Skip to Content

June 2009

Cash-strapped states up against budget deadlines (Reuters)

SAN FRANCISCO (Reuters) –
California prepared on Tuesday to resort to issuing IOUs as the giant but cash-strapped U.S. state struggled to approve a new budget in time for the new fiscal year that begins on Wednesday.

The IOUs, which are notes promising payment to vendors and local agencies, or shutting down some public services, are among measures that California and other states may have to rely on as they contend with staggering budget gaps caused by the U.S. recession.

Several U.S. states are due to start their fiscal years on July 1 with budget talks at an impasse. California, the most populous state, is especially hard hit.

The Golden State, hit by a leap in unemployment and a crash in property values, is suffering its worst tax revenue fall since the Great Depression and faces a $24.3 billion budget deficit.

"It's been a sort of perfect storm, of a very deep recession hitting us and exposing the weakness of depending on revenue sources sensitive to economic cycles," labor lobbyist Barry Broad said.

Fixing the massive budget gap "is going to require pain. That's the only way out of it," added Jack Pitney, a professor of government at Claremont McKenna College.

California Governor Arnold Schwarzenegger insists on deep spending cuts. But Democrats who run the Legislature want tax increases that Schwarzenegger and fellow Republicans oppose.

GIVING WALL STREET HEARTBURN

Budget talks have ground to a stalemate, forcing State Controller John Chiang to prepare IOUs to be mailed on Thursday.

They would preserve dwindling cash for payments to schools and, just as important since California needs to sell short-term debt, for cash-flow purposes -- once it has a budget agreement.

Chiang plans to issue $3.36 billion in IOUs in July to help California maintain $10.9 billion in normal cash payments during the month, including payments to bondholders.

"The general obligation bonds will be paid," Chiang told Reuters. "California has never defaulted on its debt obligation and we don't plan to do so."

California's budget woes are making Wall Street nervous.

Fitch Ratings last week downgraded its rating on the state's general obligation debt and warned it may lower the rating again, citing the state's fiscal and economic stress. The agency cut California's rating by one notch to A-minus, placing it four notches above speculative, or "junk" status, and making it the lowest rating of any U.S. state.

Standard & Poor's Ratings Services and Moody's Investors Service have also warned there may be downgrades of California's general obligation debt. Moody's has warned the state could see a multi-notch downgrade of its A2 rating. S&P rates $57 billion of the state's outstanding general obligation bonds A.

A MUDDLE IN THE MIDWEST

As California officials readied their IOUs, Ohio Governor Ted Strickland on Tuesday signed a seven-day interim spending plan that buys lawmakers more time to craft a two-year budget.

"It is troubling that Senate Republicans are still refusing to say what they would do to fill the budget gap. Because of this, I have no other option but to sign a temporary budget that only delays the inevitable hard choices before us," Strickland, a Democrat, said in a statement.

Meanwhile, Indiana appeared to be on course to avert a government shutdown at midnight. A vote on a compromise budget was heading for a vote on Tuesday, according to John Schorg, a spokesman for Democrats who control the House.

Republican Governor Mitch Daniels has said safety services, such as state police and prisons, will continue to operate should there be a shutdown, while other services would stop.

Illinois lawmakers could send Governor Pat Quinn legislation to sell $2.23 billion of shorter-term general obligation bonds to ease spending cuts in a budget they passed late last month. Proceeds from the bonds would fund part of a fiscal 2010 pension payment, freeing up money in the budget.

But Quinn, who has claimed the Legislature's budget has a $9.2 billion shortfall, appeared to be holding out for a balanced spending plan to avoid drastic cuts in social services spending. He has been pushing for an income tax increase.

Pennsylvania's lawmakers were stuck on Governor Edward Rendell's plan to raise the income tax rate, possibly pushing negotiations past the midnight deadline.

(Additional reporting by Karen Pierog in Chicago and Jon Hurdle in Philadelphia; Editing by Jan Paschal)

Man allegedly demands sex to return lost dog (AP)

LOS ANGELES – Los Angeles County prosecutors allege that a convicted sex offender tried to extort a teenager by demanding cash or sex for the return of her lost dog.
Deputy District Attorney Jan Perlstein says 27-year-old Alfredo Dempkey has been scheduled for arraignment Tuesday afternoon on a count of attempted extortion.
Prosecutors say the Lancaster resident found the dog Friday and used information on its tags to contact the owner.
A meeting was arranged at a fast-food restaurant, where Dempkey was arrested. The dog was returned to its owner.
Prosecutors plan to ask that bail for Dempkey be set at $170,000. A telephone listing for Dempkey could not be immediately located.

