Formally taking centre stage in Congress politics, general secretary Rahul Gandhi attended a meeting of the United Progressive Alliance coordination committee for the first time on Wednesday.
He later invited about two dozen young MPs for a tête-à-tête over tea at his residence.
The 39-year-old who addressed 120 meetings through the campaign has emerged as the face of the Congress’s success in the general election.
The Congress won 75 of the 120 seats where Gandhi campaigned.
Eight of the 10 candidates from the student and youth wings of the party won, many from difficult seats — such as Meenakshi Natarjan in Mandsaur in Madhya Pradesh.
With his participation in the coordination panel, Gandhi has been formally enlisted among the party’s key
strategists.
He did not speak at the UPA meeting, but interacted with the young MPs for over two hours. “He has had no opportunity to interact with some of the newly elected MPs,” said a party source. “He wanted to chat with them.”
Jyotiraditya Scindia, Manish Tiwari, Sachin Pilot, Sandeep Dikshit, Jitin Prasada, Jitendra Singh and Ashok Tanwar were among the MPs present.
Wednesday, May 20, 2009
India Can Now Play A Bigger Part In International Events
The stunning election victory of the UPA now gives Dr Manmohan Singh's government a second chance to establish priorities, in foreign policy no less than in other spheres. It is notable that foreign policy did not become an election issue. Despite attempts to elevate the India-US nuclear deal to the status of a decisive issue, this particular subject seemed to fade away even before the campaign got into full swing. Similarly, calls for tougher handling of the issue of terrorism did not much resonate with the electors. Even the escalating Tamil casualties in the final assault by Sri Lanka on the LTTE did not become an issue affecting the vote.
In foreign policy as much as in other realms, the election result has been seen as a vote for continuity and stability. No basic re-orientation has been demanded or promised. Moreover, the strengthening of the Congress party in Parliament means that internal pressures within the ruling coalition, as became evident at crucial times during the last government, can no longer threaten to force the issue and unbalance decision- making.
Continuity is the watchword and we can legitimately expect to see foreign policy continue along its established path. This should not imply that there is no need for change or for fresh initiatives. Indeed, it should be possible as the government heads into its second term to pick up a number of threads from its previous initiatives and re-state essential goals, presenting a coherent picture of where the government aims to go over the next five years.
First 100 days
There are reports that a programme for the first 100 days is being shaped in the PM's Office, presumably along the lines of what is seen in the USA, to try to ensure that the newly installed government gets off to a flying start. Though dealings with foreign countries cannot readily be fitted into a domestic timetable, it is possible that this 100-day programme may outline some of the priority areas in external policy: an initial agenda, as it were.
Regarding the substance of the matter, it is evident that India's main problems in its external relations lie close to home. Surveying the neighbourhood in almost every direction, there are problems to be discerned. This is nothing new and differences of one sort or another with neighbours are more or less taken for granted. But India has advanced greatly: it has always loomed over its South Asian neighbours and with the rapid progress recorded over the last several years it has pulled further ahead. For it to remain entangled in regional, sometimes even parochial, issues is hardly in keeping with the country's wider interests and associations. Maybe it is now an opportune moment for another attempt to transform the neighbourhood from one of niggling contentiousness to one of genuine cooperation.
The most practical and well-received Indian move in this direction was that of then Prime Minister I.K. Gujral whose 'Gujral Doctrine' remains a signpost for South Asia. The essence of this doctrine was that India undertook to meet its smaller neighbours more than halfway and not demand strict reciprocity in its dealings with them. This brought real expectation to the region and led to some enduring agreements that helped resolve long-standing bilateral problems. Mr. Gujral did not remain in office long enough for the full impact of his doctrine to take effect. It could be time now for a fresh all-encompassing initiative by New Delhi that places India's relations with the surrounding countries on a healthier and more cooperative basis.
In its first term, the UPA did much to move in this direction. It helped achieve a democratic solution to the Maoist insurgency in Nepal and tried to moderate the closing phase of the military destruction of the LTTE. Most important, as confirmed by the Prime Minister during the campaign, back channel talks with Pakistan brought the two sides within reach of agreement on issues that have bedeviled their relationship since they first emerged as independent nations. Thus it is possible to aspire to a South Asia free of major bilateral conflict, joined in a Virtuous Circle of mutual support and cooperation. Such an ambition would be a worthy goal for the government in its second coming.
On the wider stage, India's regional and international role needs closer explication. Much has been said ~ almost too much ~ about the implications of the India-US nuclear deal. Even though the criticism that the deal tends to make us subservient to today's sole super power is wide off the mark; with the nuclear deal India has entered a new strategic era whose implications are as yet somewhat unclear. The strengthening link with the USA comes at a time when that country has become more active than ever in South Asia. The 'Afpak' strategy makes demands on the region as a whole, not on the two principals alone. The USA has been careful until now to disclaim any direct attempt to bring India into the fold of its new policy but things might change, especially if confronting the Taliban insurgency proves more difficult and more prolonged than presently anticipated.
Indian Ocean
There are also other areas of activity where a different form of collaboration has emerged, notably in the affairs of the Indian Ocean. Here, too, the purpose and the limits of Indian strategy are not too clear. Now that India is on a crest, its democratic credentials yet again on display and several years of economic success behind it, its external associations are bound to become ever more elaborate and extensive.
To give an idea of where we are headed and what shape our future global strategy might take is a task that devolves on the country's leadership. A vision for the future commensurate with the country's changing needs and capacities is required. Nor can we ignore major issues where India's role has been under question and policy adjustments may be necessary ~ such as environment and climate change, WTO, security and counter-terrorism, among others.
One matter that is likely to loom large in the near future is that of nuclear disarmament. This is something on which we occupied the moral high ground for decades. Even now, it is India that can claim to have placed the most comprehensive and closely reasoned plan before the international community. As priorities have shifted and the older nuclear powers have started to revive global disarmament concepts, a fresh opportunity has arisen for India to take its proper place within the debate.
In the wake of the election and the clear verdict it has provided, India is in a position to play a bigger part in international events. Indeed, its burgeoning interests drive it in that direction. This is a time for big ideas and imaginative projections, which represents a considerable challenge to the incoming government.
courtsey:the statesman
In foreign policy as much as in other realms, the election result has been seen as a vote for continuity and stability. No basic re-orientation has been demanded or promised. Moreover, the strengthening of the Congress party in Parliament means that internal pressures within the ruling coalition, as became evident at crucial times during the last government, can no longer threaten to force the issue and unbalance decision- making.
Continuity is the watchword and we can legitimately expect to see foreign policy continue along its established path. This should not imply that there is no need for change or for fresh initiatives. Indeed, it should be possible as the government heads into its second term to pick up a number of threads from its previous initiatives and re-state essential goals, presenting a coherent picture of where the government aims to go over the next five years.
First 100 days
There are reports that a programme for the first 100 days is being shaped in the PM's Office, presumably along the lines of what is seen in the USA, to try to ensure that the newly installed government gets off to a flying start. Though dealings with foreign countries cannot readily be fitted into a domestic timetable, it is possible that this 100-day programme may outline some of the priority areas in external policy: an initial agenda, as it were.
Regarding the substance of the matter, it is evident that India's main problems in its external relations lie close to home. Surveying the neighbourhood in almost every direction, there are problems to be discerned. This is nothing new and differences of one sort or another with neighbours are more or less taken for granted. But India has advanced greatly: it has always loomed over its South Asian neighbours and with the rapid progress recorded over the last several years it has pulled further ahead. For it to remain entangled in regional, sometimes even parochial, issues is hardly in keeping with the country's wider interests and associations. Maybe it is now an opportune moment for another attempt to transform the neighbourhood from one of niggling contentiousness to one of genuine cooperation.
The most practical and well-received Indian move in this direction was that of then Prime Minister I.K. Gujral whose 'Gujral Doctrine' remains a signpost for South Asia. The essence of this doctrine was that India undertook to meet its smaller neighbours more than halfway and not demand strict reciprocity in its dealings with them. This brought real expectation to the region and led to some enduring agreements that helped resolve long-standing bilateral problems. Mr. Gujral did not remain in office long enough for the full impact of his doctrine to take effect. It could be time now for a fresh all-encompassing initiative by New Delhi that places India's relations with the surrounding countries on a healthier and more cooperative basis.
In its first term, the UPA did much to move in this direction. It helped achieve a democratic solution to the Maoist insurgency in Nepal and tried to moderate the closing phase of the military destruction of the LTTE. Most important, as confirmed by the Prime Minister during the campaign, back channel talks with Pakistan brought the two sides within reach of agreement on issues that have bedeviled their relationship since they first emerged as independent nations. Thus it is possible to aspire to a South Asia free of major bilateral conflict, joined in a Virtuous Circle of mutual support and cooperation. Such an ambition would be a worthy goal for the government in its second coming.
On the wider stage, India's regional and international role needs closer explication. Much has been said ~ almost too much ~ about the implications of the India-US nuclear deal. Even though the criticism that the deal tends to make us subservient to today's sole super power is wide off the mark; with the nuclear deal India has entered a new strategic era whose implications are as yet somewhat unclear. The strengthening link with the USA comes at a time when that country has become more active than ever in South Asia. The 'Afpak' strategy makes demands on the region as a whole, not on the two principals alone. The USA has been careful until now to disclaim any direct attempt to bring India into the fold of its new policy but things might change, especially if confronting the Taliban insurgency proves more difficult and more prolonged than presently anticipated.
Indian Ocean
There are also other areas of activity where a different form of collaboration has emerged, notably in the affairs of the Indian Ocean. Here, too, the purpose and the limits of Indian strategy are not too clear. Now that India is on a crest, its democratic credentials yet again on display and several years of economic success behind it, its external associations are bound to become ever more elaborate and extensive.
To give an idea of where we are headed and what shape our future global strategy might take is a task that devolves on the country's leadership. A vision for the future commensurate with the country's changing needs and capacities is required. Nor can we ignore major issues where India's role has been under question and policy adjustments may be necessary ~ such as environment and climate change, WTO, security and counter-terrorism, among others.
One matter that is likely to loom large in the near future is that of nuclear disarmament. This is something on which we occupied the moral high ground for decades. Even now, it is India that can claim to have placed the most comprehensive and closely reasoned plan before the international community. As priorities have shifted and the older nuclear powers have started to revive global disarmament concepts, a fresh opportunity has arisen for India to take its proper place within the debate.
In the wake of the election and the clear verdict it has provided, India is in a position to play a bigger part in international events. Indeed, its burgeoning interests drive it in that direction. This is a time for big ideas and imaginative projections, which represents a considerable challenge to the incoming government.
courtsey:the statesman
Chandrayaan-1 orbit raised
The orbit of Chandrayaan-1, which was at a height of 100 km from the moon since November 2008, has been raised to 200 km. Manoeuvres to raise the orbit were performed between 9 a.m. and 10 a.m. on Tuesday.
