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[News] from [guardian.co.uk]

[Environment > Solar power]
Solar power from Sahara a step closer
The German-led Desertec initiative believes it can deliver power to Europe as early as 2015
Ashley Seager
guardian.co.uk, Sunday 1 November 2009 14.20 GMT Article history

A $400bn (£240bn) plan to provide Europe with solar power from the Sahara moved a step closer to reality today with the formation of a consortium of 12 companies to carry out the work.

The Desertec Industrial Initiative (DII) aims to provide 15% of Europe's electricity by 2050 or earlier via power lines stretching across the desert and Mediterranean sea.

The German-led consortium was brought together by Munich Re, the world's biggest reinsurer, and consists of some of country's biggest engineering and power companies, including Siemens, E.ON, ABB and Deutsche Bank.

It now believes the DII can deliver solar power to Europe as early as 2015.

"We have now passed a real milestone as the company has been founded and there is definitely a profitable business there," said Professor Peter Höppe, Munich Re's head of climate change.

"We see this as a big step towards solving the two main problems facing the world in the coming years - climate change and energy security," said Höppe.

The solar technology involved is known as concentrated solar power (CSP) which uses mirrors to concentrate the sun's rays on a fluid container. The super-heated liquid then drives turbines to generate electricity. The advantage over solar photovoltaic panels, which convert sunlight directly to electricity, is that if sufficient hot fluid is stored in containers, the generators can run all night.

The technology is not new - there have been CSP plants running in the deserts of California and Nevada for two decades. But it is the scale of the Desertec initiative which is a first, along with plans to connect North Africa to Europe with new high voltage direct current cables which transport electricity over great distances with little loss.

Leading European energy industry expert Paul van Son has been appointed chief executive of DII and will recruit staff to build up a framework to make the building of both power plants and the grid infrastructure.

"We recognise and strongly support the Desertec vision as a pivotal part of the transition to a sustainable energy supply in the Middle East, North Africa and Europe," he said.

"Now the time has come to turn this vision into reality. That implies intensive cooperation with many parties and cultures to create a sound basis for feasible investments into renewable energy technologies and interconnected grids."

Desertec has gained broad support across Europe, with the newly elected German coalition government of Angela Merkel hoping the project could offset its dependence on Russian gas supplies.

North African governments are said to be keen, too, to further exploit their natural resources. Algeria and Libya are already big oil and gas suppliers to Europe.

Höppe said Munich Re had been concerned about the potential impact of climate change on the insurance business since the early 1970s. Extreme weather events related to climate change are already a reality and have the potential to be uninsurable against within a few decades, pointing to a possible crisis for the industry, he said.

"To keep our business model alive in 30 or 40 years we have to ensure things are still insurable," he said.

Munich Re also plans to invest in the new initiative and Höppe said banks were confident that they could raise sufficient funding to make the project work.

There are already some small CSP plants in Spain and North Africa, with the power used locally. But Desertec plans to see big power stations of one gigawatt operating in five years' time and exporting some current across the Mediterranean. The consortium stresses, though, that power generated by solar fields in North Africa would be used by North Africans as well as Europeans. North Africa has a small population relative to the size of its deserts. For similar reasons Australia is putting together its own Desertec initiative.

Dan Lewis, head of a new thinktank, the Economic Policy Centre, and author of a forthcoming energy policy paper, said: "This is just the sort of long-term, big-difference, energy security gain project that our UK short-term targets and policy framework can't deliver.

"Instead, we're spending ridiculous sums on no-hoper, marginal stuff like fusion energy and a massive smart meter rollout, that at best will only shave a fraction off peak demand."
　

[Environmeny > Deforestation]
Ancient Peruvian Nazca turned land to desert
Lessons to be learned from Nazca civilisation, which exposed itself to floods after mass deforestation, research says
Rory Carroll, Latin America correspondent
guardian.co.uk, Monday 2 November 2009 Article history

The ancient Nazca civilisation of Peru, made famous by the giant geoglyphs it left etched in the soil, partly triggered its own downfall by chopping down forests and creating a desert, according to researchers.

The society vanished 1,500 years ago after flourishing for centuries, during which it made sophisticated arts and crafts as well as the famous Nazca lines. A study published today suggests its collapse was caused by the clearing of huarango trees, which had maintained an ecological balance in that corner of South America.

