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.

How to be a good president

Barack Obama says the most important quality is vision for the future. No, says John McCain, the key requirement is experience – or at least that’s what he said until he picked Sarah Palin as his running mate.

A former film star, Ronald Reagan was an excellent communicator

Both want the most powerful job in the world – but neither they, nor anyone else, can agree on what, precisely, are the qualities needed to serve as president of the United States.

Indeed, there is not even a job description – only an oath of office demanding the president defend the US constitution.

What’s more, the job keeps changing, evolving constantly in the 230 years since the founding of the republic.

Still, an understanding has gradually emerged of the key qualities required of a president.

The trouble is, they are so many and various, it’s almost impossible to imagine any normal human being matching up.

Preacher and protector

Ever since Theodore Roosevelt described the presidency as a “bully pulpit,” Americans have expected first-class rhetorical skills from their leaders.

Mr Obama’s camp hopes to capitalise on Bill Clinton’s lasting popularity

A president must be able to inspire, to preach, to stir the American people to greater things.

In the modern era, Roosevelt, John F Kennedy and Ronald Reagan all had a great talent for communication; so too did Bill Clinton, though in a different style.

The presidents who have struggled – both George Bushes and Jimmy Carter come to mind – were those who lacked oratorical gifts.

But the job requires more than that. Americans look to their president as a protector, someone who will keep the country strong and ward off its enemies.

Roosevelt was a great war leader. As the former Allied commander during World War II, Dwight Eisenhower made Americans feel similarly secure.

Rightly or wrongly, Americans still revere Reagan for winning the Cold War.

Minimum mendacity

Foreign policy acumen is a related and essential element in the presidential kit of parts.

Nixon and John McCain could both claim foreign policy expertise

It’s why Mr McCain makes so much of his own experience in international affairs – and why the Obama camp equally emphasizes Sarah Palin’s lack of a foreign policy record.

The first George Bush’s reputation rests on his skillful handling of the post-Cold War world, while his son will have to persuade future historians that he did not make terrible blunders abroad.

Yet skill on the world stage is not enough to guarantee the respect of posterity.

Richard Nixon regarded himself as a geo-strategic sage, thanks to his opening to China, but he is still known by a single word: Watergate.

Domestic scandal trumps international accomplishments. Put that down as another lesson for those keen to learn how to be a good president: you need to be, if not saint-like in your honesty, at least not so mendacious that you get tangled up in your own deceptions.

It helps if you’re someone who can get things done. Lyndon Johnson will forever be saddled with the disaster of the Vietnam war, but he retains respect for passing a canon of social legislation – from civil rights to his war on poverty – that genuinely improved millions of lives.

Jimmy Carter was seen as a decent but aloof president

That was largely down to his mastery of the often arcane ways of the senate, which he had once dominated as majority leader.

That hard-headed, practical ability to get results is often underestimated.

In the words of British journalist Yasmin Alibhai-Brown, Johnson “pushed through so much legislation which has changed the way we think about equality, equal rights and human dignity, and I think that is a huge accolade”.

Star quality

It’s good if you’re a palpably decent man, as Jimmy Carter was – but less good if that makes you seem lofty, prissy or aloof, as Carter often seemed.

It’s good if you can keep the country at peace and the economy in rosy health – as Bill Clinton did – but less good if you let that get overshadowed by personal indiscipline, as he did.

Finally, in the modern era, the president needs a compelling personal story, great charisma and as much screen presence as a movie star.

As I discovered making “President Hollywood”, the demands of Washington DC and Tinsel Town are remarkably similar.

Which man matches up to this impossible checklist, Barack Obama or John McCain? Well, the American people will decide that on 4 November.

But they had better get used to one thing right away: the president with every one of these essential qualities simply does not exist.

Thai PM plans crisis referendum

Protesters listened to Mr Samak’s address, hoping he would resign

Thai Prime Minister Samak Sundaravej has announced plans to hold a national referendum in an effort to defuse the ongoing political crisis.

