South Korean consumer confidence fell to a three-month low in December, as concern the political outlook in the North will worsen in the wake of Kim Jong Il
The Sappington Farmers Market, which filed for bankruptcy Friday, will remain open despite its troubles.
“The reorganization of Sappington Farmers Market will allow the store to remain open and viable,” said Nancy Smith, the market’s manager, in a written statement. “We feel this will position us to be successful in the future.”
Smith didn’t provide an interview.
The store, on Watson Road in Marlborough, has roots going back to the early 1980s and has been at its present location since 1995, where it has gained a loyal following of bargain hunters and proponents of local farming.
The store’s mission has long been to support area farmers by featuring their products.
In her statement released Saturday, Smith said the store would continue to feature local farmers and would continue distributing their products not only through the store but through schools, restaurants and a “mobile market.”
The store’s founder, Tessa Greenspan, sold it in 2008 to a cooperative of small-scale farmers known as the Missouri Farmers Union, which formed a company called Farm to Family Naturally LLC to buy the business.
Farm to Family Naturally, which does business as Sappington Farmers Market, was the organization that filed for bankruptcy on Friday.
Members of the original cooperative who purchased the store have since left, according to employees.
A slew of bad news on European banks has fueled fears about their ability to survive the debt crisis and raised the prospect of a new global credit crunch.
Five large lenders saw their credit ratings downgraded this week, and a sixth, Commerzbank, saw its stock plunge on speculation it might need more government support. As uncertainty grows that a fellow lender might collapse, banks are cutting back on lending to each other for fear of not getting their money back.
When that credit between banks dries up, loans soon stop flowing to businesses and households, stunting economic growth. On Thursday, the rates banks charge to lend dollar to one another remained at their highest level since September.
The heart of Europe’s problem is bad government debt _ a phrase that until recently was nearly an oxymoron. Government bonds of wealthy countries were long considered the safest of safe assets.
But as the debt loads of European countries soared, investors began to wonder if their governments could pay back the loans, so they began charging more to extend those loans. That only fed a vicious circle: The more governments had to pay to borrow money, the more trouble they had paying it back. Eventually, Greece had to admit it wouldn’t repay all of its loans _ and that shattered confidence in other eurozone countries. Would Italy renege? Would Spain? France?
European leaders have been struggling to reassure investors that they will pay back their debts and to work out a way to make sure they never again grow so large. But in the meantime, the bonds are all still out there, their value has plunged, and much of them sit in Europe’s banks.
In addition, banks are struggling to raise more cash for their rainy-day funds, their stocks are plunging and they’re facing higher borrowing rates.
“European banks remain the nexus of most European problems,” analyst Huw Van Steenis wrote in a Morgan Stanley research note.
It’s the banks that “transmit” the debt crisis to businesses and consumers, he argues. Because what were traditionally their safest assets _ government bonds _ are now among some of their most suspect, banks are struggling to secure the loans they need to fund their day-to-day operations. Until the debt crisis erupted, those government bonds typically served as collateral for loans from other banks.
When banks stop lending to one another, they also stop lending to the “real economy”: homeowners, consumers, businesses. The European Central Bank’s lending survey in October, the latest available, showed that standards for lending to businesses tightened significantly, and that banks expected them to tighten even further through the end of the year.
The banks also told the ECB that they were finding it increasingly hard to get their hands on loans. The percentage of banks saying their access to markets was tightening skyrocketed in the October report. They expected that situation to improve a bit toward the end of the year but to remain difficult.
Even that grim assessment may have been overly rosy: The rates banks charge each other to borrow dollars overnight has been steadily increasing in recent weeks. On Thursday, the rate known as LIBOR was 0.1505 percent _ a high matched once last week but not surpassed since late September.
The ECB has stepped in to lend to banks when no one else will. As a measure of how bad things have gotten, the ECB supplied banks with a total average of euro615.3 billion ($801 billion) in ready money to operate their businesses over the three months to Nov. 8. That’s up euro99.1 billion ($129 billion) from what banks needed in the previous three months.
