Early Bird summary
Tuesday’s Early Bird leads with a story from the Washington Post reporting that prospects for building a new fleet of high-tech presidential helicopters darkened yesterday, after the new commander in chief called the costly Bush administration effort an example of military procurement "gone amok" and said he thinks the existing White House helicopter fleet "seems perfectly adequate."President Obama's remarks at the opening of a meeting with lawmakers on fiscal responsibility did not rule out finishing the program, now expected to cost more than $11.2 billion, or nearly twice the original estimate. He joked that he has not had a helicopter before, so perhaps "I've been deprived and I -- I didn't know it."
A similar story in the New York Times puts it this way: “President Obama and Senator McCain found themselves in agreement that a project to build 28 new helicopters for the White House has gone way off course.”
In a story filed from the aircraft carier USS Theodore Roosevelt, the New York Times also reports that the United States flew more than 19,000 combat missions in the country in 2008 — more than ever before, surpassing even the number in Iraq over the same period. But over all, American pilots dropped slightly fewer bombs and other munitions, perhaps as a result of more restrictive rules imposed in September after an uproar about civilian casualties.
USA Today reports that Americans by 2-1 approve of President Obama's decision to send 17,000 additional U.S. troops to Afghanistan despite skepticism over whether they can succeed in stabilizing the security situation there within the next few years. A USA TODAY/Gallup Poll taken Friday through Sunday shows a reservoir of support for Obama's first major military decision as president. Two-thirds express approval of his order to expand the U.S. deployment to Afghanistan by 50%; one third disapprove.
The San Francisco Chronicle reports that as the United States and NATO craft a new strategy for Afghanistan, they are likely to apply counterinsurgency lessons learned at great cost during the war in Iraq.Last week, President Obama ordered 17,000 more troops to Afghanistan, prompting comparisons to the "surge" strategy in Iraq.But there was more to the surge than just additional troops, and it is those elements - changing the troops' mission from offense to defense, increasing support for indigenous forces, and stepping up diplomacy within the nation and among its neighbors - that analysts say could be most relevant for Afghanistan.
The Christian Science Monitor reports that President Bush was hardly out of the White House before his European opponents to the invasion of Iraq began lining up for what are expected to be lucrative contracts to rebuild the oil-rich country.In recent weeks, France and Germany, which Donald Rumsfeld, former secretary of Defense, once chided as "Old Europe" for their opposition to the war, spearheaded Europe's forceful return to Baghdad. On separate visits with similar goals, French President Nicolas Sarkozy and German Foreign Minister Frank-Walter Steinmeier swung through Baghdad. Their message was clear: As the danger subsides and the US scales back, Europe should move in quickly with money and know-how to rebuild everything from power stations, water systems, schools, and hospitals to roads and bridges.
USA Today states that the global economic crisis is making combustible countries such as Pakistan even more of a security risk to the United States and its troops abroad. The fear (in Pakistan), and in other parts of the Muslim world, is that unrest over soaring unemployment and food shortages could cause unpopular governments to collapse, resulting in more support for militant organizations such as al-Qaeda or the Taliban.
Washington Times reports that three major Pakistani Taliban commanders have joined forces, a development that poses a significant threat to Pakistan's stability and could hamper U.S. efforts to flush out al Qaeda from a safe haven in the country's lawless borderlands.People based in North and South Waziristan along Pakistan's border with Afghanistan told The Washington Times that the top Pakistani Taliban commander, Baitullah Mehsud, and two rival Taliban chiefs, Hafiz Gul Bahadur and Maulvi Nazeer, met at an undisclosed location recently and settled their differences to unite against U.S. and Pakistani government operations in the region.
The London Daily Telegraph reports that Vladimir Putin is facing an unprecedented military challenge to his authority as discontent grows over poor conditions and planned personnel cuts in the Russian armed forces.A growing number of disgruntled servicemen, including senior officers, are making contact with Russian opposition groups for the first time since Mr Putin came to power in 2000.
The final news item in today’s Early Bird comes from the New York Times, which reports that F.B.I. director, Robert S. Mueller III said Monday that a Somali-American man who was one of several suicide bombers in a terrorist attack last October in Somalia had apparently been indoctrinated into his extremist beliefs while living in the United States.The man, Shirwa Ahmed, was the first known suicide bomber with American citizenship. He immigrated with his family to the Minneapolis area in the mid-1990s, Mr. Mueller said, but he returned to Somalia after he was recruited by a militant group.
