Ally-on-ally killings muddy path for U.S. pullout

WASHINGTON — The Obama administration is only beginning to calculate the pace of troop withdrawals from Afghanistan beyond this summer, facing an endgame fraught with political risk and complicated by shocking setbacks like the alleged U.S. slaughter of Afghan civilians.

At stake is not only President Barack Obama’s pledge to prevent Afghanistan from reverting to the terrorist haven it was before the Sept. 11, 2001, attacks, but also his commitment to wind down the war while crafting a long-term security relationship with the Afghans.

U.S. military commanders want to keep as many troops in the country as possible until the Dec. 31, 2014, target date for having all combat forces out. They fear a too-rapid pullout would risk surrendering the security gains they have made in recent years.

But the White House faces the prospect of intensifying political pressure to end the military mission, especially after events such as the burning of Muslim holy books by U.S. troops last month that triggered a wave of Afghan violence, including the killings of at least six U.S. troops by Afghan troops.

Rep. Adam Smith, D-Wash., a top Democrat on the House Armed Services Committee, is among those calling for a faster withdrawal.

“It is time to bring our troops home, and, while the president has laid out a responsible path to do so, we should continue to look for every opportunity to accelerate our timeline,” Smith wrote in an opinion piece in USA Today.

“We should have been gone a long time ago,” Sen. Joe Manchin, D-W.Va., said in an interview. “It’s time to come home and rebuild America.”

Senate Foreign Relations Chairman John Kerry, D-Mass., however, cautioned against using the weekend slayings, apparently by a U.S. soldier, of more than a dozen Afghan civilians as a reason to abandon the existing schedule for ending the combat mission.

“I still think you have to do this mission on the basis of what makes sense for the mission so you’re not jeopardizing everything that has been achieved,” Kerry said in an interview.

Obama said twice Tuesday that the war must end `’responsibly,” following his warnings Monday that the U.S. must not rush to the exits and risk all it has done in Afghanistan. Just last week, he said the transition out must be gradual, “not a cliff.” That language is similar to his approach in Iraq, where the last U.S. troops left in December 2011.

From today’s total of 90,000, Obama has instructed his top commander in Afghanistan, Marine Gen. John Allen, to cut the number of U.S. troops to 68,000 by the end of September.

Beyond that, no decisions have been made, although officials are starting to sketch out possibilities, officials said Tuesday.

Allen’s chief spokesman, Navy Capt. John Kirby, said Allen is under “no pressure” from the White House to come up with a plan for continuing the troop withdrawal beyond September. Allen has yet to present Defense Secretary Leon Panetta with his plan for getting down to the 68,000 mark.

“There is no work being done by Gen. Allen and his staff” to determine further troop reductions after he reaches the 68,000 plateau, Kirby said. “There are no demands for options or recommendations.”

Other officials said, however, that informal work is being done in Washington before the formal process begins that would end with decisions by Obama on future troop cuts.

Obama has said additional reductions will ensue at a “steady pace,” but no numerical markers have been set. The hope is that by mid-2013 the Afghans will take the lead security role throughout their country, enabling the U.S. and its allies to end their combat role. U.S. and allied troops probably would stay beyond 2014 as military advisers rather than as combat forces.

The New York Times reported Tuesday that one of the options being considered is for at least 10,000 more to come home by the end of December, and then 10,000 to 20,000 more by June 2013.

In response, administration officials stressed that no formal options have been crafted. Said White House spokesman Jay Carney: “There are no options being reviewed with specific troop numbers attached to them. There are no individuals promoting specific options over others.”

Outrage, both in the U.S. and in Afghanistan, over the recent killings by each side of their nominal allies has made it more difficult for Obama to strike a balance between “staying the course” and signaling that the war must end.

Obama tried to address that double-sided message in interviews with local television stations Monday. He said the latest events will not speed up the withdrawal, a message aimed mostly at European allies eager to bring their own forces home. But Obama appeared to reflect the frustration of a war-weary home front when he stressed that the war is ending.

