Today's News Update 2 October 2008

News Update as of 0800 Eastern Time:

Bottom Line Up Front:
1. Economy
2. Iraq
3. CNN Pakistan Blog
4. North Korea

From Fox News (Economy):

House members get another chance to vote on a bill that many would like to avoid: a massive financial rescue plan that has infuriated millions of voters but is described by President Bush and congressional leaders as vital to keeping the economy from sliding into a deep recession.

This time, it comes back to the House loaded with billions of dollars worth of tax cuts and other sweeteners. They are meant to attract at least a dozen House members who voted against the measure Monday, when it failed, 228-205, triggering a record drop in the stock market.

Senators added the new items in a 74-25 vote late Wednesday, sending the beefed-up package back to the House for a showdown vote expected Friday. House leaders planned to spend Thursday pressing rank-and-file members for the dozen converts they need.

The bailout package was never in danger in the Senate. Senators instead played catalysts for the House, adding tax provisions popular with the left and right in a bid that House leaders hope — but cannot guarantee — will persuade enough of the House rank-and-file to switch from "nay" to "aye" on a highly contentious bill a month before Election Day.

From CNN (Economy):

The Senate on Wednesday night passed a sweeping and controversial financial bailout similar in key ways to one rejected by the House just two days earlier.

The measure was passed by a vote of 74 to 25 after more than three hours of floor debate in the Senate. Presidential candidates Sens. Barack Obama, D-Illinois, and John McCain, R-Arizona, voted in favor.

Like the bill the House rejected, the core of the Senate bill is the Bush administration's plan to buy up to $700 billion of troubled assets from financial institutions.

Those assets, mostly mortgage-related, have caused a crisis of confidence in the credit markets. A major aim of the plan is to free up banks to start lending again once their balance sheets are cleared of toxic holdings.

But the Senate legislation also includes a number of new provisions aimed at Main Street.

The changes are intended to attract more votes in the House, in particular from House Republicans, two-thirds of whom voted against the bailout plan.

The House is expected to take up the Senate measure for a vote on Friday, according to aides to Democratic leaders.

From Fox News (Iraq):

Homicide bombers targeted Shiite worshippers as they left morning prayers Thursday at two Baghdad mosques, killing 19 people and injuring 50 others, police said.

In a separate attack, gunmen fatally shot six people as they were traveling in a minibus in Wajihiyah, a town 60 miles north of Baghdad.

The dead included two children, three women and a man, police in Diyala province said. Another woman and her small child were injured.

The bombings in Baghdad occurred as Shiite worshippers were celebrating the holiday of Eid al-Fitr, which marks the end of the fasting month of Ramadan.

No group claimed responsibility, but attacks on Shiite civilians are widely associated with Sunni extremists like Al Qaeda in Iraq hoping to re-ignite the sectarian conflict that pushed the nation to the brink of civil war two years ago.

In the deadliest attack, a homicide car bomber in a white Mercedes sedan detonated his explosives about 20 yards from a mosque in Zafaraniyah in southeastern Baghdad. He set off the bomb when Iraqi soldiers tried to stop him from approaching the building, police said.

From CNN and it's Pakistan Blog (Pakistan):

He looked annoyed and carried an old AK-47 assault rifle. He walked up to me, looked me dead in the eyes and yelled: “Go! Just go!” This was my up-close look at what anti-American anger looks and feels like in Pakistan’s lawless tribal region.

What military strategists in Washington should know is that the venom did not come from members of the Taliban or al Qaeda. It came from Pakistani tribesmen who had taken up arms and formed militias to fight against the Taliban, but equally willing to take on U.S. and NATO forces.

I saw hundreds of these militiamen during a rare trip for journalists to Pakistan’s Federally Administered Tribal Area, or FATA, along the Afghan border. FATA is widely believed to be home to the Taliban and al Qaeda.

It’s slightly bigger than the state of New Jersey and it’s the focal point in the U.S.-led war on terror. In recent months Washington has turned up the heat on Pakistan and accused it of not doing enough against the Taliban and al Qaeda. This trip was an effort by the Pakistan Army to refute criticism and show the world it’s making progress.

From NY Times (North Korea):

A senior U.S. envoy extended talks in North Korea on Thursday in a bid to save a troubled disarmament pact and convince secretive Pyongyang not to restart a nuclear plant that makes arms-grade plutonium.

The visit to the hermit North by Assistant Secretary of State Christopher Hill raised hopes that a deal might be in the works. It came as the rival Korean states held their first talks in almost a year, but with no discernible progress.

The flurry of diplomacy coincided with a report that North Korea might be about to ratchet up regional tensions by upgrading a launch site used to test missiles that can hit all of South Korea and most of Japan.

Hill, who went to Pyongyang on Wednesday, was scheduled to hold a second day of talks with the North's top nuclear envoy on Thursday, the State Department said.

Hill had been expected to drive back to Seoul on Thursday but South Korea's Foreign Ministry said he would now stay at least until Friday. Yonhap cited a diplomatic source as saying the extended talks could mean a compromise was in the works.

More to follow:

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