Eroding some of the social and economic gains of the late 1990s, the nation's poverty rate rose last year while the typical household's income went down, the government reported yesterday. Government and private researchers said the changes largely reflected the effects of the economic recession.

In its annual report on income and poverty, the Census Bureau said that 1.3 million more Americans slipped below the government's official poverty line last year, the first increase since 1993. As a result, 11.7 percent of the population is considered to be in poverty, up from 11.3 percent in 2000.

Unlike previous recessions, most of the increase in poverty was experienced by white households and in suburban and rural areas, particularly in the South. The poverty rate fell for Hispanics and increased marginally in black households.

Still, while the poverty rates among blacks (22.7 percent) and Hispanics (21.4 percent) are at their lowest levels ever, they remain about twice those of the population at large.

For a family of four, the government calculates the poverty line at about $18,000.

On the income front, the Census Bureau reported that the median household income fell 2.2 percent last year to $42,228, after adjusting for inflation -- the first drop since 1991.

The decline in income was broad if not particularly steep, affecting all but the richest households and all regions except the Northeast.

"This report signals a significant reversal of what had been a very positive trend in terms of income and poverty," said Jared Bernstein, senior economist at the union-backed Economic Policy Institute in Washington.

But the $950 decline in cash income for the median household was still less than that experienced during the first years of the last two recessions.

"So far, what you're seeing in these numbers is a garden-variety recession," said Timothy Smeeding, an expert on wages and income at Syracuse University. "But I suspect we haven't seen the worst of it yet."

The Census Bureau found that the income of the typical black household fell 3.4 percent last year, more than double the rate of decline among whites (1.4 percent) and Hispanics (1.6 percent). Households headed by women also suffered bigger-than-average decreases.

Geographically, income fell the most in the Midwest (3.7 percent) and the West (2.3 percent), reflecting the recession's heavy impact on manufacturing in the high-tech sectors. Household income increased 1.7 percent in the Northeast.

Some analysts yesterday pointed to a more comprehensive definition of after-tax income that the Census Bureau also prepared on an experimental basis -- one that includes capital gains, and the value of noncash income such as health insurance and food stamps. It showed a much smaller reduction of 0.3 percent of median income.

The census survey found that income inequality, which had begun to moderate in the late 1990s, showed signs of picking up last year. Among income classes, only households at the top of the ladder -- those with $100,000 or more of cash income -- gained in income as a group, while the greatest percentage losses were suffered among the poorest households.

For the first time, the highest-earning 20 percent of households earned more than half of the nation's income before taxes. The top 5 percent, with incomes above $150,000, earned 22.4 percent of the national income, up from 22.1 percent in 2000.

"The share of national income going to the bottom fifth of households is at the lowest ever, while the proportion going to the top fifth is the highest ever," said Robert Greenstein, executive director of the liberal Center on Budget and Policy Priorities.

The census data did not take into account any reduction in capital gains income, or profits made from selling stock and bonds, which is disproportionately earned by high-income families and declined significantly last year. Nor did the data reflect changes in the sharp decline in wealth that has occurred as a result of falling stock prices.

No sooner was yesterday's information released than politicians and interest groups were rushing to put their particular spin on it or use to lobby for their policy agendas.

Emerging from a Cabinet meeting at the White House, President Bush spoke of the resiliency of the American people, the productivity of the American worker and low interest rates -- all ingredients, he said, for a return to household income growth going forward.

"I understand we got a lot of work to do -- and we will," the president told reporters. "We will continue to work hard to make sure that people can find work."

Meanwhile, on Capitol Hill, Paul Sarbanes (D-Md.), chairman of the Senate Banking Committee, said the report shows that the administration needs to spend as much attention to the economy as it has been to foreign affairs.

"Their statistics depict an economy which was not only weak in 2001, but for the first time in seven years, an economy in which Americans were regressing instead of progressing," he said.

