Montana town hall: Obama seeks out skeptics

President Obama on Friday took his push for a health care overhaul to traditionally conservative Montana, saying a bill to extend coverage to the uninsured while helping those already with coverage will pass this year.

However, an influential Democratic representative said the House would only pass a health care bill in January or later, signaling continuing rifts within Obama's party on his domestic priority for 2009.

"We're taking some time to make sure it's done right," said Rep. John Murtha of Pennsylvania. "I don't know that we'll get something done before January, and even then we may not get it done. We're going to do it right when it's finally done."

President Obama discusses his health care plans Friday at a meeting in Belgrade, Montana.

Obama told a largely supportive Montana audience at his second of three town hall meetings this week that fixing the health care system requires improving health insurance practices and reducing the costs of treatment. He sought questions from skeptics of his proposed health care overhaul, seeking to confront some misconceptions fueled by opponents Democrats say are undermining the debate.

One man who identified himself as a proud National Rifle Association supporter and believer in the Constitution asked how the government would pay to expand health insurance coverage to 46 million uninsured people.

"You can't tell us how you're going to pay for this," said the questioner, Randy Rathie, a welder from Ekalaka, Montana. "The only way you're going to get the money is to raise our taxes. That's the only way you can do that."

Obama responded with his oft-repeated explanation that two-thirds of the cost of overhauling health care -- estimated at about $900 billion over 10 years -- would come from eliminating waste and improving efficiency in the current system, which includes the government-run Medicare and Medicaid programs for the elderly and impoverished.

The rest would have to come from new revenue, he agreed with the questioner, and he called for reducing the amount of deductions that people making more than $250,000 a year can make on their income taxes.

"If we did that alone, just that change alone ... that would raise enough to pay for health care reform," Obama said, noting that would meet his election campaign pledge to avoid any tax increase on people earning less than $250,000 a year.

However, Obama said some taxes would have to be raised, and the crowd applauded when he said he believes people with more money, like himself, ought to pay a heavier burden.

"We've got to get over this notion that we can have something for nothing," Obama said. "That's how we got into this deficit and this debt in the first place."

In reference to emotional and heated debate at some other town hall meetings across the country in recent weeks, Obama told Rathie, "I appreciate your question, the respectful way you asked it, and by the way, I also believe in the Constitution."

Afterward, Rathie said he was impressed by Obama's performance but remained skeptical.

"I don't think he knows where that money's going to come from," he said. "If he does, he's not saying."

Obama noted there is more work to be done, with Congress seeking to merge at least four bills, along with a possible compromise agreement being negotiated by Democratic Sen. Max Baucus and five other members of his Senate Finance Committee, into a single bill in September.

Another questioner chosen when Obama asked for a skeptic identified himself as an insurance provider who wanted to know why Obama and Democrats are vilifying the insurance industry in the health care debate. Earlier in the meeting, Obama described what he called discriminatory practices by insurance companies that dropped coverage of people who became sick or refused to cover those with pre-existing medical conditions.

Obama noted some insurance companies are contributing to the reform debate, but said others are spending millions of dollars to try to defeat any health care legislation. For a health care overhaul to work for everyone, he said, it has to ensure all Americans are covered so that insurance companies have incentive to participate.

They won't be able to exclude coverage for pre-existing conditions or "cherry pick" healthy people while refusing coverage for sick people, Obama said, so increasing the total numbers covered will be the enticement.

On Saturday, Obama will hold another town hall meeting in Grand Junction, Colorado, before vacationing in some national parks with his family next week. In addition, White House spokesman Robert Gibbs said Obama will hold "some events not yet announced" in coming days.

While Obama has said consensus can be reached on health care reform, contentious town hall meetings held by lawmakers around the country have created a different impression.

The White House, and many Democrats in Congress, hope that by building support in the West, the president can start to turn the tide. Though the region is largely Republican, Obama made some inroads in the latest election. He won in Colorado and lost by just a slim margin in Montana.

However, Murtha's comments in Bentleyville, Pennsylvania, to CNN affiliate WJPA signaled continuing divisions among House Democrats over the scope and pace of health care legislation.

"We said to the speaker [House Speaker Nancy Pelosi], the leadership, let's not rush this thing," Murtha said. "Let's do it right, so we'll have a uniquely American plan, if the thing passes."

Obama's town hall events are just part of a larger Democratic strategy for winning support in the region.

The Democratic National Committee began a TV ad this week promoting the president's health care plan. A committee spokesman said the ad will run on national cable as well as on local cable in New Hampshire, Montana, Colorado and the District of Columbia.

The group Families USA, which supports the president's plan, also launched a campaign Thursday that includes an ad running in a dozen states -- among them Montana and Colorado.

But groups opposed to the president's plan have their own campaigns.

One voter in Livingston, Montana, not far from where the president spoke in Belgrade, summarized the kinds of concerns that she and many others in the region have.

"I believe that there is a health care crisis, I really do," Sonja McDonald, who voted for Obama in 2008, told Ed Henry on Thursday. "Do I believe that the government needs to be more involved? No!"

Henry met McDonald at a clinic that gets half its funding from taxpayers.

"The government being involved is fine," McDonald said. "It's just ... when they try and overstep, when they try to say, 'No, this is what needs to be done.

Health care Conference; hurting Obama

The national health care debate is taking a toll on President Obama's popularity as his poll numbers have hit a new low

the president wraps up his two-day visit to Guadalajara, Mexico, where he's taking part in a summit with Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper.

"President Barack Obama's first North American summit is proving it's a lot easier to agree on battling a killer flu virus than to untangle knotty disputes over cross-border trade," writes the Associated Press' Mark S. Smith. "Obama flew into Mexico's second-largest city late Sunday for a two-day speed summit ... a meeting whose main accomplishment will likely be a joint plan of attack for swine flu.

"But there was little chance of any breakthrough in long-running squabbles over Mexican trucks, or U.S. 'Buy American' rules or how best to curb the deadly flow of drugs across the frontier.

"The so called 'Three Amigos' summit began over dinner at an ornate cultural center here and was to conclude a mere 17 hours later at a joint news conference."

"President Obama arrived here Sunday on his second official visit this year and quickly headed for a 45-minute meeting with his Mexican counterpart, Felipe Calderon," report the Los Angeles Times' Peter Nicholas and Tracy Wilkinson from Guadalajara, Mexico.

"In the session, which one senior U.S. official called 'cordial,' Calderon broached the U.S. ban on Mexican truckers, which has sparked punitive action by Mexico and cries of protectionism…

"As for Canada, Prime Minister Stephen Harper is displeased with 'Buy American' provisions in the stimulus bill Obama signed into law in February. And Canada and Mexico are sparring over Ottawa's requirement that visitors from Mexico obtain visas -- triggering a retaliatory requirement that officials working in Mexico for Canada also acquire visas."

"The North American Leaders' Summit is an annual gathering for the presidents of the United States and Mexico and the prime minister of Canada to work collaboratively on issues such as border security, immigration reform and economic recovery," adds the Washington Post's Cheryl W. Thompson. "It is Obama's second visit to Mexico since he became president and his second meeting with Canadian Prime Minister Stephen Harper, who is scheduled to visit the White House next month. Obama and Harper met in Ottawa in February and agreed to work together to fight the global economic recession."

Swine Flu News by BBC UK

Build Trust on U.S. vaccine by experts

When advisers to the U.S. Food and Drug Administration met to discuss a new vaccine against H1N1 swine flu last week, some of the biggest critics of vaccination were not only in the room, but at the table.

Likewise for a meeting on Wednesday of advisers who decide who will be first in line to get the vaccine, which drug companies are racing to make, test and distribute all within the space of a few weeks.

Registered nurse Vicky Debold, on the board of the National Vaccine Information Center, which questions vaccine safety, is also a member of the FDA's Vaccine and Related Biological Advisory Committee. The group's founder, Barbara Loe Fisher, asked extensive questions at the meeting.

Lyn Redwood, president of SafeMinds, a group that advocates about potential links between mercury and neurological disorders, asked questions at a meeting on Wednesday of vaccine advisers to the Centers for Disease Control and Prevention.

The U.S. federal government is more ready than it has ever been for questions, criticisms and fear of vaccines -- a state of preparedness more than 30 years in the making.