“My plan calls for us to get out of Afghanistan, to transition to Afghan lead,” he told KVUE-TV in Austin. “We need to do that responsibly, we don’t want to do it in such a way that suddenly, everything that we have done over the last decade collapses. But it is time for us to go.”

To KABC in Los Angeles, Obama said, “Keep in mind that I have put us on a path where we’re going to have this war over by the end of 2014, that our troops will be coming out, but we’ll be coming out responsibly.”

——

Associated Press writers Lolita C. Baldor in Bishkek, Kyrgyzstan and Donna Cassata, Anne Gearan, Ben Feller and Julie Pace in Washington contributed to this report.

BC-US--Army Corps-Bribery, 1st Ld-Writethru,113 Executive pleads guilty in contracting fraud case

By ERIC TUCKER

Associated Press

WASHINGTON (AP) — A former executive is admitting his role in a $20 million government contracting fraud scheme.

Harold F. Babb pleaded guilty in Washington’s federal court on Tuesday to charges of bribery and unlawful kickbacks. Prosecutors say Babb is cooperating with their investigation.

Babb and three other men were arrested in October and charged with a scheme to submit fraudulent and inflated invoices for government contracting work. Two of the men were employees of the Army Corps of Engineers, and Babb was the director of contracts for a company that did business with the government

Prosecutors say the proceeds of the $20 million fraud were spent on personal luxuries, including cars, homes and high-end watches.

BC-US--Sunshine Week, 2nd Ld Writethru,716 Obama supports new category of secret gov’t files

By RICHARD LARDNER

Associated Press

WASHINGTON (AP) — In the middle of Sunshine Week, when news organizations and advocacy groups promote government transparency, the Obama administration urged Congress on Tuesday to keep secret a whole new category of information even under the Freedom of Information Act.

A few miles away, the White House organized a conference call with two senior administration officials to preview an announcement by President Barack Obama about an important China trade issue but told reporters that no one could be quoted by name. The officials were U.S. Trade Representative Ron Kirk and the deputy national security adviser for international economic affairs, Michael Froman.

On Capitol Hill, the director of the Justice Department’s office of information policy, Melanie Ann Pustay, told senators they need to protect against public disclosures of material about cybersecurity, critical U.S. computer networks, industrial plants, pipelines and more. Businesses have sought such a new exemption under the law for at least 10 years.

Obama has promised that his administration will be the most transparent in American history. But events on Tuesday illustrate that old habits die hard.

Pustay told the Senate Judiciary Committee that a Supreme Court ruling in March 2011 narrowed an exemption under the records law and left federal agencies unable to protect secrets about cybersecurity and critical infrastructures, even though the Justice Department since then has recommended at least three other ways under current law to justify withholding such information.The case involved a retired electrician, Glen Milner, who sought in 2003 to learn more about the types and amounts of explosives stored at the Navy’s nearby Indian Island facility. Milner said he wanted to know whether his family and neighbors were at risk of being blown up.

Pustay said the Supreme Court decision put at risk “a wide range of sensitive material whose disclosure could cause harm,” and urged the Senate to approve a proposal in cybersecurity legislation that would keep it off-limits under the Freedom of Information Act. She said it was unlikely the government’s other methods under existing laws would adequately protect such secrets.

Under the records law, citizens and foreigners can compel the government to turn over copies of federal records for zero or little cost. Anyone who seeks information through the law is generally supposed to get it unless disclosure would hurt national security, violate personal privacy or expose business secrets or confidential decision-making in certain areas.

Open government advocates urged lawmakers to proceed carefully.

“Protections against threats we might face as a nation need not and should not include carte blanche authority for the government to withhold information under an exceedingly broad and ill-defined rubric,” said Kenneth F. Bunting, executive director of the National Freedom of Information Coalition of Columbia, Mo.