AFL-CIO President John J. Sweeney put the report in the context of recent corporate scandals. "It is a shameful commentary on this nation that despite all its wealth, and while executives cut deals to pay themselves millions in perks, severance and retirement, 11.7 million children and 3.4 million seniors continue to live in poverty."

At the Brookings Institution, senior fellow Isabel V. Sawhill took some comfort from the fact that the poverty rate among children was unchanged last year despite the increase overall. Credit, she said, should probably go to welfare reform, which has moved thousands of women from welfare to work and made their children "better off and less likely to be poor than when they were on welfare."

Commentary:
Bush's tax cuts used borrowed money to help the rich so they wouldn't be harmed in the last recession. The rest of us were screwed. Borrowed money going to the rich or anyone else who doesn't need it(ie:corporate farmers) when time are bad is bad economic and immoral. Bush like Reagan before him, not only borrowed money to pay for his tax cuts but uses class warfare to divide America.

WASHINGTON (Reuters) - The U.S. House passed a bill on Thursday that would limit damage awards in medical malpractice lawsuits, a top priority for doctors and business groups that argue such caps will help hold down health costs and prevent doctors from abandoning high-risk practices.

The bill, strongly sought by the American Medical Association, passed by a 217-203 vote, with about 30 lawmakers crossing party lines in both directions.

While malpractice reform has long had support in the House and from President Bush, it has consistently faced obstacles in the Senate. The Senate in July defeated a narrower malpractice proposal offered as an amendment to an unrelated drug bill.

Sponsored by Pennsylvania Republican James Greenwood, the House bill places no limits on economic damages but caps "pain and suffering" damages at $250,000. Punitive damages are also at $250,000 or twice the economic damages, whichever is greater.

The legislation also sets a sliding scale for attorneys fees and shields from litigation makers of medical devices and products approved by the Food and Drug Administration.

Critics of the legislation, including some who said they could back narrower reforms or who support tort reform at the state level, say that the bill is too sweeping and will help bail out insurers who have lost money in the stock market but won't necessarily bring any benefits to doctors and patients.

"Who seriously believes that premiums will go down if this bill is passed?" asked New York Democrat Jerrold Nadler. Ohio Democrat Sherrod Brown said the message of the bill was, "Businesses are never at fault, patients are greedy, juries are misguided."

But Greenwood and fellow proponents of the bill say a flawed malpractice system has pushed insurance premiums so high that in some states doctors are abandoning high-risk fields such as emergency medicine, neurosurgery and obstetrics, moving to states with cheaper insurance or giving up medicine all together.

"There's a massive exodus of doctors from my state," said Republican Rep. Shelley Capito of West Virginia, a state that has had severe problems with high malpractice rates. Greenwood said if the trend is not halted, it would lead to "third world medicine."

Both the AMA and the U.S. Chamber of Commerce, among other groups, have pushed strongly for the House to act.

"The United States has created a litigation lottery where a few patients and their lawyers receive astronomical awards, and many others suffer access to care problems because of it," AMA president Dr. Yank Coble said this week.

"Failure to address this burgeoning problem means more communities will endure greater difficulties attracting new businesses and retaining them, as well as recruiting high quality employees to the area," according to a letter to lawmakers from Chamber Executive Vice President Bruce Josten.

Commentary:
Malpractice caps are nothing more or less than price controls. Those of us who believe in the free-market system think the market will take care of bad doctors as long as they're not protected by the courts and state government (both of whom allow doctors to settle cases and keep it secret). For an opposing side of the dispute try Public Citizen.

"WASHINGTON, D.C. – Just 5 percent of American doctors are responsible for half the malpractice in the United States, according to a new analysis of federal data by the consumer group Public Citizen. The analysis was released as the U.S. House of Representatives is scheduled to consider legislation that would make it more difficult for injured patients to hold their doctors accountable for negligence."

States that are losing doctors need to weed out bad ones (dah!) instead of giving us more big government that protects those who wrong others. Not so long ago protecting criminals was a crime--these days it's part of the conservative belief system. So much for values.