"We know that there are some people who are reluctant to vaccinate and they have heard information that concerns them," Dr. Anne Schuchat of the U.S. Centers for Disease Control and Prevention told reporters late on Wednesday.

The concerns:

*Will a vaccine against a swine-like virus cause more adverse reactions than a seasonal flu vaccine?

*Will special additives called adjuvants cause reactions?

*Will the vaccines contain thimerosal, a mercury-based preservative that critics say might cause problems?

*Is it dangerous to vaccinate against both seasonal flu and the new H1N1 flu at the same time?

QUICK SPREAD

H1N1 swine flu has swept around the world in weeks, infecting millions and killing more than 800 by official counts. While only a "moderate" pandemic by World Health Organization standards, it could worsen as temperatures cool in the Northern Hemisphere, making conditions better for viruses.

Five companies are making H1N1 vaccine for the U.S. market -- AstraZeneca's MedImmune unit, Australia's CSL Ltd, GlaxoSmithKline Plc, Novartis AG and Sanofi-Aventis SA.

CSL has started trials of its vaccine in people and the U.S. National Institutes of Health starts trials next month. They will compare vaccines with and without adjuvants -- ingredients that boost the immune system response to a vaccine.
Adjuvants are used in flu vaccines in Europe but not the United States and although it would be possible to get a U.S. license under Emergency Use Authorization, officials have chosen to use vaccines without it for now.

Companies such as Glaxo say they will be ready to start vaccinating people in Europe just as the first data from those trials start emerging at the end of September. Some have questioned this speed.

The FDA's Dr. Hector Izurieta said the agency had set up an exceptionally extensive network for what is known as post-marketing surveillance.

"If something happens after vaccination, the vaccine will be accused," Izurieta told last week's meeting. "There will be many, many reports of things that could be, or not, associated with vaccination."

Vaccine regulators and public health experts are painfully aware of the last swine flu vaccination campaign. In 1976, the U.S. government rushed out a mass immunization against a swine flu virus that never spread off one military base.

Several hundred cases of a rare, paralyzing neurological disease called Guillain-Barre syndrome were reported afterward and although no clear link has ever been found to the vaccine, the incident made many people mistrustful of immunizations.

More recently, fears center on thimerosal, taken out of most vaccines after activists claimed it could cause autism -- a link discredited by many scientific studies but one that some vocal activists say is still valid.

Instead of fighting the perception, Schuchat said the CDC will roll with it. "There will be thimerosal-free formulations available for those people who are interested in that sort of preparation," she said.

Obama doesn’t want to pull plug on grandma

This just in: President Barack Obama opposes pulling the plug on your sick grandmother.

In a sign of how twisted the healthcare debate has become, the president of the United States was forced to stand up in public and say definitively that he did not favor killing off the elderly when their care became too expensive.

The dramatic declaration came in New Hampshire in response to one of the wilder accusations circulated by opponents of his efforts to overhaul healthcare.

“The rumor that’s been circulating a lot lately is this idea that somehow the House of Representatives voted for death panels that will basically pull the plug on grandma because we’ve decided that it’s too expensive to let her live anymore,” Obama said, taking the issue head-on.
It apparently arose from a provision intended to give people more information so they could handle end-of-life issues like setting up living wills and hospice care, he said.

“Somehow it’s gotten spun into this idea of death panels,” Obama said. “I am not in favor of that.”

He did not mention Sarah Palin, former Republican vice presidential candidate and ex-governor of Alaska, who got the ball rolling on ”death panels.”

The fact that the president had to take a public stand on a rumor that at another time might appear absurd (it would be political suicide for anyone to suggest the government promote euthanasia) shows that the opposition is making inroads in stoking fear about healthcare overhaul.

Obama used some scare tactics of his own, saying that unless things change, health insurance premiums would skyrocket and the deficit would grow because of rising costs of government health programs for the poor - Medicaid - and elderly - Medicare.

One thing to watch is Obama’s increased reference to the healthcare plan as “health INSURANCE reform,” perhaps the White House believes that substituting insurance for care somehow makes it more palatable to the public.

Do you think Obama effectively addressed the criticism and put the rumors to rest? Did his comments in any way change your view on the healthcare debate?

Obama strategy will win Afghan war : White House

The White House said on Monday that President Barack Obama has a "winning" strategy in Afghanistan and enough forces on the ground to achieve U.S. goals despite advances by the Taliban.

The assurances came as the top U.S. commander in Afghanistan warned that the Taliban were gaining momentum, while gunmen and bombers stormed government buildings near Kabul just 10 days before a presidential election,

White House spokesman Bill Burton said that Obama had authorized 21,000 new troops for Afghanistan since taking office in January and not all of these were on the ground yet.

"The president's strategy hasn't fully been implemented just yet. But we do believe that with the strategy that we have, with assets that we're putting on the ground, that we are going to be able to achieve the goals that we're trying to achieve," Burton told reporters on Obama's Air Force One flight back to Washington from a North American summit in Mexico.

U.S. Army General Stanley McChrystal, who will soon present an assessment of the Afghan war, said in a newspaper interview published on Monday that the resurgent Taliban have forced a change of tactics on foreign forces and that record casualty figures would remain high for some months.

"It's a very aggressive enemy right now," McChrystal, who is also the NATO commander in Afghanistan, told The Wall Street Journal (online.wsj.com/). "We've got to stop their momentum, stop their initiative. It's hard work."

The White House said McChrystal was preparing a thorough assessment of the situation on the ground in Afghanistan and U.S. officials will see what his review turns up.

"Obviously the president is in close contact with his commanders on the ground, but ... thinks that the strategy that he put in place is a winning one," Burton said.

Violence across Afghanistan this year had already reached its worst levels since the Taliban were ousted by U.S.-led Afghan forces in 2001 and escalated dramatically after major offensives were launched in southern Helmand province in July.

Three Afghan police and two civilians were killed in a strike by Taliban gunmen and suicide bombers on government buildings near Kabul on Monday.

Washington plans to increase the number of its troops to about 68,000 by year's end, more than double the 32,000 it had stationed in Afghanistan at the end of 2008. McChrystal may ask for more after he submits his strategy review in coming weeks.

Jobless rate eases(reduce), Payrolls fall less in July

The U.S. unemployment rate fell in July for the first time in 15 months as employers cut far fewer jobs than expected, providing the clearest sign yet that the economy was turning around.

Employers shed 247,000 jobs in July, the Labor Department said Friday, the least in any one month since last August, taking the unemployment rate to 9.4 percent, down from 9.5 percent in June.

"It suggests the recession will be ending before the end of the year. There isn't any part of the economy that hasn't shown some slowing in deterioration," said Joe Davis, chief economist at Vanguard in Valley Forge, Pennsylvania.

Recent data ranging from home sales to manufacturing have pointed to an economy starting to dig itself out of one of the worst recessions since the Great Depression of the 1930s.

The fall in the jobless rate will be good news for President Barack Obama, who has seen his standing in public opinion polls slip as Americans fret about the weak economy and high unemployment.

The White House warned it would be "quite some time" before the economy saw sustained job growth, adding it still believed the jobless rate would hit 10 percent this year.

U.S. stocks and the dollar rose on the data as investors sensed the recession was ending. Safe-haven government bond prices tumbled.

Analysts had expected non-farm payrolls to fall by 320,000 in July and the jobless rate to hit 9.6 percent. The forecast was made earlier this week before other jobs data prompted some analysts to lower their estimates for job losses.

The government revised job losses for May and June to show 43,000 fewer jobs lost than previously reported.

The easing in the unemployment rate could have been the result of the labor force shrinking by 422,000 in July, far more than the 155,000 decline in June, suggesting jobless workers may have given up looking for new work.

In the U.S., for the purpose of calculating the unemployment rate, the labor force is defined as those with a job plus those out of a job but actively looking for work.

The small decline in July non-farm payrolls was a welcome reflief as some employment indicators released this weak had raised the risk of a big rise in the numbers of jobless.

Slowing job losses could also mean less pressure for a second government economic stimulus as a $787 billion package approved this year slowly works its way into the economy.

"This is another indication that the economy is on an improving track and a confirmation that we're going to see a positive GDP number for the third quarter...," said Robert Dye, senior economist at PNC Financial Services Group in Pittsburgh.