LONDON/PARIS (Reuters) - A European summit deal to strengthen budget discipline in the euro zone failed to restore financial market confidence on Monday, forcing the European Central Bank to step in again gingerly.
The euro fell, stocks slid and borrowing costs for Italy and Spain rose as investors weighed the outcome of last week’s summit that split the European Union, with Britain blocking treaty change and forcing euro zone countries to negotiate a fiscal accord outside the Union.
Friday’s initial market rally petered out in less than 24 trading hours due to legal uncertainty surrounding the new pact and the absence of an unlimited financial backstop for the single currency.
French President Nicolas Sarkozy said the legal basis of a new accord to enforce debt and deficit rules in the 17-nation euro area with quasi-automatic sanctions and intrusive powers to reject national budgets would be worked out before Christmas.
“In the next fortnight, we will put together the legal content of our agreement. The aim is to have a treaty by March,” Sarkozy told newspaper Le Monde in an interview.
“You have to understand this is the birth of a different Europe — the Europe of the euro zone, in which the watchwords will be the convergence of economies, budget rules and fiscal policy. A Europe where we are going to work together on reforms enabling all our countries to be more competitive without renouncing our social model,” he said.
Traders said the ECB intervened to buy short-term Italian debt after yields on Italian and Spanish debt spiked. But ECB sources told Reuters last week that purchases would remain limited with a maximum ceiling of 20 billion euros a week.
There is no prospect of a “big bazooka” to shock the markets.
Despite the central bank dabbling, Italian 5-year bond yields shot up above 7 percent, widely seen as a danger level while 10-year yields spiked above 6.8 percent and Spanish 10-year yields topped 6 percent.
Investors’ appetite for short-term paper drove Italian one-year borrowing costs down just below 6 percent at an auction but yields remain uncomfortably high.
“Let’s not raise expectations too high, there will be more summits,” credit ratings agency Standard & Poor’s chief European economist Jean-Michel Six said.
“Time is running out and action is needed on both sides of the equation, on the fiscal and monetary side,” he told a business conference in Tel Aviv.
S&P has put 14 euro zone governments on watch for a possible rating downgrade in the coming weeks, arguing that the deepening debt crisis and looming recession will increase their potential liabilities and reduce their ability to cope with them.
If some of the euro zone’s ‘AAA’-rated members are downgraded, it would call into question the solidity of the euro zone’s rescue fund, which would likely suffer a similar fate fast cash loans.
“There is probably yet another shock required before everyone in Europe reads from the same page, for instance a major German bank experiencing difficulties in the market,” Six said. “Then there would be a recognition that everyone is on the same boat and even German institutions can be affected by this contagion.”
Interbank lending rates in the euro zone fell to their lowest level since May after the ECB threw cash-starved banks a lifeline last week by offering unlimited three-year liquidity to counter a credit crunch.
Political aftershocks from Friday’s historic rift between Britain and the rest of the 27-nation bloc continued to shake Europe on Monday with Prime Minister David Cameron facing tension in his coalition and doubts in the business community.
Cameron was assured of a hero’s welcome from Eurosceptics in his Conservative party in parliament but faced a backlash from his Liberal Democrat coalition allies when he explains a veto that has cast Britain adrift from its continental partners.
LibDem Deputy Prime Minister Nick Clegg said on Sunday he was “bitterly disappointed” with an outcome that would diminish Britain’s global influence and was bad for jobs and business.
In business, the chief executive of the world’s largest advertising group, Martin Sorrell of London-based WPP, told Reuters that Britain’s interests would be better serviced “inside the EU tent” than on the sidelines.
In Brussels, officials were groping for a strong legal basis for the planned fiscal compact, with Britain arguing that the euro zone cannot use the EU treaty institutions — the European Commission and the European Court of Justice.
European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters most of the practical measures to strengthen budget enforcement could be implemented immediately under a set of rules known as the “six-pack” agreed in October.
Euro zone finance ministers may hold an extra meeting before the end of the year to try to nail down details of the agreement before their winter break, diplomats said.
