NEW YORK TIMES STORY ABOUT ENGLISH CURRENCY PROBLEMS

May 24, 2010

In Europe, Britain May Face Largest Debt Hurdle

By LANDON THOMAS Jr.

LONDON — As governments from Greece to Portugal to Spain try to sell markets on their budget-cutting zeal, the country that may face the biggest hurdle is Britain.

Propelled by a robust economy that finally collapsed in 2008, Britain’s spending boom was the most expansive in Europe, producing a welter of shiny hospitals, school buildings and highways, along with a cadre of well-paid public sector officials.

Now the new government must unwind not so much the debt incurred from two years of economic stimulus efforts, but more broadly, the structural deficits built up over more than a decade of expanded health care, education and pension commitments.

Prime Minister David Cameron has talked boldly of closing a British budget deficit now equal to 11 percent of its gross domestic product. But he also has said that he will allow health spending to outpace inflation, continuing a trend started by the Labour government that has doubled the cost of the government’s elephantine National Health Service since 2000.

It is this apparent disconnect between the promises of politicians and the harsh demands of investors for immediate and across the board spending cuts that is at the root of the financial crisis in Europe today.

Even after the nearly $1 trillion rescue package arranged by European Union leaders to shore up the weaker euro zone members, financial markets have gyrated as fears build that debt-plagued nations lack the will to stand up to powerful unions and pare back once generous welfare programs.

“You need a martyr to cut this type of deficit,” said Andrew Lilico, chief economist at Policy Exchange, a right-leaning London research group, who has argued that quick and immediate spending cuts would actually hasten economic recovery rather than derail it.

“You need someone to say, ‘I will do the right thing and everyone will hate me.’ ”

According to a recent analysis by Citigroup, Britain’s structural deficit — meaning the part of the budget gap that will not close even when the economy improves — was 9.2 percent of G.D.P. last year, ranking third in the world behind rapidly aging Japan and almost bankrupt Greece.

As is the case with other countries in Europe, like Spain, Greece and Ireland, Britain has a deficit that has grown mostly because of a decade of rising government outlays that seemed reasonable at the time, but rested heavily on rising tax revenue that disappeared when the bubble burst.

In a recent report, the International Monetary Fund warned that the countries that would have to make the biggest sacrifices in spending cuts and tax increases to return to precrisis levels of indebtedness — Britain, France, Ireland, Spain and the United States — also face the biggest increase in spending demands. These are driven by the rising number of the elderly, thus making the cuts all the harder to impose.

“All developed economies now have in-built structural components in their government deficits due to having pension and health systems and aging populations,” said Edward Hugh, an independent economist based in Barcelona. “And these costs will go up by the year.”

The British chancellor of the Exchequer, George Osborne, who has long urged the Conservative Party to trim the deficit, said on Monday that he would push through £6 billion ($8.65 billion) in spending cuts.

Though decidedly modest when compared with a budget deficit estimated to be about £178 billion, the cuts represent an effort to convince skittish markets that Mr. Cameron’s team is committed to fiscal restraint.

The latest menu of restrictions, freezes and spending reversals also represents an effort to convince the public that Britain must be in tune with the budget-cutting in Greece, Portugal, Spain and other parts of Europe.

“The years of public sector plenty are over,” Mr. Osborne said. “The more decisively we act, the more quickly we can come through these tough times.”

Mr. Cameron has fulminated publicly about cutting public sector pay and decreed that members of Parliament themselves take a 5 percent pay cut.

But it remains unclear whether he can force significant savings in what has become in many respects a public sector aristocracy of elite civil servants, heads of national railroads and top officials of obscure agencies, like the National Policing Improvement Agency and the Horserace Betting Levy Board. The heads of those two agencies, for example, were paid salaries last year that exceed Mr. Cameron’s pay of £197,000 (about $284,000) — £211,831 and £220,665, respectively.

Among the highest paid have been administrators and doctors within the country’s government-financed National Health Service, which has become its own separate economy with its 1.7 million employees and £100 billion plus budget.

For example, David Taube, a doctor, administrator and medical director for five hospitals comprising the Imperial College Healthcare N.H.S. Trust, was paid £260,000 (about $375,000) at the exchange rates last year. That is also more than the prime minister received.

According to the TaxPayers’ Alliance, an advocacy group for spending cuts, the highest-paid 805 government employees in Britain received a 5.4 percent pay increase last year, with the average official taking in £209,224.

Whether it be the £1.3 million paid to the chief executive of the Royal Mail, the £267,000 for the head of information technology in the Department for Work and Pensions, or the £270,000 earned this year by the chief executive of the Guy’s and St. Thomas Hospitals in London, the galloping pay of public sector workers in Britain has become a major component of the structural deficit and shows little sign of letting up.

“We have been doing this for five years now, and the numbers just get bigger and bigger,” said John O’Connell, an analyst at the TaxPayers’ Alliance.

Starting in 2000, the Labour government made it a priority to improve the N.H.S.’s lackluster reputation and invested billions in bricks and mortar as well as the salaries of its growing ranks of doctors and administrators.

Health care spending in Britain soared to 9 percent of G.D.P. from 3 percent. The image of the service has been transformed from one that exemplified drab inefficiencies of the British state to what is now hailed as a world archetype, even by Conservative politicians like Mr. Cameron.

As for Dr. Taube, a spokeswoman for the Imperial College Healthcare N.H.S. Trust said that he was a leading renal clinician and that the bulk of his salary, £180,000 to £185,000, came from his clinical work. He was paid an additional £75,000 to £80,000 for his administrative duties.

Now the new government must wrestle with whether it can restrain such pay and spending and at what political cost.

