Editor's Note:
Tax cuts that cause deficits are tax increases. Bush is postponing paying for what he gives away and spends. Never forget that deficits are future taxes plus interest. There is no Bush tax cut. In 2001 Bush passed a $1.3 trillion tax increase and this year he wants to pass another $695 billion tax increase. There is only one word to describe such silliness, "irresponsible."

Federal Reserve Chairman Alan Greenspan was wrong in cautioning against big tax cuts, House Majority Leader Tom DeLay said Thursday, asserting that President Bush's tax relief plan will restore the nation to economic prosperity.

Senate Democratic leader Tom Daschle, at the same time, was urging Bush to withdraw his 10-year, $1.3 trillion tax cut plan and come back with something better for the economy and more fiscally responsible.

The issue is expected to come to a head in the next month when the House takes up the massive tax relief plan that the White House insists will stimulate the weak economy in the short term and ensure long-term growth. Democrats say the Bush plan favors the rich and will bring little short-term relief.

DeLay has said he hopes to get the legislation through the Senate and on the president's desk by Memorial Day.

Greenspan, in testimony to Congress this week, said that while he supported the idea of eliminating double taxation on stock dividends, a main element of the Bush plan, he did not believe the economy needed further stimulus and urged Congress to avoid adding to growing budget deficits.

Greenspan, whose comments on the economy carry considerable weight, supported the $1.35 trillion tax cut that Bush signed into law in 2001.

DeLay, asked at a news conference about Greenspan's advice, said he would "ignore it. He was wrong."

"I reject economic defeatism," DeLay said about general opposition to the tax cut plan. With the Bush plan, "we will unleash a powerful economic expansion that will extend greater opportunities to every single American."

Congress is in recess next week, and GOP leaders said they would use the time to convey the benefits of the plan to their constituents. Commerce Secretary Don Evans said Americans who have learned about the proposal were universally in support. "This is all about creating more jobs, not only in the short term but in the intermediate and the long term," he said.

Republicans said a family of four with an annual income of $39,000 would get back $1,000 a year from the package. The $695 billion package Bush unveiled last month includes $385 billion to eliminate the dividend tax and $214 billion to speed up provisions of the 2001 tax cut. There were also provisions to extend child tax credits and to make it easier for lower income people to get health insurance.

The rest of the $1.3 trillion package would come from making permanent the 2001 tax cuts, which are now to expire after 10 years.

Daschle, in a letter to Bush, said the situation has changed dramatically since 2001 when the government was still enjoying budget surpluses. This year the deficit is expected to exceed $300 billion. "At a time of heightened terrorism alert, we find it impossible to understand how such an extravagant proposal can be justified when so much more needs to be done by the federal government to address critical but unmet homeland security needs," Daschle wrote.

House Democratic leader Nancy Pelosi of California, at a news conference, said she agreed with an earlier Daschle statement that Greenspan's comments were a "kiss of death" for the Bush plan.

Republicans, however, argued that the impact of the tax cut on the deficit would be far less if economists used a method called "dynamic scoring" that figures in how tax cuts will help the economy. Under that argument, tax cuts will spur economic growth, returning to the government much of the revenues lost by cutting taxes.

The third-ranked House Republican, Rep. Roy Blunt of Missouri, said that in 10 years the government would recoup 70 percent of the revenue lost from eliminating the double tax on dividends.

© 2003 The Associated Press

Commentary:
Anyone knowing the numbers knows that tax cuts destroy revenue. The tax cuts under Reagan and Bush have resulted in the record deficits. Some republicans hang on to the old idea that if we just bankrupt our Treasury today we'll reap the rewards in 10 years. Disregard such nonsense.

A group of House members introduced a balanced budget amendment to the U.S. Constitution on Thursday, arguing that recent deficits demonstrate Congress doesn't have the discipline to balance the budget on its own.

"The time has come for a little constitutional supervision over the Congress, just like we have to have parental supervision over our children," said Rep. Jim Sensenbrenner, a Wisconsin Republican who chairs the House Judiciary Committee.

The amendment was introduced by Rep. Ernest Istook, R-Okla., who told a Capitol Hill news conference, "It's hypocritical to say you oppose the deficit but don't support the balanced budget amendment."

To win passage, the amendment would have to clear both the House and Senate by two-thirds margins and then be ratified by three-fourths of the state legislatures. It would go into effect in 2008 or two years after final passage, whichever is later.

The White House is projecting budget deficits of $304 billion this year and $307 billion next year. Democrats say the Bush administration is to blame because of President Bush's 2001 tax cuts and his proposed $1.3 trillion in additional tax cuts.

Both Sensenbrenner and Istook support Bush's tax cuts, but they said that was not inconsistent with a balanced budget amendment. Sensenbrenner argued that the tax cuts would stimulate the economy and raise more tax revenue.

"This is more of a brake on spending than anything else," he said.

The White House has said President Bush supports a balanced budget amendment but that it should include exceptions for war, national emergency and economic recession. Istook's amendment has an exception for declared war or national emergency but not for recessions.