The euro area faces the next potential crunch point in mid-January when Italy, which has a debt mountain of 1.9 billion euros or 120 percent of its annual output, has to start issuing tends of billions of euros in bonds towards a 2012 total of 340 billion euros needed to roll over maturing debt.
Michael Leister, rate strategist with German bank WestLB in Duesseldorf, said the summit outcome had done little to restore confidence in the absence of stronger central bank action.
“The question is will this help to stabilise sentiment? I don’t believe so, given that those comments from
Diplomats frazzled by sleeplessness debated into the early hours of Sunday at a U.N. conference over a complex and far-reaching program meant to set a new course for the global fight against climate change for the coming decades.
South Africa’s foreign minister and chairman of the 194-party conference, Maite Nkoana-Mashabane, told delegates that failure to agree after 13 days of work would be an unsustainable setback for international efforts to control greenhouse gases.
“This multilateral system remains fragile and will not survive another shock,” she told a full meeting of the conference, which had been delayed more than 24 hours while ministers and senior negotiators labored over words and nuances.
The proposed Durban Platform offered answers to problems that have bedeviled global warming negotiations for years about sharing the responsibility for controlling carbon emissions and helping the world’s poorest and most climate-vulnerable nations cope with changing forces of nature.
The package must be approved by consensus, and no vote will be called. Determined opposition from even a small group of countries would unravel the deal put together after hundreds of hours of contentious negotiations.
Speakers from many developed countries said the package of documents more than 100 pages thick did not go far enough to help poor nations and did not require industrial countries to make more immediate and serious cuts in their carbon emissions. But most said they would accept it for lack of a better option.
But not Venezuela. “We all know this is a very bad agreement, that it will require more work next year and it cannot be adopted,” chief delegate Claudia Solerno said.
After weeks of being accused of obstructionism and delay, U.S. climate envoy Todd Stern voiced surprisingly strong support for the deal.
“This is a very significant package. None of us likes everything in it. Believe me, there is plenty the United States is not thrilled about,” Stern said. But the package captured important advances that would be undone if it is rejected.
Saturday afternoon, as negotiations dragged on with no sign of breakthrough, some ministers and top negotiators left Durban with no assurance of an agreement.
European Commissioner Connie Hedegaard, drawn and fatigued after two nights with minimal sleep, warned that failure in Durban would jeopardize new momentum in acting against global warming.
Introducing the package late Saturday, Nkoana-Mashabane said its four documents, which were being printed as she spoke, were an imperfect compromise, but they reflected years of negotiations on the most central political responses to global warming.
The package would give new life to the 1997 Kyoto Protocol, whose carbon emissions targets expire next year and apply only to industrial countries.
A separate document obliges major developing nations like China and India, excluded under Kyoto, to accept legally binding emissions targets in the future, by 2020 at the latest.
Together, the two documents overhaul a system designed 20 years ago that divide the world into a handful of wealthy countries facing legal obligations to reduce emissions, and the rest of the world which could undertake voluntary efforts to control carbon.
The European Union, the primary bloc falling under the Kyoto Protocol’s reduction commitments, said an extension of its targets was conditional on major developing countries also accepting limits with the same legal accountability. The 20th century division of the globe into two unequal parts was invalid in today’s world, the EU said.
The package also would set up the structure and governing bodies of a Green Climate Fund, which will receive and distribute billions of dollars promised annually to poor countries to help them adapt to changing climate conditions and to move toward low-carbon economic growth.
But the document made no specific mention of how those funds would be mobilized. Wealthy countries have pledged $100 billion a year by 2020 to poor countries, scaling up from $10 billion today.
The remaining document of more than 50 pages lays out rules for monitoring and verifying emissions reductions, protecting forests, transferring clean technologies to developing countries and scores of technical issues.
In the final hours, talks focused on unresolved differences on a clause encouraging countries to pledge greater reductions of greenhouse gases and to close what is known as the “ambition gap.” More than 80 countries have made either legally binding or voluntary pledges to control carbon emissions. But taken together, they will not go far enough to avert a potentially catastrophic rise in average temperatures this century, according to scientific modeling and projections.
Hedegaard said a lack of ambition could derail progress made on a host of other issues.
