U.S., Afghanistan discuss "last chapter" in war aims: Panetta

WASHINGTON (Reuters) - U.S. Defense Secretary Leon Panetta and Afghan President Hamid Karzai discussed on Thursday the "last chapter" in building a sovereign Afghanistan that can provide its own security, including the nature of U.S. involvement after combat troops withdraw in 2014.

Panetta said he and Karzai made "very good progress" on the issues they discussed, but he declined to say whether they had agreed on the size of any residual U.S. force that would remain in Afghanistan to do counterterrorism operations and training once combat troops withdraw.

Panetta said both sides were committed to the goals approved at the NATO summit in Chicago in May, which calls for a continuing effort by members of the alliance to train, advise and assist Afghan forces. Karzai is scheduled to meet President Barack Obama on Friday for more talks on the remaining issues.

The Obama administration has been considering a residual force of between 3,000 and 9,000 troops in Afghanistan to conduct counterterrorism operations while providing training and assistance for Afghan forces. But the administration said this week it did not rule out a complete withdrawal after 2014.

While Karzai has been critical of U.S. troop activity in Afghanistan, it is unclear how Afghan forces would perform without U.S. helicopters, medical facilities, intelligence and other military support, of which Afghanistan has very little.

"After a long and difficult past, we finally are, I believe, at the last chapter of establishing ... a sovereign Afghanistan that can govern and secure itself for the future," Panetta told Karzai after a welcoming ceremony at the Pentagon that included an honor guard and 21-gun salute.

Panetta said 2013 would mark an important step in the war, with Afghans due to take over the lead role for security across the country.

"We've come a long way towards a shared goal of establishing a nation that you and we can be proud of, one that never again becomes a safe haven for terrorism," Panetta said. "Our partnership, forged ... through almost 11 years of shared sacrifice, is a key to our ability to achieve the final mission."

STRAINS IN RELATIONSHIP

Karzai's three-day visit to Washington follows a year of growing strains on the U.S.-Afghan partnership, including incidents in which Afghan soldiers or police attacked and killed U.S. or coalition troops. U.S. forces also were involved in a series of incidents that enraged Afghans, including burning Korans, which touched off days of rioting.

In addition to discussing the U.S. troop presence after 2014, the two countries are negotiating long-term support for the Afghan military. Afghan officials came with a list of military equipment, including aircraft, they hoped to obtain.

General Martin Dempsey, chairman of the Joint Chiefs of Staff, said he and Afghan Defense Minister Bismillah Khan Mohammadi discussed the equipment issue and agreed to start with a broader review of Afghanistan's threats and military needs.

"What we talked about yesterday was ... let's move beyond a wish list of equipment and start by discussing what is your vision for the future of the Afghan military against threats and requirements," Dempsey said.

"He was very open, very eager to enter into that kind of comprehensive strategic review, and from that will come ... a view of how to move from where they are today, which is clearly focused on counterinsurgency, to something they may wish to become in the future," he said.

Karzai, in remarks in Panetta's office, said he was confident that the two sides during his trip would "work out a modality for a bilateral security agreement" in the interests of both countries.

The United States is insisting on immunity for any U.S. troops that remain in Afghanistan. That question also may come up at Karzai's talks with Obama on Friday.

(Editing by Paul Simao and Peter Cooney)

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Fiji's military ruler drops draft constitution

SUVA: Fiji's military government has announced it will dump a draft constitution prepared by an academic panel and prepare its own version, a move New Zealand labelled a "backward step" for the Pacific nation.

Military leaders in the coup-plagued island state commissioned a panel led by Kenyan academic Yash Ghai to draw up a constitution last year but took issue with some recommendations put forward in the document.

President Ratu Epeli Nailatikau said Ghai's blueprint risked reigniting racial tensions in Fiji, where divisions exist between the indigenous population and ethnic Indians brought to the country in the colonial era.

He said it also threatened to undo reforms introduced by Prime Minister Voreqe Bainimarama, who seized power in a 2006 coup and has pledged to hold elections in 2014 after the new constitution has been adopted.

