up to U.N. sanctions as well as expose the president and his inner circle to possible prosecution by the International Criminal Court. Syria is not a signatory of the Rome Statute that established the ICC's authority. The Security Council is on the only world body that can refer crimes against humanity to the international court. Russia, a Soviet-era ally with trade and arms ties to Syria, has been adamantly opposed to a resolution that calls for al-Assad to step down, saying it amounts to a mandate for regime change. But Russian Foreign Minister Sergey Lavrov indicated Moscow may be open to supporting a Security Council resolution that stipulates -- under certain conditions -- that peacekeepers could be deployed to Syria. "If the issue is about stopping gunfire, everything is possible," Lavrov said at joint a news conference with his Dutch counterpart Uri Rosenthal, according to state-run RIA-Novosti news agency. Russia has given mixed messages as to whether it would accept a U.N. arms embargo or economic sanctions, even though it has said it is concerned about the prospect of a Syrian civil war. Meanwhile, China announced Thursday that it was sending an envoy to Syria in an attempt to help defuse the crisis, according to state-run China National Radio (CNR). Vice Foreign Minister Zhai Jun is scheduled to travel to Syria beginning Friday for a two-day visit, CNR said. The report did not say who the minister would meet with, saying only "his detailed schedule is still in planning." CNN cannot independently confirm opposition and government reports of violence because the Syrian government has severely restricted the access of international journalists.

Published: Thu, 16 Feb 2012 13:15:49 GMT

Stocks to decline on Europe worries

U.S. stocks were poised to open lower Thursday, as nervous investors continue to question whether Greece will secure a second bailout. Investor sentiment was further dampened after Moody's put 17 global banks and 114 European financial institutions on review for possible downgrades. The Dow Jones industrial average, S&P 500 and Nasdaq futures fell between 0.1% and 0.5% ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET. Among the global banks possibly affected by Moody's review -- nine are headquartered in Europe, the agency said. Moody's added that Swiss banks Credit Suisse and UBS, as well as New York-based Morgan Stanley, could see their long-term ratings slashed by up to 3 notches. U.S.-based Citigroup, Goldman Sachs, JPMorgan Chase, and Bank of America were also put on watch. Meanwhile, uncertainty remains over Greece and its efforts to secure much-needed additional bailout funds. European finance ministers delayed a decision on the bailout Wednesday, as they continue to evaluate a proposed austerity program from Athens. The Eurogroup meets again on Monday and indicated it would likely give its approval for the latest economic reform proposal, which Greece needs in order to secure bailout funds and avoid defaulting on a €14.5 billion bond redemption in March. U.S. stocks closed lower Wednesday, as the euro hit a 1-week low on uncertainty over Greece's debt crisis. World markets: European stocks were in the red in morning trading. Britain's FTSE 100 fell 0.7%, the DAX in Germany dropped 1% and France's CAC 40 shed 0.4%. Asian markets ended lower. The Shanghai Composite and the Hang Seng in Hong Kong slipped 0.4%, while Japan's Nikkei edged lower 0.2%. Economy: Reports due Thursday morning include initial unemployment claims, producer prices and data from the housing market. Investors will look to see whether the economic data offers further signs that the U.S. is on the path to economic recovery, after a number of strong macroeconomic reports in recent weeks. Initial unemployment claims for the week ended February 11 are expected to total 365,000, according to a survey of analysts by Briefing.com -- up from 358,000 in the week prior. Housing starts for January are expected to total 671,000, while the Producer Price Index for January is expected to have increased by 0.3%. Companies: General Motors posted a record $7.6 billion net profit for 2011, making it the first year since 2004 that all Big Three automakers -- GM, Ford and Chrysler -- are profitable. DirectTV beat earnings and sales estimates during the fourth quarter, with particular strength coming from the company's presence in Latin America. DirecTV also announced a $6 billion stock buyback program. Nvidia's stock tumbled a day after the company first-quarter revenue forecast fell short of Wall Street's estimate. Shares of J.M. Smucker slid after the maker of Jif peanut butter and Folgers coffee posted a 11% drop in its fiscal third-quarter profit that also fell below expectations. Shares of Amazon were down after Apple asked the e-commerce giant to halt sale of the iPad in China. The move came after Apple lost a trademark dispute over the "iPad" name against in Chinese courts against Proview Technolgoy. Currencies and commodities: The dollar was higher against the euro, the British pound and the Japanese yen. Oil for March delivery slipped 47 cents to $101.33 a barrel. Gold futures for April delivery fell $8.40 to $1,719.70 an ounce. Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 1.92% from 1.93% late Wednesday.