While employers cut fewer jobs than forecast in July, unemployment remains stubbornly high, meaning households have less income to spend. This could set the economy for an anemic recovery, analysts said.

Since the start of the recession in December 2007, the economy has shed 6.7 million jobs, the Labor Department said, adding that the number of long-term unemployed continues to rise.

However, in a sign that the labor market deterioration was slowing, a gauge of labor market slack that measures both the unemployed, people working part-time for economic reasons, and those only marginally attached to the labor force, fell to 16.3 percent in July from a record high 16.5 percent in June.

Job losses in July were spread across all sectors, but the pace of firings slowed markedly from previous months.

Manufacturing employment fell by 52,000 after shrinking by 131,000 in June. This was the first time since last September that manufacturing job losses were less than 100,000 and was probably due to the re-opening of General Motors and Chrysler assembly plants after the two automakers emerged from bankruptcy.

"Because layoffs in auto manufacturing already had been so large, fewer workers than usual were laid off for seasonal shutdowns in July," Labor Commissioner Keith Hall said, adding that the seasonally adjusted gain did not indicate an improvement in the industry.

Payrolls in construction industries slipped 76,000 after falling 86,000 in the previous month, likely reflecting spending on infrastructure projects from the government's $787 billion stimulus package and a modest pickup in ground breaking for new homes.

In the services sector, 119,000 workers were laid off, and the goods-producing industries lost 128,000 positions.

Education and health services continued to add jobs though, with payrolls increasing 17,000 in July after rising 37,000 in June. Government employment increased 7,000 after slipping 48,000 in June.

The closely watched average work week, the total amount of labor input, inched up to 33.1 hours in July after having slipped to 33.0 in June. The average work week in the manufacturing sector rose to 39.8 hours from 39.5 hours in June, the department said.

Average hourly earnings increased to $18.56 in July from $18.53.

Obama enters 'The Matrix'

As the president moves forward on his ambitious legislative agenda, it might seem as if he is entering "The Matrix," a surreal world that only has the vaguest connection to real life.

And, indeed, the Congress has its own rules that make quick legislative action, no matter how popular with the American people, hard to achieve.

The Obama agenda is breathtaking in its scope and eye-popping in its cost.

He seeks to completely recast the health care, energy, financial services and automobile sectors of this country, as he seeks to make the tax code more progressive, retirement programs more sustainable, and the immigration system more welcoming to immigrants. And he also wants to stimulate the economy and get us out of what some people are calling the "Great Recession." But can it all get done, and in a form that makes his political base happy?

The president insists that he can get this all done, and his chief of staff, Rahm Emanuel, has implied that the financial crisis has actually given the White House more momentum to get it all done. But history tells a different story.

Congress has its own code, and cracking that code usually means taking into account five different factors. These five factors are:

Money: It may seem trite, but the biggest factor in determining the size and scope of a legislative agenda is how much money -- and more importantly, the perception of how much money -- is available for the government to use. Bill Clinton's legislative agenda was necessarily limited because his budget constraints made it difficult to spend money on big things.
George Bush, who inherited a fairly large budget surplus, had money to burn, which allowed him to pass a prescription drug benefit. President Obama has no money, which means that if he wants to pass a big new entitlement like a health care public option, he will have to make the Congress take the painful step of raising a lot of taxes.

Time: The legislative calendar is simply not that long. A new administration has a little less than a year to pass its big-ticket items, mostly because it is very hard to get major initiatives done in an election year. Take away the three months it takes to hire key staff, a couple of months for the various congressional recesses, and you have about six months to really legislate.

Since Congress is supposed to use some time to pass its annual spending bills (there are 12 that need to be passed each year, not counting supplemental spending bills), time for big initiatives is actually very limited. Each day the president takes time to travel overseas or to throw out the first pitch at an All Star game, he is taking time away from making contacts with legislators whose support is crucial for the president's agenda. Time is not a limitless resource on Capitol Hill.

Political capital: A president enters office with the highest popularity ratings he will ever get (barring a war or some other calamity that brings the country together), which is why most presidents try to pass as much as possible as early as possible in their administrations. The most famous example of that was Franklin Roosevelt's Hundred Days. But there are other examples. Ronald Reagan moved his agenda very early in his administration, George Bush passed his tax proposals and the No Child Left Behind law very early in his White House. They understood the principle that it is important to strike while the iron is hot.

President Bush famously misunderstood this principle when he said that he was going to use the "political capital" gained in his re-election to pass Social Security reform. What he failed to understand was that as soon as he won re-election, he was a lame duck in the eyes of the Congress, and he had no political capital.

President Obama believes he has a lot of political capital, and perhaps he does. But each day he is in office, his political capital reserve is declining. And each time he goes to the well to pass things like "cap and trade" makes it more difficult for him to pass his more important priorities like health care.

Focus: Congress can walk and chew gum at the same time. But focus is essential to achieving results. Presidential focus quite often moves off the domestic agenda and into the wider world of diplomacy. But that can spell greater political danger for a president and his party.

George H.W. Bush spent most of his presidency winning a war against Iraq and successfully concluded the Cold War conflict with the Soviet Union. But neither of those foreign policy successes helped him win re-election. His son, George W. Bush, understood that he had to keep a tight focus on the economy and one big domestic policy item (education), and while the war on terror did end up dominating his presidency, Bush never forgot to focus on his domestic achievements.

The biggest danger to President Obama is not just foreign entanglements, it is also competing domestic priorities that threaten to undermine his ability to get big things done. For example, the House vote on cap and trade has made it very hard for conservative and moderate Democrats to join with Speaker Nancy Pelosi on a more important health care bill.

After the cap and trade vote, opponents deluged the offices of centrist House Democrats with loud complaints about the costs of the energy bill, and according to media reports, that has made these critical members even more nervous about the budget ramifications of the health care reform package being pushed by the president.

Ego: Probably the most intangible and most unpredictable part of the legislative process is the rather large egos of the legislators. Despite having generally milquetoast reputations, each member of Congress has a variety of factors that impact how and why they vote. Of course, their chief motivation is political survival. But each assesses their political viability differently, and loyalty to the White House is not always top of the list. Some members of Congress, who have been in the trenches for decades, have healthy egos that need love and affection from the Obama administration.

For example, when the White House concluded deals with health care providers, legislative leaders like Charlie Rangel and Henry Waxman, who weren't party to the talks, threw a fit, said the deals didn't apply to them, and sent a strong message that they weren't going to honor those commitments. That of course, threw the larger health care negotiations into disarray. Egos matter on Capitol Hill, and stroking them is an essential part of cracking the congressional code.

In the movie "The Matrix," Keanu Reeves, playing Neo, ends the film with the line, "Anything is possible." In a Hollywood movie, anything is possible. But in Congress, with limited money, limited time and limited patience, the president can't get everything he wants. And after watching his cap and trade proposal fall flat in the Senate, his health care bill lose support in both chambers, his tax proposals meet stiff resistance from the business community and key centrist Democrats, and his financial service reform proposals go nowhere, he risks getting nothing that he wants.

Policy on detaining terror suspects : Deadline missed

In a move already drawing fire from liberal activists, aides to President Obama acknowledged the administration will miss its own Tuesday deadline to submit a report detailing its policy on detaining terror suspects.
The report is a key part of laying out the White House's plan for shutting down the U.S. military prison at Guantanamo Bay.
In a briefing for reporters, four senior administration officials confirmed the task force dealing with detention policy has been granted a six-month extension to flesh out its plans. A separate task force dealing with interrogation policy has been given a two-month extension to submit its own report to the president. The reports had been mandated to be completed this week by executive orders the president signed during his first week in office.
The administration will miss its deadline to submit a report detailing its policy on detaining terror suspects.

Meanwhile, the task force did issue a preliminary report late Monday regarding the process of determining whether suspected terrorists will be prosecuted in federal courts or military commissions. However, the memo gave few details, instead reiterating the administration's intent to reform the military commissions and affording basic protections for detainees.

Despite the delays, the four senior officials insisted the Obama administration is making strong progress in resolving the thorny legal issues surrounding the 240 terror suspects that were detained at Guantanamo as of January of this year, and is still on track to shut the prison down next January as spelled out by executive order.