"The Ghai draft (constitution ) can lead to financial and economic catastrophe and ruin," Nailatikau said in a nationally televised address on Thursday night.

While the draft has not been officially released, leaked copies indicate Ghai wanted the military, a key player in the four coups the Pacific nation has endured since 1987, to stay out of politics after the 2014 elections.

He also called for a transitional government to take over ahead of the 2014 vote, meaning Bainimarama would have to cede power.

New Zealand Foreign Minister Murray McCully said the government had effectively "trashed" the work of Ghai's Constitutional Commission, which completed its draft after receiving more than 7,000 public submissions.

He said the international community would be watching closely to ensure the new constitution allowed for free and fair elections, rather than providing a blueprint for the military's version of democracy.

"This is not flash, it's a backward step of some proportions," McCully told Radio New Zealand.

"But it's been the history of this whole process. This is not going to be a simple straight line towards elections and international credibility, there are always going to be steps forward and steps back."

He added that the move by the military to draw up its own draft constitution was "rather larger a step back than any of us feel comfortable with, but it's what we've got to work with".

The new draft constitution is expected to be completed by the end of the month.

- AFP/al

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Uh-oh, Windows RT. Samsung's got second thoughts

Samsung's Ativ Tab runs Windows RT, shown here with the mandatory new Metro interface by Damien Cusick, general manager of Samsung Electronics UK, at a press conference at IFA.

(Credit:
Stephen Shankland/CNET)

LAS VEGAS--Microsoft launched Windows RT with grand ambitions only a few months ago, but CNET has learned the operating system is facing yet another setback.

This time it's Samsung having second thoughts about the computer software that runs on cellphone chips.

Mike Abary, the Samsung senior vice president who oversees the company's PC and
tablet businesses in the U.S., told CNET today at the Consumer Electronics Show that the Korean electronics giant won't be launching its Qualcomm-powered Windows RT device in the U.S. It's unclear what the company's plans are for the non-U.S. markets.

Abary noted Samsung reached its decision about he device, dubbed the Ativ Tab, for two main reasons. First, feedback from its retail partners indicated demand for such products is only modest. Second, Samsung determined it would take a lot of investment to inform consumers about the benefits of Windows RT. Here's what he told CNET:

There wasn't really a very clear positioning of what Windows RT meant in the marketplace, what it stood for relative to Windows 8, that was being done in an effective manner to the consumer. When we did some tests and studies on how we could go to market with a Windows RT device, we determined there was a lot of heavy lifting we still needed to do to educate the customer on what Windows RT was. And that heavy lifting was going to require pretty heavy investment. When we added those two things up, the investments necessary to educate the consumer on the difference between RT and Windows 8, plus the modest feedback that we got regarding how successful could this be at retail from our retail partners, we decided maybe we ought to wait.

Abary added that one of the big selling points for Windows RT is the devices should be less expensive than those using
Windows 8. However, Samsung found that it would have had to make tradeoffs -- like including less memory -- to bring down the price, and that wasn't something it was willing to do.

"We didn't necessarily attain the price point that we hoped to attain," Abary said. "It's not an issue on Microsoft's side. It's more an issue of how the product was built and some of the tradeoffs we had to incorporate in it."

Check out CNET's in-depth report on how Microsoft became a control freak with tablet makers.

The comments from Abary come only a few days after Microsoft CEO Steve Ballmer joined Qualcomm Chief Executive Paul Jacobs onstage during his keynote address at the Consumer Electronics Show in Las Vegas. The two talked up their partnership on Windows RT devices and touted the devices from Dell and Samsung.

"The new Windows PCs, tablets, and phones, I think are stunning," Ballmer said. "Windows RT devices are the new addition to the family."

Samsung's move to hold off on Windows RT, at least in the U.S., raises concerns about the operating system and deals a blow to Microsoft's efforts to gain a bigger footprint in mobile devices. Samsung is one of the world's top provider of smartphones and tablets, and while it's relatively new to the U.S. PC market, those operations have been experiencing double-digit sales growth on a percentage basis. That means Samsung is a key partner for any software maker to have.