Published: Thu, 16 Feb 2012 13:06:26 GMT

Desperately seeking Americans for factory jobs

U.S. factories are creating many new jobs. But owners are hard pressed to find skilled American workers to fill them. There is a "critical shortage of machinists," a common and crucial position in factories, said Rob Akers, vice president at the National Tooling and Machining Association. "Enrollment in this field in technical schools has been down for a long time." The problem comes at a terrible time. Domestic contract manufacturers -- known as "job shops" -- are seeing a boom in business. In the case of Win-Tech, a Kennesaw, Ga., manufacturer, orders are coming in fast and furious from its customers in the defense and aerospace industries. But the company's owner Dennis Winslow is more concerned than elated. Winslow's been trying to add 12 more workers to his staff of 42 to meet the increased demand, but he's struggling. "I'm facing a real conundrum," he said. "There are so many unemployed people in the country. But I can't find the skill sets that I need. I would hire tomorrow if I could." For more than a year, Winslow has been looking for manual machinists, quality control inspectors and machinists trained to use computer-controlled systems. He said he may be forced to hire people who are not fully skilled, and then train them. "I am coming to the conclusion that this (situation) has become the new normal," said Winslow. "Being a machinist once was considered a respectable trade. But young Americans just don't consider manufacturing to be a sexy vocation." He noted that most people possessing the skill sets he needs today are baby boomers, many of whom work at his factory. As the United States outsourced its manufacturing jobs over the last few decades, the country lost a significant chunk of its manufacturing talent pool, said Mitch Free, CEO of MFG.com, an online directory that matches businesses with domestic manufacturers. "Now, as manufacturing is slowly coming back, we just don't have this talent quickly available," said Free, a machinist by training. Every factory needs a machinist to operate it, whether it's to operate machines or to create machine parts. And machinists also create molds and casings to make plastic parts that are used in everyday products, such as computers and cell phones, said Free. It takes about a year in trade school to become a machinist, followed by a few years of apprenticeship at a manufacturing facility, said Free. Machinists make about $60,000 a year. But with many logging overtime lately, Free said that income can get close to $100,000 a year. "This is also a highly technical craft," he said. "It requires knowledge of computers, programming, even geometry. You can't hire someone off the street and turn them into a machinist." Mark Engelbracht, owner of Omni Machine Works in Covington, Ga., is trying to hire just three new machinists. He, too, is having a hard time, a situation that will worsen as his older machinists retire. "Finding more work isn't the problem for our business," he said. "Getting the worker is becoming a problem." Omni Machine Works makes parts used by machines that manufacture consumer products, such as tires and phone plates. "But we're also a job shop. So we do a little bit of everything," he said. Engelbracht has hired headhunters and temp agencies to fill the slots, but has had no luck. He's now thinking about starting an in-house apprentice program to train hires himself. "I've been trying to hire for a year," he said. "It's not that people aren't applying. But many are claiming to be machinists when they aren't exactly."

Published: Thu, 16 Feb 2012 12:55:39 GMT

Plan to bury Powell near slain sons sparks outrage

An anti-crime group in Washington state is rallying to block Josh Powell's relatives from burying him near the two sons he killed in a fiery murder-suicide earlier this month. Authorities say their father snatched them from a social worker delivering them for a supervised visit, locked the doors and hacked them with a hatchet before an explosion engulfed his home on February 5. The gas-fueled blast killed Powell and his sons, Charles, 7, and Braden, 5, a grisly end to a story that started with the 2009 disappearance of the boys' mother. Powell's relatives want him laid to rest near his sons at Woodbine Cemetery in their hometown of Puyallup, and have expressed interest in a plot there, CNN affiliate KOMO reported Wednesday. But the mother's side of the family said having the father buried near the children is an outrage, and have pledged to derail the plans. "I just can't see this happening ... and I just hope it goes away quickly," said Charles Cox, the boys' maternal grandfather. In an attempt to block the move, Crime Stoppers and the local sheriff bought the plots on both sides of where the boys are buried, according to the affiliate. The nonprofit, which works with local police, announced plans to buy the plots on its website and asked for donations to help cover the cost. Extra funds will go toward beautification of the site and supporting other crime victims in the area, the group said. "The plan here is not for us to own grave sites, it's to stop Josh Powell or anybody that doesn't deserve to be next to those boys there," said Ed Troyer, a spokesman for the Pierce County Sheriff's Office. An attorney for the boys' maternal grandparents plans to seek a temporary restraining order to block the burial. The grandparents, Charles and Judy Cox, were engaged in a long and bitter child custody battle with Powell at the time of his death. Utah authorities have said he was under investigation in the disappearance of the boys' mother, Susan Cox-Powell. While she has not been found, the Coxes have suggested they believe she is dead and is now reunited with her sons in heaven. "We know that they are with their mother," Charles Cox said. The boys were buried Saturday in a service attended by hundreds.