The top Democrat on the House Budget Committee, Rep. John Spratt of South Carolina, issued a statement Thursday questioning the usefulness of the amendment.

"A constitutional amendment does nothing to resolve the re-emergence of deficits because it lays down no plan of action and will not take effect for six years at the earliest," he said.

The last time a balanced budget amendment came up for a vote, in 1997, it came one vote short in the Senate. It passed the House in 1995.

Sen. Larry Craig, an Idaho Republican, has introduced a balanced budget amendment in the Senate.

© 2003 The Associated Press

Commentary:
Bush and the GOP believe the Constitution need to be amended to fix what they're doing to the budget? Good grief. The problem is not and never has been a flaw in the Constitution. The problem is and always has been the massive give-aways republican presidents promise. The Bush deficits are future taxes, not tax cuts. Americans need to get used to the idea that this president is giving us the largest future tax increase of any president any history, exceeding the irresponsible Reagan deficits.

President Clinton gave us the largest surpluses in US history and he did it with a tax increase. Since both Reagan and Bush gave us large tax cuts (their words), and both resulted in record deficits, we must conclude that tax cuts create deficits. Tax cuts simply pass the burden of paying for what was spend to the next responsible president.

Feb. 13 — A key piece of the information leading to recent terror alerts was fabricated, according to two senior law enforcement officials in Washington and New York.

The officials said that a claim made by a captured al Qaeda member that Washington, New York or Florida would be hit by a "dirty bomb" sometime this week had proven to be a product of his imagination. The informant described a detailed plan that an al Qaeda cell operating in either Virginia or Detroit had developed a way to slip past airport scanners with dirty bombs uncased in shoes, suitcases, or laptops, sources told ABCNEWS. The informant reportedly cited specific targets of government buildings and Christian or clerical centers.

"This piece of that puzzle turns out to be fabricated and therefore the reason for a lot of the alarm, particularly in Washington this week, has been dissipated after they found out that this information was not true," said Vince Cannistraro, former CIA counter-terrorism chief and ABCNEWS consultant.

It was only after the threat level was elevated to orange — meaning high — last week, that the informant was subjected to a polygraph test by the FBI, officials told ABCNEWS.

"This person did not pass," said Cannistraro.

According to officials, the FBI and the CIA are pointing fingers at each other. An FBI spokesperson told ABCNEWS today he was "not familiar with the scenario," but did not think it was accurate.

Despite the fabricated report, there are no plans to change the threat level. Officials said other intelligence has been validated and that the high level of precautions is fully warranted.

New Yorkers Taking Police Presence in Stride

In New York, police are out in force in the subways, at train stations and airports and at the bridge and tunnel crossings into the city with radiation detectors and gas masks. In a press conference this afternoon, Mayor Michael Bloomberg said 16,000 law enforcement officials trained to combat terrorism were deployed in the city. Air patrols have also returned to New York.

"We are constantly changing what we're doing so no one can predict what instruments we'll be using and where we'll be going," Bloomberg said. The mayor stressed that while people should be vigilant, they should also be aware that New York City has been on code level orange for 17 months — since the Sept. 11, 2001 attacks that destroyed the World Trade Center.

New Yorkers, and people around the country, should not be frozen by fear and must carry on with their daily lives, the mayor said. New York Gov. George Pataki said it is important for people to be alert to anything suspicious around them, but that they should not spread rumors that could create panic.

‘Threat Is Still There´

"By no means do people believe the threat has evaporated," said Cannistraro. "The threat is still there, the question really is the timing and when this is going to happen."

It's not the first time a captured al Qaeda operative has made up a huge story and scared a lot of people.

The FBI concluded the information that led to a nationwide hunt for five men suspected of infiltrating the United States on Christmas Eve was fabricated by an informant, and the agency called off the alert sparked by the information.

Officials said this one got so far because it coincided with other intelligence, that officials still believe points to a coming attack, timed to hostilities with Iraq.

Copyright © 2003 ABCNEWS Internet Ventures

Commentary:
Let's face it these guys have never been right yet. I suppose if we wait long enough just about anything can happen, but so far this Administrations record remains ZERO. They missed four attacks on 9/11, and have issued numerous warnings, all of which have been wrong. With a record of 100% wrong, one wonders why anyone still listens to them.

RBIL, Iraq, Feb. 5 — Secretary of State Colin L. Powell's assertion today that Islamic extremists were operating a poisons training camp and factory in northern Iraq appeared to surprise Kurdish officials, who greeted the claim with a mix of satisfaction and confusion.

The officials were pleased to hear an American effort to discredit their Islamist enemies, and to sense momentum toward war to unseat Saddam Hussein. But some also wondered if the intelligence Mr. Powell presented to the United Nations Security Council was imprecise.

As part of his presentation to the Security Council, Mr. Powell said a terrorist network run by Abu Musaab al-Zarqawi, an operative of Al Qaeda, had "helped establish another poison and explosive training center camp, and this camp is located in northeastern Iraq."

