News

Obama team draws sharp Hill questions on budget

Date Feb 03 2010 14:59:17 Source:Assoiated Press

WASHINGTON – President Barack Obama''s $3.8 trillion budget outline drew bipartisan fire on Capitol Hill on Tuesday, with Republicans complaining it doesn''t address deficits soon enough and raises taxes too much. Democrats balked at some of Obama''s spending cuts.

It was a rocky reception for the day-old document, underscoring election-year restlessness and rising public anger at bailouts, bonuses and ballooning deficits. The complaints across party lines suggested it could be difficult for Obama to win support for key parts of his budget, even from members of his own party.

Sen. Bill Nelson, D-Fla., called Obama''s proposal to cancel NASA''s manned moon return program shortsighted. Sen. Patty Murray, D-Wash., derided his proposal to include Army Corps projects in a proposed partial three-year spending freeze. Sen. Jay Rockfeller, D-W.Va., said environmental priorities in the budget would unfairly burden coal states such as his.

Treasury Secretary Timothy Geithner, under grilling by the Senate Finance Committee, said that despite the lively crossfire he could see a bipartisan consensus building that "deficits matter, tax cuts are not free."

"The American people want to see their leaders coming together and bringing practical solutions" to the problems created by the worst downturn since the 1930s, Geithner said.

In one sign of possible common ground, Senate Finance Committee Chairman Max Baucus, D-Mont., suggested there is support across party lines for Obama''s proposal to give companies a $5,000 tax credit for each new worker they hire in 2010.

"We need to work on legislation that will create jobs. And we need to work across the aisle, so that the legislation on which we work can become law," Baucus said.

Even so, Obama may not be able to count on one Republican senator who has worked with Democrats in the past. Sen. Olympia Snowe, R-Maine, blasted Obama''s effort to create jobs while proposing higher taxes on families making more than $250,000 a year. Snowe said the tax increase would also hit small businesses, leaving many owners unwilling to start hiring again because of uncertainties over future tax liabilities. "Who is going to take the risk?" Snowe asked.

One contentious area was Obama''s proposal to draw up to $30 billion remaining in the $700 billion bank bailout program, enacted in 2008, to invest in community banks to encourage them to lend to small businesses. Obama promoted the program on Tuesday at a campaign-style appearance in Nashua, N.H.

New Hampshire Republican Sen. Judd Gregg argued that money from the Toxic Asset Relief Program that is left over or repaid by banks is by law supposed to go toward paying down federal debt. "It''s not for a piggy bank because you''re concerned about lending to small businesses," Gregg told White House Budget Director Peter Orszag.

Orszag replied that the administration was well aware of the provision in the TARP legislation — and that''s why it is seeking legislation to authorize the program.

But separately, Sen. Maria Cantwell, D-Wash., told Geithner the administration shouldn''t wait for legislation to OK such small-business loans, it should just extend the money — as it had done in using TARP funds to help bail out automakers and Wall Street financial giants.

The government "put the screws to the community banks and gave all the money to the big banks. Right now people are cutting lines of credit to small business," Cantwell complained.

The administration has also proposed a $90 billion tax on big banks over ten years to help recoup losses from the TARP program. Geithner told senators the U.S. might have to extend such a tax — the administration calls it a "fee" — beyond the ten years if bailout costs haven''t been recouped by then.

The Democratic chairman of the Budget Committee, Sen. Kent Conrad of North Dakota, joined Republican Gregg in faulting the administration for not doing enough to stanch the deficit flood.

"I don''t see the focus on bringing down that long-term debt," Conrad said. Years of deficit spending, aggravated by the recession and two wars, have swollen the national debt to a whopping $12.3 trillion.

While Obama''s economic team was sparring with members of the Senate Finance and Budget committees, his Pentagon team was defending its part of the budget before the Senate Armed Services Committee.

Defense Secretary Robert Gates said the $768.2 billion defense share of the budget would help pay for "a broad portfolio of military capabilities" as it fights wars in Afghanistan and Iraq and help the U.S. "prepare for a much broader range of security capabilities" for the future.

Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, told the panel that the war in Afghanistan is now the Pentagon''s top priority, adding: "The Afghan people are the center of gravity and defeat of al-Qaida the primary goal."

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Associated Press writers Andrew Taylor and Stephen Ohlemacher contributed to this report.

Honda profit soars fivefold from previous year

Date Feb 03 2010 14:58:40 Source:Assoiated Press

TOKYO – Honda says its profit for the October-December quarter soared fivefold from the previous year to 134.6 billion yen ($1.49 billion) as it slashed research expenses and other costs to offset declining sales.

The results released Wednesday marked Tokyo-based Honda Motor Co.''s first profit increase in two years, underlining a gradual recovery in the global auto market.

The Japanese automaker reported an 11.5 percent drop in sales for the quarter ended Dec. 31 at 2.24 trillion yen ($24.8 billion), partly because of the strong yen.

Honda has weathered the auto slump better than some of its bigger rivals because of its strength in emerging markets and its solid motorcycle division.

Toyota hit by over 100 Prius brake complaints

Date Feb 03 2010 14:58:12 Source:Assoiated Press

TOKYO – Toyota Motor Corp. has been hit by over 100 complaints in the U.S. and Japan about brake problems with the popular Prius hybrid, the latest in a spate of quality troubles for the automaker as it grapples with massive global recalls.

The Japanese company''s sales are being battered in the U.S. — Toyota''s biggest market — after recalls of top-selling models to fix a gas pedal that can stick in the depressed position.

The new Prius gas-electric hybrid, which went on sale in Japan and the U.S. in May 2009, is not part of the recalls that extend to Europe and China, covering nearly 4.5 million vehicles.