Published: Thu, 16 Feb 2012 12:54:40 GMT

Foreclosures climbed in January

Foreclosures picked up in January, yet another sign that the nation's huge glut of delinquent homes may soon start making their way onto the market. The number of homes hit with a notice of default, auction sale, bank repossession or some other foreclosure filing in January rose 3% since December, but it was still significantly lower than it was a year ago, according to RealtyTrac. One in every 624 U.S. households, nearly 211,000 in total, got hit with some sort of foreclosure filing last month. That was down 19% since January 2011, the 16th month of consecutive declines. While the declines seem like good news for the housing market, where the large number of foreclosed homes have depressed home prices, much of it was due to processing delays caused by fall-out from the robo-signing scandal that broke in late 2010. Last year, banks spent more time making sure paperwork was legal and proper, creating a backlog in the foreclosure pipeline. But now there are signs that "the frozen-up foreclosure process is beginning to thaw," especially in some parts of the country, said Brandon Moore, CEO of RealtyTrac. "Foreclosure activity increased on a year-over-year basis for the first time in more than 12 months in Florida, Illinois, Indiana and Pennsylvania, following a pattern we saw in late 2011 in states such as California, Arizona and Massachusetts." The $26 billion foreclosure settlement that the state attorneys general signed with the nation's five largest banks should help move foreclosures more quickly through the pipeline. Under the terms of the settlement, banks agreed to process foreclosures more openly and uniformly. While it may mean an initial surge of foreclosures, the new rules should eventually cause the numbers to shrink since many borrowers draw multiple filings as they stay in the pipeline for months or even years. In fact, there are already signs that lenders are getting past the robo-signing mess, said Daren Blomquist, RealtyTrac's director of marketing communications. Florida saw a 14% increase in foreclosure filings compared with a year earlier, for example. "That was the first month-over-month increase in Florida filings after 14 months of declines," he said. The robo-signing scandal, in which bank employees improperly signed hundreds of legal documents a day, often without even reading them, was a particularly strong issue in the Sunshine State. Florida judges came down hard on the lenders, forcing them to clean up their act. The banks reacted by slowing down foreclosure processing, which kept some cases out of the foreclosure pipeline for months. Nevada led all other states in the rate of foreclosure filings for the 61st consecutive month. One in every 198 homes drew a foreclosure notice in January. More California households, nearly 52,000, received a notice of default or foreclosure than any other state. With one out of every 265 homes with a filing, it had the second highest foreclosure rate in the nation. Arizona (one in 325) and Georgia (one in 328) finished third and fourth in the nation. California cities occupied nine of the top 10 hardest hit metro areas. Las Vegas, which took fifth place, was the only exception. The worst hit place was Stockton, where one out of every 140 households received a foreclosure notice.

Published: Thu, 16 Feb 2012 12:23:28 GMT

U.S. drone strike kills five in Pakistan

A U.S .drone strike killed five suspected insurgents Thursday morning in Pakistan's tribal region along the Afghan border, intelligence officials said. The drone fired two missiles at a suspected militant compound at a village outside Miranshan, the main town in North Waziristan, the officials said. North Waziristan is one of seven districts in Pakistan's tribal region and widely believed to be a sanctuary for the Haqqani network and other militant groups that fuel the insurgency across the border in Afghanistan. Based on a CNN count, Thursday's drone strike was the sixth this year. There were more than 60 drone strikes last year and more than 110 in 2010. The attacks have killed scores of militants, but human rights groups say the strikes have also killed hundreds of civilians, including innocent children. The officials asked not to be named because they are not authorized to speak to the media.

Published: Thu, 16 Feb 2012 11:19:38 GMT

Thai police say bombers targeted Israelis

A group that set off explosions in Bangkok this week intended to strike Israeli diplomats, a Thai police official said, intensifying a heated argument between Israel and Iran about a string of bombings in different countries. Israel and Iran have traded accusations over attacks in Thailand, India and Georgia, with Israel pointing fingers at Tehran and the Iranian regime calling such claims a "prelude" to an Israeli attack. "I can tell you that the target of the operation of this group is specifically aimed at Israeli diplomats," Police Gen. Priewpan Damapong said late Wednesday in an interview with CNN affiliate Channel 3. His comments came after a senior Thai security official had drawn a tentative link between the Bangkok blasts and the attacks aimed at Israeli officials in India and Georgia, saying the materials used in the explosive devices were similar. Two men allegedly involved in the Bangkok blasts have been arrested in Thailand and charged, the authorities said Wednesday. Authorities arrested a third suspect in Malaysia and Thai police will send an arrest warrant to seek his extradition, said Col. Piya Uthayo, a police spokesman. Thai officials have also issued an arrest warrant for a woman who is believed to have left Thailand. Israeli officials have bluntly accused Tehran of the attacks. "Iran is a threat to the stability of the world. They are targeting innocent diplomats," said Israeli Prime Minister Benjamin Netanyahu. "The international community has to denounce the Iranian actions and to indicate red lines concerning the Iranian aggression." Ramin Mehmanparast, a spokesman for the Iranian Foreign Ministry, "condemned the blasts and said that Israeli agents are often the perpetrators of such terrorist acts," Iran's state-run Press TV said on its website. And state-run Iranian news agency IRNA quoted an analyst as saying the Israeli allegations against Iran involving the bombings in India and Thailand are "a prelude to terrorist attacks against the Islamic Republic." But Netanyahu, speaking in the Knesset, the Israeli parliament, called Iran the leading terror in the world. "Right now in the past days the Iranian terror has been witnessed by all," he said. The attacks and accusations come amid high tensions between Israel and Iran. Israel had made clear it is considering attacking Iran's nuclear facilities. Israel, the United States and other countries are concerned Iran is building nuclear weaponry, despite Tehran's insistence that its nuclear program is purely for civilian purposes. Iranian officials openly antagonize Israel, and Israeli officials have described the regime in Tehran as an existential threat. Iran on Wednesday flaunted on state television a new generation of centrifuges and mastery of the nuclear fuel cycle. The blast in Bangkok on Tuesday went off in a rental house believed to be leased to foreigners, according to Thai authorities. After the blast, two of the men left the scene while a third detonated two more bombs -- one when a taxi driver refused to give him a ride, and another when he tried to throw a bomb at police officers as they closed in on him. The last bomb exploded near the man, blowing off one of his legs, authorities said. He was taken to a local hospital for treatment and Iranian documents were found on him. Thai authorities identified him as Saeid Moradi, 28. Another man arrested at the airport holds an Iranian passport and is one of the two men who left after the bombing at the house, the Thai government said, adding that he was identified as Mohammad Hazaei, 42. He was about to leave for Malaysia, the government said. Authorities charged those two men with several offenses, including illegal possession of explosives and intent to kill a police officer, said Gen. Pansiri Prapawat, deputy police commander. Authorities in Malaysia arrested Masoud Sedaghatzadeh, 31, Wednesday afternoon as he was about to board a plane to Iran, Thai authorities said. Thai authorities were looking for Rohani Laila, the woman believed to have rented the house in Bangkok. In the events Monday, a device attached to an Israeli Embassy van in New Delhi exploded and injured four people. Another device was found on an embassy car in Tbilisi, but it was safety detonated. Iran has also denied involvement in those events, which are still being investigated. Indian police said Thursday that they have not established an Iranian tie to the New Delhi bombing. "No link with anybody," said P.N. Aggarwal, the head of the unit probing Monday's assault in the Indian capital, who declined to name possible suspects. "Suspicions can't be disclosed. No guess work." The materials used in the Bangkok bombs had similar characteristics to those used in India, the Thai National Security Council said.