Lawmakers gave no indication whether they would support the change that Pustay sought. Sen. Charles Grassley, the committee’s top Republican, said no one has approached him or his staff about legislative remedies. If the problem is so serious, Grassley asked, why has no one objected?

“Agencies under the control of President Obama’s political appointees have been more aggressive than ever in withholding information from the public and from Congress,” Grassley said. “There’s a complete disconnect between the president’s grand pronouncements about transparency and the actions of his political appointees.”

Sunday was the start of Sunshine Week.

Meanwhile, the Obama administration appears to have decided to keep one more secret. As first reported by Bloomberg, the White House declined to identify the name and vintage of wines it served during the June 2011 state dinner for German Chancellor Angela Merkel, and it’s unclear whether it will reveal the wine list for this week’s state dinner when British Prime Minister David Cameron visits. It previously has disclosed such information for previous dinners. The commercial prices for some bottles have exceeded $300.

The White House drew criticism in November 2008 when it hosted a dinner for foreign leaders working to resolve the global economic crisis, and its menu included fruitwood-smoked quail with quince gastrique; quinoa risotto; thyme-roasted rack of lamb; tomato, fennel and eggplant fondue; a salad course of endive, baked brie and walnuts; and a pear torte to cap the meal. Among the wines: bottles of Shafer Cabernet “Hillside Select” 2003 — then about $300 per bottle — for the main course.

———

Online:

Senate Judiciary Committee: http://www.judiciary.senate.gov/

BC-US--Congress-Deficit, 1st Ld-Writethru,537 CBO: Deficit estimate for 2012 hiked to $1.2T

By ANDREW TAYLOR

Associated Press

WASHINGTON (AP) — A new estimate from congressional economists says the government will run a $1.2 trillion deficit for the budget year ending just a few weeks before Election Day. It would be the fourth straight year of trillion dollar-plus deficits.

The almost $100 billion spike from earlier projections for the fiscal 2012 deficit comes almost exclusively because Congress passed legislation recommended by President Barack Obama to renew a 2 percentage point cut in payroll taxes and jobless benefits for people languishing on unemployment rolls for more than six months.

Last year’s deficit registered $1.3 trillion.

The Congressional Budget Office report is just the latest confirmation of the government’s severe fiscal problems. While the official CBO forecast predicts the deficit sliding to just 1 percent of the size of the economy within a few years, that estimate relies on revenues averaging about $500 billion a year over the coming decade — mostly from expiration of Bush-era tax cuts on income, investments, large estates and for families with children.

But Obama and Republicans alike agree on extending the bulk of the Bush-era tax cuts when they expire at the end of the year. A battle is set, however, on whether to extending income tax rate cuts on income in excess of $200,000 a year for individuals or $250,000 a year for couples.

If the Bush tax cuts are renewed, CBO says, and if automatic spending cuts mandated by last year’s budget and debt pact are waived as seems possible, annual deficits would average more than $1 trillion a year over the coming decade and would, economists says, eventually spark an economic crisis.

While the short-term deficit mess is largely a product of the recent recession and slow recovery, the long-term crisis is a result of the impact baby boomers will have on federal retirement programs and the large projected increases in health care inflation.

“The aging of the population and rising costs for health care will push spending for Social Security, Medicare, Medicaid, and other federal health care programs considerably higher,” the report said. “If that rising level of spending is coupled with revenues that are held close to their average ... the resulting deficits will push federal debt to unsupportable levels.”

The budget office estimated somewhat lower costs for covering the uninsured under President Barack Obama’s health care overhaul law, as well as slightly fewer people gaining coverage.

Assuming the Supreme Court does not overturn the law, it would reduce the number of uninsured by 30 million in 2016, or 2 million fewer people than estimated last year. Total costs from 2012-2021 are about $50 billion lower than estimated last year. That’s due to a combination of factors, including overall health care costs rising more slowly than in the recent past.