Man nabbed 3 times in week for skipping on tab (AP)

GRETNA, La. – An Arizona man who likes several drinks with his lunch has been arrested three times in the past week for refusing to pay at restaurants where he ate. Jefferson Parish sheriff's records show that a 36-year-old man was booked with defrauding an innkeeper after he ate at three restaurants, then laughed when asked to pay his bill.
The man allegedly ran up bills ranging from $23 to $31 — including four beers with a lunch plate at one restaurant and four margaritas with a cheeseburger at another — then said he was homeless and couldn't pay.
The man was being held Tuesday at the Jefferson Parish Correctional Center in Gretna in lieu of $1,000 bond. But he has been released on the same charges twice previously due to overcrowding.
___
Information from: The Times-Picayune, http://www.nola.com

Senate to hold hearing on college football's BCS (AP)

WASHINGTON – The Senate plans to hold a hearing next week looking into antitrust issues surrounding college football's Bowl Championship Series.
It will be the second hearing on the BCS held on Capitol Hill this year, following a contentious one in the House in May.
The Senate Judiciary Committee Web site says the hearing will be next Tuesday in the committee's subcommittee on antitrust, competition policy and consumer rights.
Sen. Orrin Hatch of Utah, the subcommittee's top Republican, had sought the hearing. His office did not immediately return telephone and e-mail messages.
Football fans in Hatch's state were furious that Utah was bypassed for the national championship despite going undefeated in the regular season.

Online Genetic Testing Appears to Have Benefits (HealthDay)

TUESDAY, June 30 (HealthDay News) -- Online genetic testing for
lung cancer appears to offer some benefits to patients, according to U.S.
researchers who evaluated the use of an online test among 44 smokers.

"Up until now we have had a clear model for genetic testing. You see a
professional genetics counselor, undergo a battery of tests and that
professional helps you interpret your results," Saskia Sanderson, who
conducted the study while at the social and behavioral research branch of
the U.S. National Human Genome Research Institute, said in a news release
from the American Association for Cancer Research.

"That model is coming under increasing pressure as more and more
genetic information is generated, and as a greater number of genetic tests
become available on the Internet," Sanderson added.

"What we found was encouraging in that people who got these online
genetic results recalled them correctly, and no one regretted having taken
the test, though it is important to remember that this was a small group
of select smokers and that others may respond differently," said
Sanderson, a postdoctoral fellow in the department of genetics and genomic
sciences at Mount Sinai School of Medicine in New York City.

The online test examined in this study assessed the presence or absence
of the GSTM1 gene. The absence of the gene has been associated with a
slightly increased risk of lung cancer. Half the smokers in the study were
missing the gene, and all of them correctly identified themselves as
"higher risk." Of those with GSTM1, 55 percent accurately identified
themselves as "lower risk," while 41 percent interpreted their results as
"average risk."

The patterns of accurate interpretation remained six months after the
participants received their genetic test results, which suggests that they
retained the information, the study said.

According to the researchers, the participants said they found the test
results to be believable, trustworthy, easy to understand, relevant and
important. Those who learned they had a higher genetic risk for lung
cancer did have a short-term decrease in confidence that quitting smoking
could reduce their risk of lung cancer. However, all the participants
decided to use at least one of several smoking cessation aids.

The study is published in the July issue of the journal Cancer
Epidemiology, Biomarkers & Prevention.

"Genetic information is complex, and there is a risk that providing
unfiltered information will result in heightened worry and
misinterpretation of results," Jamie Ostroff, chief of behavioral science
services at Memorial Sloan-Kettering Cancer Center in New York City and an
editorial board member of the journal, said in the news release.

"This pilot study found no harm in undergoing these tests and
underscores the importance of conducting future research as to how to best
educate smokers about gene-environment risks," Ostroff said.

More information

The U.S. National Library of Medicine has more about genetic testing.

