Previewing an expected Democratic campaign theme in the fall elections, Sen. Hillary Clinton said yesterday that President Bush and congressional Republicans have squandered the economic gains made when her husband was President.

"It's harder to imagine a faster, more heartbreaking turnaround than the one we've seen," she said.

Addressing the Democratic Leadership Council, an organization promoting centrist policies and politicians, Clinton (D-N.Y.) cited upbeat statistics from the 1990s, ranging from the creation of 42 million jobs to 7 million people leaving poverty to the elimination of the federal budget deficit.

"Now some have recently called that record a binge," she said, referring to Bush's characterization of the go-go '90s and corporate excesses, which he said resulted in the stock-market collapse.

"I am reminded of what Abraham Lincoln once said, when his commanders complained about Ulysses S. Grant's binges. 'Find out,' he said, 'what brand of whiskey Grant drinks, because I'm going to send a barrel to each of my generals.'"

Clinton added, "If all of the arrows that were pointing up are now pointing down, and those that were headed down are going back up, blame cannot and should not be placed at the feet of those who led our nation during one of the greatest periods of prosperity and progress in our nation."

Clinton did not mention that the first steps of the recession and the stock-market swoon began in the closing days of her husband's administration.

Comment: Maybe Senator Clinton didn't mention the recession or the drop in the markets under Bill because both were doing very well before Greenspan, a conservative republican raised interest rates, slowing the economy so Bush's presidency--based on a tax cut would sell. The Bush tax cut of course was based on lies, since he's using borrowed money to pay for it.

A senior Bush official shrugged off Clinton's broadsides as election-year partisan politics.

"We recognize as we get closer to the election that there will be an increasing tug to the left on the part of the Democrats. But 25% of the Senate's Democrats voted with the President for tax relief that is helping turn this economy around," he said.

Clinton took pains to say she and other Democrats support the President in the war on terrorism, but without ever mentioning Bush's name, she repeatedly slammed him and Republicans on pocketbook issues, saying they lack an economic plan and blindly repeat calls for bigger tax cuts and weaker regulation of business.

Commentary:
Have you noticed how reports use words like "shrugged off" and "partisan politics" whenever a democrat (or any other sane person) says anything bad about Shrub? How does one "shrug off" exactly? and wasn't it election-year partisan bashing that Bush engaged in when he ran for president?

It seems Dems went out of their way to help Bush even though republicans refused to do the same when President Clinton proposed a stimulus package (republicans passed Reagan's and Bush's, but defeated Clinton's---partisan. You decide.)

WASHINGTON (AP) - The U.S. economy lost momentum in the second quarter of this year, growing at an annual rate of just 1.1 percent. New figures Wednesday also showed that last year's recession was worse than thought, with the economy shrinking in three quarters of 2001.

The gross domestic product in the April-June quarter was in sharp contrast to a revised 5 percent growth rate turned in during the first three months of the year, the Commerce Department reported.

GDP measures the total value of goods and services produced within the United States and is considered the broadest measure of the economy's health.

The second-quarter performance was weaker than the 2.2 percent growth rate that many analysts had forecast. It marked the most sluggish growth since the third quarter of 2001, when the economy was still mired in a slump.

Annual revisions to GDP, based on more complete data, showed that the economy last year was in a more fragile state than earlier estimates showed. For all of 2001, the GDP grew by only 0.3 percent, versus a still-below par 1.2 percent.

And, GDP contracted in three straight quarters last year, rather than just one. The government's new figures show the economy shrank at a 0.6 percent rate in the first quarter, at a 1.6 percent rate in the second and at a 0.3 percent rate in the third quarter, which under earlier estimates had been the only quarter of negative GDP during the slump.

Weaker spending by consumers, which accounts for two-thirds of all economic activity, and bigger cuts by business in investment were the major reasons behind the first and second quarters reversals. Deep cuts in business investment were a key reason why the economy slid into recession.

The fourth quarter of 2001, however, turned out to be stronger than previously thought, with GDP growing at a 2.7 percent rate, representing an upward revision of a full percentage point.

Based on the revised GDP data, the drop in economic output during the recession was 0.6 percent. That's twice as big as previously thought, but would still match the mildest recession on record, the 1969-1970 slump, when GDP also fell by 0.6 percent.

With three quarters now showing declining GDP, versus one, that puts last year's recession more in line with one rough rule of thumb for a downturn — at least two consecutive negative quarters of negative GDP.

The National Bureau of Economic Research, the recognized arbiter of when recessions begin and end, said that the economy fell into a full-blown downturn in March 2001. It hasn't declared when it ended, though some economists believe that will turn out to be January or February of this year. NBER uses several monthly statistics to pinpoint the economy's exact turning points.

The annual revisions also showed the economy grew by 3.8 percent for all of 2000 — down from a previous estimate of 4.1 percent_ reflecting weaker growth in the second half of that year.

