Greek PM asks for support to avoid "catastrophic" default (Reuters)

ATHENS (Reuters) – Greek Prime Minister George Papandreou on Sunday appealed to parliament to support a new cabinet appointed to push through painful economic reforms, saying a debt default would be catastrophic.

Papandreou asked parliament to pass a vote of confidence in a reshuffled cabinet he appointed on Friday to push through a five-year package of new tax hikes and spending cuts agreed with international lenders.

The prime minister, whose own political survival is on the line over the package, said the country was at a critical crossroads and its problems could not be solved by rejecting international help.

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Manitoba floods farms to avoid "catastrophic" breach (Reuters)

WINNIPEG, Manitoba (Reuters) – Manitoba opened its dike on the swollen Assiniboine River on Saturday, starting a slow creep of water across rich farmland to avert a potentially catastrophic, unplanned breach in the Canadian province.

Opening the dike will, over days, flood at least 225 square kilometres (55,600 acres) of land that includes 150 homes while taking the pressure off strained dikes.

After the deliberate dike breach, Manitoba Premier Greg Selinger said the gradual, controlled flood was going well and that he knew of no homes in its path that had been damaged.

Water was spreading rapidly across fields, however, swamping land when farmers are usually planting crops of wheat, canola and vegetables.

"This was a necessity because a catastrophic overflow would have taken all the people in this area, and around it they would have had up to five times more damage if the river opened up," Selinger told reporters near the breach site. "...The dikes are very stressed with the amount of water going through, which is why we had to do this opening here."

The controlled flood looked to continue for as long as a week with flows speeding up because the river was still rising, Selinger said.

Warm, clear weather was helping volunteers and about 1,500 soldiers reinforce dikes.

Levels on the Assiniboine, which flows eastward out of Saskatchewan into Manitoba, are the highest on record after a winter of heavy snowfall on saturated land.

Along with fortifying dikes, Manitoba officials hastily expanded this week an engineered channel that diverts water off the Assiniboine into Lake Manitoba to prevent widespread flooding caused by heavy winter snowfall and spring rains.

U.S. authorities fighting a swollen Mississippi River opened a key spillway on Saturday, a move that could flood homes and crops but spare Louisiana's two largest cities.

Across Manitoba, 3,300 people had left their homes as of Friday because of the threat of flooding, including 1,400 in Brandon, the province's second-largest city. About 100 homes are flooded, mostly on Indian reserves.

Residents in the area that will be flooded east of Portage la Prairie, Manitoba, shored up flood defenses this week as provincial officials repeatedly delayed the dike breach to give them more time.

It wasn't enough, said Doug Connery, whose family runs a large vegetable farm in the area.

"It all depends now on how fast this (water) is going to move," he said. "There's stuff out there that wasn't protected last night."

Manitoba officials have aimed to pump about one-third more water than design capacity through the Portage Diversion, out of the Assiniboine and into Lake Manitoba. While that has taken some strain off dikes, it has added to flooding in a key cattle-producing region.

Farmers have moved thousands of cattle to higher ground and worry they might not be able to feed them this year.

(Editing by Laura MacInnis and Paul Simao)

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Japan warns ships to avoid floating houses, debris

Floating debris from last month's tsunami is so enormous it is clogging shipping lanes off Japan, prompting Japan's coast guard to warn ships to give the area an especially wide berth, Bloomberg Businessweek reports.

The coast guard, which is posting daily reports on the the debris on the Internet, is warning ships to stay about 45 miles farther from the area of a stricken nuclear plant than is required for safety from radiation.

"Our forces have seen everything from cars to tractor-trailers to entire, intact homes floating in the ocean," say Anthony J. Falvo, a spokesman for the U.S. 7th Fleet, which is helping with recovery efforts, Bloomberg Businessweek reports. "They have never seen anything like it."

Ships are particularly worried that major debris will damage propellers.