Published: Thu, 16 Feb 2012 10:31:40 GMT

Greek bailout decision postponed

European finance ministers expect to make a decision on a second bailout for Greece early next week, a top eurozone official said Wednesday. Jean-Claude Juncker, who heads the Eurogroup of finance ministers from the 17-member eurozone, said "substantial further progress" has been made on key aspects of a second bailout program. In a statement issued after a conference call with the finance ministers, Juncker said he's "confident" the Eurogroup "will be able to take all the necessary decisions" when they meet on Feb. 20. At issue is a second €130 billion bailout for Greece, which the nation needs to avoid a messy default on a bond payment due next month. The Greek government has been negotiating the terms of the bailout with officials from the European Union, International Monetary Fund and European Central Bank, known as the troika. Juncker said he has received the additional assurances the ministers demanded from Greek political leaders last week. The leaders from the nation's two main parties have pledged to implement recently approved austerity reforms after elections are held later this year. Greece and the troika have also identified an additional €325 million in spending cuts that are expected to help the nation meet it's deficit targets, said Juncker. In addition, Juncker said a key analysis of the sustainability of Greece's public debt has been completed by the troika and presented to the Eurogroup. The statement suggests that Greece has met the conditions set out by the Eurogroup last week, when the ministers delayed a decision on the bailout and issued more demands. But it also hinted that the ministers are seeking additional measures to ensure that Greece will use its bailout money to pay off debt before funding any of its other activities. "Further considerations are necessary... to ensure that priority is given to debt servicing," said Juncker. EU officials have said they may funnel the bailout money into an escrow account to exert more control over how the funds are used. Greece, the nation at the center of Europe's debt crisis, has been under intense political pressure from other EU governments to cut spending and revive its ailing economy. The nation has struggled to meet the conditions of its 2010 bailout as the Greek economy has sunk deeper into recession. On Monday, the Greek Parliament approved a deeply unpopular package of pay cuts, layoffs pension reforms and other measures to reduce spending. The austerity program, which is a condition for Greece to receive more aid, sparked protests and violent demonstrations across the nation earlier this week. The Greek economy has been mired in a recession with the government reporting Tuesday that Greece's gross domestic product, the broadest measure of economic growth, fell 7% in the fourth quarter, compared with a 5% decrease in the third quarter. Greece is also widely expected to announce a deal soon with private sector investors to write down a portion of its debts. The deal would result in holders of Greek government bonds voluntarily accepting a loss of up to 70%.

Published: Thu, 16 Feb 2012 10:30:30 GMT

House GOP delays transportation bill vote

House Speaker John Boehner told his Republican caucus Wednesday that the House will postpone voting on a massive transportation and energy bill until after the congressional recess scheduled for next week, according to multiple House Republican leadership aides. The move was a sign that GOP leaders were still struggling to put together the votes to pass the measure that funds highway programs and includes several energy measures, including drilling in the Arctic National Wildlife Refuge (ANWR), and approval of the Keystone XL pipeline. GOP leaders had planned to vote on the bill this week, in several pieces. However, with most Democrats making it clear they would oppose the measure, top Republican leaders faced the task of passing it with mostly GOP support. House Republicans are divided on the measure, with some conservatives thinking the level of spending is too high while several moderate Republicans object to drilling in ANWR. Boehner told rank-and-file Republicans at a meeting Wednesday morning that "it's more important that we do it right than that we do it fast," according to one aide who attended the meeting. The aide maintained that the reason for the delay was GOP leaders must find new ways to offset some of the costs. One proposal -- a cut to federal employees pension plans -- is no longer available because it's being used to help pay for the payroll tax cut extension. On Tuesday House Democratic Whip Steny Hoyer blasted the transportation bill and said Democrats weren't consulted, telling reporters that "it continues to be a sad fact that this House is as partisan body as I've seen it ever." Hoyer also pointed out that there was a bipartisan transportation bill pending in the Senate. Traditionally, major highway bills are stuffed with money set aside for members' pet projects in their districts -- bridges or highway expansions that they go home and claim credit for getting funded. After House Republicans took control in 2010, they banned earmarks, making it tougher to build support for the transportation bill. Several GOP aides pointed out that the last major transportation legislation passed by Congress contained more than 6,000 earmarks, while this House GOP bill has none. The House will begin debating the bill this week, but votes on the measure aren't expected until after the House returned from a recess scheduled for next week.

