Alaska Governor Palin to resign

Former Republican vice-presidential candidate Sarah Palin has announced she will resign as governor of Alaska on 26 July and not run for re-election.

Mrs Palin’s term of office was due to end in 2010.

Some have speculated that Mrs Palin, who is popular with the Republican Party base, might be preparing to make a bid for the White House in 2012.

But a report on NBC news suggested that Mrs Palin intends to get “out of politics for good”.

Her resignation means Alaska’s Lieutenant Governor Sean Parnell will take over as state governor.

‘New direction’

Polls indicated Mrs Palin was very popular in Alaska during the first few years of her governorship, and although her approval ratings have dipped somewhat since her vice-presidential run, she still enjoys widespread popularity in her home state.

Mrs Palin announced her decision in a statement from her home town of Wasilla, Alaska.

“I’m taking my fight for what’s right in a new direction,” she said, as her family looked on.

Mrs Palin did not reveal what she intended to do after leaving office, and did not give an explicit reason for her decision not to run for re-election.

But in a written statement, she made it clear that once she had decided not to run again, she did not want to hang on in office until her term expired.

“Once I decided not to run for re-election, I also felt that to embrace the conventional Lame Duck status in this particular climate would just be another dose of politics as usual, something I campaigned against and will always oppose,” she said.

Mrs Palin’s revelation came out of the blue, as most Americans were turning to the celebration of Independence Day on 4 July.

She offered no single clear reason for stepping down, our correspondent adds, but the strongest clue was her depiction of what it had been like to be the subject of sustained attack by liberals since she appeared on the national stage.

Steele wins Republican chair vote

Mr Steele wants to rebrand the Republican party Michael Steele has won the election to be chairman of the Republican National Committee, becoming the first African-American to lead the party. Mr Steele won in the sixth ballot, with 91 votes out of a possible 168. His nearest rival, Katon Dawson, received the remaining 77 votes. Correspondents say Mr Steele was the most moderate of the five candidates who stood for the position. The favourite, incumbent chairman Mike Duncan, pulled out after two rounds. “We’re going to say to friend and foe alike, we want you to be a part of us, we want you to with be with us, and for those who wish to obstruct, get ready to get knocked over,” said Mr Steele in his acceptance speech. Rebranding He rose to prominence in 2006 when he stood for a senate seat in Maryland. He had previously served as the state’s Lieutenant Governor. After his senate defeat, he served as the chairman of GOPAC, a conservative political action committee. As chairman of the Republican National Committee, Mr Steele will be in charge of overseeing the party’s campaigning efforts nationwide. He fought for the position on a platform of rebranding the party and finding ways to use new technology to connect with the conservative grassroots. Mr Duncan had been the favourite to win the election, but dropped out after receiving fewer votes than expected in the first two rounds of voting.

Alaska ethics probe clears Palin

Sarah Palin has always denied any wrongdoing over the affair

Republican vice-presidential candidate Sarah Palin has been cleared by a new report of abuse of power in firing Alaska’s top law enforcement official.

An independent investigator appointed by the Alaska Personnel Board said she had violated no ethics law.

Mrs Palin, governor of Alaska, was accused of sacking Walt Monegan because he failed to dismiss her ex-brother-in-law, state trooper Michael Wooten.

An earlier report for Alaska’s congress found that she had abused her office.

Mrs Palin has always denied any wrongdoing, and her supporters say the charges were motivated by her political opponents.

The Alaska Personnel Board report, led by investigator Timothy Petumenos, said there was “no probable cause to believe that the governor, or any other state official, violated the Alaska Executive Ethics Act in connection with these matters”.

Walter Monegan says Mr Wooten did nothing to warrant his dismissal

According to a copy of the report posted on the Anchorage Daily News website, the board concluded that there was no need to hold a hearing on “reputational harm”, as Mr Monegan had requested.

The report did say that the use of “private e-mails for government work” needed to be addressed, an apparent reference to Mrs Palin’s use at times of her personal e-mail account for state business.

Mrs Palin referred the matter to the personnel board herself.

The earlier report for the state legislature, released last month, said Mr Monegan’s refusal to fire Mr Wooten was not the sole reason for his dismissal, but a contributing factor.

However, it added that the actual sacking of Mr Monegan was a “proper and lawful” exercise of Mrs Palin’s rights as governor of Alaska.

House set for fresh bail-out vote

President Bush has said the bill is the best chance of rescuing the economy

The US House of Representatives is preparing to vote on a $700bn (£380bn) plan to rescue the US financial sector.