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Deal needed to avoid spending train wreck

Associated Press

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WASHINGTON –  Political ideologies and government spending realities are speeding trains headed toward a nasty crash in Washington this week barring a compromise between Republicans in the House and Senate Democrats aligned with President Barack Obama in the battle to contain America's soaring debt.

Failure to reach a deal for the rest of this budget year, which ends on Sept. 30, could lead to a partial shutdown of the government when spending authority expires at midnight on Friday. It is unclear which side would absorb public blame and anger for such a dramatic turn of events. But there was likely to be political damage, and mainstream members of both parties say they want to avoid a shutdown.

At issue are cuts to so-called discretionary programs, the cost of running various government agencies that use only 12 percent of the federal budget.

Republicans took control of the House in a landslide last November with much of their success built around tea-party-aligned candidates elected on the promise of lower taxes, less spending and smaller government. Nearly six weeks ago, the House passed a bill calling for $61 billion in cuts in discretionary spending for the remainder of the year.

The Senate, which also must approve such a measure, never took it up.

Instead both houses of Congress have passed two short-term spending laws to keep government open while cutting $10 billion out of this year's budget. That appropriation runs out Friday. Late last week, Obama said that compromise was close with Republicans on $33 billion in cuts, and he warned that without a deal the ensuing government shutdown would "jeopardize our economic recovery" just as jobs are finally being created.

There are indications the $33 billion figure may truly be in play, with sufficient votes lined up among mainstream House Republicans and Democrats. But House Speaker John Boehner is denying a deal is in the works, apparently fearing he would alienate the Republican tea party conference and damage party solidarity in advance of the coming 2012 presidential election. Many of the 87 new Republican House members say they will not go for a compromise.

What's more, the huge political divisions may only harden on Tuesday when Republicans reveal their plans to further slash government outlays for the next fiscal year, a spending outline that was expected to call for profound changes in funding for U.S. social safety net programs, particularly government-funded health care for the elderly and the poor.

Those programs, known as Medicare and Medicaid, along with Social Security pension benefits and defense spending consume the vast majority of government spending. None of them is under consideration in the current battle over cuts for the remainder of this fiscal year, even though a special Obama commission on the debt has recommended dramatic changes in all that spending and in the American tax laws.

Obama has said little about the commission recommendations and sought to remain publicly above the fray, instead focusing his message on repairing the recession-ravaged economy and reducing unemployment.

He weighed in, however, after good news on the jobs front last Friday.

"Given the encouraging news we received today on jobs, it would be the height of irresponsibility to halt our economic momentum because of the same old Washington politics," he said.

"It can't be 'my way or the highway politics,'" said the president. "We know that a compromise is within reach. And we also know that if these budget negotiations break down, it could shut down the government and jeopardize our economic recovery."

Shortly before Obama spoke, Senate Majority Leader Harry Reid shifted the Democrats' position on one key element of the talks, in apparent deference to environmentalists angered by an earlier concession.

House Republicans included provisions in their $61 billion package of spending cuts that would block the Environmental Protection Agency from implementing regulations on a variety of industries that would cut emissions of climate changing greenhouse gases.

"Neither the White House or the Senate leaders is going to accept any EPA riders," he said in a conference call with reporters.

The spending conflict also is playing out under the shadow of the upcoming requirement for Congress to vote on increasing the amount of money the government can borrow. Democrats cannot increase the debt ceiling without Republican support in both the Senate and House. The Treasury Department estimates the government will hit the $14.3 trillion debt ceiling sometime between April 15 and May 31. The administration has warned Congress that failing to raise the debt limit would lead to an unprecedented default on the national debt.

This pivotal week will test congressional abilities to compromise on a plan that moves some distance toward reducing deficit spending. Republicans warn the practice is leading toward the decline of American power and influence, and Democrats argue that cuts cannot be too Draconian in the face of a weak economic recovery and the needs of middle- and lower-income Americans.

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