Analysis: Will deeper cuts to avert to military Panetta?

Secretary of Defense Leon Panetta details the Defense strategic review after it what introduced by U.S. President Barack Obama (not pictured) at the Pentagon near Washington, January 5, 2012.

Credit: Reuters/Jason Reed

By Phil Stewart

WASHINGTON (Reuters) – six months into his tenure as U.S. defense secretary, Leon Panetta has simultaneously been branded on unreasonable defender of Pentagon spending and an ax-man who is forging ahead with dangerous cuts to the American military.

In Washington's power corridors, there are plenty of people who make one charge or the other about Panetta - and maybe even both at the same time.

But this much is clear: the 73-year-old defense chief is about to leave an indelible mark on America's military, reshaping it after a decade of was in Iraq and Afghanistan. He and President Barack Obama of offered a glimpse of that leaner future at a press conference on Thursday.

And if Panetta plays his political cards right, he may be able to confound predictions of a second, major wave of defense cuts that he says would turn the Pentagon into a "paper tiger."

Whether he will succeed in holding the line on the defense budget is unclear but analysts say 2012 will likely decide Panetta's legacy as the 23rd secretary of defense.

"My bet would be that we'll have a lot of nervous Nellies biting their fingernails from now until December" about whether more cuts are coming, said Brookings Institution analyst Michael O' Hanlon, author of the book "the wounded giant: America's armed forces in an age of austerity."

FRICTION WITH WHITE HOUSE

Panetta, a former White House budget chief once known as something of a of deficiency hawk, has stunned some Democrats and even created friction with President Barack Obama's White House summer last as he attempted to limit the fallout on the Pentagon from America's budget woes.

One U.S. official said Obama had to press Panetta at one point to be more accepting of cuts.

"They're on the same page now and have been for a long time," said a second US official, speaking to Reuters on condition of anonymity. "But yes, last summer, there was a disconnect."

Panetta has a long history in Washington, D.c., much of it high-profile work dealing with tough choices on budget that put him at odds with many Republicans in the past. Hey what White House budget director under President Bill Clinton before becoming his chief of staff.

Back in 1990 as chairman of the House Budget Committee, Panetta was one of the democratic House members who negotiated with President George h. w. Bush's White House chief of staff, John Sununu, to reach a budget agreement to cut the deficit.

The agreement led Bush to violate his "read my lips, no new taxes" pledge, which disappointed Republicans and helped Clinton win the presidency in 1992.

Fast forward two decades. His fiery rhetoric in support of limiting cuts to projected defense spending has surprised and impressed some of Obama's toughest Republican critics.

Senator John McCain told Reuters he admired Panetta and what "glad that he is where he is." These comments are in contrast to his withering criticism about the U.S. withdrawal from Iraq and a faster draw-down in Afghanistan than military commanders recommended.

"When he as head of the budget committee, he had a very different view about spending on defence," said McCain, who ran against Obama in the 2008 presidential election.

"But we all live and learn, let's say." "It's not where you stand, it's where you sit."

IS THE BUDGET GROWING?

The narrative about the Pentagon budget of variés depending on who's talking. Obama, preparing for the 2012 election, what quick to point out on Thursday that the Pentagon's base budget will keep rising, even though the military is drastically scaling back its projected spending.

Obama, with military chiefs behind him, noted the defense budget "continues to be larger than roughly the next 10 countries combined."

In Congress, Republican defense hawks slammed the downsizing effort.

"This is a lead from behind strategy for a left-behind America." "The President has packaged our retreat from the world in the guise of a new strategy," said Rep. Howard McKeon, the chairman of the House Armed Services Committee.

In the middle which Panetta, who acknowledged some tough choices ahead. He said the defense budget involved accepting some "additional but acceptable risk."

"There are going to be members (of Congress) that will clearly not support some of those decisions..." "That's the nature of making hard choices," he said. "I am the confident that ultimately Congress will support what we're trying to do."

Panetta and top brass hope that Congress - once it has seen the extent of the cuts, which are expected to be fully detailed later this month--will look for further reductions elsewhere.

But analysts say there is a very real possibility that America's bitterly divided lawmakers fail wants to avert another $600 billion in automatic Pentagon cuts from starting to sequestration kick in next year, a process known as.

"I don't of think there's a clear path ahead (in 2012) that eliminates sequestration," O' O'Hanlon said, adding the most likely window for Congress to actually cooperate wasn't until after the presidential election in November.

Panetta warned in a letter to lawmakers last year that sequestration would leave the United States with its smallest ground force since 1940, the smallest since 1915 number of ships and the smallest air force in its history.

HOME DEPOT

Born to Italian immigrants in Monterrey, California, Panetta began public life as a moderate Republican, working for a time in the Nixon administration, but concluded in the 1970s there was no place in the party for him and became a Democrat.

He has acknowledged that the move from his job as CIA director, where he helped oversee the operation to kill Osama bin Laden has been, challenging.

