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By The Skanner News | The Skanner News
Published: 05 November 2008

(AP) While you were fixated on the election campaign and on the collapsing economy and your vanishing retirement investments, stuff happened.
Iraq stood tough -- against the U.S.; Afghanistan bled; Guantanamo refused to close, all pledges to the contrary notwithstanding; At home, the deficit swelled. So did the national debt. It is now twice as big as it was when President Bush took over from Bill Clinton.
The Big Three automakers raised the possibility of becoming the not-so-big two.
The Bush administration tried to relax rules intended to protect animals and plants in danger of extinction.
You no doubt noticed that a funny thing happened at the gasoline station -- prices dropped. But that made alternative energy sources less attainable.
From Associated Press reporters covering these developments, a rundown of some things that happened while you may not have been watching:


THE WARS: A deadline in one, a buildup in the other


Iraq is grinding toward a showdown. Afghanistan, with violence on the upswing, is grinding toward a troop buildup.
Iraq is demanding greater legal control over American troops accused of committing crimes against Iraqis. That demand is blocking agreement on a U.S.-Iraq security pact that would allow American forces to continue operating in Iraq after Dec. 31.
As those discussions plod along, violence in Afghanistan is on the rise. And so is pressure to send thousands more Americans to the original battleground in the post-Sept. 11 fight against terrorism.
There are about 150,000 U.S. troops in Iraq. A U.N. mandate authorizing the U.S. mission expires at the end of the year. Without a new security agreement, the U.S. would have to suspend operations. That would put heavy pressure on Iraq's still shaky military and police to battle insurgent groups solo.
The government of Iraq may try to drag out the negotiations until after the inauguration of President-elect Obama, who wants most U.S. forces out by mid-2010.
In Afghanistan, 2008 has been the deadliest year for U.S. forces since the country was invaded for sheltering Osaka bin Laden and his al-Qaida network. About 31,000 U.S. troops now are on duty in Afghanistan; Obama supports sending as many as 10,000 more.
All is not well between Washington and Pakistan, a longtime U.S. ally. The U.S. has launched at least 17 missile strikes since August against militant targets in Pakistan's volatile tribal area along the Afghanistan border. The attacks have been condemned by Pakistan as violations of its sovereignty.
Army Gen. David Petraeus, newly installed as the officer overseeing the wars in Iraq and Afghanistan, just visited Pakistan to help ease the friction. He also traveled to Afghanistan to assess the situation there.
GUANTANAMO BAY: Still not close to closing

How much closer has the administration moved to the president's stated goal of closing the prison for terrorist suspects at Guantanamo Bay, Cuba?
Not one inch. Why?
The administration says it cannot work its way through a thicket of legal obstacles. A big question is where in the U.S. it would jail -- and put on trial -- the 80 or so it intends to charge with war crimes.
Also, what to do with the approximately 110 prisoners who, in the administration's judgment, are too dangerous to let loose but against whom the government has too little evidence to put on trial. The U.S. is having trouble finding countries willing to take the 60 or so cleared to be transferred out of Guantanamo Bay but who remain there in limbo.
The administration has repatriated 19 prisoners this year and has moved ahead with military trials for a small number.
So far, two detainees have been convicted and sentenced, both closely connected to bin Laden.
Ali Hamza al-Bahlul, who made propaganda videos for bin Laden before being captured in December 2001, was convicted of terrorism charges this past week and sentenced to life in prison. Former bin Laden driver Salim Hamdan was convicted in August and sentenced to 5 1/2 years in prison. A third prisoner, Australian David Hicks, reached a plea agreement that sent him home to serve a nine-month prison sentence.
There are now 255 held at Guantanamo Bay, compared with 390 at the end of 2006.
THE DEFICIT: A few hundred billion here and there, soon you've added another trillion

Even before an economic slump that may morph into a full-blown recession and the $700 billion financial bailout, Obama wasn't facing a pretty budget picture.
You may not have noticed the news last month that the deficit registered an ugly $455 billion for the budget year that ended Sept. 30. That is a new record in dollar terms but not quite as bad as the deficit Clinton faced when measured against the size of the economy. That is the way most economists prefer to measure deficits and whether they are too big for the nation's fiscal good.
But hold on. The deficit could double in the current year after accounting for the costs of the bailout, further erosion in tax revenues due to the sour economy and a second relief bill exceeding $150 billion.
Something else you may not have noticed: The national debt is now about $10.5 trillion, almost double the debt that Bush inherited eight years ago. Last month Congress had to raise the legal limit on the size of the debt to $11.3 trillion to accommodate borrowing to finance the bailout.
With the economy so lousy, the deficit is not a big concern in the near term. In fact, Obama and Democrats controlling Congress are likely to press for new public works spending and other deficit-financed stimulus steps to try to jolt the economy out of its slump.
Over the longer term, however, big budget deficits in the range of $500 billion or more for years on end cannot help but put a crimp in Obama's priority items like his proposed expansion in health care. Otherwise, huge deficits might lead to interest rates too high for the economy's good.
For those reasons -- coupled with the unsustainable demands on Medicare and Social Security as baby boomers retire -- closing deficit simply has to return as an issue.
Actually balancing the budget is probably out of the question in Obama's first term and is not likely to even be a goal. Rather, economic advisers such as former Treasury Secretary Robert Rubin advocate keeping deficits in the range of 2 percent -- or about $300 billion in today's dollars -- of the size of the economy once things stabilize.