Qualcomm CEO Paul Jacobs is joined on stage at CES 2013 by Microsoft CEO Steve Ballmer.

(Credit:
James Martin/CNET)

While Samsung isn't releasing the initial product it developed with Qualcomm in the U.S., Abary said the company may consider Windows RT devices in the future.

"We want to see how the market develops for RT," Abary said. "It's not something we're shelving permanently. It's still a viable option for us in the future, but now might not be the right time."

We've contacted Microsoft and will update the report when we hear back.

Meanwhile, Rob Chandhok, president of the Qualcomm's Internet services division, told CNET today at
CES that while the company cares that Samsung won't be launching its product in the U.S., "there are a bunch of devices in the pipeline."

"These first rounds of devices are going to be followed by other rounds of devices," he said.

Microsoft has tightly controlled the development process for Windows RT devices, limiting the number of companies the chipmakers could work with, in order to make better products. That's meant that few products have hit the market, and some companies in the initial development program ultimately decided to abandon Windows RT.

Even before Microsoft's Surface RT tablet hit the market, Hewlett-Packard said in June that it had scuttled its immediate plans for a Windows RT device after receiving feedback from customers that they preferred Intel-powered tablets for business use. And Toshiba in August said it canceled its initial RT products because of development problems that would have delayed launch. The company believed its devices would be handicapped if they weren't introduced with the first wave of Windows RT products.

Samsung unveiled its Windows RT device at IFA in August. However, around the time Windows 8 and RT launched in October, it said it was still trying to formulate its strategy for Windows RT.

Meanwhile, Abary said Samsung saw "exponential" growth in its tablet business in the fourth quarter, with seven-inch devices experiencing the strongest demand.

"We saw significant growth in every category," Abary said. "There's now way we could keep up with all the demand."

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Student shot at Calif. high school by classmate

Updated at 5:48 p.m. ET

TAFT, Calif. A 16-year-old student armed with a shotgun walked into class in a rural California high school on Thursday and shot one student, fired at another but missed, and then was talked into surrendering by a teacher and another staff member, officials said.

The teen victim was in critical but stable condition, Kern County Sheriff Donny Youngblood told a press conference. The sheriff said the teacher suffered a minor pellet wound to the head but declined treatment.

The gunman had as many as 20 rounds of ammunition in his pocket, the sheriff said.

When the shots were fired, the teacher tried to get the more than two dozen students out a back door and also engaged the shooter in conversation to distract him, Youngblood said. A campus supervisor responding to a call of shots fired also began talking to the gunman.

"They talked him into putting that shotgun down. He in fact told the teacher, `I don't want to shoot you,' and named the person that he wanted to shoot," Youngblood said.

"The heroics of these two people goes without saying. ... They could have just as easily ... tried to get out of the classroom and left students and they didn't," the sheriff said. "They knew not to let him leave the classroom with that shotgun."

The shooter didn't show up for first period then interrupted the class of 28 students.

Investigators had not yet had a chance to interview the student and so had no immediate word on a motive or whether the attacker had a previous disciplinary record. Nor did they know where he got the shotgun.

The wounded student was flown to a hospital in Bakersfield. Officials said a female student was hospitalized with possible hearing damage because the shotgun was fired close to her ear, and another girl received minor injuries during the scramble to flee when she fell over a table.

Officials said there's usually an armed officer on campus but the person wasn't there because he was snowed in. Taft police officers arrived within 60 seconds of first reports.

The shooting happened on the second floor of the school's science building around 9 a.m., according to CBS affiliate KBAK in Bakersfield.

As word spread, Dayna Hopper rushed to the school to pick up her son Joseph Sorensen, 16, and daughter, Cheryle Pryor, 15, who had called from Cheryle's cellphone.

"I panicked. I wanted to puke and just get here," Dayna Hopper told The Bakersfield Californian.