The Nazca wanted land for corn and other crops and did not realise the forests were crucial to soil fertility and moisture, said the Cambridge University-led report. "In time, gradual woodland clearance crossed an ecological threshold – sharply defined in such desert environments – exposing the landscape to the region's extraordinary desert winds and the effects of El Niño floods," said David Beresford-Jones, from the McDonald institute for archaeological research at Cambridge University.

The findings contrast with the stereotype that Native Americans lived in harmony with nature until the voracious European conquest, and follows reports that other ancient cultures suffered similar fates: the Maya of central America abandoned their cities and pyramids after over-intensive use of water and land, while the tribes who erected giant stone statues on Easter Island all but died out after clearing too many trees.

The Nazca – also spelt Nasca – thrived in arid valleys of what is now the southern coast of Peru between 300BC and AD800. In addition to the geoglyphs, which endure to this day and are visible from space, they built the ceremonial city of Cahuachi and underground aqueducts. Researchers found more than 60 huarango stumps preserved in the Samaca basin. Pollen samples indicated forests were replaced by fields of cotton and corn.

The short-term agricultural gain came at a high price because the trees anchored the landscape. "It is the ecological 'keystone' species in this desert zone, enhancing soil fertility and moisture, ameliorating desert extremes in the microclimate beneath its canopy and underpinning the floodplain with one of the deepest root systems of any tree known," said Beresford-Jones.

Clearances reached a tipping point at which the arid ecosystem was irreversibly damaged, leaving it vulnerable to a big El Niño-style event around AD600 which unleashed strong winds and catastrophic floods, rendering land unusable for agriculture and, eventually, creating a desert.

Had the forests still stood they would have cushioned the impact, said the study. Instead, the Nazca endured resource wars and their civilisation eventually suffered a "catastrophic" collapse.

The Nazca study's authors said their findings had contemporary resonance. There are now no undisturbed ecosystems in the region the Nazca used to call home. What remained of the old-growth huarango forests is being destroyed by illegal charcoal-burning operations.

"The mistakes of prehistory offer us important lessons for our management of fragile, arid areas in the present," said Oliver Whaley, of the Royal Botanic Gardens, Kew.

The Nazca

The Nazca people carved out a civilisation in southern Peru's arid valleys long before the Inca empire. They are best known for the Nazca lines: vast, intricate drawings etched on the desert floor, possibly sacred pathways. In addition to sophisticated pottery and textiles, the Nazca amassed one of South America's biggest collection of human trophy heads. The skulls had a hole drilled into the forehead. Academics disagree over whether the heads were of distant enemies killed in battle or sacrificial victims from closer to home.

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[News] from [guardian.co.uk]

[Environment >　Copenhagen Climate change conference 2009]
Five days of formal talks to go
John Vidal in Barcelona
guardian.co.uk, Sunday 1 November 2009 19.33 GMT Article history

Five days of formal negotiations remain before countries meet in Copenhagen to finish the most complex international agreement in UN history.

As the teams of negotiators from 191 countries come together tomorrow for a last week of talks in Barcelona, huge political gulfs remain between rich and poor.

They must make rapid progress to reduce a wordy text to a manageable few pages if the world's politicians are to have any chance of reaching an agreement when they arrive for the final talks, which take place in Copenhagen next month. According to Yvo de Boer, head of the UN Framework Convention on Climate Change, five main conditions must be met to ensure the global economy shifts rapidly from its current high-carbon trajectory.

Top of the list is for rich countries to set themselves ambitious targets and timetables for reducing emissions. The world's other big emitters, such as China, India, Brazil and Mexico, must agree to limit their emissions.

The third imperative is that rich countries pay significant sums of money to the most vulnerable countries to help them adapt to changes in the climate.

Beyond that, the poor want control over the money and access to technology.

To reach an overall agreement there must also be consensus on the regulation of emissions from aviation, shipping, forests, land use and other areas.

The reality is that the negotiations will go to the wire in Copenhagen, and the Barcelona talks can only hope to narrow the gaps. But with just a few days' formal negotiations left, the poor countries appear to hold the moral high ground and are now exerting huge diplomatic pressure on the rich to commit themselves further. Here we examine the gaps between countries and the pledges made so far.


[News > World news > Philippines]
Death toll mounts as Philippines hit by third typhoon in a month
More than 100,000 evacuated as floodwaters rise in unusually late and harsh storm season
Jonathan Watts in Manila
The Observer, Sunday 1 November 2009 Article history

The typhoon death toll in the Philippines rose yesterday as the third storm in a month tore across the main island, destroying homes and sweeping away at least six people in flash floods.