In president's speeches, Saddam dominates, economy fades

WASHINGTON, Sept. 25 — As he seeks to boost Republican candidates in the midterm elections, President Bush is increasing his emphasis on terrorism and national security, shedding his previous determination to demonstrate his concern about the flagging economy.

FOUR TIMES in the past two days, Bush has suggested that Democrats do not care about national security, saying on Monday that the Democratic-controlled Senate is "not interested in the security of the American people." His remarks, intensifying a theme he introduced last month, were quickly seconded and disseminated by House Majority Whip Tom Delay (R-Tex.).

At a fundraiser for GOP House candidate Adam Taff in Kansas Monday, Vice President Cheney said security would be bolstered if Taff were to defeat Rep. Dennis Moore (D-Kan.). "Cheney talks about Iraq at congressional fund-raiser/ Electing Taff would aid war effort," read the headline in the Topeka Capital-Journal.

Such rhetoric represents something of a shift for the administration. When there were marked signs of the economy stumbling in the summer, Bush spoke daily about the economy's health to demonstrate his concern. In recent days, however, the proportion of Bush's stump speech devoted to domestic concerns has slipped from about 50 percent to about 20 percent.

The shift has come despite a flood of grim new economic statistics. The Dow Jones industrial average fell yesterday to its lowest level in four years, and the Nasdaq composite index hit a six-year low as consumer confidence and corporate earnings slipped.

When Bush kicked off his effort this month to build support for an Iraq campaign, his aides angrily dismissed accusations that they had a political motive, saying that the timing, two months before the November 5 election, was coincidental. But as Bush continues his record-setting fundraising effort, he has shown an eagerness to discuss the topic in political venues as polls show the effort is aiding Republican candidates.

Senate Majority Leader Thomas A. Daschle (D-S.D.) blasted the White House and Republicans for trying to gain political advantage from war planning. "I hope the American people are cognizant of this effort, and demonstrate their intolerance and chagrin that people would stoop to that level," Daschle said in an interview.

DEMOCRATS GETTING ANTSY

Anxiety has spread through the Democratic caucus. "We have a crashing Dow Jones index, economic indicators that continue to depress people in Illinois and across America and the White House does not want to talk about this," said Sen. Richard J. Durbin (D-Ill.). "This is not something the president will even take time out fundraising for to address."

To drive home this point, Senate Majority Whip Harry Reid (D-Nev.) plans to call on the White House to detail how much taxpayer money is being spent to underwrite his campaign travel.

The White House says the GOP's tactics are proper. "The voters will make the judgments," said White House press secretary Ari Fleischer. "I don't think anybody has the right to tell the country it shouldn't consider either party's views on war and peace." Fleischer said Bush's economic agenda is "front and center," pointing out that he will deliver a speech Thursday on corporate accountability.

Yesterday's 2.4 percent decline in the Dow Jones industrials, the fourth triple-digit loss in six sessions, brought the average back to the four-year low it reached in July.

But while Bush spent much of July demonstrating his concern about the economy, he did not mention the falling markets yesterday until asked during a question-and-answer session with his Cabinet. Bush said he was "optimistic" about the economy, using the word six times, and he said his administration inherited a recession and falling stock market from the Clinton administration.

To boost the economy, Bush called on Congress to pass terrorism insurance legislation, make last year's tax cut permanent and restrain spending. But while emphasizing those three items — all long-term items — he made no mention of the short-term stimulus package, which the White House and Republican House leaders have shelved.

Budget Director Mitchell E. Daniels Jr. said yesterday that Bush is "still open to and looking at options" on the economy, but "you'll hear from him if and when he sees that combination that he thinks has practical value." Treasury Secretary Paul H. O'Neill, in Nashville yesterday, made no mention of economic stimulus, saying "the latest indicators look good."