According to a release from the Indian Space Research Organisation, Chandrayaan-1 going round the moon in this higher orbit will facilitate further studies of orbit perturbations and gravitation field variations of the moon, and imaging a wider swath of the lunar surface.
Over the past seven months, all the 11 payloads on board the spacecraft were successfully put into operation and data of excellent quality were obtained, the release said. Scientists from India and international agencies were analysing the data, and several interesting results were obtained, it said.
The scientific data is being archived and disseminated from the Indian Space Science Data Centre at Byalalu, near Bangalore.
The spacecraft operations are being performed at the Satellite Control Centre of the ISRO Telemetry, Tracking and Command Network in Bangalore and the Indian Deep Space Network at Byalalu.
Chandrayaan-1 was put into orbit on October 22, 2008.
According to a release from the Indian Space Research Organisation, Chandrayaan-1 going round the moon in this higher orbit will facilitate further studies of orbit perturbations and gravitation field variations of the moon, and imaging a wider swath of the lunar surface.
Over the past seven months, all the 11 payloads on board the spacecraft were successfully put into operation and data of excellent quality were obtained, the release said. Scientists from India and international agencies were analysing the data, and several interesting results were obtained, it said.
The scientific data is being archived and disseminated from the Indian Space Science Data Centre at Byalalu, near Bangalore.
The spacecraft operations are being performed at the Satellite Control Centre of the ISRO Telemetry, Tracking and Command Network in Bangalore and the Indian Deep Space Network at Byalalu.
Chandrayaan-1 was put into orbit on October 22, 2008.
Phil Mickelson's wife, Amy, diagnosed with breast cancer
Phil Mickelson was gearing up for his favorite time of year, working his way toward Bethpage Black and another crack at the U.S. Open before a New York gallery that treats him like a rock star.
All that changed today, along with his priorities, when he disclosed that his wife, Amy, has been diagnosed with breast cancer.
Mickelson is taking an indefinite leave from the PGA Tour. He withdrew from the Byron Nelson Championship, which he won in 1996. He is to defend his title next week at Colonial, but even that is uncertain. A statement from his management company said his 37-year-old wife would have more tests, though treatment would begin with "major surgery" as early as the next two weeks.
"We see Amy as this vibrant, bubbly mother of three who is tremendously devoted to her husband and family," Jack Nicklaus said. "No one, especially Amy, deserves to have to face the battle that accompanies cancer. But we know that Amy has this amazing inner strength and spirit, and with Phil's unwavering love and support, they will fight and overcome this."
Mickelson, a three-time major champion with 36 career PGA Tour victories, was closing in on the No. 1 ranking held by Tiger Woods. He was runner-up to Woods at Bethpage Black in 2002.
"Elin and I are deeply saddened to hear the news about Amy," Woods said. "Our thoughts and prayers are with her, Phil, the children and the entire Mickelson family."
Scott Verplank said Mickelson sent him a text message Tuesday night "and I had a hard time sleeping."
"Every time I've been around her, she's always had a smile on her face. She's always upbeat," Verplank said. "She's a neat girl. Hopefully, it's early and hopefully, they take care of it."
Amy Mickelson is one of the most visible wives on the PGA Tour, a former Phoenix Suns cheerleader who regularly walks the course during rounds and mingles easily with fans who recognize her blonde hair and engaging smile.
They met in 1992, when Mickelson was a senior at Arizona State, a year after he won his first PGA Tour event as an amateur. Amy knew nothing about golf at the time.
"I grew up in a tennis family, and when he told me he was a pro golfer, I thought he worked in the shop at a golf course," she wrote in Mickelson's book, "One Magical Sunday," after he won his first major at the 2004 Masters.
The first time she accompanied him to a golf tournament, the Bob Hope Classic, she figured they would walk hand-in-hand down the fairway and was angry at him for not spending enough time with her. But once she learned the difference between birdies and bogeys, she has been at his side during the highs and lows of golf tournaments.
They were married in 1996 and have three children: Amanda, 9, Sophia, 7, and Evan, 6. Their first child was born the day after the 1999 U.S. Open at Pinehurst No. 2., where Mickelson carried a pager and promised to leave if his wife went into labor.
Contractions began on Sunday, but she decided not to page him because he was so close to winning his first major. Mickelson lost by one stroke when Payne Stewart holed a 15-foot par putt on the final hole. Mickelson arrived home in time for the birth.
He nearly lost his wife during the delivery of their third child.
Sarah Strange, a breast cancer survivor and wife of former Ryder Cup captain Curtis Strange, said Amy Mickelson's outgoing personality would play a big part in her recovery.
"She's such an upbeat person, and I think she'll approach this in the same way, moving forward with confidence," Sarah Strange said. "I'm sure she's getting the best treatment they can find. An upbeat attitude plays such a key role in this, her own and those around her. I'll certainly be extending any experiences I've had, any questions she could ask me to keep upbeat.
"She was so supportive of me being a captain's wife," she said. "In return, she will feel that support from others."
Nicklaus and his wife, Barbara, spent time with the Mickelsons during his four stints as captain of the Presidents Cup team.
"She was the wife I went to for advice," Barbara Nicklaus said. "Amy is just one of those people who simply wants to help other people. Now we need to help her."
How much golf Mickelson misses this summer is uncertain, but it comes at a time when Woods, his chief rival, returned from eight months away with knee surgery. They played together in the final round of the Masters and practically stole the show with an exciting charge up the leaderboard. Mickelson finished one shot ahead of Woods, but three shots out of the playoff won by Angel Cabrera.
All that changed today, along with his priorities, when he disclosed that his wife, Amy, has been diagnosed with breast cancer.
Mickelson is taking an indefinite leave from the PGA Tour. He withdrew from the Byron Nelson Championship, which he won in 1996. He is to defend his title next week at Colonial, but even that is uncertain. A statement from his management company said his 37-year-old wife would have more tests, though treatment would begin with "major surgery" as early as the next two weeks.
"We see Amy as this vibrant, bubbly mother of three who is tremendously devoted to her husband and family," Jack Nicklaus said. "No one, especially Amy, deserves to have to face the battle that accompanies cancer. But we know that Amy has this amazing inner strength and spirit, and with Phil's unwavering love and support, they will fight and overcome this."
Mickelson, a three-time major champion with 36 career PGA Tour victories, was closing in on the No. 1 ranking held by Tiger Woods. He was runner-up to Woods at Bethpage Black in 2002.
"Elin and I are deeply saddened to hear the news about Amy," Woods said. "Our thoughts and prayers are with her, Phil, the children and the entire Mickelson family."
Scott Verplank said Mickelson sent him a text message Tuesday night "and I had a hard time sleeping."
"Every time I've been around her, she's always had a smile on her face. She's always upbeat," Verplank said. "She's a neat girl. Hopefully, it's early and hopefully, they take care of it."
Amy Mickelson is one of the most visible wives on the PGA Tour, a former Phoenix Suns cheerleader who regularly walks the course during rounds and mingles easily with fans who recognize her blonde hair and engaging smile.
They met in 1992, when Mickelson was a senior at Arizona State, a year after he won his first PGA Tour event as an amateur. Amy knew nothing about golf at the time.
"I grew up in a tennis family, and when he told me he was a pro golfer, I thought he worked in the shop at a golf course," she wrote in Mickelson's book, "One Magical Sunday," after he won his first major at the 2004 Masters.
The first time she accompanied him to a golf tournament, the Bob Hope Classic, she figured they would walk hand-in-hand down the fairway and was angry at him for not spending enough time with her. But once she learned the difference between birdies and bogeys, she has been at his side during the highs and lows of golf tournaments.
They were married in 1996 and have three children: Amanda, 9, Sophia, 7, and Evan, 6. Their first child was born the day after the 1999 U.S. Open at Pinehurst No. 2., where Mickelson carried a pager and promised to leave if his wife went into labor.
Contractions began on Sunday, but she decided not to page him because he was so close to winning his first major. Mickelson lost by one stroke when Payne Stewart holed a 15-foot par putt on the final hole. Mickelson arrived home in time for the birth.
He nearly lost his wife during the delivery of their third child.
Sarah Strange, a breast cancer survivor and wife of former Ryder Cup captain Curtis Strange, said Amy Mickelson's outgoing personality would play a big part in her recovery.
"She's such an upbeat person, and I think she'll approach this in the same way, moving forward with confidence," Sarah Strange said. "I'm sure she's getting the best treatment they can find. An upbeat attitude plays such a key role in this, her own and those around her. I'll certainly be extending any experiences I've had, any questions she could ask me to keep upbeat.
"She was so supportive of me being a captain's wife," she said. "In return, she will feel that support from others."
Nicklaus and his wife, Barbara, spent time with the Mickelsons during his four stints as captain of the Presidents Cup team.
"She was the wife I went to for advice," Barbara Nicklaus said. "Amy is just one of those people who simply wants to help other people. Now we need to help her."
How much golf Mickelson misses this summer is uncertain, but it comes at a time when Woods, his chief rival, returned from eight months away with knee surgery. They played together in the final round of the Masters and practically stole the show with an exciting charge up the leaderboard. Mickelson finished one shot ahead of Woods, but three shots out of the playoff won by Angel Cabrera.
Credit Card Industry Aims to Profit From Sterling Payers
Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.
“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.
People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.
“Despite all the terrible things that have been said, you’re making out like a bandit,” he said. “That’s a third of credit card customers, 50 million people who have gotten a great deal.”
Robert Hammer, an industry consultant, said the legislation might have the broad effect of encouraging card issuers to become ever more reliant on fees from marginal customers as well as creditworthy cardholders — “deadbeats” in industry parlance, because they generate scant fee revenue.
“They aren’t charities. They have shareholders to report to,” he said, referring to banks and credit card companies. “Whatever is left in the model to work from, they will start to maneuver.”
Banks used to give credit cards only to the best consumers and charge them a flat interest rate of about 20 percent and an annual fee. But with the relaxing of usury laws in some states, and the ready availability of credit scores in the late 1980s, banks began offering cards with a variety of different interest rates and fees, tying the pricing to the credit risk of the cardholder.
That helped push interest rates down for many consumers, but they soared for riskier cardholders, who became a significant source of revenue for the industry. The recent economic downturn challenged that formula, and banks started dumping the riskiest customers and lowering their credit limits in earnest as the recession accelerated. Now, consumers who pay their bills off every month are issuing a rising chorus of complaints about shortened grace periods, new hidden fees and higher interest rates.
