Washed It!

The wars in Iraq and Afghanistan have been good for Frank Amador Jr.’s business, a small Buena Park machine shop where workers make aluminum parts for the B-1 and B-2 bombers.

Sales have tripled since the war began, to $8 million a year. The payroll has doubled to 28 workers.

But now, after one of the biggest military buildups in decades, Amador is among the thousands of aerospace suppliers across Southern California bracing for a downturn, a slide that could have gut-wrenching consequences for an economy struggling to recover.

“It won’t be long before we’re all scrambling for business,” said Amador, who has been through a few boom-and-bust cycles over the last three decades. “I’ve seen this before. There’s a long road ahead. I just hope we can hold on.”

Aerospace has been one of the few bright spots in the region’s dismal economy, offering high-wage engineering, manufacturing and administrative jobs at a time when construction, real estate and banking work has grown scarce.

Nearly 5,500 aerospace suppliers — many with a handful of workers — collectively employ more than 130,000 people in California. Most of these small shops depend on subcontracts from giant defense contractors, which have announced a wave of job cuts in recent weeks, citing expectations of a protracted contraction of Pentagon spending.

Northrop Grumman Corp., the nation’s third-largest defense contractor and one of the largest private employers in the region, said last week that it would eliminate 500 jobs in its aerospace division, with most of the cuts expected to hit its sprawling facilities in El Segundo and Redondo Beach. Also last week, Raytheon Co. issued pink slips to about 130 employees in its Space and Airborne Systems division in El Segundo.

Boeing Co., the second-largest defense contractor, plans to trim its military aircraft business and cut workers, starting with 10% of the group’s executives. Boeing has more than 20,000 workers in Southern California at sprawling facilities in places like Seal Beach, El Segundo and Huntington Beach.

Top-ranked Lockheed Martin Corp., which operates its famed Skunk Works research facility in Palmdale, said last month that about 25% of its executives had opted for a voluntary retirement program designed to cut costs. More than 600 vice presidents and directors applied for the program.

“Eventually, these cuts will work their way down the supply chain,” said James McAleese, a lawyer in McLean, Va., who specializes in military contracts. “Prime contractors will squeeze their suppliers to bring down their costs.”

Paul H. Nisbet, a defense analyst who has been following the aerospace industry since the 1970s, expects that many small suppliers will be forced to go out of business, merge with rivals or cut employees to survive.

That’s what happened after the end of the Cold War in the early 1990s, in a downturn that fundamentally altered the defense industry.

The last time defense spending plunged, from 1989 to 1994, the amount that the Pentagon budgeted for research and buying weapons plummeted 20%. During that period, the U.S. aerospace industry job base shrank 25% nationwide.

California saw its aerospace industry employment drop 40%, the bulk of that in the Southland, as a quarter of the local defense industry suppliers went out of business, said Jack Kyser, an economist with the Southern California Assn. of Governments.

Those that survived cut back on workers, slashed employees’ hours or got into a different line of business altogether, Kyser said. Smaller firms were hardest hit because they tend to manufacture only a handful of products and for a small number of customers.

“We’re at an inflection point in the aerospace industry,” he said. “We have our fingers crossed that we don’t see cutbacks as we did before. But there are already indications that jobs are going to be cut.”

Pentagon officials confirmed that spending would slow, although they said this downturn would not be as severe as the last one.

“This is not the 1990s,” Ashton Carter, the Pentagon’s chief weapons buyer, said during a media conference last month. “But neither is it the 2000s, when we had double-digit year-on-year growth and we could always reach for more money.”

Citing the end of combat operations in Iraq and the rising federal deficit, Defense Secretary Robert Gates said he is looking to trim $100 billion from the Pentagon budget over the next five years.

“The golden era of aerospace has passed,” said Tom Captain, principal of Deloitte’s aerospace and defense consulting practice. “There is now a siren call for businesses to transfer from a hardware-based machine shop to a software-based technologically advanced firm.”

Aerospace suppliers brace for defense spending cuts

President Obama announced Friday that Rahm Emanuel, his chief of staff and a fearsome White House operative, is resigning his post and would be replaced with another senior advisor.

Emanuel, who is planning to run for mayor of Chicago, departs 20 months into Obama’s presidency and leaves as one part of a staff shuffle that will bring a significant turnover at the top levels of the White House policy and economic team.