Source: Suspected NKorean ship changes course (AP)

WASHINGTON – U.S. officials said Tuesday that a North Korean ship has turned around and is headed back toward the north where it came from, after being tracked for more than a week by American Navy vessels on suspicion of carrying illegal weapons.
The move keeps the U.S. and the rest of the international community guessing: Where is the Kang Nam going? Does its cargo include materials banned by a new U.N. anti-proliferation resolution?
The ship left a North Korean port of Nampo on June 17 and is the first vessel monitored under U.N. sanctions that ban the regime from selling arms and nuclear-related material.
The Navy has been watching it — at times following it from a distance. It traveled south and southwest for more than a week; then, on Sunday, it turned around and headed back north, two U.S. officials said on condition of anonymity to discuss intelligence.
Nearly two weeks after the ship left North Korea, officials said Tuesday they still don't know where it is going. But it was some 250 miles south of Hong Kong on Tuesday, one official said.
Though acknowledging all along that the Kang Nam's destination was unclear, some officials said last week that it could be going to Myanmar and that it was unclear whether it could reach there without stopping in another port to refuel.
The U.N. resolution allows the international community to ask for permission to board and search any suspect ship on the seas. If permission for inspection is refused, authorities can ask for an inspection in whichever nation where the ship pulls into port.
North Korea has said it would consider any interception of its ships a declaration of war.
Two officials had said earlier in the day Tuesday that the Kang Nam had been moving very slowly in recent days, something that could signal it was trying to conserve fuel.
They said they didn't know what the turnaround of the ship means, nor what prompted it.
The U.S. ambassador to the United Nations, Susan Rice, said Sunday that Washington was "following the progress of that ship very closely," but she would not say whether the U.S. would confront the Kang Nam.
The sailing of the vessel — and efforts to track it — set up the first test of a new U.N. Security Council resolution that authorizes member states to inspect North Korean vessels. The sanctions are punishment for an underground nuclear test the North carried out in May in defiance of past resolutions.
Meanwhile on Tuesday, the Obama administration imposed financial sanctions on a company in Iran that is accused of involvement in North Korea's missile proliferation network.
In the latest move to keep pressure on Pyongyang and its nuclear ambitions, the Treasury Department moved against Hong Kong Electronics, a company located in Kish Island, Iran. The action means that any bank accounts or other financial assets found in the United States belonging to the company must be frozen. Americans also are prohibited from doing business with the firm.

Iran hardliner says election protests must cease (Reuters)

TEHRAN (Reuters) –
A senior hardline Iranian cleric Tuesday demanded an end to protests over the re-election of Mahmoud Ahmadinejad as president after Iran's top legislative body slammed shut the last door for a legal challenge.

As expected, the Guardian Council Monday dismissed complaints of irregularities in the June 12 vote raised by two defeated candidates, Mirhossein Mousavi and Mehdi Karoubi.

A statement on Mousavi's website Tuesday did not comment directly on the 12-man body's ruling, but referred to the former prime minister's letter to the Guardian Council Saturday in which he repeated his demand for the election to be annulled.

The presidential poll sparked Iran's most vigorous internal unrest since the 1979 Islamic revolution.

The next formal step is for Supreme Leader Ayatollah Ali Khamenei to confirm Ahmadinejad as president. Parliament will swear him in a few weeks later.

It is not clear whether Mousavi will pursue his demand for the vote to be canceled -- and risk arrest -- or accept defeat at the hands of Ahmadinejad, who is backed by Khamenei, the elite Revolutionary Guard and his own well-placed loyalists.

"The Guardian Council is the only legal reference in the election and therefore it seems the issue of protests against the presidential election is over," said Ahmad Khatami, a cleric who called Friday for leading "rioters" to be executed.

"All who believe in the Islamic system and are committed to its laws and regulations must accept the Guardian Council's opinion," he said, the semi-official Fars news agency reported.

"If some people still oppose the Guardian Council's decision it means opposing the law and it shows that these people do not want to move forward within legal channels and they would like to achieve their aims by force," Khatami said.

Hundreds of thousands of Iranians joined street protests after Ahmadinejad's victory was first declared, but riot police and religious militia have crushed protests since June 20.

State media say 20 people died in the violence, which the government and opposition blamed on each other.

The Guardian Council, which vets presidential candidates and oversees the election process, declared that a partial recount of 10 percent of the vote had uncovered no irregularities and said in its final verdict that the dossier had been closed.

FEW OPTIONS FOR OPPOSITION

The turbulent aftermath of the poll exposed splits in Iran's political and religious elite, but for now few options seem open for Ahmadinejad's reformist and conservative foes, who include powerful men such as former President Akbar Hashemi Rafsanjani.