Published: Thu, 16 Feb 2012 09:57:01 GMT

Prosecutors seek jail time for Berlusconi

Italian prosecutors Wednesday asked a court to sentence former Prime Minister Silvio Berlusconi to five years in prison if he is found guilty of corruption charges. Berlusconi is charged with bribing a British lawyer, David Mills, to secure favorable testimony in legal cases. Prosecutors requested prison time as they summed up their case against him Wednesday, and the three-judge court is expected to issue a verdict by late February. The former premier's lawyers have argued that the statute of limitations in the case has expired, and Mills' conviction in the case was overturned in 2010. And even if convicted, the 75-year-old Berlusconi may never serve time due to appeals and his age -- under Italian law, judges can suspend sentences for convicts over 70. The 75-year-old Berlusconi dominated Italian politics for a decade and a half before resigning amid a financial crisis in November. He has survived a series of political, corruption and sex scandals over the years, involving allegations of embezzlement, tax fraud and bribery. In addition to the Mills case, he also faces trial on charges that he hired an underage prostitute and later tried to pull strings to get her out of jail when she was arrested for theft.

Published: Thu, 16 Feb 2012 09:04:08 GMT

TCU football players among 18 students accused of drug dealing

Eighteen Texas Christian University students, including four members of its Top 25 football team, were arrested Wednesday morning on suspicion of selling drugs, the school and police said. The football players include two defensive starters for last season's squad, which was No. 14 in the final Associated Press poll, plus a junior linebacker who sat out most of 2011 with an injury but was the team's leading tackler in 2010. The 18 illegally sold marijuana or other drugs, including cocaine, Ecstasy, acid and prescription medicine, to undercover officers during a six-month investigation launched after authorities received complaints about drug activity, TCU Police Chief Steve McGee told reporters Wednesday. "There is no doubt that all of those arrested today are drug dealers," said McGee, who added that the selling happened on and off the Fort Worth campus. "These individuals engaged in hand-to-hand delivery for money with undercover agents." TCU Chancellor Victor Boschini said the school has for the time being "separated" the students from TCU, and that a vice chancellor will "determine what is going to happen to those students, following this." "What they did, to be honest, is simply unacceptable. This behavior, when reported, is never tolerated at our university," Boschini said at a news conference with McGee and other officials. An investigation by university and city police continues, and more arrests could come, Boschini said. The four football players -- junior linebacker Tanner Brock, 21; junior defensive tackle D.J. Yendrey, 20; junior safety Devin Johnson, 21; and sophomore offensive tackle Ty Horn, 21 -- were arrested on preliminary charges of delivery of marijuana. Johnson and Brock face felonies, according to arrest warrants released by the Fort Worth Police Department. Other arrestees face preliminary charges of felony or misdemeanor charges of delivery of marijuana or delivery of a controlled substance, according to Fort Worth police. The students operated in several groups, and it's not clear whether those groups were connected, a Fort Worth police officer said at the news conference. The university did not immediately respond to a question about whether the football players still were members of the team, though they were not on the team's online roster Wednesday afternoon. Head coach Gary Patterson said he was shocked, hurt and then mad after he heard of the arrests Wednesday morning. "Under my watch, drugs and drug use by TCU's student-athletes will not be tolerated by me or any member of my coaching staff. Period," Patterson said on the school's athletics website. "Our program is respected nationally for its strong ethics, and for that reason the players arrested today were separated from TCU by the University. I believe strongly that young people's lives are more important than wins or losses." TCU Athletic Director Chris Del Conte said he "will not tolerate behavior that reflects poorly on TCU, the athletics department, our teams or other student-athletes within the department." "We have an excellent athletics program at TCU, and an indicator of that excellence is the fact that we will not tolerate criminal conduct among our student-athletes," Del Conte said in his online statement. The arrests come months before the football team, coming off an 11-2 season, prepares to start its first year in the Big 12 conference. Brock, the linebacker, was an SI.com honorable-mention All-American after leading the Horned Frogs in tackles and fumble recoveries as a sophomore in 2010. But he was limited to one game as a junior, sitting out most of the season with an injured foot. Johnson, the safety, started eight games in 2011, recording 47 tackles and 2.5 sacks. Yendrey, the defensive tackle, played in every game this past season and was an honorable-mention All-Mountain West Conference selection, recording three sacks and 39 tackles.