More than 100,000 people were moved out of their homes ahead of the landfall of Typhoon Mirinae, the most recent of an unusually late and intense burst of storms to hit the archipelago.

Many of those who moved to emergency shelters in schools and other public buildings had only just returned to their homes after escaping an earlier typhoon, which dumped a month's rain on the islands in one day at the end of September.

The two cyclones followed similar paths, but yesterday's storm fortunately weakened before it hit Manila, a sprawling capital of 12 million people.

Other areas, however, were buffeted by winds of 150km an hour and rains that added to the volume of rivers and streams in areas where earlier floods had yet to subside. At least 11 people died in the storms, according to authorities, adding to the 1,100 killed in landslides, floods and related bacterial infections after the earlier typhoons.

Among the latest victims was a 12-year-old girl, who drowned in a flash flood in Pagsanjan township, south of Manila. A father was killed trying to ford a torrent in Pililla with his one-year-old child – who is still missing. A father and son plunged into a river they were driving over when a bridge collapsed, according to Fred Bragas, a regional disaster officer. Criticised for its poor response to the earlier storms, the government advised people to stay indoors, and cancelled 180 flights and numerous ferry services ahead of the All Saints' Day holiday – which is normally a period of mass migration.

In Santa Cruz, in the centre of the country, floods sent residents clambering on to roofs. "We cannot move, this is no joke," the mayor, Ariel Magcalas, told a radio station. "The water is high. We need help." In Taytay township, further north, the lakeside shanty homes of about 2,000 people were destroyed by strong winds, said mayor Joric Gacula. Elsewhere trees were uprooted and power supplies cut as the typhoon made its way off the island and weakened on its way across the sea towards Vietnam.

"It looks like our countrymen can still commemorate All Saints' Day because the weather has cleared a bit," said Colonel Ernesto Torres, a spokesman for the national disaster agency. "The typhoon is on its way out of the country."

The damage caused by Mirinae was less than feared, with the number killed significantly fewer that in the earlier typhoons Katsuna and Parma.

But aid workers said the back-to-back storms were stretching emergency relief efforts. "The impact is not just from the latest typhoon, it is an accumulation," said Valerie Lewin, who is heading Oxfam's emergency response team in the Philippines. "The big problem is relocation. Most of the evacuation centres are schools. Up to 50 people are living in a single classroom."

The aid organisation is buildings lavatories and walkways above the floodwaters. It is also handing out hygiene packs and cash to thousands who are stranded. In Manila, life appeared to have returned to normal last night. But residents expressed concern at the increasing frequency of typhoons, which previously struck mainly in the summer, but are now becoming common in spring and autumn.

"It's worrying," said Rachel Pili, a waitress. "We never used to get typhoons at this time of year. But now we get many. The weather is changing."


[Environment > Marine life]
Cancún beach project suspended after environmentalist legal action
Project to replenish eroded sands in Mexican coastal resorts will damage ecosystems, critics says
Jo Tuckman in Mexico City
guardian.co.uk, Sunday 1 November 2009 22.41 GMT Article history

A huge project to replenish eroded beaches in Mexico's main Caribbean coastal resorts, including Cancún, has been suspended after legal action by environmentalists.

Campaigners claim the $75m (£45m) plan – involving taking 6.2m cubic metres from a sandbank just off Cozumel island, 50 miles from Cancún, to hotel beaches – is based on incomplete assessments.

Critics say dredging the sandbank will alter currents and damage ecosystems, including coral reefs and breeding grounds for species such as the queen conch. They also fear Cozumel will become more vulnerable to hurricanes. "It's absurd. We understand it is necessary to fill out the beaches but it needs to be done without sacrificing other places," said Alejandra Serrano of the Mexican Centre for Environmental Law.

But Rodrigo de la Pena, president of the Hotel Association, criticised the delay: "We cannot sell ourselves as a place of sun and sand, if we don't have the sand."

A federal judge ordered a review of the project last month just hours before the Mexican president, Felipe Calderón, was due to launch the dredging. However, the same judge has now ordered activists to put down a 15m peso (£680,000) guarantee against loss of earnings incurred by project delays, to be paid if the final decision went against them. Unable to raise the money, campaigners have filed for an injunction to review the bond requirement.