Media summary
1. Leading newspaper headlines: The New York Times leads with a look at how the Obama administration is facing "mounting pressure" to put more money into troubled companies that have already received billions from Uncle Sam. (Slate Magazine)
2. Taliban Swat truce ‘indefinite’: Taleban insurgents in the troubled north-western Swat valley of Pakistan have announced an indefinite ceasefire. (BBC)
3. Iran in ‘backroom offers’ to West: Iran offered to stop attacking British troops in Iraq to try to get the West to drop objections to Tehran's uranium enrichment project, a UK official says. (BBC)
4. Arrests after protests in Tehran: A group of Iranian students are reported to have been arrested following a rare show of opposition to government policies. (BBC)
Leading newspaper headlines
The New York Times leads with a look at how the Obama administration is facing "mounting pressure" to put more money into troubled companies that have already received billions from Uncle Sam. American International Group, the insurance giant, is now saying its $150 billion rescue won't be enough and is asking for billions more. The requests, which have also come from two of Detroit's Big Three and Citigroup, "reflect just how hard it is to stanch the flow of losses as the economy deteriorates." The NYT also mentions, and the Washington Post devotes its lead story to, the White House making it clear that it's willing to acquire a controlling ownership stake in troubled banks that can't raise enough private capital. The move could "culminate with the government nationalizing some of the country's largest banks," declares the Post.
The Los Angeles Times leads with, and the Wall Street Journal gives big play to, yesterday's plunge in the U.S. stock market as major indexes fell to levels not seen since 1997. The Dow Jones industrial average dropped 3.4 percent and the Standard & Poor's 500 index fell 3.5 percent as the losses spread to sectors that had been doing relatively well amid the ongoing turmoil. USA Today leads with a new poll that found a majority of Americans support plans to help struggling individuals but oppose bailouts for companies. Although a slim majority thinks the plan to help homeowners is "unfair," 59 percent say it is "necessary." The WSJ leads its world-wide newsbox with President Obama promising that his administration will move to tackle the country's growing deficit. After holding a "fiscal responsibility summit" with members of both parties, Obama said that "we cannot simply spend as we please and defer the consequences to the next budget." As the administration prepares to unveil its budget Thursday, the president also announced that the White House will host a summit on health care next week.
The WSJ devotes a front-page piece to AIG's attempts to get the government to overhaul its $150 billion bailout package. The discussions have been going on since December as AIG is seeking to repay up to $60 billion of the bailout cash with "a combination of debt, equity, cash and operating businesses, such as stakes in AIG's lucrative Asian life-insurance arms," details the WSJ. The move would ultimately convert the government from a creditor to a potential owner of AIG. An announcement is expected by Monday, when the company will release its fourth-quarter results that may end up being "one of the biggest year-end losses in American history," notes the NYT. The deal would help AIG avoid going through a credit rating downgrade, which would force it to make billions of dollars in payments to its partners.
The question of ownership is also at the heart of the discussions over what to do with the nation's ailing banks. In what the NYT calls an "unexpectedly assertive joint statement, the Treasury Department, the Federal Reserve, and regulatory agencies directly stated that the government might demand a direct ownership stake from banks that can't raise enough private capital. Whether a bank needs extra capital will be determined by the so-called "stress tests" that the government will begin to perform this week to see whether banks could survive if the economy gets worse. The government still insists that nationalization of the banks would never be their preferred course of action but it seems officials are growing less allergic to the dreaded N-word with each passing day. Officials emphasized that just because the government has a majority stake in a company doesn't necessarily mean it would get involved in managing its daily operations, although no one is ruling anything out.
USAT's survey suggests that polls measuring the public's support for using government money to stabilize banks should be taken with a grain of salt because "attitudes vary depending on the language used." But there does seem to be strong support to helping individuals, and about 80 percent back new programs to create jobs. Many of USAT's findings are backed up by polls in the NYT and WP. The WP notes that "large majorities" of Americans support the stimulus package as well as the plan to help avoid more foreclosures while almost 70 percent of Americans oppose giving more money to Chrysler and General Motors.
As Obama prepares to address a joint session of Congress tonight, it is clear that Americans are worried but still have faith in their young president. The NYT reports that 55 percent of Americans say they're just scraping by, while more than 60 percent say they're worried that layoffs will directly affect someone in their household in the next year. Despite these concerns, Obama still has plenty of political capital. USAT puts Obama's approval rating at 62 percent, the NYT at 63 percent, and the WP at 68 percent. The WP highlights that support for Obama among Republicans has decreased and now stands at 37 percent. The NYT notes that the overwhelming majority of Americans think Obama is trying to work with Republicans, and 63 percent say Republicans opposed the stimulus plan for political reasons. A mere 26 percent of Americans trust Congressional Republicans more than Obama to deal with the economy.
In a front-page piece, the LAT becomes the latest paper to note that Obama's budget will include money for the wars in Iraq and Afghanistan, as well as other expenditures that the previous administration often kept separate. The Bush administration was often criticized for failing to include certain costs in its budget to make the deficit seem smaller. While this new tactic follows Obama's pledge to make government more transparent, it could also make it easier for the new president to make good on his promise to cut the federal deficit in half during his first term. "By starting with a huge deficit now," explains the LAT, "he could slash spending in his fourth year."