As he spoke, a monitor displayed a photograph with the caption: "Terrorist Poison and Explosives Factory, Khurmal."

The network that Mr. Powell referred to appeared to be Ansar al-Islam, an extremist group controlling a small area of northern Iraq. Ansar has been accused of dispatching assassins and suicide bombers, of harboring Qaeda fighters from Afghanistan and of training several hundred local fighters.

The secular Kurdish government has been battling the group since 2001, and, since December, there have been indications that Mr. Zarqawi may have spent time in Ansar's territory last year.

But no Western officials had gone as far with claims of Ansar's danger as Mr. Powell did when he showed a photograph of the Khurmal factory. Mr. Powell also said that Baghdad has a senior official in the "most senior levels" of Ansar, a claim apparently intended to build a case that Baghdad is collaborating with Al Qaeda and, by extension, in a chemical factory.

Some here quickly seconded Mr. Powell's opinion. "We have some information about this lab from agents and from prisoners," Kamal Fuad, the Parliament speaker, said.

But Mr. Powell's assertion also produced confusion tonight. One senior Kurdish official, a member of the Patriotic Union of Kurdistan who is familiar with the intelligence on Ansar, said he had not heard of the laboratory Mr. Powell displayed.

"I don't know anything about this compound," he said.

Kurds also questioned whether Mr. Powell was mistaken, or had mislabeled the photograph. Khurmal, the village named on the photo, is controlled not by Ansar al-Islam but by Komala Islami Kurdistan, a more moderate Islamic group.

The Patriotic Union of Kurdistan, which is allied with Washington and has been hosting an American intelligence team in northern Iraq for several months, maintains relations with Komala. It has been paying $200,000 to $300,000 in aid to the party each month, in an effort to lure Komala's leaders away from Ansar.

So Mr. Powell's photograph raised a question: Is the laboratory in Komala's area, meaning the Kurdish opposition might have inadvertently helped pay for it, or has the United States made a mistake?

"My sources say it is in Beyara," one Kurdish official said. "Not in Khurmal." Ansar has a headquarters in Beyara, a village several miles from Khurmal.

Abu Bari Syan, an administrator for Komal Islami Kurdistan, the party that controls Khurmal, took an even stronger stand about Mr. Powell's claim. "All of it is not true," he said.

Copyright 2003 The New York Times Company

Commentary:
It's become clear we can't trust anything Powell or Bush say anymore. Their rants about the aluminum tubes have also been proven false. But no amount of proof stops Bush and Powell from continuing their lies. Bush repeated them in his State of the Union and Powell lied to the UN. One could argue they made a mistake months ago, but now we know it's not true but they continue anyway. This president needs to be watched carefully. If we don't, he'll become the American Hitler.

WASHINGTON -- Secretary of State Colin L. Powell spent a significant part of his presentation to the United Nations this week describing a terrorist camp in northern Iraq where Al Qaeda affiliates are said to be training to carry out attacks with explosives and poisons.

But neither Powell nor other administration officials answered the question: What is the United States doing about it?

Lawmakers who have attended classified briefings on the camp say that they have been stymied for months in their efforts to get an explanation for why the United States has not launched a military strike on the compound near the village of Khurmal. Powell cited its ongoing operation as one of the key reasons for suspecting ties between Baghdad and the Al Qaeda terror network.

The lawmakers put new pressure on the Bush administration to explain its decision to leave the facility, which it has known about for months, unharmed.

"Why have we not taken it out?" Sen. Joseph R. Biden Jr. (D-Del.) asked Powell during a Senate Foreign Relations Committee hearing Thursday. "Why have we let it sit there if it's such a dangerous plant producing these toxins?"

Powell declined to answer, saying he could not discuss the matter in open session.

"I can assure you that it is a place that has been very much in our minds. And we have been tracing individuals who have gone in there and come out of there," Powell said.

Absent an explanation from the White House, some officials suggested that the administration has refrained from striking the compound in part to preserve a key piece of its case against Iraq.

"This is it, this is their compelling evidence for use of force," said one intelligence official, who asked not to be identified. "If you take it out, you can't use it as justification for war."

Sen. Dianne Feinstein (D-Calif.), a member of the intelligence committee, said she and other members have been frustrated in their attempts to get an explanation from administration officials in closed-door briefings.

"We've been asking this question and have not been given an answer," Feinstein said. Officials have replied that "they'll have to get back to us."

A White House spokesman said Thursday he had no comment on the matter.

The administration's handling of the issue has emerged as one of the more curious recent elements of the war on terrorism. Failing to intervene appears to be at odds with President Bush's stated policy of preempting terrorist threats, and the facility is in an area where the United States already has a considerable presence.

U.S. intelligence agents are said to be operating among the Kurdish population nearby, and U.S. and British warplanes patrol much of northern Iraq as part of their enforcement of a "no-fly" zone.

Several lawmakers and intelligence experts expressed concern that Powell's presentation Wednesday might have cost the United States an opportunity to prevent the spread of toxins.