The industry says that the proposals will force banks to issue fewer credit cards at greater cost to the current cardholders.
Citigroup and Capital One referred comments to the A.B.A. Discover and American Express declined to comment. Bank of America intends to “provide credit to the largest number of creditworthy customers possible, while also remaining prudent in our lending practices,” said Betty Riess, a spokeswoman. Together with JPMorgan Chase, which has said the changes will force it to limit credit availability and raise fees, these banks account for 80 percent of the credit card industry.
Banks are not required to publicly reveal how much money they make from penalty interest rates and fees, though government officials and industry consultants estimate they constitute a growing portion of revenue.
For instance, Mr. Hammer said the amount of money generated by penalty fees like late charges and exceeding credit limits had increased by about $1 billion annually in recent years, and should top $20 billion this year.
Regulations passed by the Federal Reserve in December to curb unexpected interest charges would cost issuers about $12 billion a year in lost fees and income, according to industry calculations. The legislation before Congress would build on the Fed rules and would further squeeze banks’ revenue when they are being hit with a high rate of credit card charge-offs. The government’s stress tests showed that the nation’s 19 biggest banks will take on $82 billion in credit card losses in the next two years.
A 2005 report by the Government Accountability Office estimated that 70 percent of card issuers’ revenue came from interest charges, and the portion from penalty rates appeared to be growing. The remainder came from fees on cardholders as well as retailers for processing transactions. Many retailers are angry at the high fees and plan to pass them on to shoppers once the Congressional legislation takes effect.
Consumer advocates say they have little sympathy for credit card issuers, arguing that they have made billions in recent years with unfair and sometimes deceptive practices.
“The business model will change because the business model doesn’t work for the public,” said Gail Hillebrand, a senior lawyer at Consumers Union.
“In order to do business under the new rules, they’ll actually have to tell you how much it’s going to cost,” she said.
With many consumers mired in debt and angry at what they consider gouging by credit card companies, the issue of credit card reform has broad populist appeal. Members of Congress and the Obama administration have seized on the discontent to push reforms that the industry succeeded in tamping down when the economy was flying high.
Austan Goolsbee, an economic adviser to President Obama, said that while the credit card industry had the right to make a reasonable profit as long as its contracts were in plain language and rule-breakers were held accountable, its current practices were akin to “a series of carjackings.”
“The card industry is giving the argument that if you didn’t want to be carjacked, why weren’t you locking your doors or taking a different road?” Mr. Goolsbee said.
Ron Lieber contributed reporting.
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
As they thin their ranks of risky cardholders to deal with an economic downturn, major banks including American Express, Citigroup, Bank of America and a long list of others have already begun to raise interest rates, and some have set their sights on consumers who pay their bills on time. The legislation scheduled for a Senate vote on Tuesday does not cap interest rates, so banks can continue to lift them, albeit at a slower pace and with greater disclosure.
“There will be one-size-fits-all pricing, and as a result, you’ll see the industry will be more egalitarian in terms of its revenue base,” said David Robertson, publisher of the Nilson Report, which tracks the credit card business.
People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.
“Despite all the terrible things that have been said, you’re making out like a bandit,” he said. “That’s a third of credit card customers, 50 million people who have gotten a great deal.”
Robert Hammer, an industry consultant, said the legislation might have the broad effect of encouraging card issuers to become ever more reliant on fees from marginal customers as well as creditworthy cardholders — “deadbeats” in industry parlance, because they generate scant fee revenue.
“They aren’t charities. They have shareholders to report to,” he said, referring to banks and credit card companies. “Whatever is left in the model to work from, they will start to maneuver.”
Banks used to give credit cards only to the best consumers and charge them a flat interest rate of about 20 percent and an annual fee. But with the relaxing of usury laws in some states, and the ready availability of credit scores in the late 1980s, banks began offering cards with a variety of different interest rates and fees, tying the pricing to the credit risk of the cardholder.
That helped push interest rates down for many consumers, but they soared for riskier cardholders, who became a significant source of revenue for the industry. The recent economic downturn challenged that formula, and banks started dumping the riskiest customers and lowering their credit limits in earnest as the recession accelerated. Now, consumers who pay their bills off every month are issuing a rising chorus of complaints about shortened grace periods, new hidden fees and higher interest rates.
The industry says that the proposals will force banks to issue fewer credit cards at greater cost to the current cardholders.
Citigroup and Capital One referred comments to the A.B.A. Discover and American Express declined to comment. Bank of America intends to “provide credit to the largest number of creditworthy customers possible, while also remaining prudent in our lending practices,” said Betty Riess, a spokeswoman. Together with JPMorgan Chase, which has said the changes will force it to limit credit availability and raise fees, these banks account for 80 percent of the credit card industry.
Banks are not required to publicly reveal how much money they make from penalty interest rates and fees, though government officials and industry consultants estimate they constitute a growing portion of revenue.
For instance, Mr. Hammer said the amount of money generated by penalty fees like late charges and exceeding credit limits had increased by about $1 billion annually in recent years, and should top $20 billion this year.
Regulations passed by the Federal Reserve in December to curb unexpected interest charges would cost issuers about $12 billion a year in lost fees and income, according to industry calculations. The legislation before Congress would build on the Fed rules and would further squeeze banks’ revenue when they are being hit with a high rate of credit card charge-offs. The government’s stress tests showed that the nation’s 19 biggest banks will take on $82 billion in credit card losses in the next two years.
A 2005 report by the Government Accountability Office estimated that 70 percent of card issuers’ revenue came from interest charges, and the portion from penalty rates appeared to be growing. The remainder came from fees on cardholders as well as retailers for processing transactions. Many retailers are angry at the high fees and plan to pass them on to shoppers once the Congressional legislation takes effect.
Consumer advocates say they have little sympathy for credit card issuers, arguing that they have made billions in recent years with unfair and sometimes deceptive practices.
“The business model will change because the business model doesn’t work for the public,” said Gail Hillebrand, a senior lawyer at Consumers Union.
“In order to do business under the new rules, they’ll actually have to tell you how much it’s going to cost,” she said.
With many consumers mired in debt and angry at what they consider gouging by credit card companies, the issue of credit card reform has broad populist appeal. Members of Congress and the Obama administration have seized on the discontent to push reforms that the industry succeeded in tamping down when the economy was flying high.
Austan Goolsbee, an economic adviser to President Obama, said that while the credit card industry had the right to make a reasonable profit as long as its contracts were in plain language and rule-breakers were held accountable, its current practices were akin to “a series of carjackings.”
“The card industry is giving the argument that if you didn’t want to be carjacked, why weren’t you locking your doors or taking a different road?” Mr. Goolsbee said.
Ron Lieber contributed reporting.
Senate votes to block funding for Guantanamo closure
In an abrupt departure from President Obama's plans, the Senate today voted overwhelmingly against paying for closure of the U.S. military-run detention facility for suspected terrorists at Guantanamo Bay, Cuba.
The 90-6 vote was the capstone of a weeks-long Republican drive to turn an issue that had been a cornerstone of Obama's campaign message into a political liability for Democrats whose constituents do not welcome the prospect of detainees being brought from the island prison to U.S. soil.
The vote comes on the eve of a national security address planned by Obama on Thursday in which he is expected to discuss in more detail his plan for closing Guantanamo, which he ordered shut days after his inauguration. He set a January 2010 deadline for its closure.
The administration requested $80 million to pay for closure costs, but Democrats balked after Republicans raised pointed questions about where and how the detainees would be transferred to the U.S. -- either in its prisons or its communities.
"It was a mistake to submit an amount [of money needed] without no plan," said Sen. Dianne Feinstein (D-Calif.), who voted to strip the $80 million that had been included in a $91-billion bill to finance wars in Afghanistan and Iraq.
The issue likely will resurface later this year in other budget debates, but the Senate vote -- coupled with a similar decision by the House last week to drop funding for closing Guantanamo -- signals that Obama has a lot more political groundwork to lay before Congress will go along with the plan.
"There's been a major retreat by Democrats and Republicans," said Sen. Lindsey Graham (R-S.C.), the rare Republican who supports closing the Guantanamo facility. "Time is not on our side."
Pushing back against growing congressional opposition to moving detainees to the United States, a top Pentagon official said today that closing the military-run prison at Guantanamo Bay, Cuba, would require prisoners to be moved to the U.S. and urged lawmakers to think more strategically. Yet the director of the FBI also warned Congress today that moving detainees from Guantanamo to the U.S. -- even into maximum security prisons -- poses potential security risks.
Michele A. Flournoy, undersecretary of Defense for policy and the Pentagon's No. 3 official, said that if allied nations were going to take detainees, the U.S. also needed to take some into its prisons.
"When we are asking allies to do their fair share in dealing with this challenge, we need to do our fair share," Flournoy said today. "This is a case where we need to ask members of Congress to take a more strategic view. Many of these members called for the closing of Guantanamo, and we need their partnership in making that possible."
But FBI Director Robert Mueller said that bringing detainees from Guantanamo Bay into the U.S. could pose a number of possible risks.
Mueller, appearing before the House Judiciary Committee, was asked what concerns the FBI has about the prospect of transferring some of the 240 inmates currently held at the Naval base in Cuba to American prisons.
"The concerns we have about individuals who may support terrorism being in the United States run from concerns about providing financing, radicalizing others," Mueller said, as well as "the potential for individuals undertaking attacks in the United States . . . All of those are relevant concerns."
Rep. Jerold Nadler (D-N.Y.) prodded the FBI director to agree that dangerous detainees could be safely kept in maximum security prisons. Mueller balked at Nadler's suggestion, noting that in some instances imprisoned gang leaders have run gangs from inside prisons. "It depends on the circumstances," Mueller said.
Senate Majority Leader Harry Reid (D-Nev.) said today that he wanted neither to have detainees released into the U.S. nor to see them imprisoned here.
"We don't want them around the United States," Reid said.
With Obama set to deliver a speech about Guantanamo and detainee policy on Thursday, the White House is billing the address at the National Archives as a major statement on national security.
Defense Secretary Robert M. Gates has predicted that between 50 and 100 detainees would eventually be moved to American prisons and that some of the Chinese Muslims, who are held at Guantanamo but not considered dangerous, would be released into the U.S.
Flournoy would not offer her own prediction of how many detainees the U.S. or its allies would eventually take. She said the administration was going through each case individually, and there were no decisions on where detainees might be moved.
"I am optimistic that all of us will take more than we have agreed so far," she said. "This is a challenge that will require all of us to step up and make hard choices."
European allies so far have offered to take only a couple additional detainees from Guantanamo. If the U.S. cannot move more of the detainees to allied countries, it will be faced with holding large number of detainees it cannot transfer to their home countries.