When the "fiscal responsibility summit" ended, many Republicans complained Obama has yet to prove that he's serious about fighting the deficit. While the White House said that the president will make clear that he's "making hard choices" in his first budget, the NYT states that "early indications do not suggest bold action." Most of the savings will not come from budget cuts, but rather "from a combination of existing policies and economic assumptions."
In a front-page dispatch from Pakistan, USAT takes a look at how "the global economic crisis is making combustible countries ... even more of a security risk." Many fear that as Pakistan's economy deteriorates more will turn against the government and begin to back extremists. "If the economy goes down, the militants benefit," a Pakistani political analyst said.
Everyone reports that Obama has apparently settled on former Washington Gov. Gary Locke to lead the Commerce Department. Locke, an early supporter of Hillary Clinton in the Democratic primaries, would be Obama's third choice for the job, as well as the third Asian-American in the Cabinet.
The LAT notes that the average American now watches more than 151 hours of TV a month. Nielsen's report for the fourth quarter revealed the all-time high figure that translates into about five hours of TV watching a day.
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Taleban Swat truce 'indefinite'
The Taleban say they will release all prisoners they are holding
Taleban insurgents in the troubled north-western Swat valley of Pakistan have announced an indefinite ceasefire.
The announcement follows a deal struck last week between a radical cleric and authorities that brings Sharia law in return for an end to the insurgency.
The Taleban have been assessing that deal and Tuesday's move followed a meeting held by the group's leader in the region, Maulana Fazlullah.
The scenic valley of Swat has long been blighted by militant violence.
The latest truce announcement comes a day after militants in Bajaur district called a unilateral ceasefire with security forces there.
'Goodwill gesture'
"Today the shura [consultative council] met under Maulana Fazlullah and decided to hold a ceasefire for an indefinite period," Taleban spokesman in Swat, Muslim Khan, was quoted by the news agency AFP as saying.
"We are releasing all prisoners unconditionally. Today we released four paramilitary soldiers and we will release all security personnel in our custody as a goodwill gesture," he said.
A previous 10-day truce announced by the militants was set to expire on Wednesday.
Will Sharia law bring order?
Diary of Swat schoolgirl
The announcement comes a day after the army confirmed it was halting military operations in the region, although not leaving.
The cleric, Sufi Mohammad, who is also Maulana Fazlullah's father-in-law, has been mediating between the government and the militants.
On Monday, he urged the militants to end the patrolling of streets and to allow the government to set up the Islamic courts they have been fighting for.
Swat has been the scene of bloody clashes between militants and government forces since November 2007.
More than 1,000 civilians have died in shelling by the army or from beheadings sanctioned by the Taleban. Thousands more have been displaced.
The Taleban have also destroyed nearly 200 schools, most of them for girls, during a sustained campaign against secular education in Swat.
An earlier peace agreement broke down in mid-2008.
The BBC's Barbara Plett in Islamabad says there is concern that this peace deal will also not last, with some analysts believing the Taleban want to control territory, not just ame
nd the legal system.
Earlier this month, the North West Frontier Province government signed an agreement with Sufi Mohammad's proscribed Tanzim-e-Nifaz-e-Shariat Mohammadi (TNSM) for the implementation of a Sharia justice system in Swat.
Sufi Mohammad, who opposes militancy, led thousands of TNSM workers into Swat to set up a peace camp there and to start talks with Maulana Fazlullah.
Preconditions
The BBC's M Ilyas Khan, who was recently in Swat, says the militants are now likely to close their checkpoints in the region as the first step towards the new justice system.
The Pakistan army's battle in Swat since 2007 has been bloody
On Monday, the TNSM announced 10 preconditions for its successful implementation.
These included the evacuation of all schools and hospital buildings by the army and an end to all security checks that hamper the movement of people.
The TNSM has called on the government to station troops away from civilian areas.
It urged the government to compensate families that suffered human and material losses and called on thousands of displaced people to return to their homes.
The ceasefire moves in Swat have been echoed in Bajaur.
However, the unilateral truce called by the Taleban there follows a series of strategic gains by the military.
Reuters news agency quoted military spokesman Maj-Gen Athar Abbas as saying the militants should approach the army to discuss the terms of laying down their arms.
Correspondents say the truce deals have caused disquiet in the US and the issue will be high on the agenda as Pakistan's Foreign Minister Shah Mehmood Qureshi and army chief Ashfaq Pervez Kayani meet US Secretary of State Hillary Clinton and joint Pakistan-Afghan envoy Richard Hobrooke in Washington this week.
