Argentina ends link with U.S. dollarBUENOS AIRES, Argentina

Argentina”s economy minister announced a sharp devaluation of the peso yesterday, overriding foreign investors” concerns and ending a decade-long policy pegging the currency one-to-one with the U.S. dollar.

Outlining what many expect will be a tricky dual exchange rate, Jorge Remes Lenicov said 1.4 pesos would now buy $1 for import, export and other capital transactions, while individual Argentines would have to buy hard currency on the open market.

That free-market rate will be determined after a two-day banking holiday that starts today to allow for the transition from the old currency regime.

The announcement came hours after lawmakers granted President Eduardo Duhalde emergency powers to rebuild Argentina”s economy, ravaged by nearly four years of recession.

Once seen as an inflation-slaying panacea for emerging markets, the dollar peg, in place since 1991, has recently been blamed for dragging Argentina deeper into the slump by making its goods too expensive to compete abroad or to fend off imports at home.

“This is a change of course,” Remes Lenicov told a news conference. “The old way wasn”t going anywhere.”

Dems blame Bush tax cut for economic woes


Democrats and Republicans pointed fingers at each other yesterday in a debate over the economy, in what amounted to a game plan for each side”s election-year strategy. Democrats blamed last year”s tax cut for vanishing budget surpluses, while Republicans said anyone who criticizes a tax cut must want to raise taxes instead.

Sen. John McCain (R-Ariz.) spelled out most candidly the dilemma of lawmakers facing new budget deficits and re-election at the same time: Taking back or delaying some of President Bush”s 10-year, $1.35 trillion tax cut is not “politically salable,” McCain said on NBC”s “Meet the Press.”

Administration officials defended the tax cut, a centerpiece of Bush”s first year in office.

“The way to stimulate this economy is to give this economy tax relief,” Commerce Secretary Don Evans said yesterday on ABC”s “This Week.”

Democrats led by Senate Majority Leader Tom Daschle, along with independent analysts, note the tax cut helps explain why the federal government is now facing a budget deficit after several years of mounting surpluses.

Report: College too costly in 45 states


A new study being released today on the skyrocketing cost of higher education says only five states have four-year public colleges that low-income students can afford without financial aid.

In a third of all states, low-income students need loans even to attend some two-year community colleges, the study found.

The findings of the year-old Lumina Foundation for Education have sparked sharp criticism from higher education groups.

The foundation rated nearly 3,000 colleges and universities, and said that while at least half the public four-year schools in 40 states are financially manageable for median-income students, those students often need loans.

Only Alaska, Arkansas, Hawaii, Kentucky and Wyoming offer four-year public colleges that are affordable to low-income people, it said.

Anti-terrorism costs exceed $60 billion


Congress has provided more than $60 billion since September to combat terrorism at home and abroad and to rebuild from the attacks on New York and Washington. That”s roughly five times what the nation spent to fight terrorism in the previous year.

Some costs are one-time expenses or will diminish in coming years like helping communities recover from the Sept. 11 devastation, but other anti-terrorism programs are sure to grow.

When he sends Congress his $2 trillion budget for fiscal 2003 next month, President Bush is expected to propose billions more for the military”s $345 billion wartime budget for the rest of this year, plus a hefty increase for next year for government-wide anti-terrorism efforts. Fiscal 2003 begins Oct. 1.

Search continues for Oregon killer


A stolen vehicle linked to a man whose wife and three young children were slain in Oregon was found yesterday at San Francisco International Airport, the FBI said.

Christian Longo, 27, is accused of killing his wife and children and dumping their bodies into two Pacific Coast inlets near the towns of Newport and Waldport, Ore. The family had moved to the Newport area from Ypsilanti about three months earlier, police said.

A warrant for his arrest was issued Dec. 28, and he is the subject of a nationwide manhunt. Police have not revealed a possible motive for the killings. But they say Longo, who owned a construction cleaning company in Michigan, had faced a multitude of legal and financial problems.

Police believe Longo may have been using the vehicle as a base, driving another car to and from the airport.

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