POLLS: BUSH STRATEGY PAYS OFF

There are indications that Bush and the GOP have succeeded in directing voters' concerns to Iraq rather than the economy. A new poll by the Gallup organization found that by a 49 percent to 41 percent margin, voters are now more concerned about Iraq than the state of the economy when deciding whom to vote for this fall. This marks a 16-point shift in voters' attitudes from three weeks ago. Similarly, a poll released Monday by Ipsos Public Affairs, found that Americans, by a six-point margin, now believe the country is on the right track, a 13-point improvement.

Yet Democrats still have hope that their domestic issues will resurface. "It will get through," Sen. John Edwards (D-N.C.), a likely presidential candidate, said yesterday. "In a short period of time, Congress will have dealt with Iraq and we'll be on to other issues."

There is some reason for Democratic optimism. Independent pollster John Zogby said that when voters — 66 percent of whom have retirement accounts — get their quarterly statements in October, "that thrusts the conversation right back to the economy." Democratic pollster Mark Mellman said Bush may be creating a "long-term disadvantage" by dropping his visibility on domestic issues in voters' eyes.

Damaging or not, the change in Bush has been stark. In July, the White House, in addition to events highlighting homeland security and war, focused on corporate corruption, the economy, welfare reform, trade, disabilities, adoption, prescription drugs and Bush's "faith-based" plan. In September, Iraq and Saddam Hussein dominate virtually every major appearance by Bush, except for an odd event to spotlight education or the economy.

Fleischer said Bush's speeches are "very balanced" between domestic and foreign. "He's always done half on the war on terror and half on domestic policy. Now he's put Iraq into the war on terror part."

Before this month, Bush did devote about half of his typical stump speech to domestic matters and half to security and war. But when Bush flew to Trenton, N.J., on Monday, the 4,200-word speech he delivered at the airport included 3,100 words devoted to war and security and 700 devoted to domestic matters, with the balance devoted to introductions. Next, at a fundraiser for GOP Senate candidate Doug Forrester, war and security got 3,000 of his 4,500 words, with domestic matters receiving 800. At last night's fundraiser for Senate candidate John Thune of South Dakota, he spent twice as much time on war and security.

At the Forrester fundraiser, Bush took the stage as donors chanted "USA!" The commander in chief declared: "I believe it's in America's interests that Doug Forrester be the next United States senator from this state."

Commentary:
The likelihood the press will do anything but war is near zero. All the cable networks are running near 24-7 coverage of war with new war logo's etc. Shame on them. The propaganda machine of Bush is so pathetic only morons in the press fall for it (read: 99% of the press). Fact have become meaningless. As the press beats the war-drums for Bush, they seem to have forgotten their real purpose...to tell us the truth. I suppose those days ended during the Clinton years, when the press lied about Bill year after year but were shocked, Shocked, SHOCKED that he lied about a bj.

(St. Paul, MN) - Governor Jesse Ventura said today that President Bush and Assistant U.S. Secretary of State Otto Reich owe an apology to him, First Lady Terry Ventura, and American business leaders that will be traveling to Cuba for a U.S. Food and Agribusiness Exhibition in Havana. Over the weekend Reich was quoted in several newspapers criticizing Ventura and U.S. business leaders for attending the exhibition while Cuba is under the control of communism and President Fidel Castro. In addition, Reich was also quoted as saying he hoped Ventura and the business leaders would not engage in "sexual tourism" while visiting Cuba. "I found Assistant Secretary Reich's comments offensive and at the very least he and President Bush owe my wife and children a personal apology," Ventura said today.

STRASBOURG, France (Reuters) - The European Union said on Wednesday that U.S. demands for a blanket exemption for its nationals from a new world war crimes court flouted the tribunal's statute, but it would continue to seek a solution.

"Member states are agreed that the U.S. proposal -- as it stands at present -- would be inconsistent with our obligations with regard to the (International) Criminal Court," Danish Foreign Minister Per Stig Moeller told the European Parliament.

"Having regard to transatlantic relations, flatly rejecting the U.S. proposal is absolutely no solution," he said, speaking on behalf of the 15-nation bloc. Denmark currently holds the rotating EU presidency.

