George W. Bush ends the year with a genuine nuclear crisis on his hands. He has been assiduously trying to foment one with Iraq, dropping bombs on the country and expletives on its leader. But North Korea, which is not just suspected of working on the bomb but of having at least two, has muscled Saddam Hussein off the front pages and made our crusade against Baghdad seem crass: We're starting a war not just for oil or for Ariel Sharon but because we can win it.

North Korea is a different story. It has a million men under arms. It has a built-in hostage situation at hand in the presence of 37,000 U.S. soldiers who guard South Korea. Kim Jong Il, the Communist leader of North Korea, almost makes Saddam Hussein look like Rotarian of the Year. While Hussein is welcoming U.N. arms inspectors, Kim is throwing them out. He has dismantled the international surveillance equipment installed by a treaty in 1994; he has announced he is going to make all the weapons-grade plutonium he wants. He is, in short, behaving like the radioactive lunatic he is.

And what is George W. Bush, defender of the free world, scourge of terrorists, doing about all this? As of this moment, nothing.

As far as we can see, he seems to feel that not speaking to the North Koreans is the solution. "Isolation" and "marginalization" will bring these rogues to heel? A leader who will starve his own people to feed his military machine, whose father invaded his neighbor, who shows no acquaintance with reality, will be cowed by a snub from Washington?

The president has asked North Korea's neighbors to warn Kim Jong Il of the consequences of his horrendous behavior. Up to now, the Japanese have reported themselves as scared to death. Russia and China seem to have a million other things to do. The incoming chairman of the Senate Foreign Relations Committee, Richard Lugar (R-Ind.), says we should "talk and talk and talk" to the outlaws. His is a lone voice.

Defense Secretary Donald Rumsfeld exhibited a reflex swagger response. The North Koreans better watch out. They mustn't think for a minute we couldn't wage war against them. Just in time for Christmas, he brought our war list up to three -- the one against al Qaeda, which we seem to have forgotten, the one brewing in Iraq -- and now Pyongyang?

We should perhaps remember that President Bush has never liked talking to Koreans. His first overseas visitor was the estimable Kim Dae Jung, whom Bush snubbed.

Bush, as he was eager to demonstrate, was not a fan. Kim's sin? He was instituting a sunshine policy with the North, ending a half-century of estrangement. Bush, who looked upon North Korea as the most potent argument for his obsession to build a national missile defense, saw Kim, a Nobel Peace Prize winner, as nothing but trouble. He sent him home humiliated and empty-handed.

Kim's successor, Roh Moo Hyun, may be even worse. He is a passionate advocate of the sunshine policy, and he seeks "a more mature relationship" with the United States -- bad news for Bush.

This ugly international set-to occurs just when the president has scored his most dazzling domestic political triumph. The hullabaloo over Trent Lott, the prospective leader of the Senate, was caused by Lott's letting the cat out of the bag on the subject of the Republicans' covert Southern strategy. Lott told a birthday party for Strom Thurmond what everyone has always known: The strategy was based on race. Republicans were mortified.

Then Bush apprentice Karl Rove stepped in and saved the day. Bush and Rove engineered Lott's resignation and the substitution of glamorous Bill Frist of Tennessee, literally a medicine man, who spends his off-time flying his own plane to Africa to minister to AIDS patients. Bush issued a sharp criticism of Lott's remarks and nourished the Frist boomlet into a surge, all the while insisting through his spokesman that he did not think Lott should resign.

Republicans are delighted. In an assembly largely given over to small minds and big egos, Frist's aura as a healer and his proclivity for rendering first aid on Capitol Hill make him a romantic figure. It's like getting Lord Byron on your condo board.

The finesse of the operation was universally applauded. The qualities displayed -- the regard for the other guy's sensibilities, the willingness to forgo credit, are ones that can be successful in foreign policy negotiations. Bush could never send Jimmy Carter or Bill Clinton to represent him in the deadly and proliferating tension in North Korea -- he blames them for coddling Pyongyang. But he might send Karl Rove. He knows how the game is played.

Commentary:
Excellent!

LOS ANGELES -- David Altman, the chief medical officer of the largest trauma center in this sprawling county, scoffed when he first heard the idea. Raise property taxes to stave off the financial collapse of local public health care? Fat chance that will ever pass.

Or so he thought.

In their desperation to keep hospitals open, voters herelast month did just that, approving new property taxes for the first time in a generation. The county hasn't had a property tax referendum on the ballot since the statewide, landmark anti-tax Proposition 13 in 1978, but this year's passed overwhelmingly, with 73 percent of the vote.

At the time, the $170 million the new tax is projected to raise annually was hailed as a godsend for the county's ailing health care system. And it still might be. But already, there is more bad news.

To close a budget deficit expected to reach $35 billion, Gov. Gray Davis (D) is proposing to restrict benefits and eligibility in the state's Medicaid program. That move could affect more than 300,000 people and inundate hospitals like the one Altman supervises near downtown Los Angeles with many more patients too poor to pay for treatment they badly need.

"The system keeps getting tremendously strained," he said. "It is extraordinarily fragile right now."

Some officials are calling the last-resort decision Los Angeles County made to rush a property tax increase onto its ballot a harbinger of the predicament soon to confront states and counties nationwide.

The measure's success, they add, may tell another important story: that health care is returning to the top of voter concerns.

The struggles of Los Angeles County, where more than 2.5 million residents have no medical insurance, are one sign among many across the country of how growing economic hardships in states are creating new crises in health care.

Last month, the nation's governors said that states are facing their worst financial problems since World War II. Many have been able to delay difficult budget choices over the past year either by freezing spending or raiding reserve funds. But now, with those options exhausted, they face an unwelcome reckoning: raise taxes or curtail aid to millions of indigent patients.

Many states say health care costs are their fastest-rising expense, but fear that cutting medical services when demand for aid is increasing and public health care networks are under growing financial pressure will only make matters worse. A national group of public hospitals says that half of its members are now operating in debt, up from one-third a year ago.