Officials have been reluctant to send many of the remaining 240 detainees to their countries of origin, fearful that the suspects would either be allowed to rejoin the fight against the U.S. or could be abused in prison.
Closing Guantanamo has proven to be a far more tricky political proposition than some in the Obama administration believed it would be. Top officials have remained largely silent, failing to offer broad arguments about how closing Guantanamo could help the U.S. position in the world. Obama is expected to answer these questions Thursday.
The administration has created task forces to deal with various aspects of interrogation and detention policies -- and craft new practices on how to handle current and future detainees.
The work is complicated by the fact that many of the detainees currently in custody were captured at different times, Flournoy said. "We are dealing with an inheritance," she said. "We are dealing with . . . people . . . taken into custody when different policies were in place."
One of the most critical questions facing the administration is what to do with the potentially dozens of detainees it cannot release, transfer or try. Until now, the detainees have been held indefinitely in Guantanamo.
But if they were moved to the United States, the Obama administration may seek congressional approval to continue to hold them without formal charges.
Pressed for the administration's position, Flournoy offered few details, but did not disavow continued detention without trial -- at least for some of the detainees.
"The desire is to provide due process to as many of these detainees as possible," she said.
Human rights groups remain strongly opposed to the Obama administration's push for congressional approval for detention without trial.
The 90-6 vote was the capstone of a weeks-long Republican drive to turn an issue that had been a cornerstone of Obama's campaign message into a political liability for Democrats whose constituents do not welcome the prospect of detainees being brought from the island prison to U.S. soil.
The vote comes on the eve of a national security address planned by Obama on Thursday in which he is expected to discuss in more detail his plan for closing Guantanamo, which he ordered shut days after his inauguration. He set a January 2010 deadline for its closure.
The administration requested $80 million to pay for closure costs, but Democrats balked after Republicans raised pointed questions about where and how the detainees would be transferred to the U.S. -- either in its prisons or its communities.
"It was a mistake to submit an amount [of money needed] without no plan," said Sen. Dianne Feinstein (D-Calif.), who voted to strip the $80 million that had been included in a $91-billion bill to finance wars in Afghanistan and Iraq.
The issue likely will resurface later this year in other budget debates, but the Senate vote -- coupled with a similar decision by the House last week to drop funding for closing Guantanamo -- signals that Obama has a lot more political groundwork to lay before Congress will go along with the plan.
"There's been a major retreat by Democrats and Republicans," said Sen. Lindsey Graham (R-S.C.), the rare Republican who supports closing the Guantanamo facility. "Time is not on our side."
Pushing back against growing congressional opposition to moving detainees to the United States, a top Pentagon official said today that closing the military-run prison at Guantanamo Bay, Cuba, would require prisoners to be moved to the U.S. and urged lawmakers to think more strategically. Yet the director of the FBI also warned Congress today that moving detainees from Guantanamo to the U.S. -- even into maximum security prisons -- poses potential security risks.
Michele A. Flournoy, undersecretary of Defense for policy and the Pentagon's No. 3 official, said that if allied nations were going to take detainees, the U.S. also needed to take some into its prisons.
"When we are asking allies to do their fair share in dealing with this challenge, we need to do our fair share," Flournoy said today. "This is a case where we need to ask members of Congress to take a more strategic view. Many of these members called for the closing of Guantanamo, and we need their partnership in making that possible."
But FBI Director Robert Mueller said that bringing detainees from Guantanamo Bay into the U.S. could pose a number of possible risks.
Mueller, appearing before the House Judiciary Committee, was asked what concerns the FBI has about the prospect of transferring some of the 240 inmates currently held at the Naval base in Cuba to American prisons.
"The concerns we have about individuals who may support terrorism being in the United States run from concerns about providing financing, radicalizing others," Mueller said, as well as "the potential for individuals undertaking attacks in the United States . . . All of those are relevant concerns."
Rep. Jerold Nadler (D-N.Y.) prodded the FBI director to agree that dangerous detainees could be safely kept in maximum security prisons. Mueller balked at Nadler's suggestion, noting that in some instances imprisoned gang leaders have run gangs from inside prisons. "It depends on the circumstances," Mueller said.
Senate Majority Leader Harry Reid (D-Nev.) said today that he wanted neither to have detainees released into the U.S. nor to see them imprisoned here.
"We don't want them around the United States," Reid said.
With Obama set to deliver a speech about Guantanamo and detainee policy on Thursday, the White House is billing the address at the National Archives as a major statement on national security.
Defense Secretary Robert M. Gates has predicted that between 50 and 100 detainees would eventually be moved to American prisons and that some of the Chinese Muslims, who are held at Guantanamo but not considered dangerous, would be released into the U.S.
Flournoy would not offer her own prediction of how many detainees the U.S. or its allies would eventually take. She said the administration was going through each case individually, and there were no decisions on where detainees might be moved.
"I am optimistic that all of us will take more than we have agreed so far," she said. "This is a challenge that will require all of us to step up and make hard choices."
European allies so far have offered to take only a couple additional detainees from Guantanamo. If the U.S. cannot move more of the detainees to allied countries, it will be faced with holding large number of detainees it cannot transfer to their home countries.
Officials have been reluctant to send many of the remaining 240 detainees to their countries of origin, fearful that the suspects would either be allowed to rejoin the fight against the U.S. or could be abused in prison.
Closing Guantanamo has proven to be a far more tricky political proposition than some in the Obama administration believed it would be. Top officials have remained largely silent, failing to offer broad arguments about how closing Guantanamo could help the U.S. position in the world. Obama is expected to answer these questions Thursday.
The administration has created task forces to deal with various aspects of interrogation and detention policies -- and craft new practices on how to handle current and future detainees.
The work is complicated by the fact that many of the detainees currently in custody were captured at different times, Flournoy said. "We are dealing with an inheritance," she said. "We are dealing with . . . people . . . taken into custody when different policies were in place."
One of the most critical questions facing the administration is what to do with the potentially dozens of detainees it cannot release, transfer or try. Until now, the detainees have been held indefinitely in Guantanamo.
But if they were moved to the United States, the Obama administration may seek congressional approval to continue to hold them without formal charges.
Pressed for the administration's position, Flournoy offered few details, but did not disavow continued detention without trial -- at least for some of the detainees.
"The desire is to provide due process to as many of these detainees as possible," she said.
Human rights groups remain strongly opposed to the Obama administration's push for congressional approval for detention without trial.
A Peace Overture in Afghanistan
Leaders of the Taliban and other armed groups battling the Afghan government are talking to intermediaries about a potential peace agreement, with initial demands focused on a timetable for a withdrawal of American troops, according to Afghan leaders here and in Pakistan.
The talks, if not the withdrawal proposals, are being supported by the Afghan government. The Obama administration, which has publicly declared its desire to coax “moderate” Taliban fighters away from armed struggle, says it is not involved in the discussions and will not be until the Taliban agree to lay down their arms. But nor are they trying to stop them, and Afghan officials believe they have tacit support from the Americans.
The discussions have so far produced no agreements, since the insurgents appear to be insisting that any deal include an American promise to pull out — at the very time that the Obama administration is sending more combat troops to help reverse the deteriorating situation on the battlefield. Indeed, with 20,000 additional troops on the way, American commanders seem determined to inflict greater pain on the Taliban first, to push them into negotiations and extract better terms. And most of the initial demands are nonstarters for the Americans in any case.
Even so, the talks are significant because they suggest how a political settlement may be able to end the eight-year-old war, and how such negotiations may proceed. They also raise the prospect of potentially difficult decisions by President Hamid Karzai and President Obama, who may have to consider making deals with groups like the Taliban that are anathema to many Americans, and other leaders with brutal and bloody pasts. Some of the leaders in the current talks have been involved with Al Qaeda.
While the talks have been under way for months, they have accelerated since Mr. Obama took office and have produced more specific demands, the Afghan intermediaries said.
The Taliban leaders, through their spokesman, and those of other armed groups publicly deny that they are involved in any negotiations. But several Afghans here and in Pakistan say they have been talking directly to the Taliban leadership group headed by Mullah Muhammad Omar, the movement’s secretive founder. The council is based in the Pakistani city of Quetta.
Discussions have also been held with representatives of Gulbuddin Hekmatyar, a longtime warlord with a record of extreme brutality, and with Sirajuddin Haqqani, whose guerrilla army is based in the tribal areas of Pakistan. Mr. Haqqani’s group is also known for its ruthlessness, and for sending suicide bombers into Afghanistan.
“America cannot win this war, and the Taliban cannot win this war,” Mullah Abdul Salaam Zaeef, a former Taliban ambassador and one of the intermediaries, said in an interview. “I have delivered this message to the Taliban.”
The talks under way now appear to be directed not at individual bands of antigovernment insurgents — the strategy suggested by President Obama — but at the leaders of the large movements.
American officials insist they are not participating in any talks. “The U.S. would support such efforts only if Taliban are willing to abandon violence and lay down their arms, and accept Afghanistan’s democratically elected government,” said Ian Kelly, a State Department spokesman. Still, two of the principal intermediaries, Mr. Zaeef and Daoud Abedi, said they had held extensive discussions with American officials.
A State Department memo described a single meeting with Mr. Abedi, but said it ended briefly because American officials were not permitted to meet with representatives of Mr. Hekmatyar. There is no independent confirmation of Mr. Zaeef ’s claim to have met with Americans.
Afghan officials said they welcomed the talks. “The government has kept all channels of communication open," said Homayun Hamidzada, a spokesman for Mr. Karzai. “This includes the Taliban and Hekmatyar.”
Mr. Abedi, an Afghan-American businessman from California and a member of Mr. Hekmatyar’s political party, the Islamic Party, said he conducted negotiations in March. Guerrillas loyal to Mr. Hekmatyar are battling the Americans in the mountains of eastern Afghanistan. His political party still has a wide following in the country.
In an interview, Mr. Abedi said he undertook the negotiations — with Mr. Hekmatyar and with the Taliban leaders — at the behest of the State Department, a claim that American officials deny. Mr. Abedi said he met several times with American officials in Washington before and after his trip to Pakistan and Afghanistan. He declined to say which American diplomats he met, saying, “I am a Pashtun, and I swore on my honor that I would not reveal the names of the people I met with, so I cannot.”
Mr. Abedi said he hammered out a common set of demands between the Taliban and Mr. Hekmatyar’s group. The groups agreed to stop fighting if those conditions were met, Mr. Abedi said. The Taliban’s demands seem incompatible with much of Mr. Obama’s strategy, which is to substantially weaken the Taliban through a combination of military force and economic development. Nor did the deal Mr. Abedi described mention either Osama bin Laden or Ayman al-Zawahri, the two senior Qaeda leaders who are believed to be hiding in Pakistan under the protection of the Taliban or some other armed group.