With the recovery losing momentum from the beginning of this year, the Federal Reserve has opted to leave interest rates at 40-year lows at each of its four meetings this year. Many economists believe the Fed will hold rates steady at its next meeting on Aug. 13 and possibly for the rest of the year.

The economy's struggles pose a challenge for President Bush, who has stressed that the economy's fundamentals are sound. He has expressed confidence that economy will overcome current difficulties, including a stock market slide and eroding consumer and investor confidence from a wave of accounting scandals.

The slowdown in second-quarter GDP partly reflected more cautious consumers, whose spending accounts for two-thirds of all economic activity in the United States.

Consumer spending in the second quarter rose at a rate of 1.9 percent, the slowest pace since the third quarter of 2001, and down from a 3.1 percent growth rate in the first quarter of this year.

Consumers spent more on durable goods, such as cars and appliances, in the second quarter compared with the previous quarter, but trimmed spending on nondurables such as food and clothes.

A pullback in spending by state and local governments and less brisk spending by the federal government on national defense also contributed to slower second-quarter growth.

Investment by business, however, showed some improvements in the second quarter. Companies cut back spending on new plants and other buildings at a rate of 14 percent, slightly less than the 14.2 percent rate of decline in the previous quarter.

However, investment in new equipment and software rose for the first time in roughly two years, growing at a rate of 2.9 percent in the second quarter and raising hopes of a sustained capital spending turnaround.

Businesses rebuilding lean inventories added 1.15 percentage points to second-quarter GDP. That was less of a boost than the 2.60 percentage points added to first-quarter economic growth.

Another factor contributing to the second-quarter slowdown was the U.S. trade deficit, which subtracted 1.77 percentage points from GDP, compared with a 0.75-percentage-point reduction to first quarter GDP

Commentary:
O'Neil was telling us just a few weeks ago we didn't have a recession, so did many conservative talk show hosts. Instead of listening to the experts (the NBER) they made things up. Will we go back into recession? It's a tough one to call right now, but probably not. If however, Bush restarts his endless "terrorists warnings" another recession is inevitable.

WASHINGTON (Reuters) - Seeking to defuse a diplomatic row sparked by embattled U.S. Treasury Secretary Paul O'Neill, the White House said on Tuesday it would support international aid for Brazil and expressed "great confidence" in its economic team.

The Brazilian government was outraged by O'Neill's suggestion over the weekend that international aid for Brazil and other Latin American countries might end up in Swiss bank accounts. Asked if he would offer any assistance during his upcoming visit to the region, O'Neill said, "No, no, no."

While White House spokesman Ari Fleischer stopped short of issuing a formal retraction, as demanded by Brazilian President Fernando Henrique Cardoso, he made clear that the comments did not reflect the position of President Bush or his administration.

"Brazil is an important friend and ally, and this president and this administration have great confidence in Brazil and its economic team," said Fleischer, seeking to mend fences with a key ally and Latin America's largest economy.

"Brazil has demonstrated its ability to use international monetary assistance effectively, and they have sound economic policies that are in place," he said, adding: "The United States will continue to support international financial assistance to Brazil.

"That's the president's position and that's the position of the administration, including the secretary, of course," Fleischer said.

White House spokeswoman Claire Buchan said U.S. officials relayed that message directly to their Brazilian counterparts.

FRONT-PAGE NEWS

O'Neill's words -- front-page news in Brazil and Argentina -- contributed to a pummeling of Brazilian financial markets as investors, anxious for signs of fresh international aid, fretted that cash would not be forthcoming.

Brazil's currency plunged on Monday by 5.3 percent to 3.185 per U.S. dollar, its lowest close since the currency went into circulation in 1994.

Brazilian markets have been beset by investor angst over the outcome of a presidential election in October for its economy and its delicately balanced public debt load of $250 billion.

Brazil has never been accused by the International Monetary Fund of siphoning off their aid illegally, and its central bank announced on Monday that it was sending a team to Washington to negotiate a new deal with the lending agency.

O'Neill is scheduled to travel to Brazil, Argentina and Uruguay next week.

His comments were the latest in a series of public gaffes for O'Neill.

He recently came under fire for touring Central Asia in mid-July as the markets at home tumbled.

One Florida newspaper called for his resignation while others have questioned whether the Bush administration's economic team, for which O'Neill is the chief spokesman, have a clear plan to keep the economy on track.

O'Neill defended his actions and travel abroad, saying there was little he could say to change market fortunes and that it should be possible to stay in touch from anywhere in the world.

Asked whether Bush still had confidence in O'Neill, Fleischer said: "Yes he does. Of course he does."

Commentary:
Is this why we need Propaganda Office? The world understands this administration all too well and all the propaganda in the world won't save them from themselves.

-WASHINGTON (Reuters) - Seeking to reverse anti-Americanism in the Islamic world and elsewhere, the White House is developing an Office of Global Communications to try to improve America's shaky overseas image, the Bush administration said on Tuesday.