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Iran in 'backroom offers' to West
By Bridget Kendall BBC diplomatic correspondent
The revelation to the BBC was made by Sir John Sawers, Britain's UN envoy
Iran offered to stop attacking British troops in Iraq to try to get the West to drop objections to Tehran's uranium enrichment project, a UK official says.
The disclosure by UN ambassador Sir John Sawers in a BBC documentary throws new light on backroom discussions between Iran and the West.
Roadside bombing attacks on British and American soldiers in Iraq were at their height in 2005.
The extent of Iran's role in arming and training those militias was uncertain.
Tehran denied a role, while British officials tended to hedge their accusations with references to 'circumstantial evidence'.
Private talks
But now a senior British official has revealed that not only did the Iranians privately admit their involvement, they even made an astonishing offer to switch off the attacks in Iraq if in return the West would stop blocking Iran's controversial nuclear programme.
We stop killing you in Iraq... you allow us to carry on with our nuclear programme
Sir John Sawers on the Iranian offer
Sir John Sawers, currently Britain's ambassador to the United Nations, said Iranians raised the offer during informal private talks at a hotel in London.
"There were various Iranians who would come to London and suggest we had tea in some hotel or other. They'd do the same in Paris, they'd do the same in Berlin, and then we'd compare notes among the three of us," he told the BBC.
"The Iranians wanted to be able to strike a deal whereby they stopped killing our forces in Iraq in return for them being allowed to carry on with their nuclear programme: 'We stop killing you in Iraq, stop undermining the political process there, you allow us to carry on with our nuclear programme without let or hindrance.'"
The deal was dismissed by the British government and Iran's nuclear enrichment restarted shortly after.
Old pattern
It is just one incident in a revealing pattern of on-off backroom deals with the Iranians that appear to go back to 2001.
Former President Khatami offered to help oust Saddam, the report says
It emerges from interviews with both Iranian and American officials that after 11 September, 2001, Tehran collaborated so closely with the US in order to topple the Taleban and remove al-Qaeda from Afghanistan, that they even provided intelligence information to pinpoint military targets for bombing.
Hillary Mann, one of the US delegates, remembers how one Iranian military official pounded the table in his eagerness to get the Americans to change targets.
"He unfurled the map on the table and started to point to targets that the US needed to focus on, particularly in the north," she told the BBC.
"We took the map to Centcom, the US Central Command, and certainly that did become the US military strategy."
Over Iraq too, Iran's reformist President Mohammad Khatami offered to collaborate on ousting Saddam Hussein, arguing that the Iraqi leader was also Iran's enemy.
But relations deteriorated after former US President George W Bush accused Iran of being part of an "Axis of Evil".
Attempts at negotiations initiated by the Europeans in the end led nowhere.
Current prospects
According to Nick Burns, in charge of Iran policy at the State Department for the Bush administration until last year, the American policy of talking tough with Iran did not prove productive.
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"We had advocated regime change," said Mr Burns. "We had a very threatening posture towards Iran for a number of years. It didn't produce any movement whatsoever."
The glimpses in this TV documentary of a whole series of backroom talks over several years that on occasion yielded real collaboration would appear to be encouraging.
But the impressive collection of interviews does not address what prospects now lie ahead for a possible improvement in relations.
And the essential gap remains: without exception all Iranian policy makers, even the reformist Mr Khatami who may well stand again for the post of president this summer, insist on Iran's legal right to pursue its nuclear programme without impediment.
But the West remains deeply suspicious and alarmed at what it fears is subterfuge and deliberate procrastination to conceal Iranian plans to be able to make weapons from its uranium stocks, and therefore the Western demand remains that Iran must suspend nuclear enrichment.
President Obama's promise to "extend a hand" if Iran "unclenches its fist" may not be enough to break the logjam.
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Arrests after protest in Tehran
Student protests have become rarer under President Ahmadinejad
A group of Iranian students are reported to have been arrested following a rare show of opposition to government policies.
The arrests, of up to 70 students, followed a protest at the Amir Kabir university in Tehran.
Some students are angry at moves to re-bury war dead from the Iran-Iraq War in the grounds of the university.
A group of them carried banners, complaining that their campus was being turned into a cemetery.
The students also said the Evin prison in Tehran was being turned into a university - because of the number of students being held there.
During the re-burial ceremony, witnesses said there were clashes between the protesting students, members of the security forces and other students loyal to the government.
This kind of protest has become increasingly rare since President Mahmoud Ahmadinejad took power, because of the harsh response of the authorities to public displays of dissent.
The BBC's Jon Leyne in Tehran says that, in the past, students have been expelled for taking part in protests. Some have had to hand over the deeds of their parents' homes as a guarantee of good behaviour.