The first demand was an immediate pullback of American and other foreign forces to their bases, followed by a cease-fire and a total withdrawal from the country over the next 18 months. Then the current government would be replaced by a transitional government made up of a range of Afghan leaders, including those of the Taliban and other insurgents. Americans and other foreign soldiers would be replaced with a peacekeeping force drawn from predominantly Muslim nations, with a guarantee from the insurgent groups that they would not attack such a force. Nationwide elections would follow after the Western forces left.
As for Mr. Hekmatyar, Mr. Abedi said he maintained a “direct link” with the guerrilla leader, and that he was authorized to negotiate on his behalf. He did not meet with Afghan government officials.
After the agreement between the Taliban and the Islamic Party was reached, Mr. Abedi said the Taliban leaders added more conditions: an end to the drone attacks in Pakistan’s tribal areas, and a release of some Taliban prisoners.
Mr. Abedi said that when he returned to the United States with his proposal, he was greeted with enthusiasm by officials at the State Department. But he said they never called him back.
Mr. Hekmatyar earned a reputation as an especially brutal commander in the civil war that engulfed the country in the 1990s, in particular for the relentless bombardment of Kabul between 1994 and 1996 that killed an estimated 40,000 civilians during an attempt to capture the capital.
In 2002, after Mr. Hekmatyar resisted the American invasion, the Americans tried to kill him with a missile fired from a pilotless airplane. They missed.
The other main negotiation is led by Mr. Zaeef and Arsallah Rahmani, a former Taliban minister and now a member of the Afghan Parliament.
“We are not talking to low-ranking people — we are talking to the leaders,” Mr. Rahmani said in an interview. Mr. Zaeef was the Taliban’s ambassador to Pakistan; he served nearly four years in American military prisons, including the one at Guantánamo Bay.
Their plan would be for the guerrillas and the government to reconcile slowly, starting with the least contentious issues. One of the main low-level demands of the opposition leaders is that their names be removed from a so-called blacklist, contained in a resolution passed by the United Nations Security Council, which obliges governments to detain the men. More difficult issues would follow.
“Blood begets blood, but talking begets peace,” Mr. Rahmani said.
Mr. Zaeef said the public declarations of Mullah Omar, who usually vows to fight on, are not necessarily to be taken seriously.
“A policy can have many faces,” he said.
The talks, if not the withdrawal proposals, are being supported by the Afghan government. The Obama administration, which has publicly declared its desire to coax “moderate” Taliban fighters away from armed struggle, says it is not involved in the discussions and will not be until the Taliban agree to lay down their arms. But nor are they trying to stop them, and Afghan officials believe they have tacit support from the Americans.
The discussions have so far produced no agreements, since the insurgents appear to be insisting that any deal include an American promise to pull out — at the very time that the Obama administration is sending more combat troops to help reverse the deteriorating situation on the battlefield. Indeed, with 20,000 additional troops on the way, American commanders seem determined to inflict greater pain on the Taliban first, to push them into negotiations and extract better terms. And most of the initial demands are nonstarters for the Americans in any case.
Even so, the talks are significant because they suggest how a political settlement may be able to end the eight-year-old war, and how such negotiations may proceed. They also raise the prospect of potentially difficult decisions by President Hamid Karzai and President Obama, who may have to consider making deals with groups like the Taliban that are anathema to many Americans, and other leaders with brutal and bloody pasts. Some of the leaders in the current talks have been involved with Al Qaeda.
While the talks have been under way for months, they have accelerated since Mr. Obama took office and have produced more specific demands, the Afghan intermediaries said.
The Taliban leaders, through their spokesman, and those of other armed groups publicly deny that they are involved in any negotiations. But several Afghans here and in Pakistan say they have been talking directly to the Taliban leadership group headed by Mullah Muhammad Omar, the movement’s secretive founder. The council is based in the Pakistani city of Quetta.
Discussions have also been held with representatives of Gulbuddin Hekmatyar, a longtime warlord with a record of extreme brutality, and with Sirajuddin Haqqani, whose guerrilla army is based in the tribal areas of Pakistan. Mr. Haqqani’s group is also known for its ruthlessness, and for sending suicide bombers into Afghanistan.
“America cannot win this war, and the Taliban cannot win this war,” Mullah Abdul Salaam Zaeef, a former Taliban ambassador and one of the intermediaries, said in an interview. “I have delivered this message to the Taliban.”
The talks under way now appear to be directed not at individual bands of antigovernment insurgents — the strategy suggested by President Obama — but at the leaders of the large movements.
American officials insist they are not participating in any talks. “The U.S. would support such efforts only if Taliban are willing to abandon violence and lay down their arms, and accept Afghanistan’s democratically elected government,” said Ian Kelly, a State Department spokesman. Still, two of the principal intermediaries, Mr. Zaeef and Daoud Abedi, said they had held extensive discussions with American officials.
A State Department memo described a single meeting with Mr. Abedi, but said it ended briefly because American officials were not permitted to meet with representatives of Mr. Hekmatyar. There is no independent confirmation of Mr. Zaeef ’s claim to have met with Americans.
Afghan officials said they welcomed the talks. “The government has kept all channels of communication open," said Homayun Hamidzada, a spokesman for Mr. Karzai. “This includes the Taliban and Hekmatyar.”
Mr. Abedi, an Afghan-American businessman from California and a member of Mr. Hekmatyar’s political party, the Islamic Party, said he conducted negotiations in March. Guerrillas loyal to Mr. Hekmatyar are battling the Americans in the mountains of eastern Afghanistan. His political party still has a wide following in the country.
In an interview, Mr. Abedi said he undertook the negotiations — with Mr. Hekmatyar and with the Taliban leaders — at the behest of the State Department, a claim that American officials deny. Mr. Abedi said he met several times with American officials in Washington before and after his trip to Pakistan and Afghanistan. He declined to say which American diplomats he met, saying, “I am a Pashtun, and I swore on my honor that I would not reveal the names of the people I met with, so I cannot.”
Mr. Abedi said he hammered out a common set of demands between the Taliban and Mr. Hekmatyar’s group. The groups agreed to stop fighting if those conditions were met, Mr. Abedi said. The Taliban’s demands seem incompatible with much of Mr. Obama’s strategy, which is to substantially weaken the Taliban through a combination of military force and economic development. Nor did the deal Mr. Abedi described mention either Osama bin Laden or Ayman al-Zawahri, the two senior Qaeda leaders who are believed to be hiding in Pakistan under the protection of the Taliban or some other armed group.
The first demand was an immediate pullback of American and other foreign forces to their bases, followed by a cease-fire and a total withdrawal from the country over the next 18 months. Then the current government would be replaced by a transitional government made up of a range of Afghan leaders, including those of the Taliban and other insurgents. Americans and other foreign soldiers would be replaced with a peacekeeping force drawn from predominantly Muslim nations, with a guarantee from the insurgent groups that they would not attack such a force. Nationwide elections would follow after the Western forces left.
As for Mr. Hekmatyar, Mr. Abedi said he maintained a “direct link” with the guerrilla leader, and that he was authorized to negotiate on his behalf. He did not meet with Afghan government officials.
After the agreement between the Taliban and the Islamic Party was reached, Mr. Abedi said the Taliban leaders added more conditions: an end to the drone attacks in Pakistan’s tribal areas, and a release of some Taliban prisoners.
Mr. Abedi said that when he returned to the United States with his proposal, he was greeted with enthusiasm by officials at the State Department. But he said they never called him back.
Mr. Hekmatyar earned a reputation as an especially brutal commander in the civil war that engulfed the country in the 1990s, in particular for the relentless bombardment of Kabul between 1994 and 1996 that killed an estimated 40,000 civilians during an attempt to capture the capital.
In 2002, after Mr. Hekmatyar resisted the American invasion, the Americans tried to kill him with a missile fired from a pilotless airplane. They missed.
The other main negotiation is led by Mr. Zaeef and Arsallah Rahmani, a former Taliban minister and now a member of the Afghan Parliament.
“We are not talking to low-ranking people — we are talking to the leaders,” Mr. Rahmani said in an interview. Mr. Zaeef was the Taliban’s ambassador to Pakistan; he served nearly four years in American military prisons, including the one at Guantánamo Bay.
Their plan would be for the guerrillas and the government to reconcile slowly, starting with the least contentious issues. One of the main low-level demands of the opposition leaders is that their names be removed from a so-called blacklist, contained in a resolution passed by the United Nations Security Council, which obliges governments to detain the men. More difficult issues would follow.
“Blood begets blood, but talking begets peace,” Mr. Rahmani said.
Mr. Zaeef said the public declarations of Mullah Omar, who usually vows to fight on, are not necessarily to be taken seriously.
“A policy can have many faces,” he said.
Bankruptcies Swell Deficit at Pension Agency to $33.5 Billion
The deficit at the federal agency that guarantees pensions for 44 million Americans tripled in the last six months to a record high, reaching $33.5 billion, largely as a result of surging bankruptcies among companies whose pensions it expects it will soon need to take over.
The agency, the Pension Benefit Guaranty Corporation, faced a shortfall of just $11 billion as of October. The combined effect of lower interest rates, losses on its investment portfolio and rising numbers of companies filing for bankruptcy produced the jump in its projected deficit, officials said Wednesday.
Because the agency has $56 billion in assets — most of which is invested in Treasury bonds — it is not facing any prospect of default in the short term, officials said.
“The P.B.G.C. has sufficient funds to meet its benefit obligations for many years because benefits are paid monthly over the lifetimes of beneficiaries, not as lump sums,” the agency’s acting director, Vince Snowbarger, testified Wednesday at a Senate hearing. “Nevertheless, over the long term, the deficit must be addressed.”
The financial troubles are just a small part of the challenges facing the pension agency, which was created by Congress in 1974 and today is responsible for pension programs covering 1.3 million people. It pays about 640,000 people actual benefits worth about $4.3 billion a year.
The P.B.G.C.’s former director, Charles E. F. Millard, was subpoenaed to testify at the hearing Wednesday. But he cited his Constitutional right to avoid self-incrimination and declined to answer any questions.
Mr. Millard, who resigned in January, has been accused by the agency’s inspector general of having inappropriate contact with companies including BlackRock, JPMorgan Chase and Goldman Sachs, all of which competed for and won contracts to help manage $2.5 billion of the agency’s funds. Those contracts will now most likely be canceled.
Employers nationwide with so-called defined-benefit, or traditional, pension plans pay fees to the P.B.G.C. in return for a promise that it will take over their pension plan if a company fails.