The CBO report comes as Republicans controlling the House are preparing for this year’s budget debate, which is sure to spill over into the presidential campaign as the two sides quarrel over Medicare, taxes and cuts to the Pentagon budget.

The budget plans of the leading GOP presidential candidates each call for new, significantly larger tax cuts that would add even more to projected deficits, according to independent analysts.

———

Associated Press Writer Ricardo Alonso-Zaldivar contributed to this report.

BC-US--Student Loans, 2nd Ld-Writethru,728 Students seek to stop loan interest rate hike AP Photo DCMC101, DCMC102, DCMC103

By KIMBERLY HEFLING AP Education Writer

WASHINGTON (AP) — Millions of college students could be in for a shock this summer when the interest rate on a popular federally subsidized student loan doubles unless Congress acts.

College students on Tuesday delivered more than 130,000 letters to congressional leaders asking them to stop rates from increasing from 3.4 to 6.8 percent. The rate hike affects new subsidized Stafford loans, which are issued to low and middle income undergraduates. They hope to raise enough awareness to get Congress to stop it.

“I will be put back into buying a house and saving up for my expenses later on in life, and life as we know, is very unexpected. Adding that variable definitely limits my ability to be successful,” said Tyler Dowden, 18, a freshman at Northern Arizona University who spoke at a press conference outside the Capitol before the letters were delivered in boxes with “Congress: Don’t Double Student-Debt Rates” printed on the outside.

Dowden said he anticipates graduating with $25,000 in debt, but if the rate increases, he expects to add about $3,500 to that tally. He’s studying to be a mental health therapist.

President Barack Obama frequently tells crowds it’s important for Congress to stop the hike because one of the most daunting challenges after high school graduation is affording college. His administration has said keeping the rate low would help 7.4 million borrowers save on average more than a thousand dollars over the life of the loan.

But doing so is estimated to cost billions annually at a time when Congress is gridlocked over budgetary and other issues.

With many lawmakers acting on a campaign promise, the Democrat-controlled Congress in 2007 passed legislation to progressively lower the rate to 3.4 percent this school year.

Rep. John Kline, R-Minn., chairman of the House Education and the Workforce Committee, has said the looming hike is the “result of a ticking time bomb set by Democrats five years ago” and that “simply calling for more of the same is a disservice to students and taxpayers.”

Jennifer Allen, a spokeswoman for Kline, said in an email that we, “now face the exact predicament we expected: we must either allow interest rates to rise on student loans, or stick taxpayers with another multi-billion dollar bill.”

Kline’s office estimates based on a Congressional Budget Office figure that the annual cost to keep the rate low is about $6 billion annually, although some Democrats have estimated it would cost less than that.

With tuition costs at a high, students are taking on unprecedented levels of student debt. College students leave owing an average $25,000 in loans, and student loan debt now surpasses credit card debt.

Some graduates simply can’t keep up with it. A report released Tuesday by the federal judiciary about the courts’ caseload in the government-spending year that ended Sept. 30, showed that filings with the government as a plaintiff increased 25 percent as cases concerning defaulted student loans surged 58 percent, or by 1,588 cases.

Sen. Jack Reed, D-R.I., and Rep. Joe Courtney, D-Conn., who spoke at the press conference, said it doesn’t make sense for student loan recipients to face a higher interest rate than homeowners are getting on mortgages or that banks are able to get. The two back legislation that would keep the lower rate, but both acknowledged that in the political climate, it will be challenging to get the legislation passed by the July deadline.

The college students said they worry constantly about the debt they are taking on, and that the few thousand extra dollars they’d take on in new loans if the rate doubled would affect life decisions.

Samantha Durdock, 19, a sophomore studying government and politics at the University of Maryland, said she wants to go to graduate school after college so that she can pursue a career related to international affairs, but she thinks she won’t be able to go immediately with the additional amount she’d likely owe. She said she already expects to graduate owing at least more than $20,000.

