NEWS,09.11.2012

obama 'open to compromise' to avoid cuts

Newly re-elected President Barack Obama has offered to deal with Republicans to avert a looming US fiscal calamity but insisted a tax increase for the very rich must be part of the bargain.Obama reminded Republicans that his approach to avoiding steep tax hikes and spending cuts due in January, which could trigger another recession, had just won the backing of Americans at the polls.He spoke just hours after John Boehner, the Republican Speaker of the House of Representatives, had repeated his party's commitment not to raise anyone's tax rates as part of a deal to address the fiscal crisis.In his first event at the White House since beating Republican Mitt Romney in Tuesday's election, Obama called on Congress to work with him to produce a plan and invited congressional leaders to meet with him next week."I'm not wedded to every detail of my plan. I'm open to compromise. I'm open to new ideas," he said.The "fiscal cliff" of steep government spending cuts and tax increases due to be implemented under existing law in early 2013 is Obama's most pressing challenge after winning a second term.Aimed at cutting the federal budget deficit, the planned measures could take an estimated $600 billion out of the economy and severely hinder economic growth.While striking a conciliatory tone toward the Republican House majority, Obama said voters supported his ideas, including raising taxes on the wealthiest Americans."I just want to point out, this was a central question during the election. It was debated over and over again. And on Tuesday night we found out that the majority of Americans agree with my approach," he said.Earlier, Boehner called on Obama to play a more active role in addressing the issue and urged the president to take the lead in negotiations."This is an opportunity for the president to lead. This is his moment to engage the Congress and work towards a solution that can pass both chambers," Boehner told a news conference.While disagreeing on immediate measures to avert the looming crisis, Obama and Republicans may find common ground in calls for enactment over the next six months of a larger package of deficit reduction measures, including a rewrite of US tax laws.The non-partisan Congressional Budget Office reiterated on Thursday that if left unaddressed, the abrupt fiscal tightening would knock the economy back into recession, with unemployment rates soaring back to about 9%. The rate is now 7.9%.But it also warned of a crisis ahead if the United States does not stem the growth of its exploding deficit.Partisan squabbling over the budget crisis will also harm the US economy, according to a strong majority of economists polled by Reuters after Tuesday's presidential election.

Argentines flood streets in anti-government protest

Hundreds of thousands of Argentines flooded the streets of the country's biggest cities on Thursday in a broad protest against President Cristina Fernandez's interventionist policies and combative style.The center-left leader won easy re-election a year ago but her approval ratings have slid since. Her government has virtually banned dollar purchases and it limited imports this year, worsening a steep economic slowdown.High crime, inflation of roughly 25% a year, and a possible bid by government allies to reform the constitution to allow Fernandez to run for a third term are also stoking unrest, particularly among middle-class Argentines."We've taken to the streets because we're sick of crime and having our pockets picked. Inflation is killing us, our pensions can't keep up," said Daniel Gonzalez, 70, a retired teacher.Thursday's pot-banging protests conjured memories of the demonstrations staged by angry savers, housewives and students during Argentina's 2001-02 economic and political crisis.Protesters in neighborhoods throughout Buenos Aires waved signs demanding freedom, transparency and an end to crime and corruption. A spokesman for the city's Justice and Security Ministry estimated 700,000 people were rallying in the capital.A similar, smaller protest was staged just two months ago.Local television showed rallies in other cities, including Rosario, Cordoba and Salta. The demonstrations were organised through social media and not by any one political party.Some Argentines even took to the streets abroad with hundreds of demonstrators gathering outside the country's consulates in Italy, Spain and the United States."We're protesting against Cristina's government so she listens to us. She's not infallible like she wants to seem. With this arrogance we won't get anywhere, we're already quite isolated (in the world) because of her policies," said Pedro Dominguez, a 56-year-old doctor protesting in Buenos Aires.Fernandez's government has angered trading partners with import curbs and it riled Madrid when it seized control of energy company YPF from Spain's Repsol earlier this year. The country still has outstanding debts dating back to a financial meltdown a decade ago.Critics say a government drive to break up the media empire run by Grupo Clarin is an assault on free speech. But supporters of the anti-monopoly law that is being enforced say officials are democratising the airwaves.Fernandez won 54% of votes in October 2011, largely due to an economic boom, job growth and expanded social programmes. Her government spends heavily to stoke high economic growth and backs big wage hikes that tend to mirror inflation.Several government officials have been dismissive of the protests and accused organisers of being on the far right.Fernandez told supporters on Wednesday that Argentines enjoyed more freedom of speech than ever before."If there's a sector that is demanding certain things, they have to stand up and say this clearly. Now, please, don't anyone think that I'll start contradicting my own policies," she said.The president's approval rating edged up to 31.6% in October, up 1 percentage point from a month earlier, while her rejection rating dipped slightly to 59.3%, according to a recent poll.Other polls have given her higher approval ratings but they also show a decline of 10 to 15 percentage points this year."The government and Cristina will emerge even weaker than they were (after the protests) but the opposition will show its impotence and its inability to channel these demands," said Sergio Berensztein, director of the Poliarquia political consulting firm.Under the constitution, Fernandez cannot run for a third consecutive term in 2015. Local media report her congressional allies may try to reform the country's charter to change this, but the government has not confirmed any such plan.For now, no opposition leader poses a real challenge to her and the ruling Peronist party still has strong support in the heavily populated working-class outskirts of Buenos Aires."Cristina won with 54% of votes and if there were an election today, she would win again because there are no opposition candidates," said Cesar Pacheco, a 62-year-old shipbuilder protesting outside the presidential palace.