Published: Thu, 16 Feb 2012 09:03:41 GMT

Syria vote called 'window dressing'

The embattled Syrian president announced a constitutional referendum Wednesday as his forces pummeled Homs and other towns where people cried out for his regime to end. President Bashar al-Assad set February 26 for the vote on a draft constitution, hailed by his government as an important reform initiative. But analysts and demonstrators ridiculed the effort as "window dressing," the latest in a series of superficial measures undertaken to mollify his critics over the last 11 months. Members of a committee tasked with drafting the document "reiterated their keenness on a constitution that allows ... public freedoms and political plurality in a way to lay the foundation for a new stage that will enrich Syria's cultural history," the state-run Syrian Arab News Agency reported. Former Syrian lawmaker George Jabbour said "clause 8 of the new draft of the constitution is the essential point" of the document. It "allows a multi-party system as opposed to the Baath party being the leading party of the society and the state as stipulated in the current constitution." The Baath party rules Syria. Jabbour said "special committees will be formed to look into the licensing of new parties in line with the new constitution." As for presidential elections, they "will be competitive since there is no leading party anymore, and all the parties' candidates are eligible provided their candidacy is endorsed by at least 35 members of parliament," Jabbour said. Also, the draft forbids the creation of any political activity, or parties, or political gatherings based on religion, ethnicity, tribe or region. It forbids discrimination based on gender, race, ethnicity, or color. In Daraa, anti-government demonstrators held up signs indicating they were unimpressed: "If the new constitution doesn't include a decree that guarantees the execution of the murders, any draft will be meaningless," said one that was posted on YouTube. An electronic ticker in the square was even more blunt: "We want Bashar and his agents executed," it read. In Homs, an opposition activist called the announcement about the referendum "bullshit." In Washington, State Department spokeswoman Victoria Nuland was more diplomatic. "From our perspective, it looks like he is putting forward a piece of paper that he controls, to a vote that he controls, in an effort to try and maintain control," she said. "And frankly, it is not working in any other capacity, so we don't think this is going to work, either. He knows what he needs to do, if he really cares about his people the violence just needs to come to an end and he needs to get out of the way so we can have a democratic transition." The calls for reform that predominated in the early months of the uprising have been demands for al-Assad's ouster. Shadi Hamid, director of research for the Brookings Doha Center, called al-Assad's latest moves toward reform "a little bit too late." "It's not so much the message, but the messenger," he said. Andrew Tabler, Syria expert at the Washington Institute for Near East Policy, called the document "window dressing," citing the banning of many parties and the fact that government permission is needed to form a party. "It's not going to change the fact that it's a minority-dominated situation," he said. "It will remain a presidential system with powers vested in the hands of the president." Tabler said al-Assad is using this "tactic to get people to leave the streets." At least 32 people killed were killed across the country Wednesday, including three children, a woman and a defected soldier, according to the according to the Local Coordination Committees of Syria, an opposition group that tracks reports of violence and organizes anti-government protests. The deaths occurred in Homs, Idlib, Daraa, Hama, Latakiya, Aleppo, Hasaka, Damascus and the Damascus suburbs. In southwestern Syria, near the Jordanian border, al-Assad's forces stormed the village of Sahm al-Golan looking for military defectors, according to a member of the opposition in the town who asked to be identified only as Abu Issam out a fear of reprisal. Syrian forces shelled the town and used tanks, forcing many residents to flee toward the Jordanian border, Issam said. "Yesterday there were defections in the neighboring town of Tseel, and the Syrian forces attacked the town and could not find any defectors. So they came today to Sahm al-Golan," he said. In the same region of the country, the Syrian army reportedly took control of Zabadani, where soldiers and tanks made a show of force along the streets, according to Mohamed Ali, an opposition Syrian Revolution Coordination union member for the town. Artillery and automatic machinegun fire echoed through Homs Wednesday, a city of 1 million people, CNN's Arwa Damon reported from inside the city. Opposition activists say government forces are intent on flattening every neighborhood that might hold dissidents. The Syrian regime said an "armed terrorist group" sabotaged a diesel pipeline near the Homs neighborhoods of Baba Amr and Sultanieh, state-run media said. But the LCC told CNN that government warplanes flying over Baba Amr blew up an oil pipeline. Amateur video showed columns of smoke on the ground. There are "cases of suffocation in the neighborhood of Baba Amr from the smoke that is developing after the explosions that hit the oil pipelines, while the neighborhood is still being shelled," the LCC said. The LCC said government forces were firing mortars into the Khaldiya neighborhood in Homs, resulting in casualties. Outside Baba Amr and Khaldiya, shelling, shootings and nail bombings engulfed Homs' Old City, the most populous area of the metropolis with buildings dating back hundreds of years. "This is in conjunction with a cut of communications, electricity, and water, and heavy deployment of security checkpoints, which imposes a suffocating curfew on the city," the LCC said. The opposition Syrian Observatory for Human Rights said military forces stormed the city of Hama, where explosions rattled two neighborhoods. The Observatory said landlines, cell phone communication and Internet access in Hama were cut off. CNN cannot independently confirm details of events across Syria because the government has severely limited the access of international journalists. But the vast majority of accounts from within the country say that al-Assad's forces are slaughtering civilians en masse, part of a brutal crackdown on protesters calling for democratic reforms. Meanwhile, after repeated U.N. failures to denounce the Syrian government, the latest U.N. draft resolution condemning Syria could be brought to a vote in the General Assembly Thursday. Though a General Assembly vote would not be binding, it would mark the strongest U.N. statement yet on the violence. Russia and China have vetoed attempts to condemn Syria for the crackdown by the U.N. Security Council, whose resolutions are binding. The draft resolution calls on Syria to end human rights violations and attacks against civilians immediately, and condemns "all violence, irrespective of where it comes from." The Arab League, which has been working with the United Nations on the matter, has urged its member states to provide political and financial support to the Syrian opposition. While no country will say it has provided weapons to the opposition, it is clear the member nations will support those fighting against the regime, an Arab League senior official said. "The league sort of gave the green light. Indeed, some countries have already supplied the opposition Free Syrian Army with weapons, like Turkey for example," the senior official said. But a Turkish Foreign Ministry official Wednesday denied any such military support or aid to the resistance force. Turkey is not an Arab nation and is not a member of the Arab League. Free Syrian Army Lt. Col. Mohamed Hamado said that the force's weapons were coming from inside Syria. "We are hoping a political decision soon will provide us with more weapons," he said. The Syrian National Council, the major opposition umbrella group, met Wednesday in Doha, Qatar, and agreed to extend the presidency of Burhan Ghalion by three months, according to Naji Tayara, a member in the Syrian National Council Foreign Relations Committee. The United Nations has said since December that more than 5,000 people have been killed, but has not been able to update the number due to the turmoil on the ground. The LCC has said more than 7,000 people have been killed. European Union diplomats said they expect new EU sanctions by February 27 that would target the Syrian Central Bank and impose a ban on exports of precious metals and phosphates.

