With just one phase in these elections remaining, the focus of all the major political formations has shifted to the process of cobbling together post-poll allies.
On Saturday, Manmohan Singh was giving bedside assurance that the Congress will not dump the DMK for the AIADMK after the polls was necessitated by what was seen as overtures by Congress leaders like Rahul Gandhi to Jayalalithaa.
At a press conference in Chennai before his hospital visit to see the DMK chief M Karunanidhi, the Prime Minister tried to reach out to his only Tamil Nadu ally.
When asked if he is categorically ruling out any alliance with the AIADMK after the polls, Singh said, "As of now, we are fighting this election in the company of the DMK. It is our fervent hope that this alliance which has stood the test of time for the last five years and has delivered solid results, we will maintain this alliance as we form the government."
While reiterating the Centre's concern for Tamil civilians in Sri Lanka, Singh chose to side step a reference to Karunanidhi's recent pro-LTTE comments.
"I may not agree with them but it is a free country, a democracy and everyone has a right to express their views," he said.
But many believe that the Prime Minister is hedging his bets because he has refused to rule out a post-poll pact with the AIADMK.
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With just one phase in these elections remaining, the focus of all the major political formations has shifted to the process of cobbling together post-poll allies.
On Saturday, Manmohan Singh was giving bedside assurance that the Congress will not dump the DMK for the AIADMK after the polls was necessitated by what was seen as overtures by Congress leaders like Rahul Gandhi to Jayalalithaa.
At a press conference in Chennai before his hospital visit to see the DMK chief M Karunanidhi, the Prime Minister tried to reach out to his only Tamil Nadu ally.
When asked if he is categorically ruling out any alliance with the AIADMK after the polls, Singh said, "As of now, we are fighting this election in the company of the DMK. It is our fervent hope that this alliance which has stood the test of time for the last five years and has delivered solid results, we will maintain this alliance as we form the government."
While reiterating the Centre's concern for Tamil civilians in Sri Lanka, Singh chose to side step a reference to Karunanidhi's recent pro-LTTE comments.
"I may not agree with them but it is a free country, a democracy and everyone has a right to express their views," he said.
But many believe that the Prime Minister is hedging his bets because he has refused to rule out a post-poll pact with the AIADMK.
Comments Post your comments
Post Your Comments Fields marked with * are mandatory
*Name:
E-mail:
*Comments:
Limit 4000 characters - 4000 characters remaining
*Secure Code:
Problem viewing this image. Click to refresh
Kindly do not post any defamatory, infringing, obscene, indecent, discriminatory or unlawful material or information. NDTV Convergence Ltd reserves the right to remove without notice any content received from users.
With just one phase in these elections remaining, the focus of all the major political formations has shifted to the process of cobbling together post-poll allies.
On Saturday, Manmohan Singh was giving bedside assurance that the Congress will not dump the DMK for the AIADMK after the polls was necessitated by what was seen as overtures by Congress leaders like Rahul Gandhi to Jayalalithaa.
At a press conference in Chennai before his hospital visit to see the DMK chief M Karunanidhi, the Prime Minister tried to reach out to his only Tamil Nadu ally.
When asked if he is categorically ruling out any alliance with the AIADMK after the polls, Singh said, "As of now, we are fighting this election in the company of the DMK. It is our fervent hope that this alliance which has stood the test of time for the last five years and has delivered solid results, we will maintain this alliance as we form the government."
While reiterating the Centre's concern for Tamil civilians in Sri Lanka, Singh chose to side step a reference to Karunanidhi's recent pro-LTTE comments.
"I may not agree with them but it is a free country, a democracy and everyone has a right to express their views," he said.
But many believe that the Prime Minister is hedging his bets because he has refused to rule out a post-poll pact with the AIADMK.
Saturday, May 9, 2009
fast forward
Perhaps it’s the heat or maybe it’s excess of politics, but I’m going to make one of those reckless prognostications that make wise men weep and journalists howl with laughter. Worse, I have little more than my gut instinct to back up my prediction. It could seem rational, even logical, possibly analytical but I readily accept it’s also questionable, disputable and controversial.
Well, so much for the explanation. Or the apologia! What is it that’s prompted this self-effacing preface? Simply this: Priyanka Gandhi will be Prime Minister of India one day.
But let me quickly add it won’t happen immediately and possibly not for several years. And it’s what happens in the interregnum that will be critical to her candidature and its success. So now, lured no doubt by my own impetuosity, let me elaborate.
My hunch is we are going to see a messy outcome of the present elections. Whether it’s a third or fourth front government, or one that includes or is even led by the Congress or the BJP, it will be weak, short-lived and unable to tackle the economic, political or national security challenges we face.
However, the term khichdi falls short of fully describing this experience. Khichdi is usually light and easy to digest. This government will prove hard to accept and difficult to swallow. And the pain of endurance will determine the outcome of the next election. That could be as early as 2011.
My guess is at that point India will vote for a strong alternative led by a personality who has a national appeal and can command attention. And if at that stage the Congress is fronted by Rahul Gandhi and the BJP by Narendra Modi, then the latter fits the bill.
Secondly, the process that brings Modi to power will fracture or shatter the NDA. This means Modi will either have an outright BJP majority or, at most, depend on the Shiv Sena and Akali Dal. And I’d say his government will probably serve its full term.
So it’s seven years down the road that Priyanka Gandhi will step on to the political stage. It will be the shock of the Modi victory — and, perhaps, revulsion against the man, his policies and their outcome — that will overcome both her philosophical distaste for politics as well as her emotional reluctance to replace her brother.
Convincing Priyanka won’t be easy and it won’t happen quickly. In fact, she’ll have to convince herself — by living through Modi’s India, by wrestling with her doubts and inhibitions and by accepting, but perhaps never admitting, that Rahul, the brother she adores, cannot restore the Congress fortunes or India’s self-image and self-respect. She’ll have to convince herself that her party and her country need her.
And now, why do I believe if Priyanka steps into politics she could end up as PM? Because she has a magical spark that makes her compelling. It’s a combination of charm, charisma, presence, appearance and intelligence. You see it on tv, you sense it in her interviews and, if my colleagues are correct, it captivates the audiences she speaks to.
She has one further quality which is particularly rare. She understands herself and is comfortable with who she is. It’s a sort of Buddhist self-awareness and it’s reassuring to encounter. It makes you want to believe in her. Yet this is why she will struggle and agonise over becoming a politician but, when she does, this is also why she will rise to the top.
Pause now and ask how many ‘ifs’ have to happen for my prophecy to be fulfilled? I’d say three: an unpalatable khichdi at this elections, a Modi ‘majority’ at the next and a widespread acceptance of the Priyanka phenomenon in the interim.
The third of these three factors is already under-way. The first is likely to happen by next weekend. Thereafter, it all depends on Modi’s fortunes. The irony is that it could turn out like the disputed Modi comment of 2002 — Priyanka Gandhi will be the equal and opposite ‘reaction’ to his own coming to power!
excerpts taken from the hindusthan times as published :Karan Thapar( Sunday Edition)
Well, so much for the explanation. Or the apologia! What is it that’s prompted this self-effacing preface? Simply this: Priyanka Gandhi will be Prime Minister of India one day.
But let me quickly add it won’t happen immediately and possibly not for several years. And it’s what happens in the interregnum that will be critical to her candidature and its success. So now, lured no doubt by my own impetuosity, let me elaborate.
My hunch is we are going to see a messy outcome of the present elections. Whether it’s a third or fourth front government, or one that includes or is even led by the Congress or the BJP, it will be weak, short-lived and unable to tackle the economic, political or national security challenges we face.
However, the term khichdi falls short of fully describing this experience. Khichdi is usually light and easy to digest. This government will prove hard to accept and difficult to swallow. And the pain of endurance will determine the outcome of the next election. That could be as early as 2011.
My guess is at that point India will vote for a strong alternative led by a personality who has a national appeal and can command attention. And if at that stage the Congress is fronted by Rahul Gandhi and the BJP by Narendra Modi, then the latter fits the bill.
Secondly, the process that brings Modi to power will fracture or shatter the NDA. This means Modi will either have an outright BJP majority or, at most, depend on the Shiv Sena and Akali Dal. And I’d say his government will probably serve its full term.
So it’s seven years down the road that Priyanka Gandhi will step on to the political stage. It will be the shock of the Modi victory — and, perhaps, revulsion against the man, his policies and their outcome — that will overcome both her philosophical distaste for politics as well as her emotional reluctance to replace her brother.
Convincing Priyanka won’t be easy and it won’t happen quickly. In fact, she’ll have to convince herself — by living through Modi’s India, by wrestling with her doubts and inhibitions and by accepting, but perhaps never admitting, that Rahul, the brother she adores, cannot restore the Congress fortunes or India’s self-image and self-respect. She’ll have to convince herself that her party and her country need her.
And now, why do I believe if Priyanka steps into politics she could end up as PM? Because she has a magical spark that makes her compelling. It’s a combination of charm, charisma, presence, appearance and intelligence. You see it on tv, you sense it in her interviews and, if my colleagues are correct, it captivates the audiences she speaks to.
She has one further quality which is particularly rare. She understands herself and is comfortable with who she is. It’s a sort of Buddhist self-awareness and it’s reassuring to encounter. It makes you want to believe in her. Yet this is why she will struggle and agonise over becoming a politician but, when she does, this is also why she will rise to the top.
Pause now and ask how many ‘ifs’ have to happen for my prophecy to be fulfilled? I’d say three: an unpalatable khichdi at this elections, a Modi ‘majority’ at the next and a widespread acceptance of the Priyanka phenomenon in the interim.
The third of these three factors is already under-way. The first is likely to happen by next weekend. Thereafter, it all depends on Modi’s fortunes. The irony is that it could turn out like the disputed Modi comment of 2002 — Priyanka Gandhi will be the equal and opposite ‘reaction’ to his own coming to power!
excerpts taken from the hindusthan times as published :Karan Thapar( Sunday Edition)
Thieves make merry on poll day, steal 19 vehicles
Over 56,000 security personnel including the 38,834 strong Delhi Police force ensured smooth elections in the Capital but such a huge force couldn’t prevent vehicle thefts.
Automobile thieves managed to steal as many as 19 vehicles from the streets of the city in a single day on May 7.
Delhi police said 19 cases of vehicular theft were reported from various parts of the city on polling day.
Rahul Gupta, a resident of Sadar Bazaar, reported that his Santro car was stolen on the day of elections. “I parked my car at our residential parking lot around midnight. When I woke up in the morning around 6:00, I found out that my car was missing. There was such heavy police presence in our area but still the thieves managed to steal my vehicle,” he said.