“Right now, if the loans stay how it is, it’s going to be tight, but I could make it doing five years straight in school. But with the increase I’d probably have to take off,” Durdock said.

—————

Associated Press writer Mark Sherman contributed to this report.

—————

Federation of State Public Interest Research Groups: http://www.uspirg.org/

Rebuild the Dream: http://rebuildthedream.com/

CBO: Deficit estimate for 2012 hiked to $1.2T

By ANDREW TAYLOR

Associated Press

WASHINGTON (AP) — A new estimate from congressional economists says the government will run a $1.2 trillion deficit for the budget year ending just a few weeks before Election Day.

Last year, the deficit was $1.3 trillion. The almost $100 billion spike from earlier deficit projections comes almost exclusively because Congress passed legislation recommended by President Barack Obama to renew a 2 percentage point cut in payroll taxes and jobless benefits for people languishing on unemployment rolls for more than six months.

The Congressional Budget Office report comes as Republicans controlling the House are preparing for this year’s budget debate, which is sure to spill over into the presidential campaign as the two sides quarrel over Medicare, taxes and cuts to the Pentagon budget.

Senate Committee to Hold Hearing on No Labels’ No Budget, No Pay Bill on March 14

/FROM PR NEWSWIRE DALLAS 888-776-3971/ ¹⁄₈STK³⁄₈ ¹⁄₈IN³⁄₈ PUB ¹⁄₈SU³⁄₈ AVO EXE LEG POL -- WITH PHOTO -- TO NATIONAL EDITORS: Senate Committee to Hold Hearing on No Labels’ No Budget, No Pay Bill on March 14

Historic First Step in Implementing No Labels Make Congress Work! Action Plan

WASHINGTON, March 13, 2012 /PRNewswire-USNewswire/ -- On Wednesday, March 14 at 10 a.m. ET, the Senate Homeland Security and Governmental Affairs Committee will hear testimony on the No Budget, No Pay Act, which withholds congressional pay if members fail to pass spending bills and the budget on time. The committee will also hear testimony on additional reform proposals based on the No Labels MakeCongressWork! action plan.

(Logo: http://photos.prnewswire.com/prnh/20120210/DC51371LOGO)

WHAT: No Labels Hearing on No Budget, No Pay Bill: “Raising the Bar for Congress: Reform Proposals for the 21st Century”

WHERE:  342 Dirksen Senate Office Building

WHEN: Tomorrow, Wednesday, March 14 at 10 a.m. ET

WHO:  Sen. Dean Heller (R-NV) (scheduled to testify) Rep. Jim Cooper (D-TN) (scheduled to testify) No Labels Co-Founder Former Rep. Tom Davis (R-VA) (scheduled to testify) No Labels Co-Founder Bill Galston of the Brookings (scheduled to testify) No Labels Co-Founder Jonathan Miller (available for interviews) No Labels Co-Founder Lisa Borders (available for interviews)

No Labels is a group of Republicans, Democrats and Independents who want our government to work again. For more information on the March 14 hearing, Make Congress Work! action plan or to arrange an interview with a No Labels co-founder, please contact Sarah Feldman at pressnolabels.org or (202) 588-1990. To learn more about No Labels, please visit NoLabels.org.

SOURCE No Labels -0- 03/13/2012

/Photo: http://photos.prnewswire.com/prnh/20120210/DC51371LOGO CO: No Labels ST: District of Columbia IN: PUB SU: AVO EXE LEG POL PRN -- DC69696 -- 0000 03/13/2012 19:11:43 EDT http://www.prnewswire.com

BC-US--US-Sri Lanka, 2nd Ld-Writethru,471 US: Sri Lanka should reconcile with Tamils

By MATTHEW PENNINGTON

Associated Press

WASHINGTON (AP) — The United States said Tuesday that unless Sri Lanka’s government reconciles with minority Tamils and addresses allegations of war crimes it risks renewed conflict.