KERO-TV Bakersfield reported that the station received phone calls from people inside the school who hid in closets.

The bell had just rung at a nearby school when teachers began shouting for students to get inside buildings, and the principal used an intercom to tell students to stay inside, Felicity Reich, 13, a student at Lincoln Junior High School, told the newspaper.

Shaken, she held the hand of her mother, Ellie Reich, as she spoke.

About 900 students are enrolled at the high school, which includes 9th through 12th grades. Authorities went room by room through the school and expected to spend the day checking backpacks to make sure no other weapons were on campus.

Masses of parents headed to the school football field to find their children, and officials at other schools took action to protect their students as well, the newspaper said.

Wilhelmina Reum, whose daughter Alexis Singleton is a fourth-grader at a nearby elementary school, got word of the attack while she was about 35 miles away in Bakersfield and immediately sped back to Taft.

"I just kept thinking this can't be happening in my little town," she told The Associated Press.

"I was afraid I was going to get hurt," Alexis said. "I just wanted my mom to get here so I could go home."

The Taft shooting came less than a month after a gunman massacred 20 children and six women at Sandy Hook Elementary School in Newtown, Conn., then killed himself.

That shooting prompted President Barack Obama to promise new efforts to curb gun violence. Vice President Joe Biden, who was placed in charge of the initiative, said he would deliver new policy proposals to the president by next week.

At the state Capitol, Assembly Speaker John Perez, D-Los Angeles, said the thoughts and prayers of legislators were with the people at the Taft school.

"It really is just another very sad moment as we deal with the ongoing reality of gun violence that has captured so much of our attention this last year," Perez said.

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Jodi Arias: 'No Jury Will Convict Me' for Murder

The jury in the Jodi Arias murder trial watched a television interview today in which Arias said "no jury will convict me" for killing her ex-boyfriend, Travis Alexander.

Arias added that she could never imagine committing such a violent act as killing Alexander.

"I understand all the evidence is really compelling," she said in the interview. "In a nutshell, two people came in and killed Travis. I've never even shot a gun. That's heinous. I can't imagine slitting anyone's throat."

She went on to tell the interviewer, "No jury will convict me and you can mark my words on that. ... I am innocent."

Arias made the statements to the television show "Inside Edition" after she was indicted for murdering Alexander. Months later, she would confess to killing him in his Mesa, Ariz., home and say it was in self-defense.

Jodi Arias Trial: Watch Live

Jodi Arias Murder Trial: Full Coverage

Photos of Key Players and Evidence in the Jodi Arias Murder Trial

The tape was played on the fifth day of testimony in Arias' trial, in which police allege that she carried out the murder with such brutal force that she stabbed Alexander 27 times, slashed his throat from ear to ear, and shot him in the head.

Arias, now 32, has claimed Alexander was a controlling and abusive "sexual deviant" who she was forced to kill in self-defense.

She could face the death penalty if convicted of Alexander's murder.

Jodi Arias Trial: Jurors See Photos of Bloody Handprint Watch Video

Jodi Arias Murder Trial: Who Is the Alleged Killer? Watch Video

Jodi Arias Trial: Defense Claims Victim Was Sex Deviant Watch Video

The defense petitioned the court to declare a mistrial at the end of testimony today, but the request was denied by Judge Sherry Stephens. Arias' attorneys claimed that testimony presented by Det. Esteban Flores about whether Arias shot Alexander first or at the end of the attack was different from his earlier testimony and, therefore, affected whether Arias was "especially cruel" during the killing -- but Stephens denied that it had any effect.

The jury also watched as dozens of photos of blood-spattered walls, flooring, stained carpets and blood smeared sink were explained in detail by a forensic analyst from the Mesa Police Department, who noted that on many of the stains water had been mixed with the blood and diluted it.

The prosecution has alleged that Arias tried to wash away the evidence of the killing with water.