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Tuesday’s Early Bird leads with a story from the Washington Post reporting that prospects for building a new fleet of high-tech presidential helicopters darkened yesterday, after the new commander in chief called the costly Bush administration effort an example of military procurement "gone amok" and said he thinks the existing White House helicopter fleet "seems perfectly adequate."President Obama's remarks at the opening of a meeting with lawmakers on fiscal responsibility did not rule out finishing the program, now expected to cost more than $11.2 billion, or nearly twice the original estimate. He joked that he has not had a helicopter before, so perhaps "I've been deprived and I -- I didn't know it."
A similar story in the New York Times puts it this way: “President Obama and Senator McCain found themselves in agreement that a project to build 28 new helicopters for the White House has gone way off course.”
In a story filed from the aircraft carier USS Theodore Roosevelt, the New York Times also reports that the United States flew more than 19,000 combat missions in the country in 2008 — more than ever before, surpassing even the number in Iraq over the same period. But over all, American pilots dropped slightly fewer bombs and other munitions, perhaps as a result of more restrictive rules imposed in September after an uproar about civilian casualties.
USA Today reports that Americans by 2-1 approve of President Obama's decision to send 17,000 additional U.S. troops to Afghanistan despite skepticism over whether they can succeed in stabilizing the security situation there within the next few years. A USA TODAY/Gallup Poll taken Friday through Sunday shows a reservoir of support for Obama's first major military decision as president. Two-thirds express approval of his order to expand the U.S. deployment to Afghanistan by 50%; one third disapprove.
The San Francisco Chronicle reports that as the United States and NATO craft a new strategy for Afghanistan, they are likely to apply counterinsurgency lessons learned at great cost during the war in Iraq.Last week, President Obama ordered 17,000 more troops to Afghanistan, prompting comparisons to the "surge" strategy in Iraq.But there was more to the surge than just additional troops, and it is those elements - changing the troops' mission from offense to defense, increasing support for indigenous forces, and stepping up diplomacy within the nation and among its neighbors - that analysts say could be most relevant for Afghanistan.
The Christian Science Monitor reports that President Bush was hardly out of the White House before his European opponents to the invasion of Iraq began lining up for what are expected to be lucrative contracts to rebuild the oil-rich country.In recent weeks, France and Germany, which Donald Rumsfeld, former secretary of Defense, once chided as "Old Europe" for their opposition to the war, spearheaded Europe's forceful return to Baghdad. On separate visits with similar goals, French President Nicolas Sarkozy and German Foreign Minister Frank-Walter Steinmeier swung through Baghdad. Their message was clear: As the danger subsides and the US scales back, Europe should move in quickly with money and know-how to rebuild everything from power stations, water systems, schools, and hospitals to roads and bridges.
USA Today states that the global economic crisis is making combustible countries such as Pakistan even more of a security risk to the United States and its troops abroad. The fear (in Pakistan), and in other parts of the Muslim world, is that unrest over soaring unemployment and food shortages could cause unpopular governments to collapse, resulting in more support for militant organizations such as al-Qaeda or the Taliban.
Washington Times reports that three major Pakistani Taliban commanders have joined forces, a development that poses a significant threat to Pakistan's stability and could hamper U.S. efforts to flush out al Qaeda from a safe haven in the country's lawless borderlands.People based in North and South Waziristan along Pakistan's border with Afghanistan told The Washington Times that the top Pakistani Taliban commander, Baitullah Mehsud, and two rival Taliban chiefs, Hafiz Gul Bahadur and Maulvi Nazeer, met at an undisclosed location recently and settled their differences to unite against U.S. and Pakistani government operations in the region.
The London Daily Telegraph reports that Vladimir Putin is facing an unprecedented military challenge to his authority as discontent grows over poor conditions and planned personnel cuts in the Russian armed forces.A growing number of disgruntled servicemen, including senior officers, are making contact with Russian opposition groups for the first time since Mr Putin came to power in 2000.
The final news item in today’s Early Bird comes from the New York Times, which reports that F.B.I. director, Robert S. Mueller III said Monday that a Somali-American man who was one of several suicide bombers in a terrorist attack last October in Somalia had apparently been indoctrinated into his extremist beliefs while living in the United States.The man, Shirwa Ahmed, was the first known suicide bomber with American citizenship. He immigrated with his family to the Minneapolis area in the mid-1990s, Mr. Mueller said, but he returned to Somalia after he was recruited by a militant group.