According to Delhi Police records this year till May 8, as many as 8,704 vehicles were reported stolen in the Capital.
On an average around 70 vehicles are stolen per day and it seems that polling day was no exception. In 2007 the figure was 8,039, which rose in 2008 to 9,895 motor vehicle thefts in the Capital.
The Delhi Police on their part had rounded up various bad characters, car thieves and bootleggers before the elections. But all this has not helped in preventing car thefts in the city.
On May 7, 19 motorcycles and 8 cars were reported stolen from different parts of the city.
Even after a crackdown by police teams on a number of gangs, cases of carjacking of luxury vehicles are also on the rise in the city.
“Cars like Skoda, Honda Civic and even high-end luxury SUVs like Mitsubishi Pajeros are much in demand in the black market,” said a police officer.
courtsey: the hindusthan times
Automobile thieves managed to steal as many as 19 vehicles from the streets of the city in a single day on May 7.
Delhi police said 19 cases of vehicular theft were reported from various parts of the city on polling day.
Rahul Gupta, a resident of Sadar Bazaar, reported that his Santro car was stolen on the day of elections. “I parked my car at our residential parking lot around midnight. When I woke up in the morning around 6:00, I found out that my car was missing. There was such heavy police presence in our area but still the thieves managed to steal my vehicle,” he said.
According to Delhi Police records this year till May 8, as many as 8,704 vehicles were reported stolen in the Capital.
On an average around 70 vehicles are stolen per day and it seems that polling day was no exception. In 2007 the figure was 8,039, which rose in 2008 to 9,895 motor vehicle thefts in the Capital.
The Delhi Police on their part had rounded up various bad characters, car thieves and bootleggers before the elections. But all this has not helped in preventing car thefts in the city.
On May 7, 19 motorcycles and 8 cars were reported stolen from different parts of the city.
Even after a crackdown by police teams on a number of gangs, cases of carjacking of luxury vehicles are also on the rise in the city.
“Cars like Skoda, Honda Civic and even high-end luxury SUVs like Mitsubishi Pajeros are much in demand in the black market,” said a police officer.
courtsey: the hindusthan times
Better, but hardly great
The economy no longer is in a free fall. Everyone has heard that by now, whether or not they feel that it's true in their own lives.
Wall Street believes it's true enough: The winter plunge in stocks has given way to a two-month-old rebound that has pushed most major share indexes up 30% or more, and back into positive territory for the year.
The market's job is to anticipate key inflection points in the economy. Sometimes, it even gets them right.
Yet there's a specter over this market recovery that looms larger as stocks climb: The short-term outlook for the economy has improved significantly. But there is a glaring lack of faith in the longer term.
Many big investors fear that the huge structural problems facing the economy -- the ongoing need for consumers to shrink their debt loads, for example -- will make it very difficult to foster an expansion robust enough to justify a sustained climb in share prices.
The real challenge for Wall Street, then, isn't staying optimistic this spring but figuring out how to be hopeful beyond the end of the year, even if the recession has ended.
That's why faith in a bona fide new bull market is hard to locate among veteran investors. And the two alternatives -- another bear-market swoon, or a long period of share prices bouncing back and forth in a narrow range -- hardly inspire joy.
For the moment, however, the markets are reacting logically to more signs that the economy is bottoming.
After reaching the depths of despair early in March, investors have been cheered by the "green shoots" appearing in the financial system and economy, a term coined by Federal Reserve Chairman Ben S. Bernanke in March.
On Friday, the government reported that the economy lost a net 539,000 jobs in April. That should qualify as a disaster -- except in the context of far larger declines in the last few months, including net losses of 699,000 in March. Compared with the recent trend, April's employment report looks like a green shoot.
Likewise, in its long-awaited report Thursday on the financial health of 19 major banks, the Fed said it would require 10 of them to bolster their balance sheets by a total of $75 billion to protect against potential loan losses.
After the meltdown of much of the financial system last fall, Wall Street figures that a capital shortfall of $75 billion is a cinch: Bank stocks rocketed Friday, leading another broad advance that pushed the Standard & Poor's 500 index up 2.4%, bringing its gain since March 9 to 37%.
Skeptics say the Fed's so-called stress test of the banks is a joke, and doesn't come close to assessing the likely damage to the banks if commercial real estate loans, credit card loans and other debt follow the path of subprime mortgages.
But there have been enough other green shoots appearing, here and abroad, to push financial system fears off to the side for now.
Indeed, the rebound in U.S. stocks hasn't happened in a vacuum. Markets have surged around the globe over the last two months. So have prices of many commodities -- another bet on a reviving economy.
Crude oil in New York jumped $1.92 to $58.63 a barrel Friday, the highest price since November, even though U.S. oil inventories are at 19-year highs.
Some investors who correctly called the turn in markets this spring are sticking with the idea that the global economy has seen the worst of the recession.
Veteran money manager Jeremy Grantham, chairman of Grantham, Mayo, Van Otterloo in Boston, urged investors early in March to start putting cash to work. Because he has long been well-known as a market bear, Grantham's bullish turn got attention.
In a commentary to clients this week, Grantham said government spending aimed at ending the recession "is so extensive globally that surely it will kick up the economies of at least some of the larger countries, including the U.S. and China, by late this year or early next year."
Yet Grantham sees very little hope of lasting gains for stock investors in coming years. Any steep rally this year, he says, "Will set us up for a long, drawn-out disappointment not only in the economy, but also in the stock markets of the developed world."
Why? Look to the massive amount of wealth destroyed by the global stock crash and by the housing market's collapse, Grantham says. In the U.S., the total market value of housing, commercial real estate and stocks plummeted from $50 trillion at the peak to below $30 trillion at the recent low, he says.
That plunge, he says, "is enough to deliver a life-changing shock for hundreds of millions of people.
"Collectively, we will save more, spend less and waste less. It may not even be a less pleasant world when we get used to it, but for several years it will cause a lot of readjustment problems," Grantham says.
Notably, he warns, this New World Order will keep downward pressure on corporate profit margins. If earnings can't accelerate meaningfully, stocks' upside will be limited. And without a powerful earnings recovery, companies will have less incentive to expand and add jobs.
Joseph LaVorgna, chief U.S. economist for Deutsche Bank Securities in New York, says many investors may still be overestimating U.S. consumers' ability to bounce back from the economic and financial debacles of the last two years.
The severity of job losses in this recession have blown a hole in the nation's personal income statistics, LaVorgna notes. Add to that the burden of repaying the debt mountain built up over the last 25 years, the inability of many consumers to get new credit and the evaporation of home equity, and "we believe consumer spending will be extraordinarily weak for some time to come, even after the economy stabilizes and begins to improve sometime next year," he says.
Grantham and LaVorgna are generalizing about the future as they see it, obviously. It's a big planet with a lot of still-well-off consumers and enterprising companies. If the world isn't ending, there will be opportunities to make money in stocks even in a slower-growing global economy.
But their central point is that investors overall won't want to pay up aggressively for stocks if the economy is likely to face a slog, at best.
Of course, when recessions end there always are doubts about the economy's growth prospects in a recovery, and about how high stocks can go.
The last time doubts were this pervasive was in the expansion and bull market that began in 1982. Many investors were sure that the wild inflation and record-high interest rates of the 1970s would persist, limiting the economy's potential.
They were wrong. And as inflation and interest rates plunged, that underpinned the recovery and stocks' gains. So did a renewed borrowing binge by consumers, companies and government in the 1980s.
This time around, key interest rates, such as on mortgages, already are near record lows. The Fed's benchmark short-term interest rate is at zero. And given the credit catastrophe we're still living through, we know the next consumer borrowing binge is a long, long way off.
So investors, LaVorgna says, will keep running into the same sobering question about the economy if stocks keep rising: "How good is it going to get, really?"
Wall Street believes it's true enough: The winter plunge in stocks has given way to a two-month-old rebound that has pushed most major share indexes up 30% or more, and back into positive territory for the year.
The market's job is to anticipate key inflection points in the economy. Sometimes, it even gets them right.
Yet there's a specter over this market recovery that looms larger as stocks climb: The short-term outlook for the economy has improved significantly. But there is a glaring lack of faith in the longer term.
Many big investors fear that the huge structural problems facing the economy -- the ongoing need for consumers to shrink their debt loads, for example -- will make it very difficult to foster an expansion robust enough to justify a sustained climb in share prices.
The real challenge for Wall Street, then, isn't staying optimistic this spring but figuring out how to be hopeful beyond the end of the year, even if the recession has ended.
That's why faith in a bona fide new bull market is hard to locate among veteran investors. And the two alternatives -- another bear-market swoon, or a long period of share prices bouncing back and forth in a narrow range -- hardly inspire joy.
For the moment, however, the markets are reacting logically to more signs that the economy is bottoming.
After reaching the depths of despair early in March, investors have been cheered by the "green shoots" appearing in the financial system and economy, a term coined by Federal Reserve Chairman Ben S. Bernanke in March.
On Friday, the government reported that the economy lost a net 539,000 jobs in April. That should qualify as a disaster -- except in the context of far larger declines in the last few months, including net losses of 699,000 in March. Compared with the recent trend, April's employment report looks like a green shoot.
Likewise, in its long-awaited report Thursday on the financial health of 19 major banks, the Fed said it would require 10 of them to bolster their balance sheets by a total of $75 billion to protect against potential loan losses.
After the meltdown of much of the financial system last fall, Wall Street figures that a capital shortfall of $75 billion is a cinch: Bank stocks rocketed Friday, leading another broad advance that pushed the Standard & Poor's 500 index up 2.4%, bringing its gain since March 9 to 37%.
Skeptics say the Fed's so-called stress test of the banks is a joke, and doesn't come close to assessing the likely damage to the banks if commercial real estate loans, credit card loans and other debt follow the path of subprime mortgages.
But there have been enough other green shoots appearing, here and abroad, to push financial system fears off to the side for now.
Indeed, the rebound in U.S. stocks hasn't happened in a vacuum. Markets have surged around the globe over the last two months. So have prices of many commodities -- another bet on a reviving economy.
Crude oil in New York jumped $1.92 to $58.63 a barrel Friday, the highest price since November, even though U.S. oil inventories are at 19-year highs.
Some investors who correctly called the turn in markets this spring are sticking with the idea that the global economy has seen the worst of the recession.
Veteran money manager Jeremy Grantham, chairman of Grantham, Mayo, Van Otterloo in Boston, urged investors early in March to start putting cash to work. Because he has long been well-known as a market bear, Grantham's bullish turn got attention.
In a commentary to clients this week, Grantham said government spending aimed at ending the recession "is so extensive globally that surely it will kick up the economies of at least some of the larger countries, including the U.S. and China, by late this year or early next year."
