News Buzz: Debating a Bailout for the Big Three Auto Makers and Job Losses in the U.S.

The Big Three Bailout

The big debate in Washington this week is whether the government should extend its hand to help out the auto industry as part of its $700 billion bailout. Democrats have supported a plan to prop up General Motors, Ford, and Chrysler, otherwise known as the "Big Three," but Republicans oppose it. The White House said today that while it "does not want U.S. automakers to fail," money shouldn't be taken from the rescue package—instead, it should be drawn from Department of Energy funding for developing fuel-efficient vehicles. Senate Democrats plan to introduce legislation today that would tack a $25 billion bailout for automakers to a bill expanding unemployment benefits. Experts and economists are saying that while a Big Three failure initially would damage American manufacturing, foreign automakers would increase production in their own plants here more quickly than most people think.

Cuts Come from Citigroup, States Search for Money, and Other Economic Woes

More indicators of a financial crisis are coming from Citigroup Inc., which announced today that it will cut about 53,000 more jobs. That will reduce the banking giant's head count by 20 percent from its highest point at 2007's end. Signs of other financial difficulties also are rife today. States are scrambling to find ways to survive through the year without cutting key programs or raising taxes. Some have even found that their unemployment insurance funds are running out—just as more and more of their residents find themselves jobless. Meanwhile, the glum outlook for retailers means that fewer people looking for work over the holidays will be able to find it, with retail jobs down 24 percent in September from what they were last year. And abroad, Japan—the world's second-largest economy—has officially fallen into a recession, while experts say that a much-hyped summit of global leaders hardly affected the financial landscape. The latest forecast from economists says that the United States is in a recession that could last beyond the first quarter of 2009. More surprising? Seven top executives at Goldman Sachs have requested that they not receive year-end bonuses.

Security Pact Debated in Iraq

The Iraqi Parliament convened today to debate a security pact with the United States that was approved by the Iraqi Cabinet on Sunday. The proposal would allow American troops to remain until the end of 2011, but they'd have to leave Iraqi cities by June and give the country's authorities a great deal of power over troops' movements and operations. And it would prohibit the United States from attacking neighboring countries, like Syria and Iran, from Iraq's territory. Iran has applauded the deal; Syria opposes it. Since the Cabinet has approved the agreement, it seems likely to pass. The pact will be put to a vote on November 24.