Media summary
1. Leading newspaper headlines: The New York Times leads with a look at how the Obama administration is facing "mounting pressure" to put more money into troubled companies that have already received billions from Uncle Sam. (Slate Magazine)
2. Taliban Swat truce ‘indefinite’: Taleban insurgents in the troubled north-western Swat valley of Pakistan have announced an indefinite ceasefire. (BBC)
3. Iran in ‘backroom offers’ to West: Iran offered to stop attacking British troops in Iraq to try to get the West to drop objections to Tehran's uranium enrichment project, a UK official says. (BBC)
4. Arrests after protests in Tehran: A group of Iranian students are reported to have been arrested following a rare show of opposition to government policies. (BBC)
Leading newspaper headlines
The New York Times leads with a look at how the Obama administration is facing "mounting pressure" to put more money into troubled companies that have already received billions from Uncle Sam. American International Group, the insurance giant, is now saying its $150 billion rescue won't be enough and is asking for billions more. The requests, which have also come from two of Detroit's Big Three and Citigroup, "reflect just how hard it is to stanch the flow of losses as the economy deteriorates." The NYT also mentions, and the Washington Post devotes its lead story to, the White House making it clear that it's willing to acquire a controlling ownership stake in troubled banks that can't raise enough private capital. The move could "culminate with the government nationalizing some of the country's largest banks," declares the Post.
The Los Angeles Times leads with, and the Wall Street Journal gives big play to, yesterday's plunge in the U.S. stock market as major indexes fell to levels not seen since 1997. The Dow Jones industrial average dropped 3.4 percent and the Standard & Poor's 500 index fell 3.5 percent as the losses spread to sectors that had been doing relatively well amid the ongoing turmoil. USA Today leads with a new poll that found a majority of Americans support plans to help struggling individuals but oppose bailouts for companies. Although a slim majority thinks the plan to help homeowners is "unfair," 59 percent say it is "necessary." The WSJ leads its world-wide newsbox with President Obama promising that his administration will move to tackle the country's growing deficit. After holding a "fiscal responsibility summit" with members of both parties, Obama said that "we cannot simply spend as we please and defer the consequences to the next budget." As the administration prepares to unveil its budget Thursday, the president also announced that the White House will host a summit on health care next week.
The WSJ devotes a front-page piece to AIG's attempts to get the government to overhaul its $150 billion bailout package. The discussions have been going on since December as AIG is seeking to repay up to $60 billion of the bailout cash with "a combination of debt, equity, cash and operating businesses, such as stakes in AIG's lucrative Asian life-insurance arms," details the WSJ. The move would ultimately convert the government from a creditor to a potential owner of AIG. An announcement is expected by Monday, when the company will release its fourth-quarter results that may end up being "one of the biggest year-end losses in American history," notes the NYT. The deal would help AIG avoid going through a credit rating downgrade, which would force it to make billions of dollars in payments to its partners.
The question of ownership is also at the heart of the discussions over what to do with the nation's ailing banks. In what the NYT calls an "unexpectedly assertive joint statement, the Treasury Department, the Federal Reserve, and regulatory agencies directly stated that the government might demand a direct ownership stake from banks that can't raise enough private capital. Whether a bank needs extra capital will be determined by the so-called "stress tests" that the government will begin to perform this week to see whether banks could survive if the economy gets worse. The government still insists that nationalization of the banks would never be their preferred course of action but it seems officials are growing less allergic to the dreaded N-word with each passing day. Officials emphasized that just because the government has a majority stake in a company doesn't necessarily mean it would get involved in managing its daily operations, although no one is ruling anything out.
USAT's survey suggests that polls measuring the public's support for using government money to stabilize banks should be taken with a grain of salt because "attitudes vary depending on the language used." But there does seem to be strong support to helping individuals, and about 80 percent back new programs to create jobs. Many of USAT's findings are backed up by polls in the NYT and WP. The WP notes that "large majorities" of Americans support the stimulus package as well as the plan to help avoid more foreclosures while almost 70 percent of Americans oppose giving more money to Chrysler and General Motors.
As Obama prepares to address a joint session of Congress tonight, it is clear that Americans are worried but still have faith in their young president. The NYT reports that 55 percent of Americans say they're just scraping by, while more than 60 percent say they're worried that layoffs will directly affect someone in their household in the next year. Despite these concerns, Obama still has plenty of political capital. USAT puts Obama's approval rating at 62 percent, the NYT at 63 percent, and the WP at 68 percent. The WP highlights that support for Obama among Republicans has decreased and now stands at 37 percent. The NYT notes that the overwhelming majority of Americans think Obama is trying to work with Republicans, and 63 percent say Republicans opposed the stimulus plan for political reasons. A mere 26 percent of Americans trust Congressional Republicans more than Obama to deal with the economy.
In a front-page piece, the LAT becomes the latest paper to note that Obama's budget will include money for the wars in Iraq and Afghanistan, as well as other expenditures that the previous administration often kept separate. The Bush administration was often criticized for failing to include certain costs in its budget to make the deficit seem smaller. While this new tactic follows Obama's pledge to make government more transparent, it could also make it easier for the new president to make good on his promise to cut the federal deficit in half during his first term. "By starting with a huge deficit now," explains the LAT, "he could slash spending in his fourth year."