NY TIMES ARTICLE ABOUT FED RESERVE/US PROBLEMS IN CONVINCING CHINA TO "REVALUE" ITS CURRENCY

May 24, 2010

Clinton and Geithner Face Hurdles in China Talks

By MARK LANDLER

BEIJING — China and the United States opened three days of high-level meetings here on Monday meant to broaden and deepen the ties between the world’s largest developed and developing economies.

But the opening session instead laid bare a recurring theme between Beijing and Washington: the United States came with a long wish list for China on both economic and security issues, while China mostly wants to be left alone to pursue policies that are turning it into an economic superpower.

President Hu Jintao, welcoming the 200-strong American delegation in the Great Hall of the People, praised the “mutually beneficial and win-win cooperation” between the United States and China. Such coordination, he said, had helped speed the recovery from the 2008financial crisis.

On the crucial issue of China revaluing its currency — something the Obama administration had pushed for — Mr. Hu repeated China’s past promises to make its effectively fixed exchange rate respond more to the market, but the fact that the country’s top leader mentioned reform at all suggested it is on the leadership’s agenda.

Still, Mr. Hu also repeated that Beijing would move “under the principle of independent decision-making, controllability, and gradual progress.” Translation: China alone will determine the timing of any such move.

Economists said the deepening debt crisis in Greece, which came up immediately in the discussions on Monday, would make Beijing more reluctant to allow its currency to appreciate in value in the immediate future.

Treasury Secretary Timothy F. Geithner did not mention China’s currency in his opening remarks, and the United States did not broach it in the first working session. The administration has decided not to prod Beijing at this meeting, officials said, concluding that it would resist outside pressure.

The United States is hitting similar hurdles on security issues. Secretary of State Hillary Rodham Clinton pressed China to support measures against North Korea following the strong evidence that it torpedoed a South Korean warship in March. But China has been skeptical of North Korea’s role and is reluctant to punish the North, with which it has close ties.

And while China agreed to a watered-down United Nations resolution on Iran’s nuclear program, it has not signed off on amendments against specific Iranian citizens and companies. With big planned investments in Iran’s oil and gas industry, China may well be in business with some of them.

In her speech to the opening session, Mrs. Clinton cited Iran and North Korea as issues in which Beijing and Washington must find common cause. “Today, we face another serious challenge provoked by the sinking of the South Korean ship,” she said. “So we must work together, again, to address this challenge and advance our shared objectives of peace and stability.”

A spokesman for the Foreign Ministry, Ma Zhaoxu, was noncommittal, saying of the Korea crisis, “We hope all the relevant parties will exercise restraint and remain cool-headed.”

Some of this is cultural, to be sure. Chinese officials tend to speak far less directly than Americans. Mr. Hu did not mention Iran and North Korea, referring to regional “hot spots.” The fact that he frankly addressed the exchange rate of China’s currency, the renminbi, surprised some observers, and lent itself to varying interpretations.

For some experts, Mr. Hu’s pledge to “steadily advance the reform mechanism of the RMB exchange rate,” without repeating his previous references to the rate being “basically stable,” was a sign of conciliation. “It’s important, the fact they haven’t mentioned it,” said Ben Simpfendorfer, the China economist for the Royal Bank of Scotland.

But others interpreted it as a pre-emptive move to take the issue off the table. Eswar Prasad, an economist at Cornell University, noted that the crisis in Greece had rattled the Chinese on two levels. It was likely to curb their exports to Europe, and it had strengthened the renminbi relative to the swooning euro, which makes Chinese goods more costly in foreign markets.

“That double hit on China’s exports almost certainly means that they’re not going to move forward unless there is evidence of stabilization in the euro and stabilization in Europe’s recovery,” Mr. Prasad said.

A senior Chinese official said that Beijing would keep a “high alert and attention on the euro zone sovereign debt crisis.” He noted that it could affect not only Europe’s economic recovery but also Chinese exports. China exports more to the European Union than to the United States.

The United States needed a 48-vehicle motorcade to ferry its delegation to this second round of the so-called strategic and economic dialogue. Among the prominent names: the chairman of the Federal Reserve, Ben S. Bernanke, the commander of the military’s Pacific Command, Adm. Robert F. Willard, and the secretary of health and human services, Kathleen Sebelius.

Some of the topics under discussion veered far from economics and security. Mrs. Clinton singled out Melanne Verveer, the State Department’s ambassador at large for women’s issues, who is meeting with Chinese women’s groups to discuss their progress in women’s rights.

Mr. Geithner lobbied against Chinese government procurement rules giving preference to products with intellectual property developed in China. American businesses, particularly in technology, say this handicaps them and deprives China of state-of-the-art products. “Innovation flourishes best when markets are open, competition is fair, and strong protections exist for ideas and inventions,” he said.

The Chinese have their pet issues as well: Beijing is pushing Washington to loosen controls on exports of high-technology equipment with potential military applications. A raft of questions from reporters for state-run Chinese media organizations suggested a coordinated campaign.

If American officials seemed likely to leave China with many of their wishes unfulfilled, there was one notable difference in this year’s meeting compared to the one last year in Washington: the American economy is growing again, which gave Mr. Geithner a rare chance to crow a bit.

Rather than identify the United States with the troubled economies of Europe, Mr. Geithner said the United States was holding its own with emerging economies like Brazil, India, and China.

“Economic growth in the U.S. and China is broader and stronger than many had anticipated, even a few months ago,” he said.

Michael Wines contributed reporting from Beijing, and Keith Bradsher from Hong Kong.

NEW YORK TIMES ARTICLE ABOUT US CONFIRMATION THAT IT HAS OVER 5,000 NUCLEAR WEAPONS

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May 21, 2010

An Arsenal We Can All Live With

By GARY SCHAUB Jr. and JAMES FORSYTH Jr.

Maxwell Air Force Base, Ala.