Countries had made concessions that they had resisted for years, and it would be “irresponsible” to lose that momentum now, she said.
Strong language on curbing emissions is of prime importance to small islands endangered by rising ocean levels and by many poor countries who live in extreme conditions that will be worsened by global warming.
Throughout the talks, the U.S., China and India remained stubbornly opposed to the EU’s plan to negotiate a successor to the Kyoto accord by 2020 that also would put them under legal obligations. The talks would conclude by 2015, allowing five years for it to be ratified by national legislatures. The plan insists the new agreement equally oblige all countries _ not just the few industrial powers _ to abide by emission targets.
Hours were devoted to arcane but diplomatically important questions of whether the objective of the talks was a legal “framework,” an “outcome,” or an “instrument.”
The expiring of Kyoto’s targets have hung over the U.N. process for years, and was the most contentious issue dividing rich and poor nations.
Developing countries were adamant that the Kyoto commitments continue since it is the only agreement that compels any nation to reduce emissions. Industrial countries say the document is deeply flawed because it makes no demands on heavily polluting developing countries. It was for that reason that the U.S. never ratified it.
Agreement by developing countries to accept binding targets essentially redraws the map. “That’s a very big deal,” said Samantha Smith, of WWF International. “That reflects a major macroeconomic and geopolitical change” in climate negotiations.
MEXICO, Mo.
Lawmakers, responding to pleas from industry and foreign governments, have tentatively agreed to block the Obama administration from requiring that lithium batteries be treated as hazardous cargo because of the danger of fires during flight.
The deal came in talks on a long-term funding bill for the Federal Aviation Administration, Rep. Nick Rahall, D-W.Va., told The Associated Press. The bill will effectively block new battery-shipment rules by insisting the U.S. follow international standards, which are less stringent, said Rahall, top Democrat on the House Transportation and Infrastructure Committee.
Pilot unions said the international standards don’t provide enough safety and are weaker than rules the administration proposed nearly two years ago but never made final. The unions and the National Transportation Safety Board for several years have sought new rules on air shipments of the batteries to prevent fires that can cause air crashes and deaths.
“We’re very concerned that unless this issue is addressed we’ll continue to see accidents and we’ll continue to see fatalities,” said Mark Rogers, who heads the Air Line Pilots Association’s committee on hazardous cargo.
The U.S. shouldn’t “adopt an existing international standard on lithium batteries that’s generally recognized as inadequate,” Robert Travis, president of Independent Pilots Association, which represents UPS pilots, said in a statement.
The FAA bill “is an opportunity for the U.S. to lead by setting a higher standard on the carriage of lithium batteries,” Travis said.
A fire broke out five years ago in cargo containing lithium batteries and other goods on a United Parcel Service plane, forcing an emergency landing in Philadelphia. No one was killed, but one of the pilots said he was able to escape with seconds to spare. The cause of the fire wasn’t conclusively determined, but batteries were suspected.
Last year, another UPS plane with a fire raging on board, and carrying thousands of lithium batteries, crashed near Dubai in the United Arab Emirates, killing both pilots. The accident is still under investigation, but preliminary reports indicate investigators have focused much of their attention on the batteries.
The use of rechargeable lithium-ion and non-rechargeable lithium-metal batteries has soared since the late 1990s. Millions of products from laptops to cellphones to watches contain the batteries. And, in an age of increasing globalization of trade, those products are often shipped by air to and from the United States and other countries.
But the batteries can catch fire if they are damaged, exposed to high temperatures or packaged incorrectly. Lithium-ion battery fires can reach 1,100 degrees, close to the melting point of aluminum, a key material in airplane construction. Lithium-metal battery fires are far hotter, capable of reaching 4,000 degrees.
The administration proposed regulations that would have threated lithium batteries and goods containing the batteries as hazardous materials requiring special labeling and training of workers who package and handle them.
But they were opposed by a broad swath of powerful industries, including battery-makers, electronics manufacturers and retailers, cargo airlines, and at least a half dozen foreign governments who said they would disrupt international trade. The opponents said the regulations would cost them hundreds of millions of dollars in added packaging, paperwork and employee training. The rechargeable battery industry alone says the rules would cost more than $1 billion in the first year.
