August 2009

Togo man admits smuggling girls to NJ hair salons (AP)

NEWARK, N.J. – A man from the West African nation Togo has admitted his role in the smuggling of dozens of girls and women who were forced to work at hair braiding salons in New Jersey.
Lassissi Afolabi pleaded guilty Wednesday in federal court to conspiring with his ex-wife and others to commit forced labor and related crimes in Newark and East Orange, where he lived.
Afolabi has been held without bail since his arrest in September 2007. He could face up to life in prison when he's sentenced Dec. 8.
Prosecutors say between October 2002 and September 2007 at least 20 girls and women were taken from Togo using fraudulent visas. The girls were forced to work six or seven days a week and to turn over all of their earnings to the defendants.

Kennedy's legacy shapes Obama's path (Politico)

Through two years of wearying campaigning, defeats and victories, the cool, disciplined Sen. Barack Obama rarely was overcome by emotion. Once was on the eve of the election, when his grandmother died.
The other time, a close aide recalled, was when Sen. Ted Kennedy endorsed him.
Kennedy's endorsement may have won Obama the nomination. His legacy, health care legislation, has already shaped Obama's presidency, and Obama will deliver a eulogy at Kennedy's funeral Saturday. But it wasn't until the last minute, in late January 2008, that Kennedy decided to take sides at all - throwing himself into a hard-fought primary between two of his friends, Obama and then-Sen. Hillary Clinton.
When he did, it was without reservation. He addressed critics, declaring Obama ready to lead. And he invoked his family's legacy:
"The torch will be passed again to a new generation of Americans. The hope rises again. And the dream lives on," he said, as the future president sat on a tall stool on stage behind him at American University in Washington on Jan. 28, 2008.
"He was a monumental figure in the history of the campaign," David Axelrod, Obama's senior adviser, told POLITICO, saying that the weekend of Kennedy's endorsement "transformed the campaign."
"It was like being shot from a cannon," Axelrod said.
The day of the endorsement was, Obama told a Kennedy adviser at the time, the greatest day of his life, according to Dan Balz and Haynes Johnson's account of the campaign.
Kennedy, whose age never diminished his outsized political standing or his eye for up-and-coming talent, saw Obama dominate the 2004 Democratic National Convention in his hometown, Boston, and he may have seen a little of himself in the young celebrity senator.
"When [Obama] came to the Senate as a new young senator, he was in a certain way a little like Teddy was when he first came to the Senate. That is, that everybody already knew about him or thought they knew about him," longtime Kennedy adviser Bob Shrum told POLITICO. "So I don't think Kennedy was surprised at his eloquence, his intelligence, his grasp of issues. But it was kind of a habit with Teddy [to mentor promising young senators]. He spent time with him and got to know him well."
He also helped recruit Obama to his committee, the Health, Education, Labor and Pensions panel, Shrum said.
Their relationship was not, however, entirely smooth. Even before Obama was elected to the Senate, he chafed at the humility required of a newcomer, and sometimes it showed.
"We've got to call up not just Republicans, but we've got to call up Ted Kennedy and say, 'Ted, you're getting a little old now, and you've been a fighter for us before. I don't know what's happening now,'" Obama told a union audience in 2003 - in a video that appeared on Huffington Post in December 2007 as Kennedy was considering an endorsement. "Ted, get some spine and stand up to the Republicans."
Kennedy, who had encouraged Obama's campaign but hadn't endorsed him, shrugged off the slight after the young senator called to address the comments. Kennedy spoke occasionally to Obama during the campaign to offer advice - who to talk to, what to look for - but no endorsement.
And he watched the campaign for the next month, torn between his old friends, the Clintons, and the promise of Obama.
It was, Kennedy aides said at the time, the Clintons' own allies who gave him the final push. The days surrounding the South Carolina primary Jan. 26 saw the contest become, for the first time, racially charged. Kennedy blamed Clinton's side, and blamed President Bill Clinton himself. The two men spoke and did little to repair the breach.
Another Democratic consultant close to Kennedy's circle suggested that Kennedy's political judgment may have affected his timing as much as the harsh words in South Carolina. Kennedy had intervened at crucial moments in 2000 and 2004 to back his preferred candidates for the Democratic nomination, and he knew the impact he could have in 2008. He timed his announcement for the lead-up to a national primary - Super Tuesday - where Obama was struggling to convince millions of voters who had barely heard of him that he was ready to be president.
"Sen. Kennedy had an acute understanding of the way politics works and a particularly good understanding of the nominating process," said the consultant, Tad Devine. "When Kennedy stepped in the way he did, he essentially credentialed Obama."

Clinton's camp watched the endorsement with dismay.

"It was tremendously important and played a pivotal role in the campaign -- as he has in politics and the Senate for decades," said Clinton's chief strategist, Mark Penn, who had once also polled for Kennedy.