Senior presidential advisor David Axelrod is planning to leave the White House next year to begin preparations for Obama’s 2012 reelection drive, and economic advisor Lawrence Summers is quitting the White House to return to Harvard University.

Obama named senior advisor Pete Rouse to serve as Emanuel’s replacement, at least for now.

Emanuel’s departure had been expected since Mayor Richard Daley announced in September that he would not run for reelection. Obama lavished praise on Emanuel for his work at the White House.

“He just brings an unmatched level of energy and commitment to every single thing he does,” Obama said after embracing Emanuel before a cheering White House assembly.

Possible candidates for the permanent job include Thomas E. Donilon, a deputy national security advisor; Robert Bauer, White House counsel; Tom Daschle, a former Senate Democratic leader; and John Podesta, a former chief of staff to President Clinton.

cparsons@latimes.com
Obama makes it official, sends off top aide Emanuel

The day after Jesse Kelly won the Republican primary in Arizona’s 8th Congressional District, Democratic incumbent Gabrielle Giffords went on the air with a lacerating attack. Noting that Kelly said he ultimately wanted to eliminate Social Security, Giffords’ television ad warned that Kelly “is a risk we can’t afford.”

Kelly, a construction manager with no political experience, had made the mistake of venturing into the mine-strewn politics of Social Security. No matter that he said he would preserve benefits for current retirees. The fact that he once described it as “the biggest pyramid scheme in history” gave his rival the equivalent of cannon fodder in a district where nearly one-fifth of the population is older than 65.

Kelly is now running his own ad vowing to “honor our commitment to seniors,” trying to fend off a line of assault that Democrats are stepping up throughout the country. It’s one of the few consistent themes in Democratic campaign commercials in a year when the party has otherwise eschewed a national message.

Accusing Republicans of wanting to do away with Social Security is a well-worn trope for Democrats. But a slew of “tea party”-backed candidates who have called for privatizing or eliminating the program have given Democrats fresh ammunition at a time when they are on the defensive about healthcare reform and the economic stimulus.

The strategy allows Democrats to link their rivals to former President George W. Bush, who sought to allow younger workers to invest a portion of their Social Security taxes in the stock market.

“And because it has also become a rallying cry among some of the tea party movement … it’s an indicator of how far to the right and how extreme a position the Republican candidates are taking,” said Rep. Chris Van Hollen of Maryland, chairman of the Democratic Congressional Campaign Committee, which has devoted the majority of its spots to slamming House GOP candidates on the topic.

Republicans, however, complain that their rivals are distorting their position.

“There have been numerous fact-checks and editorials calling out Democrats for their Social Security attacks,” said Paul Lindsay, spokesman for the National Republican Congressional Committee. “Democrats are desperately trying to scare seniors.”

“This is what a Democrat says when they’re losing an argument,” said Grover Norquist, president of the conservative Americans for Tax Reform. “If they’re saying this, it means they don’t have anything else to say.”

Nevertheless, Norquist advises GOP candidates to steer clear of Social Security on the campaign trail: “It’s too easy to demagogue.”

Indeed, it’s a testament to the political thorniness of the subject that most Republicans are strenuously avoiding it now that the primaries have passed. While Rep. Paul Ryan (R-Wis.) proposed personal retirement accounts for younger workers in his “Roadmap for America’s Future” economic plan this year, the GOP “Pledge to America” released last week does not address how to reform Social Security, whose outlays will regularly exceed its revenue beginning in 2016, the Congressional Budget Office estimates.

But Democrats are still feeding off comments made by their GOP rivals earlier in the year. In Nevada, Senate Majority Leader Harry Reid weaves it into nearly every spot he runs against Republican Sharron Angle, who has backed away from earlier statements that she would phase out Social Security. A commercial for Sen. Michael Bennet (D-Colo.) includes footage of GOP rival Ken Buck calling Social Security “a horrible policy,” words Buck later said he regretted.

A commercial for Rep. Baron P. Hill (D-Ind.) spotlights a clip of GOP challenger Todd Young calling the program “a Ponzi scheme.” And a new ad by Democratic challenger Tarryl Clark argues that Rep. Michele Bachmann (R-Minn.) views seniors as addicts, noting that she said she wants to “wean everybody off” Social Security.