Party leaders are hoping the House, which stunned global markets by rejecting the initial plan, will follow the Senate and back a new version.

The House began debating the deal on Friday morning and is expected to vote later in the day.

The Senate bill added about $100bn in new tax breaks in the hope of gaining more support from House Republicans.

The New York stock exchange opened shortly after the debate began and the Dow Jones Industrial Average jumped more than 100 points in early trading.

But earlier in Japan, shares fell to a three-year low. The Nikkei index closed down more than 1.9%, its lowest level since May 2005.

In Europe, shares were relatively flat. In early afternoon trading the UK’s FTSE 100 was down just 18 points, France’s Cac 40 was down nine and Germany’s Dax up seven.

The financial volatility continued on Friday as US bank Wells Fargo announced it would buy troubled rival Wachovia in a $15.1bn (£8.5bn) deal.

The US also reported its biggest monthly job loss in more than five years.

Bush plea

In Washington, House Speaker Nancy Pelosi, a Democrat, has said no vote will be scheduled until the party feels it will pass.

NEW MEASURES IN BAIL-OUT BILL Increased protection for saving deposits Increased child tax credits More aid for hurricane victims Tax breaks for renewable energy Higher starting limits to alternative minimum tax

“We’re not going to take a bill to the floor that doesn’t have the votes. I’m optimistic that we will take a bill to the floor,” she said.

When the House first rejected the plan on Monday – by 228 votes to 205 – legislators had concerns about both the content of the plan and the speed with which they were being asked to pass it.

President George W Bush has since urged the House to back his revised bill.

The package is aimed at buying up the bad debts of failing institutions on Wall Street.

Both the Democratic and Republican parties are pressing their members in the House to swing behind the revised bill and party leaders expect it to pass.

This thing, this issue, has gone way beyond New York and Wall Street President George W Bush

Some members have called for more amendments, which opens up the prospect of further horse-trading up to the point at which votes are cast.

Pressure will particularly be applied to the 133 House Republicans who went against party affiliation to reject President Bush’s bill, correspondents say.

Tennessee Republican Zach Wamp, one of those who voted against the bill on Monday, said he would now vote in favor of the measure despite ordinary Americans remaining “as mad as heck” at the situation on Wall Street.

“You have got to do what you think is right. I thought the right thing Monday was to vote no. And I think the right thing to do tomorrow is to vote yes.”

The bill successfully passed through the Senate on Wednesday after it was amended to raise the government’s guarantee on savings from $100,000 to $250,000.

It also now includes tax breaks to help small businesses, expand the child tax credit and extend help to victims of recent hurricanes.

Most importantly, it extends the tax break aimed at boosting the provision of alternative energy such as wind farms.

It also includes a number of so-called “pork-barrel” measures including tax cuts for rum manufacturers in Puerto Rico and the owners of racetracks.

The additional cost of these unrelated tax breaks – which could add $100bn to the bill – have worried some fiscally conservative Democrats in the House of Representatives.

Senate urged to back crisis bill

Shares remain volatile ahead of Wednesday’s key vote

Democratic and Republican Senate leaders have appealed for a new version of a $700bn (£380bn) Wall Street bail-out to be approved in a key vote.

Republican Mitch McConnell said it would shield Americans from “shockwaves of a problem they didn’t create”.

The plan needs support in the Senate and House of Representatives, which rejected a similar bill on Monday.

Senate Democrat Harry Reid said he hoped a strong show of bipartisanship would “spark the House to do the same”.

President George W Bush has been speaking to senators ahead of the vote. The White House said it hoped to see “strong support for the bill”.

“It’s critically important that we approve legislation this week and limit further damage to our economy,” said spokesman Tony Fratto.

US presidential hopefuls John McCain and Barack Obama are returning from the campaign trail for the vote, which is due to begin late on Wednesday.

Revised proposal

Global shares were mixed in Wednesday trading ahead of the vote.

By early afternoon on Wall Street the Dow Jones was down 0.2% or 30 points.

CHANGES TO BILL Raises government’s guarantee on savings from $100,000 to $250,000 Tax breaks to help small businesses and promote renewable energy Expansion of child tax credit and help for victims of recent hurricanes

But hopes that enough changes had been made to get the bill through saw shares close up strongly in Asia on Wednesday.

In Europe, the UK’s FTSE 100 finished 1.1% higher at 4,959.6 points, France’s key index added 0.6% while German shares fell.

