WASHINGTON (Reuters) - President Barack Obama, in a populist gesture designed to appeal to voters, will propose a "Buffett Tax" on people making more than $1 million a year as part of his deficit recommendations to Congress on Monday.
Such a proposal, among suggestions to a congressional Super Committee expected to seek up to $3 trillion in deficit savings over 10 years, would appeal to his Democratic base ahead of the 2012 election but likely not raise much in revenues.
White House Communications Director Dan Pfeiffer said in a tweet on Saturday the tax would act as "a kind of AMT" (Alternative Minimum Tax) aimed at ensuring millionaires pay at least as much tax as middle-class families.
The "Buffett Tax" refers to billionaire investor Warren Buffett, who wrote earlier this year that rich people like him often pay less in tax than those who work for them due to loopholes in the taxcode, and can afford to pay more.
Obama will lay out his recommendations in White House Rose Garden remarks at 10.30 am on Monday and is expected to urge steps to raise tax revenue as well as cuts in spending.
But Congress is at liberty to ignore his suggestions and
Republicans, who control the House of Representatives, have said that they will not agree to tax hikes.
The super committee of six Democrat and six Republican lawmakers must find at least $1.2 trillion in deficit savings before the end of the year to avoid painful automatic cuts, and is mandated to seek savings of up to $1.5 trillion.
These savings are on top of $917 billion in deficit reduction agreed in an August deal to raise the debt limit and Obama wants it to go further.
He has separately urged it to consider $450 billion in tax increases on top of this goal to pay for a jobs bill that he unveiled earlier this month.
The Buffett Tax could help energize Obama's base by highlighting a feature of the tax code that allows the super rich to pay lower rates of tax less wealthy Americans
because the bulk of their income is capital gains, dividends and the 'carried interest' earnings of hedge fund managers.
This is taxed at 15 percent, compared to rates of 10 to 35 percent on straightforward income.
Sunday, September 18, 2011
Libyan forces battle to loosen grip on Gaddafi towns
BANI WALID/SIRTE, Libya (Reuters) - Libyan interim government forces charged a desert stronghold controlled by fighters loyal to Muammar Gaddafi and battled on the streets of the ousted leader's hometown as they struggled to quash his last pockets of support.
Nearly a month since they drove Gaddafi's forces out of the capital Tripoli, transitional government fighters have become mired in sieges of his loyalists' remaining redoubts, raising doubt over whether they can quickly unite the vast country.
Forces backed by Libya's National Transitional Council (NTC) made little headway against stiff resistance in Gaddafi's birthplace Sirte on Saturday, but were able to celebrate the capture of the town of Herawa 40 miles to the east.
The fighters also stormed back into the desert town of Bani Walid, a day after diehard loyalists beat them into a retreat.
An NTC spokesman said anti-Gaddafi forces also captured the small town of Birak as they advanced on the major loyalist stronghold of Sabha, deep in the remote southern desert.
Gaddafi's spokesman said the ousted leader was still in Libya and leading resistance. Moussa Ibrahim also accused NATO of killing 354 people in a bombing of Sirte, an accusation Reuters could not independently verify.
NATO said such reports in the past had been false.
A column of NTC pickup trucks mounted with anti-aircraft machine guns and fresh ammunition rushed into Bani Walid as dusk fell across Libya's interior desert.
Nearly a month since they drove Gaddafi's forces out of the capital Tripoli, transitional government fighters have become mired in sieges of his loyalists' remaining redoubts, raising doubt over whether they can quickly unite the vast country.
Forces backed by Libya's National Transitional Council (NTC) made little headway against stiff resistance in Gaddafi's birthplace Sirte on Saturday, but were able to celebrate the capture of the town of Herawa 40 miles to the east.
The fighters also stormed back into the desert town of Bani Walid, a day after diehard loyalists beat them into a retreat.
An NTC spokesman said anti-Gaddafi forces also captured the small town of Birak as they advanced on the major loyalist stronghold of Sabha, deep in the remote southern desert.
Gaddafi's spokesman said the ousted leader was still in Libya and leading resistance. Moussa Ibrahim also accused NATO of killing 354 people in a bombing of Sirte, an accusation Reuters could not independently verify.
NATO said such reports in the past had been false.
A column of NTC pickup trucks mounted with anti-aircraft machine guns and fresh ammunition rushed into Bani Walid as dusk fell across Libya's interior desert.