Opponents of the proposed rules turned for help to Congress, where House Republicans passed an FAA funding bill that requires the U.S. to follow standards set by the International Civil Aviation Organization, a UN agency, effectively blocking the rules. The Senate did not include the measure in its version of the funding bill, but under the tentative deal reached Friday, the House-Senate compromise bill would include it.
Kara Ross, a spokeswoman for United Parcel Service, said the cargo carrier wasn’t aware of the agreement reached by lawmakers but supports the House provision.
A spokesman for PRBA-The Rechargeable Battery Association declined to comment.
Besides Rahall, the other lawmakers involved in negotiations were Rep. John Mica, chairman of the House committee, Sen. Jay Rockefeller, D-W.Va., and Kay Bailey Hutchison, senior Republican member of the Senate committee.
By day, Wade Brosz teaches American history at an A-rated Florida middle school. By night, he is a personal trainer at 24 Hour Fitness.
Brosz took the three-night a week job at the gym after his teaching salary was frozen, summer school was reduced drastically, and the state bonus for board certified teachers was cut. He figures that he and his wife, also a teacher, are making about $20,000 less teaching than expected to, combined.
“The second job was to get back what was lost through cuts,” said Brosz, a nationally board certified teacher. “It was tougher and tougher to make ends meet. I started personal training because it’s flexible hours.”
Second jobs are not a new phenomenon for teachers, who have historically been paid less than other professionals. In 1981, about 11 percent of teachers were moonlighting; the number has risen to about one in five today. They are bartenders, waitresses, tutors, school bus drivers and even lawnmowers.
Now, with the severe cuts many school districts have made, teachers like Brosz, who hadn’t considered juggling a second job before, are searching the want ads. The number of public school teachers who reported holding a second job outside school increased slightly from 2003-04 to 2007-08. While there is no national data for more recent years, reports from individual states and districts indicate the number may have climbed further since the start of the recession.
In Texas, for example, the percentage of teachers who moonlight has increased from 22 percent in 1980 to 41 percent in 2010.
“It’s the economy, primarily,” said Sam Sullivan, a professor at Sam Houston State University, which conducts the survey.
Rita Haecker, president of the Texas State Teachers Association, said cuts in education have forced many teachers to take furlough days. It’s an extra strain because, unlike in the past, many teachers are now the primary breadwinner, either because they are a single parent or their spouse is unemployed, Haecker said.
“It affects their morale in the classroom,” she said. “The last thing we want is our teachers worried about how they are going to pay their bills.”
The average salary for a public school teacher nationwide in the 2009-10 school year was $55,350, a figure that has remained relatively flat, after being adjusted for inflation, over the last two decades. Starting teacher salaries can be significantly lower; compared to college graduates in other professions, they earn more than $10,000 less when beginning their careers.
“I think people have felt the need to supplement their teaching salaries in order to have a middle class lifestyle,” said Lawrence Mishel, president of the Economic Policy Institute, which published a study this year concluding the average weekly pay of teachers in 2010 was about 12 percent below that of workers with similar education and experience.
The Organization for Economic Cooperation and Development, which collects data on student performance across the globe, advised the United States earlier this year to work at elevating the teaching profession in order to improve student performance. The recommendations included measures like raising the bar for who is selected to become a teacher, providing better training and better pay. In many nations where students outperform the U.S. in reading, math and science, including Japan and South Korea, teachers earn more than they do in the United States.
“International comparisons show that in the countries with the highest performance, teachers are typically paid better relative to others, education credentials are valued more, and a higher share of educational spending is devoted to instructional services than is the case in the United States,” the OECD report concluded.
While moonlighting isn’t unique to teachers, they do tend to have second or third jobs at a higher rate than other professionals. One researcher estimates their moonlighting rates may be four times higher than those of other full-time, college educated salaried workers.