Published: Thu, 16 Feb 2012 08:58:03 GMT

China's VP calls for building mutual trust

Chinese Vice President Xi Jinping on Wednesday met with U.S. congressional leaders and then told business leaders that China and the United States must work toward building mutual trust. In a Washington speech sponsored by the U.S.-China Business Council, Xi said relations between the two world powers were "at a new historical starting point at this second decade of the 21st century." "We need to make important efforts toward mutual understanding and strategic trust," Xi said, defending Chinese economic policies that have been labeled unfair by the U.S. government. China has faced accusations of manipulating its currency by keeping the yuan low, which makes Chinese goods cheaper. "China has been taking measures to increase imports by the U.S.," Xi said, pointing out that China has allowed its currency to rise. He also offered some advice for the United States, saying it needs to address its economic situation by stimulating job creation and improving the balance of U.S. international payments. Xi, who is expected to become the next Community Party leader and president of China, emphasized the two nations' "interwoven interests" and said they "should reduce misunderstanding and suspicion." Earlier Wednesday, Xi huddled behind closed doors with Senate Majority Leader Harry Reid, D-Nevada, Senate Minority Leader Mitch McConnell, R-Kentucky, and other key members from both political parties. His Washington visit included White House meetings Tuesday with President Barack Obama, Vice President Joe Biden and other top officials, providing a chance for the American leaders to assess the presumptive next leader of China. In the Oval Office, Obama said China's meteoric rise as an economic powerhouse brought a responsibility to ensure balanced trade flows, referring to China's trade surpluses. The president also raised the delicate issue of human rights as a critical area of concern for the United States. "We've tried to emphasize that because of China's extraordinary development over the last two decades, that with expanding power and prosperity also comes increased responsibilities," Obama said while sitting next to Xi. "We want to work with China to make sure everyone is working by the same rules of the road when it comes to the world economic system," he added. For his part, Xi said Tuesday the main purpose of his visit was to work to strengthen U.S.-Chinese relations and build a "cooperative partnership based on mutual respect and mutual interests." In his speech Wednesday, Xi noted renewed U.S. political interest in the Asia-Pacific region following a decade of war in Afghanistan and Iraq. "China welcomes a constructive role by the United States in promoting peace, prosperity and stability in the Asia-Pacific," he said. "At the same time, we hope the United States will respect the interests and concerns of China and other countries in this region." In particular, Xi said he hoped the United States would oppose Taiwanese independence and support peaceful cross-strait relations, in addition to opposing Tibetan independence. Xi's five-day U.S. trip is an opportunity to burnish his leadership credentials. President Hu Jintao undertook a similar visit 10 years ago as he was being groomed for the top job. Beneath the carefully choreographed presentation of the high-profile Washington meetings were a range of contentious issues on which Xi has little incentive to give ground, including trade, human rights and China's growing military presence. In welcoming Xi on Tuesday, Vice President Joe Biden said the United States and China had one of the most important bilateral relationships in the world. But the two countries, he said, were not always going to see eye to eye. "We saw this in the recent U.N Security Council debate about Syria, where we strongly disagreed with China and Russia's veto of a resolution against the unconscionable violence being perpetrated by the Assad regime," Biden said. Chinese officials are aware of U.S. concerns, but Xi and other leaders face the challenge of keeping China's hundreds of millions of workers content as economic growth starts to ease from the torrid levels of recent years. Policy makers in Beijing are grappling with how to tackle rapidly rising prices and the widening gap between rich and poor. In addition to looking toward the future, Xi's itinerary gives a nod to his past. In Iowa later Wednesday, Xi revisted Muscatine, the town in which he stayed in April 1985 as part of a Chinese delegation looking into farming technology. Xi will also attend a dinner with Gov. Terry Branstad of Iowa, whom he originally met during his 1985 trip. After Iowa, Xi will fly Thursday to Los Angeles, where he is scheduled to attend an economic forum and meet with local leaders and students. His engagements in the United States began Monday with a dinner in Washington attended by former U.S. secretaries of state Henry Kissinger and Madeleine Albright. He has received a less cordial welcome from activists advocating Tibetan independence who demonstrated on Monday and Tuesday in Washington. More protesters turned up in Iowa on Wednesday, including six people carrying flags and signs as they approached a house Xi was visiting. The protesters were forced back by police, and it was unclear whether Xi saw them. Beijing has been struggling in recent weeks to contain unrest among ethnic Tibetans in the southwestern province of Sichuan. It has sent additional security forces to the region after Tibetan protesters set themselves on fire and clashed with police to express frustration with Chinese rule.