An exact date has not been decided, but a referendum can be held 30 days after being approved by the Senate.

In an earlier radio address, Mr Samak said he would not resign or bow to the demands of protesters who have been occupying his offices since last week.

A state of emergency has been in place in Bangkok since Tuesday.

The anti-government protesters – from the People’s Alliance for Democracy (PAD) – say Mr Samak is merely a proxy for former Prime Minister Thaksin Shinawatra, who was ousted in a coup in 2006 and is now in exile.

‘Threat of anarchy’

“I am not resigning, I will not dissolve parliament. I have to protect the democracy of this country,” Mr Samak said in his radio address on Thursday morning.

He said he was a defender of democracy against a movement that threatened to bring “anarchy” to Thailand.

“The PAD is an illegal group who have seized the Government House and declared their victory. How can that be correct?” he said.

After his address, Mr Samak summoned his cabinet for an emergency meeting, and they agreed to hold a referendum to try to resolve the crisis.

BANGKOK PROTESTS 26 Aug: Protesters occupy government buildings, demand the government step down 27 Aug: Authorities issue arrest warrants for nine protest leaders 28 Aug: PM Samak promises no use of force against the protesters 29 Aug: Police try to evict protesters but pull back; crowds blockade two regional airports 30 Aug: PM Samak rules out resignation, following a meeting with Thailand’s king 31 Aug: Parliament meets for a special session on the protests 1 Sep: A late-night clash between pro- and anti-government groups leaves one person dead 2 Sep: PM Samak declares a state of emergency 3 Sept: Thai FM Tej Bunnag resigns

A government spokesman said the referendum could take place by early October if the Senate quickly endorsed a bill to organize the vote.

Culture Minister Somsak Kietsuranond said the referendum would ask a range of questions including whether the government should resign, whether it should dissolve parliament and what people think about the ongoing protests.

After hearing Mr Samak’s radio broadcast, one of the PAD’s leaders, Sondhi Limthongkul, told the French news agency AFP: “His speech only increased my confidence that what we are doing is not wrong. We will not go anywhere as long as he stays.”

The PAD has a passionate following in various parts of the country, especially Bangkok, and some powerful backers among the elite.

But it has little support in most of rural Thailand, which voted strongly for Mr Samak, and Mr Thaksin before him. Thai society remains deeply divided over the issue.

As the standoff has developed, some unions have begun supporting the protesters. However, a strike called by an umbrella group of 43 unions on Wednesday appeared to have failed – one piece of good news for the government.

But the prime minister’s attempt to contain the PAD protests with a state of emergency seem to have fallen flat.

The army has refused to exercise the extra powers he gave them, arguing that the conflict is a political one that cannot be solved by military intervention.

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Obama picks Biden as running-mate

Mr Obama could benefit from Biden’s foreign policy clout, analysts say

US Democratic presidential hopeful Barack Obama has announced that Joe Biden will be his running mate in November’s election.

Mr Obama’s choice, confirmed on his website, comes ahead of next week’s Democratic Party convention.

Mr Biden, a 65-year-old veteran lawmaker, has over three decades of Senate experience and is highly respected on foreign policy issues.

Republican contender John McCain could announce his choice next week.

Speculation is mounting that Senator McCain may name his running mate on 29 August, his 72nd birthday and a day after the Democrats wrap up their convention.

‘Impressive record’

The announcement came shortly after several US media networks began reporting that Mr Biden had been chosen.

“Barack has chosen Joe Biden to be his running mate,” a brief statement on Mr Obama’s campaign website said.

“Joe Biden brings extensive foreign policy experience, an impressive record of collaborating across party lines, and a direct approach to getting the job done,” it said.

The two men are expected to appear together at a rally in Springfield, Illinois, later in the day.

Mr Biden has represented the state of Delaware in the US Senate since 1972.