On Tuesday, for example, the agency announced that it had assumed the pension plan once run by the Lenox Group, a bankrupt maker of tableware, giftware and collectibles based in Eden Prairie, Minn. Assuming control of pensions for this company’s 4,300 workers will cost the agency an estimated $128 million — the difference between what Lenox had in its pension fund and what the total estimated obligations are.
In the last six months, 93 companies whose pension plans are covered by the agency have filed for bankruptcy, including Chrysler, whose failure alone could cost the agency $2 billion. A bankruptcy by General Motors would make the situation worse. G.M. had 670,000 workers as of late last year in its pension system, whose collapse would cost the agency an estimated $6 billion.
Options to close the $33.5 billion deficit include a federal bailout by taxpayers, a change in insurance premiums it charges employers or increasing its investment returns.
Last year, the agency’s board voted to allow it to shift its investment strategy to put more money into stocks, private equity and real estate, in an effort to reduce the deficit.
If that shift had taken place, the losses would most likely have been larger. But only a relatively small amount of the funds have already been shifted to stocks, so the losses on the investment portfolio were responsible for just $3 billion of the jump in the deficit in the last six months.
Senator Herb Kohl, Democrat of Wisconsin and chairman of the Senate Special Committee on Aging, which held the hearing Wednesday, blamed poor supervision by the agency’s board and management, at least in part, for the troubles, adding that he intended to introduce legislation that would expand the board and require it to meet at least four times a year. The board has not met in person since February 2008.
“The role of P.B.G.C. is too crucial to allow its governance to slip through the cracks,” Mr. Kohl said.
The agency, the Pension Benefit Guaranty Corporation, faced a shortfall of just $11 billion as of October. The combined effect of lower interest rates, losses on its investment portfolio and rising numbers of companies filing for bankruptcy produced the jump in its projected deficit, officials said Wednesday.
Because the agency has $56 billion in assets — most of which is invested in Treasury bonds — it is not facing any prospect of default in the short term, officials said.
“The P.B.G.C. has sufficient funds to meet its benefit obligations for many years because benefits are paid monthly over the lifetimes of beneficiaries, not as lump sums,” the agency’s acting director, Vince Snowbarger, testified Wednesday at a Senate hearing. “Nevertheless, over the long term, the deficit must be addressed.”
The financial troubles are just a small part of the challenges facing the pension agency, which was created by Congress in 1974 and today is responsible for pension programs covering 1.3 million people. It pays about 640,000 people actual benefits worth about $4.3 billion a year.
The P.B.G.C.’s former director, Charles E. F. Millard, was subpoenaed to testify at the hearing Wednesday. But he cited his Constitutional right to avoid self-incrimination and declined to answer any questions.
Mr. Millard, who resigned in January, has been accused by the agency’s inspector general of having inappropriate contact with companies including BlackRock, JPMorgan Chase and Goldman Sachs, all of which competed for and won contracts to help manage $2.5 billion of the agency’s funds. Those contracts will now most likely be canceled.
Employers nationwide with so-called defined-benefit, or traditional, pension plans pay fees to the P.B.G.C. in return for a promise that it will take over their pension plan if a company fails.
On Tuesday, for example, the agency announced that it had assumed the pension plan once run by the Lenox Group, a bankrupt maker of tableware, giftware and collectibles based in Eden Prairie, Minn. Assuming control of pensions for this company’s 4,300 workers will cost the agency an estimated $128 million — the difference between what Lenox had in its pension fund and what the total estimated obligations are.
In the last six months, 93 companies whose pension plans are covered by the agency have filed for bankruptcy, including Chrysler, whose failure alone could cost the agency $2 billion. A bankruptcy by General Motors would make the situation worse. G.M. had 670,000 workers as of late last year in its pension system, whose collapse would cost the agency an estimated $6 billion.
Options to close the $33.5 billion deficit include a federal bailout by taxpayers, a change in insurance premiums it charges employers or increasing its investment returns.
Last year, the agency’s board voted to allow it to shift its investment strategy to put more money into stocks, private equity and real estate, in an effort to reduce the deficit.
If that shift had taken place, the losses would most likely have been larger. But only a relatively small amount of the funds have already been shifted to stocks, so the losses on the investment portfolio were responsible for just $3 billion of the jump in the deficit in the last six months.
Senator Herb Kohl, Democrat of Wisconsin and chairman of the Senate Special Committee on Aging, which held the hearing Wednesday, blamed poor supervision by the agency’s board and management, at least in part, for the troubles, adding that he intended to introduce legislation that would expand the board and require it to meet at least four times a year. The board has not met in person since February 2008.
“The role of P.B.G.C. is too crucial to allow its governance to slip through the cracks,” Mr. Kohl said.
Gurkhas to get right to settle in the UK
Gurkha veterans who have served four years with the historic regiment will be told tomorrow that they will be allowed to settle in the UK. The home secretary is expected to reverse government guidance issued last month that made the obstacles to entry almost insurmountable for ordinary Gurkha soldiers traditionally recruited from Nepal.
It is understood that Jacqui Smith will announce rules that will allow entry into the UK for Gurkhas previously excluded because they retired from the regiment before 1997, provided they have fought for the British army for at least four years.
Keith Vaz, chairman of the home affairs select committee, wrote to the prime minister on Tuesday saying the government should immediately approve the 1,400 outstanding applications for settlement, whether they meet new criteria established by the Home Office or not.
In a reprimand to the government, Vaz said: "The figure of 100,000 ex-Gurkhas including dependants publicly cited by the government as likely to take up settlement is clearly much overblown."
The prospective turnaround in policy came after the Labour government suffered its first big defeat last month by 21 votes, as 27 Labour rebels joined the Tories and Liberal Democrats in demanding equal residency rights for all Gurkha soldiers after a high-profile public campaign.
In an indication of the imminent policy volte face, Gordon Brown said at prime minister's questions that he had a "great deal of sympathy and support" for Gurkhas who wished to live in the UK. He said: "I believe it is possible for us to honour our commitments to the Gurkhas and to do so in a way that protects the public finances. That will be part of the announcement that is made tomorrow."
The Vaz letter to the prime minister followed a private round table discussion between Gurkhas and their campaigners and the government on the issue. The committee urged the government to "use our conclusions as a catalyst to announcing a much-needed change in policy".
He said the prospective benefit to the UK economy by the ex-Gurkhas was agreed by all to be high, both in terms of skills and economic power and in visa application fees. The committee had heard no evidence of a threat to future recruitment of Gurkhas to the British army in Nepal.
Martin Howe, one of the lawyers representing the majority of Gurkhas fighting for settlement, said: "We hope that the Gurkhas will be entitled to settlement if they have four years' service. We understand that this will be reviewed in four years time. If this is the case, we will be delighted and thankful."
David Enright, another Gurkha lawyer, said: "We think it's more or less a fait accompli but we have had several false dawns before ... I'm not going to celebrate until I know for sure."
Earlier this month, actor Joanna Lumley extracted concessions from the home office minister Phil Woolas live on television. Five Gurkhas had been sent letters telling them that they did not qualify for admittance to the UK a day after Brown had promised that the former solders' cases would be reviewed. Brown had not known about the letters and was only informed of their existence by Lumley.
It is understood that Jacqui Smith will announce rules that will allow entry into the UK for Gurkhas previously excluded because they retired from the regiment before 1997, provided they have fought for the British army for at least four years.
Keith Vaz, chairman of the home affairs select committee, wrote to the prime minister on Tuesday saying the government should immediately approve the 1,400 outstanding applications for settlement, whether they meet new criteria established by the Home Office or not.
In a reprimand to the government, Vaz said: "The figure of 100,000 ex-Gurkhas including dependants publicly cited by the government as likely to take up settlement is clearly much overblown."
The prospective turnaround in policy came after the Labour government suffered its first big defeat last month by 21 votes, as 27 Labour rebels joined the Tories and Liberal Democrats in demanding equal residency rights for all Gurkha soldiers after a high-profile public campaign.
In an indication of the imminent policy volte face, Gordon Brown said at prime minister's questions that he had a "great deal of sympathy and support" for Gurkhas who wished to live in the UK. He said: "I believe it is possible for us to honour our commitments to the Gurkhas and to do so in a way that protects the public finances. That will be part of the announcement that is made tomorrow."
The Vaz letter to the prime minister followed a private round table discussion between Gurkhas and their campaigners and the government on the issue. The committee urged the government to "use our conclusions as a catalyst to announcing a much-needed change in policy".
He said the prospective benefit to the UK economy by the ex-Gurkhas was agreed by all to be high, both in terms of skills and economic power and in visa application fees. The committee had heard no evidence of a threat to future recruitment of Gurkhas to the British army in Nepal.
Martin Howe, one of the lawyers representing the majority of Gurkhas fighting for settlement, said: "We hope that the Gurkhas will be entitled to settlement if they have four years' service. We understand that this will be reviewed in four years time. If this is the case, we will be delighted and thankful."
David Enright, another Gurkha lawyer, said: "We think it's more or less a fait accompli but we have had several false dawns before ... I'm not going to celebrate until I know for sure."
Earlier this month, actor Joanna Lumley extracted concessions from the home office minister Phil Woolas live on television. Five Gurkhas had been sent letters telling them that they did not qualify for admittance to the UK a day after Brown had promised that the former solders' cases would be reviewed. Brown had not known about the letters and was only informed of their existence by Lumley.
Power drill doctor saves boy's life
A doctor in rural Australia used a handyman's power drill to bore a hole into the skull of a boy with a severe head injury, saving his life.
Nicholas Rossi was taken to hospital after falling from his bike and hitting his head on the pavement in Maryborough, Victoria state, on Friday.
The doctor on duty, Rob Carson, recognised that the boy, who was slipping in and out of consciousness, was experiencing potentially fatal bleeding on the brain and that he needed to relieve the pressure in Daniel's skull.
The small hospital was not equipped with neurological drills, so Carson sent for a household drill from the maintenance room.
He called a neurosurgeon in Melbourne for help, who talked Carson through the procedure – which he had never before attempted – by telling him where to aim the drill and how deep to go.
The boy's father, Michael Rossi, told the Australian newspaper: "Dr Carson came over to us and said, 'I am going to have to drill into [Nicholas] to relieve the pressure on the brain – we've got one shot at this and one shot only'."
He told Fairfax Radio today: "All of a sudden the emergency ward was turned into an operating theatre. We didn't see anything, but we heard the noises, heard the drill. It was just one of those surreal experiences."
The procedure took just over a minute, said Dr David Tynan, an anaesthetist who assisted Carson.
"It was pretty scary. You obviously worry, [are] you pushing hard enough or pushing too hard, but then when some blood came out after we'd gone through the skull, we realised we'd made the right decision," he told Australian Broadcasting Corporation.