That voters are worried is evident in Arizona, where a ballot measure to double the state tax on cigarettes to $1.18 a pack and to use the $150 million that step is projected to raise strictly for local trauma centers in dire financial straits passed 2 to 1 last month.

"The situation has changed in the last year or so," said Chris Burch, executive director of the National Association of Public Hospitals and Health Systems. "States are in very precarious financial situations. People are beginning to feel a lot more vulnerability about health care."

With public health care consuming so much of state budgets, officials around the country are looking for cuts as they try to balance their books.

In Washington state, Gov. Gary Locke (D), who is trying to close a budget deficit of nearly $2 billion without raising taxes, has proposed suspending a voter initiative passed last year that requires tobacco tax revenue to be spent on expanding health insurance for low-income residents. Locke's proposal could eliminate coverage for tens of thousands of people.

Massachusetts is confronting its budget deficit by limiting medical benefits for thousands of poor residents and ending all of the coverage others have. As many as 50,000 people will lose eligibility for the state's Medicaid program early next year. Thomas Finneran, the speaker of the Massachusetts House, warned recently that soaring Medicaid costs could soon "bankrupt" the state.

In Michigan, officials say some clinics and hospitals that serve the poor are being forced to limit hours and offer only core services because of the state's financial troubles. Michigan's newly elected governor, Jennifer Granholm (D), who faces a deficit in excess of $1.5 billion when she takes office in January, just convened a summit on Medicaid funding problems.

"The economic realities of health care are as bad as ever," said Sherry Mirasola, a spokeswoman for the Michigan Health and Hospital Association. "Many of our members are trying to hang on, but things are tenuous at best."

The sluggish economy is continuing to hit many states with a double whammy. With tax revenue dwindling, they are having a harder time funding health care programs. And with unemployment rising, the ranks of the uninsured are growing -- and that is putting even more burdens on Medicaid budgets, which are financed by the federal government and states.

Governors are pleading for federal help, and here and elsewhere Bush administration officials are in complex negotiations to try to increase or better organize Medicaid funding. But the administration is also warning states that it does not have much money to spare because of the federal budget deficit and new spending demands for homeland security.

"States are just beginning to face this issue, and there's no telling yet how it's going to play out next year," said Richard Cauchi, a health care analyst for the National Conference of State Legislatures. "But we are certainly seeing real crises that will have to be dealt with."

The scope of the problems facing Los Angeles is in some ways unique because of the sheer size of the county's far-flung public health care network and its huge, growing population of poor immigrants. Its percentage of uninsured residents is twice the national average. About three-fourths of the 800,000 patients the county serves each year lack insurance. But the roots of its fiscal problems are the same as those in public health systems nationwide.

The county is saddled with budget deficits in health care that could soon top $500 million. Earlier this year, it closed 11 medical clinics, converted one of its hospitals to an outpatient facility and reduced beds and services at another.

But even those painful cuts were not enough. Two other large public hospitals began bracing for closure because of money shortages. So county officials decided to take a political gamble and ask residents to raise property taxes, a step that has been taboo ever since the anti-tax rebellion known as Proposition 13 caught fire here in the 1970s.

"We would have avoided this like the plague if we had any other choice," said Los Angeles County Supervisor Zev Yaroslavsky.

The measure proposed raising taxes by about $43 a year on an average-sized residential lot in Los Angeles County. It needed a two-thirds majority to pass, and anti-tax groups were so confident that it was doomed they barely lifted a finger to campaign against it.

But county leaders waged a frantic campaign to persuade voters that the looming demise of the health care system would harm the rich as much as the poor. One television ad promoting the tax increase featured a paramedic in an ambulance with a critically injured child receiving word from an emergency dispatcher that the nearest trauma center was no longer open and that the victim had to be taken to a distant hospital. "It's too far," the paramedic said.

The tax increase received landslide support even in conservative enclaves around Los Angeles County. It will keep the two hospitals that had been targeted for closure open -- for now. But county leaders may have only bought more time. They said they still need federal help. And they are worried about the massive cuts California may soon make in its health care budget.

Still, Yaroslavksy said he has reason to hope.

"I never thought I'd live to see the day when voters here would increase their property taxes for anything," he said. "This should be a wake-up call for political figures and policymakers around the country. Health care is back on the public's radar screen, and anxiety about it is definitely rising."

Commentary:
We can only hope the era of irresponsible government is finally over. Since 1981 and the Reagan tax cut the federal government has created $5.2 trillion of new debt. Such irresponsible policies are sure to be damned by all future generations.

States too got in the bandwagon of giving money away. No, it's not your money. When the government borrows money it creates deficits and deficits are future taxes plus interest. So when you hear a republican talk about the glory days of Reagan, remember his deficits and debt and the taxes necessary to pay for what he didn't. Never forget.

The healthcare crisis once again shows us that President Clinton was right. Healthcare needs to be reformed as it did when Clinton proposed it. Those who called the Clinton approach "socialism" refuse to accept that public schools are pure socialism too and we have no problem making sure every child gets an education. Why is it that we fear giving everyone healthcare? Is health less important than knowledge?

Republicans, backed by many corporate executives, are making significant if little-noticed progress in their campaign to strike back at trial lawyers and shield U.S. companies from multimillion-dollar liability lawsuits. Now that the GOP controls both chambers of Congress, they plan deeper pushes in the months ahead.

President Bush and his congressional allies in the past two years have written into federal law new limits on the public's ability to sue airplane manufacturers, drug makers, builders of anti-terrorism devices and teachers for alleged misconduct or gross negligence. Republicans inserted many of the legal protections into legislation during last-minute negotiations with little fanfare or debate.

At the state level, chief executive officers are persuading governors to do the same. Their biggest victory came early this month when Mississippi Gov. Ronnie Musgrove (D) signed a law capping court-awarded punitive damages and protecting retailers from some types of suits. The U.S. Chamber of Commerce and other business groups had targeted Mississippi as the nation's most plaintiff-friendly state, and spent millions of dollars on campaigns to strengthen the hand of corporations there.

