Source: U.S. to offer legal backing for 'targeted killing'

WASHINGTON (Reuters) - The Obama administration on Monday plans to outline how U.S. laws empower the government to kill Americans overseas who engage in terrorism against their home country, a source familiar with the matter said, months after a drone strike killed a U.S.-born cleric who plotted attacks from Yemen.

Civil liberties groups have been pressuring the administration to offer justification for what has been described as a top-secret "targeted kill" program in which Americans who have joined al Qaeda or other militants are deemed legitimate targets to be killed overseas.

U.S. Attorney General Eric Holder plans to address the issue and the underpinning legal principles for using lethal force during remarks at Northwestern University School of Law on Monday afternoon in Chicago, the source said Sunday on condition of anonymity.

The Obama administration has stepped up using unmanned aerial drones against terrorism suspects including the September killing of Anwar al-Awlaki, the U.S.-born cleric who went into hiding in Yemen who had been directing al Qaeda militants to launch several attacks against the United States.

U.S. officials have refused to talk much publicly about the program but some officials said last year that Americans like Awlaki could be placed on a kill or capture list by a secretive panel of senior U.S. government officials which then informs the president of its decisions.

Holder will likely couple the justification with another argument that the administration has repeatedly made about terrorism: both traditional criminal courts and military tribunals work to prosecute terrorism suspects, the source said.

The speech will be the latest attempt by the administration to address the issue, an unusual break from past precedent of eschewing virtually any discussion about the top-secret program.

Defense Department lawyer Jeh Johnson last month referred to the so-called "targeted kill" program, saying that it pursued legitimate military targets overseas and rejected suggestions that the United States was engaged in assassination.

"Under well-settled legal principles, lethal force against a valid military objective, in an armed conflict, is consistent with the law of war and does not, by definition, constitute an 'assassination,'" Johnson said at Yale Law School.

The American Civil Liberties Union on February 1 sued the Obama administration in federal court, demanding that Holder's Justice Department release what it believes are legal memoranda justifying targeting Americans overseas using lethal force.

The ACLU called such power a "breathtaking assertion" and warned that it would be available to future presidents as well.

"At bottom, the administration is asserting the unreviewable authority to kill any American whom the president declares to be an enemy of the state," Jameel Jaffer, the ACLU's deputy legal director, said in a statement.

U.S. officials have linked Awlaki to several plots against the United States, including the 2009 Christmas Day attempt by a Nigerian man to blow up a U.S. commercial airliner as it arrived in Detroit from Amsterdam with a bomb hidden in his underwear.

When the bomber, Umar Farouk Abdulmutallab, was sentenced to spend the rest of his life in a U.S. prison, authorities said that Awlaki himself approved and directed the plot from Yemen.

Civil liberties groups have complained that such militants should be captured and prosecuted in a U.S. courtroom where practical. They also fiercely oppose using military courts for terrorism cases.

The Obama administration has run into difficulties trying prosecute terrorism suspects in the U.S. court system, facing criticism over giving terrorism suspects full legal rights and whether they addressed security for the trials sufficiently.

Republicans in Congress and even some of Obama's fellow Democrats have demanded that they be tried in military tribunals and blocked moving terrorism suspects from the military prison at Guantanamo Bay, Cuba, to the federal prison system.

Administration officials have insisted that terrorism suspects can be successfully prosecuted and incarcerated in both legal systems and said that the Abdulmutallab case was an example of the traditional courts working effectively.

(Reporting By Jeremy Pelofsky; Editing by Howard Goller and Doina Chiacu)

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Source: Obama seeks 28 percent corporate tax rate

WASHINGTON (AP) — Laying down an election-year marker in the debate over taxes, the Obama administration is proposing to cut the corporate tax rate from 35 percent to 28 percent, and to seek an even lower effective rate for manufacturers, a senior administration official says.

In turn, corporations would have to give up dozens of loopholes and subsidies that they now enjoy. Corporations with overseas operations would also face a minimum tax on their foreign earnings.

Treasury Secretary Timothy Geithner on Wednesday was to detail aspects of President Barack Obama's proposed overhaul of the corporate tax system, a plan Obama broadly outlined in his State of the Union speech last month.

Chances of accomplishing such change in the tax system are slim in a year dominated mostly with presidential and congressional elections. But for Obama, the proposal is part of a larger tax plan that is central to his re-election strategy.

The corporate tax plan dovetails with Obama's call for raising taxes on millionaires and maintaining current rates on individuals making $200,000 or less.

The 35 percent nominal corporate tax rate is the highest in the world after Japan. But deductions, credits and exemptions allow many corporations to pay taxes at a much lower rate.

Under the framework proposed by the administration, the rate cuts, closed loopholes and the minimum tax on overseas earning would result in no increase to the deficit.

That means that many businesses that slip through loopholes or enjoy subsidies and pay an effective tax rate that is substantially less than the 35 percent corporate tax could end up paying more under Obama's plan. Others, however, would pay less while some would simply benefit from a more simplified system.

The official said the Obama plan aims to help U.S. businesses, especially manufacturers who face strong international competition. Obama's plan would lower the effective rate for manufacturers to 25 percent while emphasizing development of clean energy systems. The administration official spoke on condition of anonymity to describe what the administration will do.

The New York Times first reported details of the plan in its online edition early Wednesday.

Many members of both parties have said they favor overhauling the nation's individual and corporate tax systems, which they complain have rates that are too high and are riddled with too many deductions.

The corporate tax debate has made its way into the presidential contest. Former Massachusetts Gov. Mitt Romney has called for a 25 percent rate, former House Speaker Newt Gingrich, R-Ga., would cut the corporate tax rate to 12.5 percent, and former Sen. Rick Santorum, R-Pa., would exempt domestic manufacturers from the corporate tax and halve the top rate for other businesses.