Prosecutors spent much of today and Wednesday using Arias' recorded statements and other testimony to prove that she lied about her relationship with Alexander, where she was when Alexander was killed, and even where she worked as a bartender.

The testimony today suggested that Arias lied to her new boyfriend Ryan Burns about working at a bar called Margaritaville in her hometown of Yreka, Calif.

"Is there any restaurant in Yreka called Margaritaville? Has there ever been?" prosecutor Juan Martinez asked Nathaniel Mendes, a former detective with the Siskiyou County Sheriff's Office in California.

"No, sir," Mendes replied.

Mendes testified that Arias worked at a restaurant called Casa Ramos in Yreka, not a bar called Margaritaville, as she told Burns.

Mendes also went over receipts showing that Arias rented a car the day before she killed Alexander, and noted that she went to a rental outfit 90 miles from her hometown despite two businesses that rented cars in Yreka.

Arias told friends and investigators that she rented a car to go on a road trip to visit Burns, in West Jordan, Utah, on June 3, 2008. She showed up at Burns' house a day late with cuts on her hands, but told Burns that she got lost driving and that the cuts were from broken glass at her Margaritaville bartending job, according to Burns' testimony Wednesday.

The trail of receipts showed that Arias drove from California to Alexander's hometown of Mesa, Ariz., on Tuesday, June 4, 2008.

There, the pair had sex and took sexually graphic photos of one another, according to photographs and the opening statement of Arias' lawyer. Shortly after the tryst, Arias killed Alexander, both sides agree.

Burns testified that Arias never mentioned going to Alexander's house when she arrived at his home in Utah. He said he did not know that Arias and Alexander were still sexually involved, and that she told him they had broken up.

When she arrived at his home 24 hours after killing Alexander, she seemed "normal," he said. The pair kissed and cuddled, and went out with Burns' friends, where she laughed and made conversation.

Prosecutors have played recorded phone conversations between detectives and Arias in the weeks after Alexander's body was found. She could be heard apparently lying multiple times to investigators as they asked about the last time she spoke with Alexander and her trip to Utah.

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Analysis: Modi's Gujarat growth model might not work across India

SURAT, India (Reuters) - Turning a single Indian state with a long tradition of entrepreneurship and a solid political majority into an investor-friendly economic powerhouse is one thing.

Replicating that experience across a diverse country of 1.2 billion would be a tougher prospect for Narendra Modi, whose leadership of booming Gujarat state has led to his being touted as a potential candidate to become India's next prime minister.

While Modi wins praise even from critics for cutting red tape and making government more responsive and predictable, many ingredients for Gujarat's run of growth were in place well before he took office in 2001.

"It is like an icing on cake sort of thing. You have a nice cake and Modi has done a lot of good icing," said Rakesh Chaudhary, director of Pratibha Group, a textile manufacturer in Palsana on the outskirts of the Gujarat city of Surat.

Industry in Gujarat is helped by a long coastline and plenty of barren land that is easy to turn over to factory use.

The power that comes from a long-standing and heavy majority for his Bharatiya Janata Party (BJP) in the state also gives Modi an advantage that he would not enjoy on a national stage marked by fractious coalition politics.

Despite a controversial past - Modi is accused by critics of not doing enough to stop or of even quietly encouraging religious riots in 2002 that saw as many as 2,000 killed, most of them Muslims - he has established a reputation as an economic reformer in part by building on the strengths of Gujarat and marketing them heavily.

Modi's marketing savvy, aided by the Washington lobbying and public affairs firm APCO Worldwide, will be on display at the biennial "Vibrant Gujarat Summit" that begins on Friday.

Initiated by Modi in 2003 to attract investment after the violence and an earthquake in 2001, the event is attended by thousands of corporate officials who pledge billions in investment, although in reality only a fraction has seen the light of day. Of 12.4 trillion rupees ($225 billion) in investment proposed at the 2009 event, just 8.5 percent had been spent as of November 2011, according to state government data.