He is known as a strong orator and chairs the Foreign Relations Committee – something analysts say would balance Mr Obama’s self-confessed lack of foreign policy experience.

The son of a car salesman, he is also expected to appeal to the blue collar workers with whom Mr Obama has struggled to connect.

OFFICE OF THE VICE-PRESIDENT Second-highest executive officer in the United States Assumes the top role if the president cannot continue in office One of four statutory members of the National Security Council

The senator ran against Mr Obama and Senator Hillary Clinton for the presidential nomination but dropped out after failing to gain enough support.

The McCain camp called the choice of Mr Biden an admission by Barack Obama that he was not ready to be president.

“Biden has denounced Barack Obama’s poor foreign policy judgement and has strongly argued in his own words what Americans are quickly realising – that Barack Obama is not ready to be president,” McCain campaign spokesman Ben Porritt said in a statement.

John McCain has reportedly not yet settled on a running mate.

Minnesota Governor Tim Pawlenty and former Massachusetts governor Mitt Romney are reported to be under serious consideration for the role.

US halt aid over Mauritania coup

Gen Abdelaziz has promised to hold fresh elections

The United States has suspended more than $20m (£10m) in  non-humanitarian aid to Mauritania after a coup.

The US state department said it condemned in the strongest possible terms the overthrow of the country’s first democratically-elected president.

But General Mohamed Ould Abdelaziz, who led the military coup, said the army would safeguard democracy.

Meanwhile, the Arab League and the African Union have demanded the ousted president’s be released immediately.

Diplomats from both organisations are due in Mauritania on Friday to discuss the situation with the coup leaders.

President Sidi Ould Cheikh Abdallahi was detained by renegade soldiers on Wednesday after he tried to dismiss four senior army officers – including Mr Abdelaziz, the head of the presidential guard.

I’m very worried about his health and his security Amal Cheikh Abdallahi President’s daughter ‘I fear for my father, the president’ What next for coup leaders?

Prime Minister Yahia Ould Ahmed El-Ouakef – who the coup leaders had also detained – was reported to have been taken to a barracks near the presidency.

The whereabouts of the president are still unclear, and his daughter, Amal Cheikh Abdallahi, said she did not know where her father was.

“I’m very worried about his health and his security,” she told the BBC’s Focus on Africa programme.

“He doesn’t have the right to move or to call. He doesn’t have a phone. He doesn’t have liberty,” she said.

Joking

The US aid suspended includes $15m (£7.5m) in military-to-military co-operation, more than $4m (£2m) in peacekeeping training, and more than $3m (£1.5m) in development assistance.

Some MPs and parties have expressed support for the military intervention

Gen Abdelaziz said the new military council, which has promised to hold elections, would “solve the country’s problems”.

“The armed forces and the security forces will always stay with the people to deepen the democracy,” he said in the capital, Nouakchott.

“It’s them who brought the democracy here and it’s them who have always protected this democracy and they will always preserve it.”

On Thursday, there were demonstrations for and against the coup in Nouakchott.

But the BBC’s James Copnall, who arrived in the city on Thursday evening, the day after the takeover, says it is remarkably calm and relaxed.

He said some people at the airport were joking about the situation – possibly as it is not regarded as that out of the ordinary given the country’s history of coups.

The military has been involved in nearly every government since Mauritania’s independence from France in 1960.

The president transformed everything into a family business Morsen Ould Al Haj Senate vice-president

Presidential elections held in 2007 ended a two-year period of military rule – the product of a military coup in 2005.

Despite the widespread international condemnation of the takeover, many MPs and political parties have expressed their support for it.

Senate Vice-President Morsen Ould al-Haj said that the president had abused his powers and was particularly angered by the influence his daughter and wife wielded.

“He failed completely – he transformed everything into a family business. He became very stubborn; he started by installing his children all parts of the government,” he told the BBC.

“Each of his children consider themselves himself a prince ready to inherit the country. They are a real royal family.”