“In the past, the Democrats had to strain and work hard to convey the risk of a Republican victory to Social Security,” said Lawrence Jacobs, a political science professor at the University of Minnesota who studies the program. “This year, it’s low-hanging fruit … because there are prominent Republicans running for the Senate and House who have very publicly and clearly raised questions about future of Social Security.”

But in some races, Democrats have taken more generic comments by GOP candidates as evidence of their antipathy to the entitlement. In Wisconsin, the Democratic Congressional Campaign Committee has run three ads asserting that former prosecutor Sean Duffy, the GOP nominee for an open House seat, supports a plan to privatize Social Security. “Sean Duffy may not be worried about his retirement security, but the rest of us are,” stated one, featuring images of the onetime star of MTV’s “The Real World” climbing into a purple SUV.

As evidence, the committee cited Duffy’s endorsement of Ryan’s “Roadmap” plan. But Duffy has never explicitly voiced support for personal accounts, and on his campaign website he states, “I have not and will not endorse privatizing Social Security.” The Democrats’ campaign committee said Duffy was merely trying to backtrack.

It remains to be seen whether the Democratic fusillade will pay off for them at the ballot box. Evan Tracey, president of Campaign Media Analysis Group, a division of Kantar Media that tracks political advertising, said the party was hitting Social Security particularly hard in this cycle because the passage of healthcare reform took away one of their traditional critiques of the GOP.

“The Democratic message is — let’s face it — fear-based and designed to get seniors worried about their Social Security check,” he said. “That’s as common as Republicans calling Democrats liberals. I don’t know if anybody has presented a real argument that’s going to connect with voters.”

matea.gold@latimes.com
Democrats campaign on GOP threats to Social Security

Southwest Airlines announced Monday it will purchase AirTran Holdings in a $1.42-billion deal that will expand the nation’s largest low-cost airline to 37 new cities, including Atlanta — home of the nation’s busiest airport.

The merger, if approved by regulators, would create an airline with 685 aircraft that will serve about 100 million passengers annually in nearly 100 airports. The company will remain headquartered in Dallas and keep the Southwest name.

The acquisition marks the first time Southwest would offer service to Mexico and the Caribbean. The merger would also give Southwest a bigger slice of the market in the Northeast, including Boston, New York and Baltimore- Washington, D.C.

Southwest, the largest airline based on domestic passenger load, has grown quickly since it was founded in 1971, capitalizing on no-frills service, low fares, no first-class seating and no baggage fees.

The union of the two low-cost airlines, industry analysts say, will probably to lead to increased airline profits but potentially higher fares for passengers.

“While Southwest’s acquisition of AirTran is likely to be approved by regulators, the devil will be in the details on how it impacts travelers and airfares,” said Bryan Saltzburg, general manager of the travel website TripAdvisor Flights. Robust competition among low-cost carriers and legacy airlines has been essential to keeping airfares in check in recent years.

On Wall Street, shares at noon increased for both carriers and most other airline stocks. Southwest stock jumped $1.58 or nearly 13% to $13.86. AirTran stock soared $2.79 or 61% to $7.34. Overall, airline shares were trading higher.

The airline merger is the latest one in the last two years. Earlier this year, United Airlines announced plans to merge with Continental Airlines. Delta Air Lines bought Northwest Airlines in 2008.

Southwest Chief Executive Gary Kelly, however, characterized the move as an opportunity to expand Southwest to key markets and increase profits while offering the airline’s low fares. While AirTran charges a baggage fee, Kelly promised the newly merged airline would not.

“We’ve been a little busy at Southwest Airlines,” he said. “This acquisition fits in beautifully with the strategy we’ve laid out for what will be the next decade.”

Under the $1.42-billion agreement, including debt, Southwest will exchange each share of AirTran common stock for $3.75 in cash and 0.321 shares of Southwest Airlines’ common stock, subject to certain adjustments. The agreement has been unanimously approved by the board of directors of both airlines but still requires approval from AirTran stockholders and federal regulators.