"I think we're all comfortable with where we are in the process," one senior administration official said of shutting the controversial prison.

A second senior administration official said it is the administration's "goal" to still shut the prison. When pressed by reporters on whether this was a softening of the promise to actually close the prison down, this official insisted there has been no change and the administration is still planning to comply with the executive order.

This second official downplayed the delays in finishing the reports. "We wanted to get this right," said the official. "We wanted to do this carefully."

But officials at the American Civil Liberties Union criticized the delay in the release of the report on detainee policy in particular, noting Obama officials have also left the door open to holding some Guantanamo detainees indefinitely without charge or trial.

"The Obama administration must not slip into the same legal swamp that engulfed the Bush administration with its failed Guantanamo policies," said Anthony Romero, the ACLU's executive director. "Any effort to revamp the failed Guantanamo military commissions or enact a law to give any president the power to hold individuals indefinitely and without charge or trial is sure to be challenged in court and it will take years before justice is served."

Romero added, "The only way to make good on President Obama's promise to shut down Guantanamo and end the military commissions is to charge and try the detainees in established federal criminal courts. Any effort to do otherwise will doom the Obama administration to lengthy litigation. A promise deferred could soon become a promise broken."

But a third senior administration official insisted the White House is making good progress in dealing with all the terror suspects being held at Guantanamo. This third official told reporters the administration is "over halfway through reviewing the detainees at Guantanamo" by either transferring them to other countries or moving toward putting them on trial for prosecution.

This third official said that "substantially more than 50" of the detainees are prepared for transfer, while a "significant number" are being prepared for prosecution.

A fourth senior administration official said the White House is making "great progress" in getting European countries like Italy to publicly agree to take on some detainees. The official said other European countries have privately agreed to take detainees, but will not publicly discuss it yet.

"In the weeks and months ahead we will build on that strong foundation," said the official.

Senate Minority Leader Mitch McConnell criticized the administration for announcing its intent to shutter the Guantanamo prison "before it actually had a plan."
"Bipartisan majorities of both houses and the American people oppose closing Guantanamo without a plan, and several important questions remain unanswered," he said.

Ruling could reveal Gitmo secrets in late July by Judge

The U.S. government cannot collectively seal its records in more than 100 cases involving the indefinite detention of suspects held at the Guantanamo Bay facility in Cuba, a federal judge ruled Monday.

The ruling in favor of detainees and news media outlets means some judicial records in the cases involving Guantanamo detainees could become public on July 29, a deadline set by Monday's ruling.

The government had tried to designate all of its responses in cases seeking indefinite detention -- whether classified or not -- as protected from public disclosure.

A detainee walks inside an open-air yard at the U.S. prison at Guantanamo Bay, Cuba, on May 31, 2009.

In his ruling, U.S. District Judge Thomas F. Hogan said the government request was too broad.

"The government's motion attempts to usurp the court's discretion to seal judicial records," the ruling said.

"Moreover, the public has a limited First Amendment and common law right to access the factual returns," it added, referring to documents filed in response to habeas corpus petitions.

While denying the government motion, the ruling gives the government until July 29 to determine what information in the factual returns is classified and therefore can be protected from disclosure.

"Today's decision is a victory for transparency," said Jonathan Hafetz, an attorney with the American Civil Liberties Union's National Security Project.

"For far too long, the government has succeeded in keeping information about Guantanamo secret, and used secrecy to cover-up illegal detention and abuse.

"The decision marks an important step towards restoring America's open court tradition that is essential to both accountability and the rule of law," Hafetz said.

News media organizations that joined the case were The Associated Press, The New York Times and USA Today.

Obama revives Guantanamo tribunals

President Barack Obama on Friday revived the system of military trials for foreign terrorism suspects at Guantanamo, angering supporters who said he had broken a promise to end the controversial tribunals set up by the Bush administration.

The Democratic president said the commissions would be restarted as an option for trying prisoners at the U.S. military base in Cuba after undergoing several rule changes, including barring statements made under harsh interrogation and making it more difficult to use hearsay evidence.

"These reforms will begin to restore the commissions as a legitimate forum for prosecution, while bringing them in line with the rule of law," said Obama, who opposed the law that created the tribunals during the administration of his Republican predecessor, President George W. Bush.

"He (the president) is determined to reform the military commissions as an available form, along with the federal courts, for prosecution of detainees at Guantanamo," Pentagon spokesman Bryan Whitman told reporters.

Republicans welcomed the move. Senate Republican leader Mitch McConnell called it an "encouraging development." Obama's presidential rival John McCain said it was a step toward a comprehensive detainee policy that "accords with our values and protects our national security."

RIGHTS GROUPS CRITICAL

Rights groups, which have been long been critical of Washington's treatment of foreign terrorism suspects and the use of the detention center at Guantanamo Bay, condemned the decision.

"By resurrecting this failed Bush administration idea, President Obama is backtracking dangerously on his reform agenda," said Kenneth Roth, head of Human Rights Watch.

Amnesty International accused Obama, who took office in January, of breaking a major campaign promise.

"These military commissions are inherently illegitimate, unconstitutional and incapable of delivering outcomes that we can trust. Tweaking the rules of these failed tribunals so that they provide 'more due process' is absurd," said Anthony Romero of the American Civil Liberties Union.

The decision was the second in less than a week to anger Obama's liberal supporters. Earlier this week, he reversed a previous decision and announced he would seek to prevent the release of photographs showing alleged abuse of prisoners, saying the images could endanger U.S. troops abroad.

White House spokesman Robert Gibbs, asked at a briefing if Obama was worried about alienating his most loyal supporters, defended the decisions.

"Look, first and foremost the president of the United States is going to do what he believes is in the best security interests of the people of the United States," he said.

Obama has promised to close Guantanamo Bay prison by 2010. The prison was set up in 2002 at the U.S. base on the southeastern tip of Cuba to house foreign prisoners in the U.S. war on terrorism that Bush declared after the hijacked plane attacks on the United States on September 11, 2001.

Gibbs said the decision to proceed with military commissions would not block the closure, but the administration was working to determine where the tribunals could be held once Guantanamo closes. He also indicated some prisoners would be shifted to the U.S. court system.

DEATH SENTENCES POSSIBLE

Among those facing trial at Guantanamo are self-described September 11 mastermind Khalid Sheikh Mohammed and four co-defendants who could be executed if convicted of nearly 3,000 murder charges stemming from the plane attacks.

When he took office in January, Obama ordered a four-month freeze on Guantanamo court proceedings to give him time to decide whether to move the prosecutions into the regular U.S. civilian or military courts or keep the special tribunals.

The freeze order had been seen as a death knell for the Guantanamo war crimes court, which has completed only two full trials since the detention camp opened.

The administration asked on Friday for a delay in the court proceedings to allow time for the new rules to take effect. The rule changes must be shown to Congress 60 days before they go into force.

"The secretary of defense will be sending to Congress several changes to the rules for military commissions," Whitman said.

He said the rule changes included:

- A ban on using statements obtained during cruel or inhumane interrogation

- A rule making it more difficult to use hearsay evidence

- Greater latitude for the accused to choose a defense counsel

- More protections for a defendant who refuses to testify.

U.S. authorities on Friday also released a Guantanamo Bay detainee who was part of a landmark Supreme Court case that granted inmates at the U.S. military prison the legal right to challenge their confinement, officials said.

The detainee, Algerian national Lakhdar Boumediene, was released from custody and flown from the U.S. Navy base to waiting relatives in France, said officials, who spoke on condition of anonymity.

Criticism : Obama walks tightrope on detainee policy

Suddenly, President Barack Obama is getting criticism from his friends and praise from his opponents -- evidence of how hard it has become to move past George W. Bush's legacy on detainee policy.

Instead of focusing exclusively on Obama's efforts to fix the U.S. economy this week, Washington instead has been fixated on dramas involving interrogation procedures and detainees.

* Obama's decision on Friday to continue for now using the Bush policy of setting up Guantanamo military tribunals to try terrorism suspects drew fire from his allies on the left.

"No amount of tinkering with their rules can fix this discredited system. The commissions -- which President Obama has himself described as an 'enormous failure' -- should be scrapped," said Rob Freer, U.S. researcher at Amnesty International.