Yet Grantham sees very little hope of lasting gains for stock investors in coming years. Any steep rally this year, he says, "Will set us up for a long, drawn-out disappointment not only in the economy, but also in the stock markets of the developed world."
Why? Look to the massive amount of wealth destroyed by the global stock crash and by the housing market's collapse, Grantham says. In the U.S., the total market value of housing, commercial real estate and stocks plummeted from $50 trillion at the peak to below $30 trillion at the recent low, he says.
That plunge, he says, "is enough to deliver a life-changing shock for hundreds of millions of people.
"Collectively, we will save more, spend less and waste less. It may not even be a less pleasant world when we get used to it, but for several years it will cause a lot of readjustment problems," Grantham says.
Notably, he warns, this New World Order will keep downward pressure on corporate profit margins. If earnings can't accelerate meaningfully, stocks' upside will be limited. And without a powerful earnings recovery, companies will have less incentive to expand and add jobs.
Joseph LaVorgna, chief U.S. economist for Deutsche Bank Securities in New York, says many investors may still be overestimating U.S. consumers' ability to bounce back from the economic and financial debacles of the last two years.
The severity of job losses in this recession have blown a hole in the nation's personal income statistics, LaVorgna notes. Add to that the burden of repaying the debt mountain built up over the last 25 years, the inability of many consumers to get new credit and the evaporation of home equity, and "we believe consumer spending will be extraordinarily weak for some time to come, even after the economy stabilizes and begins to improve sometime next year," he says.
Grantham and LaVorgna are generalizing about the future as they see it, obviously. It's a big planet with a lot of still-well-off consumers and enterprising companies. If the world isn't ending, there will be opportunities to make money in stocks even in a slower-growing global economy.
But their central point is that investors overall won't want to pay up aggressively for stocks if the economy is likely to face a slog, at best.
Of course, when recessions end there always are doubts about the economy's growth prospects in a recovery, and about how high stocks can go.
The last time doubts were this pervasive was in the expansion and bull market that began in 1982. Many investors were sure that the wild inflation and record-high interest rates of the 1970s would persist, limiting the economy's potential.
They were wrong. And as inflation and interest rates plunged, that underpinned the recovery and stocks' gains. So did a renewed borrowing binge by consumers, companies and government in the 1980s.
This time around, key interest rates, such as on mortgages, already are near record lows. The Fed's benchmark short-term interest rate is at zero. And given the credit catastrophe we're still living through, we know the next consumer borrowing binge is a long, long way off.
So investors, LaVorgna says, will keep running into the same sobering question about the economy if stocks keep rising: "How good is it going to get, really?"
Memos shed light on CIA use of sleep deprivation
As President Obama prepared last month to release secret memos on the CIA's use of severe interrogation methods, the White House fielded a flurry of last-minute appeals.
One came from former CIA Director Michael V. Hayden, who expressed disbelief that the administration was prepared to expose methods it might later decide it needed.
"Are you telling me that under all conditions of threat, you will never interfere with the sleep cycle of a detainee?" Hayden asked a top White House official, according to sources familiar with the exchange.
From the beginning, sleep deprivation had been one of the most important elements in the CIA's interrogation program, used to help break dozens of suspected terrorists, far more than the most violent approaches. And it is among the methods the agency fought hardest to keep.
The technique is now prohibited by President Obama's ban in January on harsh interrogation methods, although a task force is reviewing its use along with other interrogation methods the agency might employ in the future.
Because of its effectiveness -- as well as the perception that it was less objectionable than waterboarding, head-slamming or forced nudity -- sleep deprivation may be seen as a tempting technique to restore.
But the Justice Department memos released last month by Obama, as well as information provided by officials familiar with the program, indicate that the method, which involves forcing chained prisoners to stand, sometimes for days on end, was more controversial within the U.S. intelligence community than was widely known.
A CIA inspector general's report issued in 2004 was more critical of the agency's use of sleep deprivation than it was of any other method besides waterboarding, according to officials familiar with the document, because of how the sleep deprivation was applied.
The prisoners had their feet shackled to the floor and their hands cuffed close to their chins, according to the Justice Department memos.
Detainees were clad only in diapers and not allowed to feed themselves. A prisoner who started to drift off to sleep would tilt over and be caught by his chains.
The memos said more than 25 of the CIA's prisoners were subjected to sleep deprivation. At one point, the agency was allowed to keep prisoners awake for as long as 11 days; the limit was later reduced to just over a week.
According to the memos, medical personnel were to make sure prisoners weren't injured. But a 2007 Red Cross report on the CIA program said detainees' wrists and ankles bore scars from their shackles.
When detainees could no longer stand, they could be laid on the prison floor with their limbs "anchored to a far point on the floor in such a manner that the arms cannot be bent or used for balance or comfort," a May 10, 2005, memo said.
"The position is sufficiently uncomfortable to detainees to deprive them of unbroken sleep, while allowing their lower limbs to recover from the effects of standing," it said.
In the Red Cross report, prisoners said they were also subjected to loud music and repetitive noise.
"I was kept sitting on a chair, shackled by hands and feet for two to three weeks," said suspected Al Qaeda operative Abu Zubaydah, the first prisoner captured by the CIA, according to the Red Cross report. "If I started to fall asleep, a guard would come and spray water in my face."
In the Justice Department memos, sleep deprivation was described as part of a "baseline" phase of interrogation, categorized as less severe than other "corrective" or "coercive" methods.
Within the CIA, sleep deprivation was seen as a method with the unique advantage of eroding prisoners' will to resist without causing lasting harm.
"Waterboarding was obviously the most controversial," said a former senior U.S. government official who was briefed extensively on CIA interrogation operations. But "sleep deprivation is probably the most effective thing they had going."
Facing congressional efforts in 2005 and 2006 to block the use of certain techniques, CIA lawyers and Bush administration officials lobbied to keep a core set of methods, including sleep deprivation.
In 2007, after a U.S. Supreme Court ruling compelled the White House to bring the CIA program into compliance with the Geneva Convention, President Bush signed an executive order that outlined detainees' rights to the "basic necessities of life." The order listed "adequate food and water, shelter from the elements, necessary clothing" and protection from extreme heat and cold. But it made no mention of sleep as a basic necessity.
Current and former U.S. intelligence officials said sleep deprivation multiplied the coercive power of other techniques that included face-slapping and confinement in small boxes.
"It was viewed as a tool that enabled all the others," said a former CIA official directly involved in the program. The former official, like others, described internal thinking on condition of anonymity.
The Justice Department memos also cited research that suggested sleep deprivation was not harmful.
"Experience with sleep deprivation shows that 'surprisingly, little seemed to go wrong with the subjects physically,' " said the May 10, 2005, Justice Department memo -- one of many instances in which government lawyers cited scientific papers in asserting the program was safe.
But some authors of those studies have since said that the conclusions of their research were grossly misapplied.
James Horne, director of the Sleep Research Center at Loughborough University in the United Kingdom, said he was never consulted by U.S. officials and didn't know how his work was being used until the memos were released.
"My response was shocked concern," Horne said in an e-mail interview. Just because the pain of sleep deprivation "can't be measured in terms of physical injury or appearance . . . does not mean that the mental anguish is not as bad."
Horne said it was dangerous for the CIA to extrapolate from independent research in which subjects had gone for as long as a week without sleep, voluntarily, and were free to eat, rest, watch television or leave the research facility at any time. By contrast, CIA prisoners were subjected to major additional stresses that risk physical and mental collapse.
"To claim that 180 hours is safe in these respects is nonsense," Horne wrote in a separate online posting. Even if sleep deprivation succeeded in getting prisoners to talk, he said, "I would doubt whether the state of mind would be able to produce credible information, unaffected by delusion, fantasy or suggestibility."
One came from former CIA Director Michael V. Hayden, who expressed disbelief that the administration was prepared to expose methods it might later decide it needed.
"Are you telling me that under all conditions of threat, you will never interfere with the sleep cycle of a detainee?" Hayden asked a top White House official, according to sources familiar with the exchange.
From the beginning, sleep deprivation had been one of the most important elements in the CIA's interrogation program, used to help break dozens of suspected terrorists, far more than the most violent approaches. And it is among the methods the agency fought hardest to keep.
The technique is now prohibited by President Obama's ban in January on harsh interrogation methods, although a task force is reviewing its use along with other interrogation methods the agency might employ in the future.
Because of its effectiveness -- as well as the perception that it was less objectionable than waterboarding, head-slamming or forced nudity -- sleep deprivation may be seen as a tempting technique to restore.
But the Justice Department memos released last month by Obama, as well as information provided by officials familiar with the program, indicate that the method, which involves forcing chained prisoners to stand, sometimes for days on end, was more controversial within the U.S. intelligence community than was widely known.
A CIA inspector general's report issued in 2004 was more critical of the agency's use of sleep deprivation than it was of any other method besides waterboarding, according to officials familiar with the document, because of how the sleep deprivation was applied.
The prisoners had their feet shackled to the floor and their hands cuffed close to their chins, according to the Justice Department memos.
Detainees were clad only in diapers and not allowed to feed themselves. A prisoner who started to drift off to sleep would tilt over and be caught by his chains.
The memos said more than 25 of the CIA's prisoners were subjected to sleep deprivation. At one point, the agency was allowed to keep prisoners awake for as long as 11 days; the limit was later reduced to just over a week.
According to the memos, medical personnel were to make sure prisoners weren't injured. But a 2007 Red Cross report on the CIA program said detainees' wrists and ankles bore scars from their shackles.
When detainees could no longer stand, they could be laid on the prison floor with their limbs "anchored to a far point on the floor in such a manner that the arms cannot be bent or used for balance or comfort," a May 10, 2005, memo said.
"The position is sufficiently uncomfortable to detainees to deprive them of unbroken sleep, while allowing their lower limbs to recover from the effects of standing," it said.
In the Red Cross report, prisoners said they were also subjected to loud music and repetitive noise.
"I was kept sitting on a chair, shackled by hands and feet for two to three weeks," said suspected Al Qaeda operative Abu Zubaydah, the first prisoner captured by the CIA, according to the Red Cross report. "If I started to fall asleep, a guard would come and spray water in my face."
In the Justice Department memos, sleep deprivation was described as part of a "baseline" phase of interrogation, categorized as less severe than other "corrective" or "coercive" methods.
Within the CIA, sleep deprivation was seen as a method with the unique advantage of eroding prisoners' will to resist without causing lasting harm.
"Waterboarding was obviously the most controversial," said a former senior U.S. government official who was briefed extensively on CIA interrogation operations. But "sleep deprivation is probably the most effective thing they had going."