THE Pentagon has now told the public, for the first time, precisely how many nuclear weapons the United States has in its arsenal: 5,113. That is exactly 4,802 more than we need.

Last week, Secretary of Defense Robert Gates and Secretary of State Hillary Clinton testified before the Senate to advocate approval of the so-called New Start treaty, signed by President Obama and President Dmitri Medvedev of Russia last month. The treaty’s ceiling of 1,550 warheads deployed on 700 missiles and bombers will leave us with fewer warheads than at any time since John F. Kennedy was president. Yet the United States could further reduce its reliance on nuclear weapons without sacrificing security. Indeed, we have calculated that the country could address its conceivable national defense and military concerns with only 311 strategic nuclear weapons. (While we are civilian Air Force employees, we speak only for ourselves and not the Pentagon.)

This may seem a trifling number compared with the arsenals built up in the cold war, but 311 warheads would provide the equivalent of 1,900 megatons of explosive power, or nine-and-a-half times the amount that Secretary of Defense Robert McNamara argued in 1965 could incapacitate the Soviet Union by destroying “one-quarter to one-third of its population and about two-thirds of its industrial capacity.”

Considering that we face no threat today similar to that of the Soviet Union 45 years ago, this should be more than adequate firepower for any defensive measure or, if need be, an offensive strike. And this would be true even if, against all expectations, our capacity was halved by an enemy’s surprise first strike. In addition, should we want to hit an enemy without destroying its society, the 311 weapons would be adequate for taking out a wide range of “hardened targets” like missile silos or command-and-control bunkers.

The key to shrinking our nuclear arsenal so radically would be dispersing the 311 weapons on land, at sea and on airplanes to get the maximum flexibility and survivability.

Ideally, 100 would be placed on single-warhead intercontinental ballistic missiles, like the Minuteman III systems now in service. These missiles, which have pinpoint accuracy, are scattered around the country in such a way that only one potential enemy, Russia, would have any chance of rendering the arsenal impotent with a surprise strike. (And it is likely that our unilateral cuts would entice Moscow, which has been retiring its systems at a fast clip in recent years, to follow suit.) Equally important, these missile sites are easily detected and monitored, which would reassure our friends and provide a credible threat to our enemies.

The sea leg of the plan would involve placing 24 Trident D-5 missiles, each with a single nuclear warhead, on each of our Ohio-class submarines. Today’s fleet of 14 can be cut to 12, with eight on patrol at a given time, together carrying 192 missiles ready to launch. The Tridents are extremely effective, as they can be moved around the globe on the submarines, cannot be easily detected, and present a risk to even hardened targets. And should any of our allies feel that our cuts in seaborne missiles are worrisome, we can remind them that the British and French will keep their complementary nuclear capabilities in the Atlantic.

Finally, for maximum flexibility in our nuclear arsenal, each of our B-2 stealth bombers could carry one air-launched nuclear cruise missile. While we have 20 such bombers, we assume that one would be undergoing repairs at any given time, giving us the final 19 warheads in our 311-missile plan. Our B-2 fleet is more than adequate for nuclear escalation control and political signaling, and giving it an exclusive role in our nuclear strategy would allow us to convert all our B-52H bombers to a conventional role, which is far more likely to be of use in our post-cold-war world.

While 311 is a radical cut from current levels, it is not the same as zero, nor is it a steppingstone to abandoning our nuclear deterrent. The idea of a nuclear-weapon-free world is not an option for the foreseeable future. Nuclear weapons make leaders vigilant and risk-averse. That their use is to be avoided does not render them useless. Quite the opposite: nuclear weapons might be the most politically useful weapons a state can possess. They deter adversaries from threatening with weapons of mass destruction the American homeland, United States forces abroad and our allies and friends. They also remove the incentive for our allies to acquire nuclear weapons for their own protection.

We need a nuclear arsenal. But we certainly don’t need one that is as big, expensive and unnecessarily threatening to much of the world as the one we have now.

Gary Schaub Jr. is an assistant professor of strategy at the Air War College and James Forsyth Jr. is a professor of strategy at the School of Advanced Air and Space Studies.

NY TIMES ARTICLE ABOUT THE ENGLISH DOCTOR PUNISHED FOR LINKING AUTISM TO VACCINATION

May 24, 2010

Britain Bans Doctor Who Linked Autism to Vaccine

By THE ASSOCIATED PRESS

Filed at 7:48 p.m. ET

LONDON (AP) -- The doctor whose research linking autism and the vaccine for measles, mumps and rubella influenced millions of parents to refuse the shot for their children was banned Monday from practicing medicine in his native Britain.

Dr. Andrew Wakefield's 1998 study was discredited -- but vaccination rates have never fully recovered and he continues to enjoy a vocal following, helped in the U.S. by endorsements from celebrities like Jim Carrey and Jenny McCarthy

Wakefield was the first researcher to publish a peer-reviewed study suggesting a connection between autism and the vaccine for measles, mumps and rubella. Legions of parents abandoned the vaccine, leading to a resurgence of measles in Western countries where it had been mostly stamped out. There are outbreaks across Europe every year and sporadic outbreaks in the U.S.

''That is Andrew Wakefield's legacy,'' said Paul Offit, chief of infectious diseases at the Children's Hospital of Philadelphia. ''The hospitalizations and deaths of children from measles who could have easily avoided the disease.''

Wakefield's discredited theories had a tremendous impact in the U.S., Offit said, adding: ''He gave heft to the notion that vaccines in general cause autism.''

In Britain, Wakefield's research led to a huge decline in the number of children receiving the MMR vaccine: from 95 percent in 1995 -- enough to prevent measles outbreaks -- to 50 percent in parts of London in the early 2000s. Rates have begun to recover, though not enough to prevent outbreaks. In 2006, a 13-year-old boy became the first person to die from measles in Britain in 14 years.