OIL & GASOLINE: Suddenly the alternatives are less attainable

As the presidential candidates tangled over energy policy and promised an aggressive push for more alternative energy, something happened that might make achieving that more difficult. Oil prices plunged. They fell from a high of $147 to less than $70 a barrel. Anger over gas prices eased. Motorists now see gas costing $2.40 a gallon instead of $4.
Good news often has an evil twin. Suddenly, alternative energy sources -- solar, wind and even ethanol -- have lost some luster. Developing alternatives to petroleum, it seems, requires high oil prices and easy credit to spur the capital investments that are needed.
So with credit tightening and oil prices falling, shares of alternative energy companies have fallen more sharply than the broader stock market. Venture capital financing is more difficult to get for advanced solar and biofuels projects. Some wind projects have been delayed. A major ethanol producer has filed for bankruptcy protection and a maker of battery powered cars has delayed production and laid off workers. The cost of new nuclear power plants has soared with little interest in financing them without substantial guarantees from the government.
Obama wants to spent $15 billion a year over the next decade to spur research into cellulosic ethanol; more fuel efficient cars; plug-in electric hybrid cars; new solar and wind turbine technologies; and capturing carbon dioxide -- the leading culprit in global warming -- from coal burning power plants. All these efforts could become less politically urgent and more financially difficult if oil prices keep on falling and financial turmoil keeps its grip on credit markets.

AUTOS: The Big Three: Venerable but Vulnerable

General Motors celebrated its 100th anniversary in mid-September. Today, Detroit's automakers are facing dire conditions that could threaten their existence. General Motors and Chrysler even had to deny bankruptcy rumors.
U.S. auto sales declined to their lowest level in more than 17 years last month. GM and Ford reported Friday that they burned through a combined $14.6 billion in the third quarter. Ford said it would slash more than 2,000 white collar jobs.
In need of cash, GM held talks with Cerberus Capital Management, the majority owner of Chrysler, about acquiring Chrysler. GM reportedly sought Chrysler's $11 billion in cash -- and federal aid -- to make the deal happen.
Congress approved $25 billion in loans in September for the companies to retool plants to build more fuel-efficient vehicles. But since then, market conditions have deteriorated and the companies are turning to Congress for more help.
The companies and the United Auto Workers want an additional $25 billion in loans to get through the downturn in sales. That money could come from the $700 billion financial bailout being run by the Treasury Department or from low-rate emergency borrowing from the Federal Reserve's discount window, used in normal times by banks. They also want an additional $25 billion in federal loans for health care payments for retirees.
The leaders of GM, Ford and Chrysler, and the president of the UAW met with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid on Thursday to discuss several options. On Saturday, Reid and Pelosi said in a letter to Treasury Secretary Henry Paulson that the administration should consider expanding the bailout to include car companies.
At a news conference Friday, Obama said his early focus as president would be on producing jobs and he mentioned actions to help the auto industry.

THE ENVIRONMENT: A quiet attempt to ease the rules

The administration tried to soften the rules that protect endangered species -- changes that Obama said he would reverse.
The Interior Department released proposals to change how the government evaluates things that could harm animals, plants and the environments they live in. Despite a court order to the contrary, the department is again trying to remove protections for gray wolves in the northern Rockies.
Specifically, the administration wants to eliminate the input of government scientists when agencies decide whether power plants, dams and other project are likely to harm species. The administration long has said the fate of the polar bear cannot be used to block projects that emit the gases blamed for global warming. During the election, that was broadened by department lawyers to cover all animals and plants.
In an effort to lock in the regulation before Obama takes over, the agency called 15 of its people to Washington to spend four days sorting through the 200,000 comments received on its proposal.
The department also is working to open up millions of acres of public lands to oil and gas drilling and motorized vehicles before Bush leaves office in January.
Well before the election season, Bush had earned the distinction of being the president to protect fewer species than any other. In his eight years in the White House, he has placed 58 species on the endangered species list. His father, the first President Bush, protected 231 animals and plants during his four years in the office.

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