On the other hand, Obama was getting praise from people who are usually highly skeptical.

"I am pleased that President Obama has now adopted this view," said Senator John McCain, the Republican presidential nominee last year, who lost the election to Obama.

Ari Fleischer, who was Bush's first press secretary, said Obama "should acknowledge his campaign criticisms were wrong."

"With some minor changes, he really is following the same path President Bush pursued," he said.

Obama also this week angered core supporters by changing his mind and ordering his lawyers to try to block the court-ordered release of dozens of photographs said to depict abuse of detainees, saying the pictures could "inflame anti-American opinion."

* Obama is walking a tightrope with his liberal supporters.

They want him to close the book on the Bush years and hold accountable those responsible for harsh interrogation procedures such as waterboarding, which they call torture.

Democratic strategist Doug Schoen said Obama is following a policy of "pragmatism combined with necessity."

"Obama understands all too well there is nothing to be gained for him and for the United States by looking backward. His problem is he can't totally abandon the Democratic left because he needs them," he said.

* Closing down the Guantanamo Bay prison by Obama's deadline of next January may prove harder than expected.

Many Republicans and Democrats do not want the prisoners there transferred to facilities on U.S. soil.
Obama's attempts to placate the left led to a decision that started the current round of recriminations sweeping Washington.

That was his release last month of previously classified Justice Department memos that outlined the Bush administration's legal justification for harsh interrogation measures.

It led to calls by House of Representatives Speaker Nancy Pelosi for a "truth commission" to investigate Bush-era officials.

She was left struggling to retain her credibility when Republicans charged she knew about the techniques when they were being used in 2002 and did not complain about them then.

Pelosi accused the CIA of lying to Congress in an extraordinary news conference, denying she was briefed by the agency's officials about waterboarding in 2002 and the interrogation of high-value suspect Abu Zubaydah.

CIA Director Leon Panetta issued a statement on Friday backing up the CIA's version of events.

"Our contemporaneous records from September 2002 indicate that CIA officers briefed truthfully on the interrogation of Abu Zubaydah, describing 'the enhanced techniques that had been employed.' Ultimately, it is up to Congress to evaluate all the evidence and reach its own conclusions about what happened," he wrote.

The Pop Vs Obama : Notre Dame Controversy

At the rate things are going, Pope Benedict XVI may find his next trip to the U.S. dogged by airplanes overhead trailing banners with images of aborted fetuses. O.K., that's a bit of hyperbole. But while several prominent conservative Catholics in this country are apoplectic over the University of Notre Dame's invitation of the pro-choice Barack Obama to give the school's commencement address on May 17, the Vatican has stayed completely silent on the matter.

The two very different reactions to the question of whether a Catholic institution should honor anyone who disagrees with the Church's teaching on abortion are just the latest examples of the strikingly divergent responses American Catholic leaders and the Vatican have had to the Obama Administration.

President Barack Obama and Pope Benedict XVI

Three-quarters of Catholics either approve of or offer no opinion on Notre Dame's decision to invite Obama, and the same percentage of U.S. bishops have opted to stay out of the fight. However, for a small but vocal group of conservative Catholics, the episode has become an opportunity to draw lines between those who are genuinely Catholic and those whom they accuse of being Catholic in name only — even the head of the country's premier Catholic university.

"It is clear that Notre Dame didn't understand what it means to be Catholic when they issued this invitation," said Cardinal Francis George, president of the U.S. Conference of Catholic Bishops (USCCB). The conservative Cardinal Newman Society organized a petition calling for Notre Dame president Father John Jenkins to disinvite the President. Professional protesters such as Alan Keyes and Randall Terry have descended on the South Bend campus, pushing blood-covered baby dolls in Spongebob strollers and getting themselves arrested. And Cardinal James Francis Stafford, one of the highest-ranking Americans at the Vatican, has declared Obama an unfit honoree because his statements on abortion reflect "an agenda and vision that are aggressive, disruptive and apocalyptic."

This isn't the first time Obama has received decidedly mixed reviews from Catholics. A few months ago, he issued an Executive Order lifting restrictions on federal funding for stem-cell research. The move was immediately denounced by the USCCB as "morally wrong," and even moderate Catholics complained about the way the decision was handled. But the Vatican had a different reaction. L'Osservatore Romano, the official newspaper published under the authority of the Vatican's Secretariat of State, ran an article in late April essentially urging the bishops to chill out.

Under the headline "The 100 Days that Did Not Shake the World," the paper gave Obama a tentative thumbs-up for his policy changes concerning the economy and international relations. "On ethical questions, too — which from the time of the electoral campaign have been the subject of strong worries by the Catholic bishops — Obama does not seem to have confirmed the radical innovations that he had discussed," said the article, which noted that Obama's stem-cell guidelines were "less permissive" than expected.

So is this a schism? Have Cardinal George and the other conservative U.S. bishops gone rogue? Or is the Pope letting them play bad cop while he makes nice with the popular new American President?

The Vatican has a tradition of remaining largely above the fray while allowing — sometimes even encouraging — local bishops to be more aggressive in challenging political leaders. In Italy, for instance, both Pope John Paul II and Pope Benedict XVI have given communion to pro-choice politicians while letting Italian church leaders take the role of lecturing those Catholics on their dissent from church teaching. And this is particularly true of the Vatican's relationships with foreign leaders, whom the Pope views as fellow heads of state. Some observers have interpreted Cardinal George's Oval Office meeting with Obama on St. Patrick's Day to talk about abortion as an emissary visit, speculating that the cardinal was sent by Benedict.

But if the Vatican merely wanted to avoid public unpleasantness in its dealing with the U.S. President, it could do that by essentially ignoring the new Administration. Instead, it has displayed a surprising optimism, bordering on enthusiasm, for Obama's presidency. Breaking with protocol that usually prevents the Pope from addressing heads of state before they take office, Benedict sent a congratulatory telegram to Obama the day after the November election. The Pope noted the "historic" nature of the victory and said he would pray that God would "sustain you and the beloved American people in your efforts to build a world of peace, solidarity and justice." The two spoke directly less than a week later, and the Pope sent yet another telegram on Jan. 20 when Obama was inaugurated.

When reporters at Catholic News Service, the official news agency of the USCCB, talked to Vatican officials just prior to the Inauguration, they found the Holy See mostly focused on economic issues and Middle East politics. "Asked about pro-life issues, on which Obama and the Catholic Church have clear differences, Vatican officials took a wait-and-see attitude," the news agency reported.

The starkly different responses of some U.S. bishops and the Vatican could just be a matter of pure politics. As Obama's European tour last month showed, the Pope would hardly be the only head of state eager to start off on the right footing with the new Administration. In addition, Obama is broadly popular among American Catholics, 67% of whom gave him a positive approval rating in a recent Pew poll. At a time when the U.S. Catholic Church is losing members — a separate Pew study found that for every American who joins the Catholic Church, four others leave — Benedict may not be willing to test the costs of opposing Obama.

Of course, the Notre Dame kerfuffle has political roots as well. The protesters aren't accusing the university of violating church teaching but rather of violating a 2004 policy that the USCCB approved in the midst of vigorous debate over John Kerry's presidential candidacy. The statement, titled "Catholics in Political Life," was speedily drafted in response to questions about whether Kerry should be denied communion because of his pro-choice positions. Catholic institutions, it read, "should not honor those who act in defiance of our fundamental moral principles." When the bishops approved the statement, it wasn't clear whether it would carry much weight after the election, much less whether it applied to the case of a non-Catholic like Obama.

Among those most eager to drive a wedge between the President and rank-and-file Catholics are Catholic Republicans, who worry about losing more voters to the Democratic Party. Newt Gingrich wasn't yet a Catholic when the 2004 statement was debated and approved. But the new convert was the first to speak out against Notre Dame's commencement speaker. On March 24, the Republican former House Speaker weighed in on his Twitter account, which appears to have limits on capital letters: "It is sad to see notre dame invite president obama to give the commencement address since his policies are so anti catholic values." There's nothing like the zeal of a convert, but Gingrich may find it's awkward to try to be more Catholic than the Pope.

10 U.S. banks to need more capital on stress test

About 10 of the 19 largest U.S. banks being stress tested will be instructed by regulators to raise more capital, according to a source familiar with official talks.