''The false suggestion of a link between autism and the MMR vaccine has done untold damage to the UK vaccination program,'' said Terence Stephenson, president of the Royal College of Paediatrics and Child Health. ''Overwhelming scientific evidence shows that it is safe.''

On Monday, Britain's General Medical Council, which licenses and oversees doctors, found Wakefield guilty of serious professional misconduct and stripped him of the right to practice medicine in the U.K. Wakefield said he plans to appeal the ruling, which takes effect within 28 days.

The council was acting on a finding in January that Wakefield and two other doctors showed a ''callous disregard'' for the children in their study, published in 1998 in the medical journal Lancet. The medical body said Wakefield took blood samples from children at his son's birthday party, paying them 5 pounds (about $7.20) each and later joked about the incident.

The study has since been widely rejected. From 1998-2004, studies in journals including the Lancet, the New England Journal of Medicine, Pediatrics and BMJ published papers showing no link between autism and the measles vaccine.

Wakefield moved to the U.S. in 2004 and set up an autism research center in Austin, Texas, where he gained a wide following despite being unlicensed as a doctor there and facing skepticism from the medical community. He quit earlier this year.

Offit said he doubted Britain's decision to strip the 53-year-old Wakefield of his medical license would convince many parents that vaccines are safe.

''He's become almost like a Christ-like figure and it doesn't matter that science has proven him wrong,'' Offit said. ''He is a hero for parents who think no one else is listening to them.''

Wakefield told The Associated Press Monday's decision was a sad day for British medicine. ''None of this alters the fact that vaccines can cause autism,'' he said.

''These parents are not going away; the children are not going to go away and I most certainly am not going away,'' he said on NBC's''Today Show.''

Wakefield claimed the U.S. government has been settling cases of vaccine-induced autism since 1991.

However, two rulings by a special branch of the U.S. Court of Federal Claims in March and last year found no link between vaccines and autism. More than 5,500 claims have been filed by families seeking compensation for children they claim were hurt by the vaccine.

Wakefield has won support from parents suspicious of vaccines, including Hollywood celebrities.

McCarthy, who has an autistic son, issued a statement in February with then boyfriend Carrey asserting Wakefield was ''being vilified through a well-orchestrated smear campaign.''

''It is our most sincere belief that Dr. Wakefield and parents of children with autism around the world are being subjected to a remarkable media campaign engineered by vaccine manufacturers,'' the actors said.

McCarthy, whose best-seller ''Louder Than Words'' details her search for treatments for her son Evan, wrote the foreword for a new book by Wakefield about autism and vaccines.

In Monday's ruling, the medical council said Wakefield abused his position as a doctor and ''brought the medical profession into disrepute.''

At the time of his study, Wakefield was working as a gastroenterologist at London's Royal Free Hospital and did not have approval for the research. The study suggested autistic children had a bowel disease and raised the possibility of a link between autism and vaccines. He had also been paid to advise lawyers representing parents who believed their children had been hurt by the MMR vaccine.

Ten of the study's authors later renounced its conclusions and it was retracted by the Lancet in February.

At least a dozen British medical associations, including the Royal College of Physicians, the Medical Research Council and the Wellcome Trust have issued statements verifying the safety of the measles, mumps and rubella vaccine.

This verdict is not about (the measles) vaccine,'' said Adam Finn, a professor of pediatrics at the University of Bristol Medical School. ''We all now know that the vaccine is remarkably safe and enormously effective... We badly need to put this right for the sake of our own children and children worldwide.''

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Associated Press Writer Kelley Shannon contributed to this report from Austin, Texas.

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Online:

Ruling on Wakefield, http://www.gmc-uk.org/Wakefield(underscore)SPM(underscore)and(unders core)SANCTION.pdf(underscore)32595267.pdf

NEW YORK TIMES ARTICLE ON BP USE OF UN.US/S.KOREAN PRESSURE ON N.KOREA

May 24, 2010

Pentagon and U.N. Chief Put New Pressure on N. Korea

By CHOE SANG-HUN and THOM SHANKER

SEOUL, South Korea — Pressure on North Korea over the sinking of a South Korean warship intensified Monday as the United States announced it would conduct joint naval exercises with South Korea and the top United Nations official said the Security Council would need to take some action against the North.

A Defense Department spokesman in Washington, Bryan Whitman, said the naval exercises would be conducted “in the near future” and would be aimed at improving the ability of South Korea and the United States to detect enemy submarines and halt banned shipments of nuclear materials. The announcement was the Pentagon’s first concrete response in the escalating tensions between North and South Korea over what South Koreans have called the deliberate sinking by the North of one of their warships two months ago.

At the United Nations, Ban Ki-moon, the secretary general, told a news conference that “there must be some measures taken,” though he stopped short of saying what those measures should be.

“The evidence is quite compelling,” he said. “ There is no controversy. Therefore it is the responsibility of the international community to address this issue properly.”

Mr. Ban, a former foreign minister of South Korea, said that he tried to separate his own personal feelings from his duties as secretary general but that the attack on the ship compelled him to respond.

Hours earlier, the South Korean president, Lee Myung-bak, said that his nation would sever nearly all trade with North Korea, deny North Korean merchant ships use of South Korean sea lanes and ask the United Nations Security Council to punish the North.

In Washington, the Obama administration said the measures South Korea announced were “entirely appropriate.” President Obamainstructed American military commanders to coordinate closely with their South Korean counterparts to “insure readiness and deter aggression.”

“The Republic of Korea can continue to count on the full support of the United States,” Secretary of State Hillary Rodham Clinton said in Beijing, where she was attending high-level talks between China and the United States that have been overshadowed by the crisis. “Our support for South Korea’s defense is unequivocal.”