Lupita Alvarez of the group Citymar, said: "If this doesn't work we will just have to go and put ourselves in front of the dredgers."

The depletion of the white-sand beaches (above) is often blamed on Hurricane Wilma but environmentalists blame high-rise hotels built on sand dunes. After Wilma, 800,000 cubic metres of sand were implanted at a cost of $19m, only to see the beaches washed away within months. The project relies on much more sand and artificial barriers.

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[News] from [guardian.co.uk]

[News > UK news > Weather]
Hundreds evacuated as floods hit Scotland and Wales
Heavy rain and strong winds bring transport chaos as forecasters warn of further danger from high river levels
Matthew Weaver
guardian.co.uk, Monday 2 November 2009 09.13 GMT Article history

Hundreds of people were rescued from homes and vehicles after heavy rain and strong winds brought severe flooding to parts Scotland and Wales yesterday.

Around 100 people, many of them elderly, were rescued from flooded properties in Huntley, Aberdeenshire.

The Grampian fire and rescue service was continuing to search homes in the town today in an attempt to ensure nobody remained trapped.

In Stonehaven, 50 people were rescued from their homes after the rivers Cowie and Carron burst their banks.

Across Tayside, several people were trapped in cars and many were evacuated from their homes. Roads were closed and trains cancelled as water levels rose across Angus, Perthshire, Grampian and Fife.

Fire crews in parts of Wales rescued people from houses and cars, with the deluges forcing the cancellation of a number of train services.

Five adults and a baby were reported to have been rescued from two houses in Meidrim, Carmarthenshire, while floodwater stranded two women in their car in Landore, Swansea, and four were stuck in two cars near Newcastle Emlyn.

In England, the Environment Agency issued six flood warnings for the north of the country.

But Scotland appears to have been worst hit by the downpours, with nine flood warnings from the Scottish Environment Protection Agency still in place today.

They included three severe warnings affecting the rivers Spey and Isla, with experts saying river levels were "extremely high".

In Dundee, the Scottish Premier League match between Dundee United and Rangers was abandoned at half-time because of the heavy rain.

Rail services between Edinburgh and Aberdeen were cancelled this morning after passengers were left stranded for hours when lines at Stonehaven and Montrose were flooded. The main road north, the A90, was closed at Brechin.

Superintendent Innes Walker, of Grampian police, said: "People should not take journeys unless absolutely necessary, and they should listen to the radio for updates on road conditions.

"Grampian police are working with the local authority, Scottish ambulance service, Grampian fire and rescue and the coastguard to alleviate the problems and minimise the effects of this flooding on affected people."

Aberdeen was hit by 39mm of rain between 6am and 6pm yesterday. Around 32mm fell in the Edinburgh area and 25mm in Glasgow.

Forecasters said the heavy rain was dying out across the UK but conditions will remain wet and windy.

news20091102nn

[naturenews] from [nature.com]

[naturenews]
Published online 1 November 2009 | Nature | doi:10.1038/news.2009.1052
News
Air tides cause landslides
Pressure fluctuations can set slopes in motion.
By Quirin Schiermeier

{Atmospheric tides speed the flow of the Slumgullion landslide.}

The intermittent stop and go of a Rocky Mountain landslide is controlled by the diurnal ebb and flow of air pressure, a study suggests.

The four-kilometre-long Slumgullion landslide in the San Juan Mountains of southwestern Colorado, so named for its yellowish loamy soil, which reminded early settlers of slumgullion stew, began about 700 years ago. At its centre, soil and weathered rocks creep downhill at an average speed of half a millimetre per hour.

The movement of the landslide accelerates during the spring snowmelt period. And, puzzlingly, it is generally faster during the night than in the day.

William Schulz of the United States Geological Survey in Denver, Colorado, and colleagues set out to investigate the landslide's mysterious movements. Over a period of nine months they monitored the landslide at two spots, taking hourly measurements of slide speed, the water pressure inside pores in the soil, and weather conditions. They discovered that the movements of the rubble were in sync with 'atmospheric tides' — daily highs and lows in atmospheric pressure that are excited by changing exposure to the Sun's rays and by the Moon's gravitational pull.

During nightly hours of low atmospheric pressure, the landslide moves fastest, the team found. When air pressure increases during the day, the flow slows down or stops. Their work is published in Nature Geoscience¹.