Some 139 states have signed the ICC's founding treaty and 80 have ratified it. But the administration of President Bush withdrew its signature in April and vowed to fight the court and insist on immunity for its own citizens from ICC jurisdiction.

Washington fears its soldiers or leaders could be subject to politically motivated prosecutions -- an anxiety heightened by the prospect of a possible war to oust Iraqi President Saddam Hussein, perhaps without explicit U.N. authorization.

EU officials held intensive talks with U.S. government lawyers this week on ways to accommodate Washington's concerns without violating the court's statute, diplomats said.

EU foreign ministers are due to discuss a possible common response to bilateral approaches by the Bush administration when they meet next Monday.

Moeller said any solution must be based on three principles:

-- excluding impunity for persons who have committed crimes falling within the court's jurisdiction;

-- avoiding any result that ruled out the surrender of nationals of ICC member states;

-- limiting any exemptions to "specific categories of persons" from non-signatories to the treaty.

Diplomats said there were differences among EU states on whether to seek a joint understanding with the United States or allow member states to respond individually, taking into account the work done in Brussels, as Britain and Spain favored.

They said part of the solution might be a U.S. pledge that any American accused of crimes falling within the court's jurisdiction would face legal proceedings in the United States.

Brussels officials were angered when EU candidate Romania, keen to garner crucial U.S. support for its NATO membership bid this year, agreed in July to negotiate a bilateral agreement never to bring U.S. citizens to the court.

Diplomats said Romanian Prime Minister Adrian Nastase was expected to pledge on a visit to Brussels on Thursday not to take any further steps with Washington until the EU had a joint position.

Commentary:
The rule of law is meaningless to Bush, but all knew that. Bush wants a UN resolution to go to war, but has no problems violating UN treaties. The only way a US soldier could be accused of war crimes is if he violated International Law and committed war crimes. Bush clearly is or plans on violating International Laws. This reminds me of those who oppose "hate crime" legislation. The only way that legislation could harm them is if they kill someone.

WASHINGTON (Reuters) - Stem cell research, which many scientists believe will some day transform medicine beyond recognition, is "crawling like a caterpillar" due to strict limits on stem cell research imposed by President Bush last year, top scientists told the U.S. Congress on Wednesday.

One scientist said he left the country to work in Britain, while others complain they cannot get hold of "legal" batches of the cells to begin their research.

"It's already hindering invaluable research," Gerald Schatten of the University of Pittsburgh school of medicine told a Senate health subcommittee.

"More and better lines are needed now and current policies are already delaying stem cell research, forcing it offshore or into inaccessible reaches in the private sector."

Stem cells are the body's master cells, serving as sources of all the different cells in the body. They are, for example, the source of new blood cells found in the bone marrow.

When taken from a days-old embryo, they have the power to form any kind of cell in the body, and scientists hope to learn to manipulate them to use to treat diseases such as diabetes and Alzheimer's, as tissue transplants and perhaps even to grow entire new organs.

But some groups oppose the destruction of a human embryo, no matter what the reason, and Bush agrees. In August 2001 he said federal funds could only be used for work on batches of stem cells, known as lines, already existing at that moment.

"The president's decision renewed our hopes of pursuing this therapeutic research. NIH's (the National Institutes of Health) initial list of stem cell lines that could be used in federally funded research seemed like a straightforward source of available resources," Dr. Curt Civin, a stem cell researcher at Johns Hopkins University in Baltimore, told the hearing.

"However, we quickly found out that none of these cell lines was available readily to us. That remains true today ...In fact, embryonic stem cell research is crawling like a caterpillar."

Privately funded scientists -- those working with grants from organizations or with corporate funds -- can do as they please. But scientists said federal funds are key to doing the academic research that tends to be the first step toward any kind of medical breakthrough.

READY TO GET STARTED

"We all believe that stem cell research has tremendous potential to deliver treatments and cures," Civin said. "As a scientist, I want to get started."

He and other researchers want to be able to work with embryos to make their own lines of stem cells.