Changes to the rescue plan involve lifting the US government’s guarantee on savings from $100,000 to $250,000 and a package of targeted tax breaks.

They are designed to answer critics who felt the original plan was weighted too much in favour of Wall Street while not enough was being done to help struggling American families.

To get through the Senate, the bill will require backing by 60 of the 100 senators. It would then return to the House of Representatives for a vote on Thursday or Friday.

Some members of Congress continue to press for more fundamental changes to the bill.

President Bush has warned of “painful and lasting” consequences for the US should Congress fail to agree a rescue plan.

The House’s rejection of the earlier version of the plan on Monday led to sharp falls on world stock markets.

In other developments:

• The European Union outlines its own proposals for reforming banking regulation which, if approved, could see dramatic changes to the way in which banks operate
• Russian Prime Minister Vladimir Putin says the “irresponsibility” of the US financial system is to blame for the crisis
• Ireland’s government discusses a move to guarantee all bank deposits with the EU Competition Commissioner

‘Painful recession’

In election campaigning on the eve of the vote, Mr McCain and Mr Obama urged politicians of both parties to work together to pass the emergency legislation.

Speaking in Reno, Nevada, Mr Obama warned that without action by Congress “millions of jobs could be lost, a long and painful recession could follow”.

John McCain said inaction by Congress was putting the US at risk

He added: “There will be a time to punish those who set this fire, but now is the moment for us to come together and put the fire out.”

Mr McCain, who campaigned in Des Moines, Iowa, said inaction by Congress had “put every American and the entire economy at the gravest risk” and that Washington urgently needed to show leadership.

“I am disappointed at the lack of resolve and bipartisan goodwill among members of both parties to fix this problem,” he said.

The vote comes a day before a TV debate between vice-presidential candidates Joe Biden and Sarah Palin.

Mr Biden, Mr Obama’s running mate, is also expected to take part in the Senate vote.

Meanwhile, ex-President Bill Clinton is to hold his first rally for Mr Obama.

Mr Clinton, whose wife Hillary lost to Mr Obama in a fierce primary contest for the Democratic nomination, is due to appear in Florida, where he will encourage people to register as voters before a deadline on Monday.

Republican quits in Hispanic row

Republican quits in Hispanic row

Mr de Baca said he was referring to the older generation of Hispanics

A Republican official in the US has resigned over comments he made to the BBC that “Hispanics consider themselves above blacks”.

Fernando de Baca, the chairman of the Republican Party in Bernalillo County, New Mexico, also said Hispanics “won’t vote for a black president”.

Mr de Baca spoke last week but resisted calls from his own party to resign, saying he was quoted out of context.

He said he decided to step down because of the “media circus” that developed.

Mr de Baca had been approached by the BBC’s Jon Kelly for comments on the presidential election campaign at the New Mexico State Fair in Albuquerque, part of Bernalillo County.

He was explaining why he thought John McCain would do well in the state, which has large population of Hispanics.

“The truth is that Hispanics came here as conquerors. African-Americans came here as slaves.”

He said the Latino emphasis on hard work and family values and the Catholic Church’s opposition to abortion made the community naturally conservative.

The remarks appeared on the BBC News website on its Talking America blog.

After calls grew for his resignation, he said the comments were taken out of context and that he was referring to views held by the older generation of Hispanics.

“Snippets were used to try and embarrass me,” Mr de Baca, 70, told the Associated Press (AP) news agency.

He said a “media circus” had developed that was obscuring the election issues.

“It’s time to step aside and let the candidates and the political races that are so important to this country and democracy be placed in focus,” he told AP.

Bush scrambles to save $700B bailout plan

Bush scrambles to save $700B bailout plan

President George W Bush has said that legislators will “rise to the occasion” and pass the Wall Street rescue plan.

In a statement he said that are still disagreements because, “the proposal is big and the reason it’s big is because it’s a big problem”.

President Bush is expected to resume talks with Congressional leaders later on Friday to try to reach an agreement.

He wants to pass a $700bn (£380bn)rescue package to buy mortgage-backed assets from US banks.

‘Shouting match’

He added that, “there is no disagreement that something substantial must be done”.

Talks to agree the huge bail-out of the financial industry ended in a “shouting match” on Thursday.

After several hours of discussions with President Bush, a group of Republican members of Congress blocked the government plan.

The proposal would have seen the government buy bad debts from US banks to prevent more of them collapsing.