The scientists suspect that changes in air pressure alter the frictional forces that hold the landslide in place. During periods of relatively low atmospheric pressure, air and water particles contained in sediment pores in the soil tend to move upwards to areas of lower pressure, easing frictional forces, they believe, and allowing easier sliding. The researchers say that their mathematical model of the basic physical forces driving landslide movement shows that their proposed mechanism is plausible.

Creeping menace

Land- and mudslides, often triggered by excessive rainfall or by earthquakes, pose a deadly natural hazard in many parts of the world. Earlier this month, more than 160 people were killed in mudslides in the Cordillera mountains of the Philippines, in the wake of Typhoon Parma.

"We do know that heavy rainfall is the most common trigger mechanism," says Falk Lindenmaier, a landslide expert at the University of Karlsruhe in Germany. "But this must not lead us to ignore other processes at play."

Studies in the European Alps have shown that small changes in environmental conditions do sometimes suffice to destabilize slopes². But not all mechanisms that trigger landslides are well understood. One reason for this, Lindenmaier says, is that scientists normally get to study slides only after they have begun or finished moving. The trigger mechanism for the landslide that occurred in 2007 near Doren in Austria is unknown, for example.

"That's why the new findings are so interesting," says Lindenmaier. "They don't directly affect safety considerations in the Slumgullion area. But they do help us better understand, and possibly predict, the behaviour of landslides."

Schulz and his team go one step further. They suspect that atmospheric tides could be involved in other phenomena that involve sliding surfaces, including earthquakes, volcanic eruptions and glacier movement.

References
1. Schulz, W. H., Kean, J. W. & Wang, G. Nature Geosci. doi:10.1038/NGEO659 (2009). (Published online 1 November 2009)
2. Lindenmaier, F., Zehe, E., Dittfurth, A. & Ihringer, J. Hydrol. Processes 19, 1635-1651 (2005).


[naturenews]
Published online 1 November 2009 | Nature | doi:10.1038/news.2009.1047
News
New targets for old drugs
A computer program predicts thousands of previously unknown drug-target associations.
By Elie Dolgin

{A computer program could help predict new uses for drugs that are already on the market.}

Researchers have identified thousands of new targets for existing drugs using a computer program that compares the molecular structures of drug compounds and chemicals that occur naturally in the body. The technique can be used to uncover new applications or reveal potential side effects for drugs already on the market.

"It's a new approach, and it's a totally different from what everyone else has done," says study author Bryan Roth, a pharmacologist at the University of North Carolina at Chapel Hill. "That's why it actually works."

The most common methods for predicting whether a small molecule binds to various drug targets involves either high-throughput laboratory screening or virtually simulating whether a particular compound fits together with proteins like a key in a lock. The experimental approach, however, is tedious and time consuming, whereas the computational method relies on the existence of high-resolution protein structures, which are hard to come by for many drug-sensitive proteins.

Tantalizing targets

Last year, Peer Bork and his colleagues at the European Molecular Biology Laboratory in Heidelberg, Germany, developed a new approach for finding novel drug targets for existing medications. They showed that drugs with similar adverse side effects often share a common target protein, even when those drugs are chemically quite different1. Now, a team led by Roth and Brian Shoichet, a computational chemist at the University of California, San Francisco, have succesfully identified new uses for marketed drugs by comparing existing drug compounds with different ligands — biologically active molecules that naturally bind proteins. Their hunch was that if a drug and ligand have similar three-dimensional structures, then there's a good chance that the drug will bind to the same protein as the ligand.

{{“It's a totally different from what everyone else has done. That's why it actually works.”}
Bryan Roth
University of North Carolina at Chapel Hill}

The researchers' suspicions were proved correct. They produced chemical 'fingerprints' of more than 3,600 drugs that were either approved or in late-stage clinical trials and some 65,000 ligands that together bind to around 250 protein targets. They then developed a statistical technique to compare the two types of molecules and singled out nearly 7,000 pairs of predicted drug-target interactions, thousands of which had never been shown before.

The technique provides "a way of giving you decent molecular-based hypotheses for side effects of drugs and a way of looking for new targets for these very special molecules", says Shoichet.

The authors validated 30 of these connections experimentally and showed that 23 of them were bona fide associations. These unanticipated interactions included hitherto unknown effects of many well-known drugs, the researchers report online today in Nature². For example, the antidepressants Prozac and Paxil, which work by boosting serotonin levels in the brain, also bound the β-adrenergic receptors, the researchers showed. This β-blocking activity could explain some of the drugs' side effects which include nausea and decreased libido.