Dr. Roger Pederson, formerly a researcher at the University of California San Francisco, told the hearing he left for a job at Britain's Cambridge University last September, just weeks after Bush's stem cell announcement, because he felt his options in the United States were too restricted.

"What the United States can do is limited to existing stem cell lines," Pederson said. "It has no clinical (human) use."

That is because all of the lines approved for use by Bush were made using mouse cells -- effectively contaminating them for use in humans.

Dr. George Daley of Harvard Medical School and the Massachusetts Institute of Technology said his group used therapeutic cloning to cure a mouse of a severe immune deficiency "similar to the Bubble-boy disease." "Encouraged by the proof of principle in mice, my team is eager to apply the same strategies in human ES cells," he said.

Daley would especially like to try to use cloning technology to make stem cells. This would allow a patient to be treated with cells taken from his or her own body -- overcoming barriers of immune rejection.

Competing bills pending in the Senate would either allow this so-called therapeutic cloning, or outlaw it. A bill banning it passed in the House last year.

"I believe legislation passed by the House imposing criminal penalties on nuclear transfer -- so-called therapeutic cloning -- will not come to pass. We have blocked it in the Senate," Pennsylvania Republican Sen. Arlen Specter, who chaired the hearing, said. "My own sense is that Congress is going to have to legislate."

Commentary:
Obviously Bush is taking "religious PC" to the extreme by disallowing scientific research simply because the rabid right doesn't like it. The research is going to be done, if not by us then by someone else. This is both a healthcare and economic issue. When conservatives say president's can't harm the economy, remember this one.

WASHINGTON (Reuters) - Republican energy bill negotiators emerged from a meeting with President Bush on Wednesday saying a compromise might be reached to allow oil drilling in the Arctic National Wildlife Refuge (ANWR) by opening a smaller area to rigs, trucks and pipelines.

However, Democratic negotiators expressed skepticism that a deal could be struck on what is one of the most contentious issues to be resolved in a wide-ranging energy bill intended to promote domestic production, encourage conservation and boost renewable energy sources.

At issue is whether to give big oil companies access to ANWR's potential 16 billion barrels of oil -- a volume equal to the amount of crude the United States would import from all foreign suppliers for five years.

The Republican-led House has voted to open the refuge located in northeast Alaska, while the Democratic-controlled Senate decided to keep energy exploration out of the area.

The energy bill has taken on more urgency in recent weeks, with worries of U.S. military strikes against Iraq, which would cut off that nation's 2 million barrels per day of oil exports to the world.

However, critics say a disruption in Iraqi oil would not be offset by crude oil production from the Arctic refuge for years. Oil industry executives have acknowledged that it could take about eight years for peak production of an estimated 1 million barrels per day to start flowing from tundra regions.

Rep. Billy Tauzin, a Louisiana Republican who is chairman of the joint Senate-House conference committee trying to hammer out a final bill, said he told President Bush that a deal may be reached on drilling in the Arctic refuge that would reduce the area opened for oil exploration.

"We discussed a compromise that would include scaling it (Arctic drilling) back dramatically," Tauzin said. "There's a lot of room for compromise on this issue."

COMPROMISE TO LIMIT LAND

ANWR, which is home to polar bears, caribou and other wildlife, sprawls across 19 million acres of Alaska's northeast corner.

The Republican-led House approved an energy bill last year that would limit drilling activities to about 2,000 acres at any one time within 1.5 million acres of the refuge's coastal plain.

Opening ANWR is the centerpiece of the White House's own energy plan. Bush, a Republican, is a former Texas oilman.

Tauzin said a compromise under consideration would make the refuge's eastern coastal plain near the U.S.-Canadian border, where caribou give birth, off limits to drilling and designate the area as a protected wilderness.

Tauzin emphasized that no drilling deal had been reached and that Bush did not say if he would support or reject a scaled back exploration area. "The president listened very tentatively (to the idea). He did not take a position on it," Tauzin said.

