The News in 2 Minutes

From The Associated Press

Bush, Congress pledge urgent economic action

WASHINGTON, D.C.— Jolted by global recession fears, the Federal Reserve slashed interest rates Tuesday, and President Bush and leaders of Congress joined in a rare show of cooperation in promising urgent action to pump up the economy with upwards of $150 billion in tax cuts and government spending.

Market meltdowns overnight around the globe and growing anxiety at home stirred lawmakers and the administration toward swift action, possibly within a few weeks. Wall Street plummeted as the day began, following Asian stocks, then warily eased its sell-off after the Fed ordered the biggest cut on record in a key interest rate. The Dow Jones industrials, down 465 points at one point, closed the day off 128.

The Fed, announcing its action after an emergency video conference Monday night, indicated further rate reductions were likely, aimed at encouraging people and companies to start spending again.

“The urgency that we feel at home is now even more urgent as we see the impact of our markets on others,” House Speaker Nancy Pelosi said after both Democratic and Republican lawmakers met with Bush at the White House.

Senate Majority Leader Harry Reid said the goal was to get a deal through Congress and on Bush’s desk within roughly three weeks — lightning speed compared with the usual snail’s pace on Capitol Hill. His Republican counterpart, Mitch McConnell of Kentucky, agreed the aim was action in the next few weeks and said, “That, by the standards in Congress, is pretty fast.”

Bush expressed confidence that he and the Democratic-led Congress could put aside bitter differences that have marked his presidency.

“I believe we can find common ground to get something done that’s big enough, effective enough so that an economy that is inherently strong gets a boost — to make sure that this uncertainty doesn’t translate into more economic woes for our workers and small business people,” Bush said in the Cabinet Room.

Later, announcing the creation of a panel to educate people about their finances, Bush said he thought there would be an agreement “in relatively short order.”

Senate OKs defense bill with troop pay raise

WASHINGTON, D.C.—The Senate passed a revised defense policy bill Tuesday that authorizes a 3.5 percent pay raise for troops while sidestepping a veto showdown with President Bush over whether the Iraqi government should compensate victims of state-sponsored abuse during the Saddam Hussein-era.

The 91-3 vote sends the $696 billion measure to Bush for his expected signature.

The president had rejected an earlier version of the bill because of a provision that would have guaranteed that victims of state-sponsored abuse can sue foreign governments in court and collect judgments by seizing its assets inside the United States. Bush said that would have exposed Iraq to high-dollar lawsuits at a time when it is struggling to rebuild its infrastructure.

Study: Obesity surgery can cure diabetes

CHICAGO—A new study gives the strongest evidence yet that obesity surgery can cure diabetes.

Patients who had surgery to reduce the size of their stomachs were five times more likely to see their diabetes disappear over the next two years than were patients who had standard diabetes care, according to Australian researchers.

Most of the surgery patients were able to stop taking diabetes drugs and achieve normal blood tests.

“It’s the best therapy for diabetes that we have today, and it’s very low risk,” said the study’s lead author, Dr. John Dixon of Monash University Medical School in Melbourne, Australia.

The patients had stomach band surgery, a procedure more common in Australia than in the United States, where gastric bypass surgery, or stomach stapling, predominates.

Gastric bypass is even more effective against diabetes, achieving remission in a matter of days or a month, said Dr. David Cummings, who wrote an accompanying editorial in the journal but was not involved in the study.

“We have traditionally considered diabetes to be a chronic, progressive disease,” said Cummings of the University of Washington in Seattle. “But these operations really do represent a realistic hope for curing most patients.”

Diabetes experts who read the study said surgery should be considered for some obese patients, but more research is needed to see how long results last and which patients benefit most. Surgery risks should be weighed against diabetes drug side effects and the long-term risks of diabetes itself, they said.

Handfuls of cash thrown from car

Two men were arrested after a pursuit through two counties at speeds topping 100 mph, Los Angeles police said. Officers were seeking other suspects.

Costa Mesa police Sgt. Bryan Glass said three masked gunmen held up a Downey Savings branch, fled in a getaway car driven by a fourth man and then switched to another vehicle.

The second car led police on a chase along freeways from Orange County into Los Angeles County.

In Los Angeles, the chase moved from freeways onto streets as someone in the car threw at least three wads of money out a car window.

The car eventually crashed into a palm tree at a mall, and the four men inside ran off.