Trip or treatment?

"The pharmaceutical industry should take note of this work," says Jeremy Jenkins, a chemoinformatician at the Novartis Institutes for BioMedical Research — the drug company's research arm — in Cambridge, Massachusetts, who was not involved in the new work. "This could really help us improve on preventing safety issues, which are one of the major contributors to drugs failing."

The authors also discovered a target for the hallucinogenic compound N,N-dimethyltryptamine (DMT). This target had been unclear until earlier this year when researchers at the University of Wisconsin School of Medicine and Public Health in Madison showed that the drug — which is found in toad skin, the psychoactive tea Ayahuasca, and the brain's pineal gland — binds to σ-1 receptors, but with poor affinity³.

Shoichet and Roth ran DMT through their predictive algorithm and found that the psychedelic drug binds much more strongly to serotonin receptors, including the one associated with the well-known hallucinogen LSD. The researchers confirmed the computational findings in cell assays and in live mice.

Andrew Hopkins, a computational chemist at the University of Dundee, UK, who wrote an accompanying commentary to the paper, was "impressed" by how the authors went from computer predictions through to experimental validation. "You can really see that some of this data makes biological sense," he says.

References
1. Campillos, M. et al. Science 321, 263- 266 (2008).
2. Keiser, M. J. et al. Nature doi:10.1038/nature08506 (2009).
3. Fontanilla, D. et al. Science 323, 934- 937 (2009).

news20091102reut1

[Top News] from [REUTERS]

[Green Business]
Carbon registry enables credit transfer system
Sun Nov 1, 2009 7:23pm EST

LONDON (Reuters) - The Voluntary Carbon Standard registry system is now able to transfer carbon emission offsets across different registries, the Voluntary Carbon Standard Association said on Monday.

The VCS multiple registry was launched in March but the transfer process was delayed due to technical reasons.

Carbon offsetting is a way for companies or individuals to voluntarily compensate for unavoidable greenhouse gas emissions by funding cuts in carbon dioxide elsewhere.

Transferring offsets called Voluntary Carbon Units (VCUs) across different registries should boost liquidity in the voluntary carbon market and encourage more interest from the United States as efforts are made to advance climate change legislation there. This is the first time independent registries have built a framework to communicate directly with each other and to transfer units from one registry to another without having to go through a central clearing house.

"We are very pleased that the registry functionality originally envisioned by the VCSA is now fully in place," VCSA's chief executive David Antonioli said in a statement.

"Being able to transfer VCUs from one registry to another both broadens the scope for transactions and strengthens the unique VCS system," he added.

Carbon credits totaling 123 million metric tons, valued at $705 million, were transacted in the global voluntary carbon market in 2008, according to New Energy Finance and Ecosystem Marketplace estimates.

U.S. climate change legislation could allow a total of up to 2 billion metric tons of offsets a year to be used in a cap-and-trade scheme from domestic and international sources.

(Reporting by Nina Chestney; Editing by David Cowell)


[Small Business]
FACTBOX: Next steps for U.S. healthcare bill in Congress
Sun Nov 1, 2009 8:11am EST

(Reuters) - Democratic leaders in the U.S. House of Representatives unveiled a bill on Thursday to reform the U.S. healthcare system, President Barack Obama's main domestic objective.

Senate Democratic leaders are also working on their version of a healthcare overhaul. Here are the likely steps to come as the bill moves through Congress:

* Democratic leaders in the House of Representatives hope to move their 1,990-page healthcare bill to the floor for a one- or two-day debate by late this week. It includes a government-run "public" insurance option and a new tax on the wealthiest Americans to pay for it.

* House Speaker Nancy Pelosi must put together 218 votes for passage in the 435-member House, where Democrats control 256 seats. She will need to placate liberals in her party who want a stronger version of the public option and about 40 moderate Democrats who want stronger language ensuring that federal funds are not used to pay for abortions.

* In the Senate, Democratic leader Harry Reid is awaiting cost estimates from the Congressional Budget Office on various parts of the legislation. He will use those estimates to help make his final decisions on melding two pending measures and publishing a final Senate healthcare bill. That could happen within the next few weeks.

* Reid already made his biggest decision -- to include a government-run "public" insurance option backed by Obama and congressional liberals. He added a compromise provision that would let states choose to opt out of participation in the national plan.