Facing congressional efforts in 2005 and 2006 to block the use of certain techniques, CIA lawyers and Bush administration officials lobbied to keep a core set of methods, including sleep deprivation.
In 2007, after a U.S. Supreme Court ruling compelled the White House to bring the CIA program into compliance with the Geneva Convention, President Bush signed an executive order that outlined detainees' rights to the "basic necessities of life." The order listed "adequate food and water, shelter from the elements, necessary clothing" and protection from extreme heat and cold. But it made no mention of sleep as a basic necessity.
Current and former U.S. intelligence officials said sleep deprivation multiplied the coercive power of other techniques that included face-slapping and confinement in small boxes.
"It was viewed as a tool that enabled all the others," said a former CIA official directly involved in the program. The former official, like others, described internal thinking on condition of anonymity.
The Justice Department memos also cited research that suggested sleep deprivation was not harmful.
"Experience with sleep deprivation shows that 'surprisingly, little seemed to go wrong with the subjects physically,' " said the May 10, 2005, Justice Department memo -- one of many instances in which government lawyers cited scientific papers in asserting the program was safe.
But some authors of those studies have since said that the conclusions of their research were grossly misapplied.
James Horne, director of the Sleep Research Center at Loughborough University in the United Kingdom, said he was never consulted by U.S. officials and didn't know how his work was being used until the memos were released.
"My response was shocked concern," Horne said in an e-mail interview. Just because the pain of sleep deprivation "can't be measured in terms of physical injury or appearance . . . does not mean that the mental anguish is not as bad."
Horne said it was dangerous for the CIA to extrapolate from independent research in which subjects had gone for as long as a week without sleep, voluntarily, and were free to eat, rest, watch television or leave the research facility at any time. By contrast, CIA prisoners were subjected to major additional stresses that risk physical and mental collapse.
"To claim that 180 hours is safe in these respects is nonsense," Horne wrote in a separate online posting. Even if sleep deprivation succeeded in getting prisoners to talk, he said, "I would doubt whether the state of mind would be able to produce credible information, unaffected by delusion, fantasy or suggestibility."
Congress Plans Incentives for Healthy Habits
In its effort to overhaul health care, Congress is planning to give employers sweeping new authority to reward employees for healthy behavior, including better diet, more exercise, weight loss and smoking cessation.
A web of federal rules limits what employers and insurers can do now.
Congress is seriously considering proposals to provide tax credits or other subsidies to employers who offer wellness programs that meet federal criteria. In addition, lawmakers said they would make it easier for employers to use financial rewards or penalties to promote healthy behavior among employees.
Two Democratic senators working on comprehensive health legislation, Max Baucus of Montana, the chairman of the Finance Committee, and Tom Harkin of Iowa, have taken the lead in devising such incentives.
“Prevention and wellness should be a centerpiece of health care reform,” said Mr. Harkin, who regularly climbs the stairs to his seventh-floor office on Capitol Hill.
The White House agrees. One of President Obama’s eight principles for health legislation is that it must “invest in prevention and wellness,” a goal espoused in almost identical words by Republican senators like John Cornyn of Texas and Orrin G. Hatch of Utah.
Frank B. McArdle, a health policy expert at Hewitt Associates, a benefits consulting firm, said, “Wellness and prevention programs have become a mainstream part of the benefits offered by large employers, and it’s virtually certain that Congress will include incentives for such programs” in its bill. The goals of such programs are to help people control blood pressure, fight obesity and manage diabetes and other chronic conditions.
Under Mr. Harkin’s proposal, employers could obtain tax credits for programs that offer periodic screenings for health problems and counseling to help employees adopt healthier lifestyles. Programs could focus on tobacco use, obesity, physical fitness, nutrition and depression, he said.
Growing numbers of employers have adopted wellness programs after finding that they can lower health costs and increase the productivity of workers. Financial incentives include gift certificates and premium discounts or surcharges.
Critics say that holding people financially responsible for their health behavior is potentially unfair and that employers have no business prying into their employees’ private lives.
Lewis Maltby, president of the National Workrights Institute, a research and advocacy group, said financial rewards and penalties were often a form of lifestyle discrimination. “You are supposed to be paid on the basis of how you do your job, not how often you go to the gym or how many cheeseburgers you eat,” Mr. Maltby said.
But federal officials insist that the rewards and penalties can be used in an ethical way.
Ethics experts at the National Institutes of Health have developed guidelines for assessing workplace wellness programs. In the current issue of the journal Health Affairs, the experts, Steven D. Pearson and Sarah R. Lieber, say the unhealthy behavior of some employees can affect co-workers by driving up costs for the group as a whole.
“The core ethical justification for penalty programs is that employees should be held responsible for voluntary actions that cause harm to others,” they write. But, they add, employees should be exempt from penalties when it is “unreasonably difficult or medically inadvisable” for them to meet a particular goal or standard.
In setting up wellness programs, employers must navigate a maze of tax, labor and insurance laws.
If, for example, an employer pays the cost of gym membership for employees as part of a wellness program, the payment is often counted as taxable income to employees.
Helen Darling, president of the National Business Group on Health, which represents 300 large employers, said, “We would like Congress to change the law so it would not be taxable income if an employer provides a benefit to help employees stay healthy.”
Employers who reward healthy behavior may also run afoul of a 1996 law intended to prevent group health plans from discriminating against people because of their health status or medical history.
If an employer offers financial incentives to employees for lowering cholesterol, losing weight or stopping smoking, the amount of such rewards generally may not exceed 20 percent of the cost of coverage.
Many employers would like to offer larger incentives, and many in Congress want to let them do so.
A web of federal rules limits what employers and insurers can do now.
Congress is seriously considering proposals to provide tax credits or other subsidies to employers who offer wellness programs that meet federal criteria. In addition, lawmakers said they would make it easier for employers to use financial rewards or penalties to promote healthy behavior among employees.
Two Democratic senators working on comprehensive health legislation, Max Baucus of Montana, the chairman of the Finance Committee, and Tom Harkin of Iowa, have taken the lead in devising such incentives.
“Prevention and wellness should be a centerpiece of health care reform,” said Mr. Harkin, who regularly climbs the stairs to his seventh-floor office on Capitol Hill.
The White House agrees. One of President Obama’s eight principles for health legislation is that it must “invest in prevention and wellness,” a goal espoused in almost identical words by Republican senators like John Cornyn of Texas and Orrin G. Hatch of Utah.
Frank B. McArdle, a health policy expert at Hewitt Associates, a benefits consulting firm, said, “Wellness and prevention programs have become a mainstream part of the benefits offered by large employers, and it’s virtually certain that Congress will include incentives for such programs” in its bill. The goals of such programs are to help people control blood pressure, fight obesity and manage diabetes and other chronic conditions.
Under Mr. Harkin’s proposal, employers could obtain tax credits for programs that offer periodic screenings for health problems and counseling to help employees adopt healthier lifestyles. Programs could focus on tobacco use, obesity, physical fitness, nutrition and depression, he said.
Growing numbers of employers have adopted wellness programs after finding that they can lower health costs and increase the productivity of workers. Financial incentives include gift certificates and premium discounts or surcharges.
Critics say that holding people financially responsible for their health behavior is potentially unfair and that employers have no business prying into their employees’ private lives.
Lewis Maltby, president of the National Workrights Institute, a research and advocacy group, said financial rewards and penalties were often a form of lifestyle discrimination. “You are supposed to be paid on the basis of how you do your job, not how often you go to the gym or how many cheeseburgers you eat,” Mr. Maltby said.
But federal officials insist that the rewards and penalties can be used in an ethical way.
Ethics experts at the National Institutes of Health have developed guidelines for assessing workplace wellness programs. In the current issue of the journal Health Affairs, the experts, Steven D. Pearson and Sarah R. Lieber, say the unhealthy behavior of some employees can affect co-workers by driving up costs for the group as a whole.
“The core ethical justification for penalty programs is that employees should be held responsible for voluntary actions that cause harm to others,” they write. But, they add, employees should be exempt from penalties when it is “unreasonably difficult or medically inadvisable” for them to meet a particular goal or standard.
In setting up wellness programs, employers must navigate a maze of tax, labor and insurance laws.
If, for example, an employer pays the cost of gym membership for employees as part of a wellness program, the payment is often counted as taxable income to employees.
Helen Darling, president of the National Business Group on Health, which represents 300 large employers, said, “We would like Congress to change the law so it would not be taxable income if an employer provides a benefit to help employees stay healthy.”
Employers who reward healthy behavior may also run afoul of a 1996 law intended to prevent group health plans from discriminating against people because of their health status or medical history.
If an employer offers financial incentives to employees for lowering cholesterol, losing weight or stopping smoking, the amount of such rewards generally may not exceed 20 percent of the cost of coverage.
Many employers would like to offer larger incentives, and many in Congress want to let them do so.
For Victims of Recession, Patchwork State Aid
As millions of people seek government aid, many for the first time, they are finding it dispensed American style: through a jumble of disconnected programs that reach some and reject others, often for reasons of geography or chance rather than differences in need.
Health care, housing, food stamps and cash — each forms a separate bureaucratic world, and their dictates often collide. State differences make the patchwork more pronounced, and random foibles can intervene, like a computer debacle in Colorado that made it harder to get food stamps and Medicaid.
The result is a hit-or-miss system of relief, never designed to grapple with the pain of a recession so sudden and deep. Aid seekers often find the rules opaque and arbitrary. And officials often struggle to make policy through a system so complex and Balkanized.
Across the country, hard luck is colliding with fine print.
Workers who banked $2,000 in severance pay can get food stamps in South Carolina; their counterparts in North Carolina cannot. Oklahomans who earned $10,000 in six months can collect unemployment if they started work on the 15th of February, May, August or November — but not if they started two weeks later.
When Beverly Johnson of Kosciusko, Miss., lost her job at a Bible college, she took solace in the prospect of jobless benefits. Then Ms. Johnson discovered that as an employee of a religious school she was ineligible for aid. “That was a shock,” she said.
When the recession cost Erika Nieves of Bridgeport, Conn., her job with a wrestling promoter, she did get unemployment benefits. But that caused her to lose a welfare-to-work grant and her child care subsidy. Now Ms. Nieves is months behind on her rent and is job hunting with a 2-year-old. “They took away my aid when I need it the most,” she said.
As a measure of the safety net, The New York Times examined state-by-state enrollment in six federal programs and found large variations in the share of needy helped.
Just 50 percent of people eligible for food stamps receive them in California, compared with 98 percent in Missouri. Nineteen percent of the unemployed get jobless benefits in South Dakota, compared with 67 percent in Idaho.
Fifteen states rank among the top 10 in providing one form of aid and the bottom 10 in another. California ranks second in distributing cash welfare but last in food stamps. South Dakota, last in jobless benefits, is first in subsidized housing.