The two airlines would be fully integrated within two years, Kelly said. “Both companies have dedicated people with kindred warrior spirits.”

hugo.martin@latimes.com
Southwest to buy AirTran for $1.42 billion

Iran’s hardline President Mahmoud Ahmadinejad provoked yet another controversy Thursday saying a majority of people in the United States and around the world believe the American government staged the Sept. 11 terror attacks in an attempt to assure Israel’s survival.

The provocative comments prompted the U.S. delegation to walk out of Ahmadinejad’s U.N. speech, where he also blamed the U.S. as the power behind U.N. Security Council sanctions against Iran for its refusal to halt uranium enrichment, a technology that can be used as fuel for electricity generation or to build nuclear weapons.

Ahmadinejad said the U.S. has allocated $80 billion to upgrade its nuclear arsenal and is not a fair judge to sit as a veto-wielding permanent member of the Security Council to punish Iran for its nuclear activities. Iran denies it is seeking a nuclear weapon.

The Iranian leader — who has in the past cast doubt over the U.S. version of the Sept. 11, 2001, attacks — also called for setting up an independent fact-finding U.N. team to probe the attacks. That, he said, would keep the terror assault from turning into what he has called a sacred issue like the Holocaust where “expressing opinion about it won’t be banned”.

Ahmadinejad did not explain the logic behind blaming the U.S. for the terror attacks but said there were three theories:

–That “powerful and complex terrorist group” penetrated U.S. intelligence and defenses, which is advocated “by American statesmen.”

–”That some segments within the U.S. government orchestrated the attack to reverse the declining American economy and its grips on the Middle East in order also to save the Zionist regime. The majority of the American people as well as other nations and politicians agree with this view.”

After Ahmadinejad uttered those words, two American diplomats stood and walked out without listening to the third theory: That the attack was the work of “a terrorist group but the American government supported and took advantage of the situation.”

Mark Kornblau, spokesman of the U.S. Mission to the world body, issued a statement within moments of the walkout.

“Rather than representing the aspirations and goodwill of the Iranian people,” he said, “Mr. Ahmadinejad has yet again chosen to spout vile conspiracy theories and anti-Semitic slurs that are as abhorrent and delusional as they are predictable.”

Ahmadinejad said the U.S. used the Sept. 11 attacks as a pretext to invade Afghanistan and Iraq, killing hundreds of thousands of people. He argued that the U.S., instead, should have “designed a logical plan” to punish the perpetrators and not occupy two independent states and shed so much blood.

He boasted of the capture in February of Abdulmalik Rigi, the leader of an armed Sunni group whose insurgency in the southeast of Iran has destabilized the border region with Pakistan. He praised Iranian security forces for capturing him in an overseas operation without resorting to violence. Rigi was later hanged.

Ahmadinejad’s attacks on the United States and the dispute over Iran’s nuclear program dominated the opening of the General Assembly’s annual ministerial meeting.

Secretary-General Ban Ki-moon warned kings, prime ministers and presidents in his keynote address of the growing political polarization and social inequalities in the world and implored U.N. members to show greater tolerance and mutual respect to bring nations and peoples together.

“We hear the language of hate, false divisions between ‘them’ and ‘us,’ those who insist on ‘their way’ or ‘no way,”‘ he said.

In times of such polarization and uncertainty, Ban said, “let us remember, the world still looks to the United Nations for moral and political leadership.”

President Barack Obama, speaking soon after, echoed the secretary-general, warning that underneath challenges to security and prosperity “lie deeper fears: that ancient hatreds and religious divides are once again ascendant; that a world which has grown more interconnected has somehow slipped beyond our control.”

The U.S. president’s 32-minute speech — more than twice the allotted 15 minutes — covered global hotspots from Iran and Afghanistan to the Mideast and North Korea.

Obama said Iran is the only party to the Nuclear Nonproliferation Treaty “that cannot demonstrate the peaceful intentions of its nuclear program” and as a result the U.N. Security Council has imposed four rounds of increasingly tough sanctions.

“The United States and the international community seek a resolution to our differences with Iran, and the door remains open to diplomacy should Iran choose to walk through it,” he said. “But the Iranian government must demonstrate a clear and credible commitment, and confirm to the world the peaceful intent of its nuclear program.”

Ahmadinejad, speaking in the afternoon session, stressed that Iran will never submit “to illegally imposed pressures” from the U.N. nuclear agency which has been demanding that Tehran halt enrichment, a key Security Council demand as well.