The steps outlined by Mr. Lee in a nationally televised speech — coupled with new moves by South Korea’s military to resume “psychological warfare” propaganda broadcasts at the border after a six-year suspension — amounted to the most serious action the South could take short of an armed retaliation for the sinking of the ship, the South’s worst military loss since the Korean War ended in a truce in 1953.

“We have always tolerated North Korea’s brutality, time and again,” Mr. Lee said. “But now things are different. North Korea will pay a price corresponding to its provocative acts. Trade and exchanges between South and North Korea will be suspended.”

North Korea’s military immediately warned that if South Korea put up propaganda loudspeakers and slogans at the border, it would destroy them with artillery shells, the North’s official K.C.N.A. news agency reported.

Mr. Lee’s speech came just as economic and security talks between China and the United States began in Beijing. In meetings on Sunday evening and Monday, Mrs. Clinton pressed Chinese leaders to take a much tougher position toward North Korea, China’s historical ally. Mr. Lee’s speech was bound to add to the pressure on the Chinese, who have called for restraint.

Mrs. Clinton expressed confidence that the Chinese would agree to take at least some measures, noting that Beijing supported additional sanctions against the North after it tested a nuclear device last year. But other American officials cautioned that Beijing remains unconvinced of the need to punish North Korea in the case of the warship.

“I can say the Chinese recognize the gravity of the situation we face,” Mrs. Clinton said to reporters after Mr. Lee’s speech. “This is a highly precarious situation that the North Koreans have caused in the region; it is one that every country that neighbors or is in proximity to North Korea understands must be contained.”

President Hu Jintao did not mention North Korea in his speech welcoming the American delegation, though he did say the two countries should “strengthen coordination on regional hot-spot and global issues.”

North Korea has denied responsibility for the sinking of the South Korean warship, the Cheonan, on March 26, which left 46 sailors dead.A growing body of evidence assembled by the South has suggested a North Korean torpedo sank the ship.

Cutting off trade with North Korea is the most punishing unilateral action the South could take against the impoverished North. It will deprive North Korea of 14.5 percent of its external trade and $253 million in cash revenues a year, according to estimates by Lim Kang-taek, a senior researcher at the Korea Institute for National Unification in Seoul.

Mr. Lee also said that South Korea would block North Korean merchant ships from using South Korean waters, which would force the ships to detour and use more fuel. North Korean merchant ships made 717 trips to South Korean ports or through South Korean sea lanes last year.

Besides these unilateral measures, South Korea will “refer this matter to the U.N. Security Council, so that the international community can join us in holding the North accountable,” Mr. Lee said. “Many countries around the world have expressed their full support for our position.”

Mrs. Clinton declined to detail specific steps the United States is weighing until after she meets Mr. Lee in Seoul on Wednesday. Other administration officials said the United States might conduct joint naval exercises with South Korea in anti-submarine warfare in the waters off the Korean Peninsula.

But Mrs. Clinton did not suggest that the State Department would soon add North Korea’s name to its list of state sponsors of terrorism, as some members of Congress have demanded. Reinstating North Korea, which was taken off the list by the Bush administration, would only happen if there was evidence that it was involved in acts of terrorism, she said.

In a separate announcement, the Defense Ministry announced the resumption of propaganda blitzes aimed at the North, a cold war tactic with loudspeaker broadcasts along the border, propaganda radio broadcasts and leaflets dropped by balloon. The resumption was bound to irritate the North Korea leader, Kim Jong-il, whose grip on power rests partly on denying outside information to citizens.

North Korea has already warned that such a move would prompt it to shut down the border with the South completely, raising the possibility of stranding 1,000 South Korean workers at a joint industrial park in the North Korean town of Kaesong.

President Lee cited evidence that a multinational team of investigators released last week on the sinking of the ship, saying, “No responsible country in the international community will be able to deny the fact that the Cheonan was sunk by North Korea.”

But he did not mention China by name.

Mr. Lee also stopped short of terminating the Kaesong industrial complex.

Delivering his speech from the Korean War Memorial in Seoul, Mr. Lee drew an analogy between the North’s surprise invasion that started the three-year Korean War on June 25, 1950, and the blast that sank the Cheonan.

“Again, the perpetrator was North Korea. Their attack came at a time when the people of the Republic of Korea were enjoying their well-earned rest after a hard day’s work,” he said. “Once again, North Korea violently shattered our peace.”

Choe Sang-hun reported from Seoul, and Thom Shanker from Washington. Mark Landler contributed reporting from Beijing and Neil MacFarquhar from the United Nations.

NEW YORK TIMES ARTICLE ON BP USE OF TOXIC CHEMICAL IN THE GULF OF MEXICO

May 24, 2010

BP Kept Using Toxic Chemical in Gulf After E.P.A. Deadline

By ELISABETH ROSENTHAL and ANAHAD O’CONNOR

The effort to stanch the vast oil spill in the Gulf of Mexico was mired by setbacks on Monday as state and federal officials feuded with BPover its failure to meet deadlines and its refusal to stop spraying a chemical dispersant.

The oil company had indicated that it could stem the flow of oil on Tuesday by trying a procedure known as a top kill, in which heavy fluid would be pumped into the well. But on Monday morning the company’s chief operating officer said the procedure would be delayed until Wednesday.

At the same time, BP was locked in a tense standoff with the Environmental Protection Agency, which had ordered the company last week to find a “less toxic” chemical dispersant than the one it was using and to make the switch by Sunday evening. But BP continued spraying the chemical on Monday after informing the agency why it believed that the dispersant it has been using, called Corexit, was the safest available.

At a news conference Monday in Louisiana, state and federal officials continued to hammer BP over its response to the spill.

“BP in my mind no longer stands for British Petroleum — it stands for Beyond Patience,” said Sen. Richard J. Durbin of Illinois, the No. 2 Democrat in the Senate. “People have been waiting 34 days for British Petroleum to cap this well and stop the damage that’s happening across the Gulf of Mexico.”