While Obama has been promoting various aspects of his economic agenda in personal appearances and speeches, the decision to leave the corporate tax plan to the Treasury Department to unveil signaled its lower priority.

What's more, the administration's framework leaves much for Congress to decide — a deliberate move by the administration to encourage negotiations but which also doesn't subject the plan to detailed scrutiny.

Obama's plan is not as ambitious as a House Republican proposal that would lower the corporate rate to 25 percent.

Still, Obama has said corporate tax rates are too high and has proposed eliminating tax breaks for American companies that move jobs and profits overseas. He also has proposed giving tax breaks to U.S. manufacturers, to firms that return jobs to this country and to companies that relocate to some communities that have lost big employers.

Geithner told a House committee last week that the administration wants to create more incentives for corporations to invest in the United States.

"We want to bring down the rate, and we think we can, to a level that's closer to the average of that of our major competitors," Geithner told the House Ways and Means Committee.

White House economic adviser Gene Sperling has advocated a minimum tax on global profits. Currently many corporations do not invest overseas profits in the United States to avoid the 35 percent tax rate.

___

Associated Press writer Alan Fram contributed to this report.

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Source: Greece to get $170B bailout, reduce debt

BRUSSELS (AP) — After more than 12 hours of talks, the countries that use the euro reached an agreement early Tuesday to hand Greece €130 billion ($170 billion) in extra bailout loans to save it from a potentially disastrous default next month, an European Union diplomat said.

The euro surged as the news broke, climbing 0.7 percent to $1.328 within minutes. While much depended on the details of the deal, a final agreement on the bailout for Greece will take some pressure off the 17-country currency union, which has been battling a serious debt crisis for two years.

The deal — details of which were still being worked out by European finance ministers in an all-night session in Brussels — was expected to bring Greece's debt down to 120.5 percent of gross domestic product by 2020, according to the official. That's around the maximum that the International Monetary Fund and the eurozone considered sustainable.

The diplomat spoke on condition of anonymity because a formal announcement was pending.

The country needs the €130 billion ($170 billion) bailout so it can move ahead with a related €100 billion ($130 billion) debt relief deal with private investors. That deal needs to be in place quickly if Athens is to avoid a disorderly default on a bond repayment on March 20.

Last week, a new report from Greece's debt inspectors indicated that the country's debt would still be close to 129 percent of GDP by the end of the decade, despite massive new spending cuts planned by Athens and a tentative €100 billion debt relief deal with private investors.

That level would have prevented the IMF and some euro countries from putting up more rescue money — on top of a €110 billion bailout Greece received in 2010.

Moving in and out of talks with bondholder representatives and consultations with the IMF and the European Central Bank, the ministers pushed private investors to accept steeper losses, going beyond a 50 percent cut in the face value of their bonds.

It was unclear what the final deal with bondholder representatives looked like, but the lower debt level suggested that they agreed to further losses. Greek state television claimed early Tuesday that the private investors will see a 53 per cent cut on the face value of their bonds, bringing overall losses to around 75 per cent on the value of the bonds.

The big question will now be how many banks and other investment funds will actually agree to participated voluntarily and whether Greece will have to force some holdouts to sign up to make the deal effective.

The lower debt level also suggested that the ECB agreed to forego some profits on its Greek bondholdings to help close the funding gap in the new bailout package. Analysts estimate that the central bank owns between €50 billion and €55 billion in Greek bonds, which it bought at a discount.

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Source: Greece to get $170B bailout, reduce debt

BRUSSELS (AP) — After more than 12 hours of talks, the countries that use the euro reached an agreement early Tuesday to hand Greece €130 billion ($170 billion) in extra bailout loans to save it from a potentially disastrous default next month, an European Union diplomat said.

The euro surged as the news broke, climbing 0.7 percent to $1.328 within minutes. While much depended on the details of the deal, a final agreement on the bailout for Greece will take some pressure off the 17-country currency union, which has been battling a serious debt crisis for two years.

The deal — details of which were still being worked out by European finance ministers in an all-night session in Brussels — was expected to bring Greece's debt down to 120.5 percent of gross domestic product by 2020, according to the official. That's around the maximum that the International Monetary Fund and the eurozone considered sustainable.

The diplomat spoke on condition of anonymity because a formal announcement was pending.

The country needs the €130 billion ($170 billion) bailout so it can move ahead with a related €100 billion ($130 billion) debt relief deal with private investors. That deal needs to be in place quickly if Athens is to avoid a disorderly default on a bond repayment on March 20.

Last week, a new report from Greece's debt inspectors indicated that the country's debt would still be close to 129 percent of GDP by the end of the decade, despite massive new spending cuts planned by Athens and a tentative €100 billion debt relief deal with private investors.

That level would have prevented the IMF and some euro countries from putting up more rescue money — on top of a €110 billion bailout Greece received in 2010.

Moving in and out of talks with bondholder representatives and consultations with the IMF and the European Central Bank, the ministers pushed private investors to accept steeper losses, going beyond a 50 percent cut in the face value of their bonds.

It was unclear what the final deal with bondholder representatives looked like, but the lower debt level suggested that they agreed to further losses. Greek state television claimed early Tuesday that the private investors will see a 53 per cent cut on the face value of their bonds, bringing overall losses to around 75 per cent on the value of the bonds.

The big question will now be how many banks and other investment funds will actually agree to participated voluntarily and whether Greece will have to force some holdouts to sign up to make the deal effective.

The lower debt level also suggested that the ECB agreed to forego some profits on its Greek bondholdings to help close the funding gap in the new bailout package. Analysts estimate that the central bank owns between €50 billion and €55 billion in Greek bonds, which it bought at a discount.

View the original article here