We now have an official nominee of the Democratic Party for the November 4, 2008 general election for President of the United States:

Barack Obama

Happy 100th birthday to LBJ, 8-27-08

From the calendar at
http://groups.yahoo.com/group/Democrats/cal

Lyndon Johnson, 1908
Wednesday August 27, 2008
Birthday

Lyndon Baines Johnson
36th President of the United States
(November 22, 1963 to January 20, 1969)
Nickname: "LBJ"

Born: August 27, 1908, near Johnson City, Texas
Died: January 22, 1973, near Johnson City, Texas   Read More »

Dems go to Denver
By JIM MYERS World Washington Bureau
Tulsa World
8/24/2008
Last Modified: 8/24/2008  2:37 AM
http://tinyurl.com/5jus8k

Obama set to make history

DENVER — Oklahoma Democrats arrived Saturday for their party's national convention, which is unusually rich in symbolism and ready to make its mark in history.

"It is going to be exciting to be here and see it in person,'' Gov. Brad Henry said of the convention, which officially begins Monday.

One of the convention's so-called superdelegates, Henry stressed the historical significance of Barack Obama becoming the first black candidate to accept a major party's presidential nomination.

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complete copyrighted story at link above

DMN: Hillary Clinton fans tough to woo
11:50 PM CDT on Saturday, August 23, 2008
By CHRISTY HOPPE / The Dallas Morning News
http://tinyurl.com/5ht6vm

AUSTIN – Barbara Rosenberg of Dallas went to her car only eight days ago and peeled off the Hillary Rodham Clinton bumper sticker – slowly, like she was removing a Band-Aid.  ...

Texas' delegation to Denver is almost equally split among Clinton and Obama backers. And while most are ready to celebrate the nominee, others are waiting to assess the salve he offers to their own wounds and the nation's problems.  ...

Offstage, the Democratic Party and the Obama campaign are clearly reaching out to female delegates. The convention offers an estrogen-fest of women's gatherings, from Sheryl Crow to Nancy Pelosi, from Oprah Winfrey to Michelle Obama, and virtually every political women's group in the nation is holding an event.

Mr. Obama still has work to do, though. He needs female voters to win in November...

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complete copyrighted story at link above

2008 Democratic National Convention Platform Committee Report
http://pages.sbcglobal.net/tom.blackwell/2008Platform.pdf

The 57 page 2008 Democratic National Convention Platform Committee Report can now be read online; the .pdf file includes 3 appendices about the 1645 local Platform meetings.

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DNCC Selects 5 Finalists for Convention YouTube Contest; vote by 8-13-08 12n EDT
Why Are You a Democrat in 2008?
Friday, August 8, 2008
Democratic National Convention Committee
FOR IMMEDIATE RELEASE
August 8, 2008

DNCC SELECTS FIVE FINALISTS FOR CONVENTION YOUTUBE CONTEST:
WHY ARE YOU A DEMOCRAT IN 2008?

YouTube Users to Select Winner to Attend Denver Convention,
Join Barack Obama on Campaign Trail as Member of Press Pool

DENVER — After receiving hundreds of submissions, the Democratic National Convention Committee (DNCC) has selected the five finalists for the DNCC’s national online video contest with YouTube - inviting Americans to respond to the question: "Why are you a Democrat in 2008?" Members of the YouTube community can now vote for their favorite entry. The video receiving the greatest number of votes will win the contest and be announced on August 14.

“Through this contest, we cast a nationwide net to bring America’s voices in to our Convention hall,” said Aaron Myers, Director of Online Communications for the DNCC. “We heard from Americans of all backgrounds and all regions of the country.  People are Democrats for different reasons – and the five finalists tell their stories quite differently. Have a look.  Your favorite finalist could join us in Denver for a big screen debut.”

Each of the five submissions can be viewed and voted upon at http://youtube.com/demconvention through noon Eastern Time on August 13.
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Democrats Announce Headline Speakers Kicking Off Week-Long Convention Programming Roll-Out
Democratic National Convention Committee (DNCC)
DNCC Press
FOR IMMEDIATE RELEASE
Sunday, August 10, 2008

THE 2008 CONVENTION:
AMERICANS GATHERING TO CHANGE THE COURSE OF A NATION

Democrats Announce Headline Speakers

Kicking Off Week-Long Convention Programming Roll-Out

DENVER - The Democratic National Convention Committee (DNCC) and the Obama for America Campaign today announced the headline speakers for the 2008 Convention. The Democratic National Convention will be held in Denver from August 25th through August 28th.