“What we need to tell BP,” he added, “is excuses don’t count anymore. You caused this mess, now stop the damage and clean up the mess. It’s your responsibility.”

At a news conference on Monday afternoon, the E.P.A.’s administrator, Lisa P. Jackson, said that she was “dissatisfied with BP’s response” to her agency’s order to switch to a “less toxic” dispersant. She said she had responded by ordering BP to take “immediate steps to scale back the use of dispersants,” saying that the amount being used could probably be reduced by 50 to 75 percent.

Since the Deepwater Horizon rig exploded a month ago and began spewing oil a mile under surface, BP has applied about 700,000 gallons of the dispersants on the gulf’s surface and in experimental undersea applications directly on the leaking well head. That is the largest quantity of dispersant deployed to date to break up an oil spill in United States waters.

Ms. Jackson said that in theory, BP’s deployment of dispersant directly onto the leaking well head — a novel and experimental use of the chemicals — would reduce the amount of oil on the surface and lessen the need for application there.

Calling BP’s safety data on dispersants “insufficient,” she said that government scientists would conduct their own scientific tests to decide which type was best to use. Ms. Jackson said the amount of dispersant applied to control the oil was “approaching a world record.”

Rear Adm. Mary Landry of the Coast Guard said that while the government had pre-approved the use of dispersant, “no one anticipated that is would ever be used at this scale and this scope.”

She said the preferred method of treating oil on the ocean was to burn it or to soak it up with devices like absorbent booms and that dispersant applications should be a second line defense for when the weather was too severe to rely on those other techniques.

Rep. Edward J. Markey, Democrat of Massachusetts, praised the E.P.A.’s action, saying, “Just like many aspects of their spill response, BP gets an ‘F’ on its analysis of dispersants, and E.P.A. has rightly told it to redo its assignment and this time, show all its work.”

He added, “Despite the assertions made by BP that dispersants can be safely used, we know almost nothing about the potential harm from the long-term use of any of these chemicals on the marine environment in the Gulf of Mexico, and even less about their potential to enter the food chain and ultimately harm humans.”

At the morning news conference, Mr. Durbin was joined by Interior Secretary Ken Salazar and Homeland Security Secretary Janet Napolitano, who were sent to the region Monday by President Obama in response to increasing criticism that the White House was not acting aggressively enough on the spill.

“BP is the responsible party, but we need the federal government to make sure they’re held accountable,” Gov. Bobby Jindal of Louisiana, a Republican, said Monday.

Mr. Salazar insisted that the federal government was not “sitting on the sidelines and letting BP do what BP wants to do.” He pointed out that the government had deployed more than 1,000 vessels to the region and more than 20,000 workers, burned oil off the surface of the Gulf and deployed miles of protective boom to protect and clean up the shorelines.

“The federal government has mounted the largest response to fight this oil in all of the history of this country,” Mr. Salazar said. Speaking of BP, he reiterated the phrase that the government would “keep our boot on their neck until the job gets done.”

Ms. Napolitano said the government had formed a group of “the best scientists available within the federal government” to calculate new estimates of how much oil has been released into the gulf, suggesting that the government was not satisfied with BP’s estimates, which have attracted widespread criticism as too low. The group is expected to have its assessment ready by early next week.

Seeking to reassure all those whose livelihoods had been threatened by the spill, Sen. Mary Landrieu, Democrat of Louisiana, repeated that BP would be held responsible for damages. She also said the state would do a better job of processing claims in the future. “If you made $50,000 last year, and you can’t work this year,” she said, “BP is going to write you a check for $50,000.”

The top-kill method that BP had said it would try on Tuesday is one of several proposed methods of stanching the flow of at least 210,000 gallons of oil a day that has been threatening marine life and sensitive coastal areas in Louisiana, Mississippi, Alabama and Florida. BP officials have emphasized that none of the methods have been tried before at the depth of this leak, and the company’s chief operating officer, Doug Suttles, noted the difficulties of working at such depths in explaining why the attempt was being delayed until Wednesday.

Meanwhile, in a letter over the weekend, the oil company defended its use of Corexit and took issue with the methods that the E.P.A. had used to estimate its toxicity.

Last Wednesday, the federal agency ordered BP to propose one or more alternative dispersants to regulators within 24 hours. Then it gave the company 72 hours after that deadline to stop using Corexit and make a switch. Officials and scientists from the E.P.A. and the oil company met Sunday night and were apparently unable to reach a compromise before the deadline passed.

“We are continuing to use Corexit while we’re still working with E.P.A. on alternatives,” said Mark Salt, a spokesman for the oil company, said by telephone from Texas on Monday.

While the Corexit products, made by Nalco of Naperville, Ill., are the time-tested old faithfuls of oil spill treatment, developed in the 1980s and 1990s, critics say that less toxic and more effective products are now available.

The purpose of the chemicals is to break up the oil into tiny droplets that drop under the water and can be more readily dispersed by ocean currents so that the oil does not have so great an effect on sea life.

Complicating the standoff between the company and regulators, there are many methods for estimating the toxicity of chemical oil dispersants and no single standard prevails.

The original E.P.A. order instructed BP “to identify a less toxic alternative” but also said that if BP were “unable to identify available alternative dispersant products,” it could instead provide the Coast Guard and the E.P.A. with a detailed description of the dispersants it had investigated and the reason it did not believe they met the required standards.

On Thursday night BP invoked that latter option. In a letter, it ticked off some of the alternative dispersants it had considered and outlined why it felt each was problematic, often because of other toxicity issues.