U.S. officials cited the Middle East and Europe as two key areas where the United States has an image problem. Muslims feel the United States is pro-Israel and cannot be trusted, and many Europeans are appalled at what they see as a go-it-alone foreign policy.

The new office, which will coordinate various U.S. agencies at the State Department and elsewhere, will seek to explain "what America is all about and why America does what it does," said White House spokesman Ari Fleischer.

The office, to be started this fall, replaces and expands the information operation launched by the White House with the U.S.-led war on terrorism. It is the brainchild of Karen Hughes, a longtime aide to President Bush.

It comes after a recognition that America's image problem is not isolated to the Middle East. A public diplomacy task force run by the Council on Foreign Relations think tank studied the problem and told the White House that negative attitudes about U.S. policy are also pervasive in front-line states in the war on terrorism and among close U.S. allies.

"Around the world, from Western Europe to the Far East, many see the United States as arrogant, hypocritical, self-absorbed, self-indulgent, and contemptuous of others," the council said in a report released on Tuesday.

Shibley Telhami, who helped author the report, said the opening of an Office of Global Communications should help.

CANNOT IGNORE PUBLIC OPINION

"Although the U.S. remains very powerful globally, it's very clear that the United States can no longer simply ignore public opinion in an era of globalization," Telhami said.

He cited two comments from the president that inflamed Muslim opinion -- his use of the word "crusade" to describe the campaign against al Qaeda, and his characterization of Israeli Prime Minister Ariel Sharon as a "man of peace" in the face of Palestinian bloodshed.

The White House said the new office was not a dressing up of the short-lived "strategic information" office the Pentagon closed in February after news reports it might be used to spread disinformation abroad to bolster U.S. defense policy.

A senior White House official involved in the planning of the new office said a key focus would be promoting what Bush called his "non-negotiable demands of human dignity."

Those are limits on the power of state, the rule of law and equal justice, respect for women, freedom of speech, religious tolerance, and the right to private property.

"They are the strategic framework of this office," the official said. "We'll have events that reflect those values."

The United States has been stung by a wave of anti-Americanism in the Islamic world and elsewhere in reaction to the U.S. military campaign after the Sept. 11 attacks and a belief America is pro-Israel at the expense of Palestinians.

Illinois Republican Rep. Henry J. Hyde, chairman of the House of Representatives International Relations Committee, said the Council on Foreign Relations report underscored an urgent need to strengthen U.S. outreach efforts. He welcomed the new White House office.

"The poisonous image of the United States that is deliberately propagated around the world is more than a mere irritation. It has a direct and negative impact on American interests," he said.

The Office of Global Communications is to be operated out of the White House in concert with the State Department's Office of Public Diplomacy.

The Coalition Information Center, an operation with branches in London and Islamabad, was set up by the White House on Oct. 26 to meet concerns that the United States and its anti-terror allies were losing the information battle with Afghanistan's former Taliban leadership.

Part of the U.S. effort to date was to open Radio Sawa for broadcast to the Arab world. It offers rock and pop music and information designed to improve America's image.

Commentary:
So the reasons America is hated isn't because GWB is president and has a knack for saying or doing really stupid things, but it's because we have an image problem. One would think someone in this administration would understand you can't spin respect, you have to earn it.

A few short years ago (it seems like decades) the US was respected because we were the worlds economic superpower. Now we need a Propaganda Office to make them understand Bush is really a nice guy. What do you think?

WASHINGTON (Reuters) - Hours after President Bush signed a law on Tuesday to combat corporate crime, key lawmakers said they were concerned he may be trying to roll back provisions that protect company whistle-blowers who come forward with allegations of fraud.

"This is disturbing," said Sen. Charles Grassley, an Iowa Republican. "Whistle-blowers need full protection. Otherwise, they won't come forward. Problems won't see the light of day."

The new law, which Bush signed with much fanfare at a White House ceremony, includes protections for employees of publicly traded companies who take "lawful acts" to assist federal regulators, law enforcement agencies, as well as "any member of Congress or any committee of Congress."

Should a company retaliate against a whistle-blower, the law would allow the person to file a complaint with the Department of Labor and later bring the matter to federal court. The whistle-blower could be reinstated, and receive back pay as well as compensatory damages.

Lawmakers credited whistle-blowers with helping bring to light accounting abuses at Enron Corp. and other major corporations, and said the changes approved by Congress and signed by Bush should encourage more corporate insiders to come forward and cooperate with investigators.

But in a statement by Bush outlining the administration's interpretation of the new law, the protections would apply to whistle-blowers who provide information to congressional committees conducting investigations, but not necessarily individual lawmakers. "An individual member of Congress does not conduct an investigation," White House spokeswoman Claire Buchan explained.

Key lawmakers said this interpretation could amount to a rollback of what Congress intended to protect whistle-blowers from retaliation.

"I would hope the administration is not beginning to water down the law within hours of the president's signing it," said Senate Judiciary Committee Chairman Patrick Leahy, a Vermont Democrat.