Eleanor Blair Hilty, an education professor at Western Carolina University, said most teachers make around $5,000 through outside work. Yet when asked if they would quit if given a raise in the equivalent amount, most said no. Her conclusion: teachers are getting something more from their second job other than an extra paycheck.
“A lot of it has to do with what I think is wrong with the teaching profession,” Hilty said, noting that teachers have little autonomy and control over what and how they teach. “They found their moonlighting jobs to be satisfying.”
Policies on moonlighting vary by district; some have no written guidelines, while others merely advise teachers to ensure any outside work doesn’t interfere with their duties at school.
In North Carolina, a survey conducted in 2007 found 72 percent of teachers moonlight, whether it’s an after-school job or summer employment.
“There’s a culture of silence,” Hilty said. “Everybody knows that moonlighting goes on and they know it’s part of what teachers do but nobody likes to talk about it very much.”
Michelle Hartman, a language arts and science teacher at a Plantation, Fla., elementary school, is balancing two other jobs, one as an organist with the local Presbyterian church, playing at church services, weddings and funerals, and another doing janitorial work twice a week at her father’s accounting firm.
The single mother has a master’s degree in educational leadership and has been a teacher 15 years. But she says she cannot afford to leave any of her extra jobs, which she said brings in about $6,000 year, in addition to her $46,000 teaching salary.
“I’m tired some days,” Hartman said. “But no matter what, it doesn’t matter because I know I need to be there for the students.”
Yet working an extra job inevitably does take a toll. On top of their work in the classroom, teachers have to grade papers and plan lessons _ work they often do at home. One study on teachers who moonlight in Texas cited the case of a teacher who ended up grading papers at the restaurant where she worked. The same study found that all the teachers interviewed reported that moonlighting had a negative effect on their health. In the Texas survey, a majority said moonlighting was detrimental to their work in the classroom.
“Yes, they go 100 percent, but they’re still tired,” said Dave Henderson, a retired professor who worked on the study for many years.
Albert Ochoa, a middle school art and publications teacher in Austin, Texas, works at least five hours a night at UPS as a shipper, a job he’s had since graduating from college in 1977. Even though he is now toward the higher end of the teacher salary schedule, he said he cannot afford to quit either job.
He said he’d have to earn another $2,000 a month in order to support his wife, who is on medical disability, and son, and not work a second job. “I’ve had opportunities to go work full time at UPS and do other things,” Ochoa said. “But I enjoy what I do. I like teaching.”
Democrats on Congress’ supercommittee secretly presented Republicans with a revised deficit-cutting proposal earlier this week that calls for a blend of $1 trillion in spending cuts and $1 trillion in higher tax revenue over the next decade, officials in both parties said Wednesday night, adding that compromise talks remain alive though troubled.
The previously undisclosed offer scaled back an earlier Democratic demand for $1.3 trillion in higher taxes, a concession to Republicans. At the same time it jettisoned a plan to slow the growth in future cost-of-living increases in Social Security benefits, a provision liberal Democrats oppose.
The one-page proposal was handed to Republicans at a meeting Monday night attended by some but not all members of the supercommittee. At the same session, GOP lawmakers in attendance advanced a revised proposal of their own that signaled for the first time they would be willing to accept higher revenues as part of a plan to cut deficits over the next decade.
Given the unusual secrecy of the meeting and the committee’s Nov. 23 deadline, it appeared that the pace of activity on the panel was accelerating. Less clear was whether there was still time to bridge enormous differences on priorities, or whether each side was laying the groundwork for trying to blame the other in case gridlock triumphs.
The committee, comprising six Republicans and six Democrats, has been working for weeks. Evidence of progress has been scarce, with Republicans demanding large cuts in benefit programs such as Social Security and Medicare, while Democrats pressed for additional tax revenue as a condition for agreeing to make deep spending cuts.
Few details are known of the session Monday night, except that Sen. Pat Toomey, R-Pa., outlined a plan on behalf of the four Republicans in attendance, and Sen. Max Baucus, D-Mont., countered with the revisions in an earlier Democratic proposal.
One official said the meeting lasted several hours.