When the GOP-controlled Congress convenes next month, Republicans plan to build on their success by pushing new federal protections for physicians, managed care firms, asbestos manufacturers, small businesses and major corporations hit with class-action suits, according to party officials. Most of the industries seeking legal protections are major GOP donors.

Sen. Trent Lott (R-Miss.) -- recently deposed as party leader but still a veteran member of the majority -- said in an interview that trial lawyers, who he likened to a "pack of wolves," are "going to kill the goose that laid the golden egg" if they aren't reined in. To do this, he said, Republicans have settled on a strategy to impose broad liability caps in "small pieces" for "serious problems like medical liability and outlandish class-action lawsuits."

Such piecemeal measures, he said, can attract enough support from pro-business Democrats to pass the Senate and enable proponents to avoid an unwinnable fight over one "big tort reform bill." Tort refers to the body of law allowing injured people to seek compensation for a defendant's alleged recklessness or other serious misconduct.

This strategy has worked well so far. Republican leaders used the wide-ranging education bill to provide new protections to teachers; the airline security bill to protect Boeing from lawsuits stemming from the Sept. 11, 2001, terrorist attacks; and the homeland security bill to protect vaccine makers and companies that build anti-terror products.

"This is what happens when you have people in power willing to stick these things in in the dark of night," said Rep. Steny H. Hoyer (D-Md.), the incoming House minority whip.

Legal protections at the federal level have included caps on punitive damages and requirements that liability suits be heard in federal courts, which are less apt than state courts to accept cases and render large verdicts.

While Democrats and Republicans disagree about the merits of curtailing lawsuits, this much is indisputable: Corporations stand to benefit financially, while individuals may lose the opportunity to win significant jury awards if they are harmed by certain products.

The plaintiff -- the person filing the suit -- often seems overlooked in the broader political clash. Democrats get much of their money and political support from plaintiffs' attorneys, known as trial lawyers. These lawyers typically receive a sizable percentage of any monetary awards given to their clients -- and nothing if the client's case is lost. Therefore, they have an incentive to push for damage awards as high as possible. Some have been known to seek out courts with reputations for quick and easy verdicts against businesses.

Republicans, meanwhile, get most of their donations from the business community, which has sought legal protection from such lawsuits and damage awards for years. This ideological alignment has left little room for compromise and lots of room for sharp debate.

Consumer activists and many Democrats oppose arbitrary caps on civil awards meant to compensate victims for pain and suffering, economic losses or other damages when a defendant has acted unlawfully. In egregious or malicious cases, they say, juries should be free to add "punitive damages" as a way to punish companies for making dangerous products and to repay Americans hurt by them.

Critics say cynical trial lawyers and sympathetic juries have slapped outrageous penalties on companies for regrettable but understandable events, such as a fast-food diner being scalded by spilt coffee. Home Depot, Wal-Mart and other frequent targets of lawsuits have spent tens of millions of dollars on a campaign to curtail punitive damages and limit their liability by demonizing trial lawyers and prodding Bush and congressional Republicans to enact "tort reforms."

Republicans, in general, believe trial lawyers abuse the legal system and drive some companies out of business by filing frivolous lawsuits designed to pad their pockets. Still, it wasn't until Bush's election that Republicans had enough power to start clamping down.

Bush was a champion of limiting lawsuits when he was governor of Texas, but his appetite for change at the federal level seemed to wane after a wave of corporate scandals rocked the country and rattled his administration early this year. White House officials are still drawing up their business agenda for next year, but congressional Republicans are pressing for stronger action on torts.

Lott said congressional Republicans early next year will push for legislation proposed by the president that would dramatically limit the liability of physicians sued for medical malpractice. Under the plan, aggrieved patients could seek no more than $250,000 for pain and suffering, even if their state's law permitted a much higher award. There would be no federal limits on compensation for economic damages, such as lost wages and medical costs.

When Bush announced the plan earlier this year, he said the limit was needed to keep doctors from being forced out of business by escalating malpractice insurance costs. Democrats say the $250,000 limit is much too low, particularly for patients whose lives are changed forever by a physician's wrongdoing.

In the last two years, doctors have given the GOP $7.8 million and Democrats $3.8 million, according to the nonpartisan Center for Responsive Politics.

More important to the chief executives who have bankrolled the anti-trial lawyer campaign through the U.S. Chamber of Commerce and other groups is a broad limit on class-action lawsuits. Such suits allow hundreds or even thousands of similarly situated people to be considered plaintiffs in a liability suit, making them eligible for court-awarded damages if the defendant loses.

Most congressional Republicans want to limit class-action suits against big corporations such as Wal-Mart and Intel by steering the cases into federal court and mandating a speedier appeals process. Democrats characterize this as favor to the some of the GOP's biggest business donors, a charge the White House might want to avoid as the 2004 elections approach.

Republicans also want to provide new protections to asbestos manufacturers -- including a subsidiary of Halliburton Co., which Vice President Cheney used to head -- and to HMOs as part of bigger legislative packages, party officials say. Carleton Carl of the Association of Trial Lawyers of America said Republicans can't muster the 60 votes needed to break a Senate filibuster unless they continue to insert the provisions in bills dealing with homeland security.

Yet in a sign that some trial lawyers see an unstoppable train coming, some plaintiffs suing Halliburton and other companies in asbestos-related cases started talking about out-of-court settlements right after the GOP sweep last month, according to the Wall Street Journal.

"Clearly, Republicans are in a better position" to make bigger changes next Congress, Hoyer said.

Commentary:
Our legal system works because it's simple. If you feel you've been wronged, you go to court, prove your case, and have a jury decide. But in our new court system, the GOP court system, you don't get to go to court because they're writing laws to protect the wrong-doers and preventing you from seeking remedies. It will take decades if not generations to undo the harm of Bush and Co.