Rossi was airlifted to a larger hospital in Melbourne and released yesterday, his 13th birthday.
Carson told the Australian: "It is not a personal achievement, it is just a part of the job and I had a very good team of people helping me."
Nicholas Rossi was taken to hospital after falling from his bike and hitting his head on the pavement in Maryborough, Victoria state, on Friday.
The doctor on duty, Rob Carson, recognised that the boy, who was slipping in and out of consciousness, was experiencing potentially fatal bleeding on the brain and that he needed to relieve the pressure in Daniel's skull.
The small hospital was not equipped with neurological drills, so Carson sent for a household drill from the maintenance room.
He called a neurosurgeon in Melbourne for help, who talked Carson through the procedure – which he had never before attempted – by telling him where to aim the drill and how deep to go.
The boy's father, Michael Rossi, told the Australian newspaper: "Dr Carson came over to us and said, 'I am going to have to drill into [Nicholas] to relieve the pressure on the brain – we've got one shot at this and one shot only'."
He told Fairfax Radio today: "All of a sudden the emergency ward was turned into an operating theatre. We didn't see anything, but we heard the noises, heard the drill. It was just one of those surreal experiences."
The procedure took just over a minute, said Dr David Tynan, an anaesthetist who assisted Carson.
"It was pretty scary. You obviously worry, [are] you pushing hard enough or pushing too hard, but then when some blood came out after we'd gone through the skull, we realised we'd made the right decision," he told Australian Broadcasting Corporation.
Rossi was airlifted to a larger hospital in Melbourne and released yesterday, his 13th birthday.
Carson told the Australian: "It is not a personal achievement, it is just a part of the job and I had a very good team of people helping me."
Tamil children 'being abducted'
number of children in camps for people displaced by Sri Lanka's Tamil conflict have been abducted, international human rights groups say.
The groups say they have verified reports of disappearances in the Vavuniya area and are calling for the United Nations to investigate.
Suspected former Tamil Tiger child soldiers are said to have been removed by paramilitaries for questioning.
A Sri Lankan military spokesman denied the groups' allegations.
A spokeswoman for the groups, Charu Lata Hogg, said the motives for the abductions were unclear but some children were being questioned about alleged links to the Tamil Tiger rebels, or LTTE (Liberation Tigers of Tamil Eelam).
Tens of thousands of children were among those displaced in the recent fighting, many finding themselves in government-run refugee camps.
On Tuesday, Sri Lankan President Mahinda Rajapaksa declared the country "liberated" from Tamil Tiger rebels after a 26-year war.
He spoke after the army reported the death of rebel leader Velupillai Prabhakaran and the capture of the last pocket of territory held by the Tigers.
'Kidnapped for ransom'
The Coalition to Stop the Use of Child Soldiers is an umbrella group of global organisations which includes Amnesty International and Human Rights Watch.
It said it had received verified reports of abductions from camps in and around Vavuniya in the north.
It alleges that groups like the EPDP, PLOTE and the TMVP-Karuna faction - all Tamil paramilitary groups affiliated to the government - have unfettered access to the camps despite the presence of the Sri Lankan military.
"The motive is slightly unclear," said Ms Hogg.
"Some are being taken away for ransom, they've been kidnapped for ransom, and there've been certain negotiated releases where mothers had some jewellery and they could negotiate a release right within the camp.
"In other cases the children have been taken away for questioning for their alleged links to the LTTE, so they are suspected of being former child soldiers with the LTTE."
She says there are fears for the safety of former LTTE child soldiers, who should be protected under international agreements.
Sri Lanka's military denied the allegations, describing them as yet another attempt to discredit the government.
Military spokesman Udaya Nanayakkara said it was impossible for "anyone, even a child or an LTTE person, to be taken out from the camps without any proper or legal authority".
The coalition says the protection of children in the north and east of Sri Lanka is a matter of urgent concern, citing the refusal of access to international agencies responsible for monitoring the camps.
Without independent scrutiny, it says, children are at risk of human rights abuses, arbitrary detention and enforced disappearance.
The groups say they have verified reports of disappearances in the Vavuniya area and are calling for the United Nations to investigate.
Suspected former Tamil Tiger child soldiers are said to have been removed by paramilitaries for questioning.
A Sri Lankan military spokesman denied the groups' allegations.
A spokeswoman for the groups, Charu Lata Hogg, said the motives for the abductions were unclear but some children were being questioned about alleged links to the Tamil Tiger rebels, or LTTE (Liberation Tigers of Tamil Eelam).
Tens of thousands of children were among those displaced in the recent fighting, many finding themselves in government-run refugee camps.
On Tuesday, Sri Lankan President Mahinda Rajapaksa declared the country "liberated" from Tamil Tiger rebels after a 26-year war.
He spoke after the army reported the death of rebel leader Velupillai Prabhakaran and the capture of the last pocket of territory held by the Tigers.
'Kidnapped for ransom'
The Coalition to Stop the Use of Child Soldiers is an umbrella group of global organisations which includes Amnesty International and Human Rights Watch.
It said it had received verified reports of abductions from camps in and around Vavuniya in the north.
It alleges that groups like the EPDP, PLOTE and the TMVP-Karuna faction - all Tamil paramilitary groups affiliated to the government - have unfettered access to the camps despite the presence of the Sri Lankan military.
"The motive is slightly unclear," said Ms Hogg.
"Some are being taken away for ransom, they've been kidnapped for ransom, and there've been certain negotiated releases where mothers had some jewellery and they could negotiate a release right within the camp.
"In other cases the children have been taken away for questioning for their alleged links to the LTTE, so they are suspected of being former child soldiers with the LTTE."
She says there are fears for the safety of former LTTE child soldiers, who should be protected under international agreements.
Sri Lanka's military denied the allegations, describing them as yet another attempt to discredit the government.
Military spokesman Udaya Nanayakkara said it was impossible for "anyone, even a child or an LTTE person, to be taken out from the camps without any proper or legal authority".
The coalition says the protection of children in the north and east of Sri Lanka is a matter of urgent concern, citing the refusal of access to international agencies responsible for monitoring the camps.
Without independent scrutiny, it says, children are at risk of human rights abuses, arbitrary detention and enforced disappearance.
Cabinet ministers press Gordon Brown for radical shakeup of politics
Gordon Brown is being pressed within his cabinet to extend plans to reform parliament, with proposals including setting up a constitutional convention that would be responsible for reconnecting politics with the people.
An intense cabinet-level debate is under way on the format of this initiative, its timescale and the range of issues that would be discussed. The enthusiasts for wider reform include Harriet Harman, leader of the Commons, James Purnell, the work and pensions secretary, and David Miliband, the foreign secretary.
The discussions were launched inside the cabinet by the business secretary, Lord Mandelson, when he raised the idea of a British constitutional convention on the model of the Scottish constitutional convention.
What the modernisers inside the cabinet want on the agenda is:
• A referendum on electoral reform for the House of Commons.
• An elected upper house.
• Spending caps on donations to political parties.
• A widening of the base from which candidates are drawn.
However, some senior cabinet figures argue a more radical agenda should be deferred for Labour's general election manifesto, and are sceptical that broader constitutional reform, including changes to the electoral system, will address public anger over expenses. There are also fears a big initiative would divert from the priorities of the recession and public services.
The sceptics would prefer the review to be confined to modernising parliament, with measures including strengthening the power of backbenchers.
The cabinet debate comes as a "furious" David Cameron last night forced the retirement of a former Conservative minister who unsuccessfully claimed £1,645 for a floating 5ft high "duck island" at his country house. Sir Peter Viggers, MP for Gosport, was told he would be stripped of the Tory whip unless he agreed to retire.
Purnell defended his claims last night after the Daily Telegraph reported that he avoided paying capital gains tax on the sale of a London flat even though he told the Commons authorities that his main home was in his Stalybridge and Hyde constituency. Purnell said he had not avoided paying the tax when he sold the London flat in October 2004, originally bought before he became an MP, because the London sale fell through when he bought his constituency property in June 2002. The eventual sale took place within the timeframe that meant no tax was payable.
Beyond Westminster, there is a growing sense that the crisis over MPs' expenses can be used as an opportunity to completely reshape the democratic process. Today, the Guardian publishes a four-page supplement on proposals for reforming politics. The ideas, ranging from the size and shape of parliament to the nature of political lobbying, are being debated in an online project on the Comment is Free website. Identifying more than two dozen areas for reform, the series aims to break down barriers between opinion-formers and the public.
Brown has hinted about the potential to use the expenses crisis to reconfigure the political landscape twice in the past 24 hours – at a press conference on Tuesday and at yesterday's prime minister's questions. He is likely to publish a reform paper after the expected drubbing in the European elections on 4 June.
At the minimum, it is thought that the review will examine the relationship between the executive and parliament, including how MPs can more easily influence the subjects for debate and vote on the floor of the chamber. It will also look at whether select committees can be appointed independently of party whips and examine ways for reconnecting people with parliament. The digital inclusion minister, Tom Watson, told a Lords select committee yesterday that MPs and peers should set up a self-publishing platform.
Lord Mandelson himself probably does not believe in trying to seize the initiative by proposing a "big bang" constitutional reform though a constitutional convention. But advocates of more radical reform pressed Brown during yesterday's PMQs.
Nick Clegg, the Liberal Democrat leader, said: "We now have a once-in-a-generation chance to change politics for good."
Brown said today: "We must consider not only how parliament can be more accountable to the people, but how the executive … can be more accountable."
An intense cabinet-level debate is under way on the format of this initiative, its timescale and the range of issues that would be discussed. The enthusiasts for wider reform include Harriet Harman, leader of the Commons, James Purnell, the work and pensions secretary, and David Miliband, the foreign secretary.
The discussions were launched inside the cabinet by the business secretary, Lord Mandelson, when he raised the idea of a British constitutional convention on the model of the Scottish constitutional convention.
What the modernisers inside the cabinet want on the agenda is:
• A referendum on electoral reform for the House of Commons.
• An elected upper house.
• Spending caps on donations to political parties.
• A widening of the base from which candidates are drawn.
However, some senior cabinet figures argue a more radical agenda should be deferred for Labour's general election manifesto, and are sceptical that broader constitutional reform, including changes to the electoral system, will address public anger over expenses. There are also fears a big initiative would divert from the priorities of the recession and public services.
The sceptics would prefer the review to be confined to modernising parliament, with measures including strengthening the power of backbenchers.
The cabinet debate comes as a "furious" David Cameron last night forced the retirement of a former Conservative minister who unsuccessfully claimed £1,645 for a floating 5ft high "duck island" at his country house. Sir Peter Viggers, MP for Gosport, was told he would be stripped of the Tory whip unless he agreed to retire.