Thousands of Tamil civilians died in the final months of its civil war that ended in 2009. The U.S. has introduced a draft resolution at the U.N. Human Rights Council, increasing international pressure on Sri Lanka to conduct an independent investigation.

The council in Geneva is expected to vote next week on the resolution that stops short of demanding an outside probe, but has angered Sri Lanka, which claims it could stir separatism.

Robert Blake, assistant secretary of state for South and Central Asia, said that accountability and reconciliation was in Sri Lanka’s best interests, so “they really can achieve peace and security and not sow anger in their own community that could give rise to new violence.”

“Experience in many civil conflicts around the world has shown that countries that don’t take adequate measures to address reconciliation and accountability frequently experience a regeneration of the insurgency that they faced,” he told The Associated Press. “We could see very much that similar situation in Sri Lanka.”

The resolution calls on Sri Lanka to investigate allegations of human rights abuses by both the government troops and Tamil Tiger rebels in the final months of the quarter-century war, and implement recommendations of its own reconciliation panel. A U.N panel of experts reported in 2011 that tens of thousands of people may have been killed, largely through shell fire by the government troops.

Sri Lanka’s government, which has defended its conduct of the war as protecting Tamil civilians, has organized a series of protests against the resolution, calling it interference in its affairs.

In Colombo on Tuesday, Housing Minister Wimal Weerawansa called for a boycott of U.S. products. He told a protest meeting that the resolution amounts to calling for the revival of the Tamil Tigers.

Eileen Donahoe, U.S. ambassador to the Human Rights Council, said Sri Lanka had reacted “very negatively” to the resolution and has fought it “tooth and nail” but she expected it to pass.

“We had intended it in a fairly cooperative spirit,” she said. “We were very forward leaning in our effort to reach out to the Sri Lankans.”

She said an earlier version of the resolution had sought an action plan from Sri Lanka by June, but as tabled now, the resolution calls for the U.N. Human Rights Commissioner to report to the council a year from now on the steps Sri Lanka has taken.

Blake said the resolution would not be weakened further.

Despite the strain on U.S.-Sri Lanka relations, Donahoe said Colombo was keeping open its channels of communication with Washington, and Secretary of State Hillary Rodham Clinton has invited Sri Lanka Foreign Minister G.L. Peiris for talks in Washington in April.

BC-US--Transportation Bill-Senate, 2nd Ld-Writethru,921 Senate ready to pass highway programs overhaul

By JOAN LOWY

Associated Press

WASHINGTON (AP) — The Senate is ready to pass long-delayed legislation overhauling America’s highway and transit systems, with lawmakers steering past partisan fights that have kept it sidelined.

The measure, now set for a floor vote Tuesday, would give states more flexibility in how they spend federal money and would step up the pace of road construction by shortening environmental reviews. Even the measure’s sponsors — California Democrat Barbara Boxer and Oklahoma Republican James Inhofe — come from opposite political poles. Passage would provide a rare display of bipartisan deal-making between the parties in a bitterly partisan election year.

We are hopeful this will become a template for all of us in the Senate and the House to find the sweet spot where we can work together,” Boxer said. She said the Senate’s bipartisan success should be a lesson for House Republican leaders, whose efforts to pass their own bill without concessions to Democrats have fallen apart.

Nearly 20 amendments — including proposals to put toll booths on interstate highways, provide tax credits for alternative energy, and tighten requirements that highways and bridges be constructed using domestic goods and labor — were slated to be voted on in an all-day marathon of Senate voting.

The first — an amendment that would have allowed states to keep nearly all of the federal gas taxes collected within their borders, thus depriving federal highway and transit programs of most of their funds — was soundly rejected.

The overall bill would spend $109 billion over less than two years. That’s far below the level of spending that two congressional commissions have said will be needed if the U.S. is to maintain its aging roads and bridges and bus and train systems and expand the national transportation network to meet population growth between now and 2050. Transportation Secretary Ray LaHood has described the nation’s roads as “one big pothole.”

