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Tuesday, October 14, 2008
Looking ahead

Some of what's happening Wednesday:

• Busy day for President Bush. In the morning he'll meet with his Cabinet, then participate in a video teleconference with Iraq Provincial Reconstruction team leaders and brigade commanders. After that he jets off to Grand Rapids, Mich., to meet with business leaders and then attend a Republican fundraiser.

• Sens. John McCain and Barak Obama face off at Hofstra University on Long Island in their final debate before the Nov. 4 election. Our colleagues at On Politics will be live blogging the action, which begins at 9 p.m. ET.

• Lots of economic data: Retail sales and the Producer Price Index for September; business inventories for August; the Federal Reserve's latest Beige Book; and the weekly report on petroleum supplies.

• European Union leaders open a two-day summit on the financial crisis and economic and political issues.

• The U.S. Election Assistance Commission holds a panel discussion on reporting election results, especially in competitive states. Florida Secretary of State Kurt Browning, Ohio Secretary of State Jennifer Brunner and an executive with the Associated Press will participate.

• The National Business Group on Health announce results of a survey of U.S. workers on what they are doing to improve their health.

• The Union of Concerned Scientists releases a new report that examines the potential and shortcomings of advanced coal technology.

• Four men go on trial for the murder of Russian journalist Anna Politkovskaya.

• In Dallas, actress-comedian Lily Tomlin has planned a news conference outside City Hall to urge the city to retire Jenny the elephant to the Elephant Sanctuary in Tennessee. The campaign to relocate Jenny and close the zoo's elephant exhibit was sparked by the death of a 39-year-old pachyderm in May.

Dying cat owner sends her 32 pets to Ala. vets, begs for new homes

The Associated Press has filed this animal-lover story from Opelika, Ala.:

Five veterinary clinics in eastern Alabama received 32 surprises in the last week: Healthy cats in containers and carriers, along with notes from an anonymous donor saying she is dying from cancer.

The notes signed by "Miss R" beg the vets to find her pets new homes.

"My time is very, very short," the donor wrote. "There is not enough time to find homes for my children another way. I beg you not to let them die because I have to, please!"

"Please do not kill!" was written in capital letters on each of the containers.

Veterinarian Kim Bond said she found three plastic containers poked with holes sitting at her clinic's front door when she got to work at 7 a.m. a week ago.

Each cat's name, age, description and medical summary was written on its container. At least four other clinics received cats in Lee County, about 50 miles northeast of Montgomery.

"These cats were dearly loved," Bond told the Opelika-Auburn News. "They're not feral cats or neglected cats."

Most have new homes already. Veterinarian Buddy Bruce at Animal Health Center still has the six males dropped off Thursday at his clinic and he is offering discounts on all vet services, such as shots and neutering, to anyone who adopts one of the cats.

The identity and location of the donor is unknown.

"Other vets that I've talked to say the same thing, 'Let's do what we can to find these kitties homes,'" Bruce said. "These are her children. She took care of the situation the best way she could."

Read the full story from the Opelika-Auburn News, which also has photos and video.

Ex-Enron executive pleads guilty in broadband fraud

The former chief executive of Enron Broadband Services pleaded guilty today to one felony count of wire fraud rather than risk a second jury trial.

Joseph Hirko, 52, of Portland, Ore., will serve no more than 16 months in prison and must pay $8.7 million in restitution for Enron victims. He also agreed to cooperate in other broadband prosecutions. Sentencing is set for March 3.

Hirko admitted to allowing press releases to be distributed in 2000 that said a groundbreaking operating system had been embedded in Enron's broadband network that would allow users to pay only for bandwidth they used instead of a flat monthly fee. The operating system was still being developed, however, and never materialized.

In accepting the plea deal, U.S. District Judge Vanessa Gilmore issued a stern, civics reminder to Hirko, the Houston Chronicle said.

''Mr. Hirko, let me remind you that as a convicted felon, you may not vote in the upcoming election,'' Gilmore said. ''Don't make that mistake.''