Purnell defended his claims last night after the Daily Telegraph reported that he avoided paying capital gains tax on the sale of a London flat even though he told the Commons authorities that his main home was in his Stalybridge and Hyde constituency. Purnell said he had not avoided paying the tax when he sold the London flat in October 2004, originally bought before he became an MP, because the London sale fell through when he bought his constituency property in June 2002. The eventual sale took place within the timeframe that meant no tax was payable.
Beyond Westminster, there is a growing sense that the crisis over MPs' expenses can be used as an opportunity to completely reshape the democratic process. Today, the Guardian publishes a four-page supplement on proposals for reforming politics. The ideas, ranging from the size and shape of parliament to the nature of political lobbying, are being debated in an online project on the Comment is Free website. Identifying more than two dozen areas for reform, the series aims to break down barriers between opinion-formers and the public.
Brown has hinted about the potential to use the expenses crisis to reconfigure the political landscape twice in the past 24 hours – at a press conference on Tuesday and at yesterday's prime minister's questions. He is likely to publish a reform paper after the expected drubbing in the European elections on 4 June.
At the minimum, it is thought that the review will examine the relationship between the executive and parliament, including how MPs can more easily influence the subjects for debate and vote on the floor of the chamber. It will also look at whether select committees can be appointed independently of party whips and examine ways for reconnecting people with parliament. The digital inclusion minister, Tom Watson, told a Lords select committee yesterday that MPs and peers should set up a self-publishing platform.
Lord Mandelson himself probably does not believe in trying to seize the initiative by proposing a "big bang" constitutional reform though a constitutional convention. But advocates of more radical reform pressed Brown during yesterday's PMQs.
Nick Clegg, the Liberal Democrat leader, said: "We now have a once-in-a-generation chance to change politics for good."
Brown said today: "We must consider not only how parliament can be more accountable to the people, but how the executive … can be more accountable."
New light on Down's cancer link
Scientists may have solved the mystery of why people with Down's syndrome seem to have a lower risk of some cancers.
The extra copy of chromosome 21 which causes Down's appears to contain a gene that protects from solid cancerous tumours, tests on mice suggest.
The gene seems to interfere with signals a tumour relies on to grow. The finding raises hope of new ways to prevent and treat cancer.
The study by the Children's Hospital of Boston appears in the journal Nature.
Humans usually have two copies of the 23 chromosomes that together contain all our genetic information, one from each parent.
Down's syndrome is a genetic disorder which results from the presence of an extra, third copy of chromosome 21.
It has been known for some time that individuals with Down's syndrome get certain types of cancer less often than those without the condition.
However, the reason why has been unclear.
The latest study showed that having an extra copy of one of the genes located on chromosome 21 - a gene called Dscr1 - is sufficient to slow cancer growth in mice.
The gene seems to work in combination with another gene also found on chromosome 21 to interfere with the signals a tumour relies upon to stimulate growth of its own blood vessels.
Without those vessels feeding the tumour with its own supply of blood it cannot thrive.
Inspiration
Writing in the journal, the researchers, led by Dr Sandra Ryeom, said: "It is, perhaps, inspiring that the Down's syndrome population provides us with new insight into mechanisms that regulate cancer growth and, by so doing, identifies potential targets for tumour prevention and therapy."
Dr Kairbaan Hodivala-Dilke, a Cancer Research UK scientist at Queen Mary, University of London, said: "This finding raises several important questions about the roles of other chromosome 21 genes that might help regulate tumour growth.
"The next stage is to think about how we might be able to exploit this research to improve cancer treatments in the future."
Stuart Mills, of the Down's Syndrome Association, said: "We have known for some time that people with Down's syndrome have lower incidences of cancer, apart from leukaemia, than the rest of the population.
"This is one of the first studies to examine the reasons why, and we welcome its findings. We will be following further research with great interest."
The extra copy of chromosome 21 which causes Down's appears to contain a gene that protects from solid cancerous tumours, tests on mice suggest.
The gene seems to interfere with signals a tumour relies on to grow. The finding raises hope of new ways to prevent and treat cancer.
The study by the Children's Hospital of Boston appears in the journal Nature.
Humans usually have two copies of the 23 chromosomes that together contain all our genetic information, one from each parent.
Down's syndrome is a genetic disorder which results from the presence of an extra, third copy of chromosome 21.
It has been known for some time that individuals with Down's syndrome get certain types of cancer less often than those without the condition.
However, the reason why has been unclear.
The latest study showed that having an extra copy of one of the genes located on chromosome 21 - a gene called Dscr1 - is sufficient to slow cancer growth in mice.
The gene seems to work in combination with another gene also found on chromosome 21 to interfere with the signals a tumour relies upon to stimulate growth of its own blood vessels.
Without those vessels feeding the tumour with its own supply of blood it cannot thrive.
Inspiration
Writing in the journal, the researchers, led by Dr Sandra Ryeom, said: "It is, perhaps, inspiring that the Down's syndrome population provides us with new insight into mechanisms that regulate cancer growth and, by so doing, identifies potential targets for tumour prevention and therapy."
Dr Kairbaan Hodivala-Dilke, a Cancer Research UK scientist at Queen Mary, University of London, said: "This finding raises several important questions about the roles of other chromosome 21 genes that might help regulate tumour growth.
"The next stage is to think about how we might be able to exploit this research to improve cancer treatments in the future."
Stuart Mills, of the Down's Syndrome Association, said: "We have known for some time that people with Down's syndrome have lower incidences of cancer, apart from leukaemia, than the rest of the population.
"This is one of the first studies to examine the reasons why, and we welcome its findings. We will be following further research with great interest."
Irish abused 'cheated of justice'
Victims of child abuse at Catholic institutions in the Irish Republic have expressed anger that a damning report will not bring about prosecutions.
The report, nine years in the making and covering a period of six decades, found thousands of boys and girls were terrorised by priests and nuns.
Government inspectors failed to stop beatings, rapes and humiliation.
John Walsh, of Irish Survivors of Child Abuse, said he felt "cheated and deceived" by the lack of prosecutions.
The findings will not be used for criminal prosecutions - in part because the Christian Brothers successfully sued the commission in 2004 to keep the identities of all of its members, dead or alive, unnamed in the report.
No real names, whether of victims or perpetrators, appear in the final document.
Mr Walsh said: "I would have never opened my wounds if I'd known this was going to be the end result.
"It has devastated me and will devastate most victims because there are no criminal proceedings and no accountability whatsoever."
Police were called to the Commission to Inquire Into Child Abuse's news conference in Dublin amid angry scenes as victims were prevented from attending.
The victims were among 35,000 children who were placed in a network of reformatories, industrial schools and workhouses until the early 1990s.
More than 1,000 people had told the commission they suffered physical and sexual abuse.
'Self-serving secrecy'
The five-volume study concluded that church officials encouraged ritual beatings and consistently shielded their orders' paedophiles from arrest amid a "culture of self-serving secrecy".
The commission found that sexual abuse was "endemic" in boys' institutions, and church leaders knew what was going on.
It also found physical and emotional abuse and neglect were rife in some institutions.
Schools were run "in a severe, regimented manner that imposed unreasonable and oppressive discipline on children and even on staff".
It found the Department of Education had generally dismissed or ignored complaints of child sexual abuse and dealt inadequately with them.
As far back as the 1940s, school inspectors reported broken bones and malnourished children but no action was taken.
The report proposed 21 ways the Irish government could recognise past wrongs, including building a permanent memorial, providing counselling and education to victims, and improving current child protection services.
The leader of the Catholic Church in Ireland, Cardinal Sean Brady, said he was "profoundly sorry and deeply ashamed that children suffered in such awful ways in these institutions".
This report makes it clear that great wrong and hurt were caused to some of the most vulnerable children in our society," he said.
"It documents a shameful catalogue of cruelty: neglect, physical, sexual and emotional abuse, perpetrated against children."
The leader of the Roman Catholic Church in England and Wales, the Most Reverend Vincent Nichols, said those who perpetrated violence and abuse should be held to account, "no matter how long ago it happened".
"Every time there is a single incident of abuse in the Catholic Church, it is a scandal. I would be very worried if it wasn't a scandal... I hope these things don't happen again, but I hope they're never a matter of indifference
The report, nine years in the making and covering a period of six decades, found thousands of boys and girls were terrorised by priests and nuns.
Government inspectors failed to stop beatings, rapes and humiliation.
John Walsh, of Irish Survivors of Child Abuse, said he felt "cheated and deceived" by the lack of prosecutions.
The findings will not be used for criminal prosecutions - in part because the Christian Brothers successfully sued the commission in 2004 to keep the identities of all of its members, dead or alive, unnamed in the report.
No real names, whether of victims or perpetrators, appear in the final document.
Mr Walsh said: "I would have never opened my wounds if I'd known this was going to be the end result.
"It has devastated me and will devastate most victims because there are no criminal proceedings and no accountability whatsoever."
Police were called to the Commission to Inquire Into Child Abuse's news conference in Dublin amid angry scenes as victims were prevented from attending.
The victims were among 35,000 children who were placed in a network of reformatories, industrial schools and workhouses until the early 1990s.
More than 1,000 people had told the commission they suffered physical and sexual abuse.
'Self-serving secrecy'
The five-volume study concluded that church officials encouraged ritual beatings and consistently shielded their orders' paedophiles from arrest amid a "culture of self-serving secrecy".
The commission found that sexual abuse was "endemic" in boys' institutions, and church leaders knew what was going on.
It also found physical and emotional abuse and neglect were rife in some institutions.
Schools were run "in a severe, regimented manner that imposed unreasonable and oppressive discipline on children and even on staff".
It found the Department of Education had generally dismissed or ignored complaints of child sexual abuse and dealt inadequately with them.
As far back as the 1940s, school inspectors reported broken bones and malnourished children but no action was taken.
The report proposed 21 ways the Irish government could recognise past wrongs, including building a permanent memorial, providing counselling and education to victims, and improving current child protection services.
The leader of the Catholic Church in Ireland, Cardinal Sean Brady, said he was "profoundly sorry and deeply ashamed that children suffered in such awful ways in these institutions".
This report makes it clear that great wrong and hurt were caused to some of the most vulnerable children in our society," he said.
"It documents a shameful catalogue of cruelty: neglect, physical, sexual and emotional abuse, perpetrated against children."
The leader of the Roman Catholic Church in England and Wales, the Most Reverend Vincent Nichols, said those who perpetrated violence and abuse should be held to account, "no matter how long ago it happened".
"Every time there is a single incident of abuse in the Catholic Church, it is a scandal. I would be very worried if it wasn't a scandal... I hope these things don't happen again, but I hope they're never a matter of indifference
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