Shrum, though, suggested that Kennedy's revulsion with the Clintons was the lesser part of his choice.

"He watched the campaign unfold, and I know that stuff has been written that it was an anti-Clinton move - it wasn't. He saw Obama as holding up the sense of hope and change, the possibility of a different America, touching the same kind of responsive chords that his brother did," Shrum said.

Obama learned of the coming endorsement on the Thursday before Saturday's South Carolina primary while crossing that state in his campaign's RV, Axelrod said.

Obama took the call alone in one of the vehicle's two sections, then came into the other where his staff gathered to hear the news.

"He said, 'We got Ted Kennedy,'" recalled Axelrod. Obama explained that the endorsement must be kept quiet and done exactly as Kennedy wanted it. But he understood its power.

"This is big," the candidate said.

"The president is not given to being overly buoyant," Axelrod recalled. "But he was plainly happy, not just because of the strategic value but because of who Kennedy was and what it meant."

The Kennedy weekend continued with an op-ed by John F. Kennedy's daughter, Caroline, in the Sunday New York Times. The headline: "A President Like My Father."

The family had decided to go all out, to make explicit a passing of its legacy to an outsider, after decades of searching for an heir inside the clan. On stage at American University that Monday with Caroline and his son, Rep. Patrick Kennedy (D-R.I.), the senator, too, referred to passing the torch and echoed his famous 1980 Democratic National Convention promise that "the dream shall never die."

Obama told Axelrod after the event: "That was a very humbling experience."

But he wasn't just a symbolic figure. Kennedy engaged actively in the campaign, using his speech to rebut Clinton's central attack on Obama, that he wasn't ready.

"I know that he's ready to be president on Day One," Kennedy said, imploring his audience - in another veiled reference to Clinton's campaign - to "reject the counsels of doubt and calculation."

Then Kennedy traveled for Obama, heading to East L.A. to make his case to a Hispanic crowd, and cutting into Clinton's edge in big states where routs might have ended Obama's campaign.

Kennedy vanished from the trail in May when he was diagnosed with brain cancer, but, understanding his own symbolism and the size of the moment, dragged himself to the convention stage in Denver.

He had spent the previous night, sleepless, in the hospital, in agonizing pain from kidney stones.

"To go give the speech he had to tell them to lower the pain medication," Shrum said. "He was just absolutely determined to do it. I had a 30-second version of the speech prepared. He scoffed at that."

"'I'm not going to come to the Democratic convention to give a 30-second speech,'" Shrum recalled Kennedy saying.

Kennedy delivered the longer version, again invoking his own legacy.

"And this November, the torch will be passed again to a new generation of Americans, so with Barack Obama and for you and for me, our country will be committed to his cause. The work begins anew. The hope rises again. And the dream lives on," he said in Denver.

When Obama was inaugurated on a cold day in January, Kennedy insisted on being there and taking in the ceremony outside the Capitol.

"He was absolutely ebullient, talking about what a great day this was," recalled Axelrod, who talked to Kennedy shortly before the senator suffered a seizure at the luncheon that day. "He was like a proud father."

The burly, passionate youngest brother of a powerful family, and the cool, slim young candidate from nowhere made an odd couple, but Kennedy seemed to impart to Obama the emotion he was sometimes unable to project. When Kennedy fell ill, their relationship was often more symbolic, and emotional, than practical: Obama filled in for Kennedy at a commencement speech soon after his cancer diagnosis, and Kennedy, an aide, said, later asked for an autographed copy of the speech. Earlier this summer when he was at the Vatican, Obama carried a letter to the pope from Kennedy, a Roman Catholic.

Now, Kennedy's death will frame the central struggle of Obama's young presidency, the charge to drive health care legislation through the Senate. The loss of his vote and his deal-making prowess are a profound blow to the bill's prospects, but his allies hope his memory will carry it through.

"It may be that now that his absence casts such a long shadow to make it more possible to get a health bill," said Shrum.

Read More Stories from POLITICO'Problem by problem,' Kennedy transformed himselfMorning showsPols eye once-in-a-generation openingTribute: Edward M. Kennedy'Never forget you saw this man'

Eduardo's deception helps Arsenal ease past Celtic (AFP)

LONDON (AFP) –
Arsenal moved into the Champions League group stages in controversial fashion as Eduardo's dive helped secure a 3-1 victory over Celtic in Wednesday's play-off second leg.

Arsene Wenger's team went through 5-1 on aggregate after outclassing the Scots for the second time in the tie, but they needed a moment of deception from Eduardo to end Celtic's hopes.

The Croatia striker won and converted a first half penalty when he exaggerated his fall as Celtic keeper Artur Boruc came out to make a save.