"Under Modi's regime, there has been significant improvement in infrastructure growth, significant improvement in industrialization, as well as agriculture," said Jahangir Aziz, senior Asia economist at JPMorgan. "But what has been overplayed is initial conditions were actually pretty decent in Gujarat."

HIGHER OFFICE?

The stocky Modi, who favors traditional Indian attire and a clipped white beard, plays down any prime ministerial ambitions.

But his popularity in Gujarat - the BJP won 115 of the state assembly's 182 seats in a December election - has fuelled speculation that he could lead his Hindu nationalist party in 2014 against India's ruling Congress party, which has been beset by corruption scandals and overseen a sharp economic slowdown.

"His economic record in Gujarat is obviously something which matters a lot to the middle classes. That, coupled with strong leadership," said Swapan Dasgupta, an analyst with links to the BJP who expects Modi to be the party standard-bearer in 2014.

Critics say that while Modi has indeed encouraged investment and helped bring reliable electricity and law and order, double-digit growth has not been shared broadly enough. In the five years through March 2010, some states - including Tamil Nadu and Karnataka - did better at bringing down poverty levels.

"Big business people get a lot from the government and scheduled caste people (minorities) get a lot, but people like us who are in between get nothing," said Bhupendra Thakkar, 50, who earns 6,000 rupees ($109) a month selling fruit near Surat's decrepit railway station.

FRIEND OF BUSINESS

Modi lured Tata Motors to the state in 2008 after the company's plans to build a factory for its low-cost Nano car were thwarted by farmers in West Bengal.

Ford Motor Co and Maruti Suzuki are also building plants in the western state - high profile investments that carry the added benefit of acting as marketing tools.

In the seven years through March 2011, Gujarat's economy grew an annual 10.08 percent at constant prices, against 6.45 percent in the eight years through March 2002 (Modi took office in October 2001), which was still ahead of the all-India average of 6.16 percent. A handful of states, including Maharashtra and Tamil Nadu, clocked bigger gains over the same recent period.

By comparison, policy gridlock at the national level has contributed to a drop-off in corporate investment, putting India on track to record its slowest annual growth rate in a decade.

Accustomed to getting his way, Modi, 62, could struggle to negotiate the coalition politics that have become the norm at the national level and have hindered attempts at reform by Prime Minister Manmohan Singh's Congress-led administration.

"Policymaking has benefited from the fact that the BJP has had absolute majority in the state legislature - an advantage it certainly will not enjoy in the federal parliament," said Anjalika Bardalai, an analyst with the Eurasia Group in London.

Modi has also been able to leverage the business acumen of Gujaratis, a group that has long been known for trading and entrepreneurship and includes a prosperous global diaspora as well as billionaires such as Adani Group chief Gautam Adani and Mukesh Ambani, who controls Reliance Industries, India's most valuable company.

"Modi might not be as successful as he has been here because the business mentality is unique to Gujarat," said Chandrakant Sanghavi, chairman of Sanghavi Exports International, a diamond trader and processor. "It could be prevalent in other states but the ratio may be less." ($1 = 55.0700 Indian rupees)

(Editing by John Chalmers and Alex Richardson)

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Sex-for-grades NUS prof wants to argue own case

SINGAPORE: The sex-for-grades corruption trial of law professor Tey Tsun Hang opened with the accused requesting to act in his own defence.

The unexpected twist came on Thursday morning, with Tey asking to act in his own defence, alongside his lawyer, Mr Peter Low.

Chief District Judge Tan Siong Thye will make a decision soon.

Forty-one-year-old Tey faces six charges of having corruptly obtained gifts and sex from Ms Darinne Ko Wen Hui, 23, in exchange for better grades.

The Prosecution has lined up more than 10 witnesses.

- CNA/ck

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Dell Windows 8 tablet now starts at $499

Dell's Latitude 10 now starts at $499.

(Credit:
Dell)

LAS VEGAS--The Latitude 10 tablet, which runs the full version of Windows 8, now starts at $499, Dell said today.

Dell claims it's the "first full-featured, enterprise-ready
Windows 8 tablet experience at a price below $500."