When the "fiscal responsibility summit" ended, many Republicans complained Obama has yet to prove that he's serious about fighting the deficit. While the White House said that the president will make clear that he's "making hard choices" in his first budget, the NYT states that "early indications do not suggest bold action." Most of the savings will not come from budget cuts, but rather "from a combination of existing policies and economic assumptions."
In a front-page dispatch from Pakistan, USAT takes a look at how "the global economic crisis is making combustible countries ... even more of a security risk." Many fear that as Pakistan's economy deteriorates more will turn against the government and begin to back extremists. "If the economy goes down, the militants benefit," a Pakistani political analyst said.
Everyone reports that Obama has apparently settled on former Washington Gov. Gary Locke to lead the Commerce Department. Locke, an early supporter of Hillary Clinton in the Democratic primaries, would be Obama's third choice for the job, as well as the third Asian-American in the Cabinet.
The LAT notes that the average American now watches more than 151 hours of TV a month. Nielsen's report for the fourth quarter revealed the all-time high figure that translates into about five hours of TV watching a day.
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Taleban Swat truce 'indefinite'
The Taleban say they will release all prisoners they are holding
Taleban insurgents in the troubled north-western Swat valley of Pakistan have announced an indefinite ceasefire.
The announcement follows a deal struck last week between a radical cleric and authorities that brings Sharia law in return for an end to the insurgency.
The Taleban have been assessing that deal and Tuesday's move followed a meeting held by the group's leader in the region, Maulana Fazlullah.
The scenic valley of Swat has long been blighted by militant violence.
The latest truce announcement comes a day after militants in Bajaur district called a unilateral ceasefire with security forces there.
'Goodwill gesture'
"Today the shura [consultative council] met under Maulana Fazlullah and decided to hold a ceasefire for an indefinite period," Taleban spokesman in Swat, Muslim Khan, was quoted by the news agency AFP as saying.
"We are releasing all prisoners unconditionally. Today we released four paramilitary soldiers and we will release all security personnel in our custody as a goodwill gesture," he said.
A previous 10-day truce announced by the militants was set to expire on Wednesday.
Will Sharia law bring order?
Diary of Swat schoolgirl
The announcement comes a day after the army confirmed it was halting military operations in the region, although not leaving.
The cleric, Sufi Mohammad, who is also Maulana Fazlullah's father-in-law, has been mediating between the government and the militants.
On Monday, he urged the militants to end the patrolling of streets and to allow the government to set up the Islamic courts they have been fighting for.
Swat has been the scene of bloody clashes between militants and government forces since November 2007.
More than 1,000 civilians have died in shelling by the army or from beheadings sanctioned by the Taleban. Thousands more have been displaced.
The Taleban have also destroyed nearly 200 schools, most of them for girls, during a sustained campaign against secular education in Swat.
An earlier peace agreement broke down in mid-2008.
The BBC's Barbara Plett in Islamabad says there is concern that this peace deal will also not last, with some analysts believing the Taleban want to control territory, not just ame
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Earlier this month, the North West Frontier Province government signed an agreement with Sufi Mohammad's proscribed Tanzim-e-Nifaz-e-Shariat Mohammadi (TNSM) for the implementation of a Sharia justice system in Swat.
Sufi Mohammad, who opposes militancy, led thousands of TNSM workers into Swat to set up a peace camp there and to start talks with Maulana Fazlullah.
Preconditions
The BBC's M Ilyas Khan, who was recently in Swat, says the militants are now likely to close their checkpoints in the region as the first step towards the new justice system.
The Pakistan army's battle in Swat since 2007 has been bloody
On Monday, the TNSM announced 10 preconditions for its successful implementation.
These included the evacuation of all schools and hospital buildings by the army and an end to all security checks that hamper the movement of people.
The TNSM has called on the government to station troops away from civilian areas.
It urged the government to compensate families that suffered human and material losses and called on thousands of displaced people to return to their homes.
The ceasefire moves in Swat have been echoed in Bajaur.
However, the unilateral truce called by the Taleban there follows a series of strategic gains by the military.
Reuters news agency quoted military spokesman Maj-Gen Athar Abbas as saying the militants should approach the army to discuss the terms of laying down their arms.
Correspondents say the truce deals have caused disquiet in the US and the issue will be high on the agenda as Pakistan's Foreign Minister Shah Mehmood Qureshi and army chief Ashfaq Pervez Kayani meet US Secretary of State Hillary Clinton and joint Pakistan-Afghan envoy Richard Hobrooke in Washington this week.