The U.S. National Highway Traffic Safety Administration has received about 100 complaints involving the brakes of the Prius new model. Two involved crashes resulting in injuries.

Japan''s transport ministry said Wednesday it has also received 14 complaints since July last year about brake problems with Toyota''s new Prius hybrid.

The 14 complaints included an accident in July 2009, in which a Prius crashed head on into another car at an intersection. Transport ministry official Masaya Ota said two people were slightly injured in the accident.

"The Prius driver in the accident told police that a brake did not work," Ota said. "Other Prius drivers also complained brakes were not so sharp." The complaints in Japan involve the new Prius model, and the vehicles were all made in Japan, he said.

The ministry ordered Toyota Motor Corp., the world''s No. 1 automaker, to investigate the complaints. The other 13 cases happened from December to January 2010. Ota said the ministry has yet to receive a formal report on the complaints from Toyota.

Toyota spokeswoman Ririko Takeuchi said the company has received reports about the Prius complaints in North America and in Japan and was now looking into the matter.

Toyota shares dropped 3.7 percent to 3,470 yen in the morning session Wednesday.

"Investors were worried the latest trouble involving the Prius could get bigger. The problem could pose a bigger question on Toyota''s quality and safety," said Kazuhiro Takahashi, market analyst at Daiwa Securities SMBC Co. Ltd.

The Japanese automaker is facing growing criticism that it has not done enough to ensure the safety of its vehicles.

U.S. Transportation Secretary Ray LaHood told The Associated Press Tuesday that federal officials had to alert Toyota to the seriousness of the safety issues that eventually led to the recalls.

"They should have taken it seriously from the very beginning when we first started discussing it with them," he said. "Maybe they were a little safety deaf."

LaHood also said the U.S. government was considering civil penalties for Toyota for having dragged its feet on safety concerns.

Toyota executive vice president Shinichi Sasaki acknowledged Tuesday in a Nagoya, Japan, news conference that it took prodding from NHTSA officials for the company to decide on the U.S. recall.

Toyota has long prided itself on sterling vehicle quality and assembly line methods that empowered workers to ensure faultless production.

The latest recall, announced Jan. 21, over sticky gas pedals affects 2.3 million vehicles in the U.S. alone.

Any serious problems emerging in the Prius, Toyota''s flagship green car model, is certain to further tarnish its brand.

The Prius, now in its third generation since its 1997 introduction, is the best-selling gas-electric hybrid in the world, racking up a cumulative 1.6 million units sold so far, according to Toyota.

Hybrids, by going back and forth between a gasoline engine and electric motor, tend to offer better mileage in slow-speed and stop-and-go driving that''s common in crowded cities.

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AP Business Writer Yuri Kageyama contributed to this report.

China imposes anti-dumping measures on terephthalic acid from Thailand, ROK

Date Feb 03 2010 14:56:43 Source:Xinhua
China''s Ministry of Commerce (MOC) said Tuesday that it would impose temporary anti-dumping measures on terephthalic acid imported from Thailand and the Republic of Korea (ROK), according to Xinhua.

The preliminary ruling required importers of terephthalic acid from Thailand and the ROK to place deposits starting Wednesday, said a statement on the MOC website.

The statement said companies from those two countries had dumped terephthalic acid on the Chinese market, caused substantial damage to China''s domestic industry.

The statement also listed deposit rates for products imported from the ROK at 2.4 percent to 11.2 percent and for products from Thailand 12.2 percent to 20.1 percent.

In another brief statement, the MOC said it would prolong anti-dumping investigation into terephthalic acid from Thailand and the ROK for six months until Aug. 12.

The decision was made because "the situation in this case is quite special and complicated," said the statement without giving further details.

The MOC started an anti-dumping probe into terephthalic acid from Thailand and the ROK on Feb. 12, 2009. The MOC said in a statement last February that the investigation would normally be finished within a year, but might last until Aug. 12, 2010.

Terephthalic acid is an organic compound used in polyester coatings and resins.

Nokia and Pearson form wireless joint venture

Date Feb 03 2010 14:55:50 Source:Global Times
By Zhao Qian

Mobile device maker Nokia and education company Pearson will form a joint venture targeting English learners in China, and an official from Pearson told the Global Times Tuesday the company will expand such cooperation to other equipment manufacturers in the future.

The joint venture, named Beijing Mobiledu Technologies, was created to accelerate the growth of Mobiledu, a mobile phone-delivered education service developed by Nokia, Pearson announced Monday.

Mobiledu, launched in 2007, is a mobile service that provides English-language learning materials and other educational content. Users can read content through an application preloaded on new Nokia handsets and visit the service''''s mobile website.

"We also want to cooperate with some other handset (makers) and not just Nokia, though no specific plans have been fixed," Elizabeth Knup, Pearson''''s chief representative in China, said Tuesday, adding that the company will increase the content it offers to appeal to different learners.

"We already have 20 million subscribers in China since Mobiledu was launched, and we believe that more and more people will study English through mobile phones," Knup said.

Xiao Yan, public relations director of Wall Street English in Beijing, which was purchased by Pearson last year, said Tuesday the company has no plans to use the Mobiledu services at present, but she was also confident in the potential of China''''s huge education market.

Chinese have been enthusiastic about learning English, especially since the country''''s successful bid to host the Olympic Games. In Beijing, some schools require students as young as kindergarteners to start learning English.

Mobile user numbers in China have surpassed 700 million since last July, the Ministry of Industry and Information Technology reported.

Nokia could not be reached for comment Tuesday. Knup said the joint venture will be an independent company, and Nokia and Pearson will just guide it in terms of its business direction.

Knup said the company will seize the potential market in China, and she doesn''''t "see some immediate competition in this mobile sector in the country at present."

New Oriental, a New York listed provider of private educational services, only offers mobile English newspapers at present.