"By revealing the existence of the camp, it's predictable whatever activity is there will probably go underground," said Rep. Jane Harman (D-Venice), the ranking Democrat on the House Intelligence Committee. "I don't understand why we don't hit it," said Robert Baer, a former CIA officer who worked extensively in northern Iraq. U.S. officials said the Pentagon and the CIA considered plans last summer for a covert raid on the compound, but that administration officials decided against pursuing the plan.

Officials would not say why the plan was scrapped but rejected reports at the time that activity at the camp was not seen as significant enough to warrant the risks.

Sen. Carl Levin (D-Mich.), ranking Democrat on the Senate Armed Services Committee, is particularly vocal on the matter.

"I favor prompt and forceful U.S. military action to deal with that problem, as we have done in attacking Al Qaeda terrorists in Afghanistan and Yemen," Levin said in a statement. A satellite photo showed by Powell depicted a collection of elongated buildings on relatively bare terrain, a seemingly easy target for U.S. warplanes or missiles fired from a Predator drone.

Some suggested that bombing the facility could complicate diplomatic efforts to build international support for a possible war with Iraq.

The camp is outside the "no-fly" zone, but lawmakers said based on Powell's remarks, the United States would seem to have ample justification for an attack under international law.

"It's clear to me there is existing authority," Feinstein said.

Several lawmakers cited the U.S. strike last November in Yemen, when a CIA Predator fired a Hellfire missile at a carful of suspected Al Qaeda operatives, killing six, including a U.S. citizen.

In his U.N. presentation, Powell portrayed the camp as an international menace, a facility where terrorists learn how to work with explosives and a deadly toxin known as ricin.

"Less than a pinch," Powell said, "would cause shock, followed by circulatory failure. Death comes within 72 hours and there is no antidote."

The facility is in a corner of Iraq controlled by an Islamic extremist group known as Ansar al-Islam, which is believed to have Al Qaeda ties.

But Powell said the camp is run by lieutenants of terrorist suspect Abu Musab Zarqawi, a 36-year-old Palestinian linked to a series of plots in Europe, and the killing of a U.S. Embassy worker in Jordan last year.

Zarqawi is seen as a possible link between Baghdad and Al Qaeda. Zarqawi was treated at a Baghdad hospital last year for a wound he suffered in Afghanistan, the United States says.

British police recently broke up a plot involving the possible poisoning of food at a British military base. A U.S. official said Thursday that traces of ricin were found in an apartment where several Islamic extremists were arrested. The official said those detained appear to have links to Zarqawi and the camp.

Staff writer Robin Wright contributed to this report.

Copyright 2003 Los Angeles Times

Commentary:
It's kind silly to bomb something based on lies, but Congress is asking some interesting questions. If Bush knows about this so-called camp (now proven to be a lie), why hasn't he done something about it. Bombing isn't the only answer of course, he could have sent the information to the UN inspectors and it could have been checked out on day one. But that's too easy. Why check out the facts when you can make them up?

If Colin Powell were to visit the shabby military compound at the foot of a large snow-covered mountain, he might be in for an unpleasant surprise. The US Secretary of State last week confidently described the compound in north-eastern Iraq - run by an Islamic terrorist group Ansar al-Islam - as a 'terrorist chemicals and poisons factory.' Yesterday, however, it emerged that the terrorist factory was nothing of the kind - more a dilapidated collection of concrete outbuildings at the foot of a grassy sloping hill. Behind the barbed wire, and a courtyard strewn with broken rocket parts, are a few empty concrete houses. There is a bakery. There is no sign of chemical weapons anywhere - only the smell of paraffin and vegetable ghee used for cooking.

In the kitchen, I discovered some chopped up tomatoes but not much else. The cook had left his Kalashnikov propped neatly against the wall.

Ansar al Islam - the Islamic group that uses the compound identified by Powell as a military HQ to launch murderous attacks against secular Kurdish opponents - yesterday invited me and several other foreign journalists into their territory for the first time.

'We are just a group of Muslims trying to do our duty,' Mohammad Hasan, spokesman for Ansar al-Islam, explained. 'We don't have any drugs for our fighters. We don't even have any aspirin. How can we produce any chemicals or weapons of mass destruction?' he asked.

The radical terrorist group controls a tiny mountainous chunk of Kurdistan, the self-rule enclave of northern Iraq. Over the past year Ansar's fighters have been at war with the Kurdish secular parties who control the rest of the area. Every afternoon both sides mortar each other across a dazzling landscape of mountain and shimmering green pasture. Until last week this was an obscure and parochial conflict.

But last Wednesday Powell suggested that the 500-strong band of Ansar fighters had links with both al-Qaeda and Iraqi leader Saddam Hussein. They were, he hinted, a global menace - and more than that they were the elusive link between Osama bin Laden and Iraq.