Having recently sit on a jury, I find any assault on this constitutional rights offensive to the highest degree. I left the democrat party over a decade ago and now I know I can never vote for a republican for the rest of my life. Their belief system is morally flawed--it is evil!

A veteran diplomat once gave me this advice: When you find yourself in a hole, stop digging.

When it comes to North Korea, the Bush administration appears to have violated this elementary rule of diplomacy again and again. It has gone from chafing at a diplomatic deal it didn't like, to calling the North "evil," to turning its back on the diplomatic deal after discovering violations, and now to standing by indignantly amid a burgeoning crisis.

Last week, the hole got deeper. Pyongyang said it would expel International Atomic Energy Agency inspectors. It covered up cameras and cut the wires that detect tampering with the canisters of spent plutonium fuel rods stored in an internationally monitored water tank. And it announced it would restart a nuclear reactor that had been closed since an agreement, known simply as the Agreed Framework, was struck by the Clinton administration in 1994. Although a separate effort by North Korea to enrich uranium was uncovered recently, by restarting the mothballed nuclear reactor Pyongyang can produce nuclear weapons-grade fuel faster and sooner for itself and perhaps for others, too.

Though Defense Secretary Donald Rumsfeld last Monday disparaged the Pyongyang government as one that does "idiotic things," the North Korean leadership has demonstrated a certain savvy for timing. With many of America's guns literally and figuratively aimed at Iraq, North Korea has chosen to engage in a bit of brinkmanship. By raising the specter that it might develop nuclear weapons, it is once again making the most of a weak hand and gambling that the Bush administration would opt for no more than one international confrontation at a time.

The North's goal might be to extract concessions from the United States. Another, more sobering possibility is that, having concluded that it is next on the U.S. hit list after Iraq, Pyongyang wants to get a credible nuclear deterrent as fast as possible. This new course could bring it half a dozen weapons by summertime. Either way, it's a dangerous gamble by the regime in Pyongyang. It is risking self-destruction.

The Bush administration has said there would be no rewards for nuclear blackmail. North Korea's ruler, Kim Jong Il, must think that there won't be any penalties, either. President Bush is known to admire Teddy Roosevelt, famous for saying the United States should speak softly and carry a big stick. But in this instance, the Bush administration has spoken loudly while waving its stick around elsewhere.

Could the Bush administration have handled North Korea in a different way to prevent this turn of events? Perhaps not. After all, North Korea's pursuit of uranium enrichment capabilities predated by a couple of years Bush's declaration that the country was part of the "axis of evil."

Perhaps Rumsfeld was right last week when he dismissed "the idea that it's the rhetoric from the United States that's causing them to starve their people or to do these idiotic things or to try to build a nuclear power plant." Certainly when I visited Pyongyang with then-Secretary of State Madeleine Albright two years ago, the country seemed suspended in time, more similar to the China of the Cultural Revolution era than the China of today. From the martial music in the Pyongyang Metro stations to the social-realist portraits of warfare against America, it seemed more like a country that felt itself under siege rather than opening up. That was when the Clinton administration was making nicer noises.

Yet the United States still needs to deal at some level with countries such as this, and the Bush administration's policy toward North Korea has been confused from the beginning. Many members of the administration and leading Republicans in Congress were obsessed with shredding the Agreed Framework that the Clinton administration had negotiated, and not without reason. It made little sense for North Korea to get, or even want, a light water nuclear reactor for electrical power generation when a fuel oil plant would have worked better and been built faster. But that's what the Agreed Framework provided, at North Korea's insistence.

To many Republicans, remedying the flaws in the accord represented more than a matter of bargaining. It became a moral crusade. With reports trickling out about repression and starvation in North Korea -- including pieces I wrote from Pyongyang and the Chinese side of the North Korean border -- many Republicans decided the United States should view the Kim Jong Il regime as one of unmitigated evil. Rather than look for a reason to reengage North Korea and renegotiate the Agreed Framework, they wanted to rip it up completely, not only ending the construction of the new, somewhat safer reactors but also cutting off fuel oil shipments to the North. After all, they were only propping up an immoral regime.

Beware what you wish for.

When North Korea admitted to Assistant Secretary of State James Kelly in October that it had a uranium enrichment program, many people in the administration and Congress saw the news as an opportunity to abandon the framework rather than as an emergency.

Here's where the administration's sense of moral clarity interfered with its chances of containing this crisis. It equated talking to North Korea with making concessions or, as one official put it, "caving in." How could the administration talk to a regime that is truly, in Bush's words, "evil"? These officials had lambasted the Clinton administration for its naivete when Albright went to Pyongyang to meet with Kim. And that was before we knew that North Korea was trying to enrich uranium.

Bush administration officials say they also feared that negotiating with North Korea after the admission would have set a bad precedent for other nations. There may be only a linguistic distinction between "talking" and "negotiating," but the world would have judged whether the United States had caved in by what emerged from such meetings. If Bush negotiators had obtained concessions from North Korea, that might have had a different effect. Instead, the administration hard-liners have confused process with results.

Rather than keep North Korea's confession secret, as it initially did, the administration should have pounced on the admission and preemptively demanded that North Korea return to the negotiating table to come up with tougher terms: cancellation of the reactor projects, acceleration of the required export of spent fuel rods from the older plutonium reactor, and destruction of the more recent uranium enrichment devices. International inspections, which the Agreed Framework did not require until the transfer of sensitive reactor technologies, should happen earlier.

One official involved in negotiating the Agreed Framework said he had long opposed the Bush administration's efforts to abrogate the deal. But, he said, "That was then. This is now." He said that North Korea had acted in a manner inconsistent with the spirit of the agreement and should pay a price.

But the administration has not appeared to have any strategy at all for exacting that price. It did not make demands, as it has with Iraq. It did not make any proposals, declaring that it would not "negotiate" until North Korea gave up all its nuclear weapons programs. One week Bush officials said they were calm and pursuing peaceful avenues. Last week, Rumsfeld talked of war and the White House plotted sanctions and containment. Meanwhile, Pyongyang is moving ahead. A U.S. official told The Post last week that the administration is playing hardball now. One observer quipped that so far it was doing nothing but taking strikes.