The banks have been negotiating with their regulators about the depth of their capital needs, should the recession prove to be deeper and longer than anticipated. Markets have been anxiously anticipating the results, which will differentiate the strongest banks from those still expected to sustain considerable credit losses.

The exact roster of banks needing to build their capital positions is still unclear. Banks are expected to be briefed on the official results on Tuesday. The Federal Reserve and Treasury Department will also tell them how policymakers plan to publicly unveil the market-sensitive results, the source said, speaking anonymously because the discussions are private.

The Treasury and Fed declined to comment on how many banks will be directed to raise more capital.

The largest U.S. banks have spent recent days making the case to regulators that they have the financial firepower to withstand a deeper recession, as Bank of America on Monday denied a report it was trying to raise capital of $10 billion.

Some industry insiders worry the stress test results come at a time when the sector is starting to see positive effects from some surprisingly strong first-quarter earnings figures.

"I think the great risk there is that you create some new uncertainty and concerns at the very time the financial condition of the banking industry is turning for the better," Wayne Abernathy, an executive at the American Bankers Association and a former Treasury official said earlier on Monday.

Banks found to be in need of more capital will have to embark on a recovery plan that could involve converting preferred stock, raising fresh private capital, or accepting government help -- assistance which comes with close scrutiny from Congress that will certainly be unwelcome on Wall Street.

Banks found to need capital will likely want to lay out capital-raising plans quickly to avoid being punished by panicky investors, although regulators won't require them to put a plan on the table immediately.

The emphasis will be placed on raising capital from within or private outlets. Pouring more public money into banks would put political pressure on President Barack Obama, whose administration is keen to avoid asking lawmakers to approve more bailout money for shortfalls that some analysts think may reach $150 billion.

The Treasury could soon have more funds on hand to infuse into weaker institutions, as officials estimate that stronger banks will return at least $25 billion doled out from the government's financial rescue fund. However, they want to ensure enough capital remains in the system as a whole.

Policymakers are expected to soon lay out conditions banks would need to meet to return funds.

White House spokesman Robert Gibbs on Monday said that the administration does not see a need to ask the U.S. Congress for additional funds to support banks, and that the banks will be encouraged to seek extra funds through private sources.

"I think everyone involved will be looking for banks to raise this through either private means or the selling of some assets that they have or that they control," Gibbs said.

He also said that the banks themselves will determine which steps they will take to raise capital. "They'll have a certain amount of time to put together a plan that meets ... the test of regulators to ensure that stability," Gibbs told reporters.

Some banks have complained that regulators were too harsh in their assessment over how much of a buffer they need to absorb future losses, and were underestimating profitability.

"The banking system can handle an awful lot of loss and be okay," JPMorgan Chase & Co Chief Executive Jamie Dimon said on a conference call, adding that he agreed with legendary investor Warren Buffett who said many banks have enough earning power to make up for future losses.

NOT SO BAD?

Bank of America Corp shares rose more than 19 percent after it denied a Financial Times report that it was working on plans to raise fresh funds to fill a $10 billion capital hole.

The KBW Banks index, which includes about two dozen large banks including Bank of America, rose almost 15 percent.

But investors remained on edge as Thursday's deadline neared. The Associated Press reported that Wells Fargo was asked to raise more capital after its stress test.

Citigroup has also been identified as a bank needing to raise its capital buffer. The firm will need to boost its common equity by up to $10 billion, a person familiar with the matter said Monday.

Bank of America, Wells Fargo and JPMorgan did not immediately respond late on Monday to a request for comment. An official from Citigroup declined comment.

Ratings agency Standard & Poor's said it may lower the counterparty credit ratings of 22 financial firms -- including Bank of America, Wells Fargo and Citigroup -- based on results of its own stress testing.

"These rating actions identify companies that we believe have at least a one-in-two likelihood of a ... downgrade within 90 days," S&P said in a statement. "That said, we believe that most rated institutions will be able to earn their way out of these credit losses during the cycle."

As analysts crunched their own numbers, at least one found that balance sheets may not be in as bad shape as feared.

David Trone, a Fox-Pitt Kelton bank analyst, said he expected Thursday's results to show a few banks were in need of more capital, although the shortfalls would probably be modest and "bank stocks won't collapse."

The U.S. Federal Reserve and other regulators have spent the past few weeks poring over holdings of the 19 largest banks, examining real estate and other assets that have lost significant value as the housing market crashed.

The process aimed to gauge how banks would hold up if the economy were to continue its steep descent and home prices fell another 22 percent this year and 7 percent in 2010.

The institutions undergoing stress tests include Citigroup Inc, Bank of America, Goldman Sachs Group Inc, JPMorgan Chase & Co, Morgan Stanley, MetLife Inc, Wells Fargo & Co, PNC Financial Services Group Inc, US Bancorp, Bank of NY Mellon Corp, SunTrust Banks Inc, State Street Corp, Capital One Financial Corp, BB&T Corp, Regions Financial Corp, American Express Co, Fifth Third Bancorp, KeyCorp and GMAC LLC.

Senators on SCOTUS pick;Obama calls (hopes for progress by July)

President Barack Obama has begun reaching out to senators who will play a key role in the confirmation of his Supreme Court nominee, who the White House hopes will be seated before the court starts its next session.

The president is aware of a "fairly tight timeline" to nominate a candidate in time for the Senate to hold hearings and vote, White House Press Secretary Robert Gibbs told reporters Monday. The next session will begin in
early October.

Obama got his first opportunity to have an impact on the nation's highest court when Justice David Souter announced Friday he will leave the bench after
19 years.

Several factors are being considered in a Supreme Court candidate, White House officials say, including diversity, experience, and age.

The president wants to have a nominee in place and "get something done before Congress gets out of town in August," Gibbs said. That would mean the Senate would vote on the nominee shortly after the August recess ends around Labor Day, if not before, he said. He later clarified his remarks, saying that by late July "this process has to be a decent ways down the field."

But the White House was offering no predictions on when a candidate will be named.

"The process has begun — and began some time ago — to go through prospective and potential candidates, to begin to review the history and the background and their experience," Gibbs said. "But I don't have a specific timeline." No candidates have yet been interviewed by Obama, he said.

Obama called Sens. Orrin Hatch and Arlen Specter of the Judiciary Committee, which will review the nominee's record and hold confirmation hearings. Hatch, a Republican, warned the White House on Sunday about selecting a "judicial activist" to the high court. Specter, a moderate, last week switched to the Democratic Party.

Several factors are being considered in a Supreme Court candidate, White House officials say, including diversity, experience, and age.

"You always assume, rightly so, that whomever you choose is going to have a significant impact on the court for quite some time," said Gibbs. "This is one of nine. And I think you have to assume that whomever you pick is somebody that you believe will have great weight on the court for a long time to come."

Chief Justice John Roberts and Justice Samuel Alito — President George W. Bush's 2005 picks — are both still in their 50s. Justice Clarence Thomas, named by President George H.W. Bush in 1991, turns 61 in June. The other justices besides Souter are all in their 70s or 80s.

But Gibbs emphasized again the main qualities Obama will be looking for: "Somebody that understands the rule of law, somebody that has a record of excellence and integrity, somebody who also understands how these opinions affect everyday lives, and will exercise some common sense."

Retire from Supreme Court:Justice David Souter

After more than 18 years on the nation's highest court, Supreme Court Justice David Souter is retiring, a source close to Souter told Thursday.

Souter will leave after the current court term recesses in June, the source said.
Filling Souter's seat would be President Barack Obama's first Supreme Court appointment -- and the first since George W. Bush's picks of Samuel Alito in 2006 and Chief Justice John Roberts in 2005.

David Souter has served more than 18 years on the Supreme Court.
Souter, 69, was tapped for the court by President George H.W. Bush in 1990, but disappointed many conservatives when he turned out to be a typical old-fashioned Yankee Republican -- a moderate, with an independent, even quirky streak.
Souter's departure will leave the two oldest justices -- and the most liberal -- still on the bench. Retirements for John Paul Stevens, 89, and Ruth Bader Ginsburg, 76, have been rumored for years, with many expecting that one or the other would be the first to give a new Democratic president a Supreme Court vacancy.
Souter's decision came as something of a surprise, although he has long been known to prefer the quiet of his New Hampshire farmhouse to the bustle of the nation's capital.