This is clearly little more than cheap hyperbole. Yesterday Hassan took the unprecedented step of inviting journalists into what was previously forbidden territory in an almost certainly doomed attempt to prevent an American missile strike once the war with Iraq kicks off. Ali Bapir, a warlord in the neighbouring town of Khormal, leant us several fighters armed with machine guns and we set off.

We drove past an Ansar checkpoint, marked with a black flag and the Islamic militia's logo - the Koran, a sheaf of wheat and a sword. We kept going. The landscape was littered with the ruins of demolished houses, destroyed during Saddam's infamous Anfal campaign against the Kurds in 1988. At the corner of the valley we passed a pink mosque, with sandbagging on the roof. Washing hung from a courtyard. A group of Ansar fighters - in green military fatigues - smiled and waved us on.

Several of their comrades were in the graveyard across the road. There were numerous fresh plots, each marked with a black flag. After 20 minutes' drive along a twisting mountain track we arrived in Serget - the village identified from space by American satellite as a haven of terrorist activity.

Yesterday, however, Hassan was at pains to deny any link with al-Qaeda. 'All we are trying to do is fulfill the prophet's goals,' he said. 'Read the Koran and you'll understand.'

Senior officials from the Patriotic Union of Kurdistan - the party with which Ansar is at war - insist that the Islamic guerrillas based in the village have been experimenting with poisons. They have smeared a crude form of cyanide on door handles. They had even tried it out on several farm animals, including sheep and donkeys, they claim. The guerrillas have also managed to construct a 1.5kg 'chemical' bomb designed to explode and kill anyone within a 50-metre radius, Kurdish intelligence sources say.

Hassan yesterday dismissed all these allegations as 'lies'. 'We don't have any chemical weapons. As you can see this is an isolated place,' Ayub Khadir, another fighter, with a bushy pirate beard and blue turban, said. And yet, despite the fact there appeared to be no evidence of chemical experimentation, Ansar's complex was lavish for an organization that purports to be made up merely of simple Muslims. Concealed in a concrete bunker, we discovered a sophisticated television studio, complete with cameras, editing equipment and a scanner.

In a neighbouring room were several computers, beneath shelves full of videotapes. A banner written in Arabic proclaims: 'Those who believe in Islam will be rewarded.'

Until recently Ansar had its own website where the faithful could log on to footage of Ansar guerrillas in battle. In small concrete bunkers the fighters operated their own radio station, Radio Jihad. The announcer had clearly been sitting on an empty box of explosives. Hassan denied yesterday that his revolutionary group received any funding from Baghdad or from Iran, a short hike away over the mountains.

'If Colin Powell were to come here he would see that we have nothing to hide,' he said. But Ansar's sources of funding remain mysterious - and their real purpose tantalisingly unclear. 'All Ansar fighters are from Iraq,' Hassan said. 'Iraq is one of the richest countries in the world. Our fighters have brought their own things with them.'

But while they appear to pose no real threat to Washington or London, Ansar's fighters are a brutal bunch. They have so far killed more than 800 opposition Kurdish fighters. They have shot dead several civilians. They have even tried - last April - to assassinate the Prime Minister of the neighbouring town of Sulamaniyah, the mild-mannered Dr Barham Salih. The plot went wrong and two of the assassins were shot dead. A third is in prison. 'We are fed up with them. We wish they would go away,' one villager, who refused to be named, said.

The militia's weapons had been inherited, captured from their enemies or bought from smugglers, Hassan said. Kurdish intelligence sources insist that there is 'solid and tangible proof' linking Ansar both to Iraqi intelligence agents and to al-Qaeda. They say that a group of fighters visited Afghanistan twice before the fall of the Taliban and met Abu Hafs, one of bin Laden's key lieutenants.

Hassan yesterday refused to say how many fighters were holed up in the three villages and one mountain valley under Ansar's control ('It's a military secret,' he said) and claimed - implausibly - that none of his men were Arab volunteers come to fight jihad in Iraq.

Commentary:
Since Powell has been discredited across the board, no need to keep this up, but needless to say there are many news sources that show Powell lied to the UN. This on top of Blair's lies and we have enough information to be certain that none of these so-called leaders can be trusted.

UNITED NATIONS, Jan. 30 — Days after delivering a broadly negative report on Iraq's cooperation with international inspectors, Hans Blix on Wednesday challenged several of the Bush administration's assertions about Iraqi cheating and the notion that time was running out for disarming Iraq through peaceful means.

In a two-hour interview in his United Nations offices overlooking Midtown Manhattan, Mr. Blix, the chief chemical and biological weapons inspector, seemed determined to dispel any impression that his report was intended to support the administration's campaign to build world support for a war to disarm Saddam Hussein.

"Whatever we say will be used by some," Mr. Blix said, adding that he had strived to be "as factual and conscientious" as possible. "I did not tailor my report to the political wishes or hopes in Baghdad or Washington or any other place."

Mr. Blix took issue with what he said were Secretary of State Colin L. Powell's claims that the inspectors had found that Iraqi officials were hiding and moving illicit materials within and outside of Iraq to prevent their discovery. He said that the inspectors had reported no such incidents.