In truth, Arsenal were always in control and second half goals from Emmanuel Eboue and Andrey Arshavin rubbed salt into Celtic's wounds as the Premier League team comfortably secured their place in Thursday's group stage draw.

Wenger said: "Having seen it again on television it doesn't look to be a penalty but we were likely to score the first goal and we always looked in control of the game.

"I believe it was not a penalty but I'm not sure if the keeper touched him. Eduardo might be a bit cautious because of the injury that he had. He might have jumped out of the way.

"I never asked in my life any player to dive to get a penalty but sometimes the player goes down because there is no way to get out of the way."

Hoops boss Tony Mowbray added: "I haven't seen the reruns but all the boys felt there wasn't any contact for the penalty.

"But we can't say Arsenal didn't deserve to go through."

Mowbray had no option but to go for broke as his side chased an unlikely comeback and he restored Scott McDonald and Marc-Antoine Fortune to the starting line-up after surprisingly dropping his most potent forwards for the first leg.

With the tie effectively wrapped up in Glasgow last week and Saturday's visit to Manchester United in mind, Wenger left Arshavin and Robin van Persie on the bench, while captain Cesc Fabregas missed out with a hamstring injury.

Although Arsenal benefited from a deflection and an own goal to win the first leg, there was no doubting their superiority and they were quickly back in the ascendency.

Eboue flicked a Gael Clichy cross into Nicklas Bendtner's path and the Dane's shot was parried by Boruc. The rebound dropped towards Eduardo but he somehow managed to poke a lunging effort wide from no more than four yards.

The speed of Arsenal's passing and movement bewildered Celtic at time and Mowbray's defence stood statuesque as Eboue's flick sent Denilson clear for a shot that crashed past the near post.

Arsenal were well on top but it took Eduardo's exploitation of the game's dark arts to open the scoring in the 28th minute.

He raced onto Bendtner's pass and waited for Boruc to come sliding off his line before tumbling theatrically to the turf. To Boruc's disbelief Spanish referee Manuel Mejuto Gonzalez ruled that the incident was worthy of a penalty.

Eduardo dusted himself down, ignored the chants of cheat from the Celtic fans behind Boruc's goal and calmly sent the Polish keeper the wrong way from the spot.

Celtic had the ball in the net just before half-time when McDonald tapped in Fortune's cross but the Australian's effort was rightly ruled out for offside.

United boss Sir Alex Ferguson was in the stands to check out Arsenal and, apart from the dive, he must have been impressed by Eduardo's display.

The Brazil-born Croatian almost scored again with a curling effort that Boruc tipped over before Bendtner headed the resulting corner wide.

Arsenal were always capable of carving open the Celtic back-four and Eduardo should have doubled the lead, only to drag his shot wide with just Boruc to beat early in the second half.

A second goal was inevitable and it arrived in the 53rd minute when Eboue's powerful finish capped a fine move between Clichy, Bendtner and Diaby that exposed the gulf in class between the teams.

Arshavin, on as a substitute for Eduardo, gave Arsenal a final flourish in the 74th minute when he took Aaron Ramsey's pass and shot past Boruc.

Massimo Donati got one back for Celtic with a superb volley in stoppage time but it was too little too late.

Kennedy's absence leaves Senate void of dealmaker (AP)