FULL PROTECTION

"Our intention is to protect any whistle-blower who exposes wrongdoing to an individual member of Congress, a congressional committee, a media outlet, or any other public entity," said Grassley, who co-authored the provisions with Leahy.

Buchan played down the issue, saying Bush was "fully committed to this legislation," and that the "technical changes" would not weaken protections for whistle-blowers.

As drafted by Leahy and Grassley, Senate aides said the protections would apply to whistle-blowers whether or not there is an active investigation under way by a committee of Congress. Likewise, they said Congress intended the protections to apply to whistle-blowers who provide information to individual lawmakers, and not just committees in the midst of an investigation.

"If that is how the administration intends to enforce the new whistle-blower law, that would be a roll back of what Congress intended. The language is clear and the language is plain, that Congress intends full protection of whistle-blowers whether or not an active investigation is underway at the time," said David Carle, Leahy's spokesman.

Modeled after the protections granted airline employees in 2000, the new law permits corporate whistle-blowers to seek federal court relief if the Department of Labor does not resolve their case within 180 days.

Supporters said it was the first time federal whistle-blower protections would be available to employees of publicly traded companies.

"Without protecting the whistle-blowers, corporate reform efforts would have failed," said Kris Kolesnik, executive director of the National Whistleblower Center.

Commentary:
Here we have it. Bush claims he has the power to rewrite another law passed by congress. If he gets away with this one too, then our system of government is finished. We might as well have a king or dictator.

On this day, Mr. Bush becomes eligible for articles of  impeachment and removal from office for violating the laws of the United States.

WASHINGTON (Reuters) - A visibly angry Defense Secretary Donald Rumsfeld on Monday called on Pentagon workers to help catch and jail a defense official who leaked an alleged U.S. plan to invade Iraq to The New York Times.

"It's inexcusable. And they ought to be in jail," Rumsfeld told reporters at a news briefing when asked about a recent report in the newspaper detailing a contingency proposal for a possible major American ground and air invasion of Iraq.

Rumsfeld said he and his top advisers had never seen the plan in question, but confirmed that he had ordered a formal investigation -- which will be handled by an Air Force team -- into who provided any top secret information to the newspaper.

"I am pleased I did. And I will say one more thing: I hope that if there is anyone in the Department of Defense who knows who did that, that they will give someone in a position of responsibility that information. Because they have every bit as big an obligation to do that as they do not to release it in the first place," he said.

Pressed on continuing reports that the United States was drawing up military plans for a possible attempt to overthrow Iraqi President Saddam Hussein, whom Washington accuses of developing nuclear, chemical and biological weapons, Rumsfeld refused to provide any details.

But the secretary, raising his voice in anger, stressed that leaks of any war plans any time could put U.S. troops in danger and were a violation of federal law.

"I think that anyone who has a position where they touch a war plan has an obligation to not leak it to the press or anybody else," said the secretary, who has repeatedly lashed out at national security leaks since he took the top Pentagon job last year for the second time in 25 years.

"Because it (the leak) kills people. People's lives will be lost. If people start treating war plans like they are paper airplanes and they can fly them around this building and throw them at anybody who wants them, I think it is outrageous.

Rumsfeld, 70, warned the Pentagon's top brass in a memorandum released last week that media leaks were helping al Qaeda operatives learn more about the U.S. war on terrorism and putting American lives at risk.

Rumsfeld's note was addressed to a long roster of top officials, including Deputy Defense Secretary Paul Wolfowitz, Joint Chiefs of Staff Chairman Air Force Gen. Richard Myers and the secretaries of the various military departments.

"Your leadership is needed to help stop leaks," he wrote. "Please meet with your staff to discuss the seriousness of the damaging lack of professionalism we continue to see on a daily basis."<.p>

Commentary:
The discussion of war plans with Iraq have been going on for months in the press with the US military clearly opposing Bush. Everyone from the Joint Chiefs down are opposed to an attack and are saying so in public, so it's not hard to figure out where/why these leaks are coming.

Bush lost control of the military in May of 2002 when the military decided not go to war with Iraq.

I like the line where Rummy is upset about leaks putting soldiers in danger. This is silly. It'll take months for the US to prepare for war with Iraq and the entire world will be reporting it long before it happens. The element of surprise isn't something the Bush clan are known for. They use the press to advertise their invasions so they can boost their approval ratings. Besides, Bush himself has been talking about war with Iraq for months also. Can the guy ever shut up? Hasn't Bush already put soldiers lives in harms way with his endless jabbering about overthrowing Saddam?

Senior American military leaders are believed to have turned sharply against any idea of invading Iraq to overthrow Saddam Hussein, and have started to gain the upper hand in persuading the White House that such a mission should be postponed, preferably indefinitely. The joint chiefs of staff have assured the White House their forces could successfully invade Iraq - or anywhere else - if instructed. But they have warned that such an invasion would be extremely fraught, given the resources depleted by the war in Afghanistan.