Published: Thu, 16 Feb 2012 08:56:31 GMT

More than 300 killed in Honduras prison fire

More than 300 inmates were killed in a prison fire in central Honduras, officials said Wednesday, as families clamored to learn whether their loved ones were among the victims. The fire was one of the worst tragedies of its kind in decades in Latin America and focused renewed attention on the often poor conditions of prisons in the region. Authorities offered differing reports of how many prisoners died in the fire. Honduran government officials said more than 300 inmates were killed, while the National Human Rights Commission said as many as 356 inmates were unaccounted for and may have died. Forensic teams removed more than 150 bodies from the facility by Wednesday evening. "Everyone ran for their lives," said one survivor who spoke briefly to local television cameras. Prisoners awakened to the screams of fellow inmates and forced themselves out of the prison any way they could, he said. Authorities were investigating what caused the blaze, which broke out late Tuesday in a minimum-security prison in Comayagua, Honduras, about 40 miles northwest of the capital, Tegucigalpa. About 200 meters away from the prison, Carlos Alfredo Garcia Zepeda said he was inside his home when he heard a series of blasts, like a bomb. "I didn't pay much attention, because we have a lot of fireworks," he said. "Then I heard them screaming. ... I went outside and couldn't believe what I was seeing." As bright orange flames and thick plumes of smoke filled the night air, the 21-year-old recorded a video of what he saw, which he submitted to CNN's iReport. Gunshots rang out. The flames raged for about an hour, he said, but a few minutes after he started recording, the cries for help stopped. "It's an outrage. It happened so quickly. I guess they couldn't do anything anymore," he said. As word of the fire spread, Honduran officials pledged to take swift action to determine what caused it. "This is a day of deep pain for Honduras," Honduran President Porfirio Lobo said in an address to the nation Wednesday. He announced the suspension of the Comayagua prison administrators and the entire prison chain of command up to the national level. "We are going to review the conditions in all the penitentiary centers to see how we can improve the overcrowding conditions that exist in many of our prisons," Lobo said. The prison was built to house 250 inmates, but 852 inmates were behind bars there at the time of the fire, the Honduran National Human Rights Commission said in a statement. Five of the prison's units -- more than half of the facility -- were affected by the fire, said Jose Turcios, a spokesman for the Comayagua fire department. The country's prison commissioner said authorities were looking into whether a short circuit sparked the fire or if a prisoner set a mattress alight. Authorities have not determined what caused the fire, but the nation's electric utility will review wiring in all prison facilities as a "preventative measure," Lobo said, "because that can be one of the causes of these types of disasters." Before dawn Wednesday, families of the prisoners gathered in front of the prison gates and authorities' offices, demanding to know if their loved ones were among the survivors. Hundreds of relatives pressed against the gates as an official read aloud the survivors' names. "I understand the worry and demands of the people, but we have to abide by the law," said Pompeyo Bonilla, the country's minister of security. "We have the best intention to give answers to the families as soon as possible." The president said Chile was sending forensics experts to Honduras to help with identification. It was the third fatal prison fire in recent years. In 2003, 61 prisoners were killed in a fire at a prison in La Ceiba. In 2004, 107 died in a fire at a San Pedro Sula prison. The U.S. State Department published a report last April painting a damning portrait of conditions in Honduras' 24 prisons. Prisoners "suffered from severe overcrowding, malnutrition, and lack of adequate sanitation," the report said, citing human rights groups. "Authorities did not provide adequate food or other basic necessities. The ready access of prisoners to weapons and other contraband, impunity for inmate attacks on nonviolent prisoners, inmate escapes, and inmate threats against prison officials and their families contributed to an unstable and dangerous penitentiary system environment," the department said in its 2010 Country Reports on Human Rights Practices. Human rights groups also alleged that prison officials used excessive force against prisoners, the State Department said. As of December 2010, the total prison population in the country was just under 12,000, about 400 of whom were women, the report said. Honduran officials told CNN that overcrowding in the country's prisons is the result of an increase in transnational organized crime. Honduras, and the world, will have to decide how to respond to the security crisis in the poor nation, Foreign Minister Arturo Corrales said. "We do not produce drugs, nor are we the main place where they are consumed. But we suffer from the scourge of the extreme increase in violence in our country because of drug trafficking," he said. Danilo Orellana, the director of prisons in Honduras, added that the prisons in general were in crisis. "The situation is grave, and we have said on many occasions that the prisons in the country are failing and that investments are necessary from the state," he said.

Published: Thu, 16 Feb 2012 03:36:26 GMT

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