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Iran in 'backroom offers' to West
By Bridget Kendall BBC diplomatic correspondent
The revelation to the BBC was made by Sir John Sawers, Britain's UN envoy
Iran offered to stop attacking British troops in Iraq to try to get the West to drop objections to Tehran's uranium enrichment project, a UK official says.
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The disclosure by UN ambassador Sir John Sawers in a BBC documentary throws new light on backroom discussions between Iran and the West.
Roadside bombing attacks on British and American soldiers in Iraq were at their height in 2005.
The extent of Iran's role in arming and training those militias was uncertain.
Tehran denied a role, while British officials tended to hedge their accusations with references to 'circumstantial evidence'.
Private talks
But now a senior British official has revealed that not only did the Iranians privately admit their involvement, they even made an astonishing offer to switch off the attacks in Iraq if in return the West would stop blocking Iran's controversial nuclear programme.
We stop killing you in Iraq... you allow us to carry on with our nuclear programme
Sir John Sawers on the Iranian offer
Sir John Sawers, currently Britain's ambassador to the United Nations, said Iranians raised the offer during informal private talks at a hotel in London.
"There were various Iranians who would come to London and suggest we had tea in some hotel or other. They'd do the same in Paris, they'd do the same in Berlin, and then we'd compare notes among the three of us," he told the BBC.
"The Iranians wanted to be able to strike a deal whereby they stopped killing our forces in Iraq in return for them being allowed to carry on with their nuclear programme: 'We stop killing you in Iraq, stop undermining the political process there, you allow us to carry on with our nuclear programme without let or hindrance.'"
The deal was dismissed by the British government and Iran's nuclear enrichment restarted shortly after.
Old pattern
It is just one incident in a revealing pattern of on-off backroom deals with the Iranians that appear to go back to 2001.
Former President Khatami offered to help oust Saddam, the report says
It emerges from interviews with both Iranian and American officials that after 11 September, 2001, Tehran collaborated so closely with the US in order to topple the Taleban and remove al-Qaeda from Afghanistan, that they even provided intelligence information to pinpoint military targets for bombing.
Hillary Mann, one of the US delegates, remembers how one Iranian military official pounded the table in his eagerness to get the Americans to change targets.
"He unfurled the map on the table and started to point to targets that the US needed to focus on, particularly in the north," she told the BBC.
"We took the map to Centcom, the US Central Command, and certainly that did become the US military strategy."
Over Iraq too, Iran's reformist President Mohammad Khatami offered to collaborate on ousting Saddam Hussein, arguing that the Iraqi leader was also Iran's enemy.
But relations deteriorated after former US President George W Bush accused Iran of being part of an "Axis of Evil".
Attempts at negotiations initiated by the Europeans in the end led nowhere.
Current prospects
According to Nick Burns, in charge of Iran policy at the State Department for the Bush administration until last year, the American policy of talking tough with Iran did not prove productive.
Iran insists on its right to pursue a nuclear programme
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"We had advocated regime change," said Mr Burns. "We had a very threatening posture towards Iran for a number of years. It didn't produce any movement whatsoever."
The glimpses in this TV documentary of a whole series of backroom talks over several years that on occasion yielded real collaboration would appear to be encouraging.
But the impressive collection of interviews does not address what prospects now lie ahead for a possible improvement in relations.
And the essential gap remains: without exception all Iranian policy makers, even the reformist Mr Khatami who may well stand again for the post of president this summer, insist on Iran's legal right to pursue its nuclear programme without impediment.
But the West remains deeply suspicious and alarmed at what it fears is subterfuge and deliberate procrastination to conceal Iranian plans to be able to make weapons from its uranium stocks, and therefore the Western demand remains that Iran must suspend nuclear enrichment.
President Obama's promise to "extend a hand" if Iran "unclenches its fist" may not be enough to break the logjam.
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Arrests after protest in Tehran
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Student protests have become rarer under President Ahmadinejad
A group of Iranian students are reported to have been arrested following a rare show of opposition to government policies.
The arrests, of up to 70 students, followed a protest at the Amir Kabir university in Tehran.
Some students are angry at moves to re-bury war dead from the Iran-Iraq War in the grounds of the university.
A group of them carried banners, complaining that their campus was being turned into a cemetery.
The students also said the Evin prison in Tehran was being turned into a university - because of the number of students being held there.
During the re-burial ceremony, witnesses said there were clashes between the protesting students, members of the security forces and other students loyal to the government.
This kind of protest has become increasingly rare since President Mahmoud Ahmadinejad took power, because of the harsh response of the authorities to public displays of dissent.
The BBC's Jon Leyne in Tehran says that, in the past, students have been expelled for taking part in protests. Some have had to hand over the deeds of their parents' homes as a guarantee of good behaviour.
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