One of the factors most alarming the generals is the possibility that their troops could be drawn into street fighting in Baghdad, without support from the local population, leading to heavy US casualties. This ties in with longstanding fears that Saddam might use such a moment to unleash biological or chemical weapons.

Their instinctive caution has been strengthened by Operation Prominent Hammer, a highly secret war game recently played by senior officials, details of which have begun to leak out. It revealed that shortages of equipment could seriously hamper the operation and endanger the lives of Americans and Iraqi civilians.

The air force is the most alarmed of the services, according to analysts, because they are short of planes, trained pilots and munitions. A third of their refueling planes are reported to be under repair.

But there are also concerns about the ability of special forces, currently being used in the Philippines and Yemen as well as Afghanistan, to operate successfully in Iraq at the same time, especially bearing in mind the intelligence services' need to concentrate on homeland security.

It is understood that the country's senior generals - the heads of the army, navy, air forces and marines - agreed with the chairman of the joint chiefs, Richard Myers, and his deputy, Peter Pace, in their assessment.

General Tommy Franks who, as head of the army's central command, would be in charge of any invasion of Iraq, has told the president that an invasion to overthrow Saddam would require at least 200,000 troops, a number that would seriously stretch even the American military, given the near impossibility of mounting an international coalition.

At a Pentagon briefing yesterday, General Pace sounded what was, by military standards, an uncertain trumpet.

Turning to his boss, the defence secretary Donald Rumsfeld, he assured him: "Your military is ready today to execute whatever mission the civilian leadership of this country gives us to do." But he added: "The fact of the matter is, the more time you have to prepare for that kind of mission, whatever it is, the more elegant the solution could be."

The head of the air force, General John Jumper, was blunter. "We never sized ourselves to have to do high force-protection levels at home and overseas at the same time. We're stretched very thin in security forces," he was quoted as saying by the New York Times.

The military assessment backs up the messages pouring into the White House from elsewhere. The dangerous situation involving India and Pakistan, as well as Israel and Palestine, unnerves diplomats. World opinion ranges from the wary - in Britain - to the vehemently opposed.

Even Turkey, regarded by the Iraq-hawks in Washington as a crucial and loyal ally on this issue, is said by government sources there to be "very nervous indeed" about the idea, mainly because of fears of the political instability that would result. Officials are also getting bleak assessments about the quality of the Iraqi opposition to Saddam Hussein, and about the likely reaction of the Iraqi people should the Americans invade.

"The Iraqi people hate Saddam," said Judith Kipper, the Iraq expert at the Centre for Strategic and International Studies, "but they blame the US for their problems. Nobody likes foreign troops marching through their country, especially the Iraqis."

The cost of American military ambitions is mounting. And, with the mid-term elections only five months away, analysts believe an invasion is impossible before 2003, and that the White House is already starting to look for a way of reconciling its declared policy of "regime change" in Iraq with the need to back away from what looks increasingly like an untenable position.

Some military sources believe that, even though special forces are now thinly stretched, the US will switch to covert operations to try to loosen Saddam's grip on power.

This ties in with what President Bush said after his meeting with the German chancellor, Gerhard Schröder, in Berlin on Thursday: "I told the chancellor that I have no war plans on my desk, which is the truth, and that we've got to use all means at our disposal to deal with Saddam Hussein." The president added that there would be full consultation with allies and that any action would be handled in a "respectful" way.

It remains possible that the US will feel its hand being forced if the Iraqis, sensing American weakness, emerge from their recent quiescence. The Pentagon says Saddam's air defence forces have attacked American and British planes three times in the last three weeks, as they patrolled the southern no-fly zone.

General Pace played this down yesterday: "It's consistent with what's been going on for the past several years," he said.

Commentary:
This article is dated May 25. Clearly Bush began loosing control of foreign policy months ago. I've included this articled and the next one on Iraq as example of the Bush people losing control of the spin cycle, the military, and foreign policy. Besides, these two articles are choice to counter the Rumsfeld statements on plans for an Iraqi invasion. (previous article).

The uniformed leaders of the U.S. military believe they have persuaded the Pentagon's civilian leadership to put off an invasion of Iraq until next year at the earliest and perhaps not to do it at all, according to senior Pentagon officials.

The Joint Chiefs of Staff have waged a determined behind-the-scenes campaign to persuade the Bush administration to reconsider an aggressive posture toward Iraq in which war was regarded as all but inevitable. This included a secret briefing at the White House earlier this month for President Bush by Army Gen. Tommy R. Franks, who as head of the Central Command would oversee any U.S. military campaign against Iraq.

During the meeting, Franks told the president that invading Iraq to oust Saddam Hussein would require at least 200,000 troops, far more than some other military experts have calculated. This was in line with views of the Joint Chiefs of Staff, who have repeatedly emphasized the lengthy buildup that would be required, concerns about Hussein's possible use of biological and chemical weapons and the possible casualties, officials said.