“Iran has always been ready for a dialogue based on respect and justice,” he said.

But the Iranian leader said sanctions imposed by the Security Council were illegal and disrespectful.

The General Assembly hall was packed for Obama’s speech, with leaders and diplomats, including Iran’s U.N. Ambassador Mohammad Khazaee, listening carefully, some snapping photos with cell phone cameras. Obama was interrupted twice by applause and received a prolonged and warm response at the end of his remarks.

Just ahead of Obama’s speech, Brazilian Foreign Minister Celso Amorin sharply criticized the United States, saying that the 2003 invasion of Iraq demonstrated that the “blind faith in intelligence reports tailored to justify political goals must be rejected.”

“We must ban once and for all the use of force inconsistent with international law,” Amorin told the General Assembly, adding that all international disputes should be peacefully resolved through dialogue.

Qatar’s Emir Sheik Hamad bin Khalifa Al-Thani declared that terrorism “should not be treated by waging wars.”

He blamed wars fought to combat terrorism for spreading destruction, causing the death and displacement of millions of people “as well as economic and financial crises that shook the stability of the world and undermined the efforts made in dialogue among cultures.

“What we fear is for the war on terrorism to turn into commercial transactions, financial contracts and armies of mercenaries who kill outside of any international and human legitimacy,” the emir said. “These are all very dangerous things.”
U.S. walks out on Ahmadinejad U.N. speech

The Border Patrol wants its leaders to talk to one another, and the agency is willing to pay some former government employees nearly half a million dollars to help make that happen.

In an example of how common it has become for government agencies to outsource seemingly routine tasks to former officials, the U.S. Customs and Border Protection has awarded a “strategic consulting” contract worth up to $481,000 over five years to a small firm staffed by former agency insiders.

One of the three major tasks outlined in the deal is to “facilitate discussions among senior Border Patrol leaders” at conferences near the agency headquarters in Washington, according to the contract documents. The fees work out to about $240 an hour — not including travel expenses or the cost of the conferences.

Among those who will benefit from the contract are the agency’s former commissioner and the husband of a current agency spokeswoman. It’s legal as long as the officials observe a one-year ban on landing work from their former agency.

“It really is just contracting as usual,” said Allison Stanger, a Middlebury College professor who detailed the explosive growth of government contracting in her 2009 book “One Nation Under Contract.” “When contractors are doing so much of the work of government, these sorts of private companies are seen as extensions of government. When former agency employees are involved, the lines are blurred even further.”

In a statement, Homeland Security Department spokesman Rafael Lemaitre said the contract was intended to “solicit independent, expert input for CBP’s ongoing efforts to design a 21st century border security strategic framework,” and that the agency “will not utilize this or any other contracts to organize conferences for CBP officials.”

The contract documents say the consultants will facilitate discussions at the conferences, not organize them.

In July, the agency requested proposals for strategic consulting. The request sought three senior consultants for a total of 389 hours a year, with four years of renewable options.

The consultants’ role is to help Border Patrol leaders “discuss strategy, policy, outreach, development and the delivery of a unified corporate direction and message,” the documents said.

After a competition, the contract was awarded to Sentinel HS Group, a 12-person company that includes Robert C. Bonner, commissioner of U.S. Customs and then U.S. Customs and Border Protection from September 2001 to November 2005.

The firm, which reported annual revenue of $3.2 million in contract documents signed last week, was founded by one of Bonner’s top aides and includes three other former agency officials.

Among the firm’s “senior consultants” is Michael Ivahnenko, who worked at the border agency from November 2003 to January 2008. He is the husband of Kelly Ivahnenko, a Customs and Border Protection public affairs officer based in Washington.

Kelly Ivahnenko said in an e-mail that she played no role in the contract award and did not speak to any agency decision-makers about it.

In addition to Michael Ivahnenko, Sentinel Chief Executive Brian Goebel said he would work as one of the agency’s other two senior consultants, along with Joshua Kussman, a former senior policy advisor at the agency.

Goebel, who said he was speaking for all members of the firm, said Sentinel won the contract through “fair and open competition.”