WASHINGTON – In an era of bitter political division, Sen. Edward M. Kennedy's death silenced a singular voice of bipartisanship at a time when colleagues are struggling with angry constituents and each other over an elusive plan to overhaul the nation's health care system.
Some lawmakers said Tuesday the current stalemate is the result of Kennedy's absence for the past few, crucial months. Some hope to rescue the embattled legislation as his legacy.
It's not clear that the post-Kennedy Senate includes anyone with the credibility among ideological opponents, the dealmaking skills or the inside knowledge to strike a quick agreement.
"There is nobody else like him," said Sen. Judd Gregg, R-N.H., who alternated with Kennedy over the years as chairman and ranking minority-party member of the health committee. "If he had been physically up to it and been engaged on this, we probably would have an agreement by now."
"Teddy was the only Democrat who could move their whole base," Sen. Orrin Hatch, R-Utah, said. "If he finally agreed, the whole base would come along even if they didn't like it."
Kennedy lost the fight he couldn't win Tuesday, to brain cancer at 77. But he had won countless others by embodying an increasingly rare type of bipartisanship — the kind perceived not as a threat to ideology or fundraising prowess, but as a way of getting something done, however imperfect.
"Bipartisanship takes a person that has leadership and personal charm, quite frankly, and a desire to get a result," said former Senate Republican Leader Trent Lott of Mississippi. "He didn't try to destroy you. That's what's happening in Washington now. It's gotten so mean."
Over 47 years in the Senate, Kennedy evolved into an institution himself, equal parts liberal icon and dealmaker who combined those skills to forge agreement on some of the most sweeping and controversial social legislation of his time.
Kennedy worked out an agreement with President George W. Bush on the No Child Left Behind Act. He regularly worked with Hatch, notably on a federally funded program for those with HIV/AIDS, health insurance for lower-income children and tax breaks to encourage the development of medicines for rare diseases.
When he compromised, Kennedy's base may have grumbled but did not question his fidelity to liberal principles. Republicans trusted him to be straight with them in tough negotiations and not make it personal. And no one questioned his knowledge of Senate procedure, rivaling even West Virginia's Robert C. Byrd, who no longer plays a big role in Senate business.
Without Kennedy, the 99-member chamber lacks anyone playing precisely his role doling out the goodwill and procedural expertise necessary to make the Senate wheels spin through controversial legislation. The Democratic caucus falls from an effective supermajority of 60, enough to kill Republican filibusters, to 59, including two independents.
No one is irreplaceable in the Senate, or so a popular saying goes. But John McCain, R-Ariz., called Kennedy just that in a statement Wednesday. McCain, last year the GOP presidential nominee, was even clearer over the weekend.
"He had a way of sitting down with the parties at a table and making the right concessions, which really are the essence of successful negotiations," McCain said on ABC's "This Week."
"It's huge that he's absent," McCain added. If Kennedy had been engaged in the debate past June, when he handed his committee chairmanship duties to Chris Dodd, D-Conn., "I think the health care reform might be in a very different place today."
Democrats widely mourned Kennedy's passing on personal and political grounds and urged their colleagues to adopt Kennedy's big-picture view of the world generally and health care specifically. There was talk Wednesday of honoring Kennedy within the Capitol, possibly by posting his portrait in the Senate Reception Room with the likenesses of other senators hailed for their bipartisan accomplishments.
"My hope is that this will maybe cause people to take a breath, step back and start talking with each other again in more civil tones about what needs to be done, because that's what Teddy would do," said Dodd, Kennedy's close friend who has taken a lead role on health care negotiations and is, himself, battling prostate cancer.
"We all share the same principles. How you get there is complicated, but that's what Senator Kennedy dedicated his life to," Dodd added. "In his memory, I will do everything I can as long as I can stand in the United States Senate to help us achieve that goal."
Vice President Joe Biden, in a tearful salute to his friend, said Kennedy raised the level of discourse and senatorial behavior and in the course of rising from dark chapters of his own life embodied the most selfless human qualities.

"It was never about him ... he never was petty," Biden told reporters, recalling how Kennedy stood by him when the former senator's wife and child were killed in a car accident.

"I just hope we remember how he treated other people and how he made other people look at themselves and look at one another," Biden added. "That will be the truly fundamental, unifying legacy of Teddy Kennedy's life if that happens, and it will for a while at least in the Senate."

Kidnapped French tourist freed in SW Pakistan (AP)

QUETTA, Pakistan – A kidnapped French tourist was freed Friday after three months in captivity in Pakistan's southwestern Baluchistan province, a government official said.
The Frenchman, who has not been identified, was released in remote Dalbandin district, about 260 miles (420 kilometers) west of the provincial capital of Quetta, local official Mohammad Tufail said.
"I can confirm that the French tourist is free. He has been transported to Quetta," Tufail said.
He would not say whether any ransom was paid, but said local elders helped secure the man's release.
Gunmen abducted the man in May from a vehicle in which he was riding with other tourists. It was not clear who the kidnappers were.
The province has long been the scene of a low-level insurgency by ethnic Baluch separatists. The Baluchistan unrest is separate from the Islamist militancy Pakistan faces along its northwestern border with Afghanistan.
Baluch separatists have acknowledged kidnapping more than 20 police in the province in the past month. At least 12 of the officers have been killed.

Analysis: Health care endgame near but uncertain (AP)