Last week, after receiving the initial E.P.A. order, BP contacted a number of dispersant manufacturers, including the U.S. Polychemical Corporation — which makes a product called Dispersit SPC 1000 — asking about product composition and how quickly the mix could be produced. In the end, BP did not place an order, an official at U.S. Polychemical said.

The Corexit dispersants were removed from a list of approved dispersants in Britain a decade ago because one type of test used in that country found them to be dangerous to animals like limpets near rocky shores.

Corexit dispersants are still approved for use in the United States and Canada, which rely on different types of testing.

Brian Knowlton contributed reporting from Washington, Campbell Robertson from Venice, La., and Daisuke Nakai from New York.

Israeli diplomat to be kicked out of Australia over passport forgery row

• Phillip Hudson with AAP From: Herald Sun, AAP May 24, 2010 12:40PM

Four Australians had their passports forged by Mossad, with the images of their faces replaced with those pictured above.

Stephen Smith, Minister for Foreign Affairs, holds a press conference at Parliament House on the fraudulent use of Australian passports by Israel. Picture: Kym Smith Source: Herald Sun

UPDATE 3.35pm: AUSTRALIA'S decision to expel a senior diplomat after finding Israel used fake Australian passports in the killing of a Hamas leader will upset the Jewish community, a Jewish-Australian political activist says.

But it could also lead to a "healthy debate'' in public about the sort of relationship Australia has with Israel, political activist and author Antony Loewenstein said.

Mahmoud Al-Mabhouh, a senior figure in the militant Palestinian organisation Hamas, was found murdered in a hotel room in Dubai in the United Arab Emirates on January 20.

"The way Israel behaves in Dubai, and indeed in many other parts of the world, is often to ignore local and international law, and expect the western world to support it and back it,'' Mr Loewenstein said.

Mr Loewenstein, whose book My Israel Question finds fault with the Jewish state for its part in the conflict with Palestine and ongoing tensions in the Middle East, described the relationship between Australia and Israel as "complicit''.

"Australia has long been treated like fools by Israel, and has often been more than happy to be seen as a fool, in many ways,'' he said.

"The bigger question really is, that hopefully this will lead to a debate about how Israel behaves, and how Australia has often accepted that and supports that.

"It shows and hopefully reveals to the wider community that most of the Jewish spokespeople in this country see themselves solely as spokespeople for Israel.''

Foreign Affairs Minister Stephen Smith told parliament today that there was "no doubt" Israel was responsible for faking four Australian passports used in the killing of Al-Mabhouh.

Mr Loewenstein criticised Australia's Jewish community for its reaction to the news that four passports belonging to dual Australian-Israeli citizens had been forged.

"The Jewish spokespeople in Australia initially said nothing,'' he said.

"Then when they did say something, they suggested there was no evidence that Israel was involved.

"Even if Israel was involved, they then said Australia should have turned a blind eye because an awful terrorist (had been) killed.

"They were essentially asking people to accept the fact that their passports are not safe because of what Israel claims to be divine rights to assassinate supposed terrorists.''

Mr Smith said today the high quality forgeries were by a "state intelligence service'', although he did not specifically name the Israeli spy agency Mossad.

But he said Israel had undermined the respect and trust with Australia.

"These are not the actions of a friend,'' Mr Smith said.

Mr Smith has asked that a member of the Israeli Embassy in Canberra be withdrawn from Australia within the week, as a result of the scandal.

"This is not what we expect from a nation with whom we have had such a close, friendly and supportive relationship,'' he said.

Mr Smith said an investigation by the federal police and ASIO found the Australian passports were deliberately counterfeited and cloned for use.

"The high quality of these counterfeited passports points to the involvement of a state intelligence service,'' he said.

"These investigations and advice have left the Government in no doubt that Israeli was responsible for the abuse and counterfeiting of these passports.''

International investigators believe Mossad was behind the assassination of Hamas official Mahmud al-Mabhuh in Dubai in January.

Four Australian passports have been linked to the murderers.

Mr Smith today said no government could tolerate the abuse of its passports and revealed Israel had previously abused Australian passports.

"I regret to advise the House this is not the first occasion that Australian passports have been misused by Israeli authorities,'' he said.

Mr Smith said it was a clear and direct breach of confidential undertakings by Israel "dating back some years''.

"This is not what we expect of a nation with whom we have had such a close, friendly and supportive relationship,'' Mr Smith aid.

"The government has asked that a member of the Israeli Embassy in Canberra be withdrawn from Australia. I have asked that the withdrawal be effected within the week.''

Mr Smith said the four Australians were innocent victims of identity fraud.

He said he hoped Australia and Israel could rebuild relations.

The Israeli Embassy said it would issue a statement later today.

Mr Smith said the United Kingdom reached similar conclusions after its investigation into the Dubai incident.

The British Government expelled Mossad's London station chief in March over the use of 12 forged British passports linked to the assassination.

Mr Smith refused to say which Israeli Embassy member had been asked to leave.

He said he would not give a name or their job description but said it was "comparable to the British response''.

He said there was no set time how long the person was expelled for.

Mr Smith said he would be disappointed if Israel responded by expelling an Australian diplomat.

He said there would be a "cooling of'' in the sharing of intelligence material with Israel.

"It does require a rebuilding of trust and confidence,'' he said in a press conference.

Mr Smith said ASIO's director-general David Irvine visited Israel as part of the investigation.

The nation's overseas-focused spy agency, the Australian Secret Intelligence Service (ASIS), was also involved.

The Australian Federal Police handed a report to the government in April.

Mr Smith said the report and advice would not be released on national security grounds.

"I received my final advice from agencies last week,'' Mr Smith said, adding that he had briefed the national security committee of the cabinet this morning.

About $100 million is being spent by the Government over the next six years to further strengthen the security of Australian passports.