Aid in states most hit by recession is also scattershot. Michigan’s programs reach a comparatively high share of the needy, while South Carolina’s rank in the middle and Nevada’s reach relatively few. All have double-digit unemployment rates.
“The system for helping Americans in need is very fragmented, and it confuses everyone,” said Theda Skocpol, a political scientist at Harvard. “Some people are covered and some people are not, even though they look like they’re in very similar circumstances.”
This complexity is a challenge for President Obama as he reacts to the economic crisis. The February stimulus act contains more than $100 billion in safety net provisions, but much of the aid consists of financial incentives the states are free to reject. Several governors quickly spurned grants to expand unemployment insurance, for example, saying the move would raise business taxes and kill jobs.
Aid programs spend hundreds of billions of dollars and reach tens of millions of people; the food stamp program alone covers more than one in 10 Americans. Yet the safety net leaves few camps satisfied. Liberals say programs are weak compared with other rich countries and are overly deferential to states. Conservatives fault costs and complexity and warn that aid can do harm.
With generous programs “you could be discouraging people from seeking better jobs,” said Stuart Butler of the Heritage Foundation.
Both sides, those who want more spending and those who want less, would unite under Mr. Butler’s description of the status quo. “You’ve got this kind of jigsaw puzzle that doesn’t really fit together, ” he said.
Compared with its peers, the United States has always made social policy in ad hoc ways, with voters quicker to call themselves self-reliant and central government more structurally constrained. Even the New Deal was a hodgepodge affair, with Social Security initially omitting about 40 percent of the work force.
Now decades after the Great Society brought a new burst of policymaking, aid programs flow through multiple — and sometimes rivalrous — departmental chains of command. Welfare and Medicaid reside at the Department of Health and Human Services; food stamps at Agriculture; rent subsidies at Housing and Urban Development; unemployment insurance at Labor; and tax credits at Treasury.
Families receive aid, or do not, in contrasting ways. Sheila Zedlewski of the Urban Institute examined use of food stamps, health insurance and child care among a representative group of low-income families. About a third got no help, a third enrolled in one program, and just 5 percent enrolled in all three.
We have people at both ends of the spectrum,” Ms. Zedlewski said in an interview. “But we have far more people who get nothing than who get the whole package. A significant group remains outside the safety net.”
Nationwide, about two-thirds of people eligible for food stamps receive them. But just 21 percent of poor children get cash welfare; 30 percent of eligible households get subsidized housing; and 44 percent of the unemployed get jobless benefits.
While calls for government transparency are common, within the safety net, confusion often reigns. Ms. Nieves, of Bridgeport, received five food stamp notices in five weeks, telling her how much to expect: $241, $256, $429, $492 and $460.
Sometimes rules that make sense in one program collide with another. That is what happened to Ms. Nieves when she lost her job shipping wrestling souvenirs for $8 an hour. She was on welfare when she found the work, and to ease the transition the state continued her welfare payments and paid for child care. Then sales slumped, and Ms. Nieves was laid off.
Unemployment benefits replaced just half her earnings, but the state withdrew her welfare grant and child care subsidy.
“Basically, when I lost my job, I just lost everything,” she said.
Sometimes rules in a single program collide with themselves. Such was the case with Jewell French-Allen, who got tangled in an obscure provision of Massachusetts unemployment law. With a high-risk pregnancy at age 35, Ms. French-Allen left a $40,000 a year job and applied for jobless benefits. But the state denied the request, ruling that she had quit by choice. She then took a sales job at much lower pay, and was laid off.
Had she never held the first job, Ms. French-Allen could have gotten unemployment benefits. But because her earlier request had been denied, the state added a test — and disqualified her because the weekly pay from the second job was less than the benefits she would have gotten from the first.
Two days after she was rejected again, she went into labor and delivered a boy who weighed less than two pounds.
“I am bitter — if I had gotten unemployment, he wouldn’t have been born prematurely,” she said. “When you can’t support yourself financially, it puts incredible stress on your body.”
Unemployment coverage tends to be high where jobs pay well and unions are strong. (Leaders include New Jersey, Pennsylvania and Wisconsin.) Subsidized housing is more plentiful in places that had comparatively large populations decades ago, when money to underwrite new apartments peaked. (It is sparse in Arizona and Florida.)
Since states bear the costs of welfare expansions, most poor states trim the rolls. (Louisiana covers about one of every 20 poor families with children.) But the federal government pays for food stamps, and poor states often grab the aid. (Alabama, Georgia and Louisiana have higher enrollment rates than New York.)
Many states defy easy depiction. While Nevada keeps most programs small, unemployment insurance is an exception, perhaps reflecting union influence in Las Vegas. Despite its modest safety net, Mississippi ranks second in subsidized housing, partly a legacy of the Jim Crow age when Southern states used it to preserve segregation.
Along with differences in program enrollment, the size of benefits differs greatly, too — adding another level of variation. Mississippi pays a weekly average of $190 in unemployment benefits, while Hawaii pays $416.
While some programs are limited on purpose, some take shape by accident. Colorado invested $200 million in a computer system and got a case study in high-tech failure. Within months of the system’s start in 2004, the backlog of food stamp and Medicaid cases tripled to 18,000. The state spent three years under court order to reduce delays, but significant backlogs remain.
A bureaucratic bungle compounded the woes of Ms. Johnson, who lost her job as a librarian at Magnolia Bible College in Kosciusko, Miss. Religious schools are exempt from unemployment taxes, so Ms. Johnson, 60, faced the recession without jobless benefits.
She applied for food stamps and was denied because she had more than $3,000 in an Individual Retirement Account, though officials said she would qualify if the savings were in a 401(k).
Finding the distinction illogical, Ms. Johnson searched the Internet and learned that Congress had just changed the law. As of October 2008, savings in either kind of retirement account are no barrier to food stamps.
But state and county officials held firm, and a federal official sent an e-mail message supporting their outdated view. With the help of an advocacy group, the Public Policy Center of Mississippi, she finally traced the problem to an errant Web page at the Department of Agriculture.
“To get maybe $320 of food stamps took an entire month of work,” she said.
Occasionally, people have the opposite fortune: getting benefits they should be denied. That is what happened to Tracey Walker, 43, who was laid off last fall after seven years on the night shift at a Baltimore cosmetics factory and lost her health insurance.
With high blood pressure and headaches, Ms. Walker tried to get Medicaid, but was told her jobless benefits were too high. “I just sat there and cried,” she said.
She was ineligible for food stamps, too, but the caseworker prayed, bent the rules and authorized $180 a month — freeing up just enough cash for blood pressure pills. “It made me cry even more,” Ms. Walker said.
There are few growth industries in Baltimore, but Ms. Walker found one: a nonprofit group that helps the needy apply for Medicaid. She started work there last month as an enrollment specialist. Among the benefits she prizes is coverage under the group’s health insurance plan.
Health care, housing, food stamps and cash — each forms a separate bureaucratic world, and their dictates often collide. State differences make the patchwork more pronounced, and random foibles can intervene, like a computer debacle in Colorado that made it harder to get food stamps and Medicaid.
The result is a hit-or-miss system of relief, never designed to grapple with the pain of a recession so sudden and deep. Aid seekers often find the rules opaque and arbitrary. And officials often struggle to make policy through a system so complex and Balkanized.
Across the country, hard luck is colliding with fine print.
Workers who banked $2,000 in severance pay can get food stamps in South Carolina; their counterparts in North Carolina cannot. Oklahomans who earned $10,000 in six months can collect unemployment if they started work on the 15th of February, May, August or November — but not if they started two weeks later.
When Beverly Johnson of Kosciusko, Miss., lost her job at a Bible college, she took solace in the prospect of jobless benefits. Then Ms. Johnson discovered that as an employee of a religious school she was ineligible for aid. “That was a shock,” she said.
When the recession cost Erika Nieves of Bridgeport, Conn., her job with a wrestling promoter, she did get unemployment benefits. But that caused her to lose a welfare-to-work grant and her child care subsidy. Now Ms. Nieves is months behind on her rent and is job hunting with a 2-year-old. “They took away my aid when I need it the most,” she said.
As a measure of the safety net, The New York Times examined state-by-state enrollment in six federal programs and found large variations in the share of needy helped.
Just 50 percent of people eligible for food stamps receive them in California, compared with 98 percent in Missouri. Nineteen percent of the unemployed get jobless benefits in South Dakota, compared with 67 percent in Idaho.
Fifteen states rank among the top 10 in providing one form of aid and the bottom 10 in another. California ranks second in distributing cash welfare but last in food stamps. South Dakota, last in jobless benefits, is first in subsidized housing.
Aid in states most hit by recession is also scattershot. Michigan’s programs reach a comparatively high share of the needy, while South Carolina’s rank in the middle and Nevada’s reach relatively few. All have double-digit unemployment rates.
“The system for helping Americans in need is very fragmented, and it confuses everyone,” said Theda Skocpol, a political scientist at Harvard. “Some people are covered and some people are not, even though they look like they’re in very similar circumstances.”
This complexity is a challenge for President Obama as he reacts to the economic crisis. The February stimulus act contains more than $100 billion in safety net provisions, but much of the aid consists of financial incentives the states are free to reject. Several governors quickly spurned grants to expand unemployment insurance, for example, saying the move would raise business taxes and kill jobs.
Aid programs spend hundreds of billions of dollars and reach tens of millions of people; the food stamp program alone covers more than one in 10 Americans. Yet the safety net leaves few camps satisfied. Liberals say programs are weak compared with other rich countries and are overly deferential to states. Conservatives fault costs and complexity and warn that aid can do harm.
With generous programs “you could be discouraging people from seeking better jobs,” said Stuart Butler of the Heritage Foundation.
Both sides, those who want more spending and those who want less, would unite under Mr. Butler’s description of the status quo. “You’ve got this kind of jigsaw puzzle that doesn’t really fit together, ” he said.
Compared with its peers, the United States has always made social policy in ad hoc ways, with voters quicker to call themselves self-reliant and central government more structurally constrained. Even the New Deal was a hodgepodge affair, with Social Security initially omitting about 40 percent of the work force.
Now decades after the Great Society brought a new burst of policymaking, aid programs flow through multiple — and sometimes rivalrous — departmental chains of command. Welfare and Medicaid reside at the Department of Health and Human Services; food stamps at Agriculture; rent subsidies at Housing and Urban Development; unemployment insurance at Labor; and tax credits at Treasury.
Families receive aid, or do not, in contrasting ways. Sheila Zedlewski of the Urban Institute examined use of food stamps, health insurance and child care among a representative group of low-income families. About a third got no help, a third enrolled in one program, and just 5 percent enrolled in all three.