Swine flu outbreak shut down economy in mexico

Mexican President Felipe Calderon told his people to stay home from Friday for a five-day partial shutdown of the economy, after the World Health Organization said a swine flu pandemic was imminent. Calderon ordered government offices and private businesses not crucial to the economy to stop work to avoid further infections from the new virus, which has killed up to 176 people in Mexico and is now spreading around the world.
"There is no safer place than your own home to avoid being infected with the flu virus," Calderon said in his first televised address since the crisis erupted last week.
Twelve countries have reported cases of the H1N1 strain, with the Netherlands the latest to join the list. It said a three year-old child had contracted the virus.
Switzerland also confirmed its first case on Thursday, saying a man returning from Mexico had tested positive for the flu. Peru reported the first case in Latin America outside Mexico.
Texas officials on Wednesday reported the first swine flu death outside Mexico, a 22-month-old Mexican boy on a visit.
The WHO raised the official alert level to phase 5, the last step before a pandemic.
"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 on Wednesday. "The biggest question is this: how severe will the pandemic be, especially now at the start," Chan said.
The world "is better prepared for an influenza pandemic than at any time in history," she said. WHO has stopped short of recommending travel restrictions, border closures or any limitation on the movement of people, goods or services. WORLD STOCK MARKETS RALLY
Mexico's peso currency weakened sharply early on Thursday after the government called for chunks of the economy to close. The peso fell 1.6 percent to 13.83 per dollar.
But world stocks struck a four-month peak, powered by gains in Asia on Thursday, as investors took heart from signs of improvement in the U.S. economy. arlier in the week markets fell on worries that a major flu outbreak could hit the struggling global economy. Almost all those infected outside Mexico have had mild symptoms, and only a handful of people have been hospitalized.
In Mexico City, a metropolis of 20 million, all schools, restaurants, nightclubs and public events have been shut down to try to stop the disease from spreading, bringing normal life to a virtual standstill.

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. Several countries have banned pork imports though the World Health Organization says swine flu is not spread by eating pork.
President Barack Obama said told an evening news conference at the White House on Wednesday there was no need for panic and rejected the possibility of closing the border with Mexico.
"At this point, (health officials) have not recommended a border closing," he said. "From their perspective, it would be akin to closing the barn door after the horses are out, because we already have cases here in the United States." Obama also praised his predecessor for stockpiling anti-viral medication in anticipation of such an outbreak.
"I think the Bush administration did a good job of creating the infrastructure so that we can respond," Obama said. "For example, we've got 50 million courses of anti-viral drugs in the event that they're needed."
EXPERT SAYS VIRUS RELATIVELY WEAK
Masato Tashiro, head of the influenza virus research center at Japan's National Institute of Infectious Disease and a member of the WHO emergency committee, told Japan's Nikkei newspaper it appeared the H1N1 strain was far less dangerous than avian flu.
"I am very worried that we will use up the stockpile of anti-flu medicine and be unarmed before we need to fight against the avian influenza. The greatest threat to mankind remains the H5N1 avian influenza." Guan Yi, a microbiologist at the University of Hong Kong, said the swine flu virus could mix with avian flu, or H5N1. "If it goes to Egypt, Indonesia, these H5N1 endemic regions, it could turn into a very powerful H5N1 that is very transmissible among people. Then we will be in trouble, it will be a tragedy." The WHO's Chan urged companies who make the drugs to ramp up production. Two antiviral drugs -- Relenza, made by GlaxoSmithKline and Tamiflu, made by Roche AG and Gilead Sciences Inc -- have been shown to work against the H1N1 strain. Mexico's central bank warned the outbreak could deepen the nation's recession, hurting an economy that has shrunk by as much as 8 percent from the previous year in the first quarter. The United States and Canada have advised against non-essential travel to Mexico, and the European Union's health commissioner advised against non-essential travel to areas badly hit by swine flu. Many tourists were hurrying to leave Mexico, crowding airports.
Japan's Masato Tashiro said the possibility of an overreaction to the outbreak was a concern. "Excessive curbing of corporate activity will be a problem. The best course of action is to adopt rational measures." (Reporting by Maggie Fox and Tabassum Zakaria in Washington;
Jason Lange, Catherine Bremer, Alistair Bell and Helen Popper in Mexico City; Laura MacInnis and Stephanie Nebehay in Geneva and Yoko Nishikawa in Tokyo; writing by Andrew Marshall and Dean Yates; editing by Philippa Fletcher)

Obama says he doesn't have 'rubber-stamp Senate'

President Obama said Wednesday that he's under no illusions that he'll have a "rubber-stamp Senate" now that Sen. Arlen Specter has switched parties to join the Democrats."To my Republican friends, I want them to realize that me reaching out to them has been genuine," Obama said at a prime time news conference capping his 100th day in office.
"I can't sort of define bipartisanship as simply being willing to accept certain theories of theirs that we tried for eight years and didn't work and the American people voted to change."
Specter on Tuesday announced he was changing parties, saying he's found himself increasingly "at odds with the Republican philosophy." He also admitted Wednesday he was worried about the prospects of facing a Republican primary in order to keep his seat next year.
Specter's move puts the Democrats one shy of a filibuster-proof Senate majority of 60 seats.
President Obama speaks on the 100th day of his administration.
Senate Democrats can reach the 60-seat mark if courts uphold Al Franken's disputed recount victory in Minnesota.As if to prove the president's point, Specter voted against Obama's budget plan shortly before the news conference.Asked if the GOP is in desperate straits, Obama said, "Politics in America changes very quick. And I'm a big believer that things are never as good as they seem and never as bad as they seem."
Obama has faced criticism from Republicans that he hasn't been reaching across the aisle. His budget moved through both chambers of Congress on Wednesday with no GOP support, and his economic stimulus plan passed with just three Republican votes from the Senate.
The president said he thinks the administration has taken steps to restore confidence in the American people, noting that "simply opposing our approach on every front is probably not a good political strategy." In his first 100 days, he's been "sobered by the fact that change in Washington comes slow," said Obama. "That there is still a certain quotient of political posturing and bickering that takes place even when we're in the middle of really big crises," he said, adding that he'd like for everyone to say "let's take a time-out on some of the political games."
In a shift from his previous news conferences which were dominated by questions about the economy, Obama fielded multiple queries on the foreign policy front. The president said a recent uptick in violence in Iraq won't affect his plan for a phased military withdrawal.
"Civilian deaths, incidents of bombings ... remain very low relative to what was going on last year," Obama said. "You haven't seen the kinds of huge spikes that you were seeing for a time. The political system is holding and functioning in Iraq." Obama said more details need to be nailed down before U.S. troops leave Iraq -- including how oil revenues will be divided, what the powers of provincial governments there will be and the political relationships between minority Kurds, Sunnis and Shiites -- including the armed Sons of Iraq groups.
On Pakistan, the president said the United States has "huge national security interests in making sure that Pakistan is stable" and doesn't end up a "nuclear-armed militant state."
"I am gravely concerned about the situation in Pakistan, not because I think that they're immediately going to be overrun and the Taliban would take over in Pakistan. I'm more concerned that the civilian government there right now is very fragile and don't seem to have the capacity to deliver basic services," he said. Obama also said Wednesday he is "very comfortable" with his decision to ban interrogation techniques like waterboarding, which he called torture.
The president called the practice a recruiting tool for terrorist groups like al Qaeda, citing World War II-era British Prime Minister Winston Churchill, who also rejected such "enhanced interrogation" techniques. "Churchill understood that if you start taking shortcuts, over time that corrodes what's best in a people," Obama said. "It corrodes the character of a country."
Asked about the previous administration, he said, "I think that whatever legal rationale were used, it was a mistake."
On the recent outbreaks of swine flu, Obama insisted his administration is "prepared to do whatever it takes to control the impact of the virus." "I've asked every American to take the same steps you would take to prevent any other flu: Keep your hands washed; cover your mouth when you cough; stay home from work if you're sick; and keep your children home from school if they're sick," he said. Obama downplayed the possibility of closing the border with Mexico as a way to control the virus, also known by its clinical name of H1N1.
"It would be akin to closing the barn door after the horses are out," Obama said
The first cases of the virus were detected in Mexico, where health officials suspect swine flu in more than 150 other deaths and roughly 2,500 illnesses. Only 26 cases have so far been confirmed, including the seven fatal cases. So far, the World Health Organization has reported 148 cases in nine countries. Obama said the $1.5 billion he asked from Congress to help fight the outbreaks will help government health officials monitor and track the virus and replenish the supply of antiviral drugs.
On immigration, Obama said he wants to work with members of Congress, including former Republican presidential rival Sen. John McCain, to revive efforts to reform the system.
Obama said he hopes lawmakers will begin working on such reform legislation and expects the process to be under way within the year. Both Obama and McCain supported an ultimately failed plan backed by then-President Bush that would have fined illegal immigrants living in the United States but provided a pathway to citizenship for some. Obama's news conference came just hours after both chambers of Congress passed his $3.4 trillion budget resolution for fiscal year 2010.
The measure approves most of Obama's key spending priorities and sets the federal government in a new direction with major increases for energy, education and health care programs. Obama said his budget begins to lay a "new foundation" that will strengthen the U.S. economy. "But even as we clear away the wreckage of this recession, I've also said that we can't go back to an economy that is built on a pile of sand -- on inflated home prices and maxed-out credit cards; on overleveraged banks and outdated regulations that allowed the recklessness of a few to threaten the prosperity of all," he said.The United States "will see a better day," but there's still a lot of work to do, he said.
"I want to thank the American people for their support and their patience during these trying times, and I look forward to working with you in the next hundred days, in the hundred days after that, all of the hundreds of days to follow, to make sure that this country is what it can be."