Senate Democrats have been pitching the measure as a jobs bill, predicting it would preserve or create nearly 3 million jobs. But economists say it’s unlikely the bill would create any more jobs than would be created by the same amount of money spent on something else.

The bill would increase the flow of highway aid to states by adjusting current spending levels to take into account inflation over the past several years. States would have greater discretion over how to spend the money, but the bill also would create a new regime of performance and project eligibility requirements aimed at preventing waste and making sure national goals are met.

A credit assistance program that helps leverage private investment for transportation projects of national and regional significance would be increased tenfold to $1 billion. In the past, the program has been able to generate as much as $30 in private capital for every $1 in aid, Boxer has said.

The measure also would reduce the number of federal transportation programs by roughly two-thirds in an effort to eliminate duplication. Bicycle, pedestrian, safe routes to schools and rails-to-trails programs — which were targeted by Republicans — were preserved by moving them into a larger congestion mitigation program where they would have to compete with other programs for money.

Safety measures in the bill would toughen regulation of the long-distance and tour bus industries, including setting deadlines for government requirements that buses have seat belts, improved roof strength, anti-ejection window glazing and rollover crash avoidance systems. The bus industry transports about 750 million passengers a year, roughly the same as the domestic airline industry.

One thing the bill doesn’t do is resolve how to keep the Federal Highway Trust Fund solvent beyond next year. The fund pays for highway and transit programs, but revenues have declined while spending has remained the same. The largest source of money for the fund is federal fuel taxes: 18.4 cents a gallon for gasoline and 24.4 cents a gallon for diesel. Revenue from those taxes has been lower since the economic downturn in 2008 and because the fuel efficiency of cars and trucks is increasing.

The bill would pay for highway programs through a combination of fuel taxes, cuts to other federal programs and tax changes, but also would drain the trust fund. Some senators have been critical of the provisions that are supposed to pay for transportation programs since they would raise about $10 billion over 10 years, but spend it in the first two years.

The highway bill “is so popular that members on both sides of the aisle are willing to kick the can down the road,” Sen. Bob Corker, R-Tenn., said. “I think the American people understand that passing a bill that spends money over two years and tries to recoup it over a 10-year period is a highway to insolvency.”

Lawmakers are under pressure to act quickly. The government’s authority to raise money through fuel taxes and spend money from the trust fund expires March 31. The fu el taxes raise about $110 million a day for the government.

In the House, Speaker John Boehner, R-Ohio, made a five-year transportation bill the election-year centerpiece of the GOP’s jobs agenda last fall when he unveiled its broad outlines. Unable to corral enough votes for passage of the GOP measure, Boehner said last week that he plans to bring the Senate bill to the House floor for a vote. But that could change when the House returns from a weeklong recess next week if GOP leaders are able to snare enough votes for their own measure.

———

Follow Joan Lowy at http://www.twitter.com/AP—Joan—Lowy

2080First lady will lead US delegation to Olympics

By STACY A. ANDERSON

Associated Press

WASHINGTON (AP) — The White House says Michelle Obama will lead the official U.S. delegation to the opening ceremonies of the 2012 Summer Olympic Games in London.

It has become somewhat of a tradition for first ladies to lead the U.S. delegation. Laura Bush headed the delegation to the 2006 Winter Olympics in Torino, Italy, and Hillary Rodham Clinton headed up the delegation at the 1994 Winter Olympics in Lillehammer, Norway.

Mrs. Obama on Tuesday will host a mini-Olympic competition with physical activities for D.C.-area children at American University. The competition is part of her Let’s Move! initiative promoting fitness and healthy eating.

She will be joined by Britain’s first lady, Samantha Cameron, who is accompanying her husband, British Prime Minister David Cameron, on a two-day visit to the U.S.

Olympians and Paralympians expected to attend the event include: Kortney Clemons, Dominique Dawes, April Holmes, Lisa Leslie, Lori Ann Lindsey, Dan O’Brien, Becky Sauerbrunn and David Wagner.