We have people at both ends of the spectrum,” Ms. Zedlewski said in an interview. “But we have far more people who get nothing than who get the whole package. A significant group remains outside the safety net.”
Nationwide, about two-thirds of people eligible for food stamps receive them. But just 21 percent of poor children get cash welfare; 30 percent of eligible households get subsidized housing; and 44 percent of the unemployed get jobless benefits.
While calls for government transparency are common, within the safety net, confusion often reigns. Ms. Nieves, of Bridgeport, received five food stamp notices in five weeks, telling her how much to expect: $241, $256, $429, $492 and $460.
Sometimes rules that make sense in one program collide with another. That is what happened to Ms. Nieves when she lost her job shipping wrestling souvenirs for $8 an hour. She was on welfare when she found the work, and to ease the transition the state continued her welfare payments and paid for child care. Then sales slumped, and Ms. Nieves was laid off.
Unemployment benefits replaced just half her earnings, but the state withdrew her welfare grant and child care subsidy.
“Basically, when I lost my job, I just lost everything,” she said.
Sometimes rules in a single program collide with themselves. Such was the case with Jewell French-Allen, who got tangled in an obscure provision of Massachusetts unemployment law. With a high-risk pregnancy at age 35, Ms. French-Allen left a $40,000 a year job and applied for jobless benefits. But the state denied the request, ruling that she had quit by choice. She then took a sales job at much lower pay, and was laid off.
Had she never held the first job, Ms. French-Allen could have gotten unemployment benefits. But because her earlier request had been denied, the state added a test — and disqualified her because the weekly pay from the second job was less than the benefits she would have gotten from the first.
Two days after she was rejected again, she went into labor and delivered a boy who weighed less than two pounds.
“I am bitter — if I had gotten unemployment, he wouldn’t have been born prematurely,” she said. “When you can’t support yourself financially, it puts incredible stress on your body.”
Unemployment coverage tends to be high where jobs pay well and unions are strong. (Leaders include New Jersey, Pennsylvania and Wisconsin.) Subsidized housing is more plentiful in places that had comparatively large populations decades ago, when money to underwrite new apartments peaked. (It is sparse in Arizona and Florida.)
Since states bear the costs of welfare expansions, most poor states trim the rolls. (Louisiana covers about one of every 20 poor families with children.) But the federal government pays for food stamps, and poor states often grab the aid. (Alabama, Georgia and Louisiana have higher enrollment rates than New York.)
Many states defy easy depiction. While Nevada keeps most programs small, unemployment insurance is an exception, perhaps reflecting union influence in Las Vegas. Despite its modest safety net, Mississippi ranks second in subsidized housing, partly a legacy of the Jim Crow age when Southern states used it to preserve segregation.
Along with differences in program enrollment, the size of benefits differs greatly, too — adding another level of variation. Mississippi pays a weekly average of $190 in unemployment benefits, while Hawaii pays $416.
While some programs are limited on purpose, some take shape by accident. Colorado invested $200 million in a computer system and got a case study in high-tech failure. Within months of the system’s start in 2004, the backlog of food stamp and Medicaid cases tripled to 18,000. The state spent three years under court order to reduce delays, but significant backlogs remain.
A bureaucratic bungle compounded the woes of Ms. Johnson, who lost her job as a librarian at Magnolia Bible College in Kosciusko, Miss. Religious schools are exempt from unemployment taxes, so Ms. Johnson, 60, faced the recession without jobless benefits.
She applied for food stamps and was denied because she had more than $3,000 in an Individual Retirement Account, though officials said she would qualify if the savings were in a 401(k).
Finding the distinction illogical, Ms. Johnson searched the Internet and learned that Congress had just changed the law. As of October 2008, savings in either kind of retirement account are no barrier to food stamps.
But state and county officials held firm, and a federal official sent an e-mail message supporting their outdated view. With the help of an advocacy group, the Public Policy Center of Mississippi, she finally traced the problem to an errant Web page at the Department of Agriculture.
“To get maybe $320 of food stamps took an entire month of work,” she said.
Occasionally, people have the opposite fortune: getting benefits they should be denied. That is what happened to Tracey Walker, 43, who was laid off last fall after seven years on the night shift at a Baltimore cosmetics factory and lost her health insurance.
With high blood pressure and headaches, Ms. Walker tried to get Medicaid, but was told her jobless benefits were too high. “I just sat there and cried,” she said.
She was ineligible for food stamps, too, but the caseworker prayed, bent the rules and authorized $180 a month — freeing up just enough cash for blood pressure pills. “It made me cry even more,” Ms. Walker said.
There are few growth industries in Baltimore, but Ms. Walker found one: a nonprofit group that helps the needy apply for Medicaid. She started work there last month as an enrollment specialist. Among the benefits she prizes is coverage under the group’s health insurance plan.
British victim of Mumbai terror tells of official neglect back in UK
Britain faced accusations of moral failure last night as politicians from all parties called for compensation for UK citizens who have been injured or disabled in terror attacks abroad.
The clamour for action was sparked by the plight of the most seriously injured Briton in last year's attack on Mumbai's Taj Hotel, in which terrorists targeted people with British or American passports. Will Pike, a 29-year-old Londoner who faces a lifetime in a wheelchair, reveals in today's Observer that he is having to cope with just £15,000 in help from a government-backed Red Cross fund.
Like others, Pike returned home to find he was not covered by the compensation scheme set up after the 7 July 2005 bombings in London to help all victims of terror attacks, of whatever nationality, on UK soil. He said he felt terribly "let down", at a time when he had hoped the government and the prime minister would show "condolence" and "care". His father, Nigel, has launched a private appeal for contributions to help Will rebuild his life. Lord Brennan, a prominent barrister and Labour peer, who has been campaigning for families affected by terror attacks abroad, said: "It is a shameful state of affairs.
"Any decent country would be ashamed to find itself in this position." He pointed out that other western countries have systems in place to provide compensation for citizens who fall victim to terror attacks abroad. The annual cost of setting up a compensation fund in the UK would be just £3m, he added.
Noting a growing sense of "community" in Britain amid the economic crisis, as demonstrated by the outcry in support of the Gurkhas, Brennan said: "People may find it very difficult to explain what justice is. But they very readily understand what an injustice is. And this is an injustice." He said victims of the Mumbai attack – and of earlier terror strikes in Bali, Turkey and Sharm el-Sheikh in Egypt – had been left without the financial help they needed to cope with physical or emotional injury, or bereavement.
The Pike family's constituency MP, Liberal-Democrat Lynne Featherstone, yesterday sent a letter to the prime minister urging him to intervene. "Just as we have a moral obligation to the Gurkhas, we also have a moral obligation to those who are injured by those who perpetrate terrorist attacks on our citizens – wherever in the world they become targets," she wrote.
Tobias Ellwood, a Conservative MP whose younger brother died in the Bali bombings in 2002, said: "What upsets me most is that the budget for counter-terrorism has actually gone up, from £1.2bn to £2bn. And yet the government still isn't willing to use a little bit of that money to help those people who have actually suffered."
Labour MP and former Foreign Office minister Ian McCartney, who secured an adjournment debate in the Commons last year to try to spur government action, said: "The situation is totally unacceptable. Terrorism is an attack not on individuals but on a state, as Mumbai made clear. A state's duty is to its citizens."
Tessa Jowell, the minister in charge of helping victims of terror, said: "I recognise the anomaly is a glaring one. Government accepts we have to find a fair solution." A Justice Ministry spokesman said Jack Straw was determined to "find further ways of supporting the victims of all crimes" and had set up a working group on the issue of compensation for overseas terror victims.
The clamour for action was sparked by the plight of the most seriously injured Briton in last year's attack on Mumbai's Taj Hotel, in which terrorists targeted people with British or American passports. Will Pike, a 29-year-old Londoner who faces a lifetime in a wheelchair, reveals in today's Observer that he is having to cope with just £15,000 in help from a government-backed Red Cross fund.
Like others, Pike returned home to find he was not covered by the compensation scheme set up after the 7 July 2005 bombings in London to help all victims of terror attacks, of whatever nationality, on UK soil. He said he felt terribly "let down", at a time when he had hoped the government and the prime minister would show "condolence" and "care". His father, Nigel, has launched a private appeal for contributions to help Will rebuild his life. Lord Brennan, a prominent barrister and Labour peer, who has been campaigning for families affected by terror attacks abroad, said: "It is a shameful state of affairs.
"Any decent country would be ashamed to find itself in this position." He pointed out that other western countries have systems in place to provide compensation for citizens who fall victim to terror attacks abroad. The annual cost of setting up a compensation fund in the UK would be just £3m, he added.
Noting a growing sense of "community" in Britain amid the economic crisis, as demonstrated by the outcry in support of the Gurkhas, Brennan said: "People may find it very difficult to explain what justice is. But they very readily understand what an injustice is. And this is an injustice." He said victims of the Mumbai attack – and of earlier terror strikes in Bali, Turkey and Sharm el-Sheikh in Egypt – had been left without the financial help they needed to cope with physical or emotional injury, or bereavement.
The Pike family's constituency MP, Liberal-Democrat Lynne Featherstone, yesterday sent a letter to the prime minister urging him to intervene. "Just as we have a moral obligation to the Gurkhas, we also have a moral obligation to those who are injured by those who perpetrate terrorist attacks on our citizens – wherever in the world they become targets," she wrote.
Tobias Ellwood, a Conservative MP whose younger brother died in the Bali bombings in 2002, said: "What upsets me most is that the budget for counter-terrorism has actually gone up, from £1.2bn to £2bn. And yet the government still isn't willing to use a little bit of that money to help those people who have actually suffered."
Labour MP and former Foreign Office minister Ian McCartney, who secured an adjournment debate in the Commons last year to try to spur government action, said: "The situation is totally unacceptable. Terrorism is an attack not on individuals but on a state, as Mumbai made clear. A state's duty is to its citizens."
Tessa Jowell, the minister in charge of helping victims of terror, said: "I recognise the anomaly is a glaring one. Government accepts we have to find a fair solution." A Justice Ministry spokesman said Jack Straw was determined to "find further ways of supporting the victims of all crimes" and had set up a working group on the issue of compensation for overseas terror victims.
Taxmen to probe MPs over profits from home sales
The crisis over parliamentary expenses reached new heights last night as it emerged that HM Revenue and Customs is to investigate whether MPs have deliberately evaded capital gains tax when selling their second homes.
News of an inquiry by tax officials, which follows days of leaks about the way MPs have exploited the Commons' allowances regime for private gain, will inflict further damage on the already battered reputation of parliament.