Similarly, he said, he had not seen convincing evidence that Iraq was sending weapons scientists to Syria, Jordan or any other country to prevent them from being interviewed. Nor had he any reason to believe, as President Bush charged in his State of the Union speech, that Iraqi agents were posing as scientists.

He further disputed the Bush administration's allegations that his inspection agency might have been penetrated by Iraqi agents, and that sensitive information might have been leaked to Baghdad, compromising the inspections.

Finally, he said, he had seen no persuasive indications of Iraqi ties to Al Qaeda, which Mr. Bush also mentioned in his speech. "There are other states where there appear to be stronger links," such as Afghanistan, Mr. Blix said, noting that he had no intelligence reports on this issue. "It's bad enough that Iraq may have weapons of mass destruction."

More broadly, he challenged President Bush's argument that military action is needed to avoid the risk of a Sept. 11-style attack by terrorists wielding nuclear, biological or chemical weapons. The world is far less dangerous today than it was during the cold war, he said, when the Soviet Union and the United States threatened each other with thousands of nuclear-tipped missiles. On balance, "nuclear non-proliferation has been a success story," he said. "The world has made great progress."

Mr. Blix said he continued to endorse disarmament through peaceful means. "I think it would be terrible if this comes to an end by armed force, and I wish for this process of disarmament through the peaceful avenue of inspections," he said. "But I also know that diplomacy needs to be backed by force sometimes, and inspections need to be backed by pressure."

The decision to disarm Iraq through force was not his, he said, restating what has become a veritable mantra: It has to be decided by the "Security Council, and yes, by Iraq."

Mr. Blix reiterated his report's key finding that Iraq had not provided anything like the wholehearted cooperation he needed to certify that Saddam Hussein was not concealing nuclear, biological or chemical weapons. His concern about Iraq's attitude, he said, led him to refrain from explicitly asking for more time for inspections when he reported to the Security Council on Monday.

"I haven't pleaded for continuing inspections because I haven't seen a change of attitude on the part of Iraq," he said.

In the interview, Mr. Blix said that his examination of a liquid-filled warhead that inspectors had discovered in a bunker on Jan. 16 found no signs of any chemical weapons agent. The other 11 warheads found in the bunker were empty, he said, adding that scores of samples his team had taken across Iraq in the past two months had turned up "no trace" of either chemical or biological agents.

Mr. Blix spent hours Wednesday in a closed meeting being questioned about his report by members of the Security Council. Mr. Blix declined to discuss his session with the Security Council. But diplomats said that the United States ambassador, John D. Negroponte, had pressed Mr. Blix to make public the "indications" he referred to in his report that Iraq had made weapons with thousands of liters of anthrax it produced in the early 1990's.

Mr. Blix is said to have demurred, saying that the burden was on Iraq to prove that it had destroyed any anthrax weapons. He also assured Mr. Negroponte that he would probably be able to determine by Feb. 14 whether two missiles Iraq has declared it is developing exceed United Nations range limits. Mr. Blix stated in his report that the missiles seemed to be a "prima facie" case of a violation by Iraq of Council resolutions.

In the interview, Mr. Blix reiterated his longstanding position that "practical problems" prevented him from using the authority he was given to interview Iraqi scientists alone, without Iraqi government minders present, at a neutral place inside Iraq or outside the country. "We will at some point ask somebody if he is willing," Mr. Blix said, noting that inspectors were already "probing" the possibility of such interviews in their discussions with scientists during inspections.

As for Mr. Bush's charges that Iraqi intelligence agents were posing as scientists to be interviewed, Mr. Blix said he had seen scant evidence of it. "There were some occasions where people didn't seem very knowledgeable," he said. "But if it has happened, it's not from the top," and "it's certainly not anything that is common."

Mr. Blix said that the intelligence information being provided by Washington had improved of late. But diplomats and American officials said that tensions lingered over American suspicions that Iraq had infiltrated the United Nations Monitoring, Verification and Inspections Commission, known as Unmovic.

Both sides agree that American satellites photographed what American analysts said were Iraqi clean-up crews operating at a suspected chemical weapons site they had identified within 48 hours after the information about the site was shared with Unmovic. But the diplomats say inspectors concluded that the site was an old ammunition storage area often frequented by Iraqi trucks, and that there was no reason to believe it was involved in weapons activities.

"It was a wild goose chase." one diplomat said.

But an administration official said there was "good reason" to believe the site was suspect, and that Unmovic had waited a week before visiting it.

"Whether something was removed, or whether it was ever there remains an open question," he complained. He noted that although the C.I.A. was still providing inspectors with sensitive information, concerns remained about Unmovic's ability to safeguard it.

"Iraqis may have bugged offices or hotel rooms of some Unmovic people," he said, noting there were "several examples" in which Iraqis seemed to have either "advance knowledge, or very good luck in going to places before inspectors."

Copyright 2003 The New York Times Company

Commentary:
Blix says one thing, Bush and Powell say another. Nothing new here. Facts are meaningless to really bad people. Powell and Bush have entered that category we can now call evil or worthless.