China charms Europe, but Beijing has own agenda
LISBON, Portugal (AP) — When a nervous horse unseated its cavalry officer at a red-carpet event during Chinese President Hu Jintao's state visit to Portugal last year, the leader of the world's second-largest economy broke with protocol and walked over to the bruised guardsman.
"I hope you get well soon," Hu told him through an interpreter.
The public display of compassion was in keeping with China's European charm offensive in recent years. It has waved its checkbook at a growing number of financially ailing European countries — although the actual impact on Europe's debt-stricken countries has been limited so far, and aimed mainly at winning friends and business contracts.
Europe's frail economies are wobbling under the weight of their debts. Their urgent austerity measures are stunting growth and driving unemployment higher, and their citizens are clamoring for improvements. That has changed the complexion of European dealings with booming China.
Crisis-hit European countries are swooning over China's $3.2 trillion cash pile — the world's biggest foreign exchange reserves — even though many are angry about what they view as unfair Chinese practices.
"China is increasingly trying to diversify its foreign policy relationships ... trying to find the right ways to use its new-found influence, to gain from it," says Nicholas Consonery, an Asia analyst at Eurasia Group in Washington DC.
Join the dots, Beijing-watchers say, and China's strategy becomes clear: It wants to use its economic leverage to make friends who may be more forgiving in disputes over trade and human rights, and ensure doors are open for its goods and corporate investments in the European Union, its main export market.
Most immediately, many European countries are looking for a lifeline to extricate themselves from the continent's severe sovereign debt crisis, which threatens to collapse the continent's financial system.
In the latest example, Rome officials disclosed this week they held talks with China's sovereign wealth fund about buying debt-stressed Italy's bonds.
Before those talks, Beijing had vowed to buy the bonds of Greece and Portugal, which ended up needing international bailouts, and Spain and Hungary.
Though neither China nor EU countries disclose figures on Chinese bond purchases, analysts believe Beijing's repeated expressions of faith in the EU's finances are aimed principally at building goodwill and have not translated into large disbursements.
"Europeans have a tendency to pray for rain from China, but the rain is not necessarily coming," says Francois Godement, a Paris-based senior policy fellow at the European Council on Foreign Relations.
Experts reckon cautious Chinese leaders are hesitant about putting big money into jittery debt markets. Some leading Chinese economists have discouraged the investment as too risky, and analysts note Beijing has to pay attention to the needs of its own poor.
According to EU officials, China has invested in Europe's euro440 billion ($605 billion) bailout fund. But that fund carries a top AAA rating, meaning it is an extremely safe way for Beijing to help Europe without exposing itself much to the dangers of a default. The sums were never disclosed.
Rachel Shoemaker, an Asia expert at Executive Analysis in London, says the bond purchases — however modest — can help win approval for broader Chinese investments down the line, such as in trade and corporate and infrastructure investments.
"We assess that China's rhetoric is likely to exceed its actual support, with China likely to focus on commercial gains and thus to negotiate bilateral deals that essentially result in investment opportunities in return for bond purchases," Shoemaker said in a written reply to AP questions.
She cites Greece as an example. As China promised to acquire that country's bonds, state transport giant China Ocean Shipping Co. snared a $1 billion concession deal in 2009 for the country's largest container-terminal port near Athens. That gives COSCO's growing port management business a foothold in Europe and positions it to prosper as Chinese trade with the Balkans and Central Europe grows. China also pledged to help double the trade volume with Greece to nearly euro6 billion by 2015.
It's a similar story across Europe, with Chinese pledges of bond purchases coming simultaneously with announcements of major investments in the continent's corporations and infrastructures.
Chinese Premier Wen Jiabao and Italian Premier Silvio Berlusconi last year spoke optimistically of doubling bilateral trade to $100 billion within five years. In one of the deals signed in their presence, Internet service provider Tiscali SpA and Zte, a Chinese maker of telecommunications equipment, made a deal for development of ultra-wideband in Italy.
One of the conditions of China's purchase of Spanish bonds in January 2011, analysts say, was the sale to Sinopec of around $7 billion worth of Brazilian oil assets held by Spanish energy company Repsol. That deal gave birth to one of Latin America's largest energy companies.
On his Portugal trip, the Chinese president signed cooperation agreements which sought to double trade between the two countries within five years. Chinese and Portuguese companies signed deals in areas covering energy production, information technology, telecommunications, tourism, banking, port infrastructure, and agriculture.