In a separate development, in an article for today's Observer, Sir Alistair Graham, the former chairman of the committee on standards in public life, describes the behaviour of the home secretary, Jacqui Smith, as "near-fraudulent" in relation to her expense claims.
Smith registered the house she shared with her sister in south London as her primary residence, allowing her to claim the parliamentary allowance of up to £24,000 for her family home in Redditch, Worcestershire, where her husband and children live.
"One has to be careful with the word 'fraudulent'," Graham writes, "because in the criminal sense there needs to be guilty intent. However, it seems to me there may be intent here and in similar cases that have emerged. People seem to be thinking, 'What's the best way to use the system so I can maximise the personal financial return to myself?'"
Graham's comments brought an immediate reaction from Smith. Her spokesman said that the home secretary would be seeking legal advice about what he had said. "This is a malicious falsehood, and implies that Jacqui is lying. He seems intent on attacking her without examining the facts of the case," the spokesman insisted.
The dispute broke out as opinion polls showed Labour to be suffering the most as a result of the expenses saga. A survey for the Mail on Sunday put Gordon Brown's party on 23% – its lowest rating since polling began. The Conservatives appear to be emerging unscathed as the controversy grows – a full 22 points ahead on 45%, enough to give David Cameron a landslide victory.
Last night a string of fresh revelations emerged about expenses claimed by MPs and peers. These included claims that:
• Kitty Ussher, a junior government minister, asked for thousands of pounds to pay for a full makeover of her second home within 12 months of becoming an MP. The Sunday Telegraph says she claimed £20,000 for the refit.
• Baroness Thornton, a Labour minister in the whips' office, has been claiming £22,000 a year in expenses by saying that her mother's bungalow in Yorkshire is her main home. As a result the peer, who has a £1m house near Hampstead Heath, has been able to claim around £130,000 since 2002.
• Stephen Byers, the former cabinet minister, has claimed £125,000 in expenses for a home which was owned outright by his partner, where he lived rent-free.
• Five Sinn Féin MPs received £500,000 in second homes allowances despite not taking up their seats in the House.
The forthcoming investigations by HM Revenue and Customs (HMRC) will focus on suspicions that some MPs have been changing the status of their first and second homes not merely to maximise the amount they can claim in allowances, but also to minimise exposure to capital gains tax (CGT) when selling their second homes. There is no CGT on the sale of first homes in most cases.
The Daily Telegraph, which has published selected details of millions of claims by Britain's 659 MPs over the past three days, revealed on Thursday that one of the ways in which MPs can "work the system" is by claiming that their second home – on which they can claim generous parliamentary allowances – is in fact their first home for the purposes of tax.
An HMRC official said: "Once these declarations were made public, we began to examine them to ensure that MPs have paid the right tax. Avoidance of capital gains tax is just one of the issues that have arisen from these articles."
Hazel Blears, the communities secretary, last night admitted not paying capital gains tax on the sale of a £200,000 flat in Kennington, south London that had been designated as her "second home". She had claimed £850 a month from the House of Commons for the mortgage on the flat until it was sold in August 2004 for a profit of £45,000, it was alleged last week. MPs can only make such claims on properties they designate to be their second homes.
Her spokesman insisted she had done nothing wrong by not paying capital gains tax. "Hazel has complied with the House of Commons authorities and the Inland Revenue. No liability for capital gains tax arose on the sale of her flat," he said.
The latest controversy involving Blears raises further questions as to whether Gordon Brown will retain her in any ministerial capacity following last week's attack on his leadership. In an article for the Observer she described the government's recent performance as "lamentable".
Another of those who did not pay CGT when he sold his second home is James Purnell, the work and pensions secretary. Although in his case there was no evidence of any wrongdoing, suggestions that MPs may be systematically avoiding tax have alarmed HMRC officials. HMRC will also take a close look at MPs' income tax payments, as many of their perks could be seen as "benefits in kind" which should be taxed.
Mark Wallace, campaigns director for the Taxpayers' TaxPayers'correct Alliance, welcomed HMRC's inquiries. "It is totally unacceptable for elected representatives to live by one set of rules and dictate another," he said.
An HMRC spokeswoman said: "We use a wide variety of information sources to ensure the tax system operates as it should."
News of an inquiry by tax officials, which follows days of leaks about the way MPs have exploited the Commons' allowances regime for private gain, will inflict further damage on the already battered reputation of parliament.
In a separate development, in an article for today's Observer, Sir Alistair Graham, the former chairman of the committee on standards in public life, describes the behaviour of the home secretary, Jacqui Smith, as "near-fraudulent" in relation to her expense claims.
Smith registered the house she shared with her sister in south London as her primary residence, allowing her to claim the parliamentary allowance of up to £24,000 for her family home in Redditch, Worcestershire, where her husband and children live.
"One has to be careful with the word 'fraudulent'," Graham writes, "because in the criminal sense there needs to be guilty intent. However, it seems to me there may be intent here and in similar cases that have emerged. People seem to be thinking, 'What's the best way to use the system so I can maximise the personal financial return to myself?'"
Graham's comments brought an immediate reaction from Smith. Her spokesman said that the home secretary would be seeking legal advice about what he had said. "This is a malicious falsehood, and implies that Jacqui is lying. He seems intent on attacking her without examining the facts of the case," the spokesman insisted.
The dispute broke out as opinion polls showed Labour to be suffering the most as a result of the expenses saga. A survey for the Mail on Sunday put Gordon Brown's party on 23% – its lowest rating since polling began. The Conservatives appear to be emerging unscathed as the controversy grows – a full 22 points ahead on 45%, enough to give David Cameron a landslide victory.
Last night a string of fresh revelations emerged about expenses claimed by MPs and peers. These included claims that:
• Kitty Ussher, a junior government minister, asked for thousands of pounds to pay for a full makeover of her second home within 12 months of becoming an MP. The Sunday Telegraph says she claimed £20,000 for the refit.
• Baroness Thornton, a Labour minister in the whips' office, has been claiming £22,000 a year in expenses by saying that her mother's bungalow in Yorkshire is her main home. As a result the peer, who has a £1m house near Hampstead Heath, has been able to claim around £130,000 since 2002.
• Stephen Byers, the former cabinet minister, has claimed £125,000 in expenses for a home which was owned outright by his partner, where he lived rent-free.
• Five Sinn Féin MPs received £500,000 in second homes allowances despite not taking up their seats in the House.
The forthcoming investigations by HM Revenue and Customs (HMRC) will focus on suspicions that some MPs have been changing the status of their first and second homes not merely to maximise the amount they can claim in allowances, but also to minimise exposure to capital gains tax (CGT) when selling their second homes. There is no CGT on the sale of first homes in most cases.
The Daily Telegraph, which has published selected details of millions of claims by Britain's 659 MPs over the past three days, revealed on Thursday that one of the ways in which MPs can "work the system" is by claiming that their second home – on which they can claim generous parliamentary allowances – is in fact their first home for the purposes of tax.
An HMRC official said: "Once these declarations were made public, we began to examine them to ensure that MPs have paid the right tax. Avoidance of capital gains tax is just one of the issues that have arisen from these articles."
Hazel Blears, the communities secretary, last night admitted not paying capital gains tax on the sale of a £200,000 flat in Kennington, south London that had been designated as her "second home". She had claimed £850 a month from the House of Commons for the mortgage on the flat until it was sold in August 2004 for a profit of £45,000, it was alleged last week. MPs can only make such claims on properties they designate to be their second homes.
Her spokesman insisted she had done nothing wrong by not paying capital gains tax. "Hazel has complied with the House of Commons authorities and the Inland Revenue. No liability for capital gains tax arose on the sale of her flat," he said.
The latest controversy involving Blears raises further questions as to whether Gordon Brown will retain her in any ministerial capacity following last week's attack on his leadership. In an article for the Observer she described the government's recent performance as "lamentable".
Another of those who did not pay CGT when he sold his second home is James Purnell, the work and pensions secretary. Although in his case there was no evidence of any wrongdoing, suggestions that MPs may be systematically avoiding tax have alarmed HMRC officials. HMRC will also take a close look at MPs' income tax payments, as many of their perks could be seen as "benefits in kind" which should be taxed.
Mark Wallace, campaigns director for the Taxpayers' TaxPayers'correct Alliance, welcomed HMRC's inquiries. "It is totally unacceptable for elected representatives to live by one set of rules and dictate another," he said.
An HMRC spokeswoman said: "We use a wide variety of information sources to ensure the tax system operates as it should."
Banks unveil cash-raising plans
US bank Wells Fargo has said it plans to raise $7.5bn (£4.9bn) from selling new shares, a day after the US Treasury said 10 banks needed to boost reserves.
Morgan Stanley is also hoping to raise $3.5bn from share sales.
Bank of America said it planned to sell assets and raise capital to secure the $33.9bn it needs.
On Thursday, the US Treasury said that 10 of America's 19 largest banks needed to raise a combined total of $74.6bn of extra funds.
That was the main finding of the so-called "stress tests" which were carried out to see if the banks had sufficient capital to cope should the recession worsen.
The banks that require extra capital have been given until 8 June to finalise their plans to do so, and get them approved by regulators.
Separately, Fannie Mae, the mortgage finance company, has said it needs an extra $19bn in government aid after reporting a loss of $23.2bn for the first quarter.
Discount sale
Wells Fargo's shares are to be priced at $22 each, a discount of 11% to Thursday's closing price, with Morgan Stanley's new shares priced at $24 each, a discount of nearly 12% to Thursday's close.
Ken Lewis, chief executive of Bank of America - the bank which requires the most new money - has said that he will stay at the bank to help it raise the cash and repay government loans.
Mr Lewis has faced criticism for his purchase of Merrill Lynch and some investors have called for his resignation.
Other banks that need more money include GMAC, the former financial arm of General Motors, which needs $11.5bn, Citigroup, which requires an additional $5.5bn of funds, and Morgan Stanley, which has been told to find $1.8bn.
The 19 banks that were tested by Treasury Department and Federal Reserve officials account for two-thirds of the total assets of the US banking system, and more than half of the total amount of credit in the US economy.
Morgan Stanley is also hoping to raise $3.5bn from share sales.
Bank of America said it planned to sell assets and raise capital to secure the $33.9bn it needs.
On Thursday, the US Treasury said that 10 of America's 19 largest banks needed to raise a combined total of $74.6bn of extra funds.
That was the main finding of the so-called "stress tests" which were carried out to see if the banks had sufficient capital to cope should the recession worsen.
The banks that require extra capital have been given until 8 June to finalise their plans to do so, and get them approved by regulators.
Separately, Fannie Mae, the mortgage finance company, has said it needs an extra $19bn in government aid after reporting a loss of $23.2bn for the first quarter.