The leader of the Democrats in the House of Representatives, Nancy Pelosi, told ABC News that she “hoped” a bailout plan could be agreed within 24 hours, because “it has to happen”.

Financial markets are gummed up because banks do not know exactly how much bad debt they hold and are therefore reluctant to lend to businesses, consumers and each other.

The fall-out of this credit crunch continues to have a huge impact:
The United States suffered its largest bank failure yet, when regulators moved in to close down Washington Mutual and then sold it to US rival JP Morgan Chase for $1.9bn
In a co-ordinated move the European Central Bank, the US Federal Reserve, the Bank of England, Bank of Japan and the Swiss National Bank announced new short-term loans to the banking sector worth tens of billions of dollars
Banks continued to cut costs, with UK banking giant HSBC saying it would axe 1,100 jobs
Shares in UK bank Bradford & Bingley fell another 20% to 17 pence before recovering slightly.

‘Full throated discussion’

On Thursday, Democrat and Republican legislators appeared to have struck a deal.

A group of Democrats and Republicans even made a public statement, with Senator Christopher Dodd, chairman of the Senate Banking Committee, announcing that they had reached “fundamental agreement” on the principles of a bail-out plan.

But after the White House meeting, the top Republican on the committee, Richard Shelby, told reporters: “I don’t believe we have an agreement.”

The intense discussions reportedly saw US Treasury Secretary Henry Paulson literally down on one knee, begging Ms Pelosi to help push through the bail-out package.

Quiet Biden back to the fore

Joe Biden’s task is to paint his rival Sarah Palin as untried and untested

Amid the hyper inflated excitement that still follows Republican vice-presidential candidate Sarah Palin wherever she goes, it is sometimes easy to forget that she has a rival for the job – Joseph Biden.

Remember him? You know, the grey-haired guy Barack Obama picked to be his running mate on the Democratic party ticket.

When he strode out onto the stage in Denver to accept his party’s nomination, Joe Biden had the media’s full attention.

Two days later it was gone. And it seems he has struggled ever since to get it back.

What happened? Sarah Palin happened. Everywhere she goes, a large media posse follows.

In contrast, Joe Biden’s press plane travels the country with a large number of conspicuously empty seats.

Supporters of the Delaware senator say he is quietly getting on with the job, going from town to town, meeting voters, patiently answering their questions and making the case that he and Barack Obama represent the real change in the race for the White House.

Blue collar votes

On the campaign trail Joe Biden has been trying to stress that, with every fibre of his working class roots, he understands the pain of ordinary American families in these troubled economic times – understands in a way, he says, that his old friend John McCain simply cannot.

JOE BIDEN Ran for presidency in 1988 Delaware senator since 1972 A straight talker, who makes occasional gaffes

That, of course, was partly why he was picked: to appeal to an important part of the electorate with which Barack Obama has consistently struggled to connect – blue collar workers.

It was also assumed that Mr Biden would act as the sharp-tongued attack dog, allowing Mr Obama to remain above the fray.

With his long experience in the Senate, especially on the Foreign Affairs Select Committee, it was argued that Joe Biden could simultaneously fill the perceived gaps in Mr Obama’s resume and go toe to toe with John McCain – one old scrapper to another.

Mr Biden has stuck to his task. But he has not set the world on fire. Then again, perhaps he was not meant to – that has always been Barack Obama’s strong suit.

Joe Biden was meant to be the reassuring older hand helping to guide the charismatic presidential challenger safely towards the White House.

He was, in a way, the classic “do no harm” pick for vice-president.

Veep debate

Despite concerns about his reputation for long-winded ramblings, sprinkled with the occasional spice of verbal gaffes, Joe Biden has hardly put a foot wrong.

Two recent quotes have raised some eyebrows though, and, interestingly, perhaps raised his media profile again.

• First, he said Hillary Clinton may have been a better choice for the vice-presidential nomination (after all the effort at the Denver convention to heal party wounds, why on Earth would he want to expose that scar again?)
• Then he said that wealthy people should consider it their patriotic duty to pay higher taxes. That brought rapid fire from the McCain-Palin campaign team and at least got the television pundits talking about him again

But it is his next big moment in the spotlight that will really test Joe Biden’s calibre – the vice-presidential debate in Missouri on 2 October.

Insider v hockey mom?

Joe Biden and Sarah Palin actually have some things in common.

Both claim to speak the language of the ordinary, hard-working, American family. Both eschew ivy league intellectualism. Both have sons serving in Iraq.