JOURNALIST Sean Boyne and student Ibrahim al-Marashi have attacked Tony Blair for using their reports to call for war against Iraq.

Mr Boyne, who works for military magazine Jane's Intelligence Review, said he was shocked his work had been used in the Government's dossier.

Articles he wrote in 1997 were plagiarized for a 19-page intelligence document entitled Iraq: Its Infrastructure Of Concealment, Deception And Intimidation to add weight to the PM's warmongering.

He said: "I don't like to think that anything I wrote has been used for an argument for war. I am concerned because I am against the war."

The other main source was a thesis by post-graduate student, Ibrahim al-Marashi, the US-born son of Iraqis, who lives in California. His research was partly based on documents seized in the 1991 Gulf War.

He said: "This is wholesale deception. How can the British public trust the Government if it is up to these sort of tricks? People will treat any other information they publish with a lot of skepticism from now on."

After the dossier's origins were revealed, Mr Blair was accused by his own MPs of theft and lies. The fiasco has deeply damaged his attempts to win backing for military action.

It emerged the PA to Mr Blair's spin chief Alastair Campbell was involved in drawing up the dossier which was published last month.

Alison Blackshaw and a Government press officer were both named on the dossier when it was first put on the Government's website. But the names were later removed.

The bulk of the Government's document is directly copied, without acknowledgment, from Ibrahim's 5,000-word thesis - Iraq's Security and Intelligence Network - published last September.

He did not even know the dossier existed until Glen Rangwala, a Cambridge-based Iraq analyst, spotted the plagarism and called him.

Ibrahim, whose parents fled to the US from Iraq in 1968, said the Government not only blatantly lifted much of his work, including typing and grammatical errors. Mr al-Marashi and Mr Boyne said their figures had been altered in the Government document.

Former Labour Defence Minister MP Peter Kilfoyle said: "It just adds to the general impression that what we have been treated to is a farrago of half-truths.

"I am shocked that on such thin evidence that we should be trying to convince the British people that this is a war worth fighting."

And Labour MP Glenda Jackson said: "It is another example of how the Government is attempting to mislead the country and Parliament.

"And of course to mislead is a Parliamentary euphemism for lying."

The PM's official spokesman rejected Ms Jackson's claims but admitted it had been a mistake not to acknowledge Mr al-Marashi's thesis in the dossier.

He added: "The fact we used some of his work doesn't throw into question the accuracy of the document as a whole. This document is solid."

Asked whether Downing Street was embarrassed about the affair, the spokesman said: "We all have lessons to learn."

The dossier had been praised by US Secretary of State Colin Powell in his speech to the UN Security Council. Mr Boyne added: "Maybe I should invoice Colin Powell."

Commentary:
Powell uses a plagiarised document from before the Gulf War to support his lies about Iraq today. Why does anyone find this surprising?

NEW YORK (CNN/Money) - Alan Greenspan stepped up his warnings about budget deficits Wednesday, forcing the White House to admit the Federal Reserve chief was at odds with President Bush's push for quick moves to stimulate the economy.

In his second day on Capitol Hill, Greenspan told the House Financial Services Committee it was crucial that policy-makers ensure that "growing budget deficits [do not] again become entrenched.''

Bush's $695 billion stimulus plans forecasts record budget deficits this year and next -- drawing criticism from opposition Democrats. Administration officials contend the deficits are modest given the size of the $10 trillion U.S. economy and are needed to spur job creation and ultimately, more tax revenues.

But Greenspan warned that a "state of relative budget tranquility will end abruptly as Baby Boomers start retiring in a decade. He said now was the time to prepare so that Social Security and other government programs can bear the strain.

The central bank chairman made similar points in his testimony to a Senate panel Tuesday in what was widely seen as a blow to the Bush plan. Under questioning, he amplified that concern by saying he considered stimulus "premature'' because it was hard to gauge the economy's underlying health amid Iraqi war fears.

Though Greenspan supported Bush's plan to eliminate the taxation of some dividends, he said such a measure should only be passed if other revenue could be found to replace the lost tax revenue.

"There should be little disagreement about the need to re-establish budget discipline," Greenspan said in his prepared remarks, especially considering the Baby Boomers' retirement, which will put a strain on Social Security and Medicare programs.

In response to legislators' questions on both days, he also warned against Congress making spending and tax plans -- including Bush's plan to make 2001's $1.35 trillion tax cut permanent and immediately effective -- without safeguards to keep them from wrecking the budget. The 2001 tax cut was originally intended to be phased in over a period of years -- a plan Greenspan supported.

Bush has said that ending the dividend tax and accelerating the 2001 tax cut would help stimulate the U.S. economy, which has been struggling for months to recover fully from a recession that began in March 2001. Democrats say Bush's tax cuts, which would mostly benefit higher-income families, are not stimulative enough and are so large they'd create massive deficits. They've offered a plan of smaller tax cuts and spending programs that would come with a smaller price tag.