100 U.S. schools closed due to swine flu

At least 74 schools have closed across the country because of confirmed or probable cases of swine flu and 30 more have closed as a precautionary measure, the Department of Education said Wednesday.

The elementary, junior high and high schools have closed because of the H1N1 virus, Department of Education spokesman Massie Ritsch said.
The closures of public and private schools across eight states affect about 56,000 students out of an estimated 55 million students attending the nation's 100,000 kindergarten through 12th grade schools, Ritsch said.
Some of the schools that were closed had already reopened, he said.
In addition to closures announced earlier Wednesday, the Fort Worth Independent School District in Texas said it will temporarily close all of its schools until further notice, affecting roughly 80,000 students, according to its Web site.
Schools will likely not reopen any sooner than Monday, May 11, the district said.
School officials said they made the decision after receiving official confirmation of one case of swine flu at one campus and news of three other probable cases at three more schools.
"We have been diligently following the recommendations of our local public health authorities since this crisis first began," Superintendent Melody Johnson said. "We will continue to work with the senior-most staff of the local health department."

On Wednesday, President Obama called on schools with confirmed or possible swine flu cases to "strongly consider temporarily closing so that we can be as safe as possible."
Education Secretary Arne Duncan said Wednesday that everyone involved in schools needs to "pitch in and do our part to prevent the spread of this flu virus."
"Use the same common sense and courtesy that you would use during winter flu season: Wash your hands, cover your mouth when you cough and stay home if you are sick," Duncan said.
The secretary said the department is closely monitoring the flu outbreak and urged schools to follow guidance from the Centers for Disease Control and Prevention.
"Do what is appropriate for the health of your communities, your schools and your students," Duncan said.
Department of Education officials and experts from the CDC held a conference call Monday with more than 1,700 people from national education associations, state school offices, individual schools and school districts.
The Department of Education emphasized the need for "common sense" preventative measures among students and faculty in school facilities, an official said.Education officials also stressed the need for people showing any flu-like symptoms to stay away from school and called on administrators to report any suspected or confirmed cases to local public health authorities as well as the Department of Education.
If a school has a confirmed case of swine flu, the CDC recommends closing the facility for about seven days

U.S. confirmed First swine flu death as cases increase

A 22-month-old child became the first swine flu fatality in the United States Wednesday, as the number of confirmed cases of the virus increased.

An official at the World Health Organization said Wednesday evening that his agency had confirmed 114 cases of swine flu worldwide. However, that number did not include additional cases announced by the Centers for Disease Control and Prevention (CDC), now at 91.
The WHO was still listing 64 swine flu cases for the United States. "It's clear that the virus is spreading, and we don't see it slowing down at this point," said Dr. Keiji Fukuda, assistant director-general of WHO, at a news conference.
Meanwhile, a spokeswoman for Houston's Health Department told CNN that the dead child had traveled from Mexico to Houston, for treatment.
Kathy Barton said the child, who died Monday, was not an American citizen. She did not know where the child was from in Mexico.
President Barack Obama expressed his condolences to the family and called on schools in the U.S. with confirmed or possible swine flu cases to "strongly consider temporarily closing so that we can be as safe as possible."
The apparent spread of swine flu was not unexpected, CDC acting director Dr. Richard Besser told CNN.
"Flu is a very serious infection and each virus is unique, and so it's hard to know what we're going to be seeing," Besser said. "But given what we've seen in Mexico we have expected that we would see more severe infections and we would see deaths."
Six of the 91 confirmed swine flu cases in the United States have been reported in Texas, according to the CDC.

A preliminary image of the swine flu virus from the Centers for Disease Control.
The United States is taking precautionary measures to stem the spread of the disease, of which most cases are not severe.
U.S. Homeland Security Secretary Janet Napolitano said Wednesday that the federal government would be releasing nearly 13 million doses of antiviral medications to try to stem the spread of the virus.
Besser added that the CDC is "taking aggressive action to try and limit the impact of this on our communities," but is not changing its recommendations as a result of the confirmed swine flu death.
"I expect we'll see more cases," Besser said. "And as we do, we'll learn more about this, and if there needs to be more stringent or less stringent recommendations, we'll be making those."
He stressed that people should maintain their perspective on the swine flu outbreak.

"Seasonal flu each year causes tens of thousands of deaths in this country, on average, about 36,000 deaths," Besser said. "And so this flu virus in the United States, as we're looking at it, is not acting very differently from what we saw during the flu season."
Germany and Austria became the latest European countries to report swine flu, while the number of cases increased in Britain and Spain.
Mexico is where the global outbreak originated. While only 26 cases have been confirmed in Mexico -- including the seven deaths -- health officials there suspect the swine flu outbreak has caused more than 159 deaths and roughly 2,500 illnesses.
They also believe they may have found "patient zero" in the global outbreak in the small village of La Gloria in the mountains of Mexico.
Five-year-old Edgar Hernandez -- known as "patient zero" by his doctors -- survived the earliest documented case of swine flu in the current outbreak. He lives near a pig farm, though experts have not established a connection between that and his illness.

Edgar has managed to bounce back from his symptoms and playfully credits ice cream for helping him feel better.
Researchers do not know how the virus is jumping relatively easily from person to person, or why it's affecting what should be society's healthiest demographic. Many of the victims who have died in Mexico have been young and otherwise healthy.
The deadly outbreak in Mexico has prompted authorities to order about 35,000 public venues in Mexico City to shut down or serve only take-out meals as health officials tried to contain spreading of the virus.
Governments around the world are scrambling to prevent further outbreak.

Some, such as China and Russia, have banned pork imports from the United States and Mexico, though the World Health Organization says the disease is not transmitted through eating or preparing pig meat. Several others countries, such as Japan and Indonesia, are using thermographic devices to test the temperature of passengers arriving from Mexico.

Obama said the outbreak is a cause for concern, not for alarm. The U.S. government has urged travelers to avoid non-essential travel to Mexico.
The U.S. Food and Drug Administration has issued emergency authorization for the use of two of the most common anti-viral drugs, Tamiflu and Relenza. The authorization allows the distribution of the drugs by a broader range of health-care workers and loosens age limits for their use.
In Mexico City, however, there is a shortage of such medication. And it became impossible to find protective surgical masks, which the government had handed out to one out of every five residents.

Swine influenza, or flu, is a contagious respiratory disease that affects pigs.
When the flu spreads person-to-person, instead of from animals to humans, it can continue to mutate, making it harder to treat or fight, because people have no natural immunity.

Symptoms include fever, runny nose, sore throat, nausea, vomiting and diarrhea.

Common seasonal flu kills 250,000 to 500,000 people every year worldwide, far more than the current outbreak of swine flu.