The United States has asked others, like Japan, Russia and China, to help bring North Korea to its senses. Meanwhile, the Bush administration has distanced itself from the "evil" regime by cutting off fuel oil shipments. But North Korea won't let itself be pushed away so easily.

A moral argument can be made for regime change in North Korea, which brutalizes its own citizens. In the absence of a strategy of regime change, diplomacy with such an odious regime might be another one of the world's evils, but a necessary one. If it's smart and tough, it might even produce some results.

Steven Mufson is deputy editor of Outlook.

Commentary:
A simple question. Is the world a safer or more dangerous place with the Bush policy towards the North? Since things are a thousand time worse the only conclusion we can draw is Bush has once again failed miserably.

After calling the North evil and after showing the world he's willing to go to war with anyone and everyone in the world, the North decided to say it has nukes (or the ability to make nukes). It did this in October a few months before winter when it badly needed oil from the US. So why did they do it? Self-DEFENSE!

Their statements stopped the Bush war machine dead in its tracks.

And while Bush is stopped, the North begins its "REAL" nuclear program. However, this time, there will be no stopping them. North Korea will go nuclear simply to defend itself from a mad (or insane) US president. Self-Defense is a primary human motive. The North felt threatened, it's now responding and the world is a far more dangerous place. Thanks GW, moron-in-chief.

The doomsday clock will be advanced a minute or two towards midnight soon, if it hasn't already. It will takes decades or perhaps generations to undo the harm of this mad man some call president.

WASHINGTON, Dec. 9 — The Bush administration has proposed sweeping new pension rules that will encourage companies to adopt a type of retirement plan that has been under attack for three years for what critics call a tendency to strip benefits from older employees.

The proposed rules, which are to be released by the Treasury Department on Tuesday, describe the steps for companies to avoid age-discrimination challenges when they convert their traditional pension plans into what are called cash-balance pension plans. Cash-balance plans tend to benefit younger workers, often at the expense of older workers, and are less costly for companies.

Getting clearance for these pension plans was near the top of businesses' wish list, but the rules were being attacked by Democrats in Congress even before their release.

Employers are cheering the new proposals, which could become final in 90 days, as a cost saver. Some big companies have trimmed more than $100 million a year from their expenses by switching plans. Employers say that the rules are good for workers, too, because the rules will spur more companies to provide pension plans.

But worker-rights advocates are criticizing the proposals, saying they permit reductions in the value of employees' benefits. Under the new rules, companies will be able to reduce or wear away benefits if they use "reasonable" interest rates and mortality projections in calculating the value of pensions when they convert to a cash-balance plan.

Unlike 401(k) and similar savings plans, traditional defined-benefit plans deliver a fixed amount based on the employee's salary and years of service. In the cash-balance version, workers accrue benefits evenly over the course of their careers. The older plans allow workers to accrue disproportionately large benefits in their final years.

The government is endorsing cash-balance plans, critics say, meaning that older workers at companies that now convert will lose out on the large benefits that had been projected for them.

Cash-balance plans were popular until September 1999, when the Internal Revenue Service, facing criticism from workers at some companies, decided to halt approvals of the plans to study whether they unfairly discriminate against older workers. At some big companies, workers staged rallies to attack executives for making the switch, forcing some companies, most notably I.B.M., to back down or offer employees a choice of keeping their old pension benefits.

Since then, some companies have converted to cash-balance plans, but they have done so without the certainty that comes from obtaining a determination letter from the I.R.S. that effectively blesses the structure of the plan and certifies its tax-exempt status.

The rules to be unveiled Tuesday are the first step toward lifting the I.R.S. moratorium on approving cash-balance plans, according to Treasury officials. After a 90-day comment period, the proposed rules will be put in final form, and the I.R.S. is expected to begin approving pension plans soon afterward, Treasury officials say — offering employers greater legal certainty that their conversions will not be attacked as discriminatory. Traditional pension plans have been heavily supplemented in recent years by employee-managed 401(k) and similar plans. Under traditional pensions, companies calculate a retiree's benefit based on length of service and the amount of the annual paycheck in the last few years before retiring. Thus, the company manages the money and most of the value accrues late in the employee's career.

Under the newer plan, employers contribute a percentage of each worker's paycheck to a cash-balance account every year, and then guarantee that money will grow at a certain interest rate. Younger workers tend to benefit from this arrangement since they have more years for interest to accrue.

About one-third of the nation's largest public companies have cash-balance plans or their equivalent. According to Congressional critics, more than 800 claims of age discrimination have been filed over conversions to cash-balance plans.

As described by a Treasury Department official, the new rules will stipulate that cash-balance plans will not be considered discriminatory if the "pay credit" — the percentage of employee paychecks contributed by the employer — is no less for older workers than for younger workers. Conversions will also pass the discrimination test if the value of employee benefits is not reduced at the time of the switch.

Furthermore, the official added, conversions will still avoid discrimination even if the benefits are reduced as long as the employer uses "reasonable" interest rate and mortality assumptions in determining the beginning value of an employee's new cash-balance account. The regulations give no guidance about what constitutes a reasonable interest rate.

Employers will find that using the rate on 30-year Treasury bonds will be a safe assumption, he said, while using a substantially different rate could mean difficulties when companies seek determination letters from the I.R.S.

"It's reasonable to look at the market rate of interest," the Treasury official said. He said that the new rules would safeguard the interests of employees and that other provisions to be unveiled Tuesday would be aimed at protecting workers' nest eggs.

Employer groups also said the new rules would help workers by prompting many companies that otherwise would not offer pension plans to do so.

"This takes an important step toward putting cash-balance plans on a firmer legal footing," said James Delaplane Jr., a partner at Davis & Harman in Washington who lobbies on pension issues for large employers.