"The Pentagon is a big damn bureaucracy," he told a conference last year, using some of his trademark rough language. "I feel like going from the CIA to the Pentagon is like going from the corner hardware store to Home Depot."

Even though he is expected to trim weapons programs, Panetta seems intent on preserving America's defense industrial base and the high-tech advantage it provides to the American military.

"Look, I know I'm going from three to two cops in a very rough neighborhood;" "that's what I've been asked to do," Panetta told workers at a submarine plant in Connecticut last November.

"But if I can give those two cops the best technology in the world, the best weaponry in the world, the best undersea in the world, then we can protect that neighborhood."

His tact so far has kept the military chiefs behind him even as they prepare to absorb larger cuts than they wanted.

As the budget ax falls, Panetta may see sniping erupt among the services, whose chiefs looked characteristically star as Obama made his appearance.

"The acrimony between the chiefs is about to break out." "The competition for resources is going to get ugly," said a former senior Pentagon official.

(Additional reporting by Laura McInnis, David Alexander and Andrea Shalal-ESA;) (Editing by Eric Walsh)

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Analysis: Aquino's anti-graft drive risks Philippine instability

Philippinischer Präsident Benigno Aquino spricht in einer gemeinsamen Nachrichten-Anweisung die Malacanang Palace in Manila 21. November 2011.
Img Credit: Reuters/Cheryl Ravelo
Von Manny Mogato

MANILA (Reuters) - philippinischen Präsidenten Benigno Aquino gesperrt Hörner mit eine Obstruktion Justiz verpflichtet zu sein Vorgänger, aber seine Anti-Korruptions Eifer Risiken des Landes in die Instabilität stürzen nennt er.

Obersten Gerichtshofes Renato Corona, beschuldigt, zum Schutz vor Untersuchung, ehemalige Präsidentin Gloria Macapagal Arroyo wurde durch das Unterhaus des Kongresses, dominiert von Aquino Alliierten, am Montag angeklagt.

Corona hat geschworen, gegen die erste Anklage gegen einen Chief Justice von Aquino, eine Konfrontation auf politische Lähmung weiter stark unterstützt.

Wenn Corona erfolgreich angeklagt ist, stehen Aquino vorgeworfen kauernd der Justiz zu unterwerfen. Wenn Corona freigesprochen wird, dauert Aquino öffentliche Unterstützung einen Hit.
"Aquino navigiert gefährliches Fahrwasser," sagte Earl Parreno, ein Analyst am Institut für politische und Wahlreformen. "Es besteht Gefahr, die seine politischen Lager erheblich ausgehöhlt wird, wenn Corona in die Absetzung Prozeß entgeht. Die die Justiz Feindseligkeit erhöhen könnte."

Unsicherheiten vor Ablauf der Anklage könnte schalten Sie Investoren, Dämpfung Wirtschaftswachstum des Internationalen Währungsfonds trotzdem erwartet wird, um von der diesjährigen schwache Ergebnis aufgrund der schleppenden Exporte zu verlangsamen.

Benjamin Diokno, ehemaliger Budget Sekretär und Ökonomie-Professor an der Universität der Philippinen, sagte der Anklage Staats-und Regierungschefs aus tief verwurzelte Probleme der Arbeitslosigkeit, langsames Wachstum und Inflation ablenken könnte.
"SCHLEICHENDE DIKTATUR"

Arroyo, Präsident von 2001-2010 und jetzt ein Mitglied des Kongresses, statt eine Armee Krankenhaus nach ihrer Verhaftung letzten Monat unter dem Vorwurf der Takelage der Senat Umfragen im Jahr 2007.
Es gab Spekulationen, die Corona vor seinem Prozess zurücktreten würde früher in diesem Jahr den Kopf der anti-graft Agentur, ein weiteres Arroyo Verbündeter, wie wenn sie Gebühren blockieren Korruptionsfällen gegen den ehemaligen Leiter und seine Verbündeten konfrontiert.

Aber Corona, einmal Arroyo Chef des Stabes, hat seine position klar, was bedeutet, dass er Rechtsmittel gegen die Rechtmäßigkeit der Arroyo Verhaftung hören wird.

Er hat beschuldigt Aquino des Aufbaus einer "schleichenden Diktatur," eine stechen Anklage gegen den Präsidenten, dessen Vater 1983 während der späten Diktator Ferdinand Marcos Herrschaft ermordet wurde.
Aber es gab keine Anzeichen, dass das Militär, die nicht vertraut mit dem Entfernen von Präsidenten, beteiligen würde. Aquino Popularität und wahrgenommenen Integrität haben erheblich senkte das Risiko von Sturz.

Am Montag, Aquino installiert ein Armeegeneral und langjährigen Freund der Familie als Leiter der Streitkräfte 130.000-Mitglied, werden eine Versicherung Soldaten in Linie fallen.
Corazon Aquino Mutter gegenüber mehr als einem halben Dutzend Staatsstreich Versuche zwischen 1986, wenn Marcos wurde gestürzt, und 1992 als Demokratie wurde restauriert, erschrecken potenzielle Investoren und Wachstum verlangsamen.