“There are circumstances in which the government needs outside assistance,” he said. “From our vantage point, there are people who bring specialized knowledge. … Sometimes it’s a question of extra arms and legs, to help people who have to do their day job.”

Goebel said he worked as an advisor to Bonner at the agency in 2001.

ken.dilanian@latimes.com

Border Patrol gives contract to firm stocked with former insiders

Two gunmen opened fire Sunday on tourists near one of India’s largest mosques, injuring two Taiwanese before making their escape on a motorcycle, raising security concerns two weeks before India hosts a major international sporting event.

The tourists were shot about 11:10 a.m. as they were boarding a bus parked near the Jama Masjid mosque in New Delhi’s crowded, labyrinthian old city, police said, sparking a major manhunt and a security alert in the Indian capital and Mumbai.

A few hours after the attack, the BBC’s Hindi-language service said it received an e-mail purportedly sent by the Indian Mujahedin, an Islamic militant group, which threatened to attack the upcoming Commonwealth Games.

“We know preparations for the games are at their peak,” the e-mail reportedly said. “Beware, we too are preparing in full swing for a great surprise.”

Police said it was not clear whether the e-mail was related to the attack and downplayed the likelihood it was the work of an organized terror group, saying it could have been done by disgruntled youths or a gang of local criminals.

There were also reports that a car caught fire two hours later in the same area under suspicious circumstances.

Indian officials, who have sought to reassure tourists, athletes and foreign governments for months that the capital is safe, were quick to point to the extensive precautions and high level of security in place.

Over 5,000 athletes are set to arrive within days for the Oct. 3-14 Games, which will feature teams from 71 countries.

“Please do not panic,” said Sheila Dikshit, New Delhi’s top elected official. “An incident like this is something worrying, but nothing to panic about.”

But analysts said the incident likely would raise concerns among national sports delegations and individuals planning to attend the Games, which have already seen weak ticket sales after media reports of infrastructure problems, alleged corruption and a dengue fever epidemic.

Shortly after Sunday’s shooting, the U.S. Embassy issued a security advisory warning Americans to “maintain a heightened situational awareness.”

Palaniappan Chidambaram, India’s home minister, visited the two injured Taiwanese men in the hospital after one underwent an operation for a stomach wound.

Analysts said the apparent random targeting of tourists and the mosque location suggested that any of several groups could be involved.

“It’s a bit surprising those hit were Taiwanese,” said Rahul Bronsle, a retired brigadier general and head of Security-Risks.com, an analysis group. “If it was a Commonwealth person injured, one could think they were going after the games. But a stray attack on any tourist raises a number of other speculations.”

While the attack may be directed at the Games, it also could be linked to divided Kashmir — where nearly 100 people have died since June in clashes with Indian security forces — or to a legal decision expected on Friday over a disputed religious site in Ayodhya that has sparked tension and past deadly riots between Muslims and Hindus.

Sunday was also the second anniversary of an incident in which two alleged Indian Mujahedin militants were killed by police.

The Indian Mujahedin, which reportedly has ties with the banned Pakistan-based Islamist group Lashkar-e-Taiba, was outlawed in June amid suspicion that it played a part in an attack on a bakery in the western Indian city of Pune in which 10 people died and was behind blasts in several cities.

mark.magnier@latimes.com

Anshul Rana in the Times’ New Delhi bureau contributed to this report.
Gunfire in India raises security concerns ahead of Commonwealth Games

WASHINGTON — Overcoming months of gridlock, the Senate approved a small-business bill on Thursday that handed President Obama an election-year victory but showed just how difficult it had become for lawmakers to agree on the best way to help the sluggish economy and create jobs.

The measure passed by a 61-38 vote, with just two Republicans crossing party lines to support the bill, which would create a $30-billion small-business lending fund and provide $12 billion in tax breaks to help companies invest and hire. The bill now heads to the House, where it is expected to pass swiftly.

Yet the months-long impasse over the bill to aid small businesses, which have been hard hit during the economic downturn and are championed by both parties as engines of the recovery, highlights the partisan divisions before the fall midterm election.

“It tells you the depth of the gridlock and dysfunction that unfortunately has gripped the Congress,” said Sen. Evan Bayh (D- Ind.). “Hopefully, some of that will abate after the election.”