Mr. Delaplane noted that almost one-third of the companies in the S.& P. 500 do not have defined-benefit pension plans. The new rules, he said, will encourage more companies to offer pensions at a time when many employees are concerned about the future of Social Security benefits and their own 401(k) plans.

But employee-rights advocates and some Democrats in Congress sharply criticized the proposals.

"This proposed change to pension rules will result in average employees losing ground in their pensions, while top company executives will continue to receive lavish treatment," said Representative George Miller of California, the ranking Democrat on the House Education and Workforce Committee.

David Certner, the director of federal affairs for AARP, said, "The Treasury could have done a lot more to protect older workers."

Employees who are just reaching the point where the accrual of benefits begins to accelerate rapidly in the years before retirement will suffer if their companies convert, Mr. Certner said.

"You've put in many years at a lower rate, and you're just about to reap the higher rate, and you change to a different benefit structure," said Mr. Certner, who was briefed on the new rules by Treasury officials. "You wind up getting much less than you were anticipating."

Commentary:
The companies have to give "reasonable interest rates" but doesn't define that "reasonable" is. Another half-baked plan passing as policy which is in reality a big off to big business.

Some companies have saved $100 million a year using these plans. Savings? or ripping off the employee? Executives rake in the big bucks, screw the investor and retirement plans and Bush is on their side. Good god, how many generations will it take to undo the mess he's created.

The Bush administration, surprised by the speed of North Korea's defiant reopening of the shuttered Yongbyon nuclear facility, intends to refer the matter to the United Nations as part of a policy one official described yesterday as "isolate and contain."

Rejecting direct negotiations as unpalatable and a military strike as presently untenable, the administration expects to seek the censure of North Korea at an emergency meeting of the International Atomic Energy Agency governing board in early January, officials said.

They said if Pyongyang still refuses to back down, the matter likely would be referred to the U.N. Security Council, where the administration would try to muster greater pressure on North Korea, particularly from China. U.S. officials are eager to avoid a distracting confrontation with Pyongyang as conflict with Iraq intensifies.

U.S. officials see no simple way to stop the maneuvers of enigmatic North Korean leader Kim Jong Il. On a day when North Korea ordered the expulsion of international inspectors and took steps to refuel a dormant nuclear reactor at Yongbyon, President Bush's top foreign policy advisers met at the White House to assess Kim's intentions.

Some senior U.S. intelligence analysts believe Kim intends to build nuclear weapons whether or not the international community offers concessions. The construction of an atomic arsenal, this thinking goes, would offer North Korea stature and leverage that he has long craved.

"It may use the current situation to extract concessions, but there is no reason to doubt that Pyongyang will continue," a senior official familiar with U.S. intelligence assessments said yesterday. CIA analysts also believe North Korea may have stored enough plutonium for one or two bombs more than a decade ago.

The administration is facing increasing political pressure to talk with Kim's government, which blames the United States for the emerging crisis. Leading Republican and Democratic foreign policy voices in the Senate have called on Bush to open discussions -- a step the administration believes would demonstrate weakness and invite further brinkmanship.

U.S. policymakers and their spokesmen, mindful of Kim's history of building a sense of crisis to win economic and diplomatic favors, have steadfastly avoided any hint of worry as North Korea has dismantled a 1994 nuclear agreement. Indeed, a high-ranking official yesterday asserted that "no one's really concerned right now."

Yet many outside experts believe a crisis may be boiling. Specialists throughout the national security apparatus have been studying Kim's moves and trying to decipher his strategy, consulting with one another and foreign governments. The reclusive leader has many moves he can yet make if his ambition is escalation, officials point out, although each one brings him closer to a potentially devastating miscalculation.

Beyond restarting the Yongbyon nuclear reactor and a facility to extract plutonium from 8,000 spent fuel rods, Kim could carry through with the expulsion of IAEA monitors. He could withdraw from the Nuclear Non-Proliferation Treaty, end a moratorium on missile testing or fire a missile over Japan, as he did in 1999.

To deter him, the administration believes it has few encouraging options.

The White House has rejected direct negotiations until Kim takes steps to halt a recently discovered uranium enrichment program. A lightning military strike would be risky, and almost certainly unpopular in the region. And U.S. efforts to marshal international pressure have so far been unsuccessful.

The heart of the administration's strategy, announced in June 2001, is a vow not to reward North Korea for provocative behavior, whether a military or nuclear buildup or aggressive moves toward its neighbors. Bush incensed Kim by naming North Korea a member of his "axis of evil," but the president said he would extend economic and diplomatic cooperation if convinced that Kim was playing fair.

Bush wanted to see progress on a range of issues, from limits on missile sales to a pullback of North Korean troops from its border with South Korea. Steps would be reciprocal and verifiable. Without concrete progress, there would be no U.S. concessions.

"The approach comes from years of being burned," a U.S. official once explained.

"When North Korea confirmed to U.S. envoys in October that it had been working secretly to enrich uranium in violation of a 1994 pledge to halt its nuclear program, the administration demanded to no avail that Pyongyang stop the project. The Americans and their allies halted promised fuel oil shipments in retaliation, angering the North Koreans.

The Kim government blasted the IAEA, whose authority it disdains. Then, last weekend, North Korean workers began removing seals and covering cameras used by the IAEA to make sure the Yongbyon facility, with its reactor and stored fuel remained shuttered. The IAEA, a U.N. organization, accused North Korea of dangerous brinkmanship.

For now, the administration has been pressing foreign governments to lean on Pyongyang and warn Kim that continued defiance will further isolate his regime and worsen the country's economic misery.

Analysts are divided about Kim's ambitions, debating whether the moves at Yongbyon are primarily a scripted drama designed to win concessions or a determined effort to produce plutonium and a nuclear arsenal. One view is that it may be both, with Kim having the option to stop or continue as events dictate.

Korea specialist Don Oberdorfer believes North Korea may have been willing to engage as recently as November, but in response to the Bush administration's tough stance has started on a series of actions that are developing a momentum of their own.