* Democratic aides said the Senate bill could drop a mandate that all employers offer insurance to workers or pay a penalty. Differences over the amount of subsidies offered to help lower- and middle-income people buy insurance and the taxes imposed to pay for the plan must also be overcome.

* Reid's goal is to hold the support of liberal Democrats without driving off moderates -- all in hopes of holding together the Democrats' 60-vote majority in the 100-member U.S. Senate. That is the exact number needed to overcome Republican procedural hurdles.

* If the Senate and House each pass a healthcare overhaul, a conference committee composed of members from each chamber will be appointed to negotiate the differences and combine the two measures. The public insurance option is certain to be one of the biggest issues there as well.

* It is at this stage where Obama and White House staffers can become most active in closed-door negotiations, cementing what they want in a final bill and what they think is most likely to pass in each chamber.

* Once the conference committee settles on a single bill, the House and Senate vote again on the revised measure. If approved, it will be sent to Obama for his signature or veto. Obama has set a goal of the end of the year for final action, and congressional leaders hope to finish work for the year by December 18. But the healthcare debate could extend to January if necessary.

(Reporting by John Whitesides; Editing by Peter Cooney)

news20091102reut2

[Top News] from [REUTERS]

[Small Business]
House takes another step on healthcare reform
Sun Nov 1, 2009 8:11am EST
By John Whitesides and Donna Smith

WASHINGTON (Reuters) - Democrats in the U.S. House of Representatives unveiled a sweeping healthcare overhaul on Thursday that would transform the insurance market, create a government-run insurance plan and levy new taxes on the rich.

Weeks of closed-door negotiations to merge three House healthcare plans produced a 1,990-page bill that would cost a net $894 billion over 10 years -- just below President Barack Obama's target of $900 billion -- and reduce the deficit by $104 billion over the same period, budget analysts estimated.

"Today we are about to deliver on the promise of making affordable, quality health care available for all Americans," House Speaker Nancy Pelosi said in a ceremony on the steps of the U.S. Capitol.

The bill's release was another step forward in Obama's drive for healthcare reform that would rein in costs, reform the insurance industry and expand coverage to many of the 46 million uninsured living in the United States.

Obama has made an overhaul of the $2.5 trillion industry, which constitutes one-sixth of the economy, his top domestic priority.

The bill was met with unanimous opposition from Republicans and grumbling from some Democrats. Party liberals had sought a stronger public insurance option and party moderates want assurances that federal funds will not be used to pay for abortions under the measure.

The legislation could be debated in the House as soon as next week. The Senate is putting together its own version, and the House and Senate bills eventually must be combined before being sent to Obama for his signature.

Obama praised House Democratic leaders for the insurance industry reforms and said he was pleased the bill featured a public insurance option and was fiscally responsible.

"The House bill clearly meets two of the fundamental criteria I have set out: it is fully paid for and will reduce the deficit in the long term," he said in a statement.

Republicans have battled Obama and Democrats at every juncture in the healthcare debate, and they criticized the size, cost and scope of the House legislation.

'BEHIND CLOSED DOORS'

"Americans' health care is too important and too complex to risk on one gigantic bill that has been written behind closed doors," said Representative Dave Camp, the senior Republican on the House Ways and Means Committee.

House Republican leader John Boehner urged Democrats to slow down the process and allow a full floor debate. "This huge bill is designed to be so complex that nobody would ever know for sure what's in it," he said.

The House bill would expand coverage to 36 million uninsured people living in the United States, the Congressional Budget Office said. It would offer subsidies to help the uninsured purchase insurance through newly created exchanges.

It would require individuals to buy insurance and all but the smallest employers to offer health coverage to workers. It also would bar insurers from refusing to cover people with pre-existing medical conditions and eliminate the industry's exemption from federal antitrust laws.

The House proposal includes a 5.4 percent surtax on individuals making more than $500,000 and couples earning more than $1 million, which would bring in an estimated $460 billion over 10 years to help pay for covering the uninsured.

It also would save money by expanding eligibility for the government's Medicaid health insurance program for the poor to people with incomes up to 150 percent of the official poverty level. Covering people through Medicaid is cheaper for the government than providing subsidies to purchase insurance.

The nonpartisan Congressional Budget Office said the subsidies for health insurance coverage would cost $1.055 trillion over 10 years, to be offset in part by $167 billion in penalties paid by individuals and employers who fail to obtain insurance.

The proposed new government-run insurance program has been a flashpoint in the debate. Obama and liberals see it as a way to increase competition with private insurers, but critics say it would lead to a government takeover.