WASHINGTON – With hopes growing ever dimmer for a bipartisan accord, White House and Democratic leaders are considering a wide range of strategies for getting a health care bill passed when Congress returns from its summer recess.
Some are blunt. Some are complex and technical. All are problematic.
Insiders say it's impossible to confidently predict which plan, if any, will prevail after lawmakers return the day after Labor Day. Will Democrats simply try to roll over minority Republicans? Will they try such uncertain paths as asking moderate Democrats, or perhaps a retiring Republican, to let a bill reach the Senate floor even if they plan to vote against it?
Possible outcomes, according to congressional and White House officials:
• A bipartisan agreement.
Still the preference of President Barack Obama and congressional leaders, prospects have dimmed this month as top Republicans have sharply criticized key Democratic goals. Most notably, the chief GOP negotiator — Sen. Charles Grassley of Iowa — signaled he would not support a bill, even if he liked it, unless most of his fellow Republicans signed on. That seems highly unlikely.
A truly bipartisan bill would draw significant numbers of House and Senate Republicans, and it surely would be among the least-ambitious scenarios under discussion. It might include widely supported measures such as barring insurers from refusing to cover pre-existing medical conditions, and allowing people to carry their insurance from job to job. But it would not include a public insurance option, hefty subsidies to help the poor buy insurance and other priorities of the left.
Political insiders see little hope for a truly bipartisan bill emerging from the current negotiations.
• A 60-Democrats strategy.
This Democrats-only strategy presumably would produce the most robust, far-reaching changes to the health care system. Liberals say that if Republicans won't play ball, there's no point in compromising the agenda Obama campaigned for, including a public insurance option and coverage for nearly all Americans.
But this approach has many hurdles, and insiders consider it a long shot. Senate filibuster rules would force Democrats to persuade each of their 58 members and two independent supporters to vote down the 40 Republicans on issue after issue. Some moderate Democrats would balk on issues they oppose. And two liberal Democrats — Robert Byrd of West Virginia and Edward Kennedy of Massachusetts — are seriously ill and often absent.
Even if the Senate passed a bill with Democratic votes only, conservative House Democrats might band with Republicans to reject it as too expensive.
A Democrats-only approach would fuel Republican accusations of heavy-handed overreaching by Obama and his allies. But it would energize the president's liberal base.
• A handful of Republicans.
Even if the negotiations involving Grassley collapse, it's possible that a tiny number of GOP senators will join nearly all the Democrats in passing a bill that includes most of Obama's priorities. Maine's Republican senators, Olympia Snowe and Susan Collins, are mentioned most often.
But they would face enormous pressure not to break ranks and provide the crucial 60th vote to overcome an otherwise solid GOP opposition. And if they did, the resulting bill still would be seen as a Democratic creation, undermining its acceptance by many Americans.
Handicappers give this scenario a less than 50-50 chance.
• Strong-arm tactics.

If they're willing to play true hardball, Senate Democrats still could pass a health care bill without amassing 60 votes on some contentious points.

The "reconciliation" process lets the 100-member Senate pass budget-related items, under tight restrictions, with a simple majority of votes. But items that arguably are unrelated to the budget could be challenged and possibly subjected to the 60-vote threshold.

Democrats could submit one big bill and fight to keep as many provisions as possible from falling victim to a 60-vote requirement. Or they could split the package in two:

One bill, dealing with spending questions, could pass under reconciliation rules with as few as 50 votes. The other bill would require 60 votes, and it would be subject to mischievous amendments. But it might include widely popular provisions such as protecting insurance buyers who have pre-existing conditions.

Senate experts differ on how many of Obama's priorities, such as a public insurance option, would fail under the reconciliation process. But everyone agrees the strategy would severely worsen the already testy relationships between Republican and Democratic senators.

Because it is complex, unpredictable and divisive, reconciliation is unpopular with many Democrats, not to mention Republicans. But Capitol insiders say Democratic leaders will use it before accepting full-blown defeat, and some see it as the likeliest outcome.

• Modified all-Democrats approach.

This approach would require Democratic solidarity at some point, but it could be portrayed as a procedural matter rather than a more highly charged policy question.

The crucial votes would occur after the House and Senate had passed separate bills, sent them to a powerful conference committee and then prepared to give the reconciled (and possibly much-changed) product a final yes-or-no vote in each chamber.

The first key is to get the House and Senate to pass their own bills, even if they differ widely. The Senate version probably would be more constrained than the House version, in order to attract enough GOP support to overcome filibusters.

House-Senate negotiators might make the final package closer to the House's more liberal version. That would anger Senate Republicans, and perhaps some moderate Democrats, who could threaten a filibuster on the last showdown vote.

But Obama and his allies could urge the centrist Democrats, in the name of party loyalty, to reject a filibuster even if they plan to vote against the bill itself. If Byrd or Kennedy could not provide the crucial 60th vote, it might come from a retiring Republican who concludes that a huge issue such as overhauling health care deserves an up-or-down vote.

Such a senator might be George Voinovich of Ohio, said Norm Ornstein, who has written about Congress for years at the American Enterprise Institute.

This multi-pronged scenario would yield something "closer to a third or quarter of a loaf than the full package" that liberals want, Ornstein said. But with the Senate's 40 Republicans able to use the filibuster, and the House's conservative Democrats able to block a bill they consider too costly, that's probably the most Obama can hope for, he said.

• Nothing.

All the above options may fail, and partisan clashes could kill the bid to overhaul health care altogether. Top lawmakers consider this unlikely. Democrats control the House, Senate and White House, and they should be able to produce at least a modest bill that Obama could tout as a victory, with hopes of coming back for more in later years.

Passing no bill at all would severely wound Obama's image, exasperate liberals and drag Congress' reputation for effectiveness lower. The political fallout might be hard to predict, however. The blame for failing to make even modest improvements to U.S. health care might stick to Republican critics of Obama as well as Democrats who used their majorities for naught.