The bill enjoyed bipartisan support at the outset, but the addition of the $30-billion small-business lending fund to give credit-starved firms access to capital created insurmountable partisan divisions.
Republicans quickly opposed the lending fund as a “mini-TARP” — reminding voters of the unpopular Troubled Assets Relief Program that was the cornerstone of the 2008 federal bank bailout.

Republicans filibustered in July, demanding the chance to offer more amendments — including those unrelated to the legislation. Democrats shelved the bill as the debate dragged on and other legislation took priority.

Those expected to champion the bill from the business community — the U.S. Chamber of Commerce and the National Federation of Independent Businesses — instead focused on using the legislation as a vehicle to overturn an onerous business reporting requirement in the new healthcare law.

“All of a sudden it became a partisan exercise again,” said Sen. Orrin Hatch (R- Utah). “It’s amazing to me how difficult it is to work together around here, even when we want to. It’s almost like an arrogance of power: We’re going to teach those Republicans.”

Republican Sen. George LeMieux of Florida and Sen. George Voinovich of Ohio, neither of whom are seeking re-election, joined 57 Democrats and two independents to pass the measure.

The House passed a version of the bill earlier this year, and at one point over the summer, frustrated House lawmakers walked across the Capitol to stage a quiet sit-in at the Senate chamber to protest the delays on this and other jobs bills.

“While I am grateful for this progress, it should not have taken this long to pass this bill,” Obama said on the eve of Senate action. He has promised to sign the legislation quickly.

The bill offers $12 billion in tax breaks to businesses to encourage investment, entrepreneurship and hiring.

Businesses also would be able to write off more of their costs of buying equipment or making shop improvements. Those who are self-employed could deduct healthcare costs from the self-employment tax. The bill would also continue to waive Small Business Administration loan fees that had been cut as part of the 2009 recovery package.

The $15-billion cost of the bill is offset by closing tax loopholes and increasing tax-reporting requirements and penalties.

Democrats estimate the legislation could create 500,000 jobs.

Amendments earlier in the week sought to lift a much-criticized healthcare tax reporting requirement that both Democrats and Republicans agree needs to be fixed. But the amendments failed as senators could not agree on a way to recoup the $17 billion in revenue that would be lost by doing away with the provision.

Republicans also made two procedural moves on Thursday to attach tax credits for research and development and biodiesel development, but both were rejected.

lmascaro@tribune.com
Senate approves Obama’s small-business aid package

Japanese Prime Minister Naoto Kan survived a takeover attempt within his own ruling Democratic Party on Tuesday, defeating a crafty and ambitious political boss who had helped set the stage for Kan’s rise to power just three months ago.

Kan’s defeat of challenger Ichiro Ozawa spares the nation, already staggering from a prolonged economic slump and perceived leadership void, from the upheaval of having its third new prime minister in just 12 months, and its sixth in four years.

For many, the results signaled a hard-won victory over Ozawa’s old-school style of backroom political arm-twisting by a pragmatic former civic activist who was able to hold off one of the controversial and entrenched kingpins of Japanese politics.

Yet Kan, 63, did not emerge unscathed from Tuesday’s party leadership vote, which could jeopardize his efforts to rein in Japan’s huge public debt and prolong its fragile recovery, activists said.

Although both politicians pledged before the election to work to support the victor, some analysts said a spurned Ozawa could split the party, fleeing with his loyal faction.

“How much of a victory this is for Kan depends on how Ozawa reacts,” said Wilhelm Vosse, a political scientist at International Christian University in Tokyo. “Given his nickname, ‘the Destroyer,’ Ozawa might come back if Kan gets into trouble, or he might immediately leave and set up his own party. Then Kan would really have a big problem maintaining his party’s majority.”

Known as a shrewd but critically-flawed political strategist, Ozawa is credited with engineering the Democratic Party’s surprise victory last August, ending a half-century of rule by the conservative Liberal Democratic Party.

But the seemingly indecisive Democratic Party soon stumbled. In one ill-timed move that many say further ruptured public confidence, Kan proposed to double Japan’s sales tax to as high as 10%. His party soon lost its upper house majority in a July election.

In August, the enigmatic Ozawa surprised supporters and critics alike when he announced that he would challenge Kan for the party’s presidency and take over as prime minister.

