Survey suggests further slowing of Midwest growth

Results from a July survey of business conditions in nine Midwestern and Plains states suggest a slowdown in growth.

Creighton University economics professor Ernie Goss says uncertainty about the national economy is among the factors hampering business expansion in the region.

The overall index for the Mid-America Business Conditions dropped only slightly, to 54.1 in July from 54.9 in June. But it was the fourth time in the past five months that the index dropped.

The survey of supply managers and executives and the report use a collection of indexes ranging from zero to 100. Any score above 50 suggests growth in an index while a score below 50 suggests that index will decline.News...

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Norwegians call for tougher laws after mass killing

Norwegians believe penalties for serious crimes in their country should be tightened in the wake of a shooting and bomb attack that killed 77 people in July, an opinion poll showed Monday.

In a survey of 1,283 people conducted six days after the July 22 attack, 65.5 percent said the penalties were "too low" and only 23.8 percent believed they were suitable, newspaper Verdens Gang reported.

Anders Behring Breivik, the 32-year old anti-Islamic immigration zealot who has confessed to the bombing in Oslo and shooting spree on a nearby island, has been charged by police with terrorism, which carries a sentence of up to 21 years.

He also faces the risk of successive five-year protective custody sentences, and some have also called for the use of provisions on crimes against humanity that could give an initial sentence of up to 30 years.

The broader aim of Breivik's attacks was to save Europe from "cultural Marxism" and a "Muslim invasion," according to a manifesto published just hours before the killings. The majority of the victims were teenagers at a Labor Party youth summer camp.

Justice Minister Knut Storberget told VG he was "not surprised" by the calls for stricter laws. "We must listen and have a debate, while not draw hasty conclusions... it's important that policy isn't shaped in a state of panic."

Hanne Marthe Narud, a political scientist at the University of Oslo, said Norway's parliament is likely to stand against immediate public calls for harsher sentencing and more surveillance.

"A lot of these attitudes we see now are reflections of the terror event," she told Reuters, referring to the VG poll.

"I don't think the politicians will change legislation on this point as a spontaneous reaction. It may be considered, but there will be a broad debate first."

"In 2001 it was as though someone had declared war against the U.S., which Al Qaeda and those groups had actually done." she added.

"This by contrast appears to be the act of one person who is sick or has his mind in a bubble. You can't really do legislation based on events like we have had in Norway."

She said public opinion has long favored stricter punishment for violent crimes while the parliament has resisted cracking down.More...

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With Debt Deal Reached, Can Congress Swallow Its Own Bitter Medicine?

If the definition of a compromise is something that most folks don't like, then the $2.4 trillion debt-ceiling deal worked out over the weekend by President Barack Obama and GOP leaders in Congress is a resounding success.

As details of the framework began to leak early Sunday, the far wings of each party quickly rejected the compromise as capitulation. Democrats angrily noted that the plan was all spending cuts and no revenue increases. MoveOn.org, the liberal advocacy group, panned the deal and called on Congress to "pass a clean debt ceiling bill that doesn't force the middle class and the poor to bear the brunt of this crisis."

Conservatives, meanwhile, worried that the deal left open the door to revenue increases and could lead to steep defense cuts. "Republican Leaders are asking their members to accept tax increases or massive defense cuts and senior anger right before the election," blogged Erick Erickson, editor of the conservative website RedState.com. (See "Obama Announces Breakthrough Debt Deal with Congressional Leaders.")

With the clock ticking and various congressional groups scheduled to meet on Monday morning to discuss the framework, the key question is whether the center can hold this deal together. Senate leaders certainly seem to think so, and a vote in the upper chamber is expected Monday afternoon.

The timing is key. Markets will be watching closely, and ever since the debacle of the first failed bank bailout vote in 2008 when the Dow plunged 778 points, lawmakers have been sensitive about when they hold economically perilous votes. But 11th hour action - the U.S. treasury has given Congress until midnight Tuesday before it says it will have to take drastic action to avoid a default - will force the House to act, leaving brazen conservative lawmakers no time to amend the bill and no choice but to pass it.

Convincing House Republicans will be a heavy lift. As President Obama announced Sunday night that "the leaders of both parties, in both chambers, have reached an agreement," Boehner was telling his conference, "There's no agreement until we've talked to you." The embattled Speaker apologized to his members that the deal "is not ideal," while trying to reassure them that "there is nothing in this framework that violates our principles."

"It's all spending cuts," Boehner said. "The White House bid to raise taxes has been shut down." Here's the Speaker's problem: It isn't exactly true that any effort to increase revenue has been defeated. While the deal would enact no tax increases up front, it leaves the door open to increased revenues through the special commission. (See the top 10 government showdowns.)

The plan would cut more than $900 billion in spending right away and raise the debt ceiling through January. Next, it would call for a vote on a balanced budget amendment to the constitution, which would likely fail in the Senate. Third, it would set up a commission of six Republicans and six Democrats to find an additional $1.5 trillion in savings. Democrats will surely push for revenue increases in the third stage, though they will be limited on the amount they can raise from individual income because they'll be working off the "current law" baseline, which assumes the expiration of the Bush tax cuts. The most likely source of new revenue will be ending corporate tax breaks and subsidies.

The real tough sell to Republicans is the enforcement mechanism on the commission. If the committee were to deadlock, $1.2 trillion in across-the-board cuts over a 10-year period would automatically kick in. Democrats have their own problems selling their members on a 2% or more cut to Medicare providers in the event of a deadlock, but Medicare benefits as well as Medicaid and Social Security would remain untouched. Republicans hate that fully half of the $1.5 trillion in triggered cuts would come out of the Pentagon's budget. When confronted with the choice of defense cuts or increased revenues, President George H. W. Bush chose to raise taxes, a move that arguably cost him reelection.