True or not, it's clear that, so far, the Windows 8
tablets out there have not been cheap compared to some of their Windows RT and
Android rivals.

Specs include 32-bit Windows 8, a dual-core Intel Atom 1.8GHz Z2760 processor, 10.1" IPS (1,366x768) LCD, Corning Gorilla Glass, Capacitive 10 Finger Touch, 2GB SDRAM, and 32GB of solid-state Storage.

The Latitude 10 is framed in magnesium alloy and weighs 1.43 pounds.

Dell said it "does not require new mobile device management or software licensing, supports new and legacy Windows applications, is compatible with Adobe Flash and connects with existing peripherals."

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Hilda Solis stepping down as labor secretary

Hilda Solis announced that she is stepping down from her post as labor secretary, CBS News has confirmed. She sent a letter to President Obama today notifying him of her retirement.

Solis was nominated to the position the same day the president was inaugurated in 2009, serving through the president's entire first term. She ran the Labor Department during the worst economic recession since the Great Depression. The department, which calculates unemployment statistics, came under criticism during the presidential campaign for a steep drop in the jobless numbers from above 8 percent to below 8 percent right before Election Day.

President Obama called her "a critical member" of his economic team who has helped put "millions" of people back to work. "Hilda Solis has been a tireless champion for working families," the president wrote in a statement.

Before her current position, she was a member of Congress, representing California since 2001 but left that job to be the first Hispanic woman to run the agency.

The president must now name a replacement that must go through the Senate confirmation process. CBS News learned today that the president intends to nominate his chief of staff, Jack Lew, to run the Treasury Department.

Solis joins Secretary of State Hillary Clinton, Treasury Secretary Timothy Geithner, CIA Director David Petraeus and Defense Secretary Leon Panetta in stepping down from their cabinet-level posts.

A White House official says Health and Human Services Secretary Kathleen Sebelius, Veterans Affairs Secretary Eric Shinseki and Attorney General Eric Holder plan to remain in their positions.

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White House Won't Rule Out $1 Trillion Coin

(United States Mint/Wikimedia Commons)

White House Press Secretary Jay Carney today flatly ruled out any negotiations with Congress over raising the debt ceiling, but there’s one odd-ball solution he would not rule out:  minting trillion dollars coins to pay off the debt.

“There is no Plan B. There is no backup plan. There is Congress’s responsibility to pay the bills of the United States,” White House Press Secretary Jay Carney told reporters at the daily White House briefing.

READ: $1-Trillion Coins: The Ultimate Debt Ceiling End-Around?

Asked if the administration would rule out minting trillion dollars coins if Congress fails to act, Carney deflected saying “you could speculate about a lot of things.”

“Nothing needs to come to these kinds of… speculative notions about how to deal with a problem that is easily resolved by Congress doing its job, very simply,” he added.

Pressed further on why they won’t offer a clear yes-or-no answer to the question, Carney referred questions to the Treasury Department.

“I answered it thoroughly,” he later joked. “And I have no coins in my pocket.”

Some have suggested the President could invoke the 14^th Amendment to the Constitution – which states, “the validity of the public debt of the United States … shall not be questioned” – and ignore the debt ceiling altogether.  On that question, Carney has offered a straight answer:  the 14 Amendment does not apply to the debt ceiling.

“We just don’t believe that it provides the authority that some believe it does,” Carney said.

The trillion-dollar-coin idea has been floated by, among others, an economist at the American Enterprise Institute.

Here’s our full Q and A:

KARL: I heard you unequivocally rule out using the 14th Amendment on the debt ceiling. I heard you unequivocally rule out negotiating with Congress. But you did not rule out this trillion-dollar coin idea. So can I ask you just a yes-or-no question? Does the White House rule out the idea of minting trillion-dollar coins as a way of dealing with the debt ceiling?