___

EDITOR'S NOTE — Charles Babington covers the White House for The Associated Press.

Bernanke's tough task: Withdrawing emergency aid (AP)

WASHINGTON – When the financial system was teetering, Federal Reserve Chairman Ben Bernanke flooded it with trillions of dollars to save the banks and free up credit for consumers and businesses.
Looming in the future is a high-risk challenge for the economy's rescuer-in-chief: He will have to mop up that money without disrupting a nascent recovery.
Bernanke speaks Friday morning at an annual Fed conference in Jackson Hole, Wyoming, where he'll look back over the past year of the financial crisis and talk about how the lessons learned can help shape policy decisions going forward.
When, precisely, to pull back the money is an issue sure to surface as Bernanke, his counterparts in other countries, academics and economists meet over the next couple of days at the conference.
Timing is vital. Act too fast, and Bernanke risks choking off lending to businesses and everyday Americans. Wait too long, and he risks setting off crippling inflation.
"We are in such an unusual situation," said Lyle Gramley, a Fed member in the early 1980s and now chief economic strategist at Soleil Securities Corp. "The Fed will have a more difficult set of decisions to make."
Assuming he manages to help usher in a sustained recovery, Bernanke, like his predecessors, will eventually face still another challenge: He will be under enormous political pressure to keep interest rates low, even though that could speed inflation.
But the Fed chief will face no task quite as perilous as withdrawing the trillions the Fed has pumped into the financial system in ways that had never been envisioned.
That money helped prop up shaky banks. It also was intended to unlock lending to people and companies, a key component of any recovery but one that so far has had only spotty success.
Some analysts think it could take four or five years for the Fed to withdraw the money entirely and shrink a balance sheet that is now about $2 trillion, more than double what it was when the financial crisis struck.
Already, the Fed has taken baby steps.
It has said it will allow one program intended to support money market mutual funds — one that hasn't even been used — to expire Oct. 30. It's also reduced the maximum it will lend to banks under two other programs.
And earlier this month, the central bank signaled it won't extend past October a $300 billion government debt-buying program. That program is intended to lower consumer and corporate loan rates.
But this week the Fed extended a separate program designed to increase lending and help the commercial real estate market. So far, about $40 billion in loans has been extended to investors — a small fraction of the $200 billion made available in the program's first phase. And Americans still have trouble getting loans.
The biggest decisions lie ahead.
One will be deciding when and how to unload $1.25 trillion in Fannie Mae and Freddie Mac mortgage-backed securities without sending mortgage rates surging. Another delicate matter is when the Fed should start selling some of its $300 billion in Treasury debt.
In fighting the recession and financial crisis, Bernanke unleashed some of the most aggressive actions in the history of the central bank, which was created in 1913 after a series of bank panics.
He slashed interest rates to record lows near zero. He provided low-cost loans for banks and bought debt so companies would have short-term "commercial paper" loans available to pay for salaries and supplies.

The Fed also bought mortgage-backed securities and government bonds to drive down interest rates on mortgages and other consumer debt. Bernanke also moved to support the mutual fund industry.

Congress, the White House and statehouses across America will probably exert intense pressure on the Fed to keep the money flowing and the emergency aid programs operating.

"There's no question the Fed has the capacity to reel in the stimulus. It is the politics that trouble me," says Allan Meltzer, a professor at Carnegie-Mellon University and author of a history of the central bank.

Keeping the easy money in place too long could feed high inflation by encouraging overborrowing and overspending. Surging inflation could then derail a recovery if it caused the Fed to aggressively boost interest rates.

But pulling the plug too soon on the Fed's emergency aid could set back a recovery even faster. If, for instance, the Fed dumped its mortgage securities and interest rates shot up, homeowners and the housing industry would take a further pounding.

Whenever it does sell those holdings, the Fed will have to pace the sales so they don't jolt the market but rather cause a smooth, gradual rise in mortgage rates.

To prevent inflation from surging, many economists also think the Fed will have to start raising its key bank lending rate next summer. Unemployment, now 9.4 percent, will probably still be high, perhaps in the double digits.

Higher interest rates could hurt Americans not long before they vote in midterm congressional elections next year. But often, there's no alternative.

A Bernanke predecessor, Paul Volcker, was credited with ending 1970s "stagflation," a toxic mix of stagnant economic activity and inflation, by ratcheting up interest rates to their highest levels since the Civil War.

But those high rates helped produce the recession that drove unemployment to its postwar high of 10.8 percent. Protesting farmers drove tractors into Washington, surrounding the Fed's stately headquarters. Angry homebuilders delivered two-by-fours to the Fed.