"[Greenspan's testimony] certainly raises the probability that the structure of any eventual stimulus plan passed by Congress will move closer to that favored by Democrats, a plan that has clearly been associated with lower revenue losses," said Anthony Chan, chief economist at Banc One Investment Advisors.

The White House did not return repeated calls seeking comment, but officials tried to put the best face on Greenspan's remarks.

"There is somewhat of a difference about the stimulus, the need for stimulus, and in that there is reasonable disagreement," White House spokesman Ari Fleischer said, Reuters reported Wednesday. "The president will err on the side of helping those who look for work."

Democrats expressed glee about Greenspan's remarks, while Republicans circled the wagons in defense of the tax plan. Sen. Tom Daschle, D-S.D., called Greenspan's criticisms "the kiss of death" for the Bush plan, while Senate Finance Committee Chairman Charles Grassley, R-Iowa, called the plan "very good policy," according to Reuters.

But Greenspan also undercut the Democrats' plans by rejecting their call for giving federal money to cash-strapped states and by questioning whether any stimulus package was necessary at all.

Greenspan said he suspected the economy's biggest problem was lingering uncertainty about the prospect of a U.S.-led war in Iraq and the kind of effect such a war might have on the economy. Once the risk of war with Iraq is lifted, the Fed believes, businesses will be more confident about making spending plans, and the economy will rebound.

"Unless and until we can make a judgment as to whether there is underlying deterioration going on -- and my own judgment is I suspect not -- then stimulus is actually premature,'' Greenspan said in response to a senator's question.

On the other hand, he also warned fixing Iraq might not be a cure-all for the economy, and that the Fed might need to again cut short-term interest rates -- already at 40-year lows -- if weakness continued beyond the resolution of the situation in Iraq.

"If these uncertainties diminish considerably in the near term, we should be able to tell far better whether we are dealing with a business sector and an economy poised to grow more rapidly ... or one that is still laboring under persisting strains and imbalances that have been misidentified as transitory," he said in his prepared remarks.

Undercutting GOP arguments
Last week, President Bush presented a budget to Congress that projected a record $304 billion deficit for the current fiscal year and deficits until at least 2008. These projections, which Greenspan called "sobering," do not include the possible cost of a war or post-war rebuilding in Iraq and are based on assumptions about economic growth that some economists think are overly optimistic.

The Bush administration and some economists have argued deficit spending is desirable when the economy is slow, a theory with which Greenspan did agree, but about which he was not very enthusiastic.

"You can have, in today's environment ... modest, small deficits. That's not inconsistent with stability," he said in response to a senator's question. "But if we get into a position ... where we are finding that the debt-to-GDP (gross domestic product) ratio begins to accelerate, we have to be very careful."

Bush and supporters of his plan have suggested tax cuts would spur economic growth, which would in turn lift the government's tax revenues and control future deficits.

Greenspan also undercut this argument, saying, "Faster economic growth, doubtless, would make deficits far easier to contain. But faster economic growth alone is not likely to be the full solution to currently projected long-term deficits."

Greenspan also disagreed with the notion, offered lately by some Republicans and economists in support of the president's tax plan, that deficits can rise without having an impact on long-term interest rates.

"There's no question that when deficits go up, contrary to what some have said, it does affect long-term interest rates, it does affect the economy," he said.

Greenspan did agree with Republican arguments a permanent tax cut would be more readily accepted by businesses and individuals and could lead to greater spending than would a tax cut that would eventually be phased out.

But, he also warned such tax cuts should be flexible, subject to checks and balances that would keep them under control if they threatened to create big deficits.

"It would be desirable to have permanent, irrevocable fiscal policy. But if it adds up to a claim on resources which exceeds what is available ... something has to give," he said in response to a question.

Greenspan was unequivocal in his support of Bush's plan to eliminate dividend taxes, saying it was "a sensible long-term program." However, he also said such a plan should be "revenue neutral," meaning Congress should find a way to make up the revenue lost by eliminating the tax.

Greenspan called for changes to the formula used to calculate cost-of-living increases in federal benefits and changes in federal income tax brackets that he said would have reduced the federal budget deficit by $40 billion through reduced outlays and increased tax collections. He seemed pessimistic Congress and the administration will take the necessary steps to restrain growing deficits.   

-- Reuters contributed to this report

Commentary:
Whatever you think of Greenspan (not much), he's been consistent about one thing--keeping the deficits down. But it was also Greenspan who increased interest rates enough to slow the economy and throw it into a recession. This slowing made Bush's flawed tax cut (increase) acceptable to morons. Without Greenspan we wouldn't have Bush and Bush's deficits (tax increases). Bush and Greenspan have master-minded massive deficits (future taxes) for as far as the eye can see. This is their legacy.

Don't forget, Greenspan opposed the Clinton tax increase which lowered deficits every year his presidency and he supported Bush's tax cut, which are giving us deficits for every Bush budget. With a record like this, why does anyone listen to Greenspan or Bush?