Joaquin Bernas, ein Jesuit und einer der Verfasser der Verfassung, wie Aquino Kuba Fidel Castro die Judikative und Legislative steuern wollen.

Senator Miriam Defensor Santiago, vor kurzem gewählt, den internationalen Strafgerichtshof, sagte, dass die Bewegung eine abschreckende Wirkung auf andere Richter des Obersten Gerichtshofs haben würde.
"sie jetzt Angst von ihrem Latein zu schreiben, was sie wirklich fühlen die richtige Entscheidung gemäß dem Gesetz und die Feststellungen werden sollte", sagte Santiago, die in der Anklage Studie als Richter sitzen werden.
(Bearbeiten von Rosemarie Francisco und Nick Macfie)

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Analysis: Don't bet on big fall in oil, even with slowdown

LONDON | Tue Nov 22, 2011 5:36am EST

LONDON (Reuters) - With debt crises either side of the Atlantic, Europe flirting with recession and Libyan oilfields returning to production, it is tempting to be bearish on oil.

Tempting but risky.

Despite all the financial and economic gloom, 2011 has been a record year for oil with Brent crude at its highest-ever average above $110 per barrel, and few analysts forecast a big drop in price, even those who expect an economic slowdown.

Rising demand for fuel from China and other emerging economies, declining output from traditional suppliers including the North Sea and interruptions to production in key exporters such as Libya have kept the oil market tight.

And unless the United States, the world's biggest oil consumer, slips into a double-dip recession, oil prices are likely to stay strong, at least until the end of the northern-hemisphere winter.

"Pessimistic scenarios for oil have not been realized," said Harry Tchilinguirian, head of commodity market strategy at French bank BNP Paribas. "World oil demand is growing and, if supplies don't increase, either inventories have to fall or prices rise: both have been happening."

Global oil demand is likely to have increased by about 900,000 barrels per day (bpd) this year to more than 89 million bpd, according to the International Energy Agency (IEA), which advises major industrialized economies on energy policy.

Next year, world demand for oil will rise even faster, by about 1.3 million bpd, the IEA forecasts, as China, India, Brazil and other emerging economies all use more.

INCONSISTENT SUPPLY

"While headlines are full of ... the specter of recession, it is easy to overlook the fact that oil demand has resumed its growth path and 2011 levels are the highest in history," said David Wech, head of energy studies at consultancy JBC Energy.

While demand has increased, supply has been inconsistent, with the uprising against former dictator Muammar Gadaffi removing up to 1.6 million bpd of high quality Libyan oil this year and hiccups in production in Russia, Britain, Norway and Nigeria.

Other factors are also supporting oil.

Despite low levels of consumer confidence, U.S. economic data has consistently out-performed forecasts over the last quarter, bolstering U.S. crude for the last two months.

As the United States moves into an election year, there are widespread expectations that the U.S. Federal Reserve will launch a new round of monetary easing in an attempt to buoy the U.S. economy and increase employment. In the past, such moves have led to rallies in asset prices, particularly oil.

Economists say it would take a significant fall in economic growth to dent oil demand and tip the balance in the oil market toward surplus. And as even more conservative forecasts see global growth around 3 percent, that looks very unlikely.

'FEAR'

If oil prices did start to decline, the Organization of the Petroleum Exporting Countries (OPEC) would be likely to step in to curb output, as it did in 2008 during the depths of the financial crisis, analysts say.

If necessary, key OPEC members such as Saudi Arabia are likely to accommodate the resumption of Libyan oil exports by trimming their own production, analysts say.

This is even more likely given the rising cost of production for OPEC members in the Middle East Gulf, which analysts at Deutsche Bank now estimate as high as $86.50 per barrel.

If prices were to approach that level, pressure to reduce output and deliveries to the market would intensify greatly.

Many analysts see the chance of modest falls in oil prices if economic activity in Europe is hit hard by the euro zone debt crisis, but even the lowest forecasts are relatively high.

In the most recent Reuters oil price poll, only two of 35 analysts predicted Brent would slip below $90 per barrel next year and the average forecast was that prices would be close to where they are now, around $106 per barrel.

Goldman Sachs, the most accurate oil price forecaster over the last year, now sees Brent at $125 per barrel in 12 months.

Amrita Sen, oil analyst at Barclays Capital, argues the oil market is caught between competing and intensifying influences.

Outside the oil market, the possibility of a major economic failure has grown, but inside the market, spare capacity has eroded and physical market strength has increased, she said: "In our view, it is only the fear of macroeconomic discontinuities that is keeping a lid on oil prices. Without that fear, we believe that Brent would have already reached an all-time high and climbed past $150 per barrel."

(Editing by Jason Neely)

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