Democratic Sen. Jeff Bingaman of New Mexico, one of the energy bill's lead negotiators, gave a more cautious assessment. Bingaman, who also attended the White House meeting, said there would be "strong opposition" to such an ANWR drilling compromise in the Senate.

Sen. Joseph Lieberman, a Connecticut Democrat and possible 2004 presidential candidate, said on Wednesday that the Senate would "reject any efforts" to drill in the refuge.

Environmental groups also oppose opening any part of ANWR to drilling, saying lawmakers should instead focus on ways to improve energy conservation.

Tauzin said negotiators did not discuss with Bush whether the president would veto a bill that did not include ANWR drilling. "The president didn't take a position," he said.

Time is running out to finish the energy bill, as lawmakers still have to decide on billions of dollars in energy tax breaks, increased production of ethanol-blended gasoline, a plan to fight global warming and U.S. electricity market reforms.

Congress has said it aims to adjourn by mid-October so lawmakers can return home ahead of the November elections.

A final energy bill to promote domestic oil drilling, energy conservation and renewable sources of energy would have to be approved by the Senate and House.

Nonetheless, Tauzin said he expects negotiators to complete the energy bill next week. "We're either going to deliver a good bill to him (Bush) next week, or we're going to deliver a great bill," Tauzin said.

Commentary:
Bush proposed a secret energy plan because of the oil crisis in California, which we now know was created by republican-backed Enron. Then Bush needed another excuse to socialize (or pay back) big oil so he put us in this endless war against terrorists. But, that didn't keep oil prices up long enough for his plan to pass so he's now taking on Iraq, and bingo, prices jumped $4-5 a barrel. Saddam then allowed weapons inspectors in and prices dropped by the same the same ($4-5 a barrel). Seeing his energy plan go up in smoke again Bush rejected the weapons inspectors and said we need war instead. The price of oil shot up again. Will Congress, the press and the American people be dupped again? Let's hope not.

As I see it we should use their oil as long as possible, leaving our oil for future generations. Bush lacks vision. Also, we know the drilling is pay-back to oil companies because Jeb Bush vetoed Bush's plan to drill in Florida because it would hurt his re election chances. If domestic oil was absolutely necessary, Bush would have allowed oil companies to fill the skyscrape of Florida's beaches with oil rigs.

WASHINGTON (Reuters) - Senate Majority Leader Tom Daschle on Wednesday demanded an apology from President Bush for comments the South Dakota Democrat said were "outrageous" and politicized a possible war with Iraq.

His voice thick with emotion, the normally soft-spoken Daschle said Bush had insulted Democrats, many of them veterans of war, in saying the Democratic-controlled U.S. Senate was "not interested in the security of the American people."

"That is outrageous, outrageous," Daschle said on the Senate floor.

He demanded the president apologize to Democrats and the American people.

"We ought not to politicize this war. We ought not to politicize the rhetoric about war and life and death," Daschle said.

As the November congressional elections approach, Bush and other White House officials have been emphasizing the war against terrorism and national security issues. Democrats, who would like to keep American attention on the struggling U.S. economy, are concerned Republicans were using a possible war with Iraq to deflect the issue of Bush's handling of the economy.

Republicans responded that Daschle's remarks Wednesday were not helpful.

"I think that Senator Daschle needs to cool the rhetoric. We've got a lot of work to do," said Senate Minority Leader Trent Lott, a Mississippi Republican.

"We need to do it in a nonpartisan way. Accusations of that type are not helpful."

Commentary:
Lott says Daschle should cool the rhetoric but says nothing about Bush. I don't know about you guys but I miss the good old days when grown-ups were in the White House. Bush is using war (ya think?) for purely political purposes. He should be impeached as soon as possible. This story works really nice with the German story that follows because Bush demanded an apology from German officials, got one, but continues to be childish about it. What or what will Bush do now? His spin team is going to be up all night again.

BERLIN (Reuters) - Friction with the United States over German Chancellor Gerhard Schroeder's "hell no we won't go" attitude to war on Iraq could ruffle the world economy if Berlin and Washington fail to patch up their pivotal relationship.