"All indications are that they are moving rapidly to produce a nuclear weapon," Oberdorfer said. Joel Wit, a scholar at the Center for Strategic and International Studies, agreed, saying that "it may be too late to stop what's going on in North Korea."

"It's still possible this is some sort of negotiating tactic," said Wit, a former Clinton administration official, "but the weight of evidence is that they may have decided to start building up their nuclear weapons stockpile."

The administration has itself partly to blame for North Korea's behavior, said Daryl Kimball, executive director of the Arms Control Association. He said of U.S. officials, "When they say they have no good options, they're continuing a policy of neglect that's worsening a bad situation."

As Kim acts in precisely the provocative way the Bush administration abhors, the unsolved riddle for the White House is how to make him change.

"There's no doubt in anyone's mind that this goes to the Security Council," an administration official said yesterday. "The question is one of timing: Can the Security Council handle North Korea and Iraq at the same time?"

Commentary:

CRAWFORD, Tex., Dec. 27 -- White House officials are rethinking a plan to accelerate last year's tax cut for upper-income taxpayers, people familiar with the deliberations said today.

Aides to President Bush had favored a plan to accelerate by a year cuts in income tax rates scheduled to take effect in 2004. But Bush's political advisers, concerned that Democrats will use a class-warfare argument to fight an accelerated reduction in the top rate, have suggested dropping that plan, instead emphasizing a cut in taxes on stock dividends.

When Congress returns next month, the White House is expected to propose a $300 billion economic stimulus package that includes cuts in dividend taxation, the accelerated income tax cuts, and more generous incentives for business investment.

The Wall Street Journal reported today that the administration is "likely" to drop the idea of accelerating the cut in the top rate, which is 38.6 percent, for incomes over $311,950. Here in Crawford, where Bush is taking a holiday vacation, spokesman Scott McClellan said the White House has not reached a decision on the ingredients in the stimulus package.

But while Bush's economic advisers have argued that the top tax rate reduction is an important economic stimulus, political advisers have argued that it may be more fruitful to put Bush's clout behind a new form of tax cuts such as dividend tax cuts.

Economist Daniel J. Mitchell of the conservative Heritage Foundation said he thinks Bush's political advisers are worried that Democrats will portray the Bush as favoring the well off. "There is a general concern that you should get the most bang for the buck if you're going to engage the class warfare criticism," he said, "and their thinking is we're already getting the rate cuts if we wait a year, so why not go for dividend tax cuts?"

The willingness to drop the expedited rate cut for the wealthiest taxpayers as part of the stimulus package aggravates some economic conservatives. "There will be a very negative reaction from free-market conservatives if rates are cut but not the highest rate," said Stephen Moore, who leads the anti-tax Club for Growth. Without the top-rate cut, "I don't think it would have any stimulative effect," he added. "That would be a surrender to class warfare."

The dividend cut, Moore agreed, "has become the centerpiece" of Bush's stimulus plan, which he said is also likely to include some form of accelerated income tax cuts and business tax breaks in the form of accelerated depreciation schedules. There has also been some discussion of a temporary or permanent cut in payroll taxes. But the details of the components of the stimulus plan are yet to be finalized.

Democrats are expected to counter Bush's tax cut package with a stimulus plan that includes more government spending. Sen. Max Baucus (D-Mont.), outgoing chairman of the Senate Finance Committee, proposed a $160 billion package that includes grants to states, a one-time income tax cut, a business investment tax break and funds for highway construction.

As the economy continues to show little evidence that it is recovering, both parties have been eager to demonstrate their concern. Bush has joined Democrats in calling for an extension of unemployment benefits when Congress returns. Businesses also have argued that a cut in dividend taxes would boost ailing stock markets. Dividends are taxed both as corporate income and as distributions to shareholders, leading businesses to complain of double taxation.

Commentary:
It's nice to see some things never change. As sure as the sun rises in the east, conservatives will borrow money from middle class programs like Social Security and give it away in tax cuts (class warfare), use the race card (Bush giving a speech at Bob Jones) and bankrupt our future with their debt-ridden policies.

When Bill Clinton proposed a few billion dollars in a stimulus package conservatives screamed tax and spend liberal. When Bush proposes hundreds of billions of dollars they want more. Once again this proves conservatives don't really believe in anything. They simply oppose what democrats want, no matter how right democrats are, but do the exact same thing when they have power. Damn it's good to be liberal and on the right side of history.

WASHINGTON –– A physician who has been criticized for his views on birth control was named to a Food and Drug Administration panel on women's health policy.

Dr. W. David Hager, a University of Kentucky obstetrician-gynecologist, was among 11 physicians appointed Tuesday to the FDA's Advisory Committee for Reproductive Health Drugs.

Hager has questioned the safety of the abortion pill, RU-486, and acknowledges he is anti-abortion.

Abortion-rights activists are concerned about Hager's appointment because he participated in a Christian Medical Association campaign this year that attempted to reverse the FDA committee's 1996 recommendation that led to RU-486 being approved.

The National Organization for Women and six other groups that support abortion rights have called Hager's selection a conflict of interest in the name of ideology.

The Planned Parenthood Federation of America issued a statement Tuesday calling the appointment of Hager and other doctors on the panel as a "a frontal assault on reproductive rights that will imperil women's health."

It said Hager and his wife, Linda, have recommended "specific scripture readings and prayers for such ailments as headaches and premenstrual syndrome."

But Hager, a part-time professor of obstetrics and gynecology at the University Kentucky College of Medicine, said his beliefs won't compromise his judgment.

"Yes, I'm pro-life," he told The Courier-Journal of Louisville, Ky. "But that's not going to keep me from objectively evaluating medication. I believe there are some safety concerns (about RU-486) and they should be evaluated."

Hager also has condemned the birth-control pill, used by an estimated 10 million American women, saying it has provided a convenient way for young people to be sexually active outside of marriage.