BC-US--US-China, 7th Ld-Writethru,758 Obama warns China against ‘skirting the rules’

By JULIE PACE

Associated Press

WASHINGTON (AP) — President Barack Obama warned China Tuesday that it would not be allowed to gain a competitive advantage in world trade by “skirting the rules.”

Making an election-year pitch to American workers, and businesses as well, Obama announced Washington has brought a new trade case against Beijing. The goal is to pressure China, a rising Asian economic power, to end its restrictions on exports of key materials used to manufacture hybrid car batteries, flat screen televisions and other high tech-goods.

“If China would simply let the market work on its own, we’d have no objection,” Obama said during remarks in the White House Rose Garden. “But their policies currently are preventing that from happening. And they go against the very rules that China agreed to follow.”

The U.S., working in conjunction with the European Union and Japan, asked the World Trade Organization Tuesday to facilitate talks with China over its curtailment of exports of what’s known as rare earth minerals. Obama cast the fresh action against China as part of a broader push to level the playing field for U.S. companies.

“When it is necessary, I will take action if our workers and our businesses are being subjected to unfair practices,” Obama said.

With the U.S economy slowly recovering from recession, Obama has sought to bring a renewed focus on Chinese policies that could hinder U.S. expansion. He used an executive order last month to create a new trade enforcement agency — the Interagency Trade Enforcement Center — to move aggressively against China and other nations.

But Obama’s posture on China has already surfaced as an election-year issue, with Republican front-runner Mitt Romney criticizing him for refusing so far to cite China for manipulating its currency. Romney has said he would label China a currency manipulator on his first day in office, a move that could lead to trade sanctions against Beijing.

China has a stranglehold on the global supply of 17 rare earth minerals that are essential for making high-tech goods, including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights, smartphones and camera lenses. The materials also are used in the manufacture of tiny motors, such as those used to raise and lower car windows and in consumer electronics.

China has reduced its export quotas of these rare earth minerals over the past several years to cope with a growing demand during rapid business expansion at home, although Chinese officials also cite environmental concerns as the reason for the restrictions. U.S. industry officials suggest it is an unfair trade practice that violates rules established by the WTO, a group that includes China as a member.

Administration officials said Beijing’s export restrictions give Chinese companies a competitive advantage by providing them access to more of these rare materials at a cheaper price, while forcing U.S. companies to manage with a smaller, more costly supply.

“America’s workers and manufacturers are being hurt in both established and budding industrial sectors by these policies,” U.S. Trade Representative Ron Kirk said in a statement. “China continues to make its export restraints more restrictive, resulting in massive distortions and harmful disruptions in supply chains for these materials throughout the global marketplace.”

On Tuesday, a Chinese foreign ministry spokesman defended Beijing’s curbs on rare earth production as necessary to limit environmental damage and conserve scarce resources.

“We think the policy is in line with WTO rules,” the spokesman, Liu Weimin, said at a briefing.

He rejected complaints that China is limiting exports. “Exports have been stable. China will continue to export, and will manage rare earths based on WTO rules,” Liu said.

The spokesman noted that China has about 35 percent of rare earth deposits but accounts for more than 90 percent of global production. “China hopes other countries can shoulder responsibility for supplies and can find alternative resources,” he said.

Rare earth minerals are scattered throughout the Earth’s crust, but only in small quantities, making them hard to mine. However, rich deposits of these rare earth oxides are in China, giving it command of the market.

The U.S. has just one rare earth mining company, the Colorado-based Molycorp Inc. There are also working mines in Australia, and a proposed one in Malaysia.

Under the terms of the WTO complaint, China has 10 days to respond and must hold talks with the U.S., E.U. and Japan within 60 days. If an agreement cannot be reached within that time frame, the U.S. and its partners could request a formal WTO panel to investigate Chinese practices.

———

Associated Press writer Tom Raum contributed to this report.