Federal budget deficit hits a record $454 billion — not counting bailout

This year's federal budget deficit nearly tripled over the past 12 months to a record $454.8 billion. Last year's barrels of red ink totaled $161.5 billion.

The previous record was set just four years ago — $413 billion.

Know what? The deficit will be even bigger next year amid the mounting costs of the financial-system bailout and the recession .

Read what Treasury Secretary Henry Paulson and Office of Management and Budget Director Jim Nussle had to say.

Tuesday, October 14, 2008
Mother of missing Fla. girl indicted for murder

Caseyanthony101408_3

An Orlando grand jury has indicted Casey Anthony for murder in the disappearance of her 3-year-old daughter, Caylee Marie, who vanished four months ago.

Casey Anthony, 22, was arrested today in Kissimmee, Fla., and is being held without bond. She is charged with first-degree murder, aggravated child abuse, aggravated manslaughter and four counts of lying to investigators.

Orange County Sheriff Kevin Beary said investigators' satisfaction that the indictment had been issued was tempered by what it concludes about the girl's fate.

A few hours before the indictment was unsealed, Anthony stood silently, sometimes crying, as her attorney told reporters she is not guilty.

"Casey is going through a nightmare," Jose Baez said. "I sincerely believe that when we have finally spoken, everyone, and I mean everyone, will sit back and say, 'Now, I understand. That explains it."Cayleeanthony101408

The Orlando Sentinel and AP have more.

(Casey Anthony wiped away tears as her attorney held a news conference before the indictment was unsealed. Photo by Red Huber of the Orlando Sentinel via AP. Photo of Caylee Marie from the Orange County Sheriff's Department.)

To cut costs, Chicago to shutter city services for 6 days during holidays

Except for police and fire, Chicago city services will be shut down for six days during the next two holiday seasons to help close a $469 million deficit.

Mayor Richard Daley announced today that city offices will be closed the day after Thanksgiving, on Christmas Eve and on New Year's Eve this year and next year. Employees will take unpaid days off, unless there is a big snowstorm and workers are called back.

"This is a very hard step to take but these are hard times," said Daley, who will release his 2009 budget tomorrow. "This is a good thing for the city, the taxpayers."

The closings will save $20 million, and Daly foresees saving an additional $42 million through layoffs, eliminating vacancies and other cost-cutting measures.

The Chicago Tribune and Reuters have more details.

Feds file child-sex charge against member of N.Y. parole board

Ortloff Federal agents arrested a member of New York's parole board yesterday on charges that he arranged to have sex with two girls "he believed to be 11 and 12 year old minors," according to a court filing.

George Ortloff, a former 10-term GOP legislator who goes by Chris, was taken into custody late yesterday afternoon at a motel near the state capital, the Albany Times-Union and New York Post report.

Investigator Mary Barette says in the criminal complaint that she has been chatting with Ortloff for "the past few months."

"On October 13, 2008, Ortloff traveled to a hotel in Colonie, New York, for the purpose of meeting who he believed were 11 and 12 year old females in order to engage in sexual acts with said minors," she writes in the complaint.

Ortloff didn't speak or enter a plea during this afternoon's hearing, according to Politics on the Hudson.

WPTZ-TV says New York State Police investigators searched the politico's house last night.

"The matter is presently under investigation," Heather Groll, a spokeswoman for the state Division of Parole, tells the Associated Press. "Effective immediately, Commissioner Ortloff has been temporarily relieved of his parole board duties. His status as a parole board member is currently under review."

(Photo by Mike Groll, AP.)

Rally fades as stocks fall on profit worries, profit-taking

"Worries about corporate earnings" and good old profit-taking are the day's explanations for the reversal of yesterday's Wall Street fortunes. All the indices ended in the red.

After shooting up 400 points at the opening, the Dow Jones Industrial Average closed down 76 points (0.8%) at 9,310, and the S&P; 500 was lower by 5 (0.5%). The Nasdaq, however, gave back 3.5% (65 points) to end at 1,779, and the Russell 2000 dropped 2.8%.