Hamid Najafi, editor-in-chief of the conservative Kayhan International daily, said Mousavi, a moderate ex-premier with solid revolutionary credentials, could take no further action.

"As far as the constitution is concerned...I don't think he can do anything," Najafi told Reuters. "It is over, finished."

Parliament's national security and foreign policy commission has been trying to heal rifts, holding meetings in the past week with Rafsanjani, Mousavi and Karoubi, as well as senior clerics and officials. It is also expected to meet Ahmadinejad.

"We are seeking to strengthen national unity and solidarity," Hassan Ebrahimi, a member of the commission, was quoted as saying by the official IRNA news agency.

U.S. Secretary of State Hillary Clinton said Iran's rulers faced a "huge credibility gap" with their own people after the election and were still likely to face internal opposition.

Asked if Washington would recognize Ahmadinejad as president of the world's fifth biggest oil exporter, she said:

"We're going to take this a day at a time."

Tehran, locked in a row with the West over its nuclear program, has blamed the post-vote trouble on foreign powers.

Four Iranian staff of the British embassy remain in custody, accused of stirring the unrest. Britain rejects the charge.

Najafi said he foresaw no change in Iran's attitude to the West during Ahmadinejad's second term. "I don't think there is going to be any change unless the other side takes some other steps. Currently they have turned more hostile toward Iran."

(Writing by Alistair Lyon; editing by Samia Nakhoul)

FDA says E. coli found in Nestle sample (AP)

NEW YORK – The Food and Drug Administration said Monday a sample of raw cookie dough collected at a Nestle USA manufacturing plant last week has tested positive for E. coli.
Nestle voluntarily recalled all Toll House refrigerated cookie dough products made at the Danville, Va., factory earlier this month after the FDA told Nestle it suspected consumers may have been exposed to E. coli bacteria after eating the dough raw.
The FDA and the federal Centers for Disease Control have been investigating whether the cookie dough was the source of the E. coli outbreak which has sickened 69 people in 29 states, according to the latest CDC data. E. coli is a potentially deadly germ that can cause bloody diarrhea, dehydration and, in the most severe cases, kidney failure.
The FDA says the sample of Toll House refrigerated prepackaged dough was manufactured at the plant on Feb. 10.
In a statement, Nestle said the sample that tested positive came from a 16-ounce Toll House refrigerated chocolate chip cookie dough bar. The product had a "best before June 10 2009" label.
"We are very concerned about those who have become ill ... and deeply regret that this has occurred," the company said in the statement.
The company also reiterated that consumers can return the recalled products to their local grocer for a full refund.
FDA spokeswoman Stephanie Kwisnek says the FDA is working with the Glendale, Calif.-based unit of Switzerland-based Nestle SA to find the source of the contamination. Nestle said it will continue to work "closely and in full cooperation" with the investigation.
Besides the Toll House products, Nestle also makes a variety of refrigerated pastas and pasta sauces at the plant.
The company shut down production in the cookie dough section of the plant when it issued the recall. That section remains closed, but the company is still manufacturing the pasta and pasta sauces in a separate section of the plant.

Mousepad

After the rubberized silicon surface was incorporated onto the surface of the steel roller ball mouse, the popular fabric-surface mousepad was found to be the most appropriate. It helped keep the rubberized roller-ball surface cleaner and with better tracking, speed and accuracy than just a desk surface, which collected dirt and slowed the mouse's motion.

Optical mice have the problem of not working well on transparent or reflective surfaces (such as glass or highly polished wood). These surfaces, which often include desk and table surfaces, cause jitter and loss of tracking on the display pointer as the mouse moves over these reflective spots. The use of mousepads with precision surfaces eliminates spot jitter effects of modern optical mice.

Mousepad

Child survivor found after Yemeni plane crash (AFP)

MORONI (AFP) –
Rescuers on Tuesday found a child survivor of a Yemeni airliner that crashed off the coast of the Indian Ocean archipelago of Comoros, a hospital official said.

"A child was found alive. He is now on a rescuers' boat," said Ben Imani, a doctor at Moroni's main hospital told AFP.

A Comoros Red Cross official confirmed the rescue.

"We have all that is needed -- drips, equipment -- to assist the child immediately," said Al fachad Salim.

It was not immediately clear if the child was the same survivor reported earlier in Sanaa by a Yemenia airline official.