Still, Democrats argue that Republicans got almost everything they wanted in the end. When Obama started debt ceiling negotiations, he asked for a three-to-one ratio of cuts to revenue increases. By the end of his "grand bargain" talks with Speaker Boehner, that ratio was five-to-one. Unless Democrats can win some revenue increases through the commission, the deal will end up as 100% cuts and no tax hikes. In addition, Republicans will get a vote on a balanced budget amendment in the Senate. (See Political Pictures of the Week.)

Despite those gains, there remains a real question as to whether Boehner can convince enough of his House Republican flock to vote for the deal. He failed to get 216 Republicans to vote for his version of this compromise on Thurdsay, and that plan was significantly more conservative than the one under consideration now. House Democrats aren't wild about the compromise either. "We all may not support it, or none of us may be able to support it," House Minority Leader Nancy Pelosi told reporters Sunday evening, though her staff was quick to clarify that she is keeping an open mind.

The final outcome may be something right out the deficit reduction deal struck by President Ronald Reagan and House Speaker Tip O'Neill in the 1980s. That vote split the House exactly; both sides delivered 109 votes. It'll be bad news for Boehner if he can't get a majority of his own conference - 121 votes - and worse if he can't get 108 to make up for half of the 216 votes required for passage. Boehner's future would be in doubt if the vote comes down to something like the second bank bailout vote in 2008, when 172 Democrats and 91 Republicans swallowed the bitter medicine together. If the bill fails altogether, as the first bank bailout did when Boehner didn't deliver the number of votes he promised, it could be the final nail in the Speaker's coffin. Pelosi's case to reclaim the House will grow stronger with every vote Boehner fails to muster.More...

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Afghan governor: NATO airstrike kills 4

The governor of Afghanistan's northeastern Nuristan province says four police officers have been killed and two wounded in a NATO airstrike on a checkpoint in the remote and mountainous region.

Jamaluddin Badar said Monday that NATO forces also detained 12 police officers after the airstrike. He strongly condemned the airstrike and arrests, which he said occurred late Sunday in the Wama district of the largely lawless province which borders Pakistan.News..

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Congress moving quickly on debt and spending deal

Congress is moving quickly on an agreement to avert a potentially devastating default on U.S. obligations, with legislation that mixes a record increase in the government's borrowing cap with the promise of more than $2 trillion in spending cuts.

After a tense weekend of bargaining, President Barack Obama and congressional leaders announced the agreement Sunday night, providing an instant boost to Asian financial markets and a huge dose of relief to an administration and Congress frazzled by months of partisan warfare and the chance that a default could send the still-fragile economy into recession.

The Senate seems likely to vote first on the measure while House GOP leaders work to assemble support for it. Democratic votes are certain to be needed to pass the measure in the Republican-dominated House, just as Republicans will be needed to clear the measure through the Democratic Senate. Liberal Democrats were already carping that Obama had given away too much to GOP leaders.

"Now, is this the deal I would have preferred? No," Obama said. "But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year."

The still-unreleased legislation would slice more than $2 trillion from federal spending over a decade and permit the nation's $14.3 trillion borrowing cap to rise by up to $2.4 trillion, enough to keep the government afloat through the 2012 elections — a key objective for Obama, whose poll numbers have sagged as the summertime crisis dragged on.

House Speaker John Boehner, R-Ohio, telephoned Obama at mid-evening to say the agreement had been struck, then immediately began pitching the deal to his fractious rank and file.

"It isn't the greatest deal in the world, but it shows how much we've changed the terms of the debate in this town," he said on a conference call, according to GOP officials. He added the agreement was "all spending cuts. The White House bid to raise taxes has been shut down."

House Democratic Leader Nancy Pelosi, D-Calif., was publicly noncommittal. "I look forward to reviewing the legislation with my caucus to see what level of support we can provide," Pelosi said in a written statement. But Democratic officials said she was unlikely to do anything to try to scuttle the package.

Passage seemed likely if not wholly assured. Support from Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., should guarantee Senate approval, but the House could prove more difficult because of defections from left and right alike.

"This deal trades people's livelihoods for the votes of a few unappeasable right-wing radicals, and I will not support it," said Rep. Raul Grijalva, D-Ariz.

Tea party favorite and presidential candidate Michele Bachmann, R-Minn., countered that the deal "spends too much and doesn't cut enough. ... Someone has to say no. I will."

The government presently borrows more than 40 cents of every dollar it spends, and without an infusion of borrowing authority, the government would face an unprecedented default on U.S. loans and obligations — like $23 billion worth of Social Security pension payments to retirees due Aug. 3.

The increased borrowing authority includes $400 billion that would take effect immediately and $500 billion that Obama could order unless specifically denied by Congress. That $900 billion increase in the debt cap would be matched by savings produced over the coming decade by capping spending on day-to-day agency budgets passed by Congress each year.

A special bipartisan committee would be established to find another $1.5 trillion in further spending cuts, probably taken from benefit programs like farm subsidies, Medicare and the Medicaid health care program for the poor and disabled. Republicans dismissed the idea that the panel would approve tax increases.

Any agreement by the panel would be voted on by both House and Senate — and if the panel deadlocked, automatic spending cuts would slash across much of the federal budget. Social Security, Medicaid and food stamps would be exempt from the automatic cuts, but payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare.More.

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