Iranian jets fired on US drone in Gulf

The Pentagon revealed on Thursday that two Iranian fighter jets fired on an unarmed US Predator drone in the Gulf last week but the aircraft was not hit, in an incident that underscored tensions in the region.The incident occurred on 1 November - less than a week before America's presidential election - but the Pentagon kept it quiet until reports of the confrontation leaked out."They intercepted the aircraft and fired multiple rounds," spokesperson George Little told a news conference.The Su-25 Frogfoot fighters, much faster than the slow-moving turboprop drone, fired at least twice and made two passes, he saidIt was unclear whether the Iranians intended to warn off the unmanned drone but Little said: "Our working assumption is that they fired to take it down."The confrontation threatened to derail diplomatic efforts to defuse a mounting crisis over Tehran's nuclear programme, amid a shadow war of cyber attacks, bombings and assassinations.Tough new sanctions led by Washington are squeezing Iran's economy, while the United States and Israel are accused of staging cyber sabotage on Tehran's uranium enrichment plants.The US military drone was "never in Iranian air space" and came under fire from the fighter jets off the Iranian coast over international waters, Little said.The robotic Predator aircraft was conducting "routine surveillance" and the United States has told Iran it has no plans to suspend the flights, he said."The United States has communicated to the Iranians that we will continue to conduct surveillance flights over international waters over the Arabian Gulf consistent with longstanding practice and our commitment to the security of the region," he said.In a warning to Tehran, the Pentagon spokesperson said the United States was prepared to safeguard its forces."We have a wide range of options, from diplomatic to military, to protect our military assets and our forces in the region and will do so when necessary," Little said.The MQ-1 drone was pursued further by the Iranian warplanes but was not fired on again, he said.The Predator later returned safely to an unspecified military base in the region following the incident.The Predator known as the weapon of choice in America's bombing campaign against al-Qaeda in Pakistan was intercepted about 16 nautical miles off the Iranian coast, beyond the Islamic Republic's territorial waters that extend 12 nautical miles off the country's shore.Iranian military speedboats have sometimes swarmed US warships in the Gulf and the strategic Strait of Hormuz, a vital waterway for the world's oil, but the incident last week was the first involving an American drone in a confrontation with Iranian aircraft, officials said.Tensions over Iran's nuclear ambitions prompted the United States to bolster its military presence around the Gulf over the past year, deploying two aircraft carrier battle groups in the area at all times, a squadron of stealthy F-22 fighters to the United Arab Emirates and more minesweeper ships.With America's drawn out election campaign finally over, analysts had predicted President Barack Obama might have more leeway to pursue diplomacy with Iran. But the encounter with the Iranian fighter jets served as a reminder that a single incident or misunderstanding could trigger conflict.A new round of talks between Iran and six world powers, the first since June, is expected by the end of the year or in early 2013.Iran insists its nuclear programme is peaceful and has made clear any deal with the major powers has to offer relief from crippling sanctions.Israel meanwhile maintains time is running out as Iran expands its uranium enrichment work, with Prime Minister Benjamin Netanyahu suggesting his country may stage a unilateral strike next year if Tehran continues on its present course.At the State Department, officials unveiled yet more sanctions on Iran, targeting the communications minister and the culture ministry among others for censoring the media and the internet.