The Bush administration still appears dedicated to the goal of removing the Iraqi leader from power, but partly in response to the military's advice, it is focusing more on undermining him through covert intelligence operations, two officials added. "There are many ways in which that [regime change] could come about, only one of which is a military campaign in Iraq," one official familiar with Defense Secretary Donald H. Rumsfeld's thinking said yesterday.

Any final decision would be the president's. Appearing in Berlin yesterday, Bush offered more tough rhetoric about Iraq and other countries he has labeled part of an "axis of evil." But at a news conference in Berlin, he also said that he had told German Chancellor Gerhard Schroeder: "I have no war plans on my desk, which is the truth, and that we've got to use all means at our disposal to deal with Saddam Hussein."

In addition to skepticism from within his own military, Bush faces concern in Europe about the wisdom of expanding the war to Iraq. Schroeder embraced the effort to pressure Hussein to accept weapons inspectors but would not be drawn into discussion of a military attack.

The debate inside the Pentagon is only part of a larger discussion of Iraq that also involves the White House, the State Department and the CIA, among others. Those deliberations go well beyond discussing the merits of mounting a military operation and lately have focused on the role of international diplomacy and what use to make of unwieldy Iraqi opposition groups abroad.

The disclosure of the efforts by the uniformed leadership to slow the drive toward war suggests that a military confrontation with Iraq may be further away than has been suggested by many administration officials. Some of the chiefs' concerns were first reported in yesterday's editions of USA Today.

However, the situation is still fluid, and Pentagon insiders say intense pressure is being brought by advocates of military action within the administration to get the chiefs on their side.

In a series of meetings this spring, the six members of the Joint Chiefs -- the chairman, Air Force Gen. Richard B. Myers; the vice chairman, Marine Gen. Peter Pace; and the chiefs of the Army, Navy, Air Force and Marine Corps -- hammered out a position that emphasizes the difficulties of any Iraq campaign while also quietly questioning the wisdom of a military confrontation with Hussein.

"I think all the chiefs stood shoulder-to-shoulder on this," said one officer tracking the debate, which has been intense at times. In one of the most emphatic summaries of the direction of the debate, one top general said the "Iraq hysteria" he detected last winter in some senior Bush administration officials has been diffused.

But others familiar with the discussions held by the Joint Chiefs in the secure Pentagon facility known as "the Tank" say that it is premature for the uniformed military to declare victory. They note that Rumsfeld has so far mostly stayed out of the debate, leaving that to Paul D. Wolfowitz, the deputy defense secretary, and Douglas J. Feith, the Pentagon's top policy official, who are seen inside the Pentagon as the Defense Department's leading hawks on Iraq.

In their Tank sessions, the chiefs focused on two specific concerns about the conduct of any offensive. One was that Hussein, if faced with losing power and likely being killed, would no longer feel the constraints that during the Persian Gulf War apparently kept him from using his stores of chemical and biological weapons. The other was the danger of becoming bogged down in bloody block-by-block urban warfare in Baghdad that could kill thousands of U.S. troops and Iraqi civilians.

Franks, who attended a Tank session before seeing the president, has expressed similar concerns, said one officer. "Tommy's issue is, a lot of things have to be in place, and these things are not all military things," he recounted.

In addition to those tactical concerns, some of the chiefs also expressed misgivings about the wisdom of dislodging an aging, weakened Hussein who, by some accounts, has behaved better than usual in recent months. Their worry is that there is no evidence that there is a clear successor who is any better, and that there are significant risks that Iraq may wind up with a more hostile, activist regime.

As the discussions of Iraq policy were culminating earlier this month, Franks briefed the Joint Chiefs and then the president on the outline of the plan he would use if ordered to attack. His plan, which was the only one presented, called for a substantial combat force that was close to half the 541,000 troops deployed for the 1991 Gulf War, which the military refers to as Operation Desert Storm. Some at the Pentagon promptly labeled the Franks plan Desert Storm Lite.

When asked at a news conference in Tampa earlier this week about what military force be needed to invade Iraq, Franks answered, "That's a great question and one for which I don't have an answer because my boss has not yet asked me to put together a plan to do that."

Franks's narrow response relied on the U.S. military definition of "plan" as a detailed, step-by-step blueprint for military operations. What Franks discussed with the Joint Chiefs and the president was a simpler outline for an attack that the military terms a "concept of operations."

By emphasizing the large force that he believes would be needed, Franks's briefings also seemed to rule out an alternate plan that some civilians in the Bush administration had advocated. Dubbed "the Downing plan," for retired Army Gen. Wayne A. Downing, who suggested it four years ago, this approach calls for conquering Iraq with combination of airstrikes and Special Operations attacks in coordination with indigenous fighters.

That option, which would have required a fraction of the U.S. troops Franks indicated he would need, was not presented as a briefing either to the Joint Chiefs or to the president, officials said. Downing serves as the White House's coordinator for counterterrorism efforts.

This spring, "the civilian leadership thought they could do this à la Afghanistan, with Special Forces," said a senior officer. "I think they've been dissuaded of that."