Kan, a plain-spoken fiscal disciplinarian and former finance minister, enjoyed a 4-to-1 margin of support in some public polls. Others interviewing younger Japanese, however, showed Ozawa ahead by the same margin.

Over the weekend, rank-and-file Democratic Party members voted overwhelmingly for Kan, but their ballots counted for only a third of the total. On Tuesday, Kan won slightly more than half the votes cast by the party’s 411 parliamentarians in the Japanese Diet, eventually giving him an unexpectedly wide margin of victory, 721-491.

An Ozawa victory would have been a stunning comeback for the controversial insider, who resigned as the party’s vice president in June amid a lingering funding scandal. He faces indictment as early as next month, but has denied all charges.

Tuesday’s power play could be Ozawa’s last. He has said that vote “wraps up my political life.”

But analysts said his influence in Japanese politics is far from over.

Now Kan is tasked with spearheading the troubled finances of a nation recently surpassed by China as the world’s second-largest economy. He has called for job creation and has threatened to slash wasteful spending.

In a not-so-subtle attack on Ozawa, Kan in recent days pledged to break free from “the old politics of money” and make government more transparent and less dictated by sleazy backroom deals.

With only three months in power — those coming during the slow summer months — analysts said Kan has had little opportunity to show his political prowess.

“Kan’s prevailing wasn’t a big surprise — [he's] only been in office for about three months. There really isn’t a legitimate reason for him to leave his position,” said Kensuke Takayasu, a political scientist at Seikei University.

“I think it would have been pretty difficult for a figure like Ozawa, someone who is undergoing prosecution, to actually lead as prime minister for this country.”

With the clean political slate won on Tuesday, experts say, Kan could stop Japan’s recent revolving door of prime ministers.

“He has momentum — the question is how long that will last,” said Vosse. “Unfortunately for Japanese politicians and especially with prime ministers, the public is fickle.

“In a few weeks or months, he could lose his current support rate, which has risen to 55% during this recent campaign. If he can show voters he is a true leader and wants to grab this opportunity with both hands, he can be successful.”

john.glionna@latimes.com

Yuriko Nagano, a freelance writer based in Tokyo, and Ethan Kim in the Times’ Seoul bureau, contributed to this report.
Japan’s prime minister survives challenge from within his own party

A New Zealand air force plane made a rare wintertime landing on an ice runway in Antarctica on a mercy mission Tuesday to evacuate an American worker in serious medical condition, officials said.

Blizzard conditions eased to allow the Orion aircraft with three medical staff aboard to land at the U.S. McMurdo Station science base on the north Antarctic coast before refueling and returning on a seven-hour flight back to Christchurch, New Zealand.

An initial rescue bid on Sunday was forced to turn back because of blizzards. Temperatures at the base have been about minus 32 degrees Fahrenheit in recent days.

Air force spokesman Squadron Leader Kavae Tamariki said the plane landed around midday during a brief period of daylight and clear weather, and spent about an hour and a half on the ground before taking off with the patient.

“It’s going fine so far,” Tamariki told The Associated Press. He said the patient was stable and would be admitted to a hospital in Christchurch after the plane arrived.

The man’s identity, exact condition and occupation have not been disclosed. He works for the U.S. company Raytheon, which provides support services — such as supplies, transportation and accommodation — for the U.S. National Science Foundation at McMurdo.

“The medical advice is to get him out of there as soon as possible for hospital care,” said Raytheon Polar Services New Zealand operations manager, Kerry Chuck.

The U.S. has more than 500 staff that spend the bleak winter — from October through March — at McMurdo each year. Flights are usually only made during the summer months, when most scientists are ferried in and out of the station. Icebreaker ships are used to bring in fuel.

A few winter evacuations of sick workers have been undertaken from Antarctica, including a dramatic midwinter flight in 1999, with blazing fuel barrels to light the runway, to pick up a U.S. woman doctor at a South Pole station who contracted breast cancer.

Last September, an American working at McMurdo Station who suffered cardiac problems was evacuated to New Zealand by air force plane in a serious but stable condition.

A broad range of scientific research is conducted at the station, including studies of the Antarctic sea and its marine life, the annual fight for survival of the world’s largest penguin colonies, and the depletion of the ozone layer.
New Zealand air force evacuates American from Antarctic base