China's European push came after its expansion into Africa where it has invested billions, mostly in gaining access to raw materials.
"I hope you get well soon," Hu told him through an interpreter.
The public display of compassion was in keeping with China's European charm offensive in recent years. It has waved its checkbook at a growing number of financially ailing European countries — although the actual impact on Europe's debt-stricken countries has been limited so far, and aimed mainly at winning friends and business contracts.
Europe's frail economies are wobbling under the weight of their debts. Their urgent austerity measures are stunting growth and driving unemployment higher, and their citizens are clamoring for improvements. That has changed the complexion of European dealings with booming China.
Crisis-hit European countries are swooning over China's $3.2 trillion cash pile — the world's biggest foreign exchange reserves — even though many are angry about what they view as unfair Chinese practices.
"China is increasingly trying to diversify its foreign policy relationships ... trying to find the right ways to use its new-found influence, to gain from it," says Nicholas Consonery, an Asia analyst at Eurasia Group in Washington DC.
Join the dots, Beijing-watchers say, and China's strategy becomes clear: It wants to use its economic leverage to make friends who may be more forgiving in disputes over trade and human rights, and ensure doors are open for its goods and corporate investments in the European Union, its main export market.
Most immediately, many European countries are looking for a lifeline to extricate themselves from the continent's severe sovereign debt crisis, which threatens to collapse the continent's financial system.
In the latest example, Rome officials disclosed this week they held talks with China's sovereign wealth fund about buying debt-stressed Italy's bonds.
Before those talks, Beijing had vowed to buy the bonds of Greece and Portugal, which ended up needing international bailouts, and Spain and Hungary.
Though neither China nor EU countries disclose figures on Chinese bond purchases, analysts believe Beijing's repeated expressions of faith in the EU's finances are aimed principally at building goodwill and have not translated into large disbursements.
"Europeans have a tendency to pray for rain from China, but the rain is not necessarily coming," says Francois Godement, a Paris-based senior policy fellow at the European Council on Foreign Relations.
Experts reckon cautious Chinese leaders are hesitant about putting big money into jittery debt markets. Some leading Chinese economists have discouraged the investment as too risky, and analysts note Beijing has to pay attention to the needs of its own poor.
According to EU officials, China has invested in Europe's euro440 billion ($605 billion) bailout fund. But that fund carries a top AAA rating, meaning it is an extremely safe way for Beijing to help Europe without exposing itself much to the dangers of a default. The sums were never disclosed.
Rachel Shoemaker, an Asia expert at Executive Analysis in London, says the bond purchases — however modest — can help win approval for broader Chinese investments down the line, such as in trade and corporate and infrastructure investments.
"We assess that China's rhetoric is likely to exceed its actual support, with China likely to focus on commercial gains and thus to negotiate bilateral deals that essentially result in investment opportunities in return for bond purchases," Shoemaker said in a written reply to AP questions.
She cites Greece as an example. As China promised to acquire that country's bonds, state transport giant China Ocean Shipping Co. snared a $1 billion concession deal in 2009 for the country's largest container-terminal port near Athens. That gives COSCO's growing port management business a foothold in Europe and positions it to prosper as Chinese trade with the Balkans and Central Europe grows. China also pledged to help double the trade volume with Greece to nearly euro6 billion by 2015.
It's a similar story across Europe, with Chinese pledges of bond purchases coming simultaneously with announcements of major investments in the continent's corporations and infrastructures.
Chinese Premier Wen Jiabao and Italian Premier Silvio Berlusconi last year spoke optimistically of doubling bilateral trade to $100 billion within five years. In one of the deals signed in their presence, Internet service provider Tiscali SpA and Zte, a Chinese maker of telecommunications equipment, made a deal for development of ultra-wideband in Italy.
One of the conditions of China's purchase of Spanish bonds in January 2011, analysts say, was the sale to Sinopec of around $7 billion worth of Brazilian oil assets held by Spanish energy company Repsol. That deal gave birth to one of Latin America's largest energy companies.
On his Portugal trip, the Chinese president signed cooperation agreements which sought to double trade between the two countries within five years. Chinese and Portuguese companies signed deals in areas covering energy production, information technology, telecommunications, tourism, banking, port infrastructure, and agriculture.
China's European push came after its expansion into Africa where it has invested billions, mostly in gaining access to raw materials.
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