Was yesterday' historic rise a one-day wonder after last week's historic plunge?

"Notwithstanding the government and Treasury's actions focusing on financials, the general economic environment has deteriorated quite a bit in the last five or six weeks,'' Jonathan Armitage, head of U.S. large-cap equities at the American unit of Schroders, told Bloomberg. "You're just seeing different parts of the equity market reacting to that.''

Lincoln Anderson, chief investment officer and chief economist at LPL Financial in Boston, told AP: "We don't know if the bottom is in. We certainly expect heightened volatility for a fair amount of time while we sort out just exactly what's going on."

The Wall Street Journal, MarketWatch and The Wall Street Journal have more.

Court wrestles with whether defendants should be identified by gang names

Lawyers and judges are split over whether alleged gang members should be called by their street names or their legal names during their criminal trial, Newark's Star-Ledger reports.

Before an Ocean County murder trial that began yesterday, defense lawyers argued that referring to the defendants by their street names “Respect,” “Gotti,” and “High Five,” would unfairly lead jurors to assume that they are gang members.

The men, Tyleek Baker, James Russell and Jamell Scott, are alleged members of the Bloods gang.

The trial judge originally banned the use of the street names in the courtroom, but an appeals court overruled his decision and allowed the names.

Prosecutors contend that witnesses know the men by their street names, and note that lawyers routinely called defendants by their nicknames during Mafia trials.

(This posting was written by USA TODAY's Elizabeth Findell.)

Referendum: Ballot measure that would limit ballot measures

In the coming weeks, On Deadline plans to present some of the referenda that voters will see when they go to the polls on Election Day.

Today's ballot measure comes to us from Arizona, where voters are being asked to make it harder for voters to pass ballot measures that result in higher spending or taxes. If approved, the Constitution of Arizona would require such measures to have the support of a majority of registered voters, not just those who cast a ballot, in order to become law.

Yuma Sun has more on the initiative. Here's a national ballot measures database.

Here's the full text of this proposed constitutional amendment:

Fiscal responsibility through true majority rule.

To preserve and protect the right of the people to fiscal responsibility through true majority rule, an initiative measure that establishes, imposes or raises a tax, fee, or other revenue, or mandates a spending obligation, whether on a private person, labor organization, other private legal entity or this state, shall not become law unless the measure is approved by a majority of qualified electors then registered to vote in this state.

How would you vote?

<p><p><p><p><p>USATODAY.com - Quick Question</p></p></p></p></p>

Earlier:
Should cities be allowed to use red-light cameras?

(Please note: This is not a scientific survey. The wording of the question that appears in our "Quick Question" doesn't match the wording on official ballots because of space limitations.)

Fighting displaces 150K in Democratic Republic of Congo

The United Nations High Commissioner for Refugees says more than 150,000 people have fled intense fighting in recent weeks in the Democratic Republic of Congo.

Government forces are battling the Lord's Resistance Army and other rebels in the eastern part of the country.

"The fighting throughout September has forced all humanitarian agencies to withdraw their staff from the field. They are conducting snapshot assessment missions from Goma," the aid agency says. "The fighting has also cut off the main supply route from Goma to Kitchanga and Masisi, leaving mainly the displaced at risk of a crisis."

The World Health Organization says there's a cholera outbreak at one of the camps for displaced Congolese.

Justice Department sues Vermont over overseas voting paperwork

The Justice Department wants a federal judge to force Vermont to comply with the law that requires states to tabulate the votes cast by military personnel and others who are overseas on Election Day.

"Vermont and [Secretary of State Deborah Markowitz] are responsible for collecting and reporting the number of military voters and overseas citizens who are sent ballots, return them and have them successfully cast in each federal general election," the Justice Department says in a statement. "Vermont has failed to fulfill this important obligation ever since it became law in the Help America Vote Act of 2002."

They want a judge to issue "an injunction against any future noncompliance."

But Markowitz, a Democrat, tells the Associated Press that her office couldn't comply with the Uniformed and Overseas Citizens Absentee Voting Act in 2006 because they didn't receive the federal government's survey before they distributed ballots.

"It's puzzling to me why they are wasting federal resources on what essentially is a paperwork snafu for a new law," Markowitz tells the Times Argus.

This year, she says local election officials are completing the survey.

"As of today, Vermont has had 1,290 requests from military and overseas ballots that were received last week with only a handful of towns not yet reporting to us," Markowitz tells the wire service. "The ballots were sent out to all those voters early last week."

Report: Poll workers get physical while helping nursing-home residents cast ballots

Two poll workers -- a 73-year-old Democrat and a 75-year-old Republican -- got into a fight last week while helping residents of an Ohio nursing home cast their ballots in the presidential election, the Akron Beacon Journal says.

The paper, citing a police report, says George Manos reported that Edith Walker "jumped on his back and struck him in the head three to four times with her fists" after he accused her of tampering with a ballot.

Manos is a Republican. Walker is a Democrat. Local election officials tell the paper that they're looking into reports that a resident's ballot was marked wrong and had to be corrected.

"Walker said in her statement that Manos tried to grab the ballot in question out of her hand," according to the paper. "She said he accused her of marking the ballot wrong and she 'apologized to him if I did do it, but he was very mean to me.'"

Another Republican poll worker says Walker tried to "stong-arm" him during the altercation.

FBI: 59K law enforcement officers assaulted in 2007

More than 59,000 law enforcement officers were assaulted last year, the FBI says.

The Bureau's annual report on line-of-duty deaths says 57 officers were "feloniously killed" in 51 separate incidents. That's up from 48 in 2006.

"Offenders used firearms to kill 55 of the 57 victim officers. Of these 55 officers, 38 were slain with handguns, eight with rifles, and eight with shotguns," the FBI says. "The type of firearm was not reported for one officer’s death. Two officers were killed with vehicles that were used as weapons."

The FBI produced the following profile based on suspects who were arrested in connection with the death of a law enforcement officer:

Fbi_profile_of_alleged_killers

Another 83 officers died in accidents, including 49 who were killed in vehicle crashes.

When the government statisticians analyzed assault reports, they found that the most dangerous time for officers was between midnight and 2 a.m. About 32% of all assault cases involved "disturbance calls," a broad category that includes everything from bar fights to domestic violence. Attackers used "personal weapons," such as fists or feet, in the vast majority of incidents.

Ohio executes inmate who claimed he was too fat for death penalty

Q1x00249_9 Ohio just executed the convicted murderer who cited his obesity in a last-ditch effort to avoid the death penalty.

Richard Cooey, 41, died this morning at the Southern Ohio Correctional Facility, according to the Associated Press. The wire service says "[t]here were no immediate reports of problems finding suitable veins."

As we told you in August, the 267-pound inmate cited his size as grounds for overturning the capital sentence he received after being convicted of raping and murdering two college students in 1986. His lawyers argued that the executioners would have too much trouble administering the lethal mix of drugs during his execution.

Last week, a federal appeals court turned down his request for a stay.

(File photo by Bob DeMay, Akron Beacon Journal via AP.)

Candidate figures out how to get the governor on the phone

Michael Krawitz couldn't get New Jersey Gov. Jon Corzine to return his calls -- until he pretended to be a powerful Democratic insider.

Krawitz, a Republican candidate for his local township committee, tells Gannett News he pretended to be an associate of the Democratic governor because he wanted to pass along allegations of corruption.

"I called and said, 'Is Jon there?' And the lady says, 'Who is calling?' And I say 'George.' She says, "George who?' I say, "George Norcross.'

"... Right away I was talking to Jon Corzine," said Krawitz. "I asked him, "How can you take a call and talk to George Norcross but not the average New Jersey citizen?"'

Gannett News describes Norcross as "the top Democratic Party power broker in South Jersey."

After the conversation, Krawitz says he met with investigators who wanted to know why he "breached the governor's security."

"It's a very serious matter," Robert Corrales, a Corzine spokesman, tells Gannett.

Inmates invited to use online complaint form in Texas

Inmates in Texas will now be able to file complaints about their treatment via the Internet, The Dallas Morning News reports on its crime blog.

The state Commission on Jail Standards has added an online complaint form to its website.

Watch the markets move throughout the day

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See more charts in USA TODAY's Money section.

In Atlanta, 36% of recent police academy grads have a criminal record

More than a third of the rookie officers who graduated from Atlanta's police academy in June and August had a criminal record when they joined the force, according to the Journal-Constitution.

The paper, citing records obtained under the local public-records law, says 12 of 33 officers were "arrested or cited for a crime" before they applied to work for the Atlanta Police Department.

"The arrests ranged from minor offenses such as shoplifting to violent charges including assault," the paper says. "More than one-third of the officers had been rejected by other law enforcement agencies, and more than half of the recruits admitted using marijuana."

Other police agencies had rejected three of the applicants because they didn't pass the requisite psych tests, according to the Journal-Constitution.

“We would like, in an ideal world, to see every applicant with a clean record, but obviously that’s not reality,” Lt. Elder Dancy, the police department's chief recruiter, tells the paper. “I don’t think you’ll find any departments who hire only applicants with squeaky-clean records.”

Still no deal on future role of U.S. forces in Iraq

The Washington Post says negotiators are growing nervous about the lack of an agreement on the role U.S. troops will play in Iraq after the United Nations mandate expires at the end of the year. Without legal authorization, the paper says U.S. troops may have to cease all combat operations on New Year's Day.

"One possibility is an extension of the United Nations mandate that expires at the end of the year. That would require a Security Council vote that both governments believe could be complicated by Russia or others opposed to the U.S.-led war," the paper says. "Another alternative would amount to a simple handshake agreement between Iraqi Prime Minister Nouri al-Maliki and President Bush to leave things as they are until a new deal, under a new U.S. administration, can be negotiated."

Bush announces partial nationalization of banks

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Update at 9:11 a.m. ET: Here's a joint statement from the Treasury Department, Federal Reserve and FDIC.

Update at 8:46 a.m. ET: Paulson says the Treasury Department is buying equity stakes in a "wide variety of banks and thrifts" so they can provide credit.

Institutions that sell stock to the government will accept restrictions on executive compensation and "strengthen their efforts to help struggling homeowners who can afford their homes avoid foreclosure."

Here's the full text of Paulson's statement.

Bush_wordle_economyUpdate at 8:32 a.m. ET: Here's the full text of Bush's statement.

Update at 8:23 a.m. ET: The Washington Post describes the new approach as a "significant reversal" that Paulson had opposed just weeks ago.

Yesterday, Paulson "told the executives that for the good of the nation -- patriotism was specifically invoked, according to a person briefed on the discussions -- they would each have to sell the government a stake in their companies," the Post says. "Representatives of several banks underscored after the meeting that they did not need the government's money but said they cooperated out of obligation and to help heal the financial system."

Update at 8:12 a.m. ET: Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are scheduled to brief reporters at 8:30 a.m. ET. Click here to watch a live feed from the Treasury Department.

While we're waiting, here's how The Wall Street Journal described the banking portion of the government's bailout plan:

Treasury will buy $25 billion in preferred stock in Bank of America -- including Merrill Lynch -- as well as J.P. Morgan and Citigroup; between $20 billion and $25 billion in Wells Fargo; $10 billion in Goldman and Morgan Stanley; $3 billion in Bank of New York Mellon; and about $2 billion in State Street.

The government will purchase preferred stock, an equity investment designed to avoid hurting existing shareholders and deterring new ones. Such shares typically don't come with voting rights. They will carry a 5% annual dividend that rises to 9% after five years, according to a person familiar with the matter. By investing in several big firms at once, the government hopes to avoid placing a stigma on any one firm for getting government help.

The plan will be structured to encourage firms to bring in private capital. For instance, firms returning capital to the government by 2009 may get better terms for the government's stake, a person familiar with the discussions said.

Update at 8:08 a.m. ET: Bush says Treasury Secretary Henry Paulson and other members of his economic team will provide additional details about the government's implementation of the bailout plan.

Update at 8:06 a.m. ET: As of this morning, Bush says the FDIC will "temporarily guarantee most new debt issued by insured banks" and "expand government insurance to cover all non-interest-bearing transaction accounts" that small businesses use to cover day-to-day operations.

Bush, speaking after a meeting with his economic team, says the Federal Reserve will also become "a buyer of last resort for commercial paper."

"By unfreezing the market for commercial paper, the Federal Reserve will help American businesses meet payroll and purchase inventory and invest to create jobs," he says.

Update at 8:02 a.m. ET: President Bush says the government will use a portion of the $700 billion bailout package to purchase equity shares in banks to ensure liquidity.

He describes this as an "essential short-term measure to ensure the viability of America's banking system."

Original posting at 7:31 a.m. ET: President Bush is scheduled to make a statement on the economic crisis at 8:05 a.m. ET. Click here to watch a live feed from the White House.

(Photo by Susan Walsh, AP; Text cloud based on Wordle.)

Firm uses cellphones to track ad exposures

The Wall Street Journal says a media research company is using cellphones to track some consumers' "exposure to the audio in ads on television, radio, computers, mobile phones, DVDs and inside a movie theater."

In return for a free phone or monthly stipend, the paper says 4,900 participants agreed to carry their mobile phones at all times, thereby allowing Integrated Media Measurement to monitor their exposure to advertisements.

"The software picks up audio from an ad or a TV show and converts it into its own digital code that is then uploaded into an IMMI database, which includes codes for media content such as TV shows, commercials, movies and songs," the Journal says. "IMMI's database then figures out what the cellphone was exposed to by matching the code. Cellphone conversations and background noise are filtered out by the software, IMMI says, since there is no "match" in the IMMI database."

News roundup: Feds to invest in banks; fires scorch Southern California

Good morning. It's Tuesday.

President Bush plans to announce plans for the government to purchase a stake in nine of the USA's top banks, according to the nation's front pages.

The Washington Post says the Treasury Department will spend $250 billion on non-voting shares in the financial institutions. This marks a "major strategic shift," according to the Los Angeles Times, which says original "plans to purchase hundreds of billions of dollars in toxic, mortgage-related securities" are "likely to move ... into a secondary position."

"It intertwines the banking sector with the federal government for years to come and gives taxpayers a direct stake in the future of American finance, including any possible losses," The Wall Street Journal reports. "Other elements of the plan, which will be announced Tuesday morning, include: equity investments in possibly thousands of other banks; lifting the cap on deposit insurance for certain bank accounts, such as those used by small businesses; and guaranteeing certain types of bank lending. It builds on an earlier plan to buy up rotten assets dragging down banks, which failed to calm investor fears, and follows similar moves by major European countries."

The Associated Press says foreign markets welcomed the news, with Japan's Nikkei jumping more than 14%. The New York Times says this plan -- if it works -- will become a "textbook case of the emergency role that government can play to rescue a teetering economy."

The Los Angeles Times reports wildfires in Southern California have scorched more than 10,000 acres and killed at least one person.

In political news, the Times points to the growing number of black elected officials as a sign of changing attitudes about race in the U.S. political system. "Political analysts say such electoral gains are quietly changing the political landscape, increasing the number of black lawmakers adept at crossing color lines as well as the ranks of white voters who are familiar, and increasingly comfortable, with black political leadership," the paper says.

Top stories in this morning's USA TODAY

• The front page of this morning's USA TODAY

A01_10_14_2008_5final_h1 Fearing a holiday letdown, retailers shifting strategies
It's beginning to look a lot like Christmas at some of the nation's stores, as retailers struggle to find ways to make shoppers forget about their battered 401(k) plans.

Treasury tries to kick-start credit
WASHINGTON — The Treasury Department will unveil today a dramatic revamping of its $700 billion plan to rescue ailing financial firms, quickly using up to $250 billion to buy stock in banks, including nine of the biggest U.S. financial institutions.

• Other sections: Sports front page | Money front page | Life front page

Monday, October 13, 2008
Looking ahead

Coming Tuesday:

• President Bush signs the National Defense Authorization Act for 2009 (pdf). He then heads to the Pentagon for a briefing.

• Canada holds its national election. Prime Minister Stephen Harper's job is on the line.

• The U.S. Chamber of Commerce and the U.S. Palestinian Partnership hold a forum on Palestinian business and investment. Secretary of State Condoleezza Rice and Palestinian Prime Minister Salam Fayyad will speak.

• The Soyuz capsule carrying U.S. space tourist Richard Garriott will arrive at the International Space Station. The computer game pioneer and son of a former NASA astronaut is accompanying a U.S. astronaut and a Russian cosmonaut on his $30 million vacation.

• NASA provides an update on the status of efforts to revive the data-handling unit that failed on the Hubble Space Telescope in late-September.

• The winner of Britain's most prestigious literary award, the Man Booker Prize, will be announced in London. "Does anyone really care who wins?"

Bush signs law creating new copyright-piracy 'czar'

The United States now has a "czar" to fight copyright pirates.

President Bush today signed the Prioritizing Resources and Organization for Intellectual Property Act, the legislation (pdf) creating the cabinet-level position equal to the U.S. drug czar. He initially opposed the new post — Coordinator for International Intellectual Property Enforcement — which will "report directly to the president and Congress regarding domestic international intellectual property enforcement programs."

Bush's successor is expected to fill the job.

The White House has posed a fact sheet on the legislation.

CNET News and Wired have the story.

Report: New U.S. plan coming to bolster banks

The Wall Street Journal is reporting that the Bush administration tomorrow will follow European governments and announce far-reaching plans to restore confidence to the banking system.

The Journal, citing unnamed sources, says the rescue effort will likely supersede many of the government's previous efforts and ensure that the U.S. banking sector will be tied to the federal government for years to come.

One central plank of these new efforts is a plan for the Treasury to take approximately $250 billion in equity stakes in potentially thousands of banks, according to people familiar with the matter, using funds approved by Congress through the $700 billion bailout bill.

In addition, the FDIC is expected to temporarily extend its backstop from bank deposits to new senior preferred debt issued by banks and thrifts for three years. That would be an aid to companies that have had a hard time raising capital without government assistance.

The FDIC is also expected to temporarily lift the insurance limits for non-interest bearing bank deposit accounts. This would extend beyond the $250,000 limit per depositor that lawmakers agreed on two weeks ago. The shift brings U.S. policy more in line with other countries that have offered blanket deposit insurance to try and prevent customers from withdrawing large sums of money from financial institutions.

Other moves could include temporary loan guarantees aimed at helping banks borrow the money they need to do business. Officials are still working through how such a plan would work.

The Journal says the Treasury plans to buy preferred stock in nine top banks and make investments in others.

Update at 6:38 p.m. ET: The New York Times notes that this isn't the first time the U.S. government has nationalized banks or other companies: In past times of war and national emergency, Washington has not hesitated.

GM plant closures will eliminate 2,500 jobs

General Motors has announced it will close a Michigan plant that stamps SUV parts and cut about 1,340 hourly jobs. The plant, outside Grand Rapids, will close by the end of next year.

The automaker also said it was speeding up the closure of its Janesville, Wis., plant to Dec. 23, more than a year earlier than originally planned. Around 1,200 workers will lose their jobs.

No response yet from the UAW, the union representing the workers.

The Associated Press has details.

Update at 5:50 p.m. ET: GM spokesman Chris Lee said the Grand Rapids plant was picked because more than 40% of its parts go to slow-selling truck and SUV plants, and because it is "some distance away from their assembly plant customers," the Associated Press says.

United Auto Workers Local 730 President Greg Golembiewski said he was "sick about what's happened here."

"I am devastated. I'd like not to believe what I heard today. It's like a bad dream," he said."