Discount sale
Wells Fargo's shares are to be priced at $22 each, a discount of 11% to Thursday's closing price, with Morgan Stanley's new shares priced at $24 each, a discount of nearly 12% to Thursday's close.
Ken Lewis, chief executive of Bank of America - the bank which requires the most new money - has said that he will stay at the bank to help it raise the cash and repay government loans.
Mr Lewis has faced criticism for his purchase of Merrill Lynch and some investors have called for his resignation.
Other banks that need more money include GMAC, the former financial arm of General Motors, which needs $11.5bn, Citigroup, which requires an additional $5.5bn of funds, and Morgan Stanley, which has been told to find $1.8bn.
The 19 banks that were tested by Treasury Department and Federal Reserve officials account for two-thirds of the total assets of the US banking system, and more than half of the total amount of credit in the US economy.
Zuma warning of economic 'pinch'
South Africa is facing hard times economically, its newly inaugurated President, Jacob Zuma, warned in his acceptance speech.
"Jobs are being lost in every economy across the world," he said. "We will not be spared the negative impact, and are beginning to feel the pinch."
But the ANC leader said the foundations of the economy were strong.
Mr Zuma's first task as president is to form his cabinet and he is due to announce its composition on Sunday.
Investors are watching to see if Finance Minister Trevor Manuel, who has been praised for his fiscal management, will be retained and also to what extent Mr Zuma's communist allies will be represented
Mr Manuel has expressed confidence in the new leader's abilities.
"Frequently people look for experience but what matters is attitude and aptitude," he said.
"The mood is very buoyed. Feeling very strong. There's a big wave to ride."
Mr Zuma was elected president by parliament after the African National Congress won the general election last month, albeit with a slightly reduced majority.
'Firm foundation'
He was sworn in on Saturday before 5,000 invited guests and crowds of supporters who had gathered at the Union Buildings in Pretoria.
We must acknowledge that we find ourselves in difficult economic times," he said.
Despite his bitter power struggle with his predecessor Thabo Mbeki, the new president paid tribute to his economic management.
Mr Mbeki had, he said, created a "firm foundation" for economic growth and development.
Turning to the 2010 World Cup, he promised "a world class event that will forever change the perceptions of the international community", drawing loud applause.
All South Africa's leaders since 1994 attended the lavish ceremony in Pretoria.
Jacob Zuma thanked Nelson Mandela for healing the wounds of the past in South Africa and establishing the "Rainbow Nation".
The Mandela-Mbeki years are now part of history, the BBC's Peter Biles reports, and it is President Zuma who has to address huge economic and social challenges.
The first test of his presidency will come in the 24 hours when he reveals the members of his cabinet, our correspondent says.
Epic struggle
Jacob Zuma's journey to the Union Buildings has been an epic struggle, our correspondent adds.
He was sacked as vice-president by Thabo Mbeki four years ago after being implicated in a corruption scandal - allegations Mr Zuma always denied.
The case was eventually thrown out amid evidence of government meddling in the investigation.
In February 2006, he was acquitted of rape in a separate case, though he was widely criticised for his comments about sex and HIV/Aids.
At the time, few observers believed Mr Zuma could remain a serious contender for president, our correspondent says.
But he fought to clear his name, retained enormous popularity, especially among his fellow Zulus, and led the ANC to a convincing election victory two weeks ago on a pro-poor populist ticket.
He has listed his five priorities as land redistribution, education, health, lowering crime levels and finding decent work for all South Africans.
"Jobs are being lost in every economy across the world," he said. "We will not be spared the negative impact, and are beginning to feel the pinch."
But the ANC leader said the foundations of the economy were strong.
Mr Zuma's first task as president is to form his cabinet and he is due to announce its composition on Sunday.
Investors are watching to see if Finance Minister Trevor Manuel, who has been praised for his fiscal management, will be retained and also to what extent Mr Zuma's communist allies will be represented
Mr Manuel has expressed confidence in the new leader's abilities.
"Frequently people look for experience but what matters is attitude and aptitude," he said.
"The mood is very buoyed. Feeling very strong. There's a big wave to ride."
Mr Zuma was elected president by parliament after the African National Congress won the general election last month, albeit with a slightly reduced majority.
'Firm foundation'
He was sworn in on Saturday before 5,000 invited guests and crowds of supporters who had gathered at the Union Buildings in Pretoria.
We must acknowledge that we find ourselves in difficult economic times," he said.
Despite his bitter power struggle with his predecessor Thabo Mbeki, the new president paid tribute to his economic management.
Mr Mbeki had, he said, created a "firm foundation" for economic growth and development.
Turning to the 2010 World Cup, he promised "a world class event that will forever change the perceptions of the international community", drawing loud applause.
All South Africa's leaders since 1994 attended the lavish ceremony in Pretoria.
Jacob Zuma thanked Nelson Mandela for healing the wounds of the past in South Africa and establishing the "Rainbow Nation".
The Mandela-Mbeki years are now part of history, the BBC's Peter Biles reports, and it is President Zuma who has to address huge economic and social challenges.
The first test of his presidency will come in the 24 hours when he reveals the members of his cabinet, our correspondent says.
Epic struggle
Jacob Zuma's journey to the Union Buildings has been an epic struggle, our correspondent adds.
He was sacked as vice-president by Thabo Mbeki four years ago after being implicated in a corruption scandal - allegations Mr Zuma always denied.
The case was eventually thrown out amid evidence of government meddling in the investigation.
In February 2006, he was acquitted of rape in a separate case, though he was widely criticised for his comments about sex and HIV/Aids.
At the time, few observers believed Mr Zuma could remain a serious contender for president, our correspondent says.
But he fought to clear his name, retained enormous popularity, especially among his fellow Zulus, and led the ANC to a convincing election victory two weeks ago on a pro-poor populist ticket.
He has listed his five priorities as land redistribution, education, health, lowering crime levels and finding decent work for all South Africans.
Pakistan urging residents to flee
Pakistan's government is lifting a curfew in the Swat valley to allow residents to escape an intense battle between the army and Taleban militants.
The curfew has trapped tens of thousands of people attempting to flee the violence.
The army is trying to reverse militant advances in the area, in what the prime minister has called a "fight for the survival of the country".
The army said dozens of militants had been killed in fighting on Saturday.
The government said the curfew would be lifted for seven hours on Sunday, beginning at 0600 local time.
It asked civilians to take the chance to flee the area.
See a map of the region
BBC regional analyst Anbarasan Ethirajan says the lifting of the curfew is a sign that the army offensive is likely to intensify over the coming days.
Pakistan's government signed a peace agreement with the Swat Taleban in February, allowing Sharia law there, which was sharply criticised by Washington.
The militants then moved towards the capital, Islamabad, causing further alarm.
Up to 15,000 troops have been deployed in the Swat valley and neighbouring areas to take on 4,000-5,000 militants.
The military has said it intends to "eliminate" the Taleban fighters.
The fighting has already displaced some 200,000 people, while a further 300,000 are estimated to be on the move or about to flee, the UN says.
The government also said on Saturday that refugee camps would be set up in Peshawar, the capital of North West Frontier Province, and to the north-east in Naushara.
Footage on local television showed people at one camp desperately looting UN supplies including blankets and cooking oil.
'Road jammed'
Earlier, fighting was reported to have reached the biggest town in the region, Mingora, which the army has been trying to recapture.
The army said it had killed 55 more militants on Saturday, having said that more than 140 militants had died in earlier clashes.
Some 15,000 troops have been deployed to fight the Taleban
Due to the intensity of the fighting and the cutting of phone networks, it is difficult to get independent information on the fighting or verify the army's claims, correspondents say.
Prime Minister Yusuf Raza Gilani told reporters on Saturday called the conflict "a guerrilla war".
"This is our own war. This is war for the survival of the country," Reuters news agency quoted him as saying.
Our correspondent says Sunday's curfew is especially aimed at the residents of the towns of Kambar and Raheemabad.
They have been blaming both sides for the violence, he says, as the military continues to bombard the area while the Taleban reportedly prevents people from fleeing.
One Mingora resident was quoted by Reuters saying he had not been able to escape during an earlier curfew.
"We are feeling so helpless, we want to go but can't," said Sallahudin Khan.
"We tried to leave yesterday after authorities relaxed the curfew for a few hours, but we couldn't as the main road leading out of Mingora was literally jammed with the flood of fleeing people."
The curfew has trapped tens of thousands of people attempting to flee the violence.
The army is trying to reverse militant advances in the area, in what the prime minister has called a "fight for the survival of the country".
The army said dozens of militants had been killed in fighting on Saturday.
The government said the curfew would be lifted for seven hours on Sunday, beginning at 0600 local time.
It asked civilians to take the chance to flee the area.
See a map of the region
BBC regional analyst Anbarasan Ethirajan says the lifting of the curfew is a sign that the army offensive is likely to intensify over the coming days.
Pakistan's government signed a peace agreement with the Swat Taleban in February, allowing Sharia law there, which was sharply criticised by Washington.
The militants then moved towards the capital, Islamabad, causing further alarm.
Up to 15,000 troops have been deployed in the Swat valley and neighbouring areas to take on 4,000-5,000 militants.
The military has said it intends to "eliminate" the Taleban fighters.
The fighting has already displaced some 200,000 people, while a further 300,000 are estimated to be on the move or about to flee, the UN says.
The government also said on Saturday that refugee camps would be set up in Peshawar, the capital of North West Frontier Province, and to the north-east in Naushara.
Footage on local television showed people at one camp desperately looting UN supplies including blankets and cooking oil.
'Road jammed'
Earlier, fighting was reported to have reached the biggest town in the region, Mingora, which the army has been trying to recapture.
The army said it had killed 55 more militants on Saturday, having said that more than 140 militants had died in earlier clashes.
Some 15,000 troops have been deployed to fight the Taleban
Due to the intensity of the fighting and the cutting of phone networks, it is difficult to get independent information on the fighting or verify the army's claims, correspondents say.
Prime Minister Yusuf Raza Gilani told reporters on Saturday called the conflict "a guerrilla war".
"This is our own war. This is war for the survival of the country," Reuters news agency quoted him as saying.
Our correspondent says Sunday's curfew is especially aimed at the residents of the towns of Kambar and Raheemabad.
They have been blaming both sides for the violence, he says, as the military continues to bombard the area while the Taleban reportedly prevents people from fleeing.
One Mingora resident was quoted by Reuters saying he had not been able to escape during an earlier curfew.
"We are feeling so helpless, we want to go but can't," said Sallahudin Khan.
"We tried to leave yesterday after authorities relaxed the curfew for a few hours, but we couldn't as the main road leading out of Mingora was literally jammed with the flood of fleeing people."
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