Republican Sen. Jim Bunning asked Bernanke last month whether he had the will, as Volcker had, to tighten interest rates even if the economy is weak. The Fed chief said he was prepared to make unpopular moves if they are in the best interest of the economy.

A skeptical Bunning replied, "I wish you good luck."

WHO predicts 'explosion' of swine flu cases (AP)

BEIJING – The global spread of swine flu will endanger more lives as it speeds up in coming months and governments must boost preparations for a swift response, the World Health Organization said Friday.
There will soon be a period of further global spread of the virus, and most countries may see swine flu cases double every three to four days for several months until peak transmission is reached, said WHO's Western Pacific director, Shin Young-soo.
"At a certain point, there will seem to be an explosion in case numbers," Shin told a symposium of health officials and experts in Beijing. "It is certain there will be more cases and more deaths."
WHO has declared the swine flu strain a pandemic, and it has killed almost 1,800 people worldwide through last week. International attention has focused on how the pandemic is progressing in southern hemisphere countries such as Australia, which are experiencing winter and their flu season.
But it is in developing countries where the accelerated spread of swine flu poses the greatest threat as it places underequipped and underfunded health systems under severe strain, Shin said.
Governments must act quickly to educate the public, prepare their health systems to care for severe cases and protect those deemed more vulnerable to prevent unnecessary deaths, he said.
"We only have a short time period to reach the state of preparedness deemed necessary," Shin said. "Communities must be aware before a pandemic strikes as to what they can do to reduce the spread of the virus, and how to obtain early treatment of severe cases."
Pregnant women face a higher risk of complications, and the virus also has more severe effects on people with underlying medical conditions such as asthma, cardiovascular disease, diabetes, autoimmune disorders and diabetes, WHO chief Margaret Chan said in a video address.
WHO earlier estimated that as many as 2 billion people could become infected over the next two years — nearly one-third of the world's population.
Health officials and drug makers, meanwhile, are looking into ways to speed up production of a vaccine before the northern hemisphere enters its flu season in coming months. Estimates for when a vaccine will be available range from September to December.
WHO has stressed that most cases are mild and require no treatment, but the fear is that a rash of new infections could overwhelm hospitals and health authorities, especially in poorer countries.
The last pandemic — the Hong Kong flu of 1968 — killed about 1 million people. Ordinary flu kills about 250,000 to 500,000 people each year.
Swine flu is also continuing to spread during summer in the northern hemisphere. Normally, flu viruses disappear with warm weather, but swine flu is proving to be resilient.

Cash for Clunkers to end on Monday (AP)

WASHINGTON – Car shoppers have until Monday night to take advantage of lucrative Cash for Clunkers rebates from the government, and the Obama administration is hoping for a smooth ending to a program that has spurred auto sales but created headaches for many auto dealers.
The popular program will end at 8 p.m. EDT Monday after burning through much of its $3 billion in funding in just a month. All new deals will have to be completed and dealers must file their paperwork by the deadline in order to get repaid for the big incentives.
President Barack Obama and administration officials declared the program a success Thursday, saying it has revitalized the ailing auto industry and finally brought reluctant car buyers back to dealership lots. Originally a $1 billion program, Cash for Clunkers was boosted to $3 billion in early August after heavy customer demand nearly depleted its funds in just one week.
Transportation Secretary Ray LaHood said the program has been "a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work." He said the department was "working toward an orderly wind down of this very popular program."
But it has also created problems for dealers, many of whom have yet to be repaid for the clunker deals they have made. Under the program, dealers take rebates of $3,500 or $4,500 off the price of a new car in return for older, less fuel-efficient trade-ins that are sent to the scrap heap. They then must submit a 13-page application with proper documentation of the sale in order to get repaid.
That has left many dealers with unpaid claims worth hundreds of thousands of dollars.
"It has brought in some traffic that we would not have had, but if you don't get paid, it is all for naught," said Alton Owen Jr., sales manager at Owen Ford in Jarratt, Va. His dealership won't be offering the clunker deals this weekend because it has yet to be repaid for 21 sales.
Obama and LaHood pledged that dealers will get their money back. But government data shows that many claims are still outstanding. As of Thursday, 457,000 sales worth $1.9 billion had been received. About 40 percent of those claims have been reviewed, but only $140 million, or about 7 percent of the claims dealers submitted, have actually been paid.
Government officials said there were no plans to extend the program again. The Monday deadline was set to avoid surpassing the $3 billion funding level, given deals that may be made this weekend and those that are still in the pipeline for approval.
Applications for rebates will not be accepted after the Monday deadline, administration officials said. The Transportation Department cautioned dealers about making sales this weekend, advising them to make sales only where the buyer's paperwork is clearly in order and can be submitted immediately for repayment. Dealers will be able to resubmit rejected applications after the deadline.
John McEleney, chairman of the National Automobile Dealers Association, said he remained concerned that so few dealers had been reimbursed for Clunker deals. But he said the Monday deadline should give dealers time to get their paperwork in order.
"I think if we can get a clean cutoff Monday and get everything processed by then, it will have been a pretty darned successful program," he said.
But Mike Mahalak, who runs a Dodge, Chrysler and Jeep dealership in Winter Haven, Fla., said the Monday end date could lead to a similar rush that nearly crippled the federal government's computer systems that were set up to handle claims.
"That Web site will lock up again once everyone is cramming it again on Monday," Mahalak said. The administration has said it expanded the capacity of the computer network in an effort to improve the process for dealers.
Obama said in an interview Thursday that the program has been "successful beyond anybody's imagination" but dealers were overwhelmed by the response of consumers. He pledged that dealers "will get their money." The administration has said it has tripled the number of staffers sorting through the paperwork.
It remains unclear whether the Monday deadline will create a new rush of sales this weekend and if dealers will continue to make deals knowing their claims have to be filed in four days.
To help cash-strapped dealers, both Chrysler and General Motors said they would begin providing cash advances to help dealers cover any cash shortfalls related to the program. The automakers said they would provide the advances for up to 30 days to dealers who have already completed a sale and that they will be available as long as the program remains in effect.
The program provided at least a temporary boost for the beleaguered auto industry and dealers.