May 21, 2010

Surveillance Suspected as Spacecraft’s Main Role

By WILLIAM J. BROAD

A team of amateur sky watchers has pierced the veil of secrecy surrounding the debut flight of the nation’s first robotic spaceplane, finding clues that suggest the military craft is engaged in the development of spy satellites rather than space weapons, which some experts have suspected but the Pentagon strongly denies.

Last month, the unmanned successor to the space shuttle blasted off from Florida on its debut mission but attracted little public notice because no one knew where it was going or what it was doing. The spaceship, known as the X-37B, was shrouded in operational secrecy, even as civilian specialists reported that it might go on mysterious errands for as long as nine months before zooming back to earth and touching down on a California runway.

In interviews and statements, Pentagon leaders strongly denied that the winged plane had anything to do with space weapons, even while conceding that its ultimate goal was to aid terrestrial war fighters with a variety of ancillary missions.

The secretive effort seeks “no offensive capabilities,” Gary E. Payton, under secretary of the Air Force for space programs, emphasized on Friday. “The program supports technology risk reduction, experimentation and operational concept development.”

The secretive flight, civilian specialists said in recent weeks, probably centers at least partly on testing powerful sensors for a new generation of spy satellites.

Now, the amateur sky watchers have succeeded in tracking the stealthy object for the first time and uncovering clues that could back up the surveillance theory. Ted Molczan, a team member in Toronto, said the military spacecraft was passing over the same region on the ground once every four days, a pattern he called “a common feature of U.S. imaging reconnaissance satellites.”

In six sightings, the team has found that the craft orbits as far north as 40 degrees latitude, just below New York City. In theory, on a clear night, an observer in the suburbs might see the X-37B as a bright star moving across the southern sky.

“This looks very, very good,” Mr. Molczan said of the identification. “We got it.”

In moving from as far as 40 degrees north latitude to 40 degrees south latitude, the military spacecraft passes over many global trouble spots, including Iraq, Iran, Afghanistan, Pakistan and North Korea.

Mr. Molczan said team members in Canada and South Africa made independent observations of the X-37B on Thursday and, as it turned out, caught an earlier glimpse of the orbiting spaceship late last month from the United States. Weeks of sky surveys paid off when the team members Kevin Fetter and Greg Roberts managed to observe the craft from Brockville, Ontario, and Cape Town.

Mr. Molczan said the X-37B was orbiting about 255 miles up — standard for a space shuttle — and circling the planet once every 90 minutes or so.

A fair amount is known publicly about the features of the X-37B because it began life 11 years ago as a project of the National Aeronautics and Space Administration, which operates the nation’s space shuttles. The Air Force took over the program in 2006, during the Bush administration, and hung a cloak of secrecy over its budget and missions.

The X-37B has a wingspan of just over 14 feet and is 29 feet long. It looks something like a space shuttle, although about a quarter of the length. The craft’s payload bay is the size of a pickup truck bed, suggesting that it can not only expose experiments to the void of outer space but also deploy and retrieve small satellites. The X-37B can stay aloft for as long as nine months because it deploys solar panels for power, unlike the space shuttle.

Brian Weedon, a former Air Force officer now with the Secure World Foundation, a private group based in Superior, Colo., said the duration of the X-37B’s initial flight would probably depend on “how well it performs in orbit.”

The Air Force Rapid Capabilities Office leads the X-37B program for what it calls the “development and fielding of select Defense Department combat support and weapons systems.”

Mr. Payton, a former astronaut and senior NASA official, has acknowledged that the spacecraft is ultimately meant to give the United States new advantages on terrestrial battlefields, but denies that it represents any kind of space weaponization.

On April 20, two days before the mission’s start, he told reporters that the spacecraft, if successful, would “push us in the vector of being able to react to war-fighter needs more quickly.” And, while offering no specifics, he added that its response to an “urgent war-fighter need” might even pre-empt the launching of other missions on expendable rockets.

But he emphasized the spacecraft’s advantages as an orbiting laboratory, saying it could expose new technology to space for a long time and then “bring it back” for inspection.

Mission control for the X-37B, Mr. Payton said, is located at the Air Force Space Command’s Third Space Experimentation Squadron, based at Schriever Air Force Base in Colorado Springs. He added that the Air Force was building another of the winged spaceships and hopes to launch it next year.

The current mission began on April 22, when an Atlas 5 rocket at the Cape Canaveral Air Force Station in Florida fired the 5.5-ton spacecraft into orbit.

Jonathan McDowell, a Harvard astronomer who tracks rocket launchings and space activity, said the secrecy surrounding the X-37B even extended to the whereabouts of the rocket’s upper stage, which was sent into an unknown orbit around the sun. In one of his regular Internet postings, he said that appeared to be the first time the United States had put a space vehicle into a solar orbit that is “officially secret.”

David C. Wright, a senior scientist at the Union of Concerned Scientists, a private group in Cambridge, Mass., said many aerospace experts questioned whether the mission benefits of the X-37B outweighed its costs and argued that expendable rockets could achieve similar results.

“Sure it’s nice to have,” he said. “But is it really worth the expense?”

Mr. Weedon of the Secure World Foundation argued that the X-37B could prove valuable for quick reconnaissance missions. He said ground crews might rapidly reconfigure its payload — either optical or radar — and have it shot into space on short notice for battlefield surveillance, letting the sensors zoom in on specific conflicts beyond the reach of the nation’s fleet of regular spy satellites.

But he questioned the current mission’s secrecy.

“I don’t think this has anything to do with weapons,” Mr. Weedon said. “But because of the classification, and the refusal to talk, the door opens to all that. So, from a U.S. perspective, that’s counterproductive.”

He also questioned whether the Pentagon’s secrecy about the spacecraft’s orbit had any practical consequences other than keeping the public in the dark.

“If a bunch of amateurs can find it,” Mr. Weedon said, “so can our adversaries.”