Any progress that may have been made by the panel has largely been overshadowed in the past two days by a Democratic campaign to dismiss the GOP proposal as a prescription for deep tax cuts for the wealthy at the expense of the middle class.
In a sign of the political struggle unfolding, Democrats circulated a four-page analysis that relied not on a review of what Toomey outlined, but on what they described as a different, similarly drawn proposal.
Republicans countered that for all the rhetoric, both sides had shown flexibility on the issues that long have been at the root of Congress’ inability to compromise on sweeping plans to cut deficits.
“Republicans have put revenues on the table. Democrats have put entitlements on the table,” said Sen. Lamar Alexander, R-Tenn. “They both need to put more of each on the table.”
Alexander said the so-called supercommittee could expect help from a bloc of 45 senators that have signed on to a letter pledging support for a deficit bargain that mixes new revenues with curbs on the growth of government benefits programs payday loan lenders.
Democrats sounded far less upbeat.
“I have yet to see a real, credible plan that raises revenue in a significant way to bring us to a fair, balanced proposal,” said Sen. Patty Murray, D-Wash., the co-chair of the 12-member supercommittee.
In something of a dissent, the No. 2 Senate Democratic leader, Richard Durbin of Illinois, said he considered this week’s GOP offer “an honest effort” and “a breakthrough that can lead to an agreement. That’s what we need.”
Asked why he considered it to be a breakthrough, he told reporters, “The word `revenue.’ It is a breakthrough.”
Durbin said the bipartisan group of 45 senators planned to release a statement later Wednesday urging the supercommittee to keep working toward a target in the $4 trillion range, well above its mandated savings target of $1.2 trillion to $1.5 trillion.
The revised Democratic plan totaled $2.3 trillion in savings over the next decade, including projected savings in interest costs the government would realize from lower deficits.
Spending on Medicare would be restrained by $350 billion over a decade, and on Medicaid, by $50 billion.
Another $200 billion would come from defense, and an identical amount from a broad swath of government programs ranging from the parks to transportation.
Democrats also called for an overhaul of the tax code that would result in an individual rate of no higher than 35 percent and a scaling back of itemized deductions.
Republicans, too, favor tax reform. In his presentation, Toomey called for a top rate of 28 percent, which appears to require deeper cutbacks in the existing deductions than Democrats favor in order to yield $250 billion in higher revenue.
Aides in both parties requested anonymity to describe the GOP proposal, and they differed on some of the details.
Broadly speaking, however, the GOP plan would raise new revenues of at least $500 billion, both skimmed off the top as Congress completes an overhaul of the tax code and from proposals such as auctioning broadcast spectrum, raising Medicare premiums and increasing aviation security fees.
The plan also would cut spending by about $700 billion, mixing a less generous cost-of-living adjustment for Social Security beneficiaries with further cuts to agency operating budgets and curbs on the booming growth of Medicare and the Medicaid health care program for the poor and disabled.
Lower interest payments on the national debt would provide the remaining savings.
Italian Premier Silvio Berlusconi has won a much-watched vote in Parliament but it shows he can no longer count on an overall majority in the Chamber of Deputies.
In parliament, 308 voted in favor, 321 abstained and no one voted against.
The opposition immediately demanded that Berlusconi resign to calm financial markets, although he has always refused those calls.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
ROME (AP) _ Premier Silvio Berlusconi geared up for one of the most critical votes of his long political career Tuesday, as his main ally urged him to resign and Italy’s political uncertainty rocked financial markets for yet another day.
Berlusconi did not immediately respond to the demand, but he has repeatedly resisted all calls for his resignation before his term ends in 2013.
Berlusconi’s government is under intense pressure to enact quick reforms to shore up Italy’s defenses against Europe’s raging debt crisis. However, a weak coalition and doubts over Berlusconi’s leadership have ignited market fears of a looming Italian financial disaster that could bring down the 17-nation eurozone and shock the global economy.
“We asked him to step aside, take a step to the side,” Northern League leader Umberto Bossi told reporters ahead of a key vote in Parliament that could force Berlusconi’s resignation. Bossi is the volatile ally who also brought down Berlusconi’s first conservative government in 1994.