In the House bill, the public option would use reimbursement rates negotiated with doctors and hospitals. House liberals led by Pelosi could not muster the votes for a stronger version pegged to rates for Medicare, the government's health insurance program.

The healthcare measure being prepared for debate in the Senate also includes a public option based on negotiated reimbursement rates but, unlike the House bill, it would allow states to decline to participate.

The House bill does not include the Senate's proposal to tax high-cost "Cadillac" insurance plans, which has been opposed by House Democrats and labor unions who fear it will hurt too many middle-income workers.

The lobbying group for the insurance industry, America's Health Insurance Plans, criticized the proposed government-run insurance program, arguing it would cause people to lose their existing coverage.

"A new government-run plan would bankrupt hospitals, dismantle employer coverage ... and ultimately increase the federal deficit," Karen Ignagni, the group's president, said in a statement.

(Editing by Chris Wilson)


[Small Business]
CIT bankruptcy to leave small businesses concerned
Sun Nov 1, 2009 8:23pm EST
By Elinor Comlay

NEW YORK (Reuters) - CIT Group Inc's (CIT.N) bankruptcy filing could push at least some small businesses it finances to look for a new lender, but finding new credit will be tough.

CIT filed for bankruptcy protection on Sunday, and said its creditors have already approved its reorganization plan.

The bankruptcy was long expected and followed a struggle to deal with its debt burden amid the credit crunch and recession, and paves the way for it to restructure its liabilities.

Under the plan announced on Sunday, CIT expects to reduce total debt by about $10 billion. The company's operating units are not in bankruptcy, and plan to continue lending.

But the company's long-term prospects are uncertain and the bankruptcy could leave more than one million small and medium-sized businesses looking for another source of funding, even if CIT's doors are still open, lawyers said.

Clients for CIT's factoring business are in a particular bind when it comes to finding alternative financing since CIT is by far the biggest company in the sector, where lenders buy unpaid customer bills from companies.

What's more, many of the factoring clients are in the garment industry, where they already face a bleak holiday season and where credit is generally tight.

"In the best of times you would have seen a situation where other lenders would certainly have been willing to consider getting into this business," said Mark Jacobs, a partner in law firm Pryor Cashman's bankruptcy group. "In the current environment, given the constraints on credit generally, there's not enough capacity out there," he added.

In the first six months of the year, CIT lent just $65 million in Small Business Administration loans, one percent of the total lent in this category over that time period. In 2008, CIT was the top SBA lender in dollar terms, providing 6 percent of all SBA lending, according to the National Small Business Association.

At the same time, banks are also broadly cutting back on lending to small and medium-sized businesses. Banks' lending to small companies fell by about 2 percent, or $14.8 billion, for the year through June, according to data from the Federal Deposit Insurance Corp.

The NSBA had expressed its concern about a potential CIT bankruptcy and in July wrote to U.S. Treasury Secretary Timothy Geithner to ask the government to consider assisting CIT. It may discuss a similar lobbying effort again, spokeswoman Molly Brogan said in an interview before the bankruptcy filing.

UNCERTAINTY ABOUT OPERATIONS

The major question for CIT's factoring clients is whether that unit will continue to operate as usual while its parent goes through bankruptcy.

The lender said on Sunday that all operating entities are expected to continue functioning normally, and that it hopes to be out of bankruptcy by the end of the year.

CIT's factoring business, worth about $42 billion in 2008, is estimated to be at least five times the size of its closest competitor, Wells Fargo & Co (WFC.N), followed by other smaller companies such as GMAC Inc and Rosenthal & Rosenthal. It is not clear if these rivals have enough capacity to take on all of CIT's existing customers.

Many of those clients, anticipating funding problems from CIT, drew down on their credit lines earlier this year. In one week in July alone -- before the company secured an emergency loan from bondholders -- CIT said in a filing it had $700 million of draws, about twice the normal level.

The company has said in filings that it hopes to complete a quick restructuring that would have minimal impact on its clients. Some 90 percent of CIT's creditors have approved the bankruptcy plan.

Still, a lot about any bankruptcy process is uncertain, and that has CIT clients worrying about the security of their financing.

"The businesses that I'm talking to are very nervous," said Vano Haroutunian, lawyer at Ballon Stoll Bader & Nadler.

(Reporting by Elinor Comlay; Editing Bernard Orr)