The point of the Franks briefings, this general said, was that, "We don't need as much as Desert Storm, but we need a large competent ground force, in order to shape the other force. What forces the other guy to mass is the presence of another ground force. Then you can deal with that force with fires and air power." In this view, those who say the model of the Afghan war can be transferred to Iraq fail to take into account that the Northern Alliance in Afghanistan had thousands of troops ready to fight, some of them heavily armed, whereas there is no equivalent indigenous force in Iraq.

Despite the confidence expressed by some officers that an attack on Iraq has been postponed and may never occur, some on the other side of the argument warn that it is far from concluded. There are other top officers in the U.S. military who disagree with the chiefs' assessment. Their worries, said one general, "smack to me of risk aversion." He added: "The fact is they [the Iraqi armed forces] are one-third the size they used to be. Their air force isn't there."

Advocates of an Iraqi invasion note that Bush has not backed away from his tough State of the Union rhetoric. "They [the military leaders] have been able to defer it, so they've won this round of the bureaucratic battle," said one Republican foreign policy expert who is hawkish on Iraq. But, he continued, "I don't believe you're going to see the president sit back and say, 'Sure, containment's the way to go, keeping him in the box is working.' "

Commentary:
This is ripe. The civilian leadership of the military (ie:the president) is forced to backdown on his plan to attack Iraq by military leaders.

WASHINGTON (Reuters) - The Bush administration on Monday scrapped its $34 million payment for 2002 to the U.N. Population Fund, saying it indirectly helped China force women to have abortions under Beijing's one-child policy.

The decision to invoke a loosely-worded U.S. law barring money to groups that help others who manage coercive abortion programs appeared to contradict a Sate Department report recommending the cash should be paid out.

It satisfied a conservative anti-abortion lobby ahead of congressional elections in November, infuriated Democrats and disappointed U.N. Secretary-General Kofi Annan.

Secretary of State Colin Powell diverted the money to other family planning and reproductive health programs conducted by the U.S. government, Powell's spokesman Richard Boucher said.

Boucher told a news briefing that the U.N. Population Fund -- known by the acronym UNFPA -- had funded purchases of computers and vehicles in China which "are used to send notices to people about not having further children."

He added: "In the context of the PRC (People's Republic of China), they are supplying equipment to the very agencies that employ coercive practices and that amounts to support or participation in the management of the program."

A spokesman for the Chinese embassy denied his government forced women to have abortions, saying it only encouraged people to have one child. However he said he could not rule out individual cases of local officials breaking the rules.

"We hope that this decision will be changed, because it's not good for the U.N. cooperation, and it's also not true to facts," the spokesman, Xie Feng, told a news conference.

The U.N. agency says it has made progress toward more voluntary family planning practices in the 32 Chinese counties where it works and that it does not spend U.S. cash in China.

"At no time have we given the Chinese government a blank check nor provided any financial support for coercion," UNFPA spokeswoman Sarah Craven said.

Her agency has noted that China has made forcing women to have abortions illegal, but criticized Beijing's policy of taxing families who have more than one child as coercive.

A May 29 report by a three-person team sent by Powell to China said "not more than $34 million" should go to the U.N. agency. It found "no evidence" the agency had knowingly supported or taken part in management of a program of coercive abortion or involuntary sterilization in China.

It said China had "coercive elements in law and in practice," but the policy had been relaxed where UNFPA worked.

STUNNED AND APPALLED

Democrats and supporters of family planning lashed out at the decision, including Population Action International, who said they were "stunned and appalled."

"Apparently, the White House has concluded that the support of right-wing ideologues is more important than the health and safety of women around the world," Democratic National Committee Chairman Terry McAuliffe said in a statement.

He said the decision was a "devastating blow" to millions relying on services he said helped reduce unintended pregnancies, abortions, maternal deaths, promoted safe pregnancy and delivery and helped prevent disease, improve nutrition and distribute emergency aid.

The agency that benefits from the move, USAID, works in a string of countries but has no reproductive healthcare planning programs in China -- or some other countries where the U.N. agency works, for example Iran.

The administration had approved the funding but then placed it under review because of allegations about China. None of the earmarked money, already approved by Congress, has been paid.

Anticipating the decision, chief U.N. spokesman Fred Eckhard made clear Annan's view, quoting him as saying: "I think UNFPA does very essential work, and we have made it clear that it does not go around encouraging abortions."

"Rather, it gives good advice to women on reproductive health and does good work around the world including in China," he quoted Annan as saying.

Annan said the U.N. would encourage other international donors to make up the shortfall, "because the work we are doing is absolutely essential, and we do not want women, particularly poor women around the world, to suffer."

Commentary:
The State Department has no problem with this money and Bush himself provided for it in his budget. Now, out of nowhere, it's about abortion. Bush feels he has the right to rewrite last year's budget without the consent of Congress and he uses the buzz word abortion to justify breaking the law. Yes conservatives, the budget once signed by the president becomes US Law.

On this day, Mr. Bush becomes eligible for articles of  impeachment and removal from office for violating the laws of the United States.