But Hager said he does not deny birth-control prescriptions to unmarried women.

The advisory committee has not met for two years, and its entire membership had lapsed. Its job is to review and evaluate data – and make recommendations – on the safety and effectiveness of marketed and experimental drugs for use in obstetrics, gynecology and related specialties.

It will be chaired by Dr. Linda C. Giudice, the chief of reproductive endocrinology and infertility for the Department of Gynecology and Obstetrics at the Stanford University Medical Center.

FDA Commissioner Mark McClellan said the panel "will provide sound, science-based advice on reproductive health issues that will improve women's lives across the country."

In addition to Hager and Giudice, the other physicians appointed were Leslie Gay Bernitsky, a urologist from Albuquerque, N.M.; Susan A. Crockett of the University of Texas Health Science Center at San Antonio; Nancy Dickey, chancellor of the Texas A&M College of Medicine; Scott Shields Emerson of the University of Washington, Seattle; Michael Furman Greene of Massachusetts General Hospital in Boston; Vivian Lewis of the University of Rochester Medical Center in Rochester, N.Y;. George A. Marcones of the University of Pennsylvania, Philadelphia; Valerie Montgomery Rice of the University of Kansas Medical Center in Kansas City, Kan.; and Joseph Barney Stanford of the University of Utah, Salt Lake City.

Commentary:
Calling this guy a nut is too kind. Prayer instead of medicine? No birth control pills? And sure, he'll be objective about RU486 after he's condemned it. And there is an easter bunny, there is an easter bunny, there is an easter bunny.

WASHINGTON –– Most terrorist organizers the U.S. government has identified as players in the Sept. 11 attacks remain beyond the reach of the worldwide effort to hunt al-Qaida.

Some still at-large are top lieutenants of Osama bin Laden. Others are midlevel financiers who paid for the hijackers' movements and training. Others are thought to be low-level logistical aides who may hold key information about how the attacks were put together.

Many had contacts with the 19 suicide hijackers, particularly with the cell based in Hamburg, Germany, that included Mohamed Atta and two of the other hijacker pilots. Only a few are dead or in custody.

Whether they could regroup to pull off another massive attack is not known. U.S. counterterrorism officials say al-Qaida has been heavily disrupted by the war on terrorism, but acknowledge that numerous senior al-Qaida figures, and many of their followers, remain at large.

"You're dealing with individuals in a worldwide conspiracy, where individuals can hide within various societies," said Daniel Mulvenna, a former Canadian domestic intelligence officer and terrorism expert. "I think you have to say on balance, (U.S. counterterrorism agencies) have done rather well. Did they get into every nook and cranny and get every individual who provided logistical support? No. Are they getting there? Yes."

Some key players in the attacks that the government has identified:

–Khalid Shaikh Mohammed: Still at large is the man U.S. authorities have pinpointed as the mastermind of the attacks. Since Sept. 11, he has risen to be al-Qaida's top operational planner, U.S. officials say. A Kuwaiti with Pakistani roots, Mohammed is thought to be in Pakistan.

–Ramzi Binalshibh: A would-be hijacker who couldn't get into the United States, he became an aide to Mohammed and a key moneyman for the attacks. He was captured in Karachi on Sept. 11, 2002.

–Mustafa Ahmed al-Hisawi: A key financier of the attacks, who remains at large, was last reported in Pakistan. Investigations of financial activity in the United Arab Emirates, where al-Hisawi was based, connected him to Khalid Shaikh Mohammed, Binalshibh and at least three hijackers, including Mohamed Atta, all in mid-2001.

–Ali Abdul Aziz Ali: Another financier, he sent money to Atta and two other hijackers in 2000. He is at large.

–Mohammed Atef: Atef was bin Laden's top operations man until he was killed by a joint military and CIA airstrike in Kabul in November 2001. The CIA says he hand-picked many of the hijackers in late 1999.

–Tawfiq Attash Khallad: Another top bin Laden lieutenant and a key planner in the October 2000 bombing of the USS Cole, Khallad met with two eventual hijackers in Malaysia in 2000. He is suspected of helping plan the Sept. 11 attacks. He is at large.

–Abu Zubaydah: Officials say they think al-Qaida's top coordinator of terrorist cells was involved in the attacks, but they have never laid out his precise role. He has given interrogators information that contradicts statements by Khalid Shaikh Mohammed and Ramzi Binalshibh, particularly about the target of the hijacked plane that crashed in Pennsylvania. Mohammed and Binalshibh said it was the Capitol; Zubaydah said it was the White House. U.S. officials said they're not sure what to believe.

–Zacarias Moussaoui: Binalshibh told interrogators that Moussaoui was an untrusted backup pilot for Sept. 11. Moussaoui, arrested by the FBI before Sept. 11, says he is an al-Qaida member but was not part of the Sept. 11 plot. He is believed to have met Khalid Shaikh Mohammed in Afghanistan, and had financial ties to Binalshibh.

–Zakariya Essabar and Said Bahaji: Both men are believed to be members of the Hamburg cell. They fled Germany and remain at large. Essabar also may have intended to be a hijacker, but was unable to enter the United States.

–Mounir El Motassadeq, Abdelghani Mzoudi, Mamound Darkazanli, Mohammed Haydar Zammar: Other associates of Hamburg cell members, El Motassadeq and Mzoudi are in German custody; Darkazanli is free and maintains his innocence, and Zammar is in Syrian custody.

–Osama bin Laden and Ayman al-Zawahri: Al-Qaida's terrorist-in-chief admitted foreknowledge of the attacks with his deputy and doctor by his side. Both have recently issued audio statements that convinced American officials they are alive and at large.

Commentary:
At some point in the near future (say when Bush goes to war with Iraq) this story will become an impeachable offense. Bush says Al Qaeda is a threat but instead of dealing with that threat, he spent a year manufacturing lies about Iraq. If Iraq also has no WMD, that too will become an impeachable offense. Defending us from the boggyman is not a Constitutional requirement.