Like Joe Biden, Sarah Palin eschews ivy league intellectualism

But, of course, it will be the differences everyone will be focusing on.

Joe Biden’s task will be to paint his opponent as untried and untested; too risky to place a heartbeat away from the presidency.

But he has to make that case without appearing patronising or demeaning, or in any other way opening himself up to the charge of sexism.

The silver-haired, battle-hardened, Washington insider versus the self-styled hockey mom from the remote reaches of Alaska.

It is one of the most keenly anticipated bouts of the entire election, and perhaps more than any of its predecessors, it could have a real influence on the outcome.

Top Republican says Palin unready

Senator Chuck Hagel could be influential with independent voters

Senior Republican Senator Chuck Hagel has voiced doubts about Sarah Palin’s qualifications for the vice-presidency.

John McCain’s running mate “doesn’t have any foreign policy credentials”, Mr Hagel told the Omaha World-Herald.

Mr Hagel was a prominent supporter of Mr McCain during his 2000 bid for the US presidency, but has declined to endorse either candidate this year.

He was opposed to the Iraq War, and recently joined Mr McCain’s rival Barack Obama on a Middle East trip.

‘Stop the nonsense’

“I think it’s a stretch to, in any way, to say that she’s got the experience to be president of the United States,” Mr Hagel told the Omaha World-Herald newspaper.

And he was dismissive of the fact that Mrs Palin, the governor of Alaska, has made few trips abroad.

“You get a passport for the first time in your life last year? I mean, I don’t know what you can say. You can’t say anything.”

This kind of thing will have an effect on independents

Mr Hagel also criticised the McCain campaign for its suggestion that the proximity of Alaska to Russia gave Mrs Palin foreign policy experience.

“I think they ought to be just honest about it and stop the nonsense about, ‘I look out my window and I see Russia and so therefore I know something about Russia’,” he said.

“That kind of thing is insulting to the American people.”

Justin Webb says Mr Hagel’s opinion of Mrs Palin will have an effect on independent voters.

A senior member of the Senate Foreign Relations Committee, Mr Hagel was a close ally of Mr McCain, but the two men parted company over the decision to go to war in Iraq.

Mr Hagel skipped this year’s Republican National Convention in favor of a visit to Latin America.

Mr Hagel’s decision to accompany Mr Obama this summer on a trip to Iraq and Israel, as part of a US Congressional delegation, led to speculation that he would throw his support behind the Democratic nominee.

However, a spokesman for the Nebraska senator insisted in August that “Senator Hagel has no intention of getting involved in any of the campaigns and is not planning to endorse either candidate”.

Record donations month for Obama

Barack Obama’s previous best monthly total was in February

US Democratic presidential candidate Barack Obama raised $66m (£37m) in August, making it his best month in terms of election fund raising.

The amount raised makes it likely Mr Obama will have more to spend than Republican rival John McCain in the final two months before the vote.

Donations were lifted by half a million new donors signing up, an aide said.

The record figure contradicts suggestions that Mr Obama’s fund raising appeal had been slipping.

His previous record, of $55m, was set in February.

The fund raising details are expected to be announced in the coming week when the rival campaigns file their monthly financial reports with the Federal Election Commission.

The public financing of presidential elections as it exists today is broken Barack Obama speaking in June

Mr Obama earlier decided not to accept public financing for the rest of his campaign and now has no spending limit.

He is the first candidate not to take public financing since the system was introduced in the mid-1970s.

Mr McCain did accept public financing, which limits his direct spending to about $84m after 1 September.

Recent opinion polls suggest Mr McCain has a lead of, on average, about 3% over Mr Obama, ahead of the 4 November vote.

Breaking the mould

Correspondents say Mr Obama raised more money than the Republican candidate partly because of the excitement generated by the Democratic nomination battle with Hillary Clinton, which ended on 7 June.

Mr McCain currently leads Mr Obama in opinion polls

Mr McCain, by contrast, wrapped up the Republican nomination back in March.

The only donations he is accepting are those to his compliance fund – money to pay for lawyers, accountants and other expenses involved in maintaining compliance with federal election laws.

The Republican National Committee, however, can still raise money to support the McCain campaign.

The Obama campaign has also broken the mould of US election finance by making big efforts to attract small donors.

Mr Obama explained his decision to shun public finance in June by saying the system was “broken”.

“It’s not an easy decision, and especially because I support a robust system of public financing of elections,” Mr Obama said then in a video message to supporters.