CARNEY: I would refer you to Treasury for the specifics of this question. I can tell you that the president does not believe that there is a backup plan or a plan B or an off-ramp. The only viable option here is Congress to fulfill its — that Congress fulfills its responsibility and ensures that the United States of America pays its bills, as it has always paid its bills throughout its history.

KARL: But why have we ruled out the 14th Amendment and not ruled out the trillion-dollar coin idea?

CARNEY: Again, I can tell you that there are no back-up plans. There are no plan B’s. I’d refer you to the Treasury.

–

KARL: Jay, the speaker of the House has made it perfectly clear that he is willing to increase the debt ceiling, but the principle is for every dollar the debt ceiling is increased, a dollar of spending must be cut. Given that you’re saying that the White House will not negotiate on raising the debt ceiling, are you willing to accept that principle from the speaker, a dollar in cuts for every dollar increase?

MR. CARNEY: I think the president’s been very clear that his absolute principle is that we need to reduce our deficit in a balanced way that does not shift all the burden, through cuts exclusively, on senior citizens, on families who have disabled children, on families who are trying to send their kids to school. That’s just unacceptable.

You know, one of the things we learned in the process that we just went through late in — late last year is that when it comes to specificity, we never saw any specificity from Republicans in terms of how exactly they would achieve the kind of sweeping cuts that they say they want and out of whose — you know, from whom would they demand that payment.

And what the president has been very clear about is he will not negotiate on Congress’ responsibility to pay its bills. He will negotiate and is willing to compromise, as he has demonstrated repeatedly, when it comes to moving forward in a balanced way to reduce our deficit. We have to deal with the sequester. We have to deal with a variety of budgetary and economic and fiscal challenges.

But he will not negotiate over the debt ceiling. And the threat itself is a problem, as we saw in the summer of 2011. The binary choice that Republicans seem to want to present to the American public is either we gut Medicare and Social Security or we tank the global economy. I’m not a communications director for the speaker of the House or the Senate minority leader, but I would think selling that would be very hard.

KARL: But help me understand how this works. You say you will not negotiate on this issue. They’ve put out a principle, so they produce something — and they say they will — that cuts a dollar for every dollar increase. And you’re saying you won’t negotiate on that?

MR. CARNEY: Have you seen that?

KARL: Well, this is what they say they are going to go forward.

MR. CARNEY: Well, I mean, you know –

KARL: So either –

MR. CARNEY: — words are not actions, and there has been, at — to this date, very little specificity, you know, since we — since the Ryan plan, which itself was lacking in specifics. And if their — if their position is we’re going to voucherize Medicare or tank the global economy, they should say so. That is unacceptable to the American people. It’s certainly unacceptable to the president.

Look, here’s the thing. Congress has the authority to authorize money, right, not the president. Congress racked up these bills. Congress has to pay these bills. We are very interested in a discussion and negotiation about getting our fiscal house in order. This president has already signed into law over $2 trillion in deficit reduction. He is eager to do more in a balanced way.

But it is not appropriate to — in this president’s view — to say that if I don’t get what I want, I’m not going to raise the debt limit. That is basically saying, I will abandon the history of the United States maintaining the full faith and credit of its currency and its — and its treasury by refusing to pay bills because I didn’t get what I want politically.

And that’s just not acceptable to the president.

KARL:  I’m not sure I understand how that works — you’re not going to negotiate at all? –

MR. CARNEY: We’re not going to negotiate. Congress has a — if Congress wants to give the president the responsibility to raise the debt ceiling, he would take it, as we saw when — in 2010 or — I forget, there have been so many of these confrontations — in — when — in 2011 when the so-called McConnell plan was adopted, you know. But they assigned themselves this responsibility. They need to be — the fact that they, you know, assigned it to them is something that they have to deal with. They assigned it to themselves, they need to act, and they need to, without drama or delay, raise the debt ceiling. We still have — there is plenty of opportunity outside of threatening the full faith and credit of the United States to debate fundamental differences over our economic and fiscal policy proposals, but it is not wise to do that around raising the debt ceiling, not wise to do it around the simple principle that we, the United States of America, pay our debts.

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