On the face of it, Tuesday’s vote is just a routine measure to approve 2010 state finances, but it has now become a test of Berlusconi’s political strength.
Italy’s center-left opposition said it would abstain in Tuesday’s voting, to make it clear just how fragile Berlusconi’s forces in Parliament are. If he is backed by fewer than 316 deputies _ or less than half of the 630-member chamber _ it would show the prime minister can no longer count on a majority in the lower house of Parliament, even though the government could still mathematically win the vote.
Bossi said the man Berlusconi has already picked as his successor, former Justice Minister Angelino Alfano, should now lead the government.
But it would be up to the Italian president, Giorgio Napolitano, to decide whether to appoint a new leader or dissolve parliament and call early elections. He would likely sound out political leaders before deciding.
Added Bossi: “Today, nothing will happen.”
Italy is the eurozone’s third-largest economy, with debts of around euro1.9 trillion ($2.6 trillion). Representing 17 percent of the eurozone’s gross domestic product, it is considered too big for Europe to bail out like the continent already has done for Greece, Portugal and Ireland.
Even worse, a substantial part of Italy’s debt needs to be rolled over in the next few years _ the nation needs to raise euro300 billion ($412 billion) in 2012 alone _ just as interest rates for it to borrow have been soaring.
Italy’s borrowing rates spiked Tuesday to their highest level since the euro was established in 1999. By mid-afternoon, the yield on Italy’s ten-year bonds was up 0.08 percentage point at 6.62 percent, down from an earlier high of 6.74 percent. A rate of over 7 percent is considered unsustainable and proved to be the trigger point that forced the other three eurozone nations into accepting financial bailouts.
Even the business leaders who once enthusiastically backed the media mogul’s leadership have been upset for months, saying Berlusconi’s government has failed to revive Italy’s stalled economy.
“(Italy) cannot go forward” with the soaring spread. “The country cannot stay in these conditions,” said Emma Marcegaglia, who leads a politically influential Italian business lobby.
The opposition center-left has long demanded the 75-year-old leader’s resignation, citing sex scandals, criminal prosecutions and legislative priorities it says are aimed at protecting his own business interests rather than those of the country. However, it has failed to come up with a leader who can unite the opposition.
Berlusconi appeared to be frantically trying to line up vote after vote, with at least two party dissenters visiting his Rome residence Tuesday as parliament resumed debate ahead of the vote.
One, lawmaker Isabella Bertolini, told reporters upon leaving she would vote in favor of the government. She said Berlusconi had laid out for her “all the possibilities and options that he’s evaluating: Stay, step back, step aside.”
Finance Minister Giulio Tremonti hurriedly left a eurozone finance ministers meeting in Brussels to get back to Rome for the vote.
But at least one deputy from Berlusconi’s People of Freedom Party won’t be there. Lawmaker Alfonso Papa, who is being investigated in a corruption scandal, is under house arrest.
If he gets through Tuesday’s hurdle, Berlusconi has indicated next week’s vote on the austerity measures would be a confidence vote. If it loses that, he would have to resign.
Antonio Di Pietro, a leader of a small center-left opposition party, told Sky TG24 TV that Berlusconi’s “political adventure has been over for a while now.” However, he doubted that Berlusconi would voluntarily leave.
One of Berlusconi’s closest allies, lawmaker Francesco Cicchitto, told reporters that coalition leaders will take stock immediately after the vote.
“One thing at a time. First the vote, let’s let it happen. Then we’ll reflect,” he said.
International financial officials and the markets, meanwhile, fretted over how long it was going to take for Italian lawmakers to approve measures promised weeks ago by Berlusconi to rein in Italy’s galloping public debt.
“I’m not making any judgment on Mr. Berlusconi personally. But I think there is a problem of confidence,” French Foreign Minister Alain Juppe told French radio RTL.
During a G-20 summit last week, Berlusconi had to take the humiliating step of asking the International Monetary Fund to monitor the country’s reform efforts. On Wednesday, a separate European Union monitoring mission is to begin work in Rome to review financial reforms taken so far.
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