GM announced plans to rehire more than 1,300 workers and automakers have been paying overtime to ramp up production. Hyundai recalled 3,000 workers in Alabama. Many dealers have made hundreds of sales and reported that even customers who don't qualify for the program are visiting lots to buy new cars.

Jeremy Anwyl, CEO of the auto Web site Edmunds.com, said the government incentives could dry up sales in September and October, along with a tight vehicle inventory, higher prices for new models arriving in the fall and consumers who are focused on finding a good deal.

"It's been a nice party for a few weeks. The hangover, I don't think, is going to be anywhere near as much fun," Anwyl said.

Drew, Lester lead Red Sox past Blue Jays (AP)

TORONTO – J.D. Drew homered twice, Jon Lester pitched eight strong innings and the Boston Red Sox beat the Toronto Blue Jays 8-1 on Thursday to complete a three-game sweep.
Victor Martinez connected for the second straight night for the Red Sox, who have hit two or more homers in six consecutive games, nine of 10 and 15 of 19.
The Red Sox have 33 homers in August, two shy of the team record for that month set in 2006. The AL wild card leaders have 10 games remaining this month, including a pivotal series this weekend against the East-leading New York Yankees at Fenway Park.
Drew hit a leadoff homer to right in the second, a two-run drive to almost the same spot in the third and finished with four hits. The homers, Nos. 14 and 15, came off rookie left-hander Brett Cecil. It was Drew's seventh multihomer game and first since June 8, 2007, at Arizona.
Martinez hit a leadoff homer off the facing of the second deck in the seventh off Shawn Camp as the Blue Jays lost their fifth straight.
Lester (10-7) allowed one run and three hits to win for the first time in five starts and improve to 3-1 with a 1.65 ERA in four outings against Toronto this season. After the first three batters reached safely, the left-hander set down 22 of the final 24 batters he faced.
Fernando Cabrera finished the three-hitter for the Red Sox.
Cecil (5-2) allowed six runs, four earned, over 4 1-3 innings in his first game since he left a home start against Baltimore on Aug. 8 with a sore left knee.
The loss was Cecil's first since a May 20 defeat at Boston, a game in which he allowed five homers, including four in one inning. Of the 11 homers he has allowed this season, seven have come against the Red Sox.
Toronto made three errors, none stranger than Cecil's miscue in the fourth. With Jason Bay on first after a leadoff walk, Cecil dropped a throw from catcher Rod Barajas, then requested a new ball from the umpire but failed to call time before firing the old one into the third-base dugout. Bay moved to third on the play and scored two batters later when Mike Lowell singled through a drawn-in infield. Drew followed with his second home run.
The Red Sox chased Cecil and tacked on two more runs in the fifth. Dustin Pedroia hit a leadoff single and Kevin Youkilis drew a one-out walk, bringing lefty Brian Tallet out of the bullpen. Pedroia scored when John McDonald threw the ball away on Bay's infield chopper, sending Youkilis to third. David Ortiz followed with an RBI grounder.
The Blue Jays loaded the bases with no outs in the first and only came away with one run. Marco Scutaro scored when Barajas grounded into a double play and Kevin Millar struck out to end the inning.
NOTES: Pedroia rejoined the team after spending two days in Boston as his wife gave birth to the couple's first child. ... C Jason Varitek (neck) missed his third straight game. "We'll just keep evaluating him and see how he's doing," Red Sox manager Terry Francona said. ... Blue Jays 3B Edwin Encarnacion left after three innings with a sore left knee and was replaced by McDonald.