The public spat between the United States and its normally cooperative ally has chilled the climate among the big economic powers ahead of Friday's meeting of Group of Seven (G7) finance ministers in Washington, adding an element of uncertainty for markets already rattled by war fears and weak global growth.

The animosity lingering since Schroeder was narrowly re-elected on Sunday after campaigning against U.S. policy on Iraq recalls a major row between West Germany and the United States 15 years ago that was seen as a contributing factor to the "Black Monday" stock market crash of October 19, 1987.

That dispute, between Treasury Secretary James Baker and Finance Minister Gerhard Stoltenberg, was specifically about G7 economic policy and so more obviously unsettling for financial markets than the present argument over attacking Baghdad.

But some analysts fear the "poison" top American officials say has seeped into relations with Germany could spread to hamper cooperation on pressing economic issues as well.

"Political tension between Germany and the United States is about the last thing markets need now," said Ulla Kochwasser, senior economist at Mizuho Corporate Bank in Frankfurt.

"It's an additional burden to the other woes markets are facing," she added. "The German-U.S. ties are very deep both politically and economically. The strains are most unhelpful."

EXPORT FEARS

An outspoken attack by Baker on high West German interest rates on Sunday, October 18, 1987, persuaded investors that G7 economic coordination was breaking down and triggered a 23 percent drop in U.S. share prices the next day.

Analysts stress that this week's slide in stock markets to five-and-a-half year lows is down to factors unrelated to President Bush feeling insulted by being supposedly likened to Adolf Hitler by one of Schroeder's ministers.

But fears the row could hurt the economy surfaced on Wednesday when a major business association warned that the big German automobile industry was vulnerable to it.

"We urgently have to repair relations with America," said Klaus Braeunig of the BDI. "Every seventh job in Germany is dependent on the car industry. We want our American friends to keep buying German cars and not be upset by all this. We need to tell America we want to continue with this close cooperation."

Other analysts agreed the traditionally close ties, built around America's protection of West Germany during the Cold War, had been soured by Schroeder's campaign and worry an escalation of the rift could cause severe damage down the road.

"Both governments are behaving poorly and making a lot of mistakes," said Adolf Rosenstock, chief European economist at Nomura International in London.

"The important question is will these tensions lead to a bigger dispute if both sides don't come to their senses and keep their mouths shut. If policy decisions are to be made based on these tensions, it would be a very big problem and cause trouble in financial markets. It's time for them to put out the fire."

"POISONED" RELATIONS"

Defense Secretary Donald Rumsfeld said on Monday ties had been "poisoned" by Schroeder's campaign and U.S. officials have said the chancellor faces a long, uphill road back to favor.

Bush repaid Schroeder with a snub -- not sending the usual congratulations on his win. The president was reported even to have declined to take a post-election phone call from Berlin.

Rumsfeld, in Warsaw for a NATO meeting, rebuffed attempts by German counterpart Peter Struck to set up a meeting to patch over their differences. Struck was quoted by German television saying he had no plans to get on his knees to talk to Rumsfeld.

Schroeder, who says attacking Iraq could destabilize the region, has now replaced the minister who still denies likening Bush to Hitler and also the parliamentary leader of his Social Democrats, who drew a similar comparison with a Roman emperor.

But memories linger of Schroeder's own campaign speeches -- including a memorable vow that Germany would "not click its heels" and follow the United States into war with Iraq.

"What Schroeder said during the campaign was quite blunt," a senior German diplomat told Reuters. "Yet the reality is German- American relations have been deteriorating since 1991 after unification. The Cold War defense bond isn't there any more."

Commentary:
It appears when Bush doesn't get his way he throws is tissy fit. No calls congratulating the winner? Good grief. Someone tell this moron to grow up a little and start being president. Bush already destroyed the US economy and not being satisfied he's trying to destroy the world economy as well. Those who say presidents' don't affect the economy need to become informed. Bush's tariffs on steel are causing major economic and foreign policy problems also.