WASHINGTON (Reuters) - Government records show that President Bush while in private business had confidential information in 1990 about financial problems facing a Texas oil company just months before he sold stock in the firm, The Washington Post reported on Sunday.

In recent weeks, Bush has been confronted with renewed questions from reporters about circumstances surrounding his sale of Harken Energy Corp. stock in 1990. Bush was an outside director of Harken at the time of the sale.

He has repeatedly responded that a Securities and Exchange Commission investigation of the transaction cleared him of any wrongdoing.

According to the Post report, documents released under the Freedom of Information Act show that four months before selling most of his Harken stock, Bush and other board members received information from management warning the company would "continue to be severely limited in our activities due to cash constraints."

The information was conveyed in a letter to Bush and his colleagues, which also said a failed deal involving a Harken subsidiary "left the company with little cash flow flexibility," the newspaper reported.

The documents were released on Friday by the Center for Public Integrity, which calls itself a nonpartisan organization that probes government and ethics issues.

Bush has brushed off recent suggestions that he ask the SEC to release all documents related to its 1991 investigation of the stock sale. "The key document said there is no case," Bush said.

The White House has also been fending off questions surrounding Vice President Dick Cheney's actions while serving as chief executive of Halliburton Co., a Texas-based oil services company.

The SEC is investigating Halliburton's procedures in accounting for cost overruns. Bush has told reporters he is confident the SEC would find Cheney did nothing wrong.

Interest in the business dealings of Bush and Cheney has grown as a wave of accounting scandals has enveloped U.S. companies in recent months, contributing to a declining U.S. stock market and stoking fears Wall Street's setbacks will hobble an economy struggling to grow.

Bush, in his weekly radio address on Saturday, called on Congress to enact legislation to increase penalties for corporate fraud and to strengthen oversight of the accounting industry. Doing so, he said, would "bring a new era of integrity to American business."

Commentary:
The entire Bush defense against insider trading is based on the assumption that he didn't know the company was going to lose money. That assumption is no longer valid and we know now he lied. Insider trading is a crime and Bush should be removed from office.

On this day, Mr. Bush becomes eligible for articles of  impeachment and removal from office for violating the laws of the United States.

Share prices worldwide suffered another battering on Friday. Investors' confidence was shaken by reports of a criminal investigation into giant US drug firm Johnson & Johnson and profits fears at hi-tech and telecoms firms in Europe and the US.

The US blue chip Dow Jones industrial average index lost 390 points, or 4.6%, to close at 8,019.26 points, within a whisker of dropping below 8,000 for the first time since October 1998.

"Part of the fear is that there's no place left to hide. People are selling everything that hasn't gone down yet," said Will Muggia, a New York-based fund manager.

Almost two and a half billion shares changed hands on the New York Stock Exchange, its second busiest day ever.

Across the US economy, big name firms saw their stocks hammered: computer maker Sun Microsystems was down 27%; soft-drinks maker PepsiCo down 10%; Johnson & Johnson down 16%.

Sectors as diverse as consumer goods, technology and oil had all lost between 6% to 10% of their value during the week, analysts said.

Also in New York, the tech-heavy NASDAQ index dropped 2.8% on Friday to 1,319, while the broader Standard & Poor's 500 index slid 3.9% to 846.49.

Global contagion

Investors have seen about $1.5 trillion wiped from the value of US stocks in a little over a fortnight since the 4 July national holiday, according to the Wilshire 5000 Total Market Index .

In Europe, London's FTSE index of leading UK shares closed down 199 points, or 4.6%, at 4098.3.

The latest worldwide sell-off began late on Thursday as investors registered disappointment with the picture of the US economy emerging from a slew of profits reports by giant companies.

On Friday, gloom spread first to Asia, as markets round the Pacific were pounded in the wake of Wall Street's woes, then to Europe.

More bad corporate news hit the already fragile confidence of investors.

Swedish mobile phone maker Ericsson announced it had lost more money than expected, and German technology group Epcos warned of losses.

"It is Friday, we had a very poor day yesterday and Europe is taking a battering today - it is again on concerns that companies are not earning as much as they thought," said Tom Hougaard, a trader at City Index.

Dollar woes

Another blow came when the US drug firm Johnson & Johnson said it was under criminal investigation over allegations of record-keeping irregularities.

And the continued uncertainty about US economic prospects was bad for the beleaguered dollar as well, pushing the yen-US dollar rate to less than 115.

The same effect was visible in Europe's currency markets, and the euro further cemented its return with a rise to more than $1.02.

With so much of the world's attention focused on the US economy, the global retreat came as little surprise given the dismal showing of US markets on Thursday night.

Down, up, down

Gains on Wall Street on Wednesday after seven straight falls, together with a modest recovery in share prices in Europe all week, had triggered hopes that markets were taking a breather from their relentless slide.

But after a succession of corporate scare stories and the evaporation yet again of hopes that US company profits would resume their climb, the gains were brittle.