"The 2008 Convention will highlight Americans coming together to change the course of this nation," said Kansas Governor and Convention Co-Chair Kathleen Sebelius. "We are at a critical moment in our nation’s history. The politics and policies that have divided us will not allow us to achieve the change we need. Barack Obama is a leader to move America in a new direction and bring us together to turn moments of great challenge into moments of great opportunity. This year’s Democratic Convention is the story of people from across the country who believe it is time for change."

Sebelius noted that the Convention will use innovative techniques to highlight the people fueling this national movement for change.

"Just as the Obama Campaign uses the energy and passion of grassroots volunteers combined with state-of-the-art technology to bring people into their positive campaign for change, so will the 2008 Convention use the voices of the people through technology and innovative programming to lay out Barack Obama’s vision and policies for how to move America in a new direction," Sebelius added.

Following today’s announcement of the headline speakers for the four nights of the Convention, the DNCC will unveil additional Convention program details and speakers throughout this week. Monday through Wednesday’s Convention programs will be held at the Pepsi Center. Barack Obama will accept the Democratic nomination for President on Thursday, August 28th at INVESCO Field at Mile High.

2008 DEMOCRATIC NATIONAL CONVENTION HEADLINE SPEAKERS

Monday August 25th’s headline prime-time speaker will be Michelle Obama.

Senator Hillary Clinton, who is a champion for working families and one of the most effective and empathetic voices in the country today, will be the headline prime-time speaker on Tuesday August 26th.

The headline prime-time speaker on Wednesday August 27th will be Barack Obama’s Vice Presidential nominee.

On Thursday, August 28th, the DNCC will throw open the doors of the Convention and move to INVESCO Field at Mile High so that more Americans can take part in the fourth night of the Convention as Barack Obama accepts the Democratic nomination.

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Democrats Release Platform
By Jonathan Weisman
Barack Obama's takeover of the Democratic Party is nearly complete.
Posted at 6:23 PM ET on Aug 7, 2008
http://voices.washingtonpost.com/the-trail/2008/08/07/by_jonathan_weisman_barack_oba_1.html

A draft of the Democratic National Committee's 2008 platform was sent this morning to platform committee members, and aside from some nods to the losers, Hillary Rodham Clinton and John Edwards, the 54-page document reads like a compilation of Sen. Obama's stump speeches. There is a section on fatherhood, a definition of patriotism (not only to declare our love of this nation, but to show it), a section detailing Obama's newly rejiggered economic stimulus plan, a call for more service, through an expanded AmeriCorps and Peace Corps, and a whole lot of hope.

"It is time for a change," declares the draft's preamble.

The Democrats commit themselves to a comprehensive overhaul of the nation's immigration laws, including a commitment to bring illegal immigrants "out of the shadows" and to allow them to "get right with the law." A party at times riven over the issue of abortion will state it "strongly and unequivocally supports Roe v. Wade and a woman's right to choose a safe and legal abortion, regardless of the ability to pay." That piece of the platform appears to favor doing away with restrictions on the use of taxpayer funds to help finance abortions.

And the party promises to turn away from the intrusive police apparatus of the post-9/11 world of President Bush's War on Terror.The platform pledges to "reject illegal wire-tapping of American citizens," so-called national security letters issued by the FBI that leave citizens little legal recourse, and "torture."

"We will restore our constitutional traditions, and recover our nation's founding commitment to liberty under the law," the draft platform states.

For Edwards, who has bigger issues to deal with at the moment, the DNC makes good on Obama's pledge to him to elevate poverty eradication as a policy goal. "Working together," the platform states, "we can cut poverty in half within ten years."

And Clinton is the star of the platform's section on expanded opportunities for women.

""We have produced [the] first woman Secretary of State, the first woman Speaker of the House of Representatives, and, in 2008, [with] Hillary Rodham Clinton, the first woman in American history to win presidential primaries in out nation," the platform states.

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Renewing America’s Promise
http://marcambinder.theatlantic.com/Platform%208%207%2008%20%282%29.pdf

The Note: Greek Drama

Obama-Clinton Relationship Stands In Way of Party Unity

By RICK KLEIN with HOPE DITTO, ALEXA AINSWORTH and JASON VOLACK
August 7, 2008

Sen. Barack Obama is set to leave for his much-deserved vacation with one very big loose end that doesn't want to be tied -- and that's not counting the veepstakes.

It's the drama that won't go away, the storyline that's too delicious to recede, the symbol of a party's divisions the very mention of which brings smiles to the faces of editors and producers: Obama vs. Clinton. (Welcome back.)

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Sen. Hillary Rodham Clinton says her defeating Barack Obama at a contested Democratic National Convention “is not going to happen” but she is looking for a way for her delegates to vent before getting behind the future nominee ahead of the November election.

Clinton, who battled Obama for 18 months but came up shy of the delegate votes needed to capture the nomination, told a mostly female group of backers at a California fundraiser last week that she wants unity in the party, but she is asked every day whether she will put her name on the ballot.

Clinton said that her delegates want to have a role and feel that their “legitimacy is validated,” before the group moves forward to back Obama.

“I happen to believe that we will come out stronger if people feel that their voices were heard and their views respected. I think that is a very big part of how we actually come out unified,” Clinton, D-N.Y., said to applause.

“Because I know from just what I’m hearing, that there’s incredible pent-up desire. And I think that people want to feel like, ‘OK, it’s a catharsis, we’re here, we did it, and then everybody get behind Senator Obama.’ That is what most people believe is the best way to go,” she said.

“Doesn’t work that way,” shouted one supporter. The video clip of her remarks was posted on YouTube accompanied by the one-word remark, PUMA, an acronym for a group of Clinton supporters who have not committed to Obama. PUMA stands for “Party Unity My A�".”

Click here to see the YouTube video of Clinton.

In the video, Clinton, who endorsed Obama on June 7 after the final Democratic primary, said that she is fully behind Obama and actually has offered more help to him than other candidates have done for other nominees in previous years.

“I think it’s fair to say if you look at recent history, I have moved more quickly and done more on behalf of my opponent than comparable candidates have. And most of them didn’t endorse until the convention,” she said, naming Massachusetts Sen. Ted Kennedy, former California Gov. Jerry Brown and former Colorado Sen. Gary Hart, all past presidential candidates who lost the party nomination.

Obama spokesman Bill Burton nothing has been decided in terms of the role of Clinton’s delegates. He said Democrats remain united, despite the hard-fought battle between Clinton and Obama.

The Democratic convention is being held in Denver on Aug. 25-28, with the first three nights’ activities taking place at the 21,000-seat Pepsi Center. Obama is expected to accept the nomination at Invesco Field at Mile High, a 75,000-seat stadium where the Denver Broncos play. Convention planners said the venue would demonstrate the massive support Obama commands.

“You don’t have to be a delegate or party insider to witness this historic moment firsthand,” Democratic National Convention Committee CEO Leah Daughtry said, announcing the plans for credentials.

Ticket selection was designed “to showcase the gains the party has made in the West,” she said. Nearly two-thirds of the tickets will go to residents of the West and Southwest, including Colorado, where Democrats have made inroads in recent elections.

But several of Clinton’s supporters are insistent that the former first lady get a vote on the convention floor. One self-identified delegate at the California fundraiser said a petition had been formed to put Clinton’s name on the ballot.

Clinton did not oppose that idea, but said it won’t change the outcome.

“I have made it very clear that I am supporting Senator Obama and we’re working cooperatively on a lot of different matters, but I think that delegates can decide to do this on their own. They don’t need permission. They can decide under the rules of the DNC, and so I think it would be better if we had a plan that actually we put in place and everybody knew what it was and then we executed it because I just think that would go more smoothly,” she said.

Former Clinton campaign manager and Howard Wolfson also obliquely acknowledged Thursday that relations between Clinton’s and Obama’s delegates aren’t all roses and sunshine.

“You know the these two people ran against each other for 18 months there were some moments of … friction as you might imagine,” he said, stressing that Clinton is doing her part to contribute to Obama’s election.

“If you have some people that are concerned that they are not getting the respect that they are looking for, that the party not quite yet unified, what is the way to bring those people back into the party to make sure that they are enthusiastically supporting Senator Obama by the time the November election comes around? And one possible way of doing that is to have roll call that has Senator Clinton’s name placed in nomination, that is one option. There are other options and I think that the important thing is that this is going to get decided between Senator Clinton and Senator Obama in a way that I think both can agree unifies the party and bring people together,” he said.

Democratic strategist Bob Beckel added that a vote for Clinton would help relieve some of the tension between the Obama and Clinton delegates.

“They can’t stop them if they want to do it. They cast their vote for Hillary Clinton and before the final roll call is finished they are going to go back through and make it unanimous by state. That’s one way I think to let a little bit of the pressure out of this pressure cooker, but it’s there. I mean it’s bound to be. You can’t have a convention with 1,800 delegates out of 4,400 be for somebody else and not expect there is still going to be some latent animosity,” Beckel said.

Clinton is expected to deliver a prime-time address to delegates on Aug. 26, the second night of the gathering. Typically the vice presidential nominee delivers the address on the third night of the convention.

As the one-year anniversary of the housing and credit crunch approaches, investors in Fannie Mae and Freddie Mac have nothing to celebrate. They won’t see an end to the losses at these mortgage finance giants until after next year.

Moreover, a report from the regulator of the two mortgage finance giants gives embarrassing new detail on how Fannie (FNM: 12.25, +0.42, +3.55%) and Freddie (FRE: 7.94, +0.42, +5.58%) were mindlessly gunning the securitization engines well after the housing bubble had burst and Wall Street backed off.

Freddie Mac will report its second-quarter financial results Wednesday. Fannie Mae will release its results on Friday. Freddie Mac’s shares are down 88% this year, while Fannie’s shares have dropped 83%. More losses and writedowns for the two are likely on the way.

The Office of Housing Enterprise and Oversight says in a new report that the two combined own about $217 bn in securities minted by Wall Street firms that are backed by the shakiest home mortgages dating to 2004 and 2005, the height of the housing bubble.

The mortgages here are subprime and Alt-A loans, just a notch above subprime. To the extent that Wall Street firms book fair value losses on this pool, “Fannie Mae and Freddie Mac may have to do so as well,” OFHEO says.

As delinquencies and defaults on subprime loans continue, and increasingly even prime loans bellyflop, Fannie and Freddie will continue to book losses into 2009, says Credit Suisse. Some analysts say they may lose an additional $24 bn or more.

This should alarm both taxpayers and investors across the country.

Elected officials enacted a $300 bn housing bailout bill that gives these two carte blanche without any statutory limits on their colossal $5.3 tn book of business (Lehman Bros says the two have another $3.3 tn in hedges, among other items, off the balance sheet). The two have reported more than $11 bn in pre-tax losses over the last three quarters and have a history of accounting misdeeds (on a fair value basis, Fannie incurred a loss of $13.3 bn, Freddie, $24.7 bn, OFHEO says).

The housing rescue now lets the government inject tens of billions of taxpayer dollars into these two publicly traded companies, who clearly have failed in their fiduciary responsibilities. The government can now use tax dollars to buy unlimited equity stakes in the companies and their bonds if needed.

The thinking is, the Treasury will simply mint more debt and use that resulting capital to inject more liquidity into Fannie and Freddie, despite their history of accounting misdeeds, losses, misstatements and repeated dilutive equity raises that prove that these two companies do not know what they are doing. Also, the two can now borrow at the Federal Reserve.

Fear is now rampant that if the rescue doesn’t work, the US government must spend more than what the Congress said it would cost to bolster Fannie and Freddie, $25 bn, a sum it cooked up in order to sell the $300 bn housing bailout bill.

Remember, the government’s estimate of the cost to taxpayers for the S&L crisis rose from an initial $50 bn to more than $124.6 bn (not inflation adjusted).

More importantly, Congress spitballed that $25 bn number even though just this past month it sent in bureaucrats from the Federal Reserve and the Office of the Comptroller of the Currency to go find out what the heck is really sitting on Fannie and Freddie’s books, as it clearly doesn’t believe the management at these two levered up examples of crony capitalism.

The fear is, too, that the government may have to swallow these two obesities, causing the US dollar to plunge in anticipation of the need to mint more dollars, creating more inflation (not to mention the $99 tn in unfunded liabilities at Social Security and Medicare, according to Fed stats).

In effect, US taxpayers have been loaded into the backseat of Congress’s spaceship pointed directly at the center of the sun.

Because the market believes the US government has given Fannie and Freddie an “implicit guarantee”of their debt, for years both have used that backing to execute a sweet carry trade, where they can borrow money much more cheaply than banks and then turn around and use that money to buy things such as higher-yielding mortgage-backed securities from lenders, in turn injecting liquidity into the lending system to make more loans. The two also sell guarantees against defaults on loans for a fee.

For years, Wall Street believed their obligations were “nearly as good as Treasurys themselves,” notes Dennis Gartman of The Gartman Letter. Indeed, their securities traded as if the government backed them, and US government debt traded as if the government did not back them.

Fannie Mae was born in 1938 as part of FDR’s New Deal to get the country out of the Great Depression and provide home ownership. Back then, millions of Americans were struggling to buy homes, and also faced foreclosures, as banks weren’t lending and mortgage money had dried up.

For years Fannie sat on the government’s books, helping to expand the real estate industry. In 1968, the LBJ administration, worried about the effect of the Vietnam War on the federal budget, moved Fannie Mae off the government’s books, and Fannie became a publicly traded company.

When the savings-and-loan industry wanted its own mortgage financing creature to play with beginning in 1968, Congress obliged and in 1970 Freddie Mac was born. The two quasi-socialist mortgage finance giants then became to the US economy what off-balance sheet vehicles were to Enron, Gartman says.

When Freddie Mac and Fannie Mae were limited in the dollar amount of mortgages they could buy and securitize, to $417,000, in the ‘90s, Wall Street stepped in to securitize these loans.

Wall Street then manufactured all sorts of subprime paper, paid the credit ratings agencies to get rosy ratings, and then sold this drunken daisy chain of paper to all sorts of unwitting investors from here to the Arctic Circle, now sitting as landfill in portfolios run by pension funds, hedge funds and local governments.

Wall Street firms then kept a sizable slug of this bad paper off their balance sheets to keep financial results rosy, and then wrote themselves sweet bonus checks off the goosed-up numbers.

So Wall Street, with the help of Fannie and Freddie, shot these risky loans into the ether, thus breaking the bond between the overseer, meaning the lender, and the borrower. Why care about monitoring a borrower who has no skin in the game with a zero-down mortgage when you’ve entirely offloaded that loan as a security?

As far back as 1987 the Financial Accounting Standards Board warned there was no adequate way to value these derivatives, and now Frankenstein derivatives are sluicing financial poison through the system.

Then Fannie and Freddie itself started buying Wall Street’s mortgage backed securities, securities backed by zombie loans given by banks such as Countrywide Financial (CFC), which already had pointed its conveyor belt of bad loans at Wall Street.

When the credit markets seized up in 2007, Wall Street stopped doing much of these securitization deals as its recycling machine for these cut and paste jobs had sand thrown in its gears.

But as Wall Street stepped back, check out how Fannie and Freddie stepped in big time.

OFHEO says in its recent report that while the volume of single-family mortgatges securitized in 2007 fell by 8% to $1.9 tn, as the number of single family mortgages originated declined, “Fannie Mae’s and Freddie Mac’s combined share of MBS [mortgage-backed securities] issuance rose substantially to 61.6% from 46.7% in 2006.”

Indeed, OFHEO says Fannie and Freddie “increased their MBS issuance by nearly one-third in 2007 as competition” from Wall Street “virtually ceased in the second half of the year,” though OFHEO says the two started to curtail their purchases of securities backed by shoddy loans. Too little too late.

Now teetering atop Fannie’s and Freddie’s painfully razor thin $54 bn in net worth is a pyramid of $5.3 tn in debt that is nearly half the size of the US gross domestic product. The two have much higher leverage ratios than banks or hedge funds, but lower borrowing costs due to their implicit government backing. The two whittled down their capital cushions after they gunned their lobbying engines on Capitol Hill, showering elected officials with money.

JPMorgan Chase (JPM: 41.10, +0.96, +2.39%) or Bank of America (BAC: 33.69, +1.07, +3.28%), for example, have almost as much bank-level capital as these two “combined supporting one fifth of the commitments,” says the research website The Institutional Risk Analyst, published by Lord, Whalen LLC.

So the fear is that, as mortgages belly flop right and left and an increasing number of homes go into foreclosure, the two are insolvent. Former Fed official William Poole has said as much of Freddie Mac.

But instead of reining in their colossal, outsized portfolios which has caused such danger to taxpayers, the new housing rescue legislation went in the opposite direction. It would increase the statutory limit on the national debt by $800 bn, to $10.6 tn, as the two would now get to buy and back jumbo loans worth $625,000.

And as economist Edward Yardeni points out (his reports are a must-read), both “have been scrambling to plug all the holes in their huge mortgage portfolios.” Citing the Wall Street Journal, Yardeni notes that at the end of last year, the two “started guaranteeing payments on loans that back mortgage securities held by others to delay recognizing losses on some delinquent loans.”

Yardeni adds that “earlier this year, in their most shocking (desperate) tactic to reduce losses, Fan and Fred started making loans of up to $15,000 to people who have fallen behind on their mortgage payments.”

Here are the stink bombs, potholes and steam pipes bursting in these two reckless publicly traded companies:

*Both have a total of a microscopic�"did you see it, did you catch it?�"$54bn in net worth, generally assets minus liabilities (don’t listen to the $81 bn figure tossed around for their total capital, that’s a pro forma fake number that doesn’t include certain losses).

*Teetering atop that razor thin wedge is a pyramid of $5.3 tn in debt.

*One stink bomb is the total of $260 bn in securitized assets backed by subprime and Alt-A loans, loans which sit in between subprime and prime. Those sums dwarf their capital positions.

*Freddie has $156.8 bn in level three assets, those illiquid securities it can’t get a pricetag on because no one wants them now. Remember, under US accounting rules, it gets to assign its own values to these assets, they could be worth more, they could be worth less.

*Fannie has $56.1 bn in level three assets, or about a seventh of its fair valued assets.

*Fannie and Freddie have combined debts of $1.59 tn, borrowings they made merely to operate their businesses. Again, that’s against just $54 bn in total net worth. Their guaranteed liabilities were 29 times their net worth at the end of the first quarter.

*They each have $2.25 bn pipelines into the Treasury, which the government now wants to expand.

*Forty years ago, when they went public, Fannie had debt of about $15 bn. Do the math against Fannie’s $804 bn in liabilities today, and the pipelines should be about $120 bn each.

Still believe that $25 bn figure Congress is selling you?

The budget office predicts the economy will grow at a rate of 1.6 percent this year and will rebound to a 2.2 percent growth rate next year. That's a half percentage point more than predicted but also the widely cited "blue chip" consensus of leading economists. The administration also sees inflation averaging 3.8 percent this year, but easing to 2.3 percent next year �" better than the 3.0 percent seen by the blue chip panel.

"The nation's economy has continued to expand and remains fundamentally resilient," said the budget office report.

Senior administration officials downplayed the impact of the number, with one noting that as a percentage of the U.S. gross domestic product, the deficit projection would be roughly 3 percent to 4 percent.

Another senior administration official said "a lot can happen" in 18 months that could worsen or improve the outlook, such as an improved economy leading to better tax returns, or increased spending under a new administration. The official specifically warned about the impact a Democrats.

"Democrats could blow the doors off spending and drive the deficit even higher," the official said.

Congressional Democratic leaders took aim at the administration �" and the Republican candidate for the next administration �" for what Senate Majority Leader Harry Reid called misguided priorities.

"The large budget deficit is a symptom of the many serious problems that Bush-McCain Republicans refuse to address. Rather than continuing the flawed policies that produced this result, Democrats believe we must change course," Reid, D-Nev., said.

Among the problems Reid said Republicans neglected were renewable energy, health care reform, and refocusing military efforts on Afghanistan. "Until we deal with these underlying problems, our budget deficits and the squeeze on Americas families will only get worse."

Likewise, House Speaker Nancy Pelosi criticized what she called unrestrained spending.

"President Bush has mortgaged our future with record deficit spending on the wrong priorities. An unnecessary and extraordinarily costly war in Iraq has turned record surpluses into record deficits. Meanwhile, our economy is in a severe economic slump as a result of this President’s mismanagement," she said.

White House officials said the increase from February's $407 billion projection for the coming year is due largely to a worse economy as well as higher-than-expected costs from the $168 billion economic stimulus package passed by Congress earlier this year.

The highest post-World War II budget deficit, in terms of a portion of the GDP, was in 1983 when it was 6 percent of the national economy. The record high-dollar mark to date was in 2004, when the deficit reached $413 billion.

The new figure actually underestimates the deficit, since it leaves out about $80 billion in war costs. In a break from tradition �" and in violation of new mandates from Congress �" the White House did not include its full estimate of war costs.

White House press secretary Dana Perino had no comment on the new outlook figure. But she told reporters that the White House and lawmakers acknowledged months ago that they were going to increase the deficit by approving a short-term boost for the slumping economy.

"Both parties recognized that the deficit would increase, and that that was going to be the price that we pay," Perino said.

Officials said revenues are holding up better than officials hoped for the current year: With costs running about $10 billion lower than expected, the budget deficit is expected to be less than $400 billion at the end of the fiscal year this September.

The deficit for 2007 totaled $161.5 billion, which represented the lowest amount of red ink since an imbalance of $159 billion in 2002. The 2002 performance marked the first budget deficit after four consecutive years of budget surpluses.

That stretch of budget surpluses represented a period when the country's finances had been bolstered by a 10-year period of uninterrupted economic growth, the longest period of expansion in U.S. history.

In his first year in office, helped considerably by projections of continuing surpluses, Bush drove through a 10-year, $1.3 trillion package of tax cuts.

However, the country fell into a recession in March 2001 and government spending to fight the war on terrorism contributed to pushing the deficit to a record in dollar terms in 2004.

House Budget Committee Chairman John Spratt, D-S.C., said the deficit projection confirms "the dismal legacy of the Bush administration: under its policies, the largest surpluses in history have been converted into the largest deficits in history."

Bush signed the paperwork on Monday from the Oval Office, said the officials, who agreed to reveal his decision only on grounds of anonymity. They said he approved the military's request to execute Ronald A. Gray, now 42. Gray was convicted in connection with a spree of four murders and eight rapes in the Fayetteville, N.C., area over eight months in the late 1980s while stationed at Fort Bragg.

U.S. military personnel cannot be executed unless the president approves it. Gray has been on death row since 1988.

John McCain said rival Barack Obama does not understand what’s at stake in the Mideast a and the world and therefore chose to call for a withdrawal in Iraq based on political expediency and not conditions on the ground.

The presumptive Republican presidential nominee said he does not doubt Obama’s patriotism, but he does question his actions in calling for a troop withdrawal in March 2007.

“If Senator Obama had had his way, we’d have been out last March and we’d been out in defeat and chaos, and probably had to come back again because of Iranian influence,” McCain said in an interview on ABC’s “This Week,” taped at his home in Sedona, Ariz.

“He was wrong, I was right,” McCain said, noting that he chose to support the surge of an additional 30,000 U.S. troops last spring that has now been widely credited with reducing violence in Iraq by 80 percent.

McCain said Obama made a decision on the surge based on whether it was the best way to appeal to the Democratic Party base.

“I am saying that he made the decision, which was political, in order to help him get the nomination of his party,” he said.

Obama originally opposed the war in Iraq, which began in March 2003. He said he still does not support the surge, saying if his plan had been enacted to withdraw troops, conditions on the ground also would be very different right now.

Obama says if he is president he will initiate a withdrawal over the first 16 months of his administration. Visiting Iraq, Afghanistan, Israel, the Palestinian territories and three European nations, Obama said he was told by Iraqi leaders that nation does not want an open-ended presence of U.S. combat forces and now is an appropriate time to start planning for a reorganization of troops in Iraq. He also noted that the war costs about $10 billion a month, which could be used to shore up the U.S. economy.

McCain criticized that timeline even though he acknowledged Friday that that 16 months is “a pretty good timetable.” However, he repeated Sunday that “anything is a good timetable” if it is based on conditions on the ground.

“I like six months, three months, two months. I like yesterday. I like yesterday, OK? That seems really good to me. But the fact is, the conditions on the ground have not dictated it,” he said.

McCain said the Democratic presidential candidate does not understand the purpose of the surge or the war itself.

“He does not understand, and did not understand, and still doesn’t understand that the surge was the vital strategy in us not having to lose a war. Chaos, genocide, increased influence of Iranians in the region, the consequences of failure would have been severe, and now the benefits are enormous,” McCain said.

“Saddam Hussein … imposed a threat to the United States of America and our security. And the Oil for Food scandal, the $12 billion he was skimming, the fact that he had said that he’d had in operation and he wanted to have weapons of mass destruction, the fact that this society that he ruled in such a brutal fashion was really awful, and he did pose a long-term threat to the security of the United States of America,” he said.

John McCain said Friday he thinks Barack Obama’s proposed timetable for withdrawal in Iraq is on the right track, even though the Arizona senator spent the last week hammering Obama for his military plans.

Obama calls for a 16-month troop withdrawal timetable, something McCain called “politically expedient” during a forum in Denver, Colo., Friday.

But then in an interview with CNN, McCain had kind words.

“I think it’s a pretty good timetable, as we should �" or horizons for withdrawal,” he added, echoing a phrase President Bush used in recent days. “But they have to be based on conditions on the ground.”

McCain has long maintained that conditions on the ground are a key consideration in any withdrawal of American troops. And he has argued that Obama would withdraw troops based on his timetable without regard to conditions in Iraq, although Obama says he would listen to U.S. military commanders about those conditions.

Obama, who is wrapping up his weeklong tour of the Middle East and Europe, said in London that “we are pleased to see that there has been some convergence around proposals that we’ve been making for a year-and-a-half.”

At first it sounds reasonable: a debit card attached to your 401(k) account. If you need to access your money in an emergency, you simply swipe your card to pay for the expense, withdrawing only the exact amount you need instead of taking out a lump sum.

That’s exactly the pitch from the folks at The Reserve, a company that is taking a lot of heat from outraged members of Congress and over the marketing of its 401(k) debit card. In fact, Sen. Herb Kohl, D-WI, who chairs the Special Committee on Aging, has co-sponsored a bill to outlaw it.

The ability to loan yourself some of the money in your retirement account is perfectly legal. If your plan allows it, the law says you can borrow up to 50% of your balance or $50,000, whichever is less.

The legislation introduced this month would not change this.

What lawmakers object to is the method for tapping your 401(k). Ashley Glacel, spokesperson for the Senate’s Special Committee on Aging, says a debit card “makes it far too easy for people to dip into their retirement savings for casual purposes.”

Lunch. Mocha lattes. The latest electronic toy. Gas for your car. Groceries. A haircut. In other words, relatively small, everyday purchases.

When asked his position on the 401(k) debit card, David Wray, president of the Profit-Sharing 401(k) Council, takes about a pico-second to reply, “We don’t support the practice. The plan loan process in place now works. There’s no need for such a radical change.”

But Bruce Bent, CEO of The Reserve, says all his company is trying to do is bring the 401(k) loan process into the 21st Century.

In general, if you apply for a loan from a 401(k) plan without a debit card arrangement (few do), the plan administrator sells the appropriate amount of investments in your account and issues you a check. Once you deposit this into your bank account, you are free to spend the money anyway you want- including, using a debit card attached to your checking account. Interest earned on the money while it sits in your bank account is, of course, subject to ordinary income tax.

In contrast, Bent points out that with a debit card loan, the amount you borrow is shifted into a money market fund inside your 401(k) account. It stays there until you swipe your card to pay an expense. Any interest earned on assets in the money market account remains tax-deferred.

“Not the point!,” say critics. (Besides, with money market rates around 1-1½ %, how much taxable interest are we really talking about?)

It’s human nature that’s got them worried.

Considering how little most Americans have managed to save for retirement and the record amount of credit card debt we’ve collectively piled up, the concern is that we won’t have the self-restraint to not raid our 401(k)s- because the debit card makes it so easy.

Wray contends that being able to swipe money out of your retirement plan (both literally and figuratively) “would send the message that a 401(k) is about current consumption and that it’s legitimate to use those assets for current consumption.”

Then there’s the issue of re-paying the loan.

Whether you have the standard lump sum variety or swipe the money from your 401(k) using a debit card, federal law requires that you replace the money in your retirement account by making regular payments- at least quarterly. If you fail to do this your plan loan is considered to be in default.

This is a disaster! Instead of being classified as a “loan,” the unpaid balance becomes a “distribution,” which means 1) you own