News Day: More on MN deficit and recession

March 4: Back to school / MN Job Watch / TCF and TARP / TOP SECRET no longer / Sudan, Afghanistan, Mexico and more

Budget deficit: Day 2 In the aftermath of the revelation that the economic stimulus will keep the red ink from rising higher, lawmakers and the governor are back to sparring over how to make up the $4.6 billion deficit. A trio of MPR reports gives context: State Finance Commissioner Tom Hanson warned that the long-term problem will get worse, with a $5.1 billion deficit forecast for 2012-13, and that the economic stimulus is a one-time rescue that does not solve the structural problem.

MN economist Tom Stinson also delivered a dose of unwelcome reality, warning that the recession is “probably going to be the longest and deepest recession since World War II,” and that the state is “going to lose 120,000 jobs by 2010,” compared to February 2008. Stinson’s warning that job losses will continue even with the job-saving effects of the federal stimulus.

MN’s biggest budget item is schools, with K-12 education accounting for $14 billion of the 2010-11 budget. You can’t leave 40 percent of your budget off the table, says Senate DFL Majority Leader Larry Pogemiller. Over in the House, DFLer Mindy Greiling says Pogemiller’s implied threat to education funding is an effort to “rile up Minnesotans” so they will support a tax increase to support education. Pawlenty says he actually wants to increase education funding and, of course, NOT raise taxes. Ever. No matter what.

And, reports the Strib, even as the federal economic stimulus helps to stabilize MN’s budget deficit, T-Paw continued to rail at the feds for overspending.

No job? Go back to school MNSCU announced a 3.7 percent increase in enrollment this spring, compared to last spring, reports AP. That’s 4.8 percent at the 25 two-year colleges and 1.5 percent at seven state universities, confirming the common wisdom that when there are no jobs, people head back to school to hone their skills.

MN Job Watch The top tier of Hennepin County employees — about 30 directors — have agreed to take three days of unpaid leave, which is about a one percent salary cut, reports MinnPost. The next tier of county employees has been asked to consider doing the same.

Take your TARP money back (but not quite yet) TCF became the latest bank to say it wants to give back money — $361 million for TCF — from the federal bailout program rather than comply with conditions including compensation caps limiting executive pay to a mere $400,000 per year and mandates to use money for loans, reports Chris Serres in the Strib. Trying to explain away the decision, TCF CEO Bill Cooper said they never really needed the money, but took it because “if we didn’t, we would be labeled as someone who couldn’t get it and must be troubled.”

Josh Marshall at TPM has quite a different take on banks saying they will give back the TARP money. (TCF is just the latest of a series including Northern Trust and Bank of America.) According to Marshall, the key question is when the banks are going to repay the money — and that’s usually not for years:

How can you say it was a mistake when you won’t be able to pay it back for years? I think that means you need it. …

What it looks like to me is that a lot of these TARPers are getting headlines on the cheap saying they either didn’t want the money, don’t need it or are actually giving it back, when it turns out they plan to hold on to the money for years.

TOP SECRET no longer The Obama administration has released secret Bush anti-terrorism memos, including “legal” opinions saying the constitution does not apply during the war on terror.

“First Amendment speech and press rights may also be subordinated to the overriding need to wage war successfully,” Deputy Assistant Attorney General John Yoo wrote, adding later: “The current campaign against terrorism may require even broader exercises of federal power domestically.”

The Obama administration also said in court documents filed Monday that the CIA destroyed 92 videos showing interrogation of terrorism suspects. The acknowledgement was made in a civil lawsuit brought by the ACLU. According to the NYT, more memos may be on the way.

Around the world in 90 seconds A former Sudanese soldier describes the atrocities he was ordered to commit in Darfur, before he deserted the army in 2003, eventually leaving the country. He said that two colleagues who refused the orders were shot dead, and that he was beaten and tortured for trying to refuse:

“The orders given to us were to burn the villages completely,” he says.

“We even had to poison the water wells. We were also given orders to kill all the woman and rape girls under 13 and 14.”

The International Criminal Court issued an arrest warrant this week for Sudan’s President Omar al-Bashir, charging him with war crimes and crimes against humanity.

After soldiers in Guinea-Bissau shot President Joao Bernardo Vieira Monday, blaming him for a bomb that killed the army chief, the speaker of parliament, Raimundo Pereira, was sworn in as the nation’s new leader, said he would serve only until elections could be held. While initial reports called the assassination a coup, the army has promised to respect the constitution and said it is not launching a coup.

In Afghanistan, President Hamid Karzai said he will move elections up to April, but senior U.N. officials say that is “nearly impossible,” according to BBC. The constitution calls for elections 30-60 days before the end of Karzai’s five-year term, which ends May 21. Elections had previously been scheduled for August by the Independent Elections Commission, which hoped that additional foreign troops could secure voting stations. The additional troops will not be in place by April, and bad weather and logistical challenges in getting ballots also pose problems.

With the drug war in Mexico continuing unabated, the Mexican government sent 1500 soldiers into Juarez, where more than 2000 people were murdered over the past year, reports BBC. The Mexican government says it will have 7000 troops and police in Juarez by the end of the week. Texas Gov. Rick Perry wants more U.S. forces on the border, , reports Jen Di Mascio in Politico, and Homeland Security chief (and former Arizona governor) Janet Napolitano promises additional border security, but not uniformed military personnel.

The IMF warns that the world’s poorest countries are now being hit by the “third wave” of the financial crisis (wave #1 hit advanced and wave #2 emerging economies). Among the poorest countries, reports BBC: Angola, Ghana, Honduras, Kyrgyzstan, Moldova, Mongolia